[Recorded by Electronic Apparatus]

Tuesday, May 9, 1995

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[English]

The Chair: Order. We're continuing our reference into Bill C-76.

Our first witness this morning is the Association of Universities and Colleges of Canada.

Welcome.

[Translation]

Mr. Claude Lajeunesse (president, Association of Universities and Colleges of Canada): Thank you, Mr. Chairman.

My name is Claude Lajeunesse. I would like to introduce to you this morning's delegation,Mr. Robert Best and Mr. William Leggett, principal of Queen's University. Professor Leggett will make the presentation on behalf of the AUCC.

[English]

Dr. William Leggett (Principal, Queen's University at Kingston, Association of Universities and Colleges of Canada): Thank you very much, Mr. Chairman. I'm very pleased to be here as part of AUCC's second visit to your committee in the last six months.

Prior to our appearance during last November's pre-budget hearings, the social security and science and technology reviews had generated major policy questions about federal responsibilities in relation to equity of access across Canada, about student assistance and debt load, about student mobility and, finally, about the health of research infrastructure in Canada's universities. It was widely expected last year - and in fact the federal government had created that expectation - that the policy reviews would permit the government to answer those questions with new and innovative policies in the 1995 budget.

However, six months later and almost three months after the budget these crucial questions remain unanswered. Budgetary decisions relating to higher education and research appear to have been taken purely for fiscal reasons, without any clear policy objectives. Frankly, they stand in stark contrast to the government's own statements and to advice from the parliamentary committees. To give an example, the red book describes the Liberal agenda as ``premised on an integrated and a coherent approach'' to various areas of public policy, which it says ``are and must be linked''.

The Chair: It sounds very good.

Dr. Leggett: So far so good.

In this budget the links among fiscal, social and science policies seem to have gone missing.

The red book stressed that for Canada as a whole the comparative advantage now hinges on our technological prowess, the sophistication of our infrastructure, our ability to innovate and, most important, the education and the skill levels of our population.

The Chair: That sounds even better.

Dr. Leggett: Good. We're pleased to have your concurrence.

Phasing out the Canada Scholarships Program, which was an extremely successful program that encouraged young people, and I think most notably young women, to pursue studies in engineering and mathematics and in natural sciences, is an example of a decision that is directly at odds with the red book statement.

So to are cuts to the granting councils and the budget's complete silence on the funding of university research infrastructure. Again, in this regard the red book promised the provision of stable funding for the granting councils. Indeed, your own committee, as you'll recall, recommended no reductions for the three granting councils.

Furthermore, Mr. Martin's document A New Framework for Economic Policy called for granting council research support and termed it a key instrument in the training of the highly qualified people who will be needed to keep Canada at the leading edge of the knowledge economy.

In February the Commons human resources development committee highlighted the importance of funding university research and, significantly, the infrastructure that supports it. In that committee's words, ``The federal government certainly has to recognize the importance of adequate infrastructure to the effective use of direct federal grants in support of research''.

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Not coincidentally, central governments play the pre-eminent role in relation to research in most, if not all, of the world's federations. In Canada the federal government has indirectly supported university research infrastructures through the EPF-PSE transfers.

This infrastructure is vital both to the success of direct federal investments in university research and to university-industry linkages and knowledge transfers. It is clearly of national, and indeed, I would say, of international, importance.

I want to emphasize very strongly just how significant this issue is from the universities' perspective. Canada and Canadian universities must be successful on the emerging international stage. To do so, there is no question that Canada's universities must have the infrastructures necessary to sustain high-quality research and, equally importantly, to attract and to retain international-calibre researchers. Beyond that, Canada must have the capacity to develop and sustain national initiatives in research.

I would argue quite strongly that neither can be guaranteed if decisions regarding the provision of infrastructure support, which is the key to sustained high performance in research, are devolved to the provinces. The importance of research infrastructure transcends provincial boundaries.

With regard to student assistance, the Commons HRD committee endorsed the income-contingent repayment loan principle as part of a comprehensive approach to improve student assistance and called for measures to ``ensure access to learning opportunities for Canadians'' and also to help students avoid excessive debt.

