FINA Committee Report
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Individuals’ decisions about education and training, and about the form and extent of their involvement in labour market and non-labour market activities, are affected by such quality of life factors as health status and access to affordable housing and other basic necessities, as well as by the incentives and disincentives inherent in employment policies, personal taxation, government program spending and legislation/regulation.
Health, both physical and mental, directly affects the ability of individuals to apply their skills and education in the labour force effectively and to enjoy activities outside the work environment. Moreover, physical health may affect decisions regarding investments in education and training, since — for example — individuals with longer life expectancies have more time to spend in the labour force and to benefit from their investments.
A number of the Committee’s witnesses spoke about the importance of good health outcomes for the nation’s competitiveness and the quality of life of our residents. Other witnesses, including the Yukon Council on Aging and the Federation of Medical Women of Canada, adopted a somewhat narrower perspective and highlighted the importance of considering the needs of specific groups of Canadians — including children, seniors, women and Aboriginal persons — when developing health-related programs and policies.
Witnesses told the Committee about the importance of health research for enabling sound health policy and resource allocation decisions. As a benchmark, the Canadian Healthcare Association suggested that at least 1% of total federal health spending be allocated to health research.
In order to achieve its legislated mandate and to compete internationally, the Canadian Institutes of Health Research (CIHR) informed the Committee that it requires a federal investment of $740 million over three years to increase its base budget to $1.1 billion per year. Other witnesses recommended smaller increases to the CIHR’s base budget, ranging from $350 million to $600 million over three years. The Hospital for Sick Children and Research Canada: An Alliance for Health Discovery suggested that the federal government implement targeted envelopes of funding administered by the CIHR and determined in consultation with the federal government. Other witnesses requested enhanced support for existing CIHR initiatives, such as the Canadian Lifelong Health Initiative, or for new initiatives, such as the request for $75 million per year for strategic public health research by the CIHR.
Witnesses identified several new projects and areas of research for federal investment, including a publicly accessible clinical trials registry to ensure the recording and public release of protocol information and trial results in order to avoid selective reporting, a cardiac arrest surveillance registry and a national lifelong cohort study to track the impact of modifiable risk factors on chronic disease outcomes, and rural health research to support evidence-based decisions for the delivery of health in rural and remote communities.
The Committee also heard recommendations regarding continuation of, or improvements to, existing initiatives. Specifically, witnesses proposed a federal investment of $36 million — $5 million to $7 million in 2007 — to improve the chronic disease surveillance system, triennial updates to the Public Health Agency of Canada’s Economic Burden of Illness report, and reinvestment in nursing research through the Nurse Fund, a $25 million, 10-year investment that will expire in 2008.
2. Public Health and Wellness Measures
The Canadian Public Health Association told the Committee that public health may be defined as a society’s organized efforts to improve the health of its population. We heard that public health is carried out through six major functions: health protection; health promotion; health assessment; public health surveillance; chronic injury and disease prevention; and emergency preparedness. We were told that, of the $130 billion health-related expenditures in Canada each year, likely more than 90% is spent on treatment; however, investments in public health can deliver proportionally greater savings in health care spending.
The Canadian Public Health Association recommended that the federal government increase core funding for federal public health functions to $1.1 billion annually, ensure that provinces/territories allocate a portion of the resources provided in the Ten-Year Plan to Strengthen Health Care to public health activities, and undertake a comprehensive review of long-term funding for public health. The Nova Scotia Association of Social Workers also encouraged the federal government to consider improving the health of Canadians by addressing social determinants of health, including poverty, income inequality and social inclusion/exclusion.
Witnesses also recommended expanding the availability of public health information through public reporting on the performance of the public health system by the Health Council of Canada as well as through continued federal support for the Canadian Health Network, a health information web portal coordinated by the Public Health Agency of Canada and Canadian health organizations.
The Canadian Medical Association told the Committee that it remains concerned about the state of Canada’s public health system and that needed infrastructure must be in place prior to a pandemic. Consequently, the federal government was urged to establish a public health infrastructure renewal fund — financed in the amount of $350 million annually — for a public health partnership program with the provincial/territorial governments in order to build capacity at the local level and to undertake advance pandemic planning.
The Committee heard that investments in women’s health — including reproductive health — are important because poor health contributes to poverty among women and reduces their productivity at work and in the home. The Society of Obstetricians and Gynaecologists of Canada and the Association of Obstetricians and Gynecologists of Quebec recommended federal investment in women’s reproductive health, including funding for a pan-Canadian maternity care strategy developed in collaboration with the provinces/territories, a pre-natal screening program, and a federal tax credit for reproductive technology expenditures similar to the provincial tax credit in Quebec.
Witnesses also commented on the importance of immunization. The Committee was informed that immunization is the most effective means of preventing serious communicable diseases and remains one of the most cost-effective types of medical intervention. We were told that, according to the U.S. Centers for Disease Control and Prevention, every dollar spent on vaccines results in savings of up to $27 in medical and societal costs. The Association of Obstetricians and Gynecologists of Quebec, the Canadian Coalition for Immunization Awareness & Promotion, the Canadian Paediatric Society and the Canadian Public Health Association, among others, supported continued federal funding of at least $10 million per year for the National Immunization Strategy and at least $100 million per year for the provincial/territorial governments to maintain ongoing immunization programs. The federal government was encouraged to ensure equal immunization access to all Canadian children through the adoption of a uniform immunization schedule across the provinces/territories and the appropriate use of First Nations and Inuit immunization program funding for Aboriginal children and youth.
Witnesses also encouraged additional federal funding for future immunization programs, with Merck Frosst Canada Inc. and the Federation of Medical Women of Canada specifically requesting $300 million per year. Some witnesses advocated the adoption of an annual process to determine the budget requirements for upcoming vaccines that are recommended by the National Advisory Committee on Immunization. Several witnesses specifically recommended a universal vaccination program for the recently approved vaccine against Human Papilloma Virus.
The Committee heard that injury is the leading cause of death for Canadians under 45 years of age, and is the fourth leading cause of death overall. According to the Insurance Bureau of Canada, injuries result in an estimated $3.9 billion annually in direct health care costs, not including the cost of lost productivity. Consequently, witnesses recommended that the federal government invest in the development of a federal-provincial/territorial strategy on injury prevention and commit to multi-year implementation funding.
The Canadian Dental Association, among others, supported federal reinvestment in tobacco denormalization and reduction strategies, including Health Canada’s Tobacco Control Programme and comprehensive mass media campaigns. Noting that tobacco control programs are the most effective means of preventing death and disability caused by lung cancer and Chronic Obstructive Pulmonary Disease, the Canadian Lung Association urged the federal government to strengthen tobacco control legislation in federal government buildings.
Witnesses also informed the Committee about the importance of healthy lifestyles, noting that physical inactivity and obesity are key risk factors for chronic disease. According to the Canadian Medical Association, the cost of obesity in Canada is approximately $9.6 billion per year. Figure 1 shows how Canada’s rate of obesity compares to rates in other Organisation for Economic Co-operation and Development (OECD) countries.
Figure 1: Rate of Obesity Among Individuals, Aged 15 Years and Older, Organisation for Economic Co-operation and Development Countries, 2003 or Most Recent Year Available
Notes: Obesity is defined as a body mass index greater than 30.
Source: Organisation for Economic Co-operation and Development (OECD), “Obesity,” OECD Factbook 2006.
In order to promote healthy lifestyles among Canadians, witnesses requested federal investment in a variety of areas, including public awareness and education programs, wellness initiatives, chronic disease management programs, and physical infrastructure such as bicycle paths, walking trails, and sports and recreation facilities. The Committee was asked to recommend funding for, and implementation of, the Pan-Canadian Physical Activity Strategy developed by the Coalition for Active Living. The Chronic Disease Prevention Alliance of Canada, the Sport Matters Group and Sport Nova Scotia urged the federal government to allocate 1% of federal health spending to physical activity and sport, and some witnesses requested dedicated funding for infrastructure that promotes healthy living.
The potential role for non-governmental organizations was also identified. Witnesses, including Community Foundations of Canada, highlighted opportunities for the federal government to partner — financially or otherwise — with community foundations and/or private organizations to encourage health and fitness among Canadians. One example of a potential partnership would be the construction of the Lourdéon Wellness Centre, which requested federal investment to supplement contributions from the community, the province of Manitoba and private foundations. Another recommendation involved a federal investment of $40 million to facilitate the implementation of comprehensive school-based strategies for preventive health, in collaboration with the provinces/territories.
Such witnesses as the Canadian Health Food Association, the Heart and Stroke Foundation, the Fitness Industry Council of Canada, the Canadian Meat Council, Ms. Margaret Azevedo, the Sport Matters Group, J.D. Irving, Limited and the Centre for Science in the Public Interest advocated tax incentives to promote healthy lifestyles. Proposals included:
- expanded eligibility for the federal medical expense deduction to include natural health products;
- an increase in the value of the proposed Children’s Fitness Tax Credit from $500 to $1,000;
- expanded eligibility for the proposed Children’s Fitness Tax Credit to include Canadians of all ages and/or all forms of physical activity;
- a federal tax deduction for gym memberships;
- an increase in the value of the federal tax deduction for the sponsorship of community sport by private corporations from 100% to 150%;
- a non-refundable federal tax credit for parents supporting high-performance athletes;
- taxes on sales of high-caloric, nutrient-poor foods;
- removal of the Goods and Services Tax/Harmonized Sales Tax (GST/HST) from products that promote physical activity, natural health products and healthy foods;
- a tax exemption for employer reimbursement of employee expenditures on certified fitness, smoking cessation and approved weight loss programs; and
- differential limits regarding the deductibility of advertising expenditures for food products, depending on the nutritional quality of the food being advertised.
Tax-based approaches to encouraging healthy lifestyles were not supported by all witnesses, however. The Canadian Restaurant and Foodservices Association encouraged an emphasis on public education and awareness rather than on tax-based solutions such as a “fat tax” or onerous nutrition labeling initiatives in restaurants.
The Committee heard that preventive programs that address the determinants of health are essential to improving the health of the general population and to decreasing health inequities. While some measures might have relevance for the entire population, more targeted measures may be needed for certain groups. The Canadian Cancer Society, among others, expressed concern about the recent elimination of funding for the First Nations and Inuit Tobacco Control Strategy and supported the implementation of a replacement program. We learned that 60% of on-reserve First Nations people between the ages of 18 and 34 smoke, as do 70% of Inuit in the North between the ages of 18 and 45.
In addition to comments about tobacco use among First Nations, witnesses requested increased federal funding for other components of Aboriginal health. The Nishnawbe Aski Nation, for example, asked that First Nations health funding be increased by 10% annually over the next three years.
3. Health Professionals and Caregivers
Witnesses told the Committee that the national shortage of health professionals must be resolved. We heard that all of our health strategies, including new investments in health infrastructure and technologies, risk being compromised without the appropriate number and distribution of health professionals across regions and health fields.
The federal government was urged to develop, in collaboration with the provinces/territories and other relevant stakeholders, a pan-Canadian, long-term health human resources strategy and related mechanisms to facilitate and coordinate health human resources planning. The Canadian Nurses Association advocated a federal investment of $10 million in a mechanism that would build on existing networks and databases, provide analytical support to governments, and link human resources planners, educational institutions, employers and health professionals. Witnesses also recommended that the federal government provide sufficient funding to implement a report prepared by the Joint Task Force on Public Health Human Resources, entitled Building the Public Health Workforce for the 21st Century: A Pan-Canadian Framework for Public Health Human Resources Planning.
Witnesses highlighted the need to expand the capacity — both in terms of infrastructure and faculty — of Canada's medical and nursing schools in order to train sufficient health care professionals in order to help address the current and anticipated shortage of nurses, physicians and other health professionals. The Association of Canadian Academic Healthcare Organizations and the Association of Faculties of Medicine of Canada urged the federal government to provide funding to the provinces/territories in order to improve the capacity to train health professionals in Canada.
Other proposals for either attracting new health care professionals or encouraging the labour force participation of existing health care professionals were also presented to the Committee. To encourage Canadians to pursue careers in health care, it was suggested that the federal government fund pilot projects through the Workplace Skills Initiative, such as a mentorship program for new graduates, and create “return-of-services” programs that provide tuition subsidies to nursing students in exchange for service in areas under federal jurisdiction when they graduate. Witnesses noted the importance of recruiting Aboriginal Canadians into health care professions, as well as the opportunity to support existing health care providers to progress into nursing and other professions.
To encourage the labour force participation of existing health care professionals, the Saskatchewan Union of Nurses recommended federal incentives to persuade trained and experienced health professionals — nurses, in particular —to re-enter the labour force. Another suggestion presented to the Committee was a direct advertising campaign to encourage the repatriation of Canadian physicians, nurses and other health care professionals practising in the United States. Finally, the Greater Kitchener Waterloo Chamber of Commerce recommended allowing physicians to employ international medical graduates in training and other qualified health professionals in order to expand the volume of services delivered.
The unique health human resources challenges in rural and remote communities were also noted. The Committee was told that while 31% of Canadians live in rural areas, about 17% of family physicians and 4% of specialists practise in these areas, as indicated in Figure 2.
Figure 2: Number of Physicians in Urban and Rural Regions, Canada, By Specialty, 2004
Source: Canadian Institute for Health Information, Geographic Distribution of Physicians in Canada: Beyond How Many and Where, 11 January 2006.
Since approximately 50% of medical students from rural communities choose rural practice compared to 5% of urban-based students, the Society of Rural Physicians of Canada suggested measures aimed at increasing the percentage of medical students from rural communities from the current level of 8%, such as scholarships to increase access to medical education for rural and remote residents as well as funding to universities with medical schools to develop mechanisms to increase rural representation. The Northern Lights Health Region also advocated the creation of programs and tax incentives to encourage health professionals to seek employment in rural and remote regions of Canada.
Other suggestions to improve rural health and health care services included increased funding to the provinces/territories to hire more health care professionals, increased rural medicine procedural and skills training in medical school programs, enhanced training of residents in rural residency programs, and the creation of a national rural medical round table of licensing, teaching, accrediting and professional medical associations.
The Committee also learned that the inability of physicians to recover the GST/HST paid on goods and services for their practices is a deterrent to investment, including in the technologies required to improve wait time management. The Canadian Medical Association requested that a GST/HST rebate be allowed on costs related to health care services provided by a medical practitioner and reimbursed by a province or provincial health plan.
Proposals to support caregivers were also presented to the Committee. Mothers on the Rampage stressed the importance of recognizing the value of unpaid work — care work, in particular — as a valuable contribution to the economy through such actions as the creation of a ministry for unpaid labour. The federal government was also encouraged to support caregivers by investing in a “caregiver portal initiative” and a 24-hour, toll-free information hotline.
Several tax measures to support caregivers were identified, including extending the Caregiver Tax Credit to spouses of infirm individuals, creating tax provisions to reimburse caregivers for their expenses, and allowing the Attendant Care Deduction to be used in respect of spouses, common law partners or other parties not necessarily in the business of supplying attendant care.
Witnesses also suggested various changes to compassionate care benefits made available to caregivers under the Employment Insurance (EI) program as of 1 January 2004. These changes included extending eligibility to caregivers of individuals who are severely disabled or who suffer from chronic — but not necessarily palliative — conditions, and extending benefits beyond six weeks to include other crisis times during which care must be given.
