[Recorded by Electronic Apparatus]

Wednesday, October 23, 1996

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[English]

The Chairman: Could we come to order, please. Thank you.

We're pleased, as the finance committee of the House of Commons, to continue our pre-budget hearings. With us at this evening's round table we have, first of all, from the National Youth in Care Network, Brian Raychaba and Yvonne Andrews. From the National Association of Friendship Centres we have Marc Maracle and Mathieu Courchene; from the National Association of Women and the Law we have Martha Jackman; from the Canadian Association of Food Banks, Sue Cox; from the Canadian Policy Research Network, Judith Maxwell; from the National Action Committee on the Status of Woman, President Joan Grant-Cummings; from One Voice - The Seniors Network, Robert Armstrong and Andrew Aitkens. Thank you very much for being with us.

We would suggest that we could maybe start off with a brief three- or four-minute statement by each one of the groups and we could then turn to questions, if that would be acceptable to you. Yvonne Andrews or Mr. Raychaba, would you like to start?

Mr. Brian Raychaba (Former Research Officer, National Youth in Care Network): Okay. Well, in two minutes I won't be able to provide you with a comprehensive policy alternative to whatever direction you're taking, but let's just by way of introduction that I used to work for an organization called the National Youth in Care Network, which represents children and young people between the ages of 14 to 24 who live or have previously lived in the care of child welfare authorities; that means foster homes, group homes, institutional care, that sort of thing.

In the interest of making the most of the time I have before you today, I guess I'll get right to the point. The federal budget has an immense impact on the lives of needy children and young people in Canada, like it or not, for better or for worse. I want to look today at the federal budget as a family budget, because it is our contention that the state - whether we're talking about provincial or federal jurisdictions, which share child welfare either in a funding capacity or an administrative capacity - take on the parental responsibility through the child welfare system for caring for children and young people who have been abused and who have no other kind of home.

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In short, I suppose I want to talk with you today about some of the responsibilities of state parenthood.

I'd like to talk about the federal contribution to Canada's social spending and how it makes a difference to this country's previously abused, victimized and maltreated and therefore most vulnerable children and youth. I'd like to talk a bit about the effects that the contemplated cuts - at least contemplated by some people - to the federal contribution will have to this group and on Canadian society as a whole.

On the first point, it's no big surprise, but the child welfare system has been in a state of permanent crisis for some years now. That's nothing new to most people around this table.

Further cuts to spending in this area will simply, if continued, further a trend that is now familiar to those who are either working in the system - adult caregivers, policy architects - or people who used to live in the system themselves, as I did, and as Yvonne did. I should maybe mention by way of introduction that I used to live in a foster home, various kinds of group home settings, and such.

How does the federal budget affect children and young people living in child welfare institutions? To begin with, prevention programs or family support programs are significant and crucial for us. Programs like these support parents. Their function and role is to keep kids at home, to prevent abuse from happening in the first place, and I guess most importantly for the finance committee, to save the state the costs incurred when kids have to be brought into care - the costs not only for housing and feeding them but, as I'll get into later, a lot of very expensive mental health care and so forth.

Unfortunately these programs are the first to be cut by cash-strapped provincial governments, which are trying to work within their means.

Once coming into a child welfare system that is experiencing and undergoing these kinds of financial pressures, many, if not most - and I'm speaking nationally here - of the 45,000 children and youth who come into the care system will find themselves facing immense psychological and developmental issues related to their previous abuse or experiences of family violence, neglect, victimization, what have you. These are experiences that could have been prevented but at the present time are not being prevented because of the lack of family support and prevention services, and by that I include community development work and so on.

Common problems experienced by abuse victims and survivors include hostile and aggressive behaviours; poor peer and social relationships; excessive low self-esteem, anxiety, and emotional insecurity - I could go on with the list of developmental sequelae, which is established in the literature.

These experiences and what they mean to young people are huge obstacles to their normal healthy development. Treating them costs money, plain and simple, the same money that it would cost any of you people at this table who are old enough to have children to pay for the health care, whether physical or mental, you would need for your children - your son or your daughter.

Unfortunately the lack of financial resources in child welfare means insufficient money for successful treatment in all the provinces concerned. In many provinces this really means no treatment whatsoever, depending on whether or not you live in an urban centre or in a rural centre. What does this mean? This means ineffective, if any, professional help for youth dealing with the crippling issues related to abuse or maltreatment, and by this we are talking about sexual exploitation, incest, the whole gamut. Like physical wounds, when the emotional and psychological wounds are not treated, they fester and persist.

Children and young people in care are often quite hesitant to open up and begin the healing process once they're in the care system. The question you might want to ask yourself, as I did when I explored the issue, is why.

Well, to begin with, very many young people in the care system - and I include myself when I was in the care system - simply don't trust adults, and with good reason. The reason is that adults don't tend to be around very much, due to casework overload and staff stress related to understaffing. Caseloads that are too high for ordinary human beings lead to staff burnout and they lead staff, whether social workers or child and youth care workers, to leave. The people working closest to children and youth in placement tend to be the most undersupported, in terms of salary, training and support.

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The lack of residential care resources, which once again relates to finances, often means that the placements we find for some of these young people - and very often there are none, and agencies are putting young people and children up in hotels because there's no other place to put them - sometimes don't fit their needs - surprise, surprise! - and the placements break down. This means the young person or child has to move again so that, even more, these young people find themselves resistant to forming trusting, caring relationships with healthy adults.

So there is a logic to the reality that individual adults tend not to hang around these youths very much and for very long. Insufficient resources - that is to say, money - is at the crux of the problem.

Poor support for and supervision of staff and foster parents creates a tinder box situation that too often erupts in episodes of abuse and violence in care. Anyone who reads newspapers or any form of media is aware the problem of violence and maltreatment for young people who are supposedly being taken out of abusive situations and protected.

It is a sad fact, however, that in this country at least, a child or a young person is more likely to be abused in the care of the child welfare system than he or she is in his or her own biological home. I wouldn't be the first to characterize Canada's child welfare system, a system administered by the provinces but partially funded by the federal government, as dysfunctional and abusive. It shares all the characteristics of a typically abusive parent.

In the interest of time, I'll move on.

You might say, as some people might, so what, life is hard and these are hard times; why should you, or I, or the average Canadian be concerned? The reason is this: I say to myself as a taxpayer, well, it costs me money. It's not only costing me money this year; it's going to cost me money in the decades to come. It costs you and I, both as taxpayers and as citizens. Simply put - and my colleague will continue this - it is the case of pay me now or pay me later.

Truly investing in children and young people who've been previously abused means helping them to heal by way of a child welfare system that is funded and empowered to truly care for them. It's both the ethically and the economically smart thing to do.

I could go into the economic costs of failing to combat the realities of domestic violence and abuse, but suffice it to say they're staggering. Governments and taxpayers pay this price annually in terms of expenditure on medical, legal, correctional, mental health and social services. The private sector pays some of these costs in terms of employee assistance plans, time off work, lack of productivity, and so forth.

The emergent new global economy, based on knowledge, technology and ideas, requires that the younger generation of workers be highly skilled, educated and adaptable in order to be competitive. Unfortunately, the educational and occupational prospects of underserviced children and youth in care, the archetypal, marginalized youth in our society, are dismal. The emotional problems and developmental sequelae resulting from their experiences with abuse, combined with a lack of funding for services and a lot of other issues, too often leave these youth with little in the way of the cognitive and psychosocial capacities necessary for them to succeed in school.

There's a lot of talk about training and employability for Canada's young people. However, the government's efforts will simply miss the boat in terms of previously victimized youth and children if it doesn't take into account that what resources many people need even to get to the point where they can take advantage of training and employment programs are severely lacking. If you're going to create a series of training and employment programs to help get young people working, a large segment of marginalized youth aren't at that level yet.

The question, as I see it, is as follows: do we wish to continue fostering a scenario, a situation, a context, where the care system produces citizens lacking the emotional and intellectual wherewithal necessary for them to contribute to Canada's economic productivity and global competitiveness?