The escalating costs facing students have contributed to increasing debt loads in recent years. Nevertheless, the budget and Bill C-76 are silent on the future of student assistance. We must ask ourselves, in that context, what message this sends to young people about the priority accorded to their higher education by the national government.

By terminating the EPF and the CAP arrangements and creating a new and reduced block transfer in 1996, Bill C-76 certainly charts a new course in relation to transfers. However, because this decision was driven by fiscal policy considerations, it has raised more questions than it has answered about the federal government's policy intentions vis-à-vis higher education and research.

When AUCC appeared before your committee last November, we proposed what you described as a very concrete and interesting initiative to the social security green paper proposals. That initiative would have resulted in significant savings to the government while at the same time maintaining an important federal investment in infrastructure and in the quality of educational opportunity across our country.

These considerations were apparently overtaken by other imperatives as the government prepared its budget, but the issues we are addressing in our alternative remain every bit as important today as they were then.

The full implications of the new Canada Health and Social Transfer and the cuts to it in 1996 and 1997 will not be clear for some time. They may well vary by province. Because the cuts will be made to a block grant revenue transfer, universities should not suffer disproportionately in comparison to other areas of provincial spending.

Nevertheless, the EPF and the PSE arrangements will do nothing to alleviate the financial pressures on students or the negative impacts on accessibility, and may well exacerbate them. It will do nothing to ensure adequate and stable investment in research infrastructure. In fact, we fear that it will have the opposite impact.

Bill C-76 will require the Minister of Human Resources Development to invite provinces to consult and work together to develop, through mutual consent, shared objectives and principles that could underlie the new transfer.

AUCC urges all governments in Canada to recognize and commit themselves to the importance of equitable access across the country to high-quality higher education, to interprovincial and international mobility of PSE students, to appropriate student assistant programs and to internationally competitive university research infrastructure. In the process, the federal government should not abdicate its responsibility as the national government where national interests are at stake.

Consequently, we call on the federal government to shoulder its responsibilities to invest appropriately, both to ensure access for Canadians, regardless of where they live and of their financial means, and to ensure the long-term health of the university research enterprise.

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We wish to stress that we are prepared to work with the federal government in developing appropriate mechanisms in these areas of immense strategic importance to Canada as a whole. Thank you very much.

The Chair: Thank you very much, Dr. Leggett.

[Translation]

We will begin the question period with Mr. Tremblay.

Mr. Tremblay (Rosemont): It is quite evident that you are making a very great dictinction between the content of the Red Book and the Government's action.

Unfortunately, I was not present last November when you made your proposal on reducing the tax burden of the federal government, and still provide increased financial assistance to students. Could you quickly summarize that proposal?

[English]

Dr. Leggett: I'll ask Dr. Lajeunesse to give you the detail of that plan, since he's familiar with it.

[Translation]

Mr. Lajeunesse: Our proposal was aimed at solving three particular problems: first, support given to students; second, support for the research infrastrure and, third, support for universal accessibility to post-secondary education.

Our proposal involved reallocating the amounts of funding committed, so as to enable students to obtain the support they require, to enable universities to receive the necessary infrastructure funding and, finally, to enable the provinces that perhaps may not be able to afford an adequate post-secondary system, to receive support from the federal government. We believe that in these three cases, the federal government has an essential role to play, as set out in the Red Book and also as defined by the Committee that is meeting here today and by the Human Ressources Development Committee.

Mr. Tremblay: That doesn't tell me very much about how you intend to arrive at your goal. I understand that you would like to fund students and the infrastructure and also assist the provinces but can you give me some concrete examples of how you intend to do this?

Mr. Lajeunesse: The federal government will, this year, be transfering approximately $1,6 billion to the provinces for post-secondary education. What we recommended was that that amount of money, which is to be reduced to $2 billion in 1996-97, be distributed differently, that is we recommended that $1 billion be allocated to a program to assist students, which would provide for the establishment of a program of repayable loans to students based on income, second, that a portion of that amount - $500 million - be allocated for distribution among the provinces and finally that $500 million be allocated to the university research infrastructure.