The Committee also heard recommendations regarding the Canada/Quebec Pension Plan (C/QPP) as it applies to caregivers. It was suggested that the federal government increase the financial security of caregivers by allowing them to contribute to the C/QPP when they are providing care rather than participating in the labour market. Moreover, such witnesses as the Multiple Sclerosis Society of Canada and VON Canada suggested that the C/QPP contain a caregiver drop-out provision similar to the child rearing drop-out provision, which excludes years spent raising children under the age of seven years from the calculation of benefits.
In addition, VON Canada recommended that the federal government provide higher levels of continuing care in First Nations and Inuit communities by investing substantial and sustainable funding in home and community care for this group of Canadians. Noting that families continue to be the primary caregivers in many First Nations and Inuit communities, recommendations were also made regarding support, training and compensation aimed at meeting the specific needs of these caregivers. Finally, the federal government was encouraged to extend the exemption from program review, which has been granted to the Department of Indian and Northern Affairs, to the First Nations and Inuit Health Branch of Health Canada.
While the Committee received requests for increased long-term public funding for health care, we also heard about the importance of increased accountability regarding the efficient and effective use of funding. The Canadian Institute of Actuaries recommended the creation of an office of the chief medicare actuary to report annually on the financial status of health care in Canada as well as to provide analysis on the financial sustainability of the current public health care system and the financial implications of proposed actions. To gauge progress against federal-provincial/territorial health care objectives and to facilitate resource allocation decisions, witnesses such as the Greater Kitchener Waterloo Chamber of Commerce advocated the reporting of comparable health care indicators and benchmarks.
Differing views regarding private sector involvement in the provision of health care services in Canada were presented to the Committee. The Vancouver Board of Trade advocated planned involvement by the private sector to enable the provision of timely and high-quality health care. Others, however, expressed reservations about the privatization of health care, and urged increased monitoring and enforcement of the Canada Health Act. The Canadian Healthcare Association took a neutral position, supporting an evidence-based approach regarding when, where and how private funding and/or delivery should occur, assuming access to health services on the basis of health need is not jeopardized.
Witnesses also spoke about the issue of wait times, with a suggestion made about the adoption of pan-Canadian wait time guarantees. To improve the capacity of health care professionals to provide timely care to Canadians, it was suggested that the federal government create a health delivery infrastructure fund; the Canadian Federation of Nurses Unions recommended that such funding be dedicated only to publicly owned and operated facilities. Other suggestions for reducing health care waiting lists included increasing the efficiency of the public health care system, implementing the recommendations of the Federal Advisor on Wait Times, and enhancing the skills, abilities and number of health care providers. The Committee was reminded, however, that wait times are only one of multiple health care issues requiring resolution.
The Committee learned that Canada lags other industrialized countries in the adoption of electronic medical records and was, therefore, encouraged to recommend accelerated implementation of information technology to support the delivery of health services. Specific recommendations included federal investment in the Canada Health Infoway in support of the recommendation of the Federal Advisor on Wait Times, targeted federal investments in physician office automation and technology in the home and community care sector respectively, and a federal guarantee that every Canadian will have a personal electronic health record within five years.
Witnesses acknowledged that there may be instances in which Canadians pay for medical expenses that are covered neither by a provincial/territorial health care plan nor a private insurance plan. To encourage individual saving for health care, the creation of a tax-sheltered long-term health care savings plan was recommended. In addition, it was suggested that the federal government create a federal tax deduction, rather than a non-refundable tax credit, for medical expenses incurred directly by Canadians.
The federal government was urged by the Dalhousie University, School of Social Work, among others, to create a comprehensive national home and community care program. While the 2004 Ten-Year Plan to Strengthen Health Care provided first-dollar coverage for certain acute home care services, witnesses recommended the inclusion of chronic care services as well. To achieve this objective, the Canadian Healthcare Association recommended an initial federal investment of $1 billion over three years. In making their recommendations, witnesses acknowledged the need to respect provincial/territorial jurisdiction regarding the delivery of care, but encouraged transparency and accountability as well as the linking of federal funds to pan-Canadian objectives for home and community care.
VON Canada made several additional recommendations regarding home care, including funding for community support services, financing to retrain and recruit high-quality labour, and an examination of the appropriate use of technology.
Investment in a palliative and end-of-life care strategy was also encouraged. In developing this strategy, the federal government was asked to re-evaluate the structure, eligibility requirements and public awareness of the existing Compassionate Care Benefits program, which the Committee learned has had low participation since its introduction in 2004.
Several of the Committee’s witnesses mentioned the establishment, in October 2004, of a ministerial task force comprised of the federal and provincial/territorial ministers of health to guide the development and implementation of the National Pharmaceutical Strategy announced as part of the 2004 Ten-Year Plan to Strengthen Health Care. A number of witnesses, including the Canadian Diabetes Association, the Canadian Labour Congress and the Canadian Federation of Nurses Unions, supported the expeditious implementation of a national pharmacare program by the federal and provincial/territorial governments in order to ensure that all Canadians have full and equitable access to drug treatment and care, both in and out of hospital. Witnesses identified specific program attributes in their vision of a national pharmacare program, including first-dollar coverage for prescription drugs, catastrophic drug coverage, bulk purchasing, and/or a national drug formulary.
The Committee also heard recommendations for enhancing drug safety in Canada. The Canadian Association of Chain Drug Stores supported the suggestion of the Canadian Pharmacists Association for a federal investment of $150 million over 10 years to improve drug safety and effectiveness. Another recommendation encouraged the federal government — in consultation with the provincial/territorial governments — to establish a national prescription drug agency under the Canada Health Act as a means of evaluating new and existing drugs, controlling costs, and ensuring the quality, safety and cost-effectiveness of all prescription drugs. The Committee was also urged to recommend changes to improve the timeliness and transparency of Health Canada’s existing drug review process and to ensure that adequate funds are available for effective implementation of the progressive drug licensing framework currently under development.
The Canadian Pharmacists Association requested a federal investment of $50 million for an electronic adverse drug reactions (ADR) reporting system that integrates reporting forms into software used by health care professionals at the point of care, and an additional $10 million annually for five years to establish and promote a related training program for health professionals.
Witnesses informed the Committee that new research is beginning to demonstrate that oral conditions have implications for overall health; for example, periodontal diseases have been implicated in pre-term, low-birth-weight babies and cardiovascular disease. Currently, oral care accounts for 6.8% of total public and private health spending in Canada, or $9.7 billion dollars in 2005. We also learned that Canada is the second lowest among OECD countries in terms of public oral health expenditures per capita, since most oral health care is financed through private health insurance and the private sector.
Since oral disease is almost entirely preventable, witnesses made recommendations designed to improve awareness about oral health and access to oral health services. In order to increase information and awareness about oral health, the Canadian Dental Association recommended that the federal government dedicate 3.5% of funding for the CIHR to oral health research and that it work with relevant stakeholders to promote oral health through public awareness campaigns.
Witnesses such as the National Anti-Poverty Organization advocated a national oral health care program that provides basic dental care services as one option to address oral health disparities between low-income and other Canadians. It was also suggested that the federal government give financial support to dental schools, which provide affordable dental care services to many low-income Canadians.
To address oral health disparities between Aboriginal and non-Aboriginal Canadians, witnesses supported continuation of the Non-Insured Health Benefits (NIHB) program for eligible First Nations and Inuit Canadians. The Canadian Dental Hygienists Association suggested that funding for the NIHB program be increased annually by 10.9%, a figure that is consistent with program projections by the Assembly of First Nations in its 2005 action plan.
Witnesses also suggested measures to increase accessibility for other groups, including investigating the merit of a new medical savings plan that would allow retired persons to place part of their Registered Retirement Savings Plan funds into a special account to be spent free of taxes on medical expenses that are not covered under the Canada Health Act, such as oral care, and amending the Public Service Dental Care Plan and the Veterans Affairs Canada Dental Services Program to allow direct payment to licensed dental hygienists, which the Committee was told would reduce the cost of oral health services and enable the provision of services in homes or long-term care facilities.
The Committee was informed that 20% of Canadians will experience an episode of mental illness in their lifetime and that 3% of Canadians live with a serious, persistent mental illness. Witnesses also noted that the direct and indirect costs of mental illness and addiction in Canada are approximately $33 billion per year. In May 2006, the Standing Senate Committee on Social Affairs, Science and Technology released its report, entitled Out of the Shadows at Last: Transforming Mental Health, Mental Illness and Addictions Services in Canada, which received support from a number of witnesses.
Noting that Canada is the only Group of Eight (G8) country without a national mental health strategy, the Canadian Mental Health Association, the Canadian Mental Health Association — Central Region and the Canadian Alliance on Mental Illness and Mental Health were among the witnesses that supported the establishment of a mental health commission to develop and implement a pan-Canadian strategy for mental health and mental illness, as recommended in the Senate report. In addition, the British Columbia Alliance for Accountable Mental Health and Addictions Services encouraged a federal investment of $5.36 billion over 10 years to establish a mental health transition fund, comprising a mental health housing initiative, community services and other strategic investments. Some witnesses supported certain elements of this proposal. Other suggestions included the development of an anti-stigma campaign and initiatives to promote mental health literacy.
To facilitate a better understanding of the incidence and burden of mental illness in Canada, the Canadian Alliance on Mental Illness and Mental Health recommended an annual federal investment of $25 million for research into clinical, health services and population health aspects of mental health, mental illness and addiction.
The Alliance to End Homelessness urged amendments to the Canada Health Act to uphold the portability clause to include urgent, out-of-province/territory mental health care provided in a psychiatric hospital or institution.
Witnesses provided the Committee with a number of recommendations regarding specific diseases.
Last year, the Committee was told that cancer is expected to become the single greatest cause of premature death by 2010. The Canadian Cancer Society estimates, however, that the 2006 federal budget commitment of $260 million over five years for a Canadian strategy for cancer control will prevent more than 1.2 million Canadians from developing cancer, save the lives of more than 420,000 Canadians, result in health care savings of more than $39 billion, and prevent the loss of more than $101 billion in wage-based productivity over the next 30 years. The Canadian Cancer Society, along with the Canadian Coalition for Action on Tobacco, requested an increase in federal tobacco taxes equal to $10 per carton of 200 cigarettes, elimination of the tax loophole for roll-your-own tobacco, and federal actions to address the problem of low-priced contraband cigarettes.
To advance understanding of the current state of respiratory disease and the effectiveness of existing national and international measures, the Canadian Lung Association recommended that the federal government invest $3 million over two years to support the development of a national framework on respiratory health. Similarly, the Parkinson Society of Canada advocated a federal investment of $5 million to acquire baseline and projected data on the economic and social burdens of Parkinson’s disease, which would increase understanding of the disease and facilitate better public policy decisions.
The Committee learned about dystonia, a crippling neurological disorder with no cure. Because dystonia is an “orphan disease,” pharmaceutical companies appear to have less interest in bringing cures to market due to return-on-investment concerns. As a result, the Dystonia Medical Research Foundation of Canada hoped to increase opportunities for the CIHR to fund dedicated clinical and statistical research initiatives for dystonia by requesting increased federal investment in the Research Translation, Commercialization and Innovations Special Program and the Institute of Neurosciences, Mental Health and Addiction.
The Committee also heard about research which suggests that some First Nations communities in Canada have Fetal Alcohol Spectrum Disorder (FASD) incidence rates of 16%. The Canadian Teachers’ Federation advocated the importance of accessible, culturally relevant intervention programs for families of children with FASD in order to receive adequate training and to develop community-based supports.
Finally, the Committee was informed that Canada has one of the highest rates of juvenile (type 1) diabetes in the world. The Juvenile Diabetes Research Foundation of Canada requested a federal investment of $25 million annually for the next five years to fund the Juvenile Diabetes Research Foundation’s priorities. In addition, we learned that diabetes occurs in First Nations adult populations three times more often than in non-First Nations populations. With type 2 diabetes accounting for about 78% of diabetes cases among First Nations adults and becoming increasingly common among First Nations children, it was suggested that the federal government establish community-operated and culturally relevant diabetes programs in Aboriginal communities that recognize the factors contributing to an increased incidence of type 2 diabetes.
The Committee believes that people are more productive, are better able to contribute to the nation’s competitiveness and enjoy a higher quality of life when they are healthy. From this perspective, we feel it is critically important that our health care system ensure good health outcomes. We urge ongoing vigilance in order to ensure that accountability, transparency, efficiency and effectiveness characterize the expenditure of moneys committed to health care. Good health outcomes benefit individuals and their families, employees and employers, and the community. They also enhance the quality of life and productivity of Canadians.
With the relatively recent development of the Ten-Year Plan to Strengthen Health Care, which provides for improved access to home care, community care, and safe and affordable drugs, the Committee believes that the health care focus should now shift — to a greater extent — to prevention in a number of areas.
Good nutrition and physical activity lead to reduced health problems such as obesity, diabetes, cancer, heart disease and strokes, among others. In the Committee’s view, expansion of the proposed Children’s Fitness Tax Credit to Canadians of all ages and to a broad range of physical activity should be considered. Immunization results in reduced human costs and lower health care costs, and we believe that there is an urgent need to ensure the existence and adequate funding of a universal vaccination program for Canadians of all ages residing in all regions, including — as one component — the vaccine against Human Papilloma Virus.
Moreover, the Committee feels that tobacco control and smoking cessation measures lower the risk of cancer and improve the health status of those with respiratory problems. This area is also one in which we believe existing federal measures must be safeguarded and augmented.
Although the Committee could provide other examples, these suggestions illustrate our point: prevention is better than a cure. It is for this reason that the Committee recommends that:
RECOMMENDATION 1
The federal government — in conjunction with provincial/territorial governments, the Canadian Institutes of Health Research, health agencies, not-for-profit health charities and other stakeholders — help to ensure the existence of adequate financing for all elements of preventive programs focused on measures that will improve the health outcomes of Canadians. Such measures should provide Canadians of all ages residing in all regions with an incentive to improve their choices with respect to nutrition, physical activity, immunization and smoking cessation.
Moreover, the government should continue to allocate funds for the National Immunization Strategy and should establish a dedicated fund, in the amount of $300 million over three years, for future immunization programs and new vaccines.
The Committee also believes that inadequate attention has been paid to mental health and mental illness. Good health outcomes in this area, too, will help to ensure a high quality of life for citizens and will contribute to both productivity growth and competitiveness. Consequently, the Committee recommends that:
RECOMMENDATION 2
The federal government, in conjunction with the provincial/territorial governments, help to develop a national mental health strategy. This strategy — which should include the creation of a Canadian mental health commission — should address the mental health needs of all Canadians, but particularly those who are determined to be at higher risk. The strategy should be completed no later than 31 October 2007.
Moreover, the Committee believes that inadequate attention has been paid to rare diseases and to diseases for which a relatively small investment now would result in significant returns in terms of reduced health care costs. From this perspective, the Committee recommends that:
RECOMMENDATION 3
The federal government, in conjunction with the provincial/territorial governments, help to develop a plan for research and funding related to rare diseases and such diseases as hepatitis C, HIV/AIDS, Parkinson’s disease, dystonia and type 1 diabetes. The plan should be developed no later than 30 June 2007.
