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37th PARLIAMENT, 2nd SESSION

Standing Committee on Finance

EVIDENCE

CONTENTS

Wednesday, November 6, 2002

0900

The Chair (Mrs. Sue Barnes (London West, Lib.))

0905

0910

Ms. Wendy Forsythe (Chair, Strategic Communications Committee, Association of Canadian Pension Management)

0915

The Chair

Mr. Michael Bach (Executive Vice-President, Canadian Association for Community Living)

0920

0925

The Chair

Mr. Vince Brescia (Canadian Federation of Apartment Associations)

0930

The Chair

Ms. Virginia McLauglin (Board Member and Chair of the OHA Advocacy Committee, Ontario Hospital Association)

0935

Mr. David MacKinnon (President and CEO, Ontario Hospital Association)

0940

The Chair

Mr. Barry Grills (Chair, Writers' Union of Canada)

0945

0950

The Chair

Mr. Charlie Penson (Peace River, Canadian Alliance)

Mr. Michael Bach

0955

Mr. Charlie Penson

Mr. Michael Bach

Mr. Charlie Penson

Mr. Michael Bach

Mr. Charlie Penson

Mr. Michael Bach

Mr. Charlie Penson

Mr. Vince Brescia

Mr. Charlie Penson

1000

Mr. Vince Brescia

Mr. Charlie Penson

The Chair

Mr. Pierre Paquette (Joliette, BQ)

The Chair

Mr. David MacKinnon

1005

The Chair

Mr. Barry Grills

The Chair

Mr. Michael Bach

The Chair

Mr. Bryon Wilfert (Oak Ridges, Lib.)

1010

The Chair

Mr. David MacKinnon

1015

The Chair

Ms. Deborah Windsor (Executive Director, Writers' Union of Canada)

The Chair

Mr. Bryon Wilfert

The Chair

Mr. Vince Brescia

The Chair

Mr. Stephen Bigsby (Executive Director, Association of Canadian Pension Management)

1020

The Chair

Mr. Tony Valeri (Stoney Creek, Lib.)

The Chair

Ms. Wendy Forsythe

1025

Mr. Stephen Bigsby

Mr. Tony Valeri

Mr. Stephen Bigsby

Ms. Wendy Forsythe

The Chair

Mr. Tony Valeri

1030

Mr. David MacKinnon

Ms. Virginia McLauglin

The Chair

Mr. Brian Masse (Windsor West, NDP)

Mr. Vince Brescia

Mr. Brian Masse

Mr. Vince Brescia

Mr. Brian Masse

Mr. David MacKinnon

Mr. Brian Masse

1035

Mr. David MacKinnon

Mr. Brian Masse

Mr. David MacKinnon

Mr. Brian Masse

Mr. Barry Grills

The Chair

Ms. Maria Minna (Beaches—East York, Lib.)

The Chair

Ms. Maria Minna

The Chair

Ms. Maria Minna

1040

Ms. Wendy Forsythe

Mr. Stephen Bigsby

Ms. Maria Minna

Mr. Stephen Bigsby

The Chair

Ms. Maria Minna

1045

Mr. David MacKinnon

Ms. Maria Minna

Mr. David MacKinnon

Ms. Virginia McLauglin

Ms. Maria Minna

The Chair

Ms. Virginia McLauglin

1050

The Chair

1055

Mr. W. Jack Millar (Senior Partner, Millar Wyslobicky Kreklewetz; Direct Sellers Association of Canada)

The Chair

Ms. Caroline Di Giovanni (Director of Public Affairs, Catholic Children's Aid Society; Campaign Against Child Poverty)

1100

Ms. Jacquie Maund (Coordinator, Campaign Against Child Poverty)

1105

The Chair

Ms. Judy Cutler (Director of Communications, Canada's Association for the Fifty-Plus)

Mr. William Gleberzon (Associate Executive Director, Canada's Association for the Fifty-Plus)

1110

Ms. Judy Cutler

1115

The Chair

Mr. Luciano Piccioni (Business Development Consultant, Brownfields Coordinator, City of Hamilton)

1120

The Chair

Mr. W. Jack Millar

1125

1130

The Chair

Ms. Catharine Laidlaw-Sly (President, National Council of Women of Canada)

1135

The Chair

Ms. Cathy Crowe (Steering Committee Member, Toronto Disaster Relief Committee)

1140

Mr. Michael Shapcott (Co-Chair, National Housing and Homelessness Network)

1145

1150

The Chair

Mr. Charlie Penson

Ms. Jacquie Maund

Mr. Gerald Vandezande (Spokesperson, Campaign Against Child Poverty)

Mr. Charlie Penson

1155

Mr. Gerald Vandezande

Mr. Charlie Penson

Mr. Gerald Vandezande

Mr. Charlie Penson

Mr. Gerald Vandezande

Mr. Charlie Penson

Mr. Gerald Vandezande

Mr. Charlie Penson

The Acting Chair (Ms. Maria Minna (Beaches—East York, Lib.)

Mr. Charlie Penson

1200

The Acting Chair (Ms. Maria Minna)

Mr. Luciano Piccioni

The Acting Chair (Ms. Maria Minna)

M. Pierre Paquette

The Acting Chair (Ms. Maria Minna)

Ms. Caroline Di Giovanni

Mr. Gerald Vandezande

M. Pierre Paquette

Mr. Gerald Vandezande

1205

Mr. Pierre Paquette

Mr. Michael Shapcott

The Chair

1210

Mr. Tony Valeri

Mr. Luciano Piccioni

Mr. Tony Valeri

Mr. Luciano Piccioni

Mr. Tony Valeri

Ms. Caroline Di Giovanni

1215

Ms. Jacquie Maund

Mr. Gerald Vandezande

Mr. Tony Valeri

The Chair

Mr. Tony Valeri

The Chair

Mr. Tony Valeri

The Chair

Mr. Bryon Wilfert

1220

The Chair

Mr. William Gleberzon

1225

Ms. Caroline Di Giovanni

The Chair

Ms. Maria Minna

1230

Mr. Michael Shapcott

Ms. Maria Minna

Ms. Jacquie Maund

Mr. Gerald Vandezande

Ms. Maria Minna

1235

The Chair

CANADA

Standing Committee on Finance

NUMBER 018

2nd SESSION

37th PARLIAMENT

EVIDENCE

Wednesday, November 6, 2002

[Recorded by Electronic Apparatus]

¿ (0900)

[English]

The Chair (Mrs. Sue Barnes (London West, Lib.)): Good morning. Bienvenue à tous. This is the Standing Committee on Finance, and we are doing pre-budget discussions pursuant to Standing Order 83(1).

This morning, for our first panel between 9 and 10:30 a.m., we have five different sets of witnesses. For the Association of Canadian Pension Management we were to have had Ian Markham, but we have Wendy Forsythe, chair of the Communications Committee, and Stephen Bigsby, who is the executive director.

From the Canadian Association for Community Living we have Michael Bach, who is the executive vice-president of the organization.

From the Canadian Federation of Apartment Associations we have Vince Brescia. Welcome.

From the Ontario Hospital Association we have Virginia McLauglin, who is a board member and the chair of the OHA Advocacy Committee, accompanied by David MacKinnon, who is the president and chief executive officer. Welcome to you.

¿ (0905)

We also have today, from the Writers' Union of Canada, Deborah Windsor, executive director, and Barry Grills, the chair.

To all of you, welcome. For your presentations you will get eight minutes. At seven minutes, if you watch my pen, I'll give you a non-verbal warning. If you stray after eight, I might go like this, but we'll probably have to end shortly thereafter.

We'll hear all of the presentations in the order in which they're listed on the agenda, and then we'll move into rounds of questioning equally divided between government and opposition time.

If I understand correctly, at least one of you has to leave to catch a plane, so just absent yourself when necessary. But we will accomplish much when we get to hear your views.

We'll start, please, with the Association of Canadian Pension Management, for eight minutes.

¿ (0910)

Ms. Wendy Forsythe (Chair, Strategic Communications Committee, Association of Canadian Pension Management): Thank you very much, Madam Chairman.

We're very pleased to be given this opportunity to present the views of the Association of Canadian Pension Management, or the ACPM. We represent private and public pension plan sponsors and related stakeholders in Canada. The ACPM's membership represents over 400 Canadian pension plans covering some 5 million registered pension plan members across the country. Our mission is to promote the growth and health of Canada's retirement income system by championing the following principles: one, clarity in pension legislation, regulation, and arrangements; two, good governance and administration; and finally, balanced consideration of stakeholder needs and interests.

The ACPM is administered by a 12-member national board of directors drawn from all regions of Canada. The organization's policy positions are discussed and developed by the ACPM's advocacy and government relations committee, comprised of 25 representatives from across the country. When appropriate, policy issues are developed in coordination with regional councils in Ontario, Quebec, and Alberta.

The ACPM has a number of priorities for consideration in planning the 2003-04 federal budget. While Canada's retirement income system may appear healthy relative to those of many other countries, long-term trends and recent events demonstrate that Canadians cannot become complacent about retirement planning. The ACPM's four-point program is more relevant today than ever before.

First, we need to promote greater financial self-sufficiency in retirement through increased workforce coverage and increased income replacement rates in our voluntary registered pension plan and RRSP pension arrangements. Current federal social policy and tax law create major obstacles to achieving this worthwhile goal.

Second, we need to promote good governance in how Canada's pension and retirement savings plans are managed. Good governance is critical to ensuring that pension promises can be met at reasonable cost. Events in the past year have demonstrated that good governance, or lack thereof, can have a direct impact on pension plan performance.

Third, we must promote a regulatory regime for pensions and retirement savings that is balanced, uniform, transparent, and cost-effective. We repeat our contention that Canada's current patchwork quilt of federal and provincial regulations far from meets this test.

Fourth, we need to promote greater financial literacy among Canadians. As we argued in our January 2000 policy paper, “Dependence or Self-Reliance: Which Way for Canada's Retirement Income System?”, if Canadians are to prepare for their retirement years, they need to understand how Canada's retirement income system works and the role they play in it.

We have a number of recommendations for concrete actions to strengthen Canada's retirement income system. The first is the promotion of greater financial self-sufficiency in retirement.

The ACPM repeats its contention that some of Canada's federal social and tax policies seriously limit Canada's ability to strengthen the voluntary pillar of its national retirement income system. The fundamental problem is that the existing system provides savings disincentives to Canadians whose incomes fall below the current registered pension plan and RRSP contribution ceiling--that is, with incomes below $75,000--and denies those earning over $75,000 retirement tax deferrals on incomes above that ceiling. This combination of savings disincentives and ceilings that are much lower than in competing jurisdictions such as the U.S. and United Kingdom puts Canadian employers at a competitive disadvantage and places a greater burden on the tax-financed OAS-GIS components of Canada's retirement income system.

The ACPM recommends two measures to solve these problems: one, capping the effective--that is, including the OAS-GIS clawback--tax rate on total pension income at 50%; and two, progressively increasing the income ceilings on which registered pension plan and RRSP contributions can be made to $150,000.

Finally, the association recommends that the government review existing tax policies that discourage workers from opting for progressive or phased retirement. Current regulations make it very difficult for a company to retain the services of a valued employee on a part-time basis while paying retirement benefits. As Canada's baby boomers begin to reach retirement age, organizations will need greater flexibility. The government should help employers meet their needs for skilled workers and accommodate Canadians who wish to remain active and supplement their retirement earnings with extra taxable income.

Number two is the promotion of good governance and administration. Pension plan members understand more acutely than before that the quality of plan governance and administration has a direct impact on the performance and security of their pension plans. The ACPM is very involved in the new industry committee established to advise the Canadian Association of Pension Supervisory Authorities, CAPSA, on detailed guidelines for what constitutes acceptable standards of trustee and administrator behaviour.

The ACPM also participates in a task force with the Pension Investment Association of Canada, PIAC, and the Canada Life and Health Insurance Association on federal investment regulations, which have been adopted by some other Canadian jurisdictions. The task force believes the current quantitative approach to permitted investments should give way to a prudent-person approach. Some aspects of the current federal regulations, such as the look-through rule and valuation of assets at book value, need to be reviewed.

The ACPM has long taken the position that the existing foreign property rule, currently at 30% of total planned assets, should be further increased or, better still, eliminated. This restriction constrains the ability of Canadian pension funds to maximize returns while spreading risks across many markets. The ACPM and PIAC have jointly commissioned an updated report on the impact of this issue from Professor Joel Fried of the University of Western Ontario. This paper will be released this fall.

The third priority is the promotion of an effective and efficient regulatory regime. We have been advised that CAPSA will issue its model law principles in the spring of 2003. The principles are designed to provide the framework for a harmonized pension law for all Canadian pension jurisdictions. Such a harmonized pension model would make existing pension plans less expensive and complex to administer. More important, the harmonized pension rules would encourage the establishment of more voluntary pension plans and improve pension coverage for Canadians.

The ACPM has three members on the new industry task force set up to advise the Joint Forum of Financial Market Regulators' Working Committee on Investment Disclosure in Capital Accumulation Plans. Both regulators and the industry aim to develop a set of practical guidelines to ensure that defined contribution and other capital accumulation retirement plans are subject to effective and workable regulatory principles.

The final priority is promotion of greater financial literacy. HRDC has taken some steps to improve communications about Canada's two public pension pillars: old age security and Canada and Quebec pension plans. We need to improve Canadians' understanding of how voluntary pension plans, the third pillar of a solid retirement income strategy, complement the two public components. Recent volatility in equity markets and high-profile cases in the U.S. concerning contribution pension plans have made this issue a major concern for individual Canadians.

Thank you.

¿ (0915)

The Chair: Thank you very much.

Now, from the Canadian Association for Community Living, we have Mr. Bach.

Go ahead, sir; you have eight minutes.

Mr. Michael Bach (Executive Vice-President, Canadian Association for Community Living): Thank you, Madam Chair.

The Canadian Association for Community Living speaks with and on behalf of the almost one million Canadians with intellectual disabilities and their families. We have 13 provincial-territorial associations and over 400 local associations, with a membership of 40,000 individuals.

I'm here today to speak to some of the specific commitments in the throne speech that we applaud, but also to call for the government to place those within a broader commitment to a national agenda for disability supports.

We believe that the federal and provincial governments have not yet acted nearly enough, and have barely even made beginning steps on their intergovernmental accord signed five years ago--the In Unison intergovernmental accord. We think the time for action is definitely now.

I'd like to give you a few facts in terms of demographics. Almost 16% of Canadians have disabilities. That's growing, as recent reports from Stats Canada on the aging of the Canadian population clearly demonstrate. Over 25% of Canadians with disabilities live in poverty. That's over twice as many as Canadians generally.

We're talking about 2.5 million family members who are the primary support system for people with disabilities. The support system in this country is not paid service agencies; it's the unpaid care of family members and significant others.

Families caring for children with disabilities are more likely to live in poverty, be on social assistance, be headed by single parents, and run out of money for food in a month than other Canadian families. This is the broad context within which my remarks are said this morning.

We have been calling for a national agenda on disability supports, to deliver on the commitments by both levels of government, in unison. We believe that a national agenda must invest in supports to individuals, families, and communities. This is not going to be resolved simply by attaching some additional dollars to individuals. We need a coordinated strategy for individuals, families, and communities.

We've outlined in our brief today some first-phase commitments within each of those three areas: individuals, families, and communities. I believe that if the government acted proactively on its throne speech commitments, it would begin to deliver on these initial commitments for a phase one national agenda.

There are really five points within the throne speech that I'd like to refer to. There is a commitment to fast-track a comprehensive agreement on employability. We urge the government to move quickly with the provinces to fast-track that plan. It has been discussed in the context of the employability assistance for people with disabilities agreement. We think that is really only one component of a comprehensive agreement.

Unless the federal and provincial governments begin introducing a commitment to address equity groups within the labour market development agreements, we're not going to move forward on the labour market situation, particularly for persons with disabilities.

Since the federal Employment Equity Act was introduced, more people with disabilities have left the labour market than have been hired. The Employment Equity Act, on its own, cannot do the trick. We need a comprehensive approach. That means the employability assistance for people with disabilities agreement and the labour market development agreement--two instruments the federal government has to have--need to be included in this picture.

The employment assistance for people with disabilities program has largely not benefited people with intellectual disabilities, because it does not recognize that people may have a longer path into employment, given their long-term exclusion, and may need lifelong supports on the job. But if you make that investment, you'll see tax revenue; you'll see people leave social assistance. We think it's worth it.

A second commitment in the throne speech that we definitely applaud is the commitment to invest in provisions for low-income families who have children with severe disabilities. We think this is long overdue, and we applaud the government's leadership. But we think it's important to look at the mechanisms or instruments to deliver on this commitment.

We see three options: add a disability component to the Canada child tax benefit; make a component of the disability tax credit refundable, because we're talking about low-income families and we're going to be talking about refundability of income tax provisions; or introduce a new Canada disability benefit and make this the first plank in that benefit.

We don't believe you should use the Canada child tax benefit. That's an income support instrument. We're talking about recognizing the cost of disability supports. We think the CCTB's integrity should be retained as an income instrument.

¿ (0920)

We think introducing refundability for families with children within the context of the disability tax credit could legitimately be challenged, unless you make it a refundable tax credit across the board, including adults with disabilities. We think there's an opportunity to introduce a Canada disability benefit and to make this the first plank, unless you have some other means of delivering cash to low-income families with children with disabilities. But that's your commitment. We think the option really is to introduce a Canada disability benefit.

Third, there's a commitment to recognize family members who provide unpaid care to the gravely ill or dying. We think this is a very important step. We expect that you can only do it through employment insurance. That's probably the mechanism. However, we don't think there's any justifiable reason to restrict this to the gravely ill and dying. The gravely ill and dying have disability-related needs. That's what we're talking about. For family members who provide significant unpaid care and who are working in the paid labour market, who are providing care to those who would meet DTC eligibility criteria, we would really encourage the government to give them access to this provision.