Mr. Tremblay: If I understand correctly, this proposal is somewhat similar to the first proposal that was made by Mr. Axworthy. There will be no more transfers to the provinces, but instead a type of equalization for some provinces.

Mr. Lajeunesse: That is correct. In areas where it is in the best interests of the federal government to remain active and where what is at stake goes beyond provincial borders, such as research and assistance to students, we recommended that the federal government play a role.

[English]

Dr. Leggett: In our view there is a very important role for the federal government in maintaining and sustaining a national presence in the advancement of education and in the advancement of research.

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The reality is that as Canada moves into the next century it will be necessary that we be increasingly effective on the international scene, not only in our research, but also in the opportunities we present to our students for international experience, the extents to which we are able to attract to our universities young scholars and future leaders of other countries, and those initiatives can best be served by a federal presence and a federal policy that transcends the special interests of the provinces.

It is for that reason - that and many other reasons - that we believe the federal government should retain the potential for development and execution of a strategy that has a national dimension, and not simply transfer over to the provinces the full responsibility for these initiatives.

[Translation]

Mr. Tremblay: Could you give us some examples of situations that you are describing, where the national interest were to be so great that provinces such as Ontario, Quebec and others would be unable to accomplish what you are describing in the fields of research, with the possible exception of such areas as space research?

[English]

Dr. Leggett: I would be pleased to attempt to do that on two fronts.

First, on the research infrastructure side, the reality is that research can no longer be effectively carried out at the provincial level. In fact, the extent to which high-quality research can be effectively carried even at the national level is changing very dramatically.

The success of the Networks of Centres of Excellence Program, of which I had the privilege to be a part, is one example of the importance of going beyond provincial boundaries and drawing the best minds and the best expertise from across our country and bring them to bear on issues of significance to our country. Beyond that, many of these initiatives, and certainly the initiative with which I was involved - in the area of fisheries and marine production - as we have seen in the past weeks, go well beyond our national boundaries.

In fact we must not only maintain a very high level of credibility internationally in order to put our best case forward when issues such as the recent experience with the Spaniards occur, but we must also establish and maintain effective international contacts if we are to be able to draw the resources, the infrastructure and the intellectual strength from those other countries. These are true partnerships, and we must have infrastructure on our side to balance the infrastructure that we are requesting and drawing from on other sides in order to be effective.

On the student mobility side and the importance of international education, I recently spent two weeks in Asia and was really struck by the intensity of the commitment of several Asian countries to an expanding international presence, and the extent to which their national governments had focused on the importance of creating international opportunities for the students, the nature of the national programs that were developed there that will be sending not a few hundred but literally thousands of students to European and North American universities to expand their contacts, their experience, their exposure to international ways. Frankly, that contrasted dramatically with the results of a recent federal government study, which showed that the proportion of Canadian students who have an opportunity in direct international experience as a part of their education is among the lowest in the developed world.

If we intend to be serious about competing on the international stage and creating the opportunities for us to do that, then we have to have a broader sense of the importance of that, and we have to have at least the opportunity for federal government to make that a policy decision and to move towards achieving it with resources.

[Translation]

Mr. Tremblay: I'm an associate professor at l'École des Hautes Études commerciales in Montreal. I have held various internal positions and I have also had an opportunity with the Montreal Urban Community to work with various universities in several fields of research. Indeed, we have a whole series of international agreements and international projects.

Companies such as Biochem and Glaxo in Quebec have a whole series of international agreements with various universities covering the field of research. Our professors have studied in all the universities of the world.

I understand that these agreements are necessary. We know that perhaps 40% of our GDP is sold outside the country, which means that we are forced to maintain international links.

To what extent does the presence of the federal government, in terms of research infrastructure, have any effect on this necessary dynamic?

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I am having difficulty understanding what it is important to know about funding. In the past, our large Canadian research centers, a good portion of which was located in Ottawa, did not have a very impressive track record.

For a certain period, I was attached to the Department of Industry, Science and Technology as Parliamentary Secretary and it could not be said that we had in what I would call our great federal research cathedrals, an outstanding track record. The role of the federal government, in terms of research infrastructure, did not appear to be very impressive in the past, and it seems to me that the preferred approach is perhaps too close to that of the business sector.