They want to contribute. We want to contribute. We want to be constructive and productive. We definitely want to make a living, and believe it or not, some of us want to pay our fair share of taxes as well. But for the most part, the lives of young people in care, so far, consist of one massive liability, and the government-funded child welfare system is itself handicapped in its own task to help us to help them heal and be better equipped for what they need to do in the 21st century.

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Whereas the deficit is real, so is the economic payback for funding services that support and help children in youth and care to attain responsible, productive adulthood. Equally real are the social costs that will come back to haunt us if we don't invest wisely now.

I could have, but I haven't, gone into some of the other costs related to crime, youth violence, and the continued cycle of child abuse and domestic violence. Regardless to say, they're very real.

We are at the present time running a social deficit, one that my children, if I can ever afford to raise some, and yours will have to deal with. The question I think this committee has to deal with is whether we're wiling to tackle that deficit as well as the more conventionally known fiscal deficit.

A federal budget that aims at working in partnership with provincial governments would, I hope, support families to prevent children and young people from having to come into care, and it would also support the child welfare system so that it can act as a good parent and successfully raise its - or, I would argue, your or our - children and young people so that they can succeed in life and be productive and not a liability, regardless of their past experiences.

I would end by saying that hopefully we can put into action and make real the words: I care about abused children and youth. Really, the question is, do we; do you? Ultimately, policy will tell us whether or not this government does. Thank you.

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

Next, from the National Association of Friendship Centres, are Marc Maracle and Mathieu Courchene.

Mr. Marc Maracle (Executive Director, National Association of Friendship Centres): Thank you very much. I also want to thank the standing committee for extending the invitation, albeit at the last minute. This is the third year in a row that we've been here making representations on behalf of urban aboriginal people.

Simply put, the vision of the friendship centres and the friendship centre movement in Canada is to improve the quality of life for aboriginal people who find themselves residing in an urban environment by supporting self-determined activities that encourage equal participation in Canadian society in a way and means that respect and strengthen our aboriginal cultural distinctiveness.

What was presented to us to come before the committee was to offer a snapshot of how friendship centres operate in this country from an economic perspective, as well as to relay a number of concerns we have in terms of how government assumptions are having an effect on our operations and constricting our ability to serve and contribute more to our communities and how we interact with the general Canadian public. On some of those economic realities, we've provided the committee with background material on the association, as well as a brief in terms of what we're presenting today. I won't be going through the entire brief.

There are 114 existing friendship centres across this country, from one end of the country to the other. We have provincial capacity through seven provincial and territorial associations, and a national office. We have an over 40-year history involved in program and service delivery. It's through over 2,000 full-time and part-time employees. We have over 1,000 board members that voluntarily serve at the community level. It's an accountable, effective and efficient way and means of delivering programs and services. It's an option, an alternative delivery mechanism that the government has looked for, one that's accountable. We represent that, and it's done in the perspective and from a feeling that's from our communities.

Friendship centres grew out of a real need that was identified in the 1950s with significant numbers of aboriginal people relocating into the cities or who have always been there. They were falling through the cracks. Mainstream service organizations, whether federal, provincial, municipal, or territorial, have simply not been able to serve our people. So out of that need grew friendship centres.

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Perhaps one of the most telling statistics the Canadian public doesn't realize is that between 60% and 70% of the 1.5 million aboriginal people in this country live in urban areas. That's the backyard we swim in. That's the reality.

We're faced with an overwhelmingly young population. Almost 60% of our people are under the age of 24, and almost 40% of that population is under the age of 15. It's going to have tremendous impacts on education and on employment and training. When you look at the federal commitment in terms of expenditures - everyone talks about this figure of in excess of $7 billion which is expended on aboriginal people - probably between 10% and 20% is directed to urban aboriginal people, despite the fact that the numbers are so completely swayed the other way.

We're not here to make a pitch, because the need in our first nations communities, in our Inuit communities, and certainly in our Métis settlements, in what they face at the community level, are equally as strong and challenging. But from an urban perspective there are a number of things we've been faced with, and that is consistent cuts to social services for aboriginal people, including our main funding program, which has recently been transferred from Canadian Heritage over to the national association. We have ongoing concerns about the direction the federal government has taken in employment and training. Overall, federal-provincial relations, when it comes to urban aboriginal people, were tossed around like a ping-pong ball.

Something quite evident in some of the most recent directions the federal government has taken is the politicization of programs and services. One only needs to look as far as the current strategy on employment and training and the negative impact it's having on urban aboriginal people. Funds are being diminished, access is being excluded, and we're simply being downsized and offloaded onto the provincial and territorial governments.

On the positive side, the association has been successful in negotiating the transfer of our funding base from Canadian Heritage. It represents approximately $15 million in this fiscal year that's providing core funding support or program delivery to 99 of the 114 friendship centres. What we would like to see the standing committee recognize and make representations to the finance minister on is to make adjustments to the funding to fund all 114 friendship centres, to make some allowance for growth, because definitely the migration continues to occur and those numbers continue to go up, and to establish linkages with government and other service delivery organizations to serve better.

Our door is open. We've certainly been open to any suggestions and cooperative relationships, and that's what we want to build on.

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

Martha Jackman.

Ms Martha Jackman (National Association of Women and the Law) : Thank you. I'm appearing on behalf of the National Association of Women and the Law, of which I'm a member.

On behalf of NAWL, I wish to make three brief submissions in relation to the forthcoming federal budget, the first, naturally, relating to national conditions under the CHST.

As you know, the 1995 budget act repealed the Canada assistance plan in favour of the new Canada health and social transfer. At the time the federal government undertook, pursuant to subsection 13(3) of the revised Federal-Provincial Fiscal Arrangements Act, to negotiate with the provinces a set of shared principles and objectives for CHST-funded welfare programs and services to replace those which were lost with the repeal of CAP.

In our presentation to your committee during last year's pre-budget hearings, NAWL identified the national standards and conditions necessary to bring the CHST into compliance with the Canadian Charter of Rights and Freedoms and Canada's international human rights undertakings. NAWL therefore hopes the 1997 budget act will include such national standards for the CHST as were promised by the federal government in 1995.

Secondly, the issue of fundamental review of the fairness of the existing tax system. In previous presentations to your committee NAWL has argued that before we pursue any further cuts in tax or program spending a major review of the fairness of the current Canadian tax system is urgently required. Recently the Auditor General brought to the attention of Parliament the issue of taxation of family trusts, which NAWL has raised with your committee in the past.

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NAWL has also argued before this committee that federal tax spending in the area of RRSPs should better reflect the needs of average rather than the most wealthy Canadians. Instead of reducing RRSP limits to the level claimed by the bulk of Canadians taking advantage of this tax deduction, RRSP limits have been raised, a benefit to wealthy Canadians at the expense of the poor.

In our 1995 brief to your committee, NAWL argued that the tax system as it currently stands contains many inequities, including inequities in relation to gender. NAWL therefore recommends again to your committee that the federal government undertake a comprehensive and long overdue review of Canadian tax policies and spendings in order to guarantee to Canadians that their tax system is indeed both effective and fair.

Finally, on the issue of a gender impact statement relating to the 1997 budget act, NAWL hopes the 1997 federal budget act is accompanied by a gender impact analysis that clarifies the particular impact on women of the budget choices that are made.

Two years ago, speaking to a meeting of national, provincial and local women's groups, Finance Minister Paul Martin stated that his department, large and wealthy though it may be, was incapable of providing such an analysis of Canadian finance policy or budgets. Since then the federal government has adopted a federal plan for gender equality, and at the fourth World Conference on Women in Beijing, the federal government endorsed the Beijing Declaration and the Beijing Platform for Action.

Domestically and internationally, the federal government has expressly committed itself to reviewing its fiscal policies and decisions from a gender-sensitive perspective. In endorsing the Beijing Platform for Action, the federal government undertook, under paragraph 58(b) of the platform, to analyse from a gender perspective policies and programs, including those relating to macroeconomic stability, structural adjustment, debt and taxation with respect to their impact on poverty, on inequality and particularly on women.

On the basis of these commitments, NAWL looks forward to a gender impact analysis by the federal Department of Finance of the forthcoming federal budget.

[Translation]

Thank you for your attention.

The Chairman: Thank you very much, Mrs. Jackman. Sue Cox, would you please proceed.