The Committee believes that chronic diseases — which include diabetes, depression, hepatitis and asthma, among others — affect both physical and mental well-being and have significant human and economic costs. Since chronic diseases often do not improve, and are rarely cured completely, we feel it is particularly important that Canadians are aware of the risk factors for chronic diseases — such as physical inactivity and obesity — and that the federal government has clear and comprehensive information about the nature, magnitude and effects of chronic diseases in Canada. In our view, it is only with this type of complete information that the federal and provincial/territorial governments can take appropriate action. For this reason, the Committee recommends that:
RECOMMENDATION 4
The federal government, in conjunction with the provincial/territorial governments, help to develop a more comprehensive pan-Canadian chronic disease surveillance system. This enhanced system should be developed no later than 1 September 2007.
Finally, in the Committee’s view, caregivers are an invaluable aid to family members who are ill. They provide much-needed emotional support as well as health-related services that might otherwise have to be provided by health care professionals. While some federal mechanisms already exist, we believe that more could be done to support family members who provide assistance to their loved ones who are ill. Therefore, the Committee recommends that:
RECOMMENDATION 5
The federal government develop and implement a family caregivers support strategy. This strategy should ensure the existence of tax measures that support caregivers.
A well-educated and highly skilled workforce fulfills a crucial role in a productive and competitive economy, generating innovation and facilitating the adoption of new technologies by businesses, among other functions. In addition to specialized knowledge applicable to a particular task or job, general skills and competencies related to literacy, numeracy and communication are also important for day-to-day living and labour force participation.
Because individuals develop skills and acquire knowledge throughout their lives, in both formal and informal settings, there are a variety of opportunities for the federal and other orders of government to facilitate lifelong learning and education with investments and incentives in such areas as early learning and child care, primary and secondary school, post-secondary education, skilled trades, on-the-job training and skills development, and literacy.
1. Early Learning and Child Care
Since decisions about early learning and child care for Canadian children have important implications for the first stages of human capital development and parents’ labour market participation, such witnesses as the Canadian Child Care Federation and the Child Care Coalition of Manitoba encouraged the federal government — in collaboration with the provincial/territorial governments — to develop a national family or social policy framework with national child care as a cornerstone.
Regarding child benefits, witnesses suggested that:
- the Universal Child Care Benefit (UCCB) be expanded to include children between the ages of 6 and 12 years;
- benefits paid through the taxable UCCB be redirected to the Canada Child Tax Benefit (CCTB) to ensure that families in which both partners work outside the home are not penalized;
- the maximum value of the CCTB be increased, with many groups advocating $4,900 or $5,000 per child, indexed for inflation; and
- the federal government work with the provinces/territories to end the clawback of the federally funded National Child Benefit Supplement (NCBS) from low-income families with children.
Such witnesses as the Child Care Coalition of Manitoba, the Coalition of Child Care Advocates of BC, First Call: BC Child and Youth Advocacy Coalition, the Manitoba Government and General Employees Union, Make Poverty History, the Canadian Co-operative Association, Communities for Children, and Dalhousie University, School of Social Work supported the development of a pan-Canadian, publicly funded early learning and child care (ELCC) system that respects the QUAD principles of quality, universality, accessibility and development.
Some witnesses expressed their preference for regulated and/or not-for-profit child care or, in the case of the Canadian Co-operative Association, for the development of child care co-operatives. It was suggested that federal investments be sufficient and appropriately allocated to ensure that an ELCC system meets the needs of all regions of Canada (including urban, rural and remote communities), of all children (including children aged 6 to 12 years, disabled children and Aboriginal children who live on- and off-reserve), and of all parents (regardless of the type of child care their situation requires).
While the requested level of federal investment in an ELCC system varied among witnesses, many groups advocated sustained and dedicated multi-year funding to the provinces/territories. Some witnesses, including SpeciaLink, specifically advocated the reinstatement of the federal-provincial/territorial Moving Forward on Child Care Agreements. The Coalition of Child Care Advocates of BC, First Call: BC Child and Youth Advocacy Coalition and the BC Child Care Advocacy Forum stated their preference for shifting child care costs from users to governments over time, with some groups advocating a short-term goal of reducing total user fee contributions to a maximum of 20% of the total cost of child care.
Witnesses, including the Manitoba Child Care Association, told the Committee about the need to ensure, through monitoring and reporting requirements, that the provinces/territories are held accountable for their expenditure of federal ELCC funds. Other witnesses argued for guarantees that federal funds be used to supplement — rather than replace — provincial/territorial spending. To this end, several groups supported the enactment of federal child care legislation. The Child Care Advocacy Association of Canada, the Ontario Coalition for Better Child Care and the New Brunswick Child Care Coalition suggested that any legislation adopted respect the rights of Quebec and First Nations to establish their own child care systems.
The need for additional affordable and high-quality child care spaces was noted by a number of groups, including the National Children’s Alliance and the National Council of Welfare, TLC Centre Inc. and the Portage Day Care Center. Witnesses shared their suggestions about how the $250 million identified in the 2006 federal budget should be used to create child care spaces. The Fraser Valley KAIROS Group supported tax incentives to encourage business to create child care spaces, while other witnesses — including the Ontario Municipal Social Services Association and the Ontario Coalition for Better Child Care — preferred that the provinces/territories receive funding in the form of dedicated transfers for child care. The Committee was reminded by the Human Early Learning Partnership, among other witnesses, about the importance of investing in the ongoing operation of child care spaces once the initial capital investment has been made.
Not all witnesses supported a national ELCC strategy, however. REAL Women of Canada shared with the Committee the results of a 2005 survey by the Vanier Institute of the Family, which found that 90% of Canadians believed that, in two-parent families, one parent should ideally stay at home and raise the children. Furthermore, the survey revealed that parental care ranked first and child care centres ranked fifth when parents were asked whom they would prefer to care for their preschoolers.
Some witnesses, such as Mothers on the Rampage, the Kids First Parent Association of Canada, the Care of the Child Coalition and REAL Women of Canada, believed that federal child care-related funds should be provided directly to individuals and families, who could then direct them to the caregiver of their choice. Proponents of this approach suggested that it would provide more equitable treatment of women who choose to stay in the home and those who work in the paid labour force. To this end, REAL Women of Canada and the Kids First Parent Association of Canada advocated the creation of a refundable tax credit for all children in order that families would be compensated for expenses incurred, regardless of the child care method they choose.
There was also no consensus on the appropriate role, if any, for the federal government with respect to child care associations. The Manitoba Child Care Association requested that the federal government sufficiently fund national and provincial/territorial child care associations, which provide research and resources to regulated ELCC programs. Other witnesses advocated the elimination of federal funding for child care lobbyists and advocates.
The Committee also heard suggestions related to the child care workforce. The Canadian Child Care Federation recommended the development of a national human resources strategy for the child care sector to address such issues as wages and benefits as well as national standards for training to facilitate the inter-provincial/territorial movement of workers. To enhance the quality and stability of the child care workforce, incentives for ongoing professional development as well as prior learning assessment and recognition to allow experienced child care providers to gain needed educational requirements were also advocated. The Face of Poverty Consultation was among the witnesses that encouraged increased salaries and/or benefits for professionally trained early childhood educators and caregivers.
Witnesses spoke about several issues regarding education from kindergarten through Grade 12, including school board finances, the use of technology and the Internet in classrooms, and the role for schools in the lives of Aboriginal and other Canadian children.
The Canadian School Boards Association and the Toronto District School Board requested that the federal government provide a 100% GST rebate on school board purchases. The Committee heard that the system of GST rebates, claims and payments currently made available to school boards has become increasingly complex and onerous. In addition, the creation of a joint federal-provincial/territorial emergency reserve program to assist school boards in financial crisis was recommended.
Witnesses, including the Canadian Children’s Rights Council, noted the educational opportunities offered by technology. Recognizing the importance of the Internet as a teaching tool in the modern classroom, the need for clarity on the issue of digital rights and the use of Internet materials for educational purposes was highlighted as an important priority. The Canadian School Boards Association and the Canadian Teachers’ Federation recommended that the Copyright Act be amended to provide teachers and students with legal access to publicly available Internet materials for which there is no expectation of payment on the part of the creators. In order to enhance access to technology, federal funding was requested for Computers for Schools, a program that involves Canadian youth in the refurbishment and distribution of computers to Canada’s neediest schools, libraries and communities.
Regarding the role of schools in children’s lives, Communities for Children encouraged support for the capacity of schools to keep children in school, prevent substance abuse, and teach life and work skills.
The Committee also heard concerns about the disparity in education achievement levels between Aboriginal and non-Aboriginal children and the consequences for subsequent employment. According to the Council of CEO's of Saskatchewan's Regional Colleges, 37% of Aboriginal Canadians without a high school diploma participate in the labour force; this figure increases to 65% among Aboriginal Canadians with a high school diploma. Witnesses requested a federal investment of $1 billion over three years for a comprehensive Aboriginal education strategy, as well as federal assistance in developing the capacity of First Nations’ authorities to deliver high-quality education. The University of Winnipeg requested a federal investment of $60 million in its Partners for Aboriginal Education initiative, a partnership approach to an integrated educational strategy for Aboriginal Canadians of all ages.
Nunavut Tunngavik Inc. noted that, despite the high rate of unemployment in Nunavut, employers have difficulty hiring and retaining qualified staff, including Inuit educators. The development of long-term strategies for education and training was encouraged as a means of addressing the shortage of qualified labour.
The Committee heard about the importance of developing a highly educated and skilled population to enable Canada to compete in global markets. As Figure 3 illustrates, Canada’s rate of post-secondary attainment is currently the highest of any OECD country. Witnesses provided us with suggestions for maintaining and improving upon this success.
Figure 3: Percentage of Individuals, Aged 25 to 44 Years, with Tertiary Education, Organisation for Economic Co-operation and Development Countries, 2003
Source: Organisation for Economic Co-operation and Development (OECD), “Tertiary Attainment,” OECD Factbook 2006.
While witnesses acknowledged the need to respect provincial/territorial jurisdiction in the area of education, some witnesses — including the Canadian Alliance of Student Associations, the College Student Alliance and the Association of Nova Scotia University Teachers — advocated the creation of a pan-Canadian accord on post-secondary education or a post-secondary education act that would outline national guidelines, principles, responsibilities and expectations for both federal and provincial/territorial governments, as well as a funding formula, among other things. Furthermore, it was recommended by witnesses — including the Ontario Undergraduate Student Alliance — that the Canada Social Transfer (CST) be divided into a social transfer and a post-secondary education transfer as a means of increasing transparency and provincial/territorial accountability for the use of funds.
Witnesses generally advocated increased federal funding for post-secondary education. Some groups, including Yukon College and the Fédération des cégeps, recommended that the CST be restored to its pre-program review level, adjusted for inflation and population growth.
To ensure that those provinces/territories that are net importers of students receive sufficient funding, the Alliance of Nova Scotia Student Associations and the Association of Nova Scotia University Teachers encouraged the allocation of federal post-secondary funding on a per-student, rather than a per-capita, basis. McMaster University also encouraged the federal government to consider providing operating funding related to highly mobile students, including graduate students. The Université Laval, the Regroupement des cégeps de la région de Québec and the Fédération des cégeps urged the federal government to increase post-secondary education funding for Quebec in particular.
Noting the success of U.S. post-secondary institutions at securing funding through private gifts, donations and endowments, the Toronto Board of Trade encouraged the federal government to work with Canadian post-secondary institutions and the private sector to increase the attractiveness of private sector investment in post-secondary education in Canada.
The Committee learned that between 1980 and 2004, average inflation-adjusted earnings increased by 6.7% and average tuition fees increased by approximately 20%. It is estimated that undergraduate students in Canada will pay, on average, $4,347 in tuition fees for the 2006-2007 academic year, compared to $1,464 in 1990-1991. We were also told that approximately 350,000 students in Canada borrow to finance their education each year, with the average student debt for a four-year program totaling almost $25,000. The Nova Scotia Government and General Employees Union recommended that the federal and provincial/territorial governments jointly adopt a short-term objective to reduce tuition fees in Canada with the longer-term goal of eliminating tuition fees completely. Other witnesses advocated tuition fee freezes, with some groups suggesting that increased federal funding for post-secondary education should be made contingent on stable or reduced rates of tuition fees.
In light of increased tuition fees, witnesses expressed concern about the accessibility of post-secondary education. The Canadian Alliance of Student Associations proposed that the federal government, in collaboration with the provincial/territorial governments and other relevant stakeholders, conduct a holistic review to assess the effectiveness of federal support for students. In its opinion, the review should focus on improving access for under-represented groups and allowing all students to obtain a post-secondary education without accumulating an unreasonable amount of debt. Other suggestions for improving accessibility included increased funding for needs-based grants and other forms of non-repayable financial aid, such as bursaries and scholarships.
The Committee learned that more than 80% of children with Registered Education Savings Plans (RESPs) pursue post-secondary education, compared to 74% of children with some form of education savings and 50% of children without any education savings. Between 1997 — when the Canada Education Savings Grant program was introduced — and 2004, assets held in RESPs increased by 518%. Moreover, the number of children with an RESP increased by more than 200% between 1997 and 2006, from 700,000 to more than 2.2 million.
The RESP Dealers Association of Canada made several proposals to enhance the success of RESPs and related programs, including marketing the importance of saving for higher education to low- and moderate-income families, eliminating administrative barriers to starting RESPs, developing flexibility in RESP contribution limits, and encouraging other provinces/territories to create programs like the Alberta Centennial Education Savings Plan, which pays a $500 grant into the RESPs of all children born in 2005 or later and provides subsequent grants at key points in the child’s development. The Committee was also encouraged to recommend that RESP proceeds be exempt from exposure under the Bankruptcy and Insolvency Act, as recommended by the Standing Senate Committee on Banking, Trade and Commerce.
Not all witnesses, however, believed that RESPs are the most effective means of assisting Canadians from lower-income families to obtain post-secondary education. Some suggested that federal resources currently allocated to such measures as RESPs, Canada Education Savings Grants and Canada Learning Bonds instead be distributed in the form of needs-based grants to support high-need and under-represented groups.
Education-related tax credits also did not receive unanimous support from witnesses. On the one hand, the Yukon Child Care Association recommended that the value of the education tax credit be increased, and the Canadian Council of Chief Executives advocated increases in both the rates for the tuition and education tax credits and the amount of these credits that can be transferred from students to parents. On the other hand, the Canadian Association of Student Financial Aid Administrators requested a review of education-related tax credits with a view to reallocating a portion of the federal fiscal cost of these measures to means-tested programs to support high-need and under-represented groups.
In addition, the Fédération étudiante universitaire du Québec requested that, for those provinces/territories with tuition fees below the Canadian average, the federal government provide additional funding for post-secondary education to compensate for the relatively reduced benefits received by their students from education-related tax credits.
There was also no consensus among witnesses regarding the Canada Millennium Scholarship Foundation (CMSF). The Committee was informed that the CMSF represents 27% of needs-based student financial aid Canada-wide and more than 40% of needs-based aid in many provinces, including Manitoba, Newfoundland and Labrador, Nova Scotia and Prince Edward Island. Created by an Act of Parliament in 1998 with a one-time investment of $2.5 billion, CMSF funds will be exhausted by 2009-2010.