There is an increasing number of ties to the business sector, and since there is an ever-widening gap in the regional economies in Canada, the absolute necessity for the federal government becoming involved does not appear to me to be obvious.

I understand that international links are necessary. Universities sign agreements every day with companies in their field and international companies, but I do not see from what you have told me why it is necessary for the federal government to become involved in all of this.

[English]

Dr. Leggett: The issue is not where we've been; it's where we're going. Where we're going with this present act and the potential outcome is to an increasingly provincial view of education and research, and the reality is that while we're moving in that direction, the rest of the world is moving to an increasingly international view of education and research. So if we wish we can focus on the past and whether or not what we did in the past was effective. I would say that it was.

In fact, Canadian research, notwithstanding the hammering it has taken from a number of people in society, has little to apologize for.

To give you a specific example, I'm particularly interested in the beating that the fisheries scientists and oceanographers in this country have taken over the past two or three years, as the tragedy unfolds, first on the Atlantic coast and secondly on the Pacific coast. I want to stress for you that, from my perspective - and this may be considered somewhat defensive, but you can take it as you wish - far too much attention has been paid to the failure of fisheries science and far too little to the failure of public policy related to fisheries, and that in fact our capacity to deal effectively with the issue with the Spaniards and with other major issues, including the previous appeal to the World Court on the Georges Bank issue, which was of fundamental significance to Canada - those successes were built on the strength of a research infrastructure in this country that is recognized in all other parts of the world - unfortunately except Canada - as one of the very best in the world. Our ability to deal internationally with issues such as that and others, and therefore to deal effectively with our future, depends heavily on that infrastructure.

Of course we understand the issue, and I think the universities have shown themselves to be willing to accept the reality that all of us, all sectors of society, will have to bear a part of the responsibility for bringing our fiscal house in order. We're not at odds with that issue. The issue we're concerned with here is the ability of the government of this country to have a presence and to exercise authority and effective policy in areas that will be central to our success as a country.

They are research, which can be carried out at the national and international level.... As I indicated to you, I don't believe we can do that if we erode our infrastructure and simply ask other countries and other provinces and other organizations to provide the infrastructure for us. If we're going to be engaged truly as partners in these activities, then we must be able to bring infrastructure with us when we come, as a fair trade for what we ask.

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Mr. Speaker (Lethbridge): I'd like to continue the discussion we're having. We're crossing a bridge at this point in time; there's no question about it. How large the national presence is in post-secondary education and research is certainly the question at this point, I think.

Could you help me out a little bit further in terms of numbers? Right now, what percentage would the federal government be funding of, say, post-secondary education in the more general sense and then of research? What would be the percentage of support for those?

Dr. Leggett: The percentage relative to what?

Mr. Speaker: I guess the gross funding provincially and federally. In terms of research funding, is the federal government providing 5%, 10%, 40% in terms of funding? Is it a major portion at this time? This is so we can understand just exactly what we're talking about.

Dr. Lajeunesse: It's very difficult to answer your question in a straight way, because if you look at research, for example, of course the bulk of the direct support of research that would come through the granting councils, or more than half, would come from the federal government.

On the other hand, that research could not happen if you did not have the research infrastructure: the lab space, the professors, the researchers, the assistants, and everyone else who contributes to that research. If you didn't have that research infrastructure, then you could not possibly end up wisely spending the amount of dollars you get directly.

Of course, that research infrastructure is funded now by the provinces, but the provinces receive transfer dollars from the federal government to support that infrastructure. We figured that with the federal government withdrawing $2.6 billion of support in the original proposal.... We don't know what this new proposal will do to it, but in the original proposal we had done some studies and they showed that since about 40% of that $2.6 billion would go for research support, when you split university and community college, the federal government was ending up withdrawing support at the level of $800 million from research infrastructure in the university.

Mr. Speaker: Let's say the province had extra tax points. Under this current proposed legislation there is not a further extension of tax points to the provinces to collect further revenue under the Canada Health and Social Transfer. If the provinces were able to secure further tax points, we had a good equalization formula that was able to distribute funds so that the poor provinces could adequately fund post-secondary education.