[English]

Ms Sue Cox (Vice-Chair, Canadian Association of Food Banks): Thank you very much.

I'm the vice-chair of the Canadian Association of Food Banks and I'm also the executive director of Daily Bread Food Bank in Toronto, the largest in the country. When I speak of people who use food banks, the people I know best are those in Toronto, but I think they reflect something that's true right across the country.

When I meet with food banks these days, as I do fairly frequently, the only thing people can talk about is the lack of food in them. Food banks are simply not able to meet the need that's been continuously created over the last several years as funding has devolved from the federal government to provincial governments and subsequently onto charitable organizations such as food banks.

The need is growing, is serious and has long-term, serious consequences for Canada. We do not have enough food. We do not have the ability to continue to pick up the slack of government programs that simply are not meeting the needs of people in need.

Let me speak specifically about the CHST, because in doing so, we have to talk about the end of the national standards that existed under the Canada assistance plan. Perhaps it wasn't the best thing in the world, but it did have those kinds of standards.

The issues I know best and the situation I know best is the situation in Toronto right now, where without national standards low-income people are put into the most significant hardship position I can imagine in Canada. Currently 150,000 people in the greater Toronto area are turning to food relief programs every month, and we know who they are.

From time to time there's been a fairly... Well, I don't know if it's systematic, but nevertheless there has existed a tendency to blame those people who are in this situation for being poor and for being out of work.

I would just like to say that half of the people we see in food banks right now, who are the heads of households, are people between 25 and 40 years of age, in what would be their most productive working years in any normal circumstance. More recently the impact has been greater on women. Women who are heads of household are 55% of the heads of households in food banks. It's a slight majority. If they go to a food bank, two-thirds of them are likely to be supporting children right now.

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The situation in Ontario and the situation that in fact we see in many other provinces right now as food banks are unable to meet their basic needs is increased hunger, and I mean real hunger: families who go without food because they are unable to purchase it for themselves and their children. For at least 30% of the children in the Greater Toronto area who are in food bank families, hunger is not unknown. For 15% or more it's a very regular occurrence.

That's the reality we're faced with. That's the lack of attention to what is, almost tritely now, called the ``social deficit''. It's just so extraordinary to us right now that I wish I could have been with the other panel. I hear Mr. d'Aquino speak and I ask how you can justify children going hungry in the interest of so many other different kinds of things and so many other kinds of tax structures that benefit wealthier people.

My plea for you is obviously for employment for these people. Unemployment is the reason people use food banks. It's a very simple thing. People who have jobs, for the most part, don't have to use food banks. If they do have jobs, one-third to three-quarters of them just have part-time jobs. They're looking for full-time jobs and not getting them. A job is the best thing people can have. They give better support for their children, or at least for their families - not just for the children but for the whole family that's in this kind of situation. They give better support if you are a woman using a food bank and are in that situation because of a family breakdown, and of course many, many are. You're in such a significantly serious situation.

Finally, I have to say more people forced onto welfare means more people are in food banks, and the recent reduction of eligibility in UI or whatever it's now called certainly has contributed to food bank need.

Let me stop there. I obviously have many other things to say.

The Chairman: Thank you. You'll have lots of opportunity.

Joan Grant-Cummings, please.

Ms Joan Grant-Cummings (President, National Action Committee on the Status of Women): I'm the current president of the National Action Committee on the Status of Women.

The first thing we want to say in this summation is that earlier this year, across this country, we had the National Women's March Against Poverty that NAC and the Canadian Labour Congress together planned. Women made fifteen demands in that march. We believe meeting those demands actually will go quite a way to dealing with the increased poverty we see in this country today. Today we have an increase of several hundred thousand people who live in poverty. We feel this definitely is regressive in terms of women's economic rights and in terms of the government keeping to its commitments to the Forward-Looking Strategies, the Beijing Platform for Action, CIDA - all those conventions the Canadian government has signed, making a commitment to advance women's equality rights in the country. I think we have taken a very, very regressive step.

Today aboriginal women are unemployed at a rate of 17.7%, women of colour at a rate of 13.4%, women with disabilities at a rate of 16%; and 70% of women work in part-time jobs. We are overrepresented in the ten lowest-paying jobs in this country. We do not have the promised national child care program and we do not believe the child benefit scheme the government is currently negotiating with the provinces is going to deal with this issue. If anything, it should enhance the national child care program, because we believe lack of access to child care does not advance women's economic rights. It's actually regressive to women's economic rights. We believe having a national child care program should be part of a job creation strategy. It builds the social infrastructure of this country and it provides jobs.

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We believe that a demand for $50 million for feminist services against violence also will deal with some of the job creation that needs to happen in this country. Not only will it build social infrastructure, but it also will create jobs, including jobs for women, since we are the most unemployed in this country.

We believe that the deficit-cutting has been done at the expense of women: poor women, unemployed women and women who are single parents. While the business community and members from other parties may be lauding the finance minister, we feel that it has been done at the expense of us, and that it is no reason or cause for celebration right now.

We do not believe, as some parties may have put forward, that there should be an across-the-board tax cut. We believe that would be ludicrous right now, and that it would be done again at the expense of poor people, in particular, poor women.

As our colleagues before have said, the CHST has left the country without national standards. That means that no level of basic services is guaranteed anywhere in this country. It means also that provinces, as is happening with the Harris and Klein regimes, will continue to use health care as the thing to keep voters, while sacrificing social spending. That is what is creating the social deficit, as our first speaker said.

We believe also that the CHST has actually created conditions in this country that have weakened Canada and the federal government. We believe that because of this, too, equality and democracy has been sacrificed in this country. We want to see a strong federal government. We want to see a federal government that comes in clearly with national standards to say to the provinces how this money should be spent.

We believe that the CHST should not go below the rate that the finance minister promised. Also, when the increases occur, they should be done in terms of cash payments, not tax points. We believe that makes a difference, because the federal government's ability to have an impact on the provinces in terms of spending on social services programs and health care can only be guaranteed if they have a sizeable cash component in that CHST payment. We believe it shouldn't be less than $18.5 billion.

The cuts to training programs, again, have negatively impacted women in this country, affecting some groups of women more than others. It's inconsistent to say that we want a productive, competitive Canada and then cut training programs.

We believe that the federal government has to be involved in training programs. There have to be national standards attached to those training programs, in particular with regards to equity issues.

Right now, in terms of women-controlled, commmunity-based training programs, what we currently have as far as women's groups are concerned isn't going to guarantee any success, productivity or competitiveness in this country. So we need the federal government to not hand over training to the provinces. If you do that, you must attach national standards to those training programs.

Because of the particular history and culture in terms of the aboriginal people of this country, we believe they should have control over those programs. We believe that because of the particular situation in Quebec they also should have control over their programs.

The finance minister talked about reforming the pension system. We believe that if there's to be any reform, it should be enhanced and strengthened rather than eroded, which is what he was putting out. We believe that for women, over their life cycle, particularly when they grow older, the issue of poverty in their lives becomes an even greater threat.

To make the changes the finance minister has suggested right now just guarantees a life full of poverty for women. When we have a greater discussion, I'd like to outline some of those points.

The final thing we want to say is in terms of the principles along which this government needs to develop this budget. Equality and democracy must be put back into how this budget is developed. You must put back equality on the agenda. It's something that the Liberal government has always prided itself on in the past, and we see that missing right now.

Thank you.

The Chairman: Thank you, Joan Grant-Cummings.

Robert Armstrong and Andrew Aitkens.

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Mr. Robert Armstrong (Member of the Issues Committee, One Voice - The Seniors' Network): Thank you, Mr. Chairman. Andrew and I will share the time. I'll be very brief.

This is an important standing committee. It has a clear reference in the Standing Orders, and Standing Order 83 in particular. We believe it to be an effective channel into the finance department, both in its formal reporting and in its informal discussions which surely take place.

We also are impressed by the fact that in this very partisan environment you manage to impart to the proceedings, and I'm sure in your reports to your colleagues, a certain independence of view. We note that, and we appreciate it.