Several witnesses supported an extension of the CMSF mandate, with various suggestions for the length of the mandate, the size of the endowment, and the frequency of reviews and audits. Witnesses, including the Ontario Undergraduate Student Alliance, the Alliance of Nova Scotia Student Associations and the Canadian Association of Student Financial Aid Administrators, also supported a continuation of the CMSF or, failing that, the creation of another program providing the same level of non-repayable assistance in its place. Other witnesses, including the Canadian Federation of Students and the Canadian Association of University Teachers, urged that the CMSF be converted into a national program for needs-based grants.
Witnesses expressed support for the Canada Access Grants program, which finances 50% of the cost of tuition fees — to a maximum of $3,000 — for first-year students from low-income families, but offered suggestions for improvement. For example, they suggested that the grants be permitted beyond the first year of education, with several groups advocating support for the duration of students’ studies. Other suggestions included calculating the grants on the basis of the total cost of education rather than on tuition fees alone, and allowing the value of the grants to vary depending on the students’/families’ income and number of family members.
Regarding student loans, the College Student Alliance and the Alma Mater Society of the University of British Columbia advocated a comprehensive review of the Canada Student Loans Program to ensure the accessibility and affordability of Canada’s post-secondary education system and to mitigate a trend toward indebtedness.
Witnesses urged the federal government to work with the provincial/territorial governments to harmonize and integrate student loan programs and to develop loan remediation programs. Because student loans are an investment in productivity, the federal government was encouraged to reduce interest rates for Canada Student Loans to prime plus ½% (floating) and prime plus 3% (fixed). Noting that the current weekly student loan limit of $210 is insufficient to meet rising educational and living costs, several witnesses suggested that the limits be reviewed periodically — with suggestions ranging from annual to triennial — to ensure that they meet the financial needs of students. The Committee was also encouraged to recommend an increase in the lifetime assistance limits to facilitate the completion of graduate and doctoral programs.
Witnesses also expressed concern that the Canada Student Loans Program assessment process does not adequately account for students’ financial situations. The Canadian Association of Student Financial Aid Administrators proposed that all needs-based awards provided by post-secondary institutions be excluded from the needs-assessment calculation for Canada Student Loans, that the in-study work exemption be increased from the current level of $50 per week to $100 per week in order to allow students to earn additional income without jeopardizing their level of financial assistance, and that an unsubsidized parental loan program be created. Mr. Ed Granger supported changes to the Canada Student Loans Program that would remove the penalties associated with part-time work, and also encouraged reconsideration of the existing limits on students’ ability to own or lease vehicles.
For borrowers who are having difficulty repaying student loans, witnesses suggested a variety of measures, including forgiving all student loans, making debt remission programs more user-friendly and increasing their profile among students, increasing the income threshold for determining eligibility for student loan interest relief and the maximum allowable amount of debt reduction, and removing the limitation in the Bankruptcy and Insolvency Act that prevents students from applying for bankruptcy for 10 years after they cease to be students. For students who choose to obtain a student loan from a financial institution, it was suggested that interest payments be deductible from income for purposes of taxation.
Mr. Jeremy Amott proposed the creation of a student insurance trust (SIT) program in collaboration with the life insurance industry. The SIT would essentially be a group life insurance program in which all students receiving federal loans would be required to enroll; the federal government would pay the premiums, based on the percentage of students whose loans are deemed to be uncollectible, and would also be the sole beneficiary. Through the SIT, the federal government could eliminate losses from irretrievably defaulted loans, extend a fair and cost-effective form of debt relief to borrowers with no prospects of repaying their loans, and generate revenues over the long term. Because the SIT would require a number of changes to existing federal government expenditure management and fiscal processes, Mr. Amott encouraged the federal government to conduct an in-depth, interdepartmental study of the idea.
Several witnesses noted what they perceived to be a confusing array of student financial assistance mechanisms. The Association of Canadian Community Colleges, among others, promoted the creation of a learner support system to simplify existing mechanisms and to address the needs of specific groups of Canadians, including Aboriginal peoples, immigrants and individuals with low literacy skills. In addition, to assist in student financial counseling, it was suggested that the federal government and relevant stakeholders centralize all information regarding student assistance provided by the federal and provincial/territorial governments and make it accessible to students, governments, service providers and post-secondary institutions.
Citing the importance of international educational exchanges for personal development and the international reputation of Canadian universities, witnesses such as the University of Alberta provided ideas for encouraging Canadians to study abroad and for foreign students to study in Canada.
To encourage Canadians to study abroad, it was recommended that the federal government create a national graduate student research exchange program, permit students to use Canada Graduate Scholarships to study abroad, and provide increased student financial assistance for international education. The Committee was informed by the Canadian Association for Graduate Studies that funding for academic programs managed by the Department of Foreign Affairs and International Trade, including Canada’s participation in the Canada-United States Fulbright Program and the Commonwealth Scholarships, has been terminated; consequently, we were encouraged to recommend the continuation of funding for these programs.
To encourage foreign students to study in Canada, it was recommended that the federal government assist in the promotion of Canadian university graduate programs abroad, use existing offshore partnerships to provide pre-departure assistance, and improve the efficiency of student visa processing.
The Committee heard that, in 2003, American universities awarded 19 times more master’s degrees and 12 times more doctoral degrees than Canadian universities, despite having only 9 times more people in the 25-34 year-old age cohort. McGill University suggested that the federal science and technology strategy include an action plan to encourage more students — both domestic and international — to undertake graduate studies in order to address the shortage of graduate degree holders in Canada. In order to monitor progress in this regard, the Canadian Association for Graduate Studies encouraged continued federal funding for Statistics Canada’s Survey of Earned Doctorates.
Witnesses encouraged the federal government to work with the provinces/territories to develop a plan to increase post-secondary participation and completion among Aboriginal persons, a group of Canadians that is currently under-represented in post-secondary institutions. The Committee heard a number of requests for increased financial aid in order to improve access to post-secondary education for Aboriginal Canadians, both on- and off-reserve. While the provision of full, non-taxable financial assistance to all qualified First Nations was advocated, others recommended expanding aid through existing programs. Witnesses, including the Nishnawbe Aski Nation and the Aboriginal Institutes’ Consortium, encouraged the federal government to increase funding and to expand eligibility for the Post-Secondary Student Support Program for on-reserve Aboriginal Canadians. In addition, the Canadian Alliance of Student Associations encouraged increased grant funding for Aboriginal students through the Canada Student Loans Program and the Canada Millennium Scholarship Foundation.
As well, the University of Ottawa noted its recent development of a special program in medicine for Aboriginal students and encouraged the federal government to continue to work with universities and colleges to develop programs that respond to the needs of Aboriginal persons and communities.
McMaster University also spoke about the importance of ensuring access to post-secondary education for Canadians with disabilities. Specifically, federal funding to develop an office of accommodation that would support research on disability supports, provide information and resources to students with disabilities, and allocate financing to enable post-secondary institutions to meet the needs of these students was encouraged.
Although witnesses tended to focus on improving access to post-secondary education, the Committee was also informed that investments are needed in post-secondary infrastructure. According to Brandon University, a 1999 survey of Canadian universities and colleges revealed accumulated deferred maintenance among respondents valued at $3.6 billion. Contingent on the existence of sufficient funds in the 2005-2006 federal budgetary surplus, the 2006 federal budget announced the creation of the Post-Secondary Education Infrastructure Trust, a one-time $1 billion investment to support critical and urgent investments in infrastructure, equipment and related institutional services in Canadian universities and colleges. While they supported this investment, several witnesses encouraged the development of a mechanism to provide ongoing funding to support the infrastructure needs of post-secondary institutions in order to ensure the availability of the facilities needed for learning, teaching and conducting research.
Some witnesses advocated infrastructure funding for specific types of post-secondary institutions. The Association of Universities and Colleges of Canada, the Council of CEO's of Saskatchewan's Regional Colleges, Polytechnics Canada, Seneca College of Applied Arts and Technology, and Red River College of Applied Arts, Science and Technology, for example, urged the creation of a dedicated infrastructure fund to address the specific facility and equipment modernization needs of colleges and technical institutes, which support skills training in Canada. The Association of Colleges of Applied Arts and Technology of Ontario indicated its desire to have federal funding for infrastructure development supplied directly to post-secondary institutions.
Witnesses also advocated funding for specific types of infrastructure. For example, Université Laval requested that the federal government commit $120 million annually to the development of sports infrastructure, while other witnesses — including Yukon College and Polytechnics Canada — focused on investment in information and communication technologies and e-learning infrastructure both to improve access in rural and remote areas and to increase access for adult learners, particularly in areas of skills shortages.
The Committee heard about Indigenous Institutions of Higher Learning (IIHLs), which are public post-secondary institutions that are legally controlled by Indigenous people and/or communities, that may or may not be affiliated with a recognized college or university, that primarily serve an Indigenous student population and Indigenous people regardless of nation-affiliation and/or legal status, and that develop and offer courses, programs, certificates, degrees or diplomas that may or may not be transferable to other post-secondary institutions. The National Association of Indigenous Institutes of Higher Learning and the Aboriginal Institutes’ Consortium informed us that IIHLs — or First Nations-controlled post-secondary institutions — are seeking official recognition of their role in Canada’s system of post-secondary education, recognition of their rights to grant degrees, diplomas and certificates, grants for program and curriculum development and delivery, and access to the funding made available to other post-secondary institutions, including infrastructure funding.
Concerns regarding part-time faculty and graduate students working as teaching assistants, demonstrators and markers in Nova Scotian universities were also brought to the Committee’s attention. The Canadian Union of Public Employees, Local 3912 informed us that hourly pay for graduate students is about 35% below the national average and starting salaries for part-time instructors are about 25% lower than the national average. To address these concerns, designated federal funding for improved wages and benefits for graduate students, as well as improved income, benefits and job security for part-time academic faculty, were recommended. Additional funding was requested to encourage part-time faculty to increase their educational qualifications.
Noting that credit and credential recognition is a barrier to the inter-provincial/territorial mobility of students, Université Laval, Polytechnics Canada and Seneca College of Applied Arts and Technology advocated the development of a national credentials framework and accreditation/recognition system.
The Committee heard about the growing skills shortage in Canada, with specific reference to construction and resource industries. The federal government was encouraged by Red River College of Applied Arts, Science and Technology and the Atlantic Provinces Community College Consortium to support and enhance access to apprenticeship programs in colleges as a means of overcoming this labour challenge. The Northern Alberta Institute of Technology (NAIT) shared its vision for its Centres for Apprenticeship Technologies, which would increase apprentice-training capacity by approximately 34% or 29,000 apprentices. Federal funding of $22 million was requested to complement a $44 million investment by the province of Alberta and other investments by the NAIT, business and unions.
Several suggestions for broadening the proposed Apprenticeship Job Creation Tax Credit and the Apprenticeship Incentive Grant program announced in the 2006 federal budget were presented to the Committee. The Canada West Equipment Dealers Association suggested extending eligibility for the proposed tax credit to include journeymen as well as apprentices. In addition, the Canadian Construction Association and the Information Technology Association of Canada requested that the list of trades eligible for the proposed tax credit and the grant be expanded to include other occupations in the areas of construction and information and communication technology respectively.
The Committee also heard about an element of the Employment Insurance (EI) program that creates financial hardship for apprentices and may deter Canadians from pursuing careers in trades. Apprentices who experience a work interruption in order to complete the in-school portion of their training are subject to a two-week waiting period before they receive EI benefits. The Canadian Construction Association requested that the federal government eliminate the two-week waiting period for apprentices in this situation or, alternatively, allow apprentices who are enrolled in a registered apprenticeship program to defer their waiting period to the final year of their apprenticeship when they may be in a more stable financial position and thereby better able to manage this delay in benefits.
Red River College of Applied Arts, Science and Technology noted the increasing share of Aboriginal peoples in Manitoba’s population and highlighted the importance of federal support for access initiatives to increase the participation of Aboriginal Canadians in apprenticeship programs as well as in applied education and training.
5. On-the-Job Training and Skills Development
In order for investments in human capital to result in improved productivity, the skills of the labour force must match the needs of the labour market. Polytechnics Canada advocated the development of a national people and skills strategy to identify how Canada can best compete in the world market and how we can ensure appropriate skills development in the labour force.
The Committee also heard from The Alliance of Sector Councils about the role of sector councils, which bring together representatives from business, labour, educational and other professional groups to analyze and address sector-wide human resources issues, such as developing sector and career awareness strategies, facilitating school-to-work transitions, anticipating skills shortages, recruiting and retaining workers, developing occupational standards, and promoting on-the-job learning. The Canadian Plastics Industry Association requested continued funding for the Canadian Plastics Sector Council, while the Biotechnology Human Resource Council advocated continued federal support for sector councils more generally, noting their potential role in enhancing the integration of Aboriginal peoples and immigrants into the workforce, facilitating the development of national skills and occupational standards, and supporting the creation of a national qualifications framework, among other areas.
Other groups suggested more specific strategies for aligning labour force needs and the skills of Canadians. The Certified Management Accountants of Canada, for example, urged increased interaction between the business community and academia through the establishment of a fellowship program that provides work experience and scholarships to students and that promotes exchanges between industry and post-secondary institutions.
In addition to a proposal by the Nova Scotia Government and General Employees Union that worker training rights be legislated in federal and provincial/territorial labour law, the Committee was presented with a number of proposals designed to increase on-the-job training and skills development, ranging from tax incentives for individuals and businesses to direct federal investment.
Some witnesses proposed tax incentives for individuals to invest in their own training and skills development, although it was noted that individual tax incentives shift the burden of adult learning to the employee. For example, the Canadian Dental Hygienists Association urged the federal government to expand certain definitions in the Income Tax Act, including “designated educational institution” and “qualifying education program,” as well as the Department of Human Resources and Social Development’s criteria for a “certified educational institution,” in order to allow individuals to claim the education tax credit for conferences and short-term, online courses offered by professional associations.
Other witnesses suggested that employers be required to invest in the training and skills development of their workforce. The University of Montréal advocated the creation of tax incentives for organizations that permit employees to participate in university courses or research internships, as well as a tax deduction for organizations that invest in work terms for university students, as a means of simultaneously enhancing labour force skills and encouraging the development of local networks and industry clusters. Other witnesses supported the creation of a training tax credit to assist employers with the financial burden of upgrading the skills and capabilities of their employees. Noting the surplus available in the Employment Insurance (EI) program, such witnesses as the Canadian Council of Chief Executives, Canadian Manufacturers & Exporters, Canadian Manufacturers & Exporters — Ontario Division and Canadian Manufacturers & Exporters — British Columbia Division advocated the application of the proposed training tax credit against employers’ EI premiums.
The Committee heard that, while many large businesses already make significant investments in employee training, small and medium-sized enterprises may face greater financial constraints. Consequently, La Chambre de commerce de Québec proposed that small and medium-sized enterprises with fewer than 100 employees be permitted to deduct training expenses at twice the value invested or be granted a refundable tax credit equal to 50% of the cost of the training.
Witnesses also advocated federal investment in training and skills development initiatives. The use of Labour Market Partnership Agreements to provide labour market programming to individuals who are not eligible for EI was supported by several groups, including the Canadian Union of Public Employees, the Consortium of Women’s Organizations of Nova Scotia and Opera.ca. Other witnesses supported the launch of a pilot project that would offer paid training leaves of absence for employed workers funded through the EI program. The Canadian Labour Congress noted that the health care sector, with its looming skills shortages, could particularly benefit from a pilot project that would allow current workers — including many recent immigrants — to upgrade their skills.