Say the funding was there at the provincial level. Do you think the universities under that circumstance...? If we're going over the bridge, then that's what's going to happen. The only thing is that we're going to go over the bridge, under this current plan, without the provinces having access to proper funding. That's one of the problems.

Let's make the assumption that they did have adequate funding. That is a difficult one because there's never adequate funding; there are always more ideas than there are funds to do what we want to do. Under those circumstances, could the universities compete within that arena? Would they be able to establish their priorities, maintain standards you want in the world community, by working directly with the provinces? Provinces then would have jurisdiction over education and the federal government would not have an intervention like the one they have right now. Is that possible, or is it just an idea that we have to discount because the provinces can't see this broader need in the world community?

Dr. Leggett: I think it's hypothetically possible. We're talking in the world of the hypothetical, because we're not sure they'll have the money and it's not at all clear.

If you look to the history of how universities have been funded and the priorities that have been placed on the allocation of those funds through time in the provinces, I think you will find that at certain points in time some provinces have seen the larger picture and have moved aggressively toward it. Others have become very provincial and have viewed their problem as the only problem and in some cases have closed their borders to foreign students to reduce very dramatically the level of support and infrastructure they provided.

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So my sense is that you won't get a coherent pattern across the country even in an environment such as you describe. That absence of a coherent pattern will disadvantage individuals in various provinces from time to time, and that's our concern. Our view is that there should be a significant moderating effect on that, that the country itself should have a vision and a sense of what's required and have the opportunity to provide a broader, more coherent approach to it.

Dr. Lajeunesse: Mr. Chair, I'd just like to add a word to this. I think if we look carefully at issues such as research, these issues tend now to be dealt with at very strategic national levels. If you look at the research initiatives in Europe, they tend to be European now as opposed to being country-specific, because the scope of the work that needs to be done, the human and the financial resources that are needed to be successful in competing against the Japanese, the Asians, and so on, is such that you cannot do it at a smaller level. The tendency and the thrust is towards having a national strategic approach to these issues. In this case, the whole has to be larger than the sum of its parts.

Mr. Speaker: The Canada Health Act has maintained the five principles of health care and the federal government has had a presence in terms of provincial policy. For example, in Alberta they want to do certain things and the federal minister of health is saying, ``Look, if you do those things, we're going to withhold the federal grants''.

Under the block transfer that's here, the Canada Health Act is even broadened, whereby if the province doesn't adhere to certain policy, the Canada Health Act can hold the whole block grant back. It has that kind of authority.

Are you even suggesting in what you've just said that maybe there should be some kind of a Canada education act that maintains a certain standard across Canada? Do we need that kind of thing?

I'd like you to comment on both those things. The first is the influence of the Canada Health Act on what you're going to do, because if a province introduces a certain policy, that could withhold your funds. Secondly, do you see the federal government having further legislative authority to maintain this standard that we're talking about?

Dr. Leggett: I can say quite simply that our concern is with the ability of the federal government to maintain for itself the opportunity to deal with national and international issues that are of substance to the country. I don't think we have a position on how you should achieve that. That should be worked out between the provinces and the federal government. The important issue is not what the mechanics are in terms of whether we use the federal health act model or another, but rather maintaining the potential for having a federal presence in these activities.

One of the downstream consequences of the river we're following at the moment is that there won't be any funds to hold back. So where's your power? You can say what you like, but if the provinces have all the funds, then your ability to hold back funds seems to be a fairly moot point.

Mr. Speaker: That's right; I agree.

Mr. Robert Best (Director of Government Relations and Public Affairs, Association of Universities and Colleges of Canada): Could I just add one point? You'll recall that the line of argument we followed when we appeared last November and that we referred to earlier emphasized federal investments through specific programs rather than transfers and conditions and so forth.

As Dr. Leggett pointed out, there's a variety of ways for the federal government to achieve some of the same aims. The world offers many models. The point is that in this legislation and in the budget we don't see any of them with reference to post-secondary education. There's no indication of direction; there are many unanswered questions about where we should go. But there's a variety of ways to achieve the same ends. Program funding is an alternative to transfers and conditions and so forth that needs to be examined.