Last year we asked you to consider protecting people who are retired and about to retire in the context of changes to OAS. You listened, you acted, and the government acted. In some other respects, however, the budget was a disappointment. As far as we are concerned - I have to say this sadly - new alarm bells are being set off.

We are intermediaries between seniors and the government. We're not the only ones, but One Voice has a very broad mandate. We're concerned about the patenting of drugs; the use of generics, the abuse of older people, whether that's in managed care or by financial institutions; telephone rates; and transportation issues. It's a very broad mandate.

There's always a temptation to reach out to some individuals to find that they're fully in accord with the directions the government wants to take. But to see that as giving overall approval could be very misleading.

There are other seniors, and there are other concerns. The clawback of old age security is still with us. It's never been revisited, but it has recently been refined. People now have the money taken at source.

That amounts, in a way, to an intrusion of privacy. Say someone now arrives at the bank with OAS. It's now $275; I don't know what it used to be. The clerk can sort of shake his or her head and say, gee, Mary Jones is doing better than we ever thought. So it's really intrusive in a serious way.

The previous budget in 1995 dealt a blow to the whole severance pay packaging. That is to say, years of services after 1995 cannot be rolled over into a tax shelter. That's going to be very serious down the road. It will mean that employers won't offer a severance pay component for years of service after 1995. That's the inevitable result.

Last year's changes - it's called the fatal year - to the withdrawal age for registered retirement funds, which went from 71 to 69, was a source of particular anger, because the budget said there would be no tax increases in that budget. The budget brief spoke of unnecessary tax deferral. Well, this is necessary. People leave the money in as long they can, because they're afraid they're going to run out of money. They're going to die poor, having saved all their lives.

We all know some people who are very well off, but they are probably the same people. There are probably only four or five out of a hundred. There are very few people who are really well off, but there is this sort of mythology out there.

I think that cutting into the age was a vengeful act, really, and I don't see why it was necessary. In the year 1998-99 it will yield about $175 million of tax savings. You could give Bombardier another loan in 1999. You could double the loan, but I don't think seniors would get any credit. It's interesting the way the money flows. It's not a significant amount in terms of government, but it enraged seniors. It sets a very poor tone.

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The other thing that sets off alarm bells is the possibility of deindexing CPP benefits. Considering that it's proposed that this new seniors' benefit not be taxed and be fully indexed, it seems to me a very cynical move to now turn around and say you will deindex to the first percentage point the Canada Pension Plan.

That will lead to an unravelling of CPP and other pension arrangements as well, which generally speaking take into account the fact that the systems are joined. They're not stacked on one another; they're melded, as is the case with the Public Service Superannuation Act. So you interfere with contractual arrangements in a serious way.

Unfortunately what is called pension reform strikes me as a euphemism for what I term blunt ambition driven by a single goal. The government is not an end unto itself. That should be well understood. You exist for us; we do not exist for you. That really needs to be driven home.

The independent business people today spoke of the misuse of this whole concept of tax expenditure, which has been floating through the finance department for years, as if by the grace of those people we have until they decide we should have not. It's interesting that it came from the business people.

Seniors are respectful of our institutions. If you want to get proof of that, watch when the veterans leave the cenotaph on November 11. People clap, and I think in all sincerity. But we worry. We worry about the ebbing of trust and we worry about the fragility of our institutions. Only d'Aquino mentioned that this afternoon. That's still an issue and it has to be dealt with.

We're in the midst of a Canada Savings Bonds campaign and you're using an English person called Marian, the translation of which in French would be more Marianne than Mariette, but Marianne conjures up the image of the people on the barricades during the French Revolution, which is a subliminal signal, but perhaps not one you intended.

More serious is the interest rate gap. If Marian is 71, she'll get 3% and 4% on those bonds in the first year, but her statutory withdrawal from an RRSP is 7.38% and 7.48%. We think that merits discussion down the road and those figures may have to be revised down if we're going to stay in a low-interest period.

We'd like to sit down with officials. There's lots of talent, lots of very bright gals and guys who could go over this with us. Maybe it won't look as bad as it appears on the surface; I don't know. We'd like to go over it.

We hope this budget will not be an instrument to effect changes in the retirement income system. We said that last year and I believe in all sincerity that you listened very carefully, Mr. Chairman. We were very hopeful. This year we're a little more cautious.

On the question of revenue, which we've been asked to address, there's nothing like an economy in good health. That would do a great deal to restore fund balances. An underperforming economy drains resources. As John Kennedy said, a rising tide lifts all the ships, and I believe that.

I'm coming very quickly to my last point.

With respect to employment - and the independent business people raised this point as well - because seniors feel undervalued in a certain sense, constantly off balance and very much the target of significant and repeated changes that affect or may affect their economic well-being, they have become reluctant consumers.

Stop badgering us. Stop threatening. Stop the continued sniping.

I propose that this budget announce a cooling off period - that's from Taft-Hartley, showing my labour background - on any negative intrusions into seniors' incomes. That would be a big step to restoring confidence. If you could go beyond that with a more lasting assurance, then I think the job situation would improve.

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Last - I know Andrew is anxious to say something and he does have time - stop the wasteful and almost hateful war of attrition on seniors. It seems to me you have enough to do, you really do, war on two fronts, I think.

With the frictions in the country, to be alienating systematically... Though the polls show you're invincible, there's a deep underlying resentment and irritation among a significant number of people - and we're with you. We love Canada and we're not unfriendly to our own government, whatever its stripe. We just think we're being pushed, and you've taken on too much. There's too much tension. You have a serious problem, and we want you to deal with it and leave us alone for a while.

The Chairman: Thank you, Robert Armstrong.

Last, Judith Maxwell.

[Translation]

Mrs. Judith Maxwell (Chairman, Canadian Policy Research Network): On behalf of the Canadian Policy Research Network, it is a pleasure for me to participate in your committee's proceedings.

[English]

Let me begin by saying, first of all, I think it's very important to get the federal and provincial fiscal houses in order. The difficulty that I think has been well illustrated by the voices we've heard among the earlier speakers is the way in which we go about doing that. I think we have choices in how we set priorities, federally and provincially, and there are opportunities here for a different kind of leadership on the part of government that could make a difference to the way in which this process of fiscal adjustment impacts on citizens generally.

The big issue we face in the 1990s is social cohesion - that is, the degree to which the people feel that they're members of the same society and that they're part of an enterprise with shared values and goals.

Social cohesion is at risk at any time of insecurity because insecurity breeds alienation, encourages people to look for scapegoats, and makes people rebel against centralization, hierarchies and big institutions, especially governments. So insecurities like we're experiencing in Canada these days make the country much more difficult to govern.

The divisions in our society are driven in part by the labour market. They're reinforced by our education and training systems and by the unequal allocation of our renewable resources, by the kinds of seniority systems we have, and also by a lot of the program cuts that have been part of the fiscal correction.

I don't think I need to go further to point out that we're in the process of creating a kind of class society here of haves and have-nots. There's also a big difference between east and west in terms of the sense of optimism and relative opportunity these days, and there are very serious divisions emerging between young and old.

One issue I would like to speak to with respect to all of these voices around the table is that there is an opportunity here for a different kind of leadership. I think in a period of insecurity what people look for is a new kind of anchor, some sense that we are going to hold onto basic values that are Canadian, that there will fundamentally be an effort on the part of governments and citizens collectively to create a shared community.

Several speakers have spoken about the need for national standards. I think that language probably has to change these days because of the shifting balance between federal and provincial governments, that whatever standards or principles are enunciated must flow from a dialogue between federal and provincial governments and should not be something that comes down from on high from the federal government. But that is an example of the way in which we need a much better coordinated effort on the part of federal-provincial governments and management of interdependence on the social side of the agenda.

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The federal government can act relatively independently and autonomously in monetary policy, fiscal policy, trade policy, etc., but on the social side of the agenda there is total interdependence between the programs that occur at federal and provincial levels. Therefore I don't think you can use the jargon of ``overlap'' and ``duplication'' on the social side of the agenda. It has to be much more a joint action - joint action in terms of agreeing on principles, but also in setting some priorities and agreeing on what national projects we should be pursuing. Both the principles and the national projects, which could be themes such as investing in children or whatever - the minister has suggested some ideas in his recent speeches - provide an anchor for Canadians. They give a sense of where the sense of direction is and what the underlying commitments of governments will be.