The Committee also heard testimony specific to the training of federal public servants. The Purchasing Management Association of Canada indicated its support for provisions contained in the Federal Accountability Action Plan which indicate that the federal government will provide accreditation and training for procurement officers, and requested that sufficient funding be allocated to achieve this goal. In addition, the federal government was encouraged to endorse professional standards in the day-to-day operation of governments and to provide funding to recruit and train public servants to meet those standards. Response: A Thousand Voices also recommended the establishment of standards regarding minimum qualifications for civil servants in departments that interact directly with low-income Canadians.
The Committee was told that there is a direct correlation between literacy and employability: people with low literacy skills are about twice as likely to be unemployed and one in four people with the lowest level of literacy are unemployed. As a result, Canadians with low literacy skills are more likely to live in low-income situations or to require social assistance. Witnesses informed us about a 2004 study, entitled International Adult Literacy Survey: Literacy Scores, Human Capital and Growth Across Fourteen OECD Countries, which considered literacy scores between 1960 and 1995 in OECD countries. The results indicated that a country which achieved literacy scores that were 1% above the international average had labour productivity that was 2.5% higher than other countries and Gross Domestic Product per capita that was 1.5% higher, on average. Figure 4 shows selected results for Canada from the 2003 International Adult Literacy and Skills Survey.
Figure 4: Literacy and Numeracy of Canadians, Aged 16 Years and Older, 2003
Notes: Higher levels correspond to higher test scores. Level 3 performance is generally chosen as a benchmark because, in developed countries, performance above Level 2 is associated with such positive outcomes as increased employment opportunities and higher civic participation.
Source: Statistics Canada, "International Adult Literacy and Skills Survey," The Daily, 9 November 2005. Data are from the 2003 International Adult Literacy and Skills Survey. Chart prepared by the Library of Parliament.
Witnesses also explained the link between literacy and health. In particular, Canadians with low literacy skills are more likely to report poorer health status, experience higher rates of chronic diseases, have less or inaccurate knowledge of disease management and health-promoting behaviours, and be hospitalized or use emergency services.
The Council of CEO's of Saskatchewan's Regional Colleges and the Yukon Literacy Coalition were among the witnesses that presented results from the recent International Adult Literacy Survey, which found that 40% of Canadians do not have the literacy skills needed to learn new job skills or to participate fully in the workplace, and 20% do not have the literacy skills needed to follow the directions on their medication or to participate fully in society.
Several witnesses requested federal leadership on the issue of literacy in the form of investment and a national literacy action plan with goals and targets. It was also suggested that all federal policies, programs and legislation be developed and implemented using a literacy lens.
The Canadian Nurses Association and the Canadian Public Health Association encouraged continued federal investment in the Adult Learning, Literacy and Essential Skills Program. Other witnesses requested increased federal funding for the National Literacy Secretariat, with ABC CANADA Literacy Foundation recommending that the Secretariat’s budget be doubled from its current level of $35 million. It was also suggested that additional investment in cross-departmental initiatives occur. In addition, the Social Planning Council of Winnipeg and the Yukon Literacy Coalition recommended that the $17.7 million in federal funds identified by the federal government as savings on 25 September 2006 be restored and allocated to the most effective literacy enhancement programs.
The Atlantic Provinces Community College Consortium advocated the unique position of colleges — both in terms of their mandates and their physical presence in communities — as institutions that could potentially play a critical role in improving Canadian literacy.
The Committee also heard about other types of literacy. The Alliance of Sector Councils, for example, advocated an “essential skills” program to ensure that all Canadian adults have the nine essential skills, including reading text, document use, numeracy, writing, oral communication, working with others, computer use, continuous learning, and thinking skills. We also learned about financial literacy and the correlation between economic and financial knowledge and the skills and capacity of individuals to achieve economic well-being. Believing that the existing education system is deficient in providing Canadians with financial literacy skills, the Canadian Foundation for Economic Education urged the development and implementation of a national strategy to improve the financial and economic capabilities of Canadians.
Lifelong learning — beginning at birth and continuing into retirement — is, in the Committee’s view, a key contributor to productivity growth, competitiveness and a high quality of life. We believe that children and youth of all ages, beginning at birth and continuing until age 18, must be supported in a manner that is appropriate to their circumstances and to those of their parents. Moreover, in our opinion, adults must be provided with incentives to engage in the lifelong learning that will ensure ongoing productivity for their employer as well as enhancements to their quality of life and the choices available to them.
With a focus on the productivity growth that is needed for the nation’s future and on the competitiveness that we seek, the Committee believes that parental participation in the productive endeavours of society — whether in the paid labour market, in volunteer activities or otherwise — are enhanced when parents know that their children are receiving quality care that is suited to their needs. Quality care also helps to ensure that the children of today become the highly productive workers of tomorrow. In recognizing the costs of quality care and the options that should be available to parents in selecting that care, the Committee recommends that:
RECOMMENDATION 6
The federal government amend the Income Tax Act to increase the value of the Canada Child Tax Benefit. Following this increase, the value of the tax benefit should be increased annually to reflect changes in the cost of living as measured by the Consumer Price Index.
Moreover, the government — in conjunction with the provincial/territorial governments — should fund a national, accessible, affordable, high-quality, publicly regulated child care system. This system should respect any provincial/territorial child care programs already in effect, recognizing the leadership of the province of Quebec.
The Committee supports the need to invest in the education and skills required to participate fully in society, to enhance workplace-based skills development, and to increase access to — and the affordability of — post-secondary education. We believe that a highly literate, highly skilled and well-educated workforce and population will be critical for improved productivity growth and enhanced competitiveness, particularly in light of the technological changes that lie ahead. We also feel, however, that other actions are required.
While the Committee believes that a range of measures are needed to support education and training, we are not convinced that the measures and programs that currently exist — which include a complex system of grants, bursaries, scholarships, loans, bonds, transfers and tax incentives, among others — are necessarily well-integrated. Moreover, we are skeptical that, despite the allocations in these areas, the desired outcomes — including access and affordability — are being achieved. The problem may be particularly acute for Aboriginal Canadians, those with low incomes and persons with disabilities. Among the existing measures that enhance post-secondary access and affordability, we feel that the Canadian Millennium Scholarship Foundation and the Canada Access Grant program should be recognized for the contribution they make in enhancing the educational outcomes of some Canadian students. It is from this perspective, and bearing in mind comments about a modernized student financial assistance system and increased investments in graduate scholarship support made by the Minister of Finance in his 23 November 2006 appearance before us, that the Committee recommends that:
RECOMMENDATION 7
The federal government — in conjunction with the provincial/territorial governments and such stakeholders as educational institutions, student associations, employers and groups representing employees — review the full range of federal measures that support students, educational institutions and their physical infrastructure, employees and employers engaged in post-secondary education and training in Canada. This review should be undertaken with a view to ensuring that the measures are coordinated in a manner that maximizes outcomes for Canadians.
Moreover, on a priority basis and bearing in mind the review of federal measures that support post-secondary education and training, the government should — with the aim of eliminating economic barriers to post-secondary education — provide direct funding assistance to post-secondary students through a comprehensive system of needs-based grants and loans. These grants and loans should be available to students enrolled in university, college and qualified training programs. As well, the province of Quebec should be permitted to opt out of participation in this system of needs-based grants and loans, with full compensation. This system should be developed and funded no later than 31 August 2007.
Finally, the government should extend the mandate of the Canada Millennium Scholarship Foundation and expand the Canada Access Grants program to finance the cost of tuition for all years of undergraduate education. The province of Quebec should be permitted to opt out of participation, with full compensation.
Finally, the Committee believes that greater transparency and accountability must exist with respect to the manner in which post-secondary education funds are spent. We feel that a separate education transfer is needed and that guidelines, principles, responsibilities and accountabilities for the federal and provincial/territorial governments would help to meet the intended goals. From this perspective, and bearing in mind the Minister of Finance’s comments to us on 23 November 2006 about stable and predictable funding for post-secondary education and training, the Committee recommends that:
RECOMMENDATION 8
The federal government, once a long-term strategy for federal support of post-secondary education and training has been concluded among the federal and provincial/territorial governments, divide the Canada Social Transfer into a post-secondary education transfer and a social assistance and services transfer.
Once the Canada Post-Secondary Education Transfer has been created, the government should introduce guidelines, principles, responsibilities and accountabilities with respect to post-secondary education.
Canada’s competitive position can be improved and — at the same time — the effects of an ageing population can be mitigated by providing individuals with incentives to work or, at a minimum, by removing any disincentives to work. Incentives should be provided in order to create an environment conducive to labour force participation and attachment from all groups in society — including women, low-income Canadians, retirement-age individuals, Aboriginal Canadians, immigrants and persons with disabilities — and the focus must be existing labour force participants, older workers who wish to engage in paid employment, and those who are not currently in the labour force but wish to engage in paid employment.
When considering the incentives to work, it is also important to consider the measures needed to ensure immigrant settlement and integration in order to meet both moral considerations and demographic priorities, the nature and extent of supports for disabled Canadians wishing to participate in paid employment, and the extent to which the design of social assistance systems affects the incentive to engage in labour market activity. Finally, along with health and education — which were discussed earlier — access to appropriate and affordable housing is a consideration that affects the quality and enjoyment of life as well as the nature and quality of labour force participation.
Several witnesses noted their preference for personal income tax reductions rather than other possible actions by the federal government. For example, the Canadian Printing Industries Association, the Canadian Hardware & Housewares Manufacturers Association and the Canadian Retail Building Supply Council supported personal income tax relief as a priority over increased program spending by the federal government, and the St. John’s Board of Trade favoured personal and corporate income tax relief to Goods and Services Tax/Harmonized Sales Tax (GST/HST) relief in the future. Although the Retail Council of Canada believed that personal income tax relief would be more beneficial to Canadians, it supported the federal government’s commitment to reduce further the GST/HST rate.
Some witnesses, such as the Canadian Taxpayers Federation, the Winnipeg Chamber of Commerce, the Certified General Accountants Association of Canada and the Canadian Federation of Independent Business, advocated broad-based personal income tax relief in the form of tax rate reductions, expansion of income tax brackets and/or an increase in the basic personal amount.
Other witnesses proposed personal tax changes targeting a specific group or groups. The Tenant’s Rights Action Coalition and First Call: BC Child and Youth Advocacy Coalition, for example, recommended that the personal income tax system be made more progressive, while KAIROS: Canadian Ecumenical Justice Initiatives urged the creation of a Blue Ribbon Panel on Fair and Equitable Taxation.
A number of witnesses, including The Alliance to End Homelessness, the Fraser Valley KAIROS Group, the Retail Council of Canada and the Manitoba Chambers of Commerce, urged the Committee to recommend tax relief for low-income and, in some cases, middle-income Canadians in the form of reduced tax rates and/or an increase in the basic personal amount. In addition to supporting an increase in the basic personal amount, REAL Women of Canada proposed that the spousal amount be made equal in value to the basic personal amount.
There was no consensus among witnesses about tax relief for high-income Canadians. Some recommended that the threshold for the highest marginal tax rate be increased, while others advocated that it be decreased.
Because of the nature of their work, truck drivers have meal expenses that, unlike many other employees, are necessary work expenses. Questioning the fairness of a restriction on what may be seen as a legitimate business expense, the Canadian Trucking Alliance asked that the tax deductibility for meals, which was decreased from 80% to 50% in the 1990s, be restored to 80%.
Since Canada’s existing system of personal income taxation uses the individual as the basic unit of taxation, families whose income is distributed unevenly between two individuals tend to be taxed more heavily, in aggregate, than families whose income is divided evenly between two individuals. Mothers on the Rampage and REAL Women of Canada advocated the elimination of what they believe to be inequitable tax treatment between single- and dual-income families. They urged a change to the taxation system that would allow single-income families to split family income for the purposes of taxation or that would permit the filing of joint or family-based tax returns.
The Committee was informed that the Department of Finance has estimated the federal revenue loss from allowing income splitting for all age groups to be approximately $4 billion. Many witnesses, however, advocated a targeted approach focused on Canadian seniors. Witnesses argued that the existing system of taxation penalizes senior couples who, in the past, had one spouse remain in the home as a caregiver as well as those who remain married; filing for divorce enables senior couples to split their pensions. Moreover, witnesses cited the precedent that has been set by allowing income splitting of Canada/Quebec Pension Plan (C/QPP) benefits.
Consequently, witnesses — including Air Canada Pionairs, the Canadian Activists for Pension Splitting, Canada’s Association for the Fifty-Plus, the Royal Canadian Legion, the General Motors Salaried Retirees Association, the Canadian Association of Retired Teachers, SenTax, the Federal Superannuates National Association and the Royal Canadian Legion — encouraged the federal government to give seniors aged 65 years or older the option to split all registered retirement income.
2. Labour Force Participation Rates and Labour Force Attachment
Witnesses informed the Committee that labour force participation among all Canadians must be encouraged in order to address the imminent demographic challenge and skills shortages. In addition to providing suggestions specific to certain groups of Canadians — including women, retirement-age individuals, persons with disabilities, Aboriginal Canadians and new immigrants to Canada —witnesses also shared general ideas for improving labour force participation and productivity.
The Committee was told that employers will be required to respond to the needs and demands of their employees through workplace innovations in order to attract and retain the needed number of personnel with the right skills. To this end, the Manitoba Child Care Association encouraged the federal government to work with the provinces/territories to promote family-friendly practices in the workplace, including parental leave, full- and part-time centre-based and home child care, part-time preschool programs and family resource programs.
To encourage labour force participation among retirement-age Canadians, several witnesses urged the Committee to recommend the elimination of mandatory retirement at age 65, and such groups as the Certified General Accountants Association of Canada and the Canadian Restaurant and Foodservices Association encouraged the removal of public pension incentives for early retirement.
The Committee was told by several witnesses that the Employment Insurance (EI) program should return to its original goal of providing insurance against unintended unemployment. The establishment of an independent insurance fund that is separate from federal government accounts was advocated. The Canadian Federation of Independent Business also suggested that the federal government review the cost-effectiveness of existing EI programs and prohibit the expansion of non-regular benefits without adequate consultation and consensus.
Other witnesses expressed concern that a growing proportion of the Canadian labour force — including the self-employed, part-time workers, casual and contract workers, recent immigrants and precariously employed women — is not eligible for EI benefits and the associated employment supports and training. According to the Confédération des syndicats nationaux, for example, 32% of female and 38% of male workers currently qualify for EI benefits. A number of witnesses, including Citizens for Public Justice, Make Poverty History, the Sustained Poverty Reduction Initiative, the Nova Scotia Association of Social Workers, the National Council of Welfare and the Ontario Municipal Social Services Association, suggested increasing the accessibility and coverage of the EI program to reflect better the current labour market reality.
Witnesses also advocated lower eligibility thresholds, higher income replacement rates and/or longer benefit periods in the EI program. For example, the Canadian Labour Congress and the Canadian Union of Public Employees recommended lowering the eligibility threshold for all EI benefits to 360 hours of work, regardless of the regional unemployment rate or the type of benefit. The Committee also heard proposals to increase weekly EI benefits to at least 66.67% of the individual’s highest 12 weeks of insurable earnings and to extend the maximum benefit period from 45 to 50 weeks.