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Mrs. Stewart (Brant): Thank you, everyone, for being here.

As we listen to these debates, whether on education, health, or Canada Assistance, it becomes clear to me that the discussions we're having are probably the most important ones I'll have in my career as a legislator. I believe that to be the case.

I'm interested in the comment that you just made, Mr. Best. Essentially, you're saying there are many models, and I agree with you. Those are the mechanics.

Dr. Leggett was just saying that it's not the mechanics that are so important but rather the fact that the federal government should maintain its role. This whole debate.... I'll just reiterate some of the questioning that's gone around here, but it is a very confusing topic.

I'd just like to start by asking, given the current structures that we have, the process that we have now with a set of transfers, how successful we have been on the four categories that are important to you: equitable access, interprovincial-international availability, student support, and research and infrastructure?

Dr. Leggett: To start at the back end, on the research infrastructure, until recently I think we've been quite successful. One of the successes - I'm sure it will be viewed in that way - is the Networks of Centres of Excellence Program, which took the resources that were available across the country, brought them together, provided an infrastructure that allowed those groups to work well together and certainly created a national and an international presence that wasn't there before. It's a very effective example of the role of the federal government.

Mrs. Stewart: It supported research and the international presence, those two.

Dr. Leggett: Yes. Beyond that, certainly the quality of the research that was done, the creativity of it, the international recognition of that research was enhanced.

To step beyond that and into education, particularly at the level of graduate education, where the Networks of Centres of Excellence had and are still having a major impact, we had the creation of a critical mass in an area that could never have been achieved in any one of the individual universities that were participants in that. The federal presence there made it possible for that critical mass to come together from across the country and created learning opportunities for graduate students vastly exceeding anything that could have been achieved in any given province in any given university, and international opportunities for those students as well because of the profile.

So on that side, in the infrastructure support - and I'm using only one example, we could find many others - we have been successful. There is evidence of the very powerful role of the federal government as a facilitator.

Mrs. Stewart: Let me test it in something. Given the structure we have, where there is a transfer made with essentially, as my colleague Mr. Speaker points out, no controls, no national standards as we have with CAP or with the Canada Health Act, the moneys have been there and yet you've been able to be successful outside of that or with that in that structure on a couple of -

Dr. Leggett: I think the fundamental point here is that these moneys didn't come from transfers; they came directly from the federal government -

Mrs. Stewart: Outside that process.

Dr. Leggett: - outside that process. What we proposed to your committee in our previous meeting was that the government retain, not transfer - retain a subset, an element of those funds that would be used in the way in which, for example, the Networks of Centres of Excellence money was used, to create something above and beyond what the province -

Mrs. Stewart: That could come from a number of different directions.

Dr. Leggett: Yes, and that we've indicated. But if all of the money is transferred to the provinces and the federal government has no fiscal resources in order to support, initiate and create such initiatives, then that opportunity is lost. Once lost, I would say it is lost forever. So we're arguing very strongly that you should retain some of this money in the federal coffers for the support of infrastructure to create these opportunities and, similarly, that you would maintain some of this money to support student assistance through an income-contingent loan repayment scheme or some other procedure that would facilitate broader access across the country.

Mrs. Stewart: Something similar to the status quo.

Dr. Leggett: Not entirely.

Mrs. Stewart: Let's go by a different way. Talking about the likelihood, the availability, the opportunity for provinces to come together and work more globally as a country, as we see happening in other parts of the world, I think I heard you say that you see a possibility for that, that you have not seen any indications for blockage in that.

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Dr. Leggett: No. I didn't say that. I don't remember saying that. I said in response to the question here that if you look at the pattern of behaviour of provinces through time, you will find quite different strategies in difference provinces.

Let me take one example, the Ontario government's tuition policy as it relates to foreign students and the availability of the Ontario education system to foreign students, graduate and undergraduate. The policy of the Ontario government has been steadily to increase the tuition fees charged to those students, to the point where, at present, Ontario is simply no longer competitive in the international student market.