The reality is that there are 900,000 family members who are working in the paid labour market who have significant unpaid caregiving responsibilities. If you look at the demographics of family members who are doing this, they are downgrading their careers, they are having to leave jobs, and they're going on social assistance because they're not getting the paid leave support from the labour market. If we make families the core of the support system for people with disabilities and the aging of our population, we've got to do something to provide them backup support.

Look at Sweden, for example. If you have a child with a disability in Sweden and you're working in the paid labour market, you get up to three months' paid leave a year, 80% of your salary. Canadians are now moving to Sweden, to live in Sweden, and staying there and not returning home because they cannot imagine a future where they don't have support. We're seeing the consequences primarily for women, who have a triple burden. They are doing domestic work, working in the paid labour market, and doing 40, 50, 60 hours of work in disability-related care alone.

We would really encourage that the issue of the gravely ill and dying is about disability-related support.

Safe and healthy communities--we're calling on the government for a $5-million strategic investment fund to assist communities in transitioning to a support system that can meet the criteria of In Unison for flexible, responsible supports. The federal government's investments under the Canada assistance plan help to build a community service system that we now recognize is highly exclusive. It keeps people attached to nursing homes, to group homes, to sheltered workshops. Your housing initiative to assist communities to develop capacity is a model that could be drawn upon to create a community transition fund, and we've laid that out in our brief.

We've also called for the learning architecture, the learning system, to include specific investments for the equity groups and include them in the development of the national reporting system around the learning system.

Finally, we state very clearly our opposition to the narrowing of the disability tax credit. The federal government has not done much on disability support. The Minister of Finance's actions to narrow the criteria of the DTC we find unconscionable. We don't think it was an informed decision, and we are certainly hoping he'll pull back those amendments.

Thank you.

¿ (0925)

The Chair: Thank you very much, and thank you for speaking to your brief.

Now, from the Canadian Federation of Apartment Associations, we'll go to Mr. Brescia.

Mr. Vince Brescia (Canadian Federation of Apartment Associations): Thank you, Madam Chair and members of the committee. We appreciate the opportunity to speak to you today.

I'm on the board of directors of the Canadian Federation. We're an umbrella group that represents apartment owners and managers, rental housing owners and managers, right across the country, small and large, and we're a $30 billion industry.

We have a presentation, which hopefully all of you have. We've had a photocopying issue and the bottom is cut off, so my apologies, but we have most of the info there. I want to walk you through some of that information rather quickly.

The national supply of rental housing--one of the first charts you'll see there--is in precipitous decline across the country. This chart really tells the story of our industry. We have gone from producing 60,000 to 70,000 rental housing units a year down to about 5,000 units a year for the past few years. That's one of the reasons why we have housing issues right across the country.

Federal tax treatment has played a role in this, and the next chart tells a bit of that story. It talks about some of the changes in the early 1970s, some attempts by the government to bring back rental supply, which have now been phased out, and we have the resulting supply of about 5,000 units a year.

The next couple of pages summarize just what some of those changes have been over the past few years. I'm not going to walk you through each of them. We don't have time in an eight-minute presentation, but they're summarized there for your interest.

The next chart compares our production to that of the United States, and you can see the drastic differences between the two countries. We're really losing ground to them in terms of rental housing production. I've tried to summarize one of the reasons why. On the next page, you can see some of the differences between U.S. tax treatment of the industry and Canadian tax treatment. As an example, the allowance of rollovers there improves tax returns. An Ernst & Young study shows a 15% return on investment. They allow pooling down there, they have a better depreciation system in the United States, they don't have a federal tax system on rental, and there are a few other things. And it really shows up in terms of supply there. They have a 10% national vacancy rate in the States, and we have less than a 2% national vacancy rate here in Canada.

Rental housing is important for our country. It's important for competitive reasons, and it's important for reasons of social policy. We need to make sure people have enough housing. In a changing economy, it's an important type of housing. Rental housing provides housing for people who have short-term job situations or who are unsure of what their job situation is going to be, and it's the housing of choice for a lot people. Again, the problem is that we don't have enough.

We've been asked by people in the government and by Minister Manley to provide some background on and do some research into how we can solve this problem without necessarily hitting the budget in a negative way, and we've done that work. We have a couple of charts here from a report that we've done and submitted to people in the finance department. It outlines some of the tax changes and some possibilities for turning around our industry and getting our industry going again. Those are listed for you under the heading “Exhibit E-1”. Again, though, I don't have time to go through them.

I want to take you to the next chart. We've also done an estimate of what the costs of these changes might be, and in turn what the additional revenues might be to the federal government, and I guess this is the crux of our argument. Because our industry has gone through such a decline, the federal government is actually losing out on a lot of revenues. With some of the proposed tax changes we've put in front of you, what we're suggesting is that you're actually going to make a lot more money, as opposed to losing money. This is a net gain, from our perspective.

Yes, you have to consider the finances, but we'd also ask you to think about the housing situation. We're trying to show you a way in which, without costing you any money, we can get a lot more housing, which we need nationally.

At the tail end of our presentation, I've summarized for you some of the groups that have written reports asking for federal tax changes to get this industry going again. It's a pretty long list, but it's not a comprehensive list. In Toronto, the Mayor's Homelessness Action Task Force , chaired by Dr. Anne Golden, recommended these tax changes, as did our own association. The Federation of Canadian Municipalities has asked for these changes. Not a day goes by that a mayor or a municipality doesn't approach our industry to ask us how we can get more rental housing. The Toronto Board of Trade and the Province of Ontario have done reports, as have the City of London, the York Region Affordable Housing Task Force, the Canadian Home Builders' Association, the Universal Workers Union, the Laborers' International Union of North America, and the Urban Development Institute. All have asked for these tax changes.

From our industry's perspective, the bottom line is that we've done our homework. We think we've shown you a way how you can get a lot more housing, and it doesn't have to cost the federal treasury anything. In fact, you might make some money.

I thank you for your time today.

¿ (0930)

The Chair: Thank you.

Next, from the Ontario Hospital Association, Ms. McLauglin, go ahead.

Ms. Virginia McLauglin (Board Member and Chair of the OHA Advocacy Committee, Ontario Hospital Association): Thank you very much for the opportunity to appear before you today, Madam Chair. Our message is one of urgency, it's one of opportunity, and it's one of renewed partnerships—partnerships amongst all levels of government in funding health care services, and partnerships between providers and governments in meeting patient care needs.

The OHA was founded in 1924 as an independent, non-profit organization. It represents 160 public hospital corporations operating in 225 sites in Ontario. These hospitals provide a diverse and complex range of services in a variety of settings: mental health; rehabilitation; complex continuing care and long-term care; large and medium-sized community hospitals providing comprehensive services; hospitals in small and rural communities; and leading-edge teaching, research, and specialty hospitals.

The OHA also has approximately 200 associate and affiliate members, such as: community care access centres, which coordinate home care and long-term care services; the Association of Ontario Health Centres, which represents community health care clinics in Ontario; organizations responsible for women's health, AIDS, youth support services, and senior citizens' centres; and several health research organizations.

Why invest in health care? Canada's health care system contributes to our quality of life, better health outcomes, jobs, and economic growth. The people who work in health care are knowledge workers, and health care is an economic driver. It is repeatedly cited as a contributing factor to Canada's international competitiveness. Investing in health care is investing in our future health and economic prosperity.

However, as noted in the recent report of the Senate committee, rising health care costs strongly indicate that Canada's publicly funded health care system as it is currently organized and operated is not fiscally sustainable, given current funding levels.

The federal government's September 2000 accord was greatly appreciated, as it provided a significant injection of funding for patient care and allocated new funding on an equal per capita basis.

As you can appreciate, health care needs far exceed the incremental increase in this additional federal funding, which now covers a small portion of the higher cost of providing essential patient care services. The federal government has a unique opportunity to build on this initiative, to protect patient care, and increase its share of public health care funding in Canada. We need stabilization.

We believe the Senate committee has advanced and the Romanow commission will advance the health care reform debate in Canada, but until longer-term reform measures can be introduced, the federal government has a critical role to play in ensuring that Canadians continue to have access to essential health care services.

Given that the process of reform will likely occur over a number of years, we are concerned that major disruptions to existing patient care services and front line workers will make the task of reform much more difficult. Stabilizing existing essential health care services is a key component to any health care reform agenda.

We are therefore asking here today that you give your support to nurses, doctors, other health care workers, and hospitals so that they have the ability to maintain essential patient care services. We realize there are limited resources, but we are also aware that Canadians need essential health care services whenever and wherever they live.

We are asking the federal government to provide emergency funding to protect patient care services this year, in addition to long-term investment in health care reform. Stabilization is a precondition for reform.

¿ (0935)

Mr. David MacKinnon (President and CEO, Ontario Hospital Association): Madam Chair, I'll just talk, in light of the time limitations: the rest of our presentation essentially amplifies most of the comments Virginia has made.

I'd like to draw to your attention a few particularly challenging issues.

The first is that at the moment the Ontario hospital system, which by some measures is the largest part of the Canadian public sector infrastructure, is effectively insolvent. We have a $1 billion shortfall in working capital, we are facing a tidal wave of demand, and we are in significant financial difficulty. That is why short-term stabilization pending reform is so important to us.

I've just come from visiting hospital boards around the province, and what we are talking about is further service reductions to a system that already has the least accessibility to its population of any Canadian jurisdiction.

The second issue I'd like to explain relates to the wording of Virginia's comments--“an equal per capita basis”--which you may have noticed. We are very concerned that this happen in terms of subsequent changes to health care funding.

At the moment Ontario's fiscal contribution to the Canadian federation is about $25 billion a year, and we do not think additional layers of transfers of any kind to other jurisdictions, beyond core equalization, can work for us in relation to transfers that now effectively are at a level equivalent to the amount by which Ontario grows each year.

The third comment on the reform side of the argument relating to the comments that Virginia has made is this: we believe, as you will see--and it's the implied comment throughout our presentation--that the survival of the current system really does depend on very substantive reform, including dealing with the twin issues of expectations and lifestyle management that are at the root of all the forces driving health care costs in this country. I'd like to particularly comment on and support the Minister of Health's recent decision to support obesity research. This is the kind of thing we really need to do more of in this country.

For us, reform is absolutely critical in terms of our ability to move forward. We really depend on the development of a national consensus around the principal directions of the reform, and we're reasonably optimistic in the sense that we see many common themes in the Mazankowski committee report in Alberta, in the preliminary Romanow report, in the Kirby report. For the future, we think we should concentrate on what these reports agree on and build a consensus from there. And the good news is that they agree on a fair bit.

The fourth comment I'd make is very, very brief. One of the sweeping issues in Canadian health care is mentioned in the chart called Health Care Reform on the bottom of page 6, and it's called Scope of Practice. We really need to modernize the whole human resource management and health care system, including finding ways in which the positions and the clinical partnerships necessary for future progress are made.

Finally, we believe we have the evidence to indicate that we're running one of the most cost-effective and accountable hospital systems in North America. We are open to all the reforms that have been put forward in the various national commissions. We have implemented many of them, including hospital report cards, a pioneering initiative in Canada. We look forward to doing much more of that, but again, we simply cannot go through yet another round of service reductions and expect that process of reform or change will be easy or straightforward. It will not be easy or straightforward in any event, but if we have to make further reductions and further destabilize the workforce and the system in the months and weeks to come, then reform will be much more difficult than it otherwise needs to be.

Thank you.

¿ (0940)

The Chair: Thank you very much.

And from the Writers' Union of Canada we have Mr. Grills, the last presenter before we go into questioning.

Mr. Barry Grills (Chair, Writers' Union of Canada): Thank you, Madam Chair.

The Writers' Union of Canada appreciates this opportunity to participate in pre-budget consultations with you, the Standing Committee on Finance.

As our brief already before you points out, the union was founded by writers for writers in 1973 and has evolved into the national voice of 1,450 writers of books and all general trade genres. It has a mandate to promote and defend the interest of its creator membership and all Canadian's freedom to write and publish.

The past year has been an exceptionally difficult year for book authors. The new economy's tendency towards corporate convergence generally, and to inspire monopolies specifically, among the publishing and book-selling industries has had a disastrous impact on authors, who have suffered severe royal declines and a reduced market in which to sell their works, especially domestically.

Massive returns to publishers from the chain bookstores, and General Publishing's financial crisis mean that many writers, particularly those published by General, are in a precarious position and have lost, or are likely to lose, their entire year's income from their writing. For others, many of them published by publishers whose books were distributed by General, payments of royalties will be much delayed or lost completely.

As creators, we are keenly aware of our role in helping Canada maintain an articulate, fair, and compassionate leadership role in the emerging global society. In fact, because we're an association of creators, we spend much of our time reflecting thoughtfully on these kinds of issues. We do all of this as a calling inherent to our craft. Often we do it in the face of hardship and the kind of financial inequities this committee is intent on correcting. However, the policy and tax inequities we face while plying our craft continue.

The Writers' Union of Canada urges the Government of Canada in its next budget to introduce a limited back averaging plan for the professional income of creators whose incomes fluctuate; to introduce a copyright income deduction for creations modelled on that used in the province of Quebec; to exempt from taxation subsistence grants for creators administered by the Canada Council for the Arts; to further increase funding to the Canada Council to enable it to improve the level of funding for creation of new works; and to extend employment insurance benefits to self-employed creators and creators who work in paid employment to supplement their self-employment to make them eligible for EI when paid employment is lost.

Many of these proposals are not new, but we maintain that they can address the inequities writers and other artists face. We respectfully submit that they can help this committee achieve its stated objectives.

As we've described, most writers cobble together their incomes from various sources--teaching, editing, or driving a cab. Still, book royalties and advances account for a third of a writer's income on average. A book, like any large creative endeavour, can take years to write yet the bulk of the income generated from that book usually arrives in one fell swoop.

A creator puts in years of labour and often years of sacrifice, incurring debt, doing without, and then when the payoff comes, that income is taxed as if it were earned entirely within that taxation year. We are pleased that in the past this committee has recognized the injustice of this inequity and has recommended that the government institute income backward averaging for creators.

A targeted-income backwards averaging program for self-employed creators would be easy to apply and to enforce. Revenue Canada has issued bulletins defining writers and artists already, thus ensuring that the backward averaging measure would be easily targeted and specific.

More than a year ago Parliament considered a private member's bill calling for a copyright income deduction for writers and other artists. Although the bill was general in tone and lacked specifics, it nonetheless captured the spirit of the inequity writers face and the general principles of what might help correct it.

We again recommend that the Department of Finance institute a copyright income deduction for creators. This deduction has been used in Quebec for several years, where it not only corrects the tax penalty implicit in the Income Tax Act but also works to encourage rather than penalize those who try to make a living from their creations.

In Quebec the provision applies to writers, artists, filmmakers, composers, anyone who produces copyright material that generates income. Since copyright is clearly defined under the Copyright Act, such a provision is very easy to administer.

The copyright income deduction effectively removes fluctuations from creators' incomes since it is the royalties earned on copyright material that creates the wild income fluctuations. The copyright income deduction requires almost no calculation and fits easily within the existing framework of the Income Tax form. There are many precedents already on the form such as the deduction for employment income earned outside Canada or the deduction for employees of certain international organizations like the United Nations.

Canada has a long history of giving special consideration to enterprises that further the national interest; for instance, scientific research and experimental development. The cost to the government would be minuscule, setting a reasonable upper limit of income, and only that income derived from the artistic endeavour, would ensure that only those writers and artists with low incomes would be able to derive benefit from the deduction.

As creators we are unlike other taxpayers. Our creativity provides the raw materials for the entire cultural sector, which receives a variety of subsidies and incentives at the production and dissemination levels. We are seeking equitable treatment.

One of the most confusing inequities has been policy towards subsistence grants for writers and artists. These are grants that quite literally provide funds for artists to live for several months while they create their cultural product, hence their name, “subsistence”. We contend that these grants should be tax exempt. People otherwise employed on a full-time basis are ineligible to apply for these grants. Only self-employed creators may apply.

If grants arrive at the beginning of the year, the grant usually has been exhausted at tax time by rent, food, and the necessities of life required during the period of the grant. Creators may have to borrow money in order to pay the tax. In essence, taxing grants such as these undermines the principle of survival that inspired their creation.

¿ (0945)

These grants provide minimal living allowances. The maximum value is only $20,000. Also, they often arrive at the end of the calendar year. When a writer receives a subsistence grant in the winter before the beginning of the period it is designed to offset, too often a third or more of the grant is lost to tax immediately.

It is time now for the Government of Canada to encourage the creators of this country not only to ensure an uninterrupted flow of creative content for the burgeoning group technology of the new economy, but also to signal to the nation and to the world that Canada values creative work.

I'm going to wrap up very quickly here.

We're also hoping for increases to funding for creators through the Canada Council for the Arts and a good look at the recommendations made by the Standing Committee on Human Resources Development for employment insurance benefits for writers, who often have part-time jobs.

I want to stress, as my final remark, that the cultural sector is very large and continuing to grow. It accounts for between 5% and 8% of the Canadian labour force.

Thank you, Madam Chair, and I apologize for--

¿ (0950)

The Chair: You were right on time. Don't worry. Thank you very much. Now you can amplify your thoughts and your presentation and answer in response to the committee members' questions.

Everyone will have eight minutes. We'll start with Mr. Penson, then Mr. Paquette.

Mr. Charlie Penson (Peace River, Canadian Alliance): Thank you, Madam Chair.

I'd like to thank all the presenters today for your thoughtful submissions to the committee. It's going to be helpful to us in writing the pre-budget recommendations for government.