The Canadian Actors’ Equity Association and the Canadian Conference of the Arts urged the Committee to rectify what they believe to be inequitable treatment of self-employed individuals — artists, in particular — under the EI program, since self-employed individuals — who are classified as independent contractors — are required to pay both the employer and employee share of EI contributions but do not have access to all of the program’s benefits. It was suggested that the federal government explore ways of providing maternity and parental leave benefits to parents who currently do not qualify for EI benefits. The Canadian Dental Association suggested that individuals be permitted to withdraw funds from their RRSPs, penalty-free, with provisions for repayment.
The Committee also heard EI-related recommendations from an employer’s perspective. A number of witnesses suggested that the employer’s EI contribution rate be reduced so that employers and employees contribute equally, a change that the Committee was told would increase the real wages received by employees and would reduce real wage costs to employers, thereby increasing the attractiveness of hiring additional labour. Moreover, it was proposed that a system be implemented to allow over-contributions by employers to be refunded.
Other suggestions for change to the EI program for employers included the phasing in of an experience rating system for employers, the reintroduction of the EI New Hires Program that would recognize the costs associated with hiring and training new employees by exempting employers from paying EI premiums on new employees for up to one year, and the introduction of a yearly basic exemption of $3,000 on which no premiums would be paid by either the employer or the employee, a change that the Committee was told would make EI premiums more progressive and reduce the burden on labour-intensive industries.
The Vancouver Board of Trade urged the federal government to phase out the seasonal component of the EI system, believing that it encourages Canadians to remain in areas of high unemployment and can discourage skills development.
4. Federal Minimum Wage and Labour Laws
Although the federal government aligned the minimum wage for employees within federal jurisdiction with the provincial/territorial general adult minimum wage rate in each jurisdiction in 1996, the Citizens for Public Justice, Make Poverty History and the National Council of Welfare, among others, advocated the reinstatement of a federal minimum wage for the approximately 10% of Canadian workers under federal jurisdiction, with some groups specifically requesting a rate of $10 per hour, indexed to inflation. Other witnesses, including the Campaign Against Child Poverty and the Face of Poverty Consultation, stressed the importance of a “living wage” that enables Canadians to afford daily living.
Maple Leaf Foods Inc. informed the Committee that the fragmented nature of Canadian labour legislation complicates business operations and creates labour recruitment and retention problems.
The Committee heard that reducing barriers to labour mobility is crucial to the resolution of Canada’s labour market challenges. To this end, the creation of a national agency to facilitate both the inter-provincial/territorial and international movement of labour was suggested.
Canadian Manufacturers & Exporters — Ontario Division urged federal government leadership in the creation of a multilateral inter-provincial trade agreement on labour mobility, which it believes would be beneficial not only for the manufacturing and exporting sector but for the entire Canadian economy. The Canadian Association of Petroleum Producers also encouraged the federal government to work with the provincial/territorial governments to strengthen and achieve commitments regarding labour mobility contained in the Agreement on Internal Trade. Bilateral progress on this issue, including the British Columbia–Alberta Agreement on Trade, Investment and Labour Mobility and the Ontario–Quebec Labour Mobility Agreement, was also noted and supported.
The Committee also heard about the value of consistent and integrated social assistance rates and supports across the country. To facilitate inter-provincial/territorial migration for work or health reasons, Response: A Thousand Voices proposed the creation of a database containing relevant information about service users, which could serve as a resource for case workers regarding prior case appeals and decisions.
The Canadian Construction Association informed the Committee about the Federal Government Worker Mobility Program which, in the mid-1970s, offered grants to workers in order to help mitigate the costs of travel and accommodation associated with seeking employment elsewhere in the country. Tax incentives for workers and employers who incur the costs of seeking either employment or workers in other regions of the country, as the case may be, were suggested as an alternative, although the delay associated with a tax benefit as opposed to an upfront grant was noted.
In order to provide an incentive for increased labour mobility, the Canadian Real Estate Association suggested that the federal government amend the Income Tax Act to permit Canadians to deduct the fees paid directly to buyer brokers as a moving expense. In addition, the Provincial Building and Construction Trades Council of Ontario, the International Brotherhood of Electrical Workers, Local Union 353, and the International Brotherhood of Electrical Workers, Construction Council of Ontario encouraged the federal government to allow workers to deduct reasonable travel and room and board expenses incurred to travel to temporary work locations.
In order to provide workers with an incentive to locate in northern areas, which typically have higher costs of living, the Makivik Corporation and Kativik Regional Government recommended that the Northern Residents Deduction be increased to recognize changes in the cost of living since 1990 and be made a refundable tax credit.
The Committee also heard about barriers to labour mobility in specific professions and/or trades. For example, we learned that bureaucratic procedures and costs are deterring Canadian geoscientists from joining professional associations. In order to maintain standards and protect the public interest, the Prospectors and Developers Association of Canada urged the co-operation of all orders of government in harmonizing the necessary legislation to accommodate the development of an internationally recognized, Canada-wide system of registration for geoscientists, administered by the provinces/territories.
With respect to skilled trades, the Ontario Chamber of Commerce asked the federal government to work with the provinces/territories in order to develop uniform national training and certification procedures and requirements to facilitate a streamlined process for national certification of apprentices through the Red Seal Program.
6. Immigrant Settlement and Integration
Witnesses told the Committee that the federal government has an important role to play in immigrant settlement and integration. As Figure 5 demonstrates, new immigrants to Canada often do not find employment immediately upon their arrival. Witnesses provided us with a number of suggestions for assisting new immigrants with their entry into the labour force and their integration into Canadian society more generally.
Figure 5: Percentage of Immigrants, Aged 25 to 44 Years, Employed After Six Months, One Year and Two Years of Residence in Canada, Provinces/Regions, 2003
Source: Statistics Canada, Longitudinal Survey of Immigrants to Canada: A Regional Perspective of the Labour Market Experiences, January 2006, Table 1, p. 37. Chart prepared by the Library of Parliament.
To ensure that new immigrants have the opportunity and means to become productive members of Canadian society, witnesses supported increased federal investment in immigration settlement and integration services. The Affiliation of Multicultural Societies and Service Agencies of BC requested that all provinces receive immigrant settlement funding comparable to the amount that will be received by Ontario and Quebec in 2007-2008 and that a process be established to ensure the provision of equitable settlement services throughout Canada. In addition, the Federation of Canadian Municipalities asked that the federal government provide resources to assist communities in attracting and retaining new Canadians and engage municipalities in discussions regarding immigration policy and programs more generally. In all immigration-related interactions with not-for-profit agencies, the federal government was asked to adhere to the Voluntary Sector Initiative Codes of Good Practice for Funding and Policy Dialogue.
The Committee heard from several witnesses, including the Certified General Accountants Association of Canada, about the need for the federal government to identify occupations or industries where there is high demand for labour and/or skills shortages, and to attract immigrants who are qualified in these areas.
To facilitate the inflow of qualified workers, the Canadian Electricity Association suggested that the immigration point system be aligned with Canadian labour market information and that visa restrictions be eased for certain countries. Several witnesses also supported expediting the process by which temporary foreign workers can enter Canada, especially those workers destined for sectors currently experiencing labour shortages. The Canadian Meat Council recommended specific changes to the Temporary Foreign Worker Program, including a simplified and efficient application process, an approval process that cannot be blocked by unions and/or competitors, and a clear process by which foreign workers can become permanent residents.
Witnesses also presented ideas for improving the existing delivery of immigrant services. The Canadian Immigrant Settlement Sector Alliance encouraged the adoption of national standards for settlement and integration services, based on research into the optimal duration of services and differences in the needs of various types of immigrants, among other considerations. Other recommendations included the establishment of a central organization to coordinate all federal and provincial/territorial policies and services, the adoption of a case management approach that provides services to new Canadians through a single access point according to their profession, and the provision of pre-departure assistance to immigrants before they arrive in Canada.
Other witnesses supported an increased role for certain organizations in the settlement and integration process. For example, the Biotechnology Human Resource Council and the Hotel Association of Canada advocated federal support for sector councils as a means of facilitating the labour force integration of foreign workers and immigrants, while Red River College of Applied Arts, Science and Technology and Seneca College of Applied Arts and Technology urged the federal government to support college initiatives for new Canadians.
There was also support from such witnesses as the Ontario Chamber of Commerce and The Alliance of Sector Councils for continued — and in some cases, increased — federal funding for the certification, licensing and accreditation of internationally trained professionals and tradespeople. Seneca College of Applied Arts and Technology, however, urged the Committee to recommend that funding for foreign credential recognition be targeted at unregulated professions as a priority. Such witnesses as the Canadian Council of Professional Engineers and the Canadian Printing Industries Association supported the establishment of a Canadian agency for the assessment and recognition of foreign credentials, as announced in the 2006 federal budget. The Committee heard that, in establishing such an agency, the federal government should ensure that the jurisdiction of licensing bodies is respected and that duplication with existing processes is minimized.
In addition to ensuring the integration of skilled immigrant adults, witnesses also stressed the importance of providing support and integration services for other family members, including children and youth, in order to ease their transition into Canadian society. The Canadian School Boards Association identified schools as a key point of contact for immigrant children and youth, and recommended a variety of measures to assist them, including expansion of the federal Settlement Workers in School program, federal-provincial/territorial-community partnerships to provide essential supports such as school readiness, measures to assist immigrant youth in making the transition to post-secondary education, focused supports for refugee students, and language supports, including translation and interpretation resources. The Canadian Teachers’ Federation noted many of the same needs and suggested that services targeting children and youth in immigrant families be included in federal-provincial/territorial agreements concerning immigrants and refugees.
7. Disability Supports in the Workplace
Witnesses urged the federal government to develop appropriate programs for persons with disabilities that either enable their labour force participation or that provide appropriate income security and supports, depending on the abilities of the individual.
In order to promote labour force participation among brain-injured Canadians, the Brain Injury Association of Nova Scotia proposed that the federal government use Australia’s Acquired Brain Injury Act as a model and provide job coaches to brain-injured individuals who return to work as well as information and support to employers of brain-injured employees.
The Committee learned that the relatively high cost of wheelchairs can affect the education and labour force participation decisions of persons with disabilities and can create a barrier to their meaningful contribution to Canadian society. Muscular Dystrophy Canada advocated the creation of a national phone service and website to provide single-window access to information about provincial/territorial wheelchair access programs, as well as the adoption of national standards to ensure that persons in need of a wheelchair receive equal levels of service and funding regardless of where they live in Canada.
The Committee also heard about the labour force participation challenges faced by people with episodic disabilities; that is, disabilities characterized by unpredictable periods of illness and wellness. The Committee was informed that individuals who are eligible to receive disability benefits through the Canada Pension Plan (CPP) or through private insurance may be required to forgo these benefits if they engage in limited participation in the labour force. To facilitate the labour force participation of Canadians with episodic disabilities, the Multiple Sclerosis Society of Canada suggested that the federal government enhance flexibility in the rules regarding part-time or occasional work so that recipients of CPP disability benefits can increase their labour force participation without risking their eligibility for benefits. In addition, it was suggested that the federal government redefine sickness benefits provided under the EI program in terms of 75 days or 150 half-days, instead of 15 weeks.
Because persons with disabilities are now outliving their parents, the Committee was told that parents need new tools that, should they die, would help to ensure a good life for their family members with disabilities. The Planned Lifetime Advocacy Network and Families Matter Co-operative Inc. encouraged the creation of a flexible, tax-deferred savings vehicle — a registered disability savings plan (RDSP) — to encourage contributions from family members and to enhance self-reliance and planning among Canadians with disabilities.
In addition, while there was support for the recent policy that allows families to transfer funds from their Registered Retirement Savings Plans or Registered Retirement Income Funds into a discretionary trust to benefit their relatives with disabilities on a tax-deferred basis, the Committee heard that the tool would be more useful and flexible if it were not contingent on the purchase of an annuity and if the proposed RDSPs were accepted as an alternative to discretionary trusts. It was also suggested that revenue from trusts established for persons with disabilities and from the proposed RDSPs be exempt from the calculation of the amount of Guaranteed Income Supplement benefits.
Finally, the Planned Lifetime Advocacy Network requested that the federal government make a one-time, $50 million investment in a “no one alone” fund, which would be used to end isolation and loneliness among persons with disabilities through the development of relationships and the creation of inclusive communities.
KAIROS: Canadian Ecumenical Justice Initiatives advocated the creation of a task force to develop a new social architecture for adult income security in Canada in consultation with the public. In 2004, the Toronto City Summit Alliance, St. Christopher House and a coalition of civic leaders in the Toronto region created the Task Force on Modernizing Security for Working Age Adults to address the issue of income security reform. The Nova Scotia Association of Social Workers recommended that the federal government implement the Task Force’s proposal for a working-age adult benefit, comprised of an income-tested refundable tax credit for all low-income, working-age adults and a working income supplement delivered through the tax system to low-income wage earners; each component would be phased out as income rises. Other witnesses, including the Sustained Poverty Reduction Initiative, advocated comparable benefits.
The Committee was told that low- and moderate-income Canadians can face marginal tax rates that exceed 60% due to the clawback of public transfers. In addition to raising incomes, the Committee heard that a working-age adult benefit would remove impediments to making the transition from social assistance to work and would reduce the number of unemployed people who rely on social assistance.
The Ontario Chamber of Commerce urged the federal government to expedite the distribution of federal funding committed in the November 2005 Labour Market Development and Labour Market Partnership Agreements to the province of Ontario for employment programs and services.
The Campaign Against Child Poverty informed the Committee that all countries that have reduced child poverty to a rate below 5% have used benchmarks and targets, and recommended that the federal government adopt a target of reducing child and family poverty in Canada from 14.9% to 9.9% by 2010. Figure 6 shows how Canada’s rate of child poverty compares with rates in other countries.
Figure 6: Child Poverty, By Country, Various Years
|
Country |
Children living in relative poverty (%) |
Change in child poverty rates during the 1990s (%) |
|
Denmark |
2.4 |
0.6 |
|
Finland |
2.8 |
0.5 |
|
Norway |
3.4 |
-1.8 |
|
Sweden |
4.2 |
1.2 |
|
Switzerland |
6.8 |
n/a |
|
Czech Republic |
6.8 |
4.1 |
|
France |
7.5 |
-0.2 |
|
Belgium |
7.7 |
3.9 |
|
Hungary |
8.8 |
1.9 |
|
Luxembourg |
9.1 |
4.2 |
|
Netherlands |
9.8 |
1.7 |
|
Germany |
10.2 |
2.7 |
|
Austria |
10.2 |
n/a |
|
Greece |
12.4 |
-0.2 |
|
Poland |
12.7 |
4.3 |
|
Spain |
13.3 |
2.7 |
|
Japan |
14.3 |
2.3 |
|
Australia |
14.7 |
-1.7 |
|
Canada |
14.9 |
-0.4 |
|
UK |
15.4 |
-3.1 |
|
Portugal |
15.6 |
3.2 |
|
Ireland |
15.7 |
2.4 |
|
New Zealand |
16.3 |
2.0 |
|
Italy |
16.6 |
2.6 |
|
USA |
21.9 |
-2.4 |
|
Mexico |
27.7 |
3.0 |
|
Average |
11.6 |
1.4 |
Notes: Relative poverty is defined as households with income below 50% of the national median income. The relative poverty rates in the second column refer to the following years: 2001 (Switzerland, France, Germany, New Zealand), 2000 (Denmark, Finland, Norway, Sweden, Czech Republic, Luxembourg, Japan, Australia, Canada, Portugal, Ireland, Italy, USA), 1999 (Hungary, Netherlands, Greece, Poland, UK), 1998 (Mexico), 1997 (Belgium, Austria) and 1995 (Spain). The change in child poverty in the third column is measured from the year 1991 or 1992, except in the case of Belgium (1988), Germany (1989) and Australia (1993/94).