Another issue I'd like to raise is more a question of how you link this discussion we're having now with some of the discussion you heard in the previous session. A very important underlying assumption in the macro-assumptions that are laid out... The economic statement speaks about restoring confidence and stronger economic growth and a resurgence in consumer spending as the underpinning for economic growth, but I think none of us actually know the degree to which the social deficit will have an impact on the way in which consumers will be able to respond at this stage in the business cycle. We know savings are very low, even on average, and obviously in many families debt levels are very high and there are no savings. This is also a period when saving requirements are much higher than they used to be, because post-secondary education costs families so much more, because families now have to absorb more health care costs, because when young people start out in life they start out in low-paid and insecure jobs, and because when interests rates are low people have to put more money into their insurance and their pensions to maintain the degree of protection they desire.

When you add all those things together, I think economists who are doing their forecasting these days really don't know what the behaviour of citizens at large, the consumers out there, will be in an environment where they face a good deal of hardship as a result of unemployment or low wages, or because they have become marginalized from society in some way. But even among middle-class families the amount of insecurity that exists at this point should make us ask some serious questions, and I would encourage the committee to do that when it's meeting with the economists who are the active players in the forecasting community.

The Chairman: Thank you very much, Judith Maxwell.

Some of you probably didn't have enough time to present your full case, and as the chair I gave some witnesses a lot more time than others, but I'll make sure you have just as much time as any of you wish, to make sure we understand fully what you want to present to us.

Could we start with you, Mr. Solberg.

Mr. Solberg (Medicine Hat): Thank you very much, Mr. Chairman.

I've heard more than a few people talk about some of the challenges people are facing today. One of the observations I would make is that in the last three years we have seen after-tax disposable income fall by about $3,000 a family in this country in the last three years.

Ms Maxwell made reference to the high level of personal indebtedness people are facing today. Although Ms Grant-Cummings did talk about her opposition to broad-based tax cuts, I haven't heard this issue really discussed at all: the high level of taxes and, other than the reference fromMs Maxwell, the reference to high personal debt.

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To me, all these facts point to a rising tax burden on people. It makes it extremely difficult for them to cope today. It causes tremendous stress on families.

I wonder if any of the witnesses have any comments on the role high taxes play in creating stress on families, in some cases pushing people into food banks and making it extremely difficult for the economy to create the long-term permanent jobs that are the best social program of all.

Ms Cox: I would just like to say the constituency I represent would dearly love to have that kind of tax burden. Any kind of tax burden would be very welcome. The purpose of the tax system surely is to transfer the burden away from some of the people at the very bottom and, frankly, to give them more money.

I'm appalled to think about a tax cut when we have children going hungry. It sickens me to think about that, quite frankly.

I agree, people want jobs. That is the very best thing people can have. But if they don't have jobs, and they don't right now, to think about cutting taxes while people are going without food... It's such an awful thing to think about.

Mr. Solberg: Do you see any relationship between high taxes and the lack of jobs, or the lack of stimulation in the economy to go ahead and create jobs? The domestic economy is very soft right now. We have tremendously high taxes in this country. I'm wondering if you see any relationship between the high taxation levels and the lack of economic activity that creates jobs that would allow your clients to find long-term work.

Ms Cox: I'm not an economist. It's the usual excuse; I realize that. But I will say that if I had my way I would see taxes used to create jobs directly, to do the kinds of infrastructure programs that would get people back to work. So in that sense no, I don't. There probably is a relationship, but I suppose I have a very Keynesian approach to that and would rather see tax dollars used to create jobs for people, more than almost anything else I can think of.

Ms Maxwell: Mr. Chairman, I think the most important question about tax cuts is how they are to be financed. If they're to be financed through further spending cuts in the areas where governments have discretion to cut, then there is a serious risk a tax cut will benefit the rich and lead to a situation where there are even poorer public services and fewer programs to support the people who have been mentioned many times among the people around the table. A tax cut is always attractive in the long run, but given the degree to which a social deficit has been created in the last few years, it seems to me that if anything, if there's room to manoeuvre, one would be directing resources at the prevention programs and at the support programs that will keep people whole as they go through this radical restructuring.

Mr. Grubel (Capilano - Howe Sound): Could I just follow up on that? Do you see no cuts in programs that do not directly affect the social delivery of services? The Department of External Affairs is spending $142 million on a centre for research on economic development abroad. Is this something that could possibly be curtailed without affecting the welfare of the kinds of people represented around this table? Do we really need a public broadcaster, as was asked today? How does a cut in that affect the welfare of the people around here?

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Ms Maxwell: To the degree that there is any room to manoeuvre, I think a priority area should be to reallocate resources in a direction that will minimize the size of the social deficit, that will help people to adjust to a radically different labour market and a radically different environment in which they have to try to piece their lives together.

Mr. Grubel: I know it is an ideological position as to whether we need a public broadcaster or not in the age of a hundred channels, the electronic network and so on. Would you agree that there are some such expenditures which could be reduced without touching social programs?

Ms Maxwell: I'm sure there are some. I'm just disagreeing with you about the way in which the savings from specific cuts might be allocated.

Mr. Grubel: That's a separate issue. We're talking about the possibility of tax cuts so that some people have some more money to spend, which in turn will bring people into employment in the restaurants or in whatever they spend their money on. Instead of it coming through expenditures for research in developing countries or for the CBC, we might give it to people who will spend it out in the community, where it will lead to more jobs because they're demanding the kinds of services that are, in principle, provided by the people who are represented around this table.

Ms Maxwell: I'll let some of my colleagues speak to that.

Ms Grant-Cummings: I'd just like to add a few things.

First of all, I think it's inconsistent to talk about having this capitalist global restructuring of our economy where we're doing business all over the world. In fact, we're talking about spending - what was it? - $140 million or billion overseas when Canada mines more than that from countries overseas. In fact, in terms of some of the building blocks of Canada, of how we got here, I think we got them through resources from other people's countries. That's one thing, so I don't think that's a waste at all. It's an investment in our future. If we're talking about this wonderful global economy, I can't see why we should stop spending money in foreign affairs.

In terms of a tax cut, I definitely agree with my colleague at this side of the table that it is courting disaster. In previous administrations, we have already seen that it is the already wealthy who will benefit. And given that there's such a push to privatize services, what do you think we're going to use that money for right now? It will be to pay for those services that usually are part of the responsibility of government to provide.

I think it's short-sighted to talk about a tax cut right now. We should really focus on long-term planning and getting this country out of the state of poverty that it's in right now. NAC has always maintained that we need a fair taxation system. In a previous brief, I think we totalled up the amount - as have other groups here - of deferred taxes. Corporations would not be bad off at all, even maintaining the profits that they currently have, if they paid their taxes. I think that is one of the ways in which to balance things right now.

We're talking about a kinder, gentler nation right now. We're talking about developing a country that is based on social inclusion, and that's what we need.

Mr. Grubel: [Inaudible - Editor]

Ms Grant-Cummings: Yes. You see, we have different value principles. Our family values are based on human rights values.

Mr. Grubel: You come here and you demand, you demand, you demand. How that makes for a gentler nation, I can't see.

Ms Grant-Cummings: It is our right as citizens - and I am a citizen of this country -

Mr. Grubel: You said ``I demand'' at least fifteen times.

Ms Grant-Cummings: - to ask the government to do what we put them in power to do, what they're mandated to do.

Mr. Armstrong: That was only a phraseology. You mustn't hold that against anyone appearing here. That's a term of art for anyone who writes a brief in a court or various settings. There are sets of demands at a bargaining table, so I'm a little surprised.

The Chairman: Thank you, Mr. Armstrong, for your timely intervention.

Ms Jackman.

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Ms Jackman: With respect, Mr. Grubel, we believe your party would probably strike a much stronger chord with the public if you stopped talking about tax breaks, which most Canadians don't actually want, and started talking about fair taxation. The problem right now isn't that Canadians bear an uncomfortable burden of taxation, it's that they perceive that they are not being taxed fairly and equitably.