I don't have a lot of time. I have a couple of questions that I want to ask Mr. Bach and Mr. Brescia. But before that, I do note, Ms. Forsythe, that the presentation you made recognizing the changing dynamic of Canada's aging population is a big concern to all of us. How that is addressed and how we are able to fund the pension issue needs a close review. I support that aspect of it.

As well, with regard to the Ontario Hospital Association's presentation, this is very current. Some provinces are spending almost 50% of their budgets on health care right now. We do know that Canadians support an accessible system on a timely basis through a public system. We are hopeful that the reforms that are coming will address that. But I take your point that, in the interim while those reforms are being made, we don't want to lose the system.

I do want to ask you this, Mr. Bach. In your presentation you talked about a lot of things, but I picked up on one area that is quite disturbing to me, and that is the narrowing of the disability tax credit. I've had a lot of correspondence from constituents, as I know many of us have, about this issue. We have constituents who have been taken off the disability tax credit because of what seems to be a narrowing of definition.

I take your points. There are really two issues there. One is an income tax issue. There is an appeal process going on, I understand. The other one, though, seems to be the existence of a form that seems to have changed the criteria for eligibility. I had a constituent who has had a leg amputated. He has a prothesis. He's working in the oil field, making a living, and they've taken away his disability tax credit. He said the test was that his doctor now has to ask him whether he can walk 50 metres unaided. Now, he's a proud individual and he said, “Of course I can get over there, but I certainly have a problem in my work.” There is an extra cost to him to rig up his vehicle for that and so on.

I want to ask you this question. What is the genesis of this? Is it the act itself, or is it a question of the government having put out a new form that asks doctors to ask the person coming in a narrower definition of the act itself?

Mr. Michael Bach: There are two sources. The request by the Canada Customs and Revenue Agency to have eligibility reviewed, basically, went out to people who had been determined eligible for a number of years and were given instructions to strictly apply the criteria. Our understanding is that a number of people didn't apply, and a number of people were cut off.

In the course of this, after the renewal was announced, the agency also started a process of consultation with organization like ours, and we had physicians involved. That process was proceeding very well. We had looked at the form for determining eligibility, we had identified where there were some inherently discriminatory guidelines, and we thought we were working very well with the agency and the Government of Canada to develop a determination process that would be more fair--all within the guidelines of the Income Tax Act.

At the same time, the standing committee of HRDC and the status of persons with disabilities came out with their report in March 2002, Getting it Right for Canadians: The Disability Tax Credit, which confirmed, yes, this consultation was bearing fruit. They supported, really, the results of that consultation and recommended that some of these provisions be addressed.

Three months later, by August, the Minister of Finance's office came out with proposals to change the income tax, to actually restrict even further precisely the example of what you came up with. That person would be ineligible under the Income Tax Act. Well, fine, you can do that, but given that the Government of Canada has not been able to come up with provisions or a federal-provincial agreement to address support issues for people with disabilities, this is now the only game in town. After five years of work by federal-provincial-territorial committees, following In Unison, to come up with a disabilities support agenda, the one and only disabilities support provision by the federal Government of Canada gets closed down, just after the standing committee and the CCRA say they're proceeding and things are working out.

This sends a message to Canadians with disabilities, a growing proportion of our population, that the accord the Government of Canada signed five years ago is not something that's going to guide its actions.

¿ (0955)

Mr. Charlie Penson: Mr. Bach, I raised this in the pre-budget consultations back in May, I think, when we had the Minister of Revenue, Ms. Caplan, at committee. In my view, she didn't seem to be too sympathetic. Just the fact that nothing has really happened to address your concerns worries me.

As you correctly identified, the House of Commons committee itself made recommendations. I gather that you would like to see those followed up on and implemented.

Mr. Michael Bach: We don't think those are unreasonable recommendations. As in the example you brought up, there are Canadians who want to work, and to take away even the minor provisions if you're going to cover the additional costs.... Canadians already spend $2.5 billion in out-of-pocket expenses on disabilities, just to support themselves--

Mr. Charlie Penson: Mr. Bach, I agree with you. The constituent I'm talking about asked me, “What do they want me to do, go on welfare?” Because that's an option.

Mr. Michael Bach: That is the option.

Mr. Charlie Penson: These are proud people who want to work.

Mr. Michael Bach: Exactly; I agree.

Mr. Charlie Penson: I'm sorry I don't have more time for that issue. I have limited time here.

To Mr. Brescia, you raised an important issue in terms of apartments and the fact that there aren't as many being built as there needs to be. There's been a decline. And you made some recommendations to us on the tax side.

In terms of the deferral of capital gains and recaptured depreciation, I see you want the capital cost allowance provision to be increased to 5%. I gather what you're saying is that you're not against paying taxes, but you want your capital cost allowance to be in line with other sectors, and you want it to be raised so that, in the provisions you have for recognition that there is a real cost to you, you have a little bit quicker payback. Is that right?

Mr. Vince Brescia: That's correct. We are treated differently from other industries. Somebody at some point in time decided that running a rental housing business was not a business, so we're just treated as bondholders as far as the tax system is concerned. Whoever made those rules obviously never ran an apartment building or a rental complex. At any rate, because of that, a whole slew of rules treats us differently from other businesses.

You mentioned the recapture and deferral of capital gains. I mean, that traps capital in our industry. If you sell a building and buy another one or build another one, you face huge tax consequences that no other industry faces.

So we've listed several changes. We're not saying that you need to do every one of them, but I think a package, obviously, needs to be.... Any one of them can have an impact that would ameliorate the negative treatment we receive.

Mr. Charlie Penson: You raise an interesting concept, Mr. Brescia, in that you suggest that by reducing tax, government may actually take in more revenue in the long run. That happens to be the experience of a whole bunch of other jurisdictions, such as the Netherlands, Ireland, Georgia, southeast United States. Whereas right now we seem to have quite a few people trying to avoid tax because they think it's too high, if we were able to lower rates, the government might be surprised and have a lot more revenue coming in as it empowers people and unharnesses sectors like yours.

À (1000)

Mr. Vince Brescia: I couldn't agree with you more. There was a famous economist called Laffer, known for something called the Laffer curve, and we're too much on the wrong end of that curve. I think, with lower taxes in our industry, the government will get more revenue. That's what we're saying.

Mr. Charlie Penson: Thank you.

The Chair: Thank you very much.

Monsieur Paquette.

[Translation]

Mr. Pierre Paquette (Joliette, BQ): Madam Chair, let me start by apologizing for being late: the plane was delayed because we had a snowfall of 10 centimetres in Montreal. I have therefore only quickly read our witnesses' briefs.

I will first address the Ontario Hospital Association.

You wisely recommend that the government start by investing in health care and by consolidating its financial structure prior to changing the Canada Health Act. You are aware that the provinces have spent $68 billion for health care. We estimate 14% of this amount to be federal money.

Recently, we saw an ad campaign from the provinces denouncing how the federal government underfunds the Canada Health and Social Transfer and lobbyes for $5 billion additional in order to help meet provincial needs. We know the federal government has the money to do it. Last year, the federal surplus was 8.9 billion and the year before it was 17 billion. This year, we forecast the surplus to reach 10 billion.

I would like to know if you approve this recommendation for an additional 5 billion in Canada Health and Social Transfer or if you have other figures in mind. That is my first question.

The next question is to the Writers' Union of Canada. I went over your brief quickly. You did not address the cancellation of GST on books. I want to know if you have a proposal regarding this matter. As you are aware, provincial sales tax in Quebec, the TVQ, is not applied on books. Does your association have an opinion on that?

Finally, I want to say that I am totally in favour of the recommendation for a refundable tax credit for the disabled that the Canadian Association for Community Living has put forth. The issue we face is that we are fighting for the right of actual disabled people to have access to such a credit; one must be a “vegetable” to get the credit the way the law is applied today. I wonder though, if we are at risk of diluting the message by simultaneously asking for greater access to the credit for the disabled and by asking for it to be a refundable credit. That being said, I agree in principle with this idea and I am ready to defend it.

Lastly, let me point out that the Minister of Finance has indicated yesterday he is willing to meet with the various associations concerning this question. I encourage you to follow up on his offer.

Those were my questions Madam Chairman.

[English]

The Chair: We'll go, for the answers, by the order of the questions.

Mr. MacKinnon.

Mr. David MacKinnon: Thank you.

Our recommendation is that the government announce in its 2003 federal budget an additional investment of $2 billion and $3 billion in 2003-04, for a total of $5 billion in incremental CHST cash transfers allocated to provinces on an equal per capita basis. There is other fine-tuning one could make to the actual amounts, knowing that at the end of the day, the contributions provinces have been asked to make to the health care system are very high as a proportion of their expenses. We do think the federal government has room and an opportunity, and I think a duty, to do a little more.

On the first issue you raised, Mr. Paquette, about the share, we have generally, in most of our presentations, accepted the argument that tax points should be considered when everyone debates this issue. If you accept the position of the federal government basically in that respect, the amount the federal government is contributing, using that line of argument, is in fact closer to 30%. I think I'd want to acknowledge that. There is a difference of opinion. At the end of the day, however, we don't believe the federal share is at the 50% level contemplated when medicare was originally put in place. Sadly, when your hair is the colour of mine, you can remember that time.

À (1005)

The Chair: Mr. Grills, from the Writers' Union.

Mr. Barry Grills: Thank you.

That wasn't incorporated in the brief, because you almost get used to it. I wouldn't want that to imply that we're in favour of GST on books, because we're not, from both a cultural and an educational point of view. It is an impediment to a certain degree, in that it commodifies a cultural object from a tax point of view, if I'm being clear on that. We would endorse eliminating GST on books purely from an educational point of view. Regardless of the Internet, it's still the major means by which people learn and by which people understand their culture. I know Quebec particularly is sensitive to this very issue. Ideologically, we support the notion that if you want to maintain your culture, you have to use every means possible to bring a cultural sensitivity to people. You do that best through books, and you probably do it better when they're GST-exempt.

The Chair: Mr. Bach, did you want to address that question too?

Mr. Michael Bach: I would just say we're quite happy to meet with the Minister of Finance again. We thought we had made our positions clear along with other associations in the context of the hearings for the committee on HRDC and through the ongoing consultations with the Canada Customs and Revenue Agency, and you have put significant resources into that process, but we'll do it again.

As to refunds, we're talking specifically about the commitment in the throne speech to low-income families with children with severe disabilities. We're saying that is clearly going to have to be a refundable component in the tax system if we're going to reach low-income families. We're saying that's a great place to start. We're hoping the Government of Canada can proceed on that.

[Translation]

The Chair: Is that all Mr. Paquette?

Mr. Pierre Paquette: Thank you, that is all.

The Chairman: Mr. Wilfert, you have 10 minutes.

[English]

Mr. Bryon Wilfert (Oak Ridges, Lib.): Thank you, Madam Chairman.

I thank everyone for coming this morning.

Our task is always daunting, trying to make sure, first of all, we don't go into a deficit, which we will not do, at the same time looking at some of the strategic investments that are being proposed.

I want to first say to the Canadian Association for Community Living that there's obviously a lot of disinformation out there. Very clearly, the amendments that are proposed and have not been put into effect should not disqualify anyone who previously qualified in accordance with the intent of the DTC. In fact, the DTC was never designed for someone to say they don't have the particular food items they want near their home, so they have to drive. The minister has made it very clear, and as his parliamentary secretary, I'll reinforce it. We have been meeting with key organizations. We do not intend to have people who currently receive the disability tax credit disenfranchised. In fact, we're talking about a government that currently provides $3 billion in programs and $1 billion in tax measures.

So what has been circulated is not true. I am concerned about some of the sensitivity that CCRA sent out in respect of their questionnaires to see if people qualify. But I emphasize again that the intent is not to disenfranchise anyone who currently is to receive these dollars legitimately.

As far as the OHA is concerned, it has to be no surprise to you that we have never funded medicare at 50%. There was never even the intent in the 1960s to do that. Currently this year under the CHST, we're providing in cash and tax points $35.7 billion, of which $16.6 billion are tax points—which the provinces, of course, conveniently forget.

My question to you, Mr. MacKinnon, is where would you stand on the unbundling of the CHST for each dollar sent directly to provinces? For each dollar we send them, of course, we need accountability and transparency, which we don't have. The Province of Ontario last year announced $1.2 billion in new health care funding, of which $1.1 billion was federal transfers. In my view, if you want to take tax cuts first--which is quite legitimate of the government--but at the same time turn around and say you want the federal government to fund you for health care, it doesn't wash.

As for your point about providing additional dollars as an emergency or transition during the debate as to what kind of health care system we want, and then what kind of health care system we can afford, I would be very much opposed to providing any extra dollars without corresponding transparency and accountability, which I do not see from the provinces. Their 14-cent ads are absolute nonsense, and anybody with half a brain knows that when they see them. I've given you the figures. The figures are very, very clear.

Regarding the Writers' Union of Canada, I`m for anything we can do to promote Canadian writers in this country. The only thing I would like to get from you, sir, is some analysis of the cost provisions. This would help us in our deliberations.

As far as the Canadian Federation of Apartment Associations is concerned, I am very sympathetic to what you're looking for. I'll take any comments afterwards. But again, Mr. Brescia, you know that I have said this to you before: we need corresponding support from municipalities.

Development charges are an example. Some municipalities--who I won't name, although you know the ones that I've flagged before--are not prepared to waive them. They want to have their cake and eat it too. As an old municipal politician, I can tell you we would all like to do that. Unfortunately, it's not very practical. If you're going to provide that kind of incentive in the tax area, the municipalities and the provinces.... And unfortunately in this country we have the curse of living in a federal system where the jurisdictions are not black and white in many cases. They are in fact grey areas. We need to have some clarification on that.

I would hope that your figures are as accurate as you say they are. I think there is something there that we need to be pushing in collaboration with our colleagues in the other two orders of government in order to move quickly on that. The rental rates are shameful.

The last thing I was going to comment on was the Association of Canadian Pension Management. Could you provide some elaboration on the costs, particularly the effect of taxation on total pension income at 50%? What would that impact be? At the end we don't want to go into a deficit, yet we have all these wonderful demands. So how do we deliver them?

I will take any comments anybody would like to give me.

À (1010)

The Chair: I will go in the same order, again. We will start with the Ontario Hospital Association.

Mr. MacKinnon.

Mr. David MacKinnon: Madam Chair, I'd like to just respond to three or four aspects of the question.

First of all, on the original intent of medicare, I worked in the office of the Ontario minister of finance at the time. There was a general sense of partnership. Ontario was dragged reluctantly or screaming into medicare in the first place.

I recommend very highly some comments made recently by a former Quebec minister of health on what went wrong in terms of the original intent. His view is that we lost sight of the fact that it was intended to be insurance, not fundamental and complete entitlement for everything. I think that is what went wrong. But I don't have an immediate reference for the speech.

But at the time, as I recall, there was a sense that this would be a joint partnership between provinces and the federal government. There wasn't quibbling on whether it was 50-50, but I think the implied understanding was that it was.

On the second issue of tax cuts, standing back from that issue, all Canadian jurisdictions, federal or provincial, that have made tax cuts have probably not looked at what it takes to provide world-scale public services that contribute to the maximum extent to our competitiveness. I think this applies to all governments or jurisdictions. Effectively, in solving the major government deficits in the early nineties, we've created a series of new deficits and they show on the books, and sometimes off the books, of other public institutions and that is our central problem.

On the third issue, I reiterate, in everything that we produce on the federal government's contribution to health care, we show tax points. I don't think, in the end.... We disagree, by the way. I wouldn't think it was 35, I think it would be more like 30, but we're within the ballpark. I think the department needs to look at it again. I think it would be about 30. Again, in relation to the original general tone, I think that 30 is probably a little low, but I accept absolutely the argument that tax points should be considered by anybody who looks at this.

Finally, I have two very brief comments. On the additional dollars, insolvency is a really tough taskmaster. We are in very serious difficulty every day operating hospitals in Ontario and we're three-quarters the national average in terms of size and accessibility to our population. We really do essentially have an emergency problem here. It's been building for years. We've been warning about it for years. But it is an emergency. It's a tough taskmaster. We absolutely have to manage, whether this system is stabilized over the next few months, the next years, and that will be a precondition for any national successes Virginia has mentioned in terms of health care reform. We are insolvent. We're the biggest part of the national public sector infrastructure. We have to solve it.

À (1015)

The Chair: Thank you. I have to mention the other people, otherwise the time will expire.

Go ahead, please, Ms. Windsor.

Ms. Deborah Windsor (Executive Director, Writers' Union of Canada): Yes, my question is a process question.

Thank you, Mr. Wilfert, for your comments on culture. It is very important.

There are financial numbers and economic statements we can make available to you that would identify both the cost to implement these, as well as the revenues to be gained.

My question is a process question and I'm not too sure if it goes to you, Madam Chair, or to the greffières. When and how do we present this information?

The Chair: With respect to any further materials that you wish to present, instead of sending it to the individual member, if you send it to the clerk of the committee it will be translated and distributed to all members of the committee.

Thank you very much.

Mr. Bryon Wilfert: Could I advise you that we need it--

Ms. Deborah Windsor: Yesterday?

Mr. Bryon Wilfert: --tout de suite; otherwise we won't be able to incorporate it.

The Chair: On the rentals, did you have a quick comment?

Mr. Vince Brescia: Thank you very much for your comments and your question, Mr. Wilfert.

You're absolutely correct that there is a problem at the municipal level. We certainly don't deny that. And some municipalities have even stated publicly in the papers recently that they simply don't want rental housing in their municipality. However, what I would ask is that you not use that as an opportunity to suggest that the federal government doesn't need to do anything till the other level does because we do face, at each level that we approach, the situation where the municipality will say it's the province, or the province will say it's the federal government, and our view is that everybody can make a contribution.