Source: United Nations Children’s Fund, Child Poverty in Rich Countries 2005, Report Card No. 6, 2005, pp. 4-5.
A number of witnesses — including the National Anti-Poverty Organization, the Nova Scotia Association of Social Workers, the Saskatchewan Council for International Cooperation, the National Council of Welfare and KAIROS: Canadian Ecumenical Justice Initiatives — identified the reduction in, and ultimately the elimination of, poverty as a priority. As a means of achieving this goal, witnesses advocated the creation of a national anti-poverty strategy with supporting legislation, targets and timetables, and a system to monitor results. It was suggested that the federal government provide leadership by setting standards and providing funding, but that the provincial/territorial governments be permitted to develop their own programs and policies to achieve the targets. Make Poverty History also stressed the importance of involving groups where poverty is predominant — including women, youth, seniors, persons with disabilities, Aboriginal Canadians and persons who are a visible minority — in the design and implementation of the strategy in order to ensure that their needs are met.
The Committee heard several suggestions designed to alleviate poverty among Canada’s elderly. In addition to the suggestion by the Canadian Association of Retired Teachers that Old Age Security (OAS) and Guaranteed Income Supplement (GIS) benefits should be non-taxable, Canada’s Association for the Fifty-Plus advocated OAS/GIS reform to address the rising cost of living and the clawback of GIS benefits.
The National Anti-Poverty Organization urged the federal government to ensure that Canadians apply for, and receive, the government benefits to which they are entitled, including those provided under the OAS/GIS program. To this end, the Canadian Association of Retired Teachers recommended the revision of restrictions on retroactive payment of benefits to match the penalties levied against unpaid taxes.
With respect to persons with disabilities who are unlikely to enter the paid labour force, such witnesses as the Nova Scotia Association of Social Workers and the Task Force on Modernizing Security for Working Age Adults encouraged the creation of a national disability income support program. SpeciaLink advocated the development of a comprehensive disability strategy focused on program expenditures rather than tax measures.
The Health Charities Coalition of Canada recommended that the current list of qualifying expenses within the disability supports deduction be replaced by a general statement of principle that eligible medical expenses would include all reasonable amounts paid for any goods and services that are certified as medically necessary by a qualified medical practitioner. Other suggestions for improving the lives of these Canadians included harmonization of the application processes for the Disability Tax Credit and CPP disability benefits, other administrative improvements to the Disability Tax Credit and to CPP disability benefits, refundable tax credits to recognize the lower incomes and higher expenses that Canadians with disabilities may face, and elimination of the clawback by some insurance companies of the benefits that dependent children receive if a parent is a long-term disability recipient.
The Committee also heard about the unique challenges for Canadians with episodic disabilities. In order to facilitate access to benefits, it was recommended that the eligibility criteria for CPP disability benefits and the Disability Tax Credit be modified to take into consideration the episodic nature of disabilities resulting from such diseases as multiple sclerosis, HIV/AIDS, lupus, muscular dystrophy and mental illness. In addition, we learned that Canadians with episodic disabilities who reduce their labour force participation to part-time status may be disadvantaged by the CPP contribution rule, which bases CPP disability benefits on the amount of contributions credited to an individual’s CPP account and the length of time the individual has contributed. The federal government was urged to allow the development of CPP pilot projects to test new approaches for the provision of benefits to individuals with episodic disabilities.
In November 2005, the federal government, the provincial/territorial governments and Aboriginal leaders signed the Kelowna Accord, a 10-year plan to improve the socio-economic conditions of Aboriginal Canadians. Such witnesses as Campaign 2000 and Dalhousie University, School of Social Work encouraged the federal government to honour the 2005 Kelowna Accord. Make Poverty History specifically advocated the implementation of poverty reduction measures contained in the Accord.
Other Aboriginal poverty-alleviation measures were also proposed to the Committee. Nishnawbe Aski Nation urged the development of a comprehensive Aboriginal poverty strategy with targets and timelines and a federal investment of more than $3 billion dedicated to new Aboriginal poverty measures. Noting its role in providing services to Aboriginal peoples living in poverty in urban areas, the National Association of Friendship Centres recommended that the federal government increase funding for, and continue to work with, the Aboriginal Friendship Centre Program. Finally, to support economic development strategies in Atlantic First Nations communities in particular, the Atlantic Policy Congress of First Nation Chiefs Secretariat Inc. requested an annual federal investment of between $10 million and $15 million.
The Committee learned that, since 1997-1998, spending increases for core services for Aboriginal Canadians have been limited to 2% per year. The Assembly of First Nations requested that the spending cap be removed and replaced by guaranteed funding escalators that reflect the costs of population and inflation growth, and which are administered through non-discretionary funding frameworks. When allocating funding for Inuit programs, the federal government was urged to provide financial recognition of the special needs and circumstances facing Inuit Canadians.
To improve federal programming for Aboriginal Canadians, Mr. Daniel Brant recommended increasing the emphasis on program outcomes in terms of benefits to communities rather than program administration, using measures of Gross Reserve Product to set program targets and goals and to monitor progress, improving access to capital, and increasing private sector involvement in Aboriginal development through the use of incentives.
The Committee also heard requests from certain Aboriginal organizations, including Pauktuutit Inuit Women of Canada and the National Association of Friendship Centres, for federal recognition commensurate with other organizations. The Pauktuutit Inuit Women of Canada also encouraged federal support for inter/multi-departmental program partnerships that ensure gender equity.
Witnesses, including the Canadian Federation of University Women, the Federation of Medical Women of Canada and Ms. Janet Goldie, requested that the federal government renew the mandate of Status of Women Canada and increase its funding. Other suggestions for advancing women’s equality included:
- the application of gender-based analysis within federal departments;
- the creation of a minister for the status of women or minister of women’s equality with full cabinet status;
- electoral reform to increase the representation of women in politics; and
- adoption of the recommendations of the Expert Panel on Accountability Mechanisms for Gender Equality.
Witnesses noted the recent elimination of the Court Challenges Program of Canada, a national, non-profit organization that provides financial assistance for court cases that advance language and equality rights guaranteed under the Canadian Constitution. They advocated its reinstatement.
9. Homelessness and Affordable Housing
The Committee was reminded of the federal role in homelessness prevention and elimination. A number of witnesses supported the continuation and/or expansion of existing federal homelessness and affordable housing initiatives and, in some cases, encouraged additional actions. The North End Community Health Centre suggested that the federal government review and build on the past success of multi-sectoral, cross-jurisdictional collaborations.
As well, the Committee heard requests for renewal — and, in some cases, expansion — of both the Affordable Housing Initiative and the Residential Rehabilitation Assistance Program (RRAP); groups generally advocated a minimum three-year extension of federal funding. As well, the British Columbia Real Estate Association recommended that the federal government honour its commitment to work with the province of British Columbia for fair relief for owners of leaky condominiums.
Witnesses also requested renewed — and, in some cases, increased — federal funding for the National Homelessness Initiative, including the Supporting Communities Partnership Initiative (SCPI), with some witnesses specifically advocating a minimum five-year extension and the Réseau solidarité itinérance du Québec requesting annual funding for Quebec of at least $50 million under the initiative.
A number of witnesses, including the Nova Scotia Association of Social Workers, the Front d’action populaire en réaménagement urbain, the Registered Nurses’ Association of Ontario and Citizens for Public Justice, encouraged increased federal investment in affordable and social housing. Such witnesses as Make Poverty History and the Canadian Federation of University Women requested an estimated $1.5 billion in federal funding for the construction and operation of 25,000 new social housing units each year.
The Canadian Housing & Renewal Association spoke about the “legacy savings” that are now beginning to accrue on previously funded social housing as mortgages are retired and debt costs are reduced, and encouraged the federal government to reinvest these funds in the preservation and expansion of social housing stock.
A one percent solution was advocated by the Toronto Disaster Relief Committee and the National Housing and Homelessness Network, whereby a federal investment of $2 billion per year — the 2006 federal budget allocation of $466 million plus the balance in new funding — would be matched by the provinces/territories and the funds would be used to supply new homes and to provide rent supplements in order to increase the affordability of homes.
Since housing insecurity can jeopardize the health, education and social development of Canadians, such witnesses as Campaign 2000, the Greater Vancouver Regional District, the Tenant’s Rights Action Coalition, the Toronto Board of Trade, the National Housing and Homelessness Network, the Association of Municipalities of Ontario and The Alliance to End Homelessness urged the development of a comprehensive national housing strategy supported by long-term funding.
The Fraser Valley KAIROS Group advocated funding disbursements through a single, central organization. A number of witnesses discussed the importance of collaboration among the federal, provincial/territorial and municipal governments, as well as communities, to ensure that federal funding provided for homelessness and affordable housing is invested appropriately and responds to local needs.
Nunavut Tunngavik Inc. requested additional funding for housing in Nunavut, noting that the recent federal investment of $200 million will provide approximately 700 new units, compared to an estimated demand of 3,000 units, and will not cover ongoing operating and maintenance costs.
The Committee was informed that homeownership forms the basis for the economic well-being of families and individuals and, as a result, witnesses suggested actions to assist Canadians in purchasing homes. For example, the British Columbia Real Estate Association, the Toronto Real Estate Board, the Fédération des chambres immobilières du Québec and others advocated an increase in the maximum loan available under the Home Buyers’ Plan from the existing $20,000 to perhaps $25,000, with periodic adjustments for inflation.
In addition, noting that the housing price thresholds under the GST/HST New Housing Rebate have remained unchanged since the GST/HST was introduced in 1991, several witnesses suggested that the thresholds be indexed and adjusted annually based on changes in the New Housing Price Index.
Witnesses also observed that, in several municipalities, municipal charges —such as development cost charges — comprise at least 50% of the total levies, fees, charges and taxes on a typical modest new home. The Committee was urged to recommend federal investment in municipal infrastructure as a means of reducing the dependence of municipal government on taxes on new development.
For low-income Canadians, the Canadian Real Estate Association supported the implementation of a 10-city demonstration project of the Home$ave Initiative. Under this program, low-income Canadians would deposit funds in a specialized savings account for the purchase of a home and have their savings matched to pre-established limits within a specified timeframe.
In order to promote competition in the mortgage insurance market, Genworth Financial Canada encouraged the federal government to introduce market conduct rules similar to legislation currently in place in the United States and Australia and to provide all public and private mortgage insurers with an equal guarantee of 100% in the event of bankruptcy.
The Committee heard support for the efforts by the Canada Mortgage and Housing Corporation (CMHC) to set aside retained earnings from its mortgage insurance business to meet the Office of the Superintendent of Financial Institutions’ capital adequacy guidelines.
The Committee also learned about proposals designed to increase the private sector supply of affordable housing. Using the Home Buyers’ Plan as a model, the Canadian Hardware & Housewares Manufacturers Association and the Canadian Retail Building Supply Council suggested that Canadians be permitted to use RRSP savings of up to $40,000 to finance residential retrofits to meet seniors’ needs or residential repairs and renovations. The Toronto Board of Trade urged the federal government to create a tax and regulatory environment that encourages the building of affordable housing, and the Tenant’s Rights Action Coalition noted the potential value in offering tax incentives for non-profit housing and market rental units, among other areas. It was also suggested that the GST/HST be refunded to businesses that invest in rental housing by zero-rating rental housing.
Several witnesses also suggested that the federal government encourage the development of secondary or accessory suites as an affordable housing alternative; these suites are typically rented at a lower cost than conventional rental apartments and can improve the affordability of homeownership. Specifically, witnesses requested that “substantial renovation” be redefined under the GST/HST New Housing Rebate to include renovations for the creation of secondary or accessory suites. Furthermore, it was suggested that the value of the secondary or accessory suite alone be used to determine eligibility for the rebate.
The Committee learned from the Union of Ontario Indians that 65% of on-reserve Aboriginal households occupy houses that fall below Canadian housing standards for suitability, adequacy and affordability, while 49% of off-reserve households live below housing standards and 73% are in core need. Witnesses such as the British Columbia Real Estate Association recommended increased federal funding for Aboriginal housing, including a suggestion of annual increases, for five years, to levels that would be sufficient to reduce current housing shortages. Specific allocations for on- or off-reserve housing were requested. The federal government was encouraged to ensure that housing programs are responsive to the needs of local communities and to explore opportunities for private sector involvement.
The Nishnawbe Aski Nation urged the federal government to invest an additional $1 billion per year to address on-reserve Aboriginal housing needs. Other suggestions received by the Committee regarding on-reserve housing included the transfer of responsibility to Aboriginal housing authorities and the immediate resolution of the mold problem.
The Committee also received several suggestions regarding the housing needs of Aboriginal Canadians living in urban areas. In particular, the New Brunswick Non-Profit Housing Association supported continuation of the Urban Aboriginal Strategy, which is designed to address the socio-economic needs of Aboriginal Canadians living in urban areas. Moreover, the National Association of Friendship Centres urged the federal government to expand its existing housing-related commitments to include the implementation of urban Aboriginal affordable housing agreements and to involve the Friendship Centres in the design, delivery and administration of affordable housing programs for Aboriginal Canadians. In addition, the Canadian Real Estate Association encouraged the provinces to develop specific programs in consultation with Aboriginal communities to address off-reserve housing needs.
The Union of Ontario Indians encouraged the implementation of a three-part structure for Aboriginal housing management, financing and operational delivery, developed by the Assembly of First Nations. The First Nation Housing Investment Trust would consolidate federal funding for First Nations housing and provide funding — through members of the First Nation Housing Authority Network — to local housing service providers supported by the First Nation Housing Institute. The Committee was informed that this strategy would require neither additional federal funding nor legislative, policy or program changes.
The Committee learned that First Nations land tenure does not permit owners to sell homes and fails to provide sufficient certainty to attract development. To resolve this issue, the Indian Taxation Advisory Board proposed the creation of a $250 million, five-year First Nations mortgage support program for leasehold houses to increase the number of first-time First Nations homebuyers, the establishment of an institutional framework to support long-term leasehold residential tenure, and the development of a First Nations land title system.
The Committee was told that current methods for securing title on First Nations lands do not provide sufficient certainty and, as a result, deter investment and reduce land values. To improve the marketability and attractiveness of First Nations lands, the Indian Taxation Advisory Board urged the Committee to support the development of First Nations land title legislation, which would replace the authority of the Indian Act over land registry, at an estimated cost of $10 million over three years.
Witnesses, including the Council of Yukon First Nations, also advocated the settlement of outstanding Aboriginal land claims, noting the importance of land claim settlement for such projects as the development of a major fuel pipeline and the construction of a transnational rail line. Other groups encouraged progress on treaties, jurisdictional issues, self-government initiatives and matrimonial property rights, among other issues.