Mr. Grubel: I really must tell you that I don't see where giving more money to a second income earner in a family so that their taxes will be reduced, so that a husband and wife will have the same opportunity as people who hold two different jobs, is inequitable. We would increase the amount of money going to families with children. They would have more disposable income without having to put their children into daycare. I do not know what you're talking about. You're telling me that reducing the basic exemption so that one million more people will not have to pay any taxes is not making it more equitable. What do you have in mind?

Ms Jackman: Obviously I'd like to refer you to the briefs that we and other groups presented to you last year, as well as to those of the year before. We did outline very specific tax measures in them that we considered would make the system more equitable.

Mr. Grubel: The ones that you presented to the government.

Ms Jackman: No, I'm sorry, the ones that we presented to you as a member of this committee. I've been speaking to you for three years in a row now.

Mr. Grubel: You talked about the Reform Party.

Ms Jackman: And about you as a member of the committee.

Mr. Grubel: You addressed me in my capacity as a representative of the Reform Party.

Ms Jackman: That's right.

Mr. Grubel: I'm now telling you what the proposals are that we have just put on the table. You should study them sometime.

Thank you.

Mr. Solberg: Mr. Chairman, may I follow up? I'd just like to make one comment.

People must understand that when we talk about the level of taxation that different groups face, it's always important to point out in these hearings that the top 10% of people who pay income tax in this country pay 50% of the taxes. People who earn over $50,000 a year are regarded as being within the top 10%. So when we run around saying we're going to tax the rich, I think we should be mindful that a lot of people would regard $50,000 as being definitely middle income.

Mr. Grubel: Statistics Canada.

The Chairman: Thank you, Mr. Solberg and Mr. Grubel.

Mr. Duhamel, please.

Mr. Duhamel (St. Boniface): Mr. Chairman, I wanted to try to pick up on what I thought were the main themes being shared with us here this evening. I shall share some, and if you want to add anything, please do.

I keep hearing, not just here but in other situations, that there is an ebbing of trust - I think it was Mr. Armstrong who may have used that particular phrase. I understand that to mean that we no longer trust the institutions that exist in Canadian society nearly as much as we have. This trust is dissipating.

I've heard in the most recent exchange that there is a feeling that the taxation burden is not necessarily excessive - although some people would disagree with that - but perhaps it is unfairly distributed. In fact, the comment was that the role of the state is to ensure fair distribution.

I get the impression as well that another preoccupation is that, as laudable as it might be to hit deficit targets and to start attacking the repayment of the debt, the government may have become somewhat too focused upon that. Perhaps we're cutting too much, and to the detriment of those who do not necessarily have either the advocates that others have or the power.

My question is whether or not those are an accurate reflection of some of the major concerns that have been expressed. Are there others to add? I would just throw that out as a general question, if I might.

The Chairman: Mr. Aitkens, please.

Mr. Andrew Aitkens (Director of Research, One Voice - The Canadian Seniors Network): Mr. Chairman, I'd like to respond to that in terms of social policy and social programs.

We've been talking tonight about the social deficit. I think what we need to do as a country is start putting ``social'' back into ``social policy'', because we have lost touch with what it is that we do with those programs.

By ``social'', I mean the fact that these programs benefit all of us. Medicare is probably the best example, because we all use medicare at different points in our lives, mostly when we're kids and mostly when we're dying. But there are other social programs that we need to rethink. We need to recognize that they do benefit all of us, and old age security is a good example.

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Old age security is not a seniors' program, it's a program that benefits all of us. Our grandparents are healthy and independent and our parents are healthy and independent. They remain contributing members of society. They keep their health and are less costly in terms of medicare. They look after their children and grandchildren. You'd be surprised at how many young families have moved back in with the grandparents because that's the only place where there's any economic security these days.

So these are not seniors' programs. These are social programs that we all need to support and contribute to and recognize that they benefit all of us. To start dividing groups by saying that seniors get all this money and by asking about what kids get and about what goes to education is very destructive thinking.

I would add that a promotion, a move toward intergenerational engagement and commitment, is something that could really inspire this budget. We can then view the concerns of the children in care as a problem that we all need to work at solving, and we can know that the investment we put into those children benefits all of us, even through old age security that allows the grandparents to help those kids to stay at home and not end up in care. Over the long term, we'll all benefit.

Thank you.

The Chairman: Thank you. Does anybody else wish to add anything to that?

Mr. Grubel: Could I just ask a question?

The Chairman: Sure.

Mr. Grubel: What about the unborn generation? What about the equity towards them? Is that of any concern to you? Would you say it is fair for us to have a deficit today because we incur obligations to take care of seniors, obligations that would again be met by borrowing that will have to be serviced by generations not yet born?

Mr. Aitkens: No.

Mr. Grubel: Where would the money come from so that we could do all of these things?

Mr. Aitkens: It's careful management, that's what it is, and it's also a philosophy that has to be behind that management. For example, where does saying that seniors are bleeding this country dry - which a lot of people are doing - get us? What does it achieve?

Mr. Grubel: Nothing. I fully agree with you.

Mr. Aitkens: I think we really have to stop saying that seniors are the cause of the deficit and that we're putting all this burden on the future children of tomorrow. I think we have to look at how we function as a society, what the nature of our intergenerational contract is, and how the equities are managed at all stages. If you look at the amount we spend on education as compared to the amount hat we spend on pensions, we spend twice as much of the GNP on education as we do on pensions. The figures are there, but do we then start saying that means the kids are getting twice as much as seniors? No, so let's not get into that, please.

Mr. Grubel: Do you have any numbers?

Mr. Aitkens: I can provide them. They're in my office.

Mr. Grubel: What would you like us to do?

Mr. Aitkens: I'd like you to rethink your philosophy.

Mr. Grubel: Thank you.

Mr. Armstrong: Can I give you a brief number? I don't know whether it would be for the unborn or not, and I will be long gone.

An average tax bill in the city of Ottawa might be $2,400. Of that, $1,200 goes to education, $800 to regional, and about $360 to the city. For one reason - Lord only knows why - my late wife and I did not have a family. I do not have any responsibility for children, and although I hope I will be able to live for a long time, I do not at all begrudge the building and the renewal of the educational infrastructure. I have no doubt that it is for some future generation, but that's the way it works.

There is a false intergenerational conflict being brewed, and I do regret that the minister has gotten carried away in some documents related to CPP and other matters. I know it's a very busy job, it's very hectic, and he has officials storming into his office all day and hardly knows which foot to dance on. But the fact of the matter is that some things have been said to foster a kind of intergenerational pull, and that is totally regrettable.

The Chairman: Well put.

Yes, Ms Grant-Cummings.

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Ms Grant-Cummings: I just wanted to add my support in terms of what One Voice just presented, and we definitely support what the National Council of Welfare said, and one of the things is that the federal government needs to have a public education strategy in dealing with the whole issue of CPP and the future of young people in this country. That's what we mean by social inclusion, by the way - that we're all a part of this country and we all have social rights.

The Chairman: Thank you. Mr. Grubel.

Mr. Grubel: Mr. Chairman, I have thought about this a lot and looked at the numbers, and while I am very much with you in terms of the need to express the philosophy properly, the stark fact is that by the year 2030 there will be three working people for every one person retired. Right now there are six working people for every one person retired. The problem is that we are leaving those three working people in the year 2030 not just the burden of a debt that soon will exceed $600 billion, we are also leaving them with the obligation to pay for their health care and for their pension, which have to be taken away from the workers in order to be paid to those. That is approximately equivalent to another $600 billion.

I want you to know that the servicing of this $600 billion right now takes 35% of every dollar raised. Another $600 billion added to that will probably put it up to 70% of the income of the young people by the year 2030.

You are very concerned about intergenerational equity. Could you enlighten me on what the solution is to this problem? This is a very fair question that concerns me greatly, because I'm at least as humanitarian and concerned and socially conscious as Ms Grant-Cummings.

The Chairman: Just before you answer - we had to start late, unfortunately, because of a vote. We should have been finished at 7:30 p.m., which we promised you, and I know there are some of you who have to catch planes. If some of you have to leave, could you indicate that to me because I'd like to give you the opportunity of summarizing before you leave. If you can stay, I suspect we'll be going about another 15 minutes perhaps. Thank you.