The good news is that municipalities are becoming more aware of the impact they have on development. In your own backyard, for example, York Region is in the process of equalizing taxes for multi-residential in an effort to promote new rental development and they are looking at waiving development charges. So progress is being made, but thank you for your comments.

The Chair: Mr. Bigsby, did you wish to comment on the pension, and then we'll move on to the next round with Mr. Valeri, maybe.

Go ahead, please.

Mr. Stephen Bigsby (Executive Director, Association of Canadian Pension Management): Very briefly. It's a fair question, and we are persistent in asking the finance department to give us their cost estimates, obviously, since they have direct access to the data.

On the capping effective rate, we'll be asking that request specifically, but we have not yet done so. Our estimation is this is really something that tends to have an impact on people's behaviour on the margins, particularly the kick-in, as you're familiar with it, at about $53,000, I think it is now, where people are being clawed back.

Quite frankly, we think it's linked to the issue of increasing the income ceilings for middle-income and higher-income Canadians, because if the contribution limits were raised, quite frankly, I think a lot of those people would support policies that would basically reduce the amount of the old age pension they would get. They would be quite happy to arrange their affairs otherwise.

I'd just like to add one point, too. It's quite correct that you people hear all sorts of demands from very worthy constituencies, including us, for tax expenditures. On this issue--and I'm just putting it as a question to the committee, and we'll go into it in more detail--increasingly I talk to the compensation people and the HR people in large corporations in Canada that are headquartered and have big operations, growing operations, across the border especially.

On this issue of the $75,000 limit above which you cannot contribute tax-deferred contributions as an employer, when it was originally set up we were talking about people in pinstripe suits who were chief executives, or a couple of people in the corporation. Well, we're now talking of many corporations in Calgary, Montreal, Toronto, or wherever, where they have dozens and hundreds of employees, some of them very technical employees, who hit these ceilings long ago. It's beginning to become--and I ask the question, and we don't have the answer to this; it's with a number of other important issues, I grant you--an issue we have to be careful about in terms of the other big issue for this government, which is competitiveness, in terms of protecting our tax base, meaning protecting our corporate headquarters base as more and more of our companies do more and more business across the border. We're talking about companies like CN and other companies that do more business in the States than they do in Canada.

I throw that issue out, because you want revenues, obviously, and I think the issues are related.

À (1020)

The Chair: Thank you.

Mr. Valeri, you have eight minutes.

Mr. Tony Valeri (Stoney Creek, Lib.): I have a couple of questions to the Association of Canadian Pension Management. Looking at your four-point plan, my first question would be, why $150,000? The Retirement Income Coalition has been before the committee and has been advocating the $19,000 to deal with the $103,000 anomaly that's developed as a result of the tax changes that were made. I'm interested in whether you're in sync or whether there's a difference of opinion on the $150,000.

The second question would be to seek more of a reaction from you to what Malcolm Hamilton has said--I don't know whether he's said it in front of this committee, but I have certainly heard him say it before--that part of the challenge with the retirement income system is that governments, and I think I'll say “governments and stakeholders in the retirement industry”, have been advocating that people need to contribute to registered retirement savings plans to self-sustain themselves going into the future. Yet I, as a member of Parliament, and I'm sure other members around the room, deal with the impact of the clawback of OAS and GIS. In some instances perhaps they have an income level of $30,000 or $35,000 that leads to collapsing an RRSP or something that takes them far and away beyond any threshold. They look at the $5,000 and see they may have lost $1,000 or $2,000 as a result of it and come in asking: “Why did we save? We save, we struggle, and yet we're penalized at the end of the day.”

I'm seeking a reaction to what Malcolm has been saying, that some Canadians, at some income level--and I don't recall at what level--should no longer consider contributing to RRSPs, because the pension system we have in Canada--Canada Pension, OAS, GIS--will give them a standard of living equivalent to their pre-retirement years without contributing to RRSPs; and in fact they get into trouble contributing to RRSPs in their pension years. I'd like your reaction to that.

The last comment I'm looking for involves your third point, I guess it is, which talks about Canada's current patchwork quilt of federal-provincial regulation. There's a lot of discussion about that involving the securities commission, and certainly on the pension side as well. I'm interested in your reaction when you speak to provincial governments. How motivated are they--in particular, I would think, Quebec? How motivated would Quebec be in engaging in this type of thing, and who should be taking the lead?

I think the feds should be taking the lead, but I think the industry needs to do a lot in convincing provincial governments that they should be pushing forward because it's in the best interests of pensioners and pension holders.

I have a couple of questions for others, if possible.

The Chair: Let us hear from Mr. Bigsby or Ms. Forsythe.

Ms. Wendy Forsythe: Thank you very much, Mr. Valeri, for your comments. Stephen and I will play tag team on this, and I'll pick up on your question with respect to Malcolm Hamilton's position and comments. Again, I don't know if he made them directly to this committee. The main issue there is we have almost--I don't know if we'd call it that--a two-tiered system. Certainly when I've heard Malcolm speak on this point, I think he's looking at lower- to middle-income Canadians.

The issue there is the high tax rates that apply for working Canadians during their working careers and trying to encourage those individuals to also save for retirement during their working careers, when they have added pressures of mortgages and raising children and families. At the end of the day they may have been in a better position to avoid paying those additional payments to RRSPs because the government program will meet their needs. That is his position. I think there is an educational issue there that we need to reinforce.

I think what we're talking about is trying to level the playing field for people who are at the middle- to high-income levels, to be able to allow them the opportunity to make those contributions so that at the end of the day they retire with a reasonable replacement rate. And those individuals are in a position during their working careers and would like to have the opportunity to make those additional tax incentive savings during their working career.

We have two elements: the lower- to middle income earners who now have the opportunity through the tax system to make those contributions but really are probably not necessarily well served in doing that, and then you have people at the other end of the spectrum who need and want the opportunity and our system doesn't allow it.

À (1025)

Mr. Stephen Bigsby: On the uniformity, Mr. Valeri, I'll be very brief.

You may not know this, but the provincial regulators seem to be on side through their association, CAPSA. Apparently they have hammered out--and it's taken a long time--some regulations, which would be the basic principles that would lead towards greater harmonization. We're on record as actually liking uniformity with a simple, single law, but that may be overly ambitious.

The challenge now--and I think you put your finger on it--is for them to get the attention, get on the radar screen, of their political masters in each of the provinces, finance ministers and other ministers. That will be done, apparently, or be attempted, in the spring. The message is loud and clear from the regulators who talked to us in the different regions: you have to mobilize the employers, the plan sponsors, and the union trustees who are responsible for this so that they can get the message up politically, because that's what it's going to take. It's not an issue that's on their radar screen at the moment. But there seems to be a wide consensus, including, I might add, from the Régie des rentes du Québec, which has been very active in the process.

Mr. Tony Valeri: On the issue of your $150,000 versus the--

Mr. Stephen Bigsby: The $103,000, we say progressively, and we quite recognize that this is not going to be done overnight. There is a tax expenditure or a tax deferral issue here that has a real impact on government revenues. The $150,000, if you like, is our estimate of what we probably need in order to become much more competitive with the U.S. The $103,000 makes a lot of sense.

Mr. Tony Valeri: As a starting point.

Mr. Stephen Bigsby: Yes.

Ms. Wendy Forsythe: Perhaps I can reinforce one further point going back to the first comment around the lower-income Canadians and that they should be able to rely on the first pillar or the government-sponsored programs. That is all premised on the fact that those programs remain sustainable on an ongoing basis so that the Canadians who are in the workforce now who are counting on relying on those programs can expect to see them in the current state when they retire.

Mr. Tony Valeri: Agreed.

The Chair: Thirty seconds.

Mr. Tony Valeri: Thirty-three seconds.

I want to relay an experience and perhaps get a reaction.

Last week I was in a health caucus meeting in Hamilton. I think it may have been the first of its kind, certainly for us, where we had hospital administrators, community care doctors, politicians, the public at large, and we broke into working groups. I was absolutely astonished at the lack of communication that existed between what I'll call the different pillars of health care, at the medical practitioner not knowing what type of community care assistance was available or not being able to access that information effectively and quickly. And certainly there are the anecdotal issues of waiting lists and waiting times and how it's cheaper in our system today to send someone to the hospital to have a test done surgically than buy the equipment and the technology to do the internal scoping that's required. It's the situation certainly at QE II in Halifax that I've become aware of.

I'd like your reaction to that.

In your chart on page 15, you talk about buildings, major equipment, and other aspects. You don't outline or specify the need for investment in technology.

Could you comment on the importance of technology? How might it impact on health care reform, the elimination of all the patient files that exist, and the lack of knowledge that exists among physicians, specialists, specialists to home care, and community care practitioners?

À (1030)

Mr. David MacKinnon: We believe in transparency on all the data. You have a supplementary presentation from us that describes much of the statistical data on the system. If it's transparent, people can understand it better and you can move on.

I'll ask Virginia to comment very briefly on the other aspects of the question, including how to translate and get better information and collaboration among providers.

Ms. Virginia McLauglin: I think we all agree it's critically important that there be a seamless system, irrespective of how it might be structured or governed. There should be a seamless system from the perspective of the patients so patient records, various aspects of the system, and various providers can access the information they need so it can be as smooth, efficient, and effective as possible.

The Chair: Mr. Masse, you have eight minutes.

Mr. Brian Masse (Windsor West, NDP): Thank you, Madam Chair.

Unfortunately, Mr. Bach had to leave.

For the record, I do want to express my disappointment, as I am doing in the House as well, with the disability tax credit situation. It's completely deplorable. It's an attack on the disabled. We have $1 million in tax capital gains laws that have been changed. I think it has to be put in context.

As well, there are other issues with the disabled in employment insurance, for example. It's unfortunate you can't respond to this.

When I used to work for Community Living in Mississauga as an employment specialist, I would employ persons or help them find employment. I would work underneath unemployment insurance laws for maybe 10 or 15 hours. They could never collect unemployment insurance when they lost their jobs. There are many issues about taxation on the disabled that could be discussed and altered.

Going through our panel, we do have Mr. Brescia available. With regard to housing, in percentages, what type of impact do you think would happen? What would it do to the overall market if there was an implementation of the measures you suggested?

Mr. Vince Brescia: Thank you for your question.

It would be difficult to quantify an exact number in terms of where we would see the “starts” numbers move if you made the tax changes. From looking at the tax history charts, we have seen federal tax changes can have an impact on supply.

When we look at the past when the federal government has made an attempt to restore previous tax policy through, for example, MURB programs, they did have an impact on supply. We do know there will be a net positive impact.

In terms of quantifying the amount, it would be difficult to say. Certainly we think the starts are so low, at around $5,000 a year for the past few years, getting them up significantly would not take a great effort.

Mr. Brian Masse: Could the elements you have suggested be phased in as well? I know you have suggested several changes. Would it be better to do it right away?

Mr. Vince Brescia: I think it would be better to bundle the packages. The need is clearly there. The shortfall has been there for a number of years. I think if you really want to get things going, you bundle the packages. Then you can monitor the impact you've had by putting them all together. It's what we would suggest.

Mr. Brian Masse: With the Ontario Hospital Association, Mr. Valeri was touching upon an important subject with regard to data management and so on.

What is the estimated cost for Ontario or even the country to go to a standard data management process? Has it ever been quantified?

I know I've met with my local hospital association and hospitals. They have done some work together. There hasn't been a full integration. It is costing money because the processing and staffing time required are somewhat outdated.

Has it ever been looked at?

Mr. David MacKinnon: Not in the form that would correspond with the question, but we have looked. We have an e-health organization representing all the Ontario hospitals, some other health providers, as well as the private sector, that looks at the issues. The amounts are very large.

Virginia and I were trying to recall what the overall total would be that would best correspond to your question. I don't have it.

It is clearly the major opportunity for the system in the future. Indeed, if we don't modernize the technology, the public system could be blown away by American competition within ten years if we fail. It's how important it is.

Mr. Brian Masse: That's the message I got locally.

I know it's kind of a small point in your recommendations on new technology, but at one of our two local hospitals they spend half a million dollars in single-use devices, but the federal government has no standards in the criteria of single-use devices. So the manufacturing industry is determining the actual devices used, and then nobody backs them up with regard to liability if there is contamination or a problem.

Do you think the government should take some strong measures, in either guaranteeing some liability or sparking some innovation, by having some standards on single-use devices?

À (1035)

Mr. David MacKinnon: We have had many discussions on the subject of single-use devices, as you would expect, but I'm just not current on them in the last six months.

We have had problems getting regulatory conformity--the standards agreed to--across the system and with other jurisdictions. Beyond that I wouldn't comment, except to say we have been very much seized with that issue. It is an important thing to focus on in the future. It has major consumer impact, and our solvency issue is not helping it.

Mr. Brian Masse: Do you think some weight could really be applied, if there were a specific target or strategy to get in there? That's the indication I got from my local group. For example, part of a device could be used and part of it could stay, but the manufacturer has no incentive because they want you to buy the same thing over and over.

Mr. David MacKinnon: There's opportunity for a lot more progress than we've made over the years in dealing with that problem. I'm sorry I don't have a more specific answer than that. It's a big issue, there's a big opportunity, and there's a big risk if we don't realize it.

Mr. Brian Masse: To Mr. Barry Grills, on employment insurance benefits and recommended changes, how many people would potentially be affected? Would it really help to develop careers, so part-time jobs could be used as more of a backbone for the arts community?

Mr. Barry Grills: With respect to writers specifically, I would say somewhere between half and up to three-quarters of our membership would be involved. The recommendations, of course, would not just apply to writers. There are a number of people in similar circumstances who aren't writers, or possibly even artists.

I think those numbers are significant. Most of us, as self-employed people, may contract things or have part-time jobs to supplement our royalty incomes. It's important to note--in a sense this answers Mr. Wilfert's question, as well--that in a broader sense in the cultural industry there's a huge gap between the actual creators and the people who derive their income and pay taxes from the cultural industries themselves.

There are nearly 9,000 employees related to writing and publishing alone who derive an average of $40,000 a year in income. There are 13,000 authors who derive income from royalties of $11,000 per year, on average, and that's shocking. So EI benefits cushion the blow for people who have part-time jobs and then lose that employment, because part-time jobs tend to be a little risky by nature. But my educated estimate is that we're talking about half the membership, at least.

The Chair: Thank you very much, Mr. Masse.

I'm going to ask your indulgence to go for another eight minutes for my final questioner.

Ms. Minna, go ahead.

Ms. Maria Minna (Beaches—East York, Lib.): Thank you, Madam Chair. I' would like to split my time, with four minutes for pension and four minutes for health, if I could. Maybe you could help by cutting me off at four minutes.

The Chair: Does that include the answer?

Ms. Maria Minna: Yes.

The Chair: Okay.

Ms. Maria Minna: On pensions, first of all, I support the fact that there needs to be an increase. We need to allow people to declare more if they can afford more. We are trying to prescribe how they save, and I don't think that's fair.

However, when I look at the data, I find that 59% of tax filers do not use any form of RRSP at all, and that's a fairly large number of our population. And 4% are contributing about $10,000. The average contribution is $5,700, and then only 10% of tax filers with room will maximize their RRSP contribution. This is down from 11% in 1997. And 45% of that 10% are actually using up the whole available contribution room. So, in essence, we're talking about a very small number of Canadians who are really benefiting and who are really able to use and maximize this system.

So my question to you is twofold. One is, given that most Canadians can't really use an RRSP because if you save $40,000, $50,000, or $60,000 you might as well put it in the bank, because it doesn't really help you in terms of...? The CPP, OAS, GIS system is not really keeping people out of poverty. More are starting to slip below the poverty line. I know there are people in some of our ridings who are actually selling their homes so that they can make payments and keep up their homes. Some 28.7% of those who are on GIS, especially the unattached, are living below the poverty line. That has actually gone up from the last year. So there needs to be an increase in GIS.

Do we need to review our pension structure--strengthen the RRSPs, yes, but also perhaps look at a third option that would allow Canadians to contribute something, in addition to the CPP and OAS, along their ability to afford, below that level? Should we be looking at something else?

À (1040)

Ms. Wendy Forsythe: Thank you for your comments.

One of the things our association has been promoting is a comprehensive review of the entire retirement income system. We have issued a comprehensive paper that we updated about two years ago. We would strongly encourage the federal government to take a proactive role in helping to initiate a comprehensive review that would address exactly the issues that you have raised around looking at all three pillars of our retirement income system.

We focus on what we see are some gap areas, particularly related to higher-income workers, but you're absolutely right. We need to look at the public side of the equation, what we provide from a public-sponsored program basis, what is being provided by employers, and what individuals can save on their own, which speaks to your point. Whatever we do, we have to look at it not in a piecemeal way, but by looking at the whole program.

Mr. Stephen Bigsby: The 4% that you're quoting from, Ms. Minna, does that refer to the RRSPs, the percentage of people using them or pensions in general plus RRSPs? I believe it's RRSPs.

Ms. Maria Minna: RRSPs, yes.

Mr. Stephen Bigsby: So for all the people who have company pensions and can't contribute to RRSPs or can only supplement them, that's a much larger number, but your figures for RRSPs are correct.

Ms. Maria Minna: Yes.

The Chair: If you would like to send in to the clerk your comprehensive review paper, I could have that circulated.

Thank you.

Ms. Maria Minna: I would like to add that I agree with you 100%. In fact, you're very much in sync with the women's caucus, which is in fact at the moment looking at trying to start an overall comprehensive review of our pension system. So that's why I ask my question.

Okay, on health, there's no question that we need more money. I think that's a given for most people. With respect to funding, Ontario does receive per capita transfer both under the current interest use transfer and under the agreement that was done in September 2000. That was changed a few budgets back, if you recall. I'm going to a comment that was made earlier with respect to the per capita basis.