The focus for the pre-budget consultations in 2006 is competitiveness. In the Committee’s view, providing Canadians with appropriate incentives to work is a critical contributor to the productivity growth required for enhanced competitiveness as well as a high standard of living and quality of life in the future. In this context, it is important to recognize that labour market contributions are enhanced when individuals are healthy, well-educated and appropriately housed, and when they have all needed workplace supports, whether in the form of legislation/regulation or assistive devices.
An important tool that can be used to provide individuals with an incentive to engage in labour market activity is the personal taxation system. The Committee believes that changes to the system would provide individuals with an incentive to work by increasing their disposable incomes. Changes in personal taxation could also make Canada a more attractive location for those in other countries who are seeking to emigrate. In essence, we view the personal taxation system as a key mechanism with which we can attract and retain the skilled workers and entrepreneurs needed for our future competitiveness.
While not everyone supports broadly based changes to personal taxation, the Committee believes that such changes — in conjunction with certain targeted changes — are among a number of incentives to work that are important if Canada is to experience higher levels of productivity growth and improved competitiveness. From this perspective, and bearing in mind the changes to personal taxation and the Working Income Tax Benefit announced by the Minister of Finance in his 23 November 2006 appearance before us, the Committee recommends that:
RECOMMENDATION 9
The federal government amend the Income Tax Act to reduce personal income taxes. Consideration should also be given to additional tax relief for low-income Canadians as well as to a working income supplement and other personal income tax changes that would provide incentives to work and to remain employed within Canada.
As the population continues to age, it will be important to ensure that all individuals who want to work have an opportunity to do so, and that they receive needed supports in the workplace. Consequently, the Committee believes that no one should suffer discrimination in the workplace, that persons with disabilities as well as older workers and workers more generally should be provided with any assistive devices or other supports that they need, and that immigrants to Canada should have their internationally obtained credentials recognized. It is for these reasons, and bearing in mind the 15 November 2006 announcement about the Temporary Foreign Worker Program as well as the foreign credentials recognition agency mentioned by the Minister of Finance in his 23 November 2006 appearance before us, that the Committee recommends that:
RECOMMENDATION 10
The federal government — in conjunction with the provincial/territorial governments and relevant stakeholders — develop a plan to ensure that appropriate, properly funded and equitable immigration settlement and integration services are available throughout Canada. As well, a plan should be developed to recognize and reconcile the educational and professional qualifications of immigrants obtained in countries other than Canada.
In the Committee’s view, our productivity as a people and our competitiveness as a nation are improved if we have a society that nurtures, supports and cares for one another. This type of society helps Canadians to overcome the challenges they may face in order to ensure their contribution to society. As well, this type of society may be valued by those seeking to invest — thereby providing us with foreign direct investment that can enhance productivity and competitiveness — and by those seeking to emigrate to another country — thereby providing us with future citizens and future employees.
A supportive society includes many of the elements that already exist in Canada: social assistance and social services; an employment insurance system; and measures to alleviate poverty, among others. Such a society also directs assistance to particular groups in society that need help, including persons with disabilities and Aboriginal Canadians.
The Committee is aware that there are certain groups in society that continue to experience unacceptable poverty despite the program spending, taxation and other federal measures that are designed to help them; these groups include children, Aboriginal Canadians and seniors. In our view, dialogue is needed among all stakeholders in order to determine the best methods for helping these Canadians. Although moral considerations and economic priorities require us to ensure that no Canadian lives in poverty, we believe that particular priority must be given at this time to ensuring that our children — who are our future — are able to escape poverty. From this perspective, and recognizing that there are a variety of relative and absolute measures of poverty that are used by various groups and individuals, the Committee recommends that:
RECOMMENDATION 11
The federal government adopt the target of reducing child poverty in Canada to 9.9% by 2010. The government should meet with the provincial/territorial governments and groups assisting and/or representing disadvantaged Canadians, among other stakeholders, to develop a strategy for achieving that target. The strategy should be developed no later than 30 June 2007.
In the Committee’s view, a number of federal programs and non-committed funds that were eliminated by the federal government on 25 September 2006 make a valuable contribution — either directly or indirectly — to the lives of many Canadians. In light of the contribution they make, and because they were eliminated without any consultation with affected stakeholders, the Committee recommends that:
RECOMMENDATION 12
The federal government reinstate the programs and funds that were eliminated by it on 25 September 2006 in the areas of literacy, the social economy, youth, assistance to museums, Status of Women Canada, the Law Commission of Canada, volunteerism and the Court Challenges Program.
The Committee believes that appropriate housing is also an important contributor to the productivity of a nation’s residents and to the competitiveness of a country, since residents and employees must be well-rested if they are to be productive in society, and children and students must be appropriately housed if they are to concentrate in school as well as to grow and thrive. Moreover, we feel that housing must be affordable.
In the Committee’s view, housing insecurity — which we interpret to mean housing that is not appropriate and/or not affordable — can jeopardize the health, education and social development of Canadians. It also limits their productivity in society. We believe that greater efforts are needed with respect to affordable housing, both generally and particularly with respect to the housing deficiencies experienced by Aboriginal Canadians and low-income families. From this perspective, the Committee recommends that:
RECOMMENDATION 13
The federal government, on a priority basis, extend the Supporting Communities Partnership Initiative and the Residential Rehabilitation Assistance Program.
Moreover, the government should — in conjunction with the provincial/territorial governments — develop a national housing strategy and, on a priority basis, take action in order to ensure that the housing needs of Aboriginal Canadians and low-income families are met.
By creating an environment that encourages Canadians to save for their retirement, the federal government can mitigate public retirement-related costs in such areas as public pensions and, in this way, contribute to the prosperity of future generations of Canadians. While decisions with respect to retirement savings are largely made privately, the federal government has the opportunity to influence choices through changes to personal income taxation, the benefits provided under the Canada/Quebec Pension Plan (C/QPP), the types of retirement savings vehicles offered, and the terms and conditions of existing retirement savings vehicles.
1. Pensions and the Ageing Population
Witnesses noted Canada’s changing demographics and commented on the implications of an ageing population for public finances. As Figure 7 shows, the proportion of the Canadian population aged 65 years and older is projected to increase from 13% in 2006 to 27% in 2056.
Figure 7: Projected Change in Canadian Demographics, 2006-2056
Notes: Projections are based on a medium growth and medium migration trends scenario.
Source: Statistics Canada, Population Projections for Canada, the Provinces and Territories.
The Committee heard that a comprehensive review of the Canadian retirement income system is needed in order to ensure that our ageing population will be financially self-sufficient with minimum support from governments. While recognizing that pensions are regulated primarily by the provinces, witnesses noted several opportunities for federal leadership regarding pension reform, including a federal review of the weaknesses of Canada’s existing retirement income system and the creation of a national mechanism for discussing pensions. In addition, the federal government was urged to develop pension reform options for consideration by Parliament and to encourage the provinces to review and update their pension plan legislation.
The Canadian Federation of Independent Business requested that the federal government freeze the maximum pensionable earnings for the Canada/Quebec Pension Plan (C/QPP) at its current level of $42,100 as a means of restricting payroll taxes.
The Canadian Conference of the Arts and the Canadian Independent Record Production Association urged the Committee to rectify what they believe to be inequitable treatment of self-employed artists under the Canada Pension Plan (CPP). Self-employed Canadians, who are classified as independent contractors, are required to pay both the employer and employee share of CPP contributions but do not have access to all of the same benefits as employees.
The Committee was also urged to recognize the contribution of the Canadian Forces through improvements to the financial situation of surviving spouses and senior members. Currently, surviving spouses of Canadian Forces personnel receive 50% of the members’ Superannuation benefits, which we heard is insufficient to cover basic living expenses. In addition, when Canadian Forces members reach 65 years of age and are eligible to receive CPP retirement benefits, their Superannuation benefits are reduced because of the integration of their Superannuation Plan with the CPP. The Royal Canadian Legion argued that this abatement of Superannuation benefits occurs when benefits would be most useful to members.
Mr. Verne McComas suggested to the Committee that there are errors and other irregularities that have caused Royal Canadian Mounted Police constable widows and orphans to be left without a pension under the 1934 constable survivor pension plan, and urged the federal government to take actions to rectify this situation.
3. Defined Benefit Pension Plans
The Committee heard about the importance of protecting defined benefit pension plans, a component of Canada’s retirement income system that a number of witnesses and the Governor of the Bank of Canada believe is increasingly vulnerable. Witnesses urged the Committee to recommend that the federal government, in close co-operation with stakeholders, assess the current status and long-term sustainability of defined benefit pension plans.
Several suggestions for reducing the risk of solvency deficiencies in defined benefit pension plans were received, including legislating solvency, introducing regulations that require pension plans to establish the minimum and maximum range for the reserve funding for each plan, and changing the Income Tax Act to accommodate the establishment of a reserve fund account and to allow actuaries to establish maximum funding limits for this reserve.
On the issue of surpluses in defined benefit pension plans, the Canadian Institute of Actuaries urged the introduction of legislation that would permit the accumulation of appropriate levels of surplus as a means of safeguarding benefits. The Committee learned that uncertainty regarding ownership of pension plan surpluses can be a disincentive to prudent planning by pension plan sponsors. To resolve this issue, the introduction of legislation that clarifies plan sponsors’ and contributors’ rights to surpluses was advocated. Bell Pensioners’ Group Inc. suggested that the concept of “pension surplus” for ongoing plans be replaced with a “reserve fund” owned by plan contributors.
The Committee was told that key federal legislation — including the Canada Business Corporations Act, the Companies’ Creditors Arrangement Act and the Bankruptcy and Insolvency Act — should be modified in order to ensure that retirees’ pension benefits receive maximum protection if a pension plan sponsor fails financially when the plan is under-funded.
4. Registered Retirement Savings Plans and Registered Pension Plans
Because Canadians are living and working longer, the Committee was told that the federal government must adopt policies that promote retirement savings. It was recommended that the contribution limits for Registered Retirement Savings Plans (RRSPs) and Registered Pension Plans (RPPs) be increased. The Retirement Income Coalition advocated an increase in the limits to $22,000 immediately and to $30,000 by 2008, with a indexation to wages annually thereafter.
Witnesses, including the Canadian Association of Retired Teachers, Canada’s Association for the Fifty-Plus, the Retirement Income Coalition and the Canadian Federation of Independent Business, urged the federal government to increase the age at which RRSPs must be converted to annuities or to Registered Retirement Income Funds (RRIFs), with specific proposals to increase the age of conversion from the current age of 69 years to either 71 years — which was the applicable age until 1997 — or to 73 years. It was also suggested that seniors be allowed to determine the level of their annual withdrawals from RRIFs and Locked-in Retirement Income Fund (LRIFs) or that the compulsory minimum withdrawal rates be lowered.
The Investment Counsel Association of Canada requested that the federal government expedite the process by which investments in issuers listed on foreign exchanges, such as the Alternative Investment Market (AIM), become qualified investments for RRSP and other tax-deferred plans.
With the aim of providing equal access to retirement savings vehicles for employees and self-employed individuals, the American Federation of Musicians of the United States and Canada encouraged amendments to the Income Tax Act that would permit self-employed Canadians — in particular, artists — to belong to RPPs.
To encourage Canadians — especially low- and modest-income individuals —to save more for retirement, the Canadian Chamber of Commerce, the Manitoba Chambers of Commerce, the Investment Funds Institute of Canada, the Vancouver Board of Trade and the C.D. Howe Institute advocated the introduction of tax pre-paid savings plans (TPSPs). Whereas RRSP contributions are deductible from taxable income in the year that they are made and withdrawals are subject to taxation, TPSP contributions are taxable in the year that they are made but withdrawals are tax-free.
The Investment Funds Institute of Canada also advocated a federal supplement to TPSP contributions by low-income Canadians, similar to the Canada Education Savings Grant for Registered Education Savings Plans.
The Canadian Association of Retired Teachers expressed concern that Canadians — particularly seniors — who choose interest-producing investments over stocks or mutual funds, for example, pay higher taxes on the return on their investments. Consequently, reinstatement of the interest income deduction to ensure equitable tax treatment of different types of investments was advocated.
The Committee believes that Canadians should have appropriate incentives to save, both generally and for their retirement. While we recognize that incentives to save involve short-term federal fiscal costs, we believe that long-term benefits would accrue through the alleviation of future fiscal pressures. With the ageing Canadian population, and bearing in mind the comments by the OECD in its Economic Survey of Canada, 2006 about sustainable fiscal and social policies, the need to ensure that our public pension costs are sustainable is even greater. In essence, the greater the extent to which individuals save for their own retirement, the greater the extent to which the Old Age Security/Guaranteed Income Supplement/Spouse’s Allowance (OAS/GIS/SA) program will be fiscally sustainable without the requirement to raise taxes, reduce spending or incur a federal budgetary deficit.
In the Committee’s view, while the three pillars of our retirement income system — the OAS/GIS/SA, the Canada/Quebec Pension Plan and Registered Retirement Savings Plans/Registered Pension Plans — work reasonably well together for many, there are elements of all three pillars that provide those who wish to work with disincentives to do so. These disincentives could have important implications if continued population ageing results in labour shortages and pressures on older workers to remain in the workforce longer.
For example, the Guaranteed Income Supplement program contains a clawback provision, the actuarial adjustment that currently exists in the Canada Pension Plan provides an incentive to retire earlier than age 65, and Income Tax Act provisions related to RPPs limit the ability of individuals to collect pension and employment income from the same employer at the same time.
That being said, the Committee continues to feel that it is important to save both generally and for retirement, but believes that the elements of the retirement income system must provide individuals with the opportunity to make decisions suited to their circumstances, regardless of whether that involves labour force participation. While we recognize that many seniors wish to cease employment at the normal age of retirement, we also know that there are many seniors who wish to continue their attachment to the labour force; this latter group of Canadians must not be penalized for their continued employment. Moreover, we are aware of the 17 October 2006 announcement by the Minister of Human Resources and Social Development of the Targeted Initiative for Older Workers, which will assist some older workers.
There are also concerns about the extent to which some groups, such as caregivers, are able to save for their retirement and about the ability of parents, should they die, of providing financial support for the care of their disabled children. For these reasons, and bearing in mind the measures announced by the Minister of Finance on 31 October 2006 regarding pension splitting and the increase in the age credit and his comments on 23 November 2006 about reduced taxes on savings, including capital gains, the Committee recommends that:
RECOMMENDATION 14
The federal government, in consultation with the provincial/territorial governments and relevant stakeholders, undertake a comprehensive review of the Canadian retirement income system with a view to determining the adequacy of the system in meeting the retirement income needs of seniors.
The focus of the review should also include incentives for saving and the extent to which these incentives ensure that the financial and other needs — of both current and future pensioners as well as of labour force participants and those who engage in unpaid work — are being, and will continue to be, met.
The review should also focus on any incentives and disincentives in the retirement income system to continued labour force participation by older workers, on the manner in which caregivers might receive retirement income and the feasibility of a caregiver drop-out provision within the Canada Pension Plan, and on the means by which parents — particularly older parents — can provide financial support for the care of their disabled children, such as through a registered disability savings plan.
Moreover, during the review, consideration should be given to returning, to 71 years, the age at which Registered Retirement Savings Plans must be converted into Registered Retirement Income Funds and the extent to which greater flexibility should be given with respect to Locked-in Retirement Accounts and federally regulated pensions.
The review should be completed no later than 31 August 2007 and any legislative/regulatory amendments needed as a consequence of the review should be enacted no later than 31 December 2007.