Mr. Armstrong.

Mr. Armstrong: I think there's an answer and there's no answer. That's looking way down the road, and there may be more jobs than we think.

Mr. Grubel: [Inaudible - Editor] ...but not people.

Mr. Armstrong: Well, we don't know. We -

Mr. Grubel: Where are they coming from?

Mr. Armstrong: Well, I'm inclined to take a very long view well into the next millennium, which could be a very exciting time. It would be the year 2025, I think. A lot has happened in our lives. The answer is yes, it's calamitous; and the answer is it's full of challenge and hope. I think many of the plans are pretty tenuous and they're pay-as-you-go, but we're working it out. And we can work it out. So the doomsday scenario is doomsday.

The Chairman: Excuse me, Mr. Armstrong, for cutting you off. I know thatMs Grant-Cummings has to leave to catch a plane.

Ms Grant-Cummings: I assume no one at this table has the view that women don't understand economics and financial forecasting and so on. I think we understand very, very well. We also understand the cost in terms of developing a social deficit at the expense of balancing the books, and that there are different ways of doing this; and no, it's not going to be pretty, but we have to do the two together if we are going to build a society based on equality and democracy. Right now what we're doing is creating a country that is being weakened and polarized because of our current focus, looking only at the fiscal deficit and not at the social deficit that we are generating.

Thanks.

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The Chairman: Thank you very much. On behalf of all members, may I congratulate you on your election to this very important body, which in the past has had a great impact on the direction of our country on many occasions. We look forward to working with you in the future. Thank you very much for being with us.

Ms Grant-Cummings: Thanks very much.

The Chairman: Could we turn now to Mrs. Brushett.

Mrs. Brushett (Cumberland - Colchester): Thank you, Mr. Chairman. I will be brief, as the hour does proceed.

This has been extremely interesting, with a broad discussio - from our youth, to our seniors, to programs on how to find a balance between it all and to keep all generations interlinked and involved and enjoy the quality of life that we have and wish to continue to have here in Canada.

There are a couple of points I would like to make clarification on. It was brought up several times that under the CAP program we had national standards, and that is not so. There were no national standards, and there is such variance among municipalities and among provinces across the country that we haven't changed anything by going to the CHST.

As well, it was mentioned that without a cash component we wouldn't have the clout as a federal government. The Prime Minister, along with the Minister of Finance, has assured Canadians that there would always be, as long as he was in government, a cash component, so that we could keep involved with the provincial governments and maintain some clout.

I would like to bring a question forward, particularly to our youth here. I've had some major problems in my riding recently, brought to my attention as a member of Parliament. They were actually municipal and provincial social problems beyond and out of my jurisdiction, but I would like to have your view on them. The concern invoves young people who are beyond the control of their families, put in foster homes and actually beyond the control of the foster home. Social Services were reluctant to continue to lose their foster home inventory because of the abusive nature of the young people.

What do you think a solution or model is to deal with a 12-year-old who rebels against a curfew in a foster home? We don't want to deplete all of our foster care, and so on. What kind of model..? What do we do with a child whom the parents can't control and the foster homes can't either?

I open the question to young people for your recommendations.

Mr. Raychaba: I think we need clarification on the question, sorry.

Ms Andrews: Are you asking how you discipline a rebellious child?

Mrs. Brushett: Well, my answer was that if it was still a 10- or 12-year-old maybe a whack with a wooden spoon sometimes...but this child was beyond that. It was something that parents wanted our society to deal with. They felt that society should have an answer, and society, which was Social Services, really didn't have a specific answer. How do we help our young people who find themselves in that state, and still keep them in school, keep them out of trouble?

Mr. Raychaba: It's difficult in individual cases to come up with the perfect model, but certainly one of the things I found in the work I did for the National Youth in Care Network, which I think is also included in the package that all the committee members have, is a book called Pain lots of Pain, and it dealt with a whole series of interviews with young people who either were or had been in the care system, and it asked them what would have worked and what didn't work with them. I had a lot of runners and lot of very aggressive, violent children and young people.

You have to broaden the scope of your analysis of that particular case and ask, what's a 12-year-old doing being this violent? What's a 12-year-old doing being this aggressive? When I meet young people who, say, at the age of 7 or 8 watch their father stab their mother in the living room prior to the police coming, or were picked up by the ankles and smacked around, or were made to act like dogs in the basement, that starts to make me understand why this person's a little angry or angrier.

So sometimes what looks like to an outsider... Quite honestly, it's due to not being acquainted with the often unbelievable realities that some children and young people go through. What looks like misbehaviour is in very many cases a young person saying, adults are a big danger I've learned about quite early on, so you just get out of here, and if you don't get out of here I'm going to do everything to make your life miserable being around me.

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The best foster parents or staff are the ones who stay around long enough. Sometimes it means some bruises or just a lot of verbal abuse.

It takes a long time to foster that sort of permanency, what child psychologists call the irrational parent, the person who says, I'm your parent and I care for you no matter what you are. It's unconditional love, if you want. But once that comes through, communicated in whatever way to that child or young person, then there's not really a need for that kind of acting out behaviour.

I'm not saying it happens in a week, a month, a year or even two years. It's not that nice and simple. Otherwise we could construct nice, neat models to say, So-and-so is suicidal, acting out, running away, hitting staff and taking up all kinds of agency resources; we can put her with Dr. So-and-so for a month and she'll be fine. Unfortunately we deal with human beings.

The way finances and fiscal realities play into it and exacerbate that situation, make it worse, is that person with those special needs finds himself in a home where a foster parent is a volunteer - we have a lot of volunteers, but they're completely untrained - and possibly doesn't know the past history of the young person, doesn't know how to discipline positively and deal with these aggressive behaviours. So the reaction of the foster parent is either to get him or her out of there or physical abuse. I don't necessarily blame them if they're not prepared or trained.

There's no easy answer; that's what I'm telling you. Do you agree?

Mrs. Brushett: Kind of.

What about the Friendship centres?

Mr. Maracle: I don't even know where you begin to address an issue like that in the context of the human element. Friendship centres and aboriginal people in general are dealing with generations of people who are young and are coming forward with those same kinds of overwhelmingly hurt, unhealthy communities.

We have a generation of parents who don't know how to be parents. We have all of those social conditions that have been carried forward over the last 30 or 40 years and are impacting on people. They're coming through the residential school system, they're in abject poverty, they have poor housing conditions and no real opportunity to participate in the labour market as we know it.

Friendship centres, through their own resources far too often in terms of that volunteer commitment from the communities, because it's the communities that care... I've heard enough people around the table say this is going to be the measure of how we change our society. How we address what we're trying to deal with in terms of the fiscal reality and the social element is our ability as communities to care about each other. Friendship centres do that.

It is a hit and miss. Every situation is unique. We have a lot of people who don't have the skills to deal with those overwhelming issues that are coming forward, but somehow they try. We have to keep trying. It's not going to go away.

Mrs. Brushett: Thank you very much.

The Chairman: Thank you, Mrs. Brushett.

I would welcome further statements from any of you if you wish, and then I would like to ask each of you to summarize briefly for the committee the major messages that you want us and Canadians to take out of these hearings.

Sue Cox.

Ms Cox: I'd just like, with respect, to take issue with what you said about national standards, if I may.

There were standards in the Canada assistance plan. They were clear. They had to do with people having the right to an income sufficient to meet their basic needs. They may not have been the best thing in the world, and they may not even have been as high a standard as we want, but they were established and set in stone in what I think was in fact a very excellent piece of legislation for its time, and it stood the test of time.

Right now there is nothing comparable to that. The federal government has stepped back from saying anything about how people should be treated in any province. You just have to look at what can happen to people who are on special assistance. You just have to look south of the border to see what's happened in some kinds of states.

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If there's some state that decides that any able-bodied person should not have any kind of assistance, if there's some kind of province that says something like that, or that people can only stay on welfare for two years even if there are children involved, you have no standard any longer to stop that kind of thing from happening, except the Charter of Rights and Freedoms.