My question, though, has to be on the overall restructuring system, assuming that there needs to be more money and that's not an issue.

However, in my riding I have the Toronto East General Hospital, which is a regional hospital. It did a major study with all of its partners in the community and so on, and it's called From Silos to Solutions. It's called that specifically because once the study was done it was identified that, in fact, all of these community services and other semi-health services in the community and the hospital itself were not talking to one another, including the doctors in the community. People were slipping through, especially seniors who would be in hospital. Nobody knew they were in, services would stop, they would come out, nobody knew they were out, and they would get sick and they would get back into the system again.

So I'm asking three things.

Firstly, how do we get to the point of some restructuring, some reorganization of the system to maximize the dollars in addition to adding more dollars? In the example I gave, when they made their recommendations, additional money was third or fourth on their list, but the other things were important.

Second, how do we get accountability in the system? Should we be decoupling the CHST to get accountability? I'm referring to the MRIs. The regional hospital has been waiting for an MRI for 10 years. When we got the transfer from the federal government of the $1 billion for diagnostics, Ontario gave it to the private sector. We still don't have an MRI in the hospital. There should not be any hospital in existence without the proper diagnostic equipment.

So how do we do the accountability? How do we deal with this problem of different levels of government, where one is doing one thing and the other one is doing another? To me, accountability is very important in the system, in terms of both outcomes and how the moneys are tracked.

The other has to do with long-term care. We have bed blockers and we have to deal with that issue. We can't continue to say we reorganize and restructure.

Okay, I'll shut up. I have lots of other ones, but go ahead. It's a big issue and it's not easily done in two minutes. I understand that.

À (1045)

Mr. David MacKinnon: I'm going to take 30 seconds on the first and the third, and then ask Virginia to do the second, if I may.

On the issue of reorganization, we measure many of the things relating to health--hospitals in Ontario, work with other organizations. We do it in our report card, and 70% of the people are very satisfied with the handover to long-term care. Compared with three or four years ago, more than twice the number of hospitals are circulating electronic records.

What we have to do is get rid of people's propensity to pontificate on this and actually get down to the evidence. That's the first issue.

Ms. Maria Minna: Yes. I just gave you evidence--

Mr. David MacKinnon: I'm going to ask Virginia to talk about report cards in relation to accountability in just a moment.

On the long-term care issue, I couldn't agree more. We really do have to get that issue. It's impeding the functionality of most Ontario hospitals. We have to really get it.

I was very impressed with the Kirby report on the funding of new home care services and how that can be coordinated through hospital budgeting so that there's a smooth transition there. With that, I'll stop.

Ms. Virginia McLauglin: I guess I'm supposed to answer the question on accountability, but I'd be very happy to talk about reducing silos as well.

In terms of accountability, as I said earlier in response to Bryon Wilfert's question, we absolutely embrace accountability and the importance of accountability. Exactly what form that takes and how that rolls out depends on exactly what it is we're trying to be accountable for.

One of the issues we've been discussing in Ontario internally and with the Ontario government is not only financial accountability--of course financial accountability is absolutely key--but also accountability for outcomes.

So I come to the report card, which David alluded to. The report card for Ontario hospitals, as you recall, doesn't only refer to financial accountability; it looks at a variety of factors to try to get a balanced scorecard. For example, you can provide the most efficient care in the whole entire world, but if it's not patient focused, the patient may have a really bad experience. I think there has to be a balance.

In terms of accountability, we absolutely embrace it. We work with the hospitals. In fact, I'm a trustee of a hospital, and the trustees embrace it. It's a matter of specific kinds of accountability for specific things.

With respect to the MRI you referenced, as you are aware, the Ontario Hospital Association would very much like to see the hospitals being able to participate in the provision of the increased MRI and other technologies. We very much agree with that.

Ms. Maria Minna: Can you talk about silos?

The Chair: You can take two seconds on silos, but we have another panel in three minutes.

Ms. Virginia McLauglin: All I would like to say on silos is that the Ontario Hospital Association did a paper on regionalization not long ago. I think it's fair to say that the jury is out on regionalization. There are many very positive aspects to regionalization, but whether it actually accomplishes all the ends that we would like to see.... It's still relatively new. In many cases physicians aren't included in regional authority.

The principle is to reduce the silos and to find the appropriate ways to do it. We absolutely agree. Information technology is a key component of that. People's attitudes are a key component of that. We have to break it down so that people are talking to each other. We need to provide care for patients in the best possible way for patients.

À (1050)

The Chair: Thank you very much.

On behalf of all the members of the committee, first of all, thank you for preparing your briefs, sending them in so we could have them translated and distributed, and for taking the time today to come and present in the brief time that we have allowed, because we are trying to get so many people before us in a short time, but also for answering our questions. We very much appreciate your efforts. Thank you.

We'll suspend for five minutes and then start the next panel.

À (1045)

À (1050)

The Chair: Welcome to everyone.

[Translation]

Welcome to everyone.

[English]

This is the second panel of our morning hearings, pursuant to Standing Order 83(1), on pre-budget discussions.

We have seven witnesses in this panel. We welcome, from the Campaign Against Child Poverty, Caroline Di Giovanni, director of public affairs for the Catholic Children's Aid Society, Gerald Vandezande, campaign spokesperson, and Jacquie Maund, coordinator; from the Canadian Association for the Fifty-Plus, William Gleberzon, associate executive director, and Judy Cutler, director of communications; from the City of Hamilton, Luciano Piccioni, business development consultant and brownfields coordinator; from the Direct Sellers Association, Mr. Millar, the senior partner of Millar Wyslobicky Kreklewetz....

Could you give me the full pronunciation of the firm?

À (1055)

Mr. W. Jack Millar (Senior Partner, Millar Wyslobicky Kreklewetz; Direct Sellers Association of Canada): Madam Chair, I think we can just say MWK, tax lawyers.

The Chair: That's much simpler, thank you.

We have as well, from the National Council of Women of Canada, Catharine Laidlaw-Sly, president; from the Toronto Disaster Relief Committee, Cathy Crowe; and from the National Housing and Homeless Network, Michael Shapcott, co-chair.

Thank you very much, all of you. I will give you seven minutes to make your presentation, and then we'll go into rounds of questioning. We'll try to finish around 12:15, so it's very tight on time. At around six minutes, I'll hold up my pen just to give you a one-minute warning. And a minute is not as short as you think it is. You can still get about five or six sentences in. I'm sorry about the time constraints, but that's reality.

We'll start with the Campaign Against Child Poverty. Go ahead, Madam Di Giovanni, for seven minutes.

Ms. Caroline Di Giovanni (Director of Public Affairs, Catholic Children's Aid Society; Campaign Against Child Poverty): Thank you, Madam Chair.

I'm very pleased to be here representing the Campaign Against Child Poverty. I have with me Gerald Vandezande and Jacquie Maund.

We've been here before, but we're pleased to come once again, because we keep always in mind the all-party resolution in 1989 to end child poverty by the year 2000. We're not doing well on meeting that goal, but we continue to push.

We continue to look for the kinds of signals that appeared in the throne speech of 2001, and again this September in the throne speech, which was very well received. I will quote from it:

“The government will put in place a long-term investment plan to allow poor families to break out of the welfare trap.... It will again significantly increase the National Child Benefit for poor families, and will work with its partners to increase access to early learning opportunities and to quality child care.... It will extend its investments in affordable housing for those whose needs are greatest....”

Campaign Against Child Poverty is a group of people who volunteer their time to bring these issues forward as consistently and as well focused as possible, time and time again, because we know that messages don't get into the throne speech unless they've been prepared ahead of time and unless there's been a good deal of work to back up the requests and the issues brought forward. So we're pleased to see some kind of response and some level of response.

I'm going to begin with the recommendations, and then I'll turn to Jacquie Maund, who will give you the statistics. After that Gerald Vandezande will take some of the time to answer the questions.

The first message is a simple one. The government has said the right things, now we want you to do the right things. We call on you to address income security by improving the child benefits for all low-income families. Consolidate the child tax benefit into a single program providing a maximum benefit of $4,200 per child to families living in poverty. Strengthen the early childhood development agreement by holding the provinces to task and stopping the clawback of benefits for those on social assistance. That's a very significant point.

The second recommendation is to invest in early childhood education and care with a $1 billion investment in the next federal budget to establish a national child care strategy working with provinces and territories, or if that's blocked somehow, go directly to willing municipalities. Much of this is discussed in John Godfrey's report, and it is an affordable piece of work. When Jacquie Maund speaks, she'll explain how that sort of investment can work to our benefit.

The third recommendation we want to bring forward is to increase the availability of affordable housing. The reason for this is that children do not live alone, they live with their families. Child poverty is a sign of family poverty, and stable housing is a way to ensure health and safety for children. So increase the availability of affordable housing by supporting a level of 25,000 units annually targeted at the high-risk population. Hold provinces and territories accountable in bilateral agreements, and where matching provincial funding is not forthcoming, work directly with willing municipalities and not-for-profit organizations.

Now I'll turn to Jacquie Maund to supplement my remarks.

Á (1100)

Ms. Jacquie Maund (Coordinator, Campaign Against Child Poverty): We've presented three recommendations. I'd like to give you some of the background, some of the thinking behind those recommendations. I understand that the mandate of this committee is twofold, to look into means of assuring greater levels of economic prosperity widely shared by all Canadians and ways the government can best assure the highest quality of life for all. We're speaking on behalf of families and children in Canada who live below the poverty line, so these are clearly people to whom we feel your policies and your recommendations should be addressed.

We believe one of the key answers to the two questions you are dealing with is that the federal government must make significant social investments in the next budget. In his financial update last week we heard from Minister Manley that the economy is doing quite well, with a 3.4% economic growth rate predicted for this year and a very healthy financial surplus of $8.9 billion for last year. So with such numbers, what do we have to worry about? The economy is doing well, our books are getting better. But I'd like to present to you four statistics to indicate that this wealth is not shared by all, a concern we feel you need to address in your budget deliberations.

Can we say Canada is indeed enjoying economic prosperity when over 1,298,000 children in our country are growing up in poverty? That's almost one child in five you see in your communities, homes, and schools living in families where Statistics Canada defines them as below the poverty line. These are not all children on social assistance or on welfare. There are, in fact, more than 579,000 children who live in families where the parents are employed. So we're talking about the working poor as well as those who, for whatever reason, are not able to work.

How can we say that Canada is enjoying economic prosperity when over 747,000 Canadians, of which 305,000 have children, received emergency groceries in one month last year? So there are hungry children in Canada.

Yesterday a report was released by the Canadian Council on Social Development, and it notes that here in Ontario almost 15,000 children are in the care of child welfare services. That's up about 5,000 children from five years ago. And regarding child care, the issue of what care we provide for our children when we're in the workforce, there are only child care spaces for every one child in twelve, so another eleven are on the waiting list.

The final statistic I hope you're familiar with. Economic inequality in Canada has worsened. The richest 10% of households increased their net worth by 35% between 1984-99, while the poorest 10% of households sank further into debt.

We raise these statistics to negate the widely held belief that economic growth alone can solve the problem of child and family poverty in the country. I'll conclude by referring to a UNICEF study that ranks OECD countries. It concluded that state provisions, state policies have indeed made the difference in reducing child poverty rates for countries in Europe. And we refer back to our recommendations to say that is what we feel the government needs to address here in the next budget.

Thank you.

Á (1105)

The Chair: Thank you very much.

Now we'll move to Canada's Association for the Fifty-Plus. Ms. Cutler.

Ms. Judy Cutler (Director of Communications, Canada's Association for the Fifty-Plus): I thank the committee for allowing us to do this addendum to our earlier brief, which we submitted to you in May. A copy of that brief is attached in our package today.

I'd like to begin by talking about home and community care. Within the health care system annual guaranteed funding must be dedicated specifically for home and community care, with the objective of doubling the current national percentage of public funds spent on home care from about 4% in 1997-98 to 8% within at least eight years, which is the same period of time it took to double the percentage of spending on home and community care during the nineties. In our package is CARP's report card on home care in Canada, called “Home Care by Default, not by Design”, and the executive summary describes this in more detail. We believe this funding should be for services for all home and community care recipients, that is to say, post-acute and chronic care patients.

During the 1990s the focal point of the health care system shifted from institutional care to home and community care, as we all know. Families, neighbours, and friends were recruited to provide health care at home, with minimal financial support from governments, thus saving governments billions of dollars. According to the 1996 census, over 2 million Canadians provided this service in varying degrees, some part-time, some very much full-time. Undoubtedly, the most recent census will show an even greater increase in this area. We at CARP hear from thousands and thousands of people across the country who are informal caregivers.

We were very pleased to hear in the throne speech a reference to informal caregivers, this after years and years of CARP and other concerned organizations lobbying governments across the country. Informal or family caregivers who must give up paid work on a part-time or full-time basis should receive employment insurance for as long as they provide care at home, not just the last six weeks of their care recipient's palliative care, as recommended in the Kirby report. We certainly support providing EI payments during palliative care, though we're not quite sure how the six weeks would be determined. How do you know when it's starting? In any case, let's not forget that EI is contributed by workers, is not government's money, and it's needed by these people at that time.

Moreover, the stop-out provision in the Canada Pension Plan that is available to mothers for seven years after giving birth should be extended to cover family caregivers in counterbalance to child care. Again, CPP is contributed by employees and their employers, and does not belong to governments.

I'm going to turn it over to Bill Gleberzon to talk about the bigger health care picture in Canada.

Mr. William Gleberzon (Associate Executive Director, Canada's Association for the Fifty-Plus) Health care, referred to in our original brief, has taken on a greater intensity with the release of Senator Kirby's report in October and the imminent release of Mr. Romanow's report later this month. The federal, provincial, and territorial governments now have a window of opportunity to phase and enhance our unique, made-in-Canada, single-tier health care system.

A recent poll published today suggests that a large percentage of Canadians are fearful that medicare won't be around ten years from now. But the majority of Canadians support medicare and demand action now.

For example, the public will not tolerate shelving the Romanow report. Too much time and effort's been invested across the country by thousands of people in presenting their views to the commission. In June 2002, CARP organized a national forum on the Canada Health Act from the perspective of seniors, and the principal message that came out of it was, from seniors who remember Canada before the Canada Health Act: “been there; done that; don't want to go back”.

The recommendations that emerged are included in this brief. I might add that Mr. Romanow has reflected a lot of these recommendations in the recent speeches he's made across the country and in the States. Our message, of course, was echoed by other presentations to the commission.

The Kirby commission has recommended that the federal government infuse an additional $5 billion into health care in order to sustain it. It appears that Mr. Romanow will also recommend additional funding of similar magnitude. CARP agrees with the Senate report: tax increases may be required to raise additional funds. But our position on this issue can be summed up as “new taxes if necessary, but not necessarily new taxes”. The need to raise $5 billion via new taxes must be balanced against the finance minister's projection of a $70 billion federal surplus in coming years, a portion of which should be annually dedicated and guaranteed for health care in order to moderate any tax increases.

Moreover, CARP strongly urges governments to determine what parts of the health care system need to be fixed and at what cost before arbitrarily budgeting for this purpose or undertaking a massive overhaul of the system as a whole. Many believe that greater efficiencies can still be derived from the current health care system.

We have a number of other recommendations: that the federal government resume providing 50% of cost-sharing funding for health care; that these funds be dedicated expressly for health care and guaranteed annually with an escalator clause for inflation; that the federal government restore dedicated funding separately for health, education, and social services--that is, end block funding through the Canada health and social transfer, as the federal Auditor General recommended; that greater public and transparent accountability be established between the provincial, territorial, and federal governments to assure the public that funding is being spent as intended. Appropriate fiscal penalties must be assessed and enforced for non-compliance with the Canada Health Act, which is the law of the land. Meaningful tax reforms for medically related expenses must be enhanced by the federal, provincial, and territorial governments in recognition of the reality of today that one-third of medical expenditures are currently being paid directly by Canadians, according to the Canadian Institute for Health Information.

On cue, I'll turn it over to Judy to conclude.

Á (1110)

Ms. Judy Cutler: We're very concerned that governments, just like segments in the health care system, operate in silos--and I suspect you're going to be hearing this a lot from various presentations--pitting one ministry or sector against another for funding instead of working collaboratively in a holistic manner. The result is that the consumer is given with one hand and then taken from by another. For example, environment competes with health, or health with education, etc. On the provincial level, home care is competing with long-term care facilities, and each is competing with hospitals.

What is needed is an integrated approach to services of all kinds. This will ensure an improved quality of life for all Canadians and will create less of a burden, actually, on the health care system, because elements such as environment, education, affordable housing, energy, and others are determinants of health. The 2003 federal budget should be guided by this broader perspective.

I'll just close by saying that I think you heard yesterday during a presentation by the Canadian Pensioners Concerned that this position is shared by the Congress of National Seniors Organizations, which consists of 12 organizations, including CARP. As I said, we represent a total membership of two million seniors across the country.

Thank you.

Á (1115)

The Chair: Now we'll go to the City of Hamilton.

Go ahead, sir.

Mr. Luciano Piccioni (Business Development Consultant, Brownfields Coordinator, City of Hamilton): Thank you, Madam Chair.

On behalf of the mayor of the City of Hamilton, Robert Wade, and the City of Hamilton council, I would like to thank the committee for inviting me here today to make a submission and presentation.

I'll be speaking to you today about brownfields. Brownfields are abandoned, idle, or underused industrial or commercial properties where expansion or redevelopment is complicated by real or perceived environmental contamination.

Most of us know that brownfields can take the form of former industrial operations, such as steel production facilities or chemical operations, and so on. But what most of us don't know is that things like dry cleaners and printing operations, and even old schools that were once heated with fuel oil, can present a brownfield problem. These exist in cities and towns across Canada.

What we have here is a problem that is national in scope. They not only present serious environmental hazards, but also serious financial costs to cities and town across Canada. It has been estimated that the City of Toronto loses between $50 million and $100 million every year in tax revenues because of its idle brownfield sites.

It has been estimated that in the United States there are currently 650,000 brownfield sites. In Canada, the number is somewhere in the neighbourhood of 30,000 sites. So, clearly, from both an environmental and financial perspective, brownfields are a significant issue and a growing national problem in Canada.

U.S. studies have shown that one of the major stumbling blocks to redeveloping brownfields is the upfront costs to conduct site investigations and cleanups. Most financial institutions will still not fund this part of a brownfield project due to potential legal liabilities of contaminated sites. The recommendation I'll be providing you with today is simply one to level the playing field between brownfield and greenfield sites--that is, to provide some bridge financing to overcome these upfront capital costs.

The City of Hamilton has provided you today with a submission package--this package in blue--which contains a letter from the mayor outlining the reasons for the city's request to you today, to make a federal government budget allocation to promote the cleanup and redevelopment of brownfield sites. That package also contains a letter of support from the Hamilton Chamber of Commerce for our request. It contains resolutions passed by both the Ontario and the Canadian Chamber of Commerce requesting both provincial and federal funding to promote the redevelopment of brownfields. It contains information on Hamilton's award-winning environmental remediation and site enhancement, or ERASE, program, which, as its name suggests, provides financial incentives to promote the erasing of brownfield sites and their replacement with productive economic uses.

And finally, the package contains some recent magazine articles on the work of the National Round Table on the Environment and the Economy, which is developing a national brownfield redevelopment strategy for Canada. This strategy is scheduled to be released in January, in a couple of months.

There are significant and far-reaching economic, environmental, and social benefits associated with the cleanup and redevelopment of brownfields. These include the creation of new business and employment opportunities; revitalization of neighbourhoods; improved soil, water and air quality; and a reduction in urban sprawl, traffic congestion and air pollution.

A recent George Washington University study found that for every acre of brownfield land redeveloped, four and a half acres of greenfield sites are saved. That's a significant impact.

The City of Hamilton recognized the brownfield problem in the late 1990s, and since then, we have become a recognized leader in Canada in developing and implementing financial incentives to attract developers to brownfield sites. Through our ERASE program we offer generous grants for environmental studies, we offer property tax rebates to developers who clean up contaminated sites, and we've also set aside $500,000 to conduct brownfield pilot projects in conjunction with private developers.

All told, the City of Hamilton has committed over $1.2 million over the next five years to promote brownfields development. This commitment is already paying dividends. We've seen 11.3 acres of land already cleaned up. We've seen the construction and refurbishment of 228,000 square feet of building space, and an increase in property taxes of about $400,000. That's just in one year.

But due to the size of the problem, with at least several hundred brownfields just in Hamilton's older industrial area, and places like Montreal, where there are over 4,000 documented brownfield sites in the city, municipalities cannot successfully fight this battle alone. That's why we're turning to provincial and federal governments.

The Province of Ontario has passed legislation to allow property taxes to be frozen or cancelled on sites that are being remediated and redeveloped. The Quebec provincial government has allocated $90 million over seven years to provide funding for brownfield redevelopment, and that investment has already leveraged to $1.6 billion in private and public sector funding.

Turning to the Canadian federal government, unfortunately it does not provide direct funding for brownfields, but if we look at other G-7 countries they do have comprehensive brownfield programs.

In the U.S., since 1993 the federal government has provided over $280 million in funding for brownfield projects. This has leveraged $4 billion in public and private sector investment and spurred 19,000 cleanup, construction, and development jobs. And just in January of this year President Bush announced the U.S. federal government is committing $200 million a year over the next five years, or $1 billion in total, to brownfield redevelopment.

Canada's inaction on this, fortunately, is changing. The Sgro report on urban issues cites the importance of redeveloping brownfields, and in December of this year Finance Minister Paul Martin asked the round table to develop a national brownfield strategy for Canada.

I'm happy to say that I am a member of that task force and our work is almost complete. We have learned lessons from other countries and used those to craft a made-in-Canada brownfield strategy.

I can tell you that strategy is going to recommend the following as far as financial incentives are concerned: income tax incentives for brownfield developers; loans and grants for environmental investigation and cleanup in contaminated sites; and mortgage guarantees for qualifying brownfield projects.

I'm here today on behalf of the City of Hamilton to ask you to support that strategy. If moneys are not set aside in the next federal budget for the purpose of funding this strategy and funding brownfield redevelopment, we will have to wait for at least another year and possibly much longer. The positive momentum we have developed as a nation will be lost and Canada will fall even farther behind other G-7 countries on the brownfield front.

I have shown you all kinds of empirical evidence and there is far more than what I have discussed here today to show that public investment in brownfields can leverage far greater amounts of private sector investment. This results in substantial economic gains. This is not rhetoric or wishful thinking. The results are real.

At the same time, brownfield redevelopment can result in smart growth, something this country and its urban areas clearly need more of.

You may have noticed that I have referred to government funding on brownfields as an investment and that's exactly what it is, a strategic investment in the future of communities across Canada. That is why the City of Hamilton is here today asking the federal government to allocate significant funding in the next federal budget for brownfields. This investment in the future of Canada will yield real economic, environmental, and social benefits for the people of Canada.

On behalf of the City of Hamilton I would like to thank the committee for this opportunity to make this presentation to you today. Thank you.

Á (1120)

The Chair: Thank you very much.

Now Mr. Millar from the Direct Sellers Association. Go ahead, sir.

Mr. W. Jack Millar: Thank you, Madam Chair.

I am the tax counsel to the Canadian Direct Sellers Association and I am appearing here on behalf of its president, Mr. Paul Thériault, who had a prior scheduling conflict and couldn't be here.

This is either the eleventh or twelfth year the Direct Sellers Association has had the privilege of appearing before the committee, and I'm happy to say that over this period of time a number of its recommendations have been picked up and acted upon in government policy. We're hoping that trend will continue.

The Canadian Direct Sellers Association is a national association of direct selling companies and the independent sales contractors who work in that industry. There are currently 55 member companies across Canada and there are over one million independent sales contractors. Approximately 73% of them are women and 66% of the independent sales contractors work in the direct selling industry on a part-time basis.

These ISCs, in the last calendar year, have sold goods and services of over $1.6 billion to Canadian customers and they range from a broad range of the products and services, including cosmetics, personal care products, home appliances, candles, natural healthfood products, toys, educational products, and telecommunications services.

The DSA has actively been involved with all levels of government. It worked with the Department of Finance in the early nineties in creating the direct sellers mechanism. Under the GST legislation it has worked with the Canada Customs and Revenue Agency in creating an information bulletin for independent sales contractors to assist them in meeting their tax obligations. It's worked with the provincial consumer protection agencies and it's worked with the Competition Bureau to ensure that there's fair trading in the industry.

In the written submission of September 12 there were five recommendations. They are summarized on page 3 of that submission. We believe that these recommendations will help the committee in its stated objectives of best assuring the highest level of economic prosperity for all Canadians, as well as best assuring the highest quality of life for all Canadians.

I'm not going to focus on all five of those recommendations in my oral presentation. The first recommendation dealt with maintaining competitiveness by reducing taxes. In our submission we refer to the differential with the U.S. tax system as well as noting the current finance minister's statement that the reduction of taxes has played an important part in recent economic prosperity in Canada. I also note that the minister made comments on that in his recent economic statement in Halifax.

Our second recommendation goes to an area that the honourable Maria Minna mentioned with the last panel. That has to do with retirement savings. Our submission is that the freeze on the RRSP limits be increased to $17,500 now, not in 2004. We also believe that there should be introduced into the system a retirement savings plan, as has been suggested by the C.D. Howe Institute, and this should be put in on an after-tax-savings basis. We believe that is an important addition to the retirement savings plan in Canada.

I think the point to know, in terms of the direct selling industry, is that independent sales contractors are self-employed and are not in a situation in which they're going to be looking for either corporate or government pensions at the time of retirement.

Our third recommendation deals with transitioning to independence. Currently, under the various social assistance plans, there are limitations on transitioning. Currently, in terms of employment insurance, once a person earns up to 25% of their EI monthly amount, anything they earn over that is reduced dollar for dollar. In the direct selling industry this has been a barrier to transitioning to independence. Our submission is that we have a steadier reduction than that, and that in the area where somebody has made over 50% of what would otherwise be their EI monthly payments, there be a reduction of 50% for every dollar until the full amount is made. We believe that will help people in transition to independence. We note that the current EI system is focused more on people obtaining employment, as opposed to starting business opportunities.

Our fourth submission deals with providing relief under the GST system for dietary supplements and natural health products.

Currently, two things are happening. Number one is that the CCRA is administratively reducing what has historically been viewed as zero-rated foods and beverages for human consumption. They indicated in July of this year that all dietary supplements will no longer be viewed as zero-rated.

Secondly, there has been a move in Health Canada to create this third natural health product directorate as a mid-ground between foods and drugs. The concern is that this natural health products area will be viewed as a taxable commodity under the GST legislation. Our recommendation is that the Excise Tax Act be legislatively amended to ensure that all dietary supplements and natural health products be zero-rated. We believe that will ultimately be a cost-effective move and would free up Canada's publicly funded health care systems for more productive and effective use.

Our fifth and final recommendation deals with the direct sellers mechanism under the GST legislation. As currently structured, it only applies to approximately 75% of the industry. We have recommended that it be expanded to apply to 100% of the industry. It currently applies in situations where independent sales contractors buy and resell products. It does not apply where independent sales contractors act as sales agents. This has caused confusion in the industry. This amendment could be made with little, if any, cost to the FISC and it would also help reduce administrative costs, both to the small-business men and women in the industry as well as to the CCRA itself.

Á (1125)

Madam Chair, we appreciate the opportunity to be here. We believe these recommendations go toward the objectives that you set out in your letter. The DSA, as always, stands prepared to actively work with the committee and the government departments to achieve these goals. On behalf of the DSA, its members, and its over one million independent sales contractors across Canada, thank you for this opportunity.

Á (1130)

The Chair: Merci beaucoup.

Now to the National Council of Women of Canada. Please go ahead, Ms. Laidlaw-Sly.

Ms. Catharine Laidlaw-Sly (President, National Council of Women of Canada): Thank you very much, Madam Chair.

First of all, I'd like you to note a slight correction to our brief. On page 6, in the middle of the page, where we're speaking about tax rebates for people buying or using hybrid cars, the two words “low-level” somehow got left out between one computer and another. We're not talking about super emission; we're talking about super low-level emission cars.

Thank you for noting that.

We appreciate this opportunity to present some of the highlights of the brief to the pre-budget consultation committee at this time. We will only touch on a few since time is so very short.

We commend the consultative process and we recommend that it be continued. But we do ask that information sessions or the consultation process and the methods of developing budgets should be provided at the local level. This has come in from some of our federates in more scattered communities, who feel that they're away from the central process.

The process of gradually decreasing the national debt should continue, but the rate of repayment should not be increased or accelerated.

On the issue of tax relief and reform, the National Council of Women of Canada urges that all issues relative to tax relief and reform be reviewed in consideration of their effect on women, using gender-based analysis. These include the full indexation of tax brackets, which is essential for preventing further erosion of income, as well as the child-care tax deductions, which presently are unfair to lower-income families and those where one member—usually a woman—is the full-time caregiver.

I want to state additionally that gender-based analysis needs to be done properly, using sex-disaggregated statistics. Ideally it should be used when programs and regulations are being conceived, and it should inform the work of all departments when it comes to programs.

The National Council of Women of Canada is also concerned about the status of unpaid caregivers, the adult family members—primarily women—who sacrifice their opportunities for a better future to care for individuals who, otherwise, would have to be cared for at government expense. Therefore we recommend forcefully that refundable income tax credits and Canada Pension Plan credits be made available to unpaid, full-time caregivers of adult family members. We also recommend and urge that the government implement measures to recognize in the national accounting statistics the value of the unpaid work to the economy. This should not be a global figure, but be broken down, because there are many different sorts of unpaid, uncounted work being done. It ranges all the way from the unpaid advocacy work of the members of the National Council, to homemakers, mothers, child care protectors, and so on—all the people who just contribute to the basic infrastructure of this country and on which the system rests, but who are never given credit for the work. It is never acknowledged.

The National Council holds that it is essential that a balanced budget be maintained while dealing with debt reduction. The National council has a concern that if this does not occur, the government will not have the resources to continue and maintain valuable social programs, such as housing and child care and social welfare.

In discussing Canada's social infrastructure, the National Council commends the government for continuing to support the principles of the Canada Health Act. It is important that the present single-payer approach continue to be protected. The poorest Canadian has the right to have access to the same quality of basic health care as the wealthiest. As we see it, this is the Canadian way.

In discussing the new economy, national council members note that a majority of part-time workers continue to be women. This came out very clearly in a two-year program we carried out called Securing Our Future, on the economics of later life. We noted there that the operating costs for both businesses and governments are reduced by hiring a disproportionate percentage of staff on a part-time, contract basis with few or no benefits. Persons employed throughout a good portion of their working life on a part-time basis frequently spend their later years in poverty, lacking a pension income and other job-related benefits.

Therefore, the National Council of Women of Canada sees it as vital that the government enact legislation requiring employers to provide pro-rated benefits--medical, dental, pension, and vacation--to all part-time employees.

The national council is also greatly concerned about the increasingly large number of unemployed persons, often women, in the age group between 60 and 65. We believe some type of financial assistance is necessary to close the gap for such persons until OAS benefits begin at age 65.

National council members are also gravely concerned about the maintenance of the funding for the health centres of excellence, particularly for the women's centres, and see it as imperative that an appropriate and adequate level of funding be maintained that would permit the development of new programs. This problem was brought to our attention last year at the time of our annual general meeting held in Halifax. The centre of excellence there complained that their funding had been cut to such an extent they could only maintain their programs; they could develop no new work at all.

In referring to the topic of the new economy we see that a thriving economy, reflected in increased employment opportunities, benefits all levels of society; however, the National Council of Women members see a role for a government in monitoring both the changes created by the new technologies and the increased integration of domestic and world markets, with measures developed as needed to protect the quality of life of individual Canadians.

We support continuing investments in new technology to stimulate the economy and increase the standards of living in Canada.

The national council urges that all social and labour market reform must include developmental approaches designed to respect the dignity and human rights of citizens receiving social assistance, as well as those of the paid workforce.

In the alleviation of poverty, the National Council of Women particularly wishes to stress again the need for overcoming child poverty. Child poverty is parents who are poor. The provision of affordable housing would be a key ingredient in providing a decent quality of life in Canada for both parents and their children. Therefore, we urge the federal government to once again become involved in social housing programs.

I want to thank you for the opportunity to highlight issues and the opportunity to discuss them later. Thank you.

Á (1135)

The Chair: Thank you.

Now I'll go to Cathy Crowe, from the Toronto Disaster Relief Committee.

Ms. Cathy Crowe (Steering Committee Member, Toronto Disaster Relief Committee): Thank you, Madam Chair.

I'm a registered nurse and a street nurse; my patients are homeless. I'm going to be addressing the homeless issue and the need for housing plans.

I just want to mention that 14 years ago, when I began this work, there were four street nurses in Canada, and there are now close to a hundred from Halifax to Victoria.

When we formed Toronto Disaster Relief Committee in 1998 we declared homelessness a national disaster. What I want to do is give you a snapshot of the scale of the problem in Toronto. Michael Shapcott will address the solution.

Contrary to the Statistics Canada report yesterday, there are more than 14,000 Canadians who are homeless in the country. I'm just going to speak about Toronto, where I nurse.

Tonight there will be 5,000 shelter beds full in the city. There will be more than 50 “Out Of The Cold” programs--church basements and synagogue basements--that will open one night each during the winter months, sheltering several hundred more. Tonight, as in the summer, there will be between 1,000 and 1,500 men and women sleeping outside--literally outside--on grates or beams, in parks, in alleyways. Over the year 2002 there will be a total of 40,000 experiencing homelessness in the forms I've just described.

Some changes are happening. One is that the street outreach vans that try to reach the numbers of people sleeping outside run out of food by midnight. The other thing I'm sure you're aware of is the number of squats that are springing up all over the country: in Halifax; two weeks ago a squat was formed in Montreal; in London there has been a squat; there are several large squats in Toronto, most famously the tent city; and, of course, the Woodwards squat in Vancouver.

Why are these springing up? It's because in all those communities there are not enough shelter beds. There are long waiting lists for social, affordable housing. Those men and women can no longer tolerate the conditions in the shelters if they're able to access them. Many of the folks I know who are now trying to live this way and develop their own shacks and housing outside have been on waiting lists for affordable housing for eight to ten years.

We now face a tuberculosis micro-epidemic in the Toronto men's shelter system. We have now had the fifteenth DNA-linked case identified. Ironically, a political refugee, who left an endemic country where TB is prevalent, contracted tuberculosis in a shelter here. It was DNA linked, so we know he obtained it here. There will be an inquest in January or February.

I mention tuberculosis because Toronto is like the canary in the mine shaft. When a problem begins developing here with respect to illness and homeless people, it also raises its ugly head elsewhere. So TB in Toronto will soon be seen in other communities.

There will be 8,000 children this year using the shelter system, which is primarily, as you well know, the motel-hotels on the Kingston Road strip in Scarborough. Those children will have very poor health. As has been mentioned, poor children are part of poor families. Those families and children are despairing. They will be isolated and will have worsening health.

Literally while I was waiting to come in the room today, I received a call. This is a very typical phone call. A man called offering me an 8-foot by 30-foot mobile trailer, not for my personal use but for me to find a place to park it to move a family in or to move a couple in.

At the tent city there were 110 to 120 people. I mention the tent city because it's a success story now. As of today, 70 of those people have moved into housing. I mention that to prove the point that people are ready for housing. People want housing; they are not choosing to be out on the street.