The standards did disappear with the Canada assistance plan, and they were enforceable through the Canada assistance plan as long as the dollars were tied to that piece of legislation. So I want to take issue with what you said about that. I think we're in a very disturbing situation right now, and I really look forward to the establishment of some clear rights for low-income Canadians over the next little while.

You're the standards-setters; you really are. You're the boss.

The Chairman: Thank you. Mr. Aitkens.

Mr. Aitkens: If there is one area of tax cut that our organization would support, it would be the removal of partial indexation in the tax system. This causes effectively a reduction in certain credits that are designed to go to assist certain people, people with disabilities. It used to be the age credit and, of course, the basic credit.

It also contributes to bracket creep, which means that the threshold at which people start to pay their first dollar of tax is effectively lowered over time. It's a mechanism that's not well understood by most Canadians, and essentially it ends up being a tax increase for which the government does not have to be accountable before Parliament or before Canadians. It just happens every year and no one even knows, and I think it's to the detriment, in the main, of lower-income people.

So if we're talking tax cuts, that's one we would recommend.

The Chairman: Thank you. Mr. Armstrong.

Mr. Armstrong: I think government should stop keeping seniors off balance in a continuing state of ``what's next?'' - I have to be careful with my language here.

Please do not use the budget as an instrument of social policy; it's not a good idea. That's what you do when you change pensions in ways and means. You know, we talked about that last year. You listened, you were sympathetic, but someone did an end run around everybody.

Thank you.

The Chairman: Thank you, Mr. Armstrong.

Shall we go to overall summaries right now?

Mr. Armstrong: That was my summary.

The Chairman: Oh.

Mr. Armstrong: I surprised you.

The Chairman: Mr. Aitkens, was that yours too?

Mr. Aitkens: Fine.

The Chairman: Ms Maxwell.

Ms Maxwell: I very much agree with One Voice that they should not be attacking seniors, but I do think we need to put a lot more attention on future generations, thinking about the burden on the working-age people who will be in the workforce in the year 2030; thinking about the fact that the way the wage structure has evolved over the last ten years, the burden of pay cuts, in the sense of comparing the same job and adjusting for inflation, has fallen on younger workers. In real terms, mature workers have had wage increases of 5%, on average, whereas young workers have had wage declines of about 15% over the last decade or so.

There is a tremendous burden that is unwittingly being loaded on the young generation at this point. Their only access is, relatively speaking, to low-paid and insecure jobs. They're having to pay more for their education. It's very difficult for them to find an entry-level job that will get them on a career track. When they do have some earnings, they are paying higher taxes than earlier generations did, and it's harder for them to get into the housing market because of relative costs there.

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So I think if we look at both the burden on the children, because so many more of them are poor, and the burden on the young people who are trying to get their lives started, that unlike in other countries, where the polarization has been around skill, between the educated and the low-skilled, in our country the burden has been distributed quite significantly on the shoulders of the younger generation. By that I mean people under the age of 35.

Ms Cox: I'd ask you to take a look at whatever you do in the light of whether the actions you are taking now create more hungry people. If they are, then I think those actions should be rejected.

As for setting seniors against children or whatever, I would look to what's happened with seniors as a huge success story. For the most part seniors don't use food banks. They're okay. They're in a far better situation than children are. But why would you erode that and push them into a worse situation, one where they would need to use food banks?

It's a pretty simple thing, when you come right down to it. It's not just children. I'd be worried about young people who not only may be going hungry now but may have a lessened ability to enter the workforce, whether they have children or not. I think those people are just as important in the whole society as the children.

So that would be all I'd ask of you: does our action create more hunger?

Ms Jackman: I would like to reiterate two of the points we made at the outset. NAWL would exhort you to exhort the finance minister and the finance department, to the extent that the executive is actually listening to the legislature on matters of finance policy, to deliver on two of the federal government's recent commitments: to develop national standards for the CHST and to provide gender impact analysis of the budget.

Mr. Maracle: From the perspective of the friendship centres, I think we've been able to demonstrate consistently over a forty-year period that we have a comprehensive national infrastructure in place, and one that does very much serve our communities in an accountable manner. We offer this model not only to the federal government but to our provincial and territorial and municipal governments. It's an ongoing discussion that we need to take as well to our first nations leadership and to our Inuit and Métis leadership.

There is a major focus in attention that we have as an organization on our youth and that investment; and I really do look at it as an investment. Our partners, whether government or other aboriginal organizations or mainstream social service delivery organizations, or even the corporate sector...as a true investment in what this country is, what we grew from together, and what we have in the future. That's an investment in that friendship centre infrastructure and our youth.

Mr. Raychaba: I was thinking of the example of the problems you offered us, which I hope we answered. I think the way that's posed illustrates the problem with the approach to social policy in recent years. We wait for a problem to occur, we wait for a breakdown and disintegration, and we ask what we can we do. So we call the police and we call social workers, we call mental health professionals and we call whoever. It's very costly and it racks up the deficit and in the end it doesn't do very much except for maybe removing this child from danger. But the damage has been done.

The real lesson I suppose I would want this committee to impart to the government would be always to be thinking ahead in terms of the social deficit and social planning, in the same way as we are now thinking ahead in terms of the fiscal deficit and fiscal planning. We don't want to be in 2025 and discovering, my Lord, we're burdened with debt and we can't move. In the same way we don't want to wake up in 2025 and find we live in a Canada that we're not proud of and that is dangerous and violent and degrades any sense of who we think we are. Long-term planning in both realms will be good.

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The Chairman: Thank you.

Tonight is a welcome and needed change. Too often we get totally immersed, when we're in the finance committee, in questions of macroeconomics and microeconomics, supply side this and tax that. You people who have been before us tonight have put a very human side on our deliberations. You are here representing in some cases the most unfavoured people in our society.

Brian Raychaba, you talk so eloquently about abused children. Not only are these the people who have never had the chances in life that most of us have had, and who deserve a chance, but if we don't invest in these people now, to use a word of Mr. Maracle, the cost to all of us down the road will be much higher.

Mr. Maracle and Mr. Courchene, I know the work your Friendship centres are doing. I didn't realize that a majority or more of Canada's aboriginal peoples are now in our cities. You make a very compelling case for us to work with you in a cooperative effort, through the Friendship centres, to try to give a sense of belonging, a base and help to those people who need it.

Martha Jackman, we have heard your plea and we will convey it. Thank you.

Sue Cox, you've spoken on behalf of the people who increasingly use food banks. You've pointed out to us that whereas some generations ago or maybe 15 years ago the greatest number of people living in poverty in Canada were single senior women, today you are seeing women who are heads of households and a lot of children, but a lot of people who want to be working and should be working. I hope we can get rid of food banks, but until we have found the ways to do it, you're performing a very valuable role in our society.

Andrew Aitkens and Mr. Armstrong, you have spoken so eloquently on behalf of seniors. What struck me most about what you said was this sense of imbalance. A lot of seniors feel insecure and don't know what's going to come next. They're saying, even though we may be well off today, we know you're nibbling at us, we know you're looking at our benefits, we know you may be looking at us through the tax system or a clawback system or whatever. Until seniors have a real sense, on an ongoing basis, of permanency of programs, they are going to feel that lack of certainty, that lack of security.

Judith Maxwell, you have talked, as always very intelligently, in a way that gives me new thoughts about the great social issues we face. You put them in the context of our fiscal problems but talking about social cohesion, something that is referred to in other words by Mr. Armstrong, and the need for people to have a new anchor on values. You pointed out too that it's just not within the hands of the federal government any more to be able to do these things unilaterally; we will have to have joint actions with the provinces, which may not always be easy. In the old days we did have the power to and did act unilaterally.

We have heard talk about future generations, we've heard talk about the generation of seniors and we've heard talk about our youth today. One of the themes that has come out from all of you is this is not the time to pit one against the other. It is not the time to try to drag some who might be slightly up on the ladder down to lower rungs, but to raise all people and provide equality of opportunity to as many as we possibly can. In this way we will have not only a fairer society, a more just society, but I believe a much more prosperous society.

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On behalf of all members of Parliament, may I thank you for awakening our consciences to these very real problems and for your ongoing contribution in working with us.

Thank you.

Some hon. members: Hear, hear!

The Chairman: This meeting is adjourned.

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