Rather than bring you a written deputation today, I brought you a movie, which has been filed with the staff. It's called Shelter From The Storm. It's a CBC documentary that you may be familiar with. It aired on Witness. It paints the picture of Toronto but also of a national movement and call for housing.

I'm so pleased to hear the word “housing” mentioned so many times here today already. As a nurse, I'm quite confident that there is a huge medicare movement fighting to save medicare in the country.

For myself, as a nurse, I'm not a carpenter, but I have to speak to the housing question. I know Michael will now make recommendations to you that I will fully support.

Thank you.

Á (1140)

Mr. Michael Shapcott (Co-Chair, National Housing and Homelessness Network): Thank you. My name is Michael Shapcott. I'm co-chair of the National Housing and Homelessness Network. Our network has partners in more than 20 communities across the country, including both provincial organizations and local groups. Madam Chair, I know you've met with the London Homeless Coalition in London. They're part of our national network.

In August we sent a submission to the committee called “Housing for all Canadians: An additional $2 billion for a comprehensive national housing strategy”. Based on the theory that more paper is better than less paper, we have a small addendum to that, with some more current information, called “The One Percent Solution”--what is it, what will it do? I'll make brief reference to both of those.

This committee has heard from Cathy Crowe today and also, in other spots where you visited in Halifax and in Vancouver, from other network partners about the scale of the national disaster of homelessness and the national housing crisis. We think that disaster and crisis need to be met with a solution of an equally large scale.

We are proposing and urging that this committee adopt what we call the one percent solution. We're specifically, respectfully, asking that this committee recommend that the federal government commit $2 billion in funding annually for a renewed national housing program.

Before I go into the components of what we think this renewed national housing program should involve, I want to say that in the three to four years since our network was formed, there has been some movement, some positive momentum on the part of the federal government. We do want to acknowledge that.

In December 1999 the federal homelessness strategy was announced by Minister Bradshaw. This involved $753 million over three years. One of the components of that, of course, is the Supporting Communities Partnership Initiative, or SCPI, as the bureaucrats like to call it. SCPI has led to the development of a handful of very successful projects in a number of cities.

I know Maria Minna attended the opening of an SCPI project here in Toronto, Project Amik, about two weeks ago--an urban aboriginal housing project--and we do want to say that the federal homelessness strategy was a very important first step.

We also want to acknowledge the federal government's role in the affordable housing framework agreement, which was signed by the federal government and all the provinces and territories in November 2001. Under the terms of this agreement, the federal government committed to spend $680 million over five years on new affordable housing. The provinces and territories agreed to provide matching funding and the program to be administered by provincial and territorial governments.

Our main criticism, though, of these two programs has been, first of all, that the funding has not been adequate to meet the scale of the need. For instance, with the SCPI or the homelessness strategy program, we've seen communities that have been fighting with each other to get access to the limited funds.

Here in Ontario, Guelph and Cambridge had to argue about who would get access to the small pot of money that was available to provide for a homeless shelter for residents of those communities.

We've seen some communities such as Parry Sound, which was completely frozen out and wasn't even able to fight for funds, because it's such a small community. So the homelessness strategy, as welcome as it was, was simply not enough funding.

Our other major concern, particularly with the affordable housing framework agreement, is that it has relied on provincial and territorial governments to roll out the particular programs, and there has been, to be polite, very uneven rollout of this program across the country.

On the positive side, we've seen the Quebec government embrace the program, provide matching funding, add its own unilateral provincial funding, and we've actually seen the construction of new units go ahead.

On the other side of the country, we've seen the British Columbia government, at the same time as it signs the affordable housing framework agreement, cancelling a provincial program that was to deliver 1,700 units of affordable housing, and then using the federal money to create 697 units in its place. So we've ended up with a net loss in British Columbia.

Incidentally, we've taken these concerns to the federal housing minister. We had a meeting with Minister Collenette about two weeks ago and raised the issue, and in particular, we said we think the federal government needs to take leadership on this issue and needs to understand that while cost-sharing with the provinces is a laudable goal, in the real world we inhabit it is not producing housing in the way it's intended.

I also want to acknowledge that the recent throne speech contained some very positive language in terms of housing and also a commitment to extend the federal homelessness strategy. We welcomed that very general language, and in our meeting with the minister we were very encouraged to hear Minister Collenette say he is very keen to look for a renewed mandate for Canada Mortgage and Housing Corporation, the national housing agency. Again, we think all of these are signs of very positive momentum.

I want to turn now to our very specific recommendation, the one percent solution or $2 billion annually for a renewed national housing program. We believe there are five components of a new national housing program. We've set this out in our document.

There are different ways the money could be divided up to deal with the various components. We've offered one suggestion in our brief. The Federation of Canadian Municipalities, which we work with very closely on a number of events, has suggested a slightly different division. We're not going to argue about $100 million here or there. We do think, however, that the five components of this $2-billion funding envelope are supply--we think there needs to be new social housing supply; affordability--that is to say, rent supplements for low-income households in new and existing social units; additional supportive housing for people who have special needs; additional funding for rehabilitation of substandard housing..... On that point, the committee will know that the federal government's RRAP program, the residential rehabilitation assistance program, is due to expire this year, and the government has been doing extensive consultation on that. We fully support the extension of RRAP and additional funding, a doubling of the funding, for RRAP.

Á (1145)

The fifth and final component of a new national housing program is, we believe, emergency relief. We think the federal homelessness strategy from December of 1999, again due to expire this year, should be renewed. We're pleased that the throne speech has made that general promise. We think the funding should be doubled to allow for more money to get out to places that need it.

I know that the previous panel contained representatives from the private development industry who suggested to you that somehow, by using tax-based measures or grants to private developers, we can achieve new affordable housing. Our network believes that the history of these kinds of initiatives, whether you look at the MURB program, the multiple unit residential building program of the 1980s, or the previous program, CRISP--there are a number of funny acronyms, but they all amount to the same thing--shows that the chief problem with programs that try to use either the tax system or direct grants to private investors in private rental housing is that, first of all, they don't target the people who absolutely need the housing the most, that is to say low-income households. Secondly, there are no long-term guarantees. So we think that on that basis the funding should go to new social housing.

I'd be pleased during the question period to answer specific questions about the details of our program, but we do hope, as I said, that this committee will make a very strong recommendation of about $2 billion for a renewed national housing program.

Thank you very much.

Á (1150)

The Chair: Thank you very much, all of you.

We'll go five minutes longer, to 12:20, and that will allow seven minutes for questioning for each member here.

Mr. Penson, please start.

Mr. Charlie Penson: Yes, thank you, Madam Chair.

I'd like to welcome all the presenters this morning.

I'd like to start with Ms. Maund from the Campaign Against Child Poverty. You've identified a serious problem. One of the issues that's been debated for quite some time is whether families who are earning as little as $7,400 should start paying federal income tax. The reason I raise this is there's more than one way to approach this issue. Right now an individual earning $7,400 has to start paying federal tax. There are some people who believe that basic exemption should be raised significantly, and also the amount of exemption per child that you are claiming as an exemption. Therefore, it would create some room at the bottom end of the poverty scale. I think you've correctly identified that children don't live in isolation in most cases. They belong to families that, obviously, are poor too and therefore have difficulty.

One way to address this issue is to leave more money in their pockets, or don't tax them until they get to a higher level, rather than having a national child benefit program where people send their taxes to Ottawa, it gets put through the bureaucracy, pays a bunch of wages along the way, and then comes back in the form of a child tax benefit.

So I'm wondering if you would support that idea of raising the basic exemption levels to a much higher level.

Ms. Jacquie Maund: I know Gerald wants to comment, but our immediate response is to support the national child benefit because that is the universal program and it's available to all people within a certain income level. So we're looking at universality to put more money right in the pockets of the families who need it.

Gerald, did you want to add something?

Mr. Gerald Vandezande (Spokesperson, Campaign Against Child Poverty): In previous appearances before this committee we have stressed that people living below the so-called poverty line should not be paying income tax. In addition, people living below the poverty line should get a much more generous child tax credit.

Thirdly, as Jacquie has already mentioned, it's crucial that these people get the national child benefit and that there be no clawback of any kind by any province, and that they be treated fairly, humanely, and, in the context of the budget, that there be the kind of tax equity that treats these people with dignity and with respect.

Mr. Charlie Penson Yes, I certainly understand what you're saying, but my point is, if people have to pay tax and then get some kind of a rebate back, isn't something lost along the way? I accept your premise they still need the national child benefit, but isn't the better approach to leave more money in people's pockets so that they can make those decisions themselves, instead of losing some of it in a process of handling it along the way?

Á (1155)

Mr. Gerald Vandezande: It's not an “either/or”; it's a “both/and”.

Mr. Charlie Penson: I'm asking you which is the better approach, if you had to choose.

Mr. Gerald Vandezande: I would want to do both, at the same time, because indeed there is something wrong fiscally, morally--and I'm an accountant by background--when you first take it out and then try to give it away. Usually the government has an easy time taking money away from people and not returning it when it should.

I think, both provincially and federally, governments should go out of their way to make sure that people who live below the poverty line are not taxed in any way, shape, or form, that they are given increased benefits, both through the national child benefit and the sales tax credit, and so on, and that every step be taken to make sure it's an integrated policy.

We often talk about the three-legged stool: there must be adequate child care; there must be adequate child benefits; and there must be an adequate family home. If you take one of the legs of the stool away, the stool falls over. So it must be an integrated approach that treats the family and the members of the family with respect. You treat them equitably, and you make sure that the measures--

Mr. Charlie Penson: The reason I raise this is because when government takes taxes from us--in this case, you start to be taxed at $7,400--government makes a number of decisions on how that is going to be spent. I guess it's a matter of setting priorities on how they want to spend it.

Mr. Gerald Vandezande: I think it would be great, and--

Mr. Charlie Penson: Just hear me out for a moment, because I want to get your reaction to this.

One of the areas they spend on is business subsidies in a number of areas...in technology areas such as aerospace. Pratt & Whitney, General Electric, and Bombardier receive huge government grants or subsidies. I'm just asking you, if you had to set that priority list on where government should spend--because that's what this issue is all about today, trying to establish what the priorities are that Canadians want--where you would rate that?

Mr. Gerald Vandezande: The issue your committee is seized by is what do we do with greater levels of economic prosperity, and how do we ensure highest quality of life for all? For us, that is important, that everything the government does is thought of in terms of environmental, social, and economic well-being.

So in that context, we need to talk about which social investments, which environmental investments, which housing investments best contribute to the promotion of the common good, to promote human well-being particularly for those who are squeezed out of this economic rat race that people are caught up in and end up on the street, as we've heard.

We are deeply concerned--and that's why we all volunteer our time--that everything be done to eliminate the scandal of child and family poverty, and that we finally implement the 1989 resolution that was adopted unanimously and we hope will be confirmed unanimously in the next Parliament, and we insist that Mr. Manley introduce the measures needed to eliminate poverty, once and for all, throughout our good country.

Mr. Charlie Penson: Thank you.

I'd like to move to the gentleman representing the City of Hamilton. I thought you introduced a very interesting area in terms of the brownfield or pollution that is contaminating a number of sites that could be very valuable additions back to our cities and towns. It concerns me as well that there are people holding these properties, even in small towns, where they may operate a service station or a business where there has been contamination over the years.

The Acting Chair (Ms. Maria Minna (Beaches—East York, Lib.): Excuse me, Mr. Penson, you're actually out of time. If you want an answer, you should finish off the question very quickly.

Did anybody get the gist of what he was trying to ask?

Mr. Charlie Penson: I understand what you're saying, that there needs to be federal-provincial-municipal cooperation to clean up these sites, because there are liabilities that are hurting the development.

Individuals who might hold them may be unsuspecting in many ways when they inherit the properties. There was a different standard 30, 40, or 50 years ago when it happened.

Â (1200)

The Acting Chair (Ms. Maria Minna): Give a very quick, short answer, please.

Mr. Luciano Piccioni: Part of the problem I wasn't able to talk about today is on the liability aspect of holding the sites, either by sins of commission, omission, or otherwise. It is being addressed in the brownfield strategy. We are promoting and recommending in the strategy a national liability regime to manage risk and liability. There are a number of mechanisms we're including in the strategy. They include liability limitations, the end of liability, and then the coverage, after a certain point of time, by an insurance pool that would be paid into by developers of brownfield sites. It is something we're also trying to address in the strategy.

The financial and legal aspects go hand in hand. They have to. Otherwise, you won't be successful with one or the other. It's a lesson we learned.

The Acting Chair (Ms. Maria Minna): Thank you, Mr. Piccioni.

Monsieur Paquette, s'il vous plaît.

[Translation]

M. Pierre Paquette: Thank you for all of your comments. We could debate these questions at length.

My first question is to the people of Campaign Against Child Poverty. You have made two proposals concerning budget criteria 3 and 5. I would like you to clarify what you meant by your remarks given that both these programs already exist in Quebec. You advocate creating a partnership with the provinces and municipalities for additional funding of daycare programs. You would like to see agreements in place for direct funding from the federal government in cases where daycare programs are part of a global approach taken by these provinces and municipalities.

You know, Quebec has a network of non-profit daycare centres completely independent of the municipalities. We are proud of this network. I wish to understand how it would be affected since it belongs essentially to the social economy. Non-profit centres are sustained neither by the government nor by the private sector. Their existence is owed to the initiative of both parents and daycare workers.

Similarly, with respect to criteria 5, you propose that the federal government invest nationally in order to freeze tuition fees for post-secondary students. As you know, fees have been frozen for some years in Quebec. Consequently, the average student debt in the province of Quebec is half of the debt of the other Canadian students. If I understand you correctly, the federal government should put greater emphasis on such programs while respecting provincial jurisdictions. I would like for us to be clear.

[English]

The Acting Chair (Ms. Maria Minna): Would you like to respond?

Ms. Caroline Di Giovanni: Gerald can.

Mr. Gerald Vandezande: Thank you.

We're impressed, frankly, by the Quebec model with respect to the provision of child care. The $5 a day per person, for us, seems an equitable way of sharing the prosperity this committee needs to discuss, and increasing the quality of life.

We think it is very important there is the kind of cooperation you refer to. In the planning of programs, the non-government sector should be deeply involved in setting the priorities and establishing the standards.

In that context, we want to emphasize that if any provision is made, and there should be, in the next federal budget, Finance Minister Manley must make sure the moneys allocated for child care are indeed used for child care and there are adequate standards that are enforceable through mechanisms agreed upon before the money is spent.

We have had some bad experiences with the Province of Ontario, where the federal government allocated substantial moneys with respect to childhood services and with respect to housing, and then did not deliver.

We commend what Quebec has done. The model is an example for the rest of the country. We think, within the commitments made in the throne speech, the Prime Minister and the cabinet could make an all-party commitment that this is what we want across the country. It would show that Quebec has been a powerful example for equity.

[Translation]

M. Pierre Paquette: You know that my party and I, as are people of Quebec in general, are very much against the idea of establishing a national norm since the federal government often promotes his coast-to-coast vision. This was clearly the case for the Young Offenders Act where Quebec's views were completely ignored.

I am a little surprised none of you have discussed one particular program managed by the federal government and under federal jurisdiction: Unemployment Insurance. This program is critical in redistributing revenue and providing insurance in case of loss of employment. As you know, it is now being used for other purposes. The federal government has taken more than $40 billion from Unemployment Insurance to pay down the debt without having a public debate on the question. Meanwhile less than one person out of two who contributes to the program can actually be a beneficiary of it.

If parents are poor, usually so are their children. Many of you have discussed poverty in general and more specifically child poverty. Do you agree with the Auditor General that the federal government has violated the spirit of the Employment Insurance Act? The question is put forth to those you are willing to answer it.

[English]

Mr. Gerald Vandezande: I think the government has violated a spirit of the understanding that was there, has violated the spirit of the charter in that context. It must not take money from poor working people and then shuffle that off for debt reduction, and in the process create a social deficit.

The unemployment insurance moneys were intended to ensure that people who were caught among the unemployed would have the kind of social security that would enable them to make the transition to paid employment.

So I think--and I'll make a reference--when I talk about national standards, I mean cross-Canada standards that all governments, together with the federal government, implement and enforce, and they should make sure that the moneys allocated in the budget and used provincially by the governments are used wisely so that it goes to the people for whom it was collected and by whom it was paid.

I think we need to revisit the reduction of debt through moneys collected from working families who desperately need it for child care and other social purposes. In that situation, these people are increasingly suffering. The common good goes down the drain because debt reduction takes priority, and in the process we create a social and an environmental deficit that is a blight on this nation.

Â (1205)

[Translation]

Mr. Pierre Paquette: I don't know if someone else wishes to answer the question. If not, I will ask a question to the two individuals who have brought forth the issue of social housing.

The notion of affordable housing seems to me a little biased. Here we are, discussing subsidies for renters and owners in hope of showing that certain private housing is affordable. We are insinuating that the private sector is able to meet the needs of a portion of our population who is having tremendous difficulty finding adequate housing for economic and social discrimination reasons. Should we not rather be discussing public funding for social housing, in essence low-rent-housing and cooperative housing?

[English]

Mr. Michael Shapcott: Thank you very much for the question, and I do apologize to the member if I didn't make myself clear enough.

Our network believes that public funding should go to social housing and not to private investors and private rental housing. We believe that the history of federal programs that have used either the tax system or the direct grants to private investors to build rental housing has been a history of failure, hasn't created units that are affordable.

On the other hand, we know that programs, both at the national level and in a number of provinces, that fund the development of community-based non-profit and co-op housing, municipal housing of various sorts, have been very successful. And of course Quebec is now the only province that still has a provincial social housing program, AccèsLogis, which continues to provide many units to people.

Our network believes absolutely that social housing is the way to go. Over the period from 1973 to 1993, when the federal government was in the business of partnering with social housing providers at the community level, there were many successes right across the country. Those units continue today to be very successfully managed units. I just received a draft copy of an evaluation that Canada Mortgage and Housing Corporation has done on one element of the social housing sector, the cooperative housing program. I haven't yet had a chance to read it in its entirety, as it's still in its draft form, but it appears to be once again acknowledging the success of social housing in meeting the housing needs of low-income people. So our network does fully support social housing.

The Chair: Thank you very much.

We'll go to Mr. Valeri, then Wilfert, and then Ms. Minna. Seven minutes, please.

Â (1210)

Mr. Tony Valeri: Thank you, Madam Chair.

I have a couple of comments and a couple of questions. I have a comment to Mr. Piccioni on the brownfields. I first of all want to congratulate him and the City of Hamilton, and certainly the Laborers' International Union of North America, for advancing this issue--certainly at the local level, but also in your participation at the national level. I think it's a very important issue. We are now seeing statistics and the evidence on developing brownfield sites and its impact on greenfield. Being able to save greenfield acreage I think is very important.

In your documents you list a three-point plan. I was wondering if you can be more specific and give a sense of priorities going forward for the committee to consider. What would be the most urgent steps we would need to take immediately to move the issue forward and reap some of the benefits you've described with brownfield redevelopment?

Mr. Luciano Piccioni: In answer to that question, I think the most important thing the federal government could do would be to push to see that strategy completed as soon as possible, and to support it.

Within that strategy, the evidence seems to point to the fact that direct funding in the form of grants and loans, either to municipalities that would then administer those grants and loans or directly to the developers and property owners who would actually clean up the sites, is the most effective form of funding. That's what we've seen in the United States.

Tax incentives have come in second. They do not seem to be as effective. That may be in part because of the way the U.S. has structured its tax relief act as far as brownfields goes. The administration is cumbersome, and the payoff in the form of a tax incentive is not that significant. That may have something to do with it.

Direct funding to provide property owners and developers with grants and loans, so that they can investigate the sites, find out how big a problem they're dealing with and how to clean it up, and then actually giving them the money to clean it up would seem to be, from a financial perspective, the top priority.

Mr. Tony Valeri: Would a possible initiative, then, be an expansion of the funds that were established in previous budgets under the management of the Federation of Canadian Municipalities? Would that be an approach the federal government could take to deal with the management of the grants and loans for municipalities?

Mr. Luciano Piccioni: That's definitely an approach the federal government could take. It has several positives. First, you have an administrative structure in place to deliver the program. Second, it can be handled from a competitive perspective. That is to say, the municipalities that have their houses in order and are ready to implement these initiatives and see brownfield redevelopment happen in their municipalities are the ones that in theory would get the money first, and so you would have successes right off the bat. That is definitely something I think the City of Hamilton would support: to see FCM or another agency of that type administer the programs.

Right now, under the green municipal fund the FCM administers, the only funding for brownfields is to do inventories and that sort of thing. Those are fine, but they really don't get the job done when you need upfront capital to get these sites assessed and cleaned up.

Mr. Tony Valeri: I'll make one more intervention with respect to the testimony by the Campaign Against Child Poverty.

You make the point that child poverty is really about family poverty; it's about the parents who are unable to sustain the family and the family unit. I wonder if you can expand a bit more on the role of economic growth and the role it can or should play, or give your reaction to that subject.

Second, there are a number of programs and certainly a number of actions that governments have taken in the past to deal with this issue. Obviously we have not been successful. Part of the mandate of this committee is to also get the testimony with respect to what's working and what's not. I'm wondering if you can focus for a second on what the one or two most effective existing programs are for reducing child poverty and on identifying some we should not actually be pursuing any longer, reallocating the resources of those programs to other initiatives that are having a greater impact on child poverty.

Ms. Caroline Di Giovanni Thank you for your question. I'll start, but my fellow deputants will probably jump in.

On your first one, what would be the effect of economic growth, I think the child tax benefit is a start, and also clear support and leadership from the national government to work with the social union to promote centres for early childhood and centres for family support across the country, to ensure that child care is at a high-quality level, and to really see as a priority that, in working with the community and social service ministers across the country, that is put into place and that the money is spent for that purpose.

In the countries of the OECD that we've referred to, that sort of investment from the national level, moving things through a system is really the payoff. Early investment, payment towards good parenting, and good nutrition for children and stability in their homes means a lower call on educational systems, and also ultimately on law enforcement, because the civil society is more stable.

I'm going to ask Jacquie if she has something more to add.

Â (1215)

Ms. Jacquie Maund: Just as a specific response to your question, what's not working, there are components of the early childhood development agreement that was signed in September 2000 by the federal government, the provinces, and the territories that are definitely not working. For example, there is money there, some of which is supposed to flow through to child care in Ontario. None of that is flowing through to day care centres at all, because the provincial government here has chosen to take that portion of their federal money and apply it to other programs, not to child care.

For example, in Toronto alone, we have 15,400 children on the waiting list for subsidized day care spaces, and there are none available because there's no money for it. So I think that's an example of where the federal government needs to hold provinces to task when money is flowed through for a certain purpose.

Another case is the clawback, where most provinces are clawing back the portion of the national child benefit for families who are on social assistance, so they have less money for the children who need it most.

Mr. Gerald Vandezande: If I may, I have a comment, Madam Chair.

First of all, I want to refer you to an excellent article that appeared in the October 14 issue of Maclean's, “You Call this Progress? It's time to rethink how we measure 'growth' in our society”. It's a first-rate article. Other studies have been done by the Atkinson Foundation and the Atlantic Institute, and I'll be glad to supply the committee with copies of that.

Secondly, in his speech giving a fiscal update, Finance Minister John Manley made reference to the need for responsible economic stewardship. In that context, we'd like to think of an inclusive understanding of economic stewardship. That is very important. You can have substantial increase in the gross national product when you spent, as the U.S. is inclined to do, trillions of dollars on the war industry, and you can have a negative impact on the job creation picture for people who need jobs. So I think it's important for this committee to spell out what it means by economic growth, by economic prosperity, and how that best benefits the quality of life that you need to come to grips with.

I think it's helpful that Canada, in its budget policies and social policies, takes into active consideration the reality that when you build houses, when you give social security to families and children through day care or whatever, you are creating jobs, useful jobs, beneficial jobs, stewardly jobs. That's far better than investment in armaments, like nuclear bombs or what have you, that ultimately have a negative, destructive environmental and social effect.

Canada has its unique identity, as the throne speech said. At the end, we want to work for the common good, the Prime Minister said. I say amen, let's do it, in the sense that the common good is our common concern for a community that flourishes, that prospers, where all people are treated with respect, with dignity, and have a sense of being safe in Canada as their homeland.

Mr. Tony Valeri: Is that it?

The Chair: You're a minute over.

Mr. Tony Valeri: Okay. That's fine.

The Chair: Is that okay?

Mr. Tony Valeri: Sure.

The Chair: All right, Mr. Wilfert, for seven minutes, all in.

Mr. Bryon Wilfert: Thank you, Madam Chairman. Thanks, everyone, for coming.

As parliamentarians we're engaged in the development of public policy and looking at the appropriate public policy initiatives and instruments to implement what we think is for the good of society. We do that through the tax system and through direct investments. We do it in collaboration with other orders of government, the private sector, and NGOs. Obviously the federal government cannot do it alone. I keep referring to the fact that we're not an ATM machine and I hear more groups coming asking for money we don't have.

I'll make some general comments, and you can respond as you will.

In terms of child poverty, I agree with you; the issue is accountability and transparency. We don't have it; therefore, I don't know why we continue to provide money to the provinces that tell us they know the needs best and yet do not do the job. Part of it is our fault. Part of it is that we don't wield the big stick we should wield. But it's a disgrace--on child poverty, on homelessness, etc.--that you come to us because you're not getting the answers from the provinces. We are not the sole provider in this particular case and cannot be.

On CARP's point about maintaining the Canada Health Act, absolutely; we'll have to see what happens with Romanow and what kind of system we want and how we can afford it. I'd love to see home care; in fact, home care will be very critical. The question, obviously, is can we afford it, and how would it be applied with universal acceptance?

I'm intrigued by your comment about the permanent council, the secretariat--anything that would improve transparency and accountability with all of the players. You may want to expand on that; I like it.

We never had 50% funding; that's a fallacy. It was around 40% or 41% back in 1964; however, I won't quibble with that, but I don't think the answer is more money, personally, because it's not being properly accounted for anyway.

Concerning the City of Hamilton and brownfields, yes, as a former president of the FCM who worked very hard to get the green enabling fund I supported a brownfields enabling fund, and as a member of the Prime Minister's tax force on urban issues I'd love to see it, because actually the green enabling fund is better managed by the FCM than anything. In fact, they're much stricter than probably we would be.

You might want to elaborate a little more about what kind of bridge financing you're looking at, because again the provinces talk big; they don't deliver.

To the Direct Sellers Association, I continue to support putting more money in people's pockets and I believe it's extremely important. Our corporate taxes will be 5% to 15% less than in the U.S.; it's a mug's game. I don't think we can continue to get too much into that. Particularly when 44 million Americans don't have any form of health care coverage, we have to look at the social aspect as well.

I would like more information on the GST-HST mechanism. As the parliamentary secretary to the finance minister I'm more than happy to talk directly to him on that.

National Housing and Homelessness Network, I've said it all before: we're doing our part, I believe. Concerning your $2 billion, I actually had to laugh, I have to tell you, because we put $680 million on the table, and you're quite right, the provinces--Ontario is a good example--won't even put their appropriate share down. So how are we going to put $2 billion down? They won't put their $2 billion down in total. I'm sure you are putting the heat on them, although I don't know how successfully, but that to me is a real concern.

To the National Council of Women, the one thing I will agree with is on the WTO. I think increasingly these international organizations are taking the control and the power out of sovereign governments, and it's having a tremendous impact, which I think we really need to have a public debate about.

Finally, as far as Toronto's disaster relief committee is concerned, I think one of the great things about the SCPI program was that we worked with NGOs from the bottom up. But again, where are the provinces--particularly Ontario, which has a social deficit, in my view, in this regard?

Â (1220)

The Chair: Mr. Gleberzon and then Ms. Di Giovanni.

Mr. William Gleberzon: On the affordability of home care, while we recognize that it's a provincial jurisdictional issue, we must have a national home care program, which we believe must be universal. Mr. Kirby said in his report, “only for those with acute care needs”. We say, to exclude people with chronic care needs misses the heart of the program, because that's where the greatest need is.

As to whether more money is needed, we could debate that for much more than seven minutes, but from our point of view we agree that accountability is needed. That's why we've recommended that a council be established that's at arm's length. We have done reports on home care, and reports of the kind CARP produced are necessary for the whole health care system.

The major problem is that the health care system is seen not in a holistic manner, it's seen--and you heard this earlier--in silos and we don't have groups that can sit back and look at this from an objective point of view for what's good for the country. The Canada Health Act has worked for the majority of Canadians, and we see no reason why it should not and cannot continue to work if properly supported and if properly organized.

Â (1225)

Ms. Caroline Di Giovanni: Thank you. In response to your question that if the social union framework is not working in each province, the agreement to distribute funding to assist with families and child care centres and the objectives of assisting with child poverty, then why should we continue it, I say please continue it. We really have to keep working at repairing what needs to be done and looking at ways to deliver it. As Mr. Vandezande has said so passionately, we have to meet the needs. Let's find ways.

If you've had municipal experience...we're prepared, and I think there are large municipalities across this country ready to do business directly with the federal funding to try to work out ways to accomplish that without completely alienating the rest in the system. Let's keep our eye on the next generation. Let's keep our eye on those statistics of the numbers of children who are suffering and work at ways to make sure that they get the kind of child care support, family support, good nutrition, and housing that is required. And municipalities, as you well know, can very well distribute this. They can put it into action. In fact, in Ontario they are the location of child care facilities, but we need to overcome whatever blocks are in the way and work at it without giving up our objective.

The Chair: Thank you very much.

Ms. Minna, please, for the last seven minutes.

Ms. Maria Minna: Thank you, Madam Chair.

Firstly I want to correct I think a misunderstanding of Mr. Millar's from when I spoke earlier.

Mr. Millar, I was not suggesting that we increase the upper level of RRSPs at this point. What I was suggesting was that we need to have an overall evaluation and review of the overall pension system rather than do it piecemeal because of all kinds of...I won't go over the material that I mentioned earlier. I just wanted to correct that.

I'd like to discuss the issue of child poverty. It's of no surprise to me that there are 579,000 children in the families who don't have housing because 6.1 million tax filers, or 40% of the total reported, lived below $20,000. So it doesn't surprise me there are that many children in poverty when you look at the income tax system and the number of Canadians who are below the $20,000 earnings--6.1 million is a lot of people.

As you know, I've worked very hard for a good eight, nine years now, however long we've been here, and you and I have met many times before, both in respect to child care and early learning, which are to me one and the same, and the whole issue of child benefit. Child benefit we got some movement on, and I think that increasing it to the levels you're suggesting would go a long way in dealing with some of the problems. Housing is obviously...I'll touch base on that in a moment.

But we do have to address the issue of the clawback that's happening with respect to welfare and we have to address the issue of early learning, because you're quite right, it's dysfunctional. After working on it for two years, and as the chair of the social policy committee of caucus coming out with recommendations, the end result we have is that we allowed the provinces to cherry-pick, basically, and in Ontario they're not picking child care. In fact, they're cutting back. I've seen it in my riding, and it's just not acceptable. It's not an integrated program. We are creating new infrastructures in fact for the early learning and abandoning the structures that already exist on child care, and it's a total...whatever.

My problem here is that the reality on all these issues, on housing and what have you, is we're not going to get the federal government to pick up 100% of the bill all the time. Are we saying that we have got to the point in this country, at least in Ontario, where we are no longer going to deal with the provinces, period, on any of these issues? And what do the provinces then provide to Canadians, to their residents? I need you to tell me, because I keep hearing this over and over again.

I met with some other coalition groups just last week on universal child care and so on. What I heard from them was bypass it and go to the municipality on housing. We've done it on income support. They're clawing back, and we want to stop that. They were saying the same thing for urban transit earlier, and so on.

At what point do we say we're not functioning? Under our system, where do the provinces sit? What do you do with the provinces? We have to deal with this issue.

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Mr. Michael Shapcott: I think this is an important question you've raised. We certainly don't think the provinces should be let off the hook. Our network and our provincial allies are putting pressure on the provinces in every way we can. I'd like to say we are making some momentum, but I can't say that, unfortunately. The three richest provinces--British Columbia, Alberta, and Ontario--are the three most recalcitrant in terms of housing issues. But there are other provinces--Quebec, Manitoba, and Saskatchewan--plus the three territories, that are seizing their responsibility in a much more responsible way.

We do think, however, when it comes to housing, that first of all the federal government.... When we talk about our $2 billion figure, we're really talking about the federal government restoring what it used to do. Starting in 1984 until 1993, the federal government cut about $1.4 billion in national housing spending, and then in 1993 stopped all funding for new social housing. So we think the $2 billion we're asking the federal government for is really to ask Ottawa to assume the role that it historically has assumed. We don't think that means letting the provinces off the hook; we think the federal government can use specific agreements, including the affordable housing framework agreement, as a way of putting political pressure on the provinces from the national level.

After all, when we read the details of the affordable housing framework agreement, it contains very specific obligations that the provinces have agreed to. Quite frankly, we don't think the federal government is using the levers it has under that agreement, and perhaps others, in order to get the provinces to agree to do what in fact they have done under these specific agreements.

So those are two things that would apply. First of all, the federal government does have an important role to play, and secondly, it does have some levers that it can use on the provinces as well.

Ms. Maria Minna: The opportunity to work together with the federal government should not bypass the provinces, but the federal government can insist on the accountability of the provinces before they transfer the funds. I think there has to be a transparency and accountability, and that's what's been missing. We don't really have a tracking system. Those of us who are on the ground and working with families who need child care are not in a position to insist on that tracking, but the federal coffers are.

Jacquie.

Ms. Jacquie Maund: I wanted to say that 10% of all the children in Canada live in Toronto. Caroline was telling me earlier that one-third of all Canadian children are actually born in Toronto. So I think if there is a willing municipality to work with, that should be taken advantage of, almost to shame the province if it's recalcitrant.

I also just wanted to quote one of our steering committee members, June Callwood, who asked why the federal government isn't publicizing these recalcitrant provinces. Why are they not using the media? Why are they not shaming them? These are my federal tax dollars that are not going into day care. The loop is being broken and the federal government is in a position to make a statement and to call those provinces to account.

Mr. Gerald Vandezande: Hopefully the federal budget will be out before the April budget of the Ontario government comes out. Just to focus on that, if the federal budget included specific conditional agreements, promises to transfer funds for particular purposes, then there is a signal to the Ontario electorate: hold your government accountable. At the same time, the government at the federal level must then be steadfast in its determination to make sure the funds get to the people who deserve them. Then they're under the social union agreement. There are ways and means of doing that.

Where there is a will, there is a way. The pledges have been made, the promises are on record. Let's make the commitments in the budget. Hold Ontario accountable and demonstrate that you want to engage in eliminating the democratic deficit that occurs in Ontario.

Ms. Maria Minna: We're always with you to hold them accountable.

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The Chair: Thank you very much. On behalf of all the committee members here, and the ones who have received your brief and are travelling in the other parts of the country, we thank you for taking the time to put together your briefs, get them to us early to allow us to translate and circulate them, and also for taking the time to come today and answer our questions. We look forward to seeing you in another year and taking advantage of your input to us.

Thank you very much.

We are adjourned until 1:15.