The numbers of foreign graduate students in our universities are plummeting. The numbers of undergraduate students are declining. In fact, just to give you a number on it, the tuition fee for a foreign graduate student in an Ontario university is currently about $14,000 a year.

Mrs. Stewart: So on the issue of equitable access we haven't done so well.

Dr. Leggett: British Columbia has a quite different strategy. There, they view the importance of international students and international research opportunities and have progressively reduced the tuition fees so that it's around $2,300 for a foreign graduate student. Now, this is not a national policy. This is hit and miss. We could go to all the other provinces and get -

Mrs. Stewart: The next thing is the discussion on mechanics and the many models that exist that perhaps could help us with this issue of equitable access and a broad common base. Can you suggest to us some of those things? I don't want to talk about cash. I don't want to talk about cash control.

One thing that comes to mind is the whole notion of interprovincial trade barriers. Clearly, education can be determined to be a winning or a losing entity. Can you see some opportunity for the federal government to have facilitative discussions as we have had already with the provinces, from that point of view, in the context of providing better access? What are some of the possible models we can look for?

Dr. Leggett: The Erasmus program in Europe is an example of a national - I mean in the EU national - a transnational approach to education. It has been extremely successful. The numbers of students moving from university to university, country to country, building international connections, has been enormous. Contrast that with Canada's pattern, which is disappointing to say the least. That's one example.

Maybe my colleagues will want to highlight others, but I think there are....

The Networks of Centres of Excellence were a federal initiative. It didn't grow out of the provinces. It was an initiative that came from the federal government, which provided the infrastructure that made it possible. for myself, working at that time in Quebec, to interact with colleagues who were in British Columbia, Newfoundland, Nova Scotia and in Ontario and then to draw upon our respective resources in order to carry out a mission that none of us could have achieved working from a provincial base. So that is another example.

Mrs. Brushett (Cumberland - Colchester): For the record, I would like to agree with you that the universities of the Atlantic, the marine biology research and so on, the international law of the sea out at Dalhousie, and the programs affiliated with international relations and problems are quite grand and quite successful. For the record, I think the number of universities and the amount of education that is both national and international there are exceptional.

I chaired a meeting just a week ago with the unions of professors from the Atlantic universities to have input. One of the very important things that came out of that discussion was the value or the benefit of education in society today. They put forth a figure of something like $5,000 as the benefit to the individual in the market-place following an undergraduate degree. Subsequent to a graduate degree, an additional $5,000 might be expected in remuneration from this education.

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Some of the newspapers will use a figure like $50,000 as the benefit of a degree.

I'm asking for your views on how we measure this in terms of how we then fund education, because if it is $50,000, then we certainly would be able to repay the student loans. However, if it's only $5,000 and the cost becomes directly incremental, as it may, then we perhaps are getting ourselves into a box here. I'm looking for input.

Dr. Leggett: It's not possible to be so simplistic about it.

The best study I've seen on this issue was actually done by the Canadian Federation of Students. There are two very revealing outcomes of that study.

The first was that the unemployment rate of university graduates is dramatically less than the unemployment rate of those without that benefit. We're talking about half or less. So there's a value in itself that is not translated into what the additional income is. We shouldn't assume everybody's working, but look at both who's working and what the income is. So that's the first one, and I think that's a societal benefit. Either we pay people to go to university or we pay them unemployment insurance and social assistance, and we may pay that for a very long time.

Beyond that, addressing the question you raised on what is the value added to annual income of a university graduate - I think you're talking about annual income - we can't put a single figure on it. With the value added to someone who benefits from a medical degree at $2,500 a year of tuition, they'll probably pay off the entire loan in a year. The value added for people in dentistry and law or in the business sectors clearly is much higher than it would be for some of the humanities and social sciences.

So the ability to put a simple number on it is not that great, and I think that's one of the reasons why a number of countries, and certainly we, have talked about the income-contingent repayment possibility, which deals to a substantive degree with that issue. It may well be that someone graduating in classics receives a $5,000 benefit on an annual basis, but someone graduating in medicine receives a $50,000 or $75,000 benefit over what they would have received otherwise, and the income-contingent loan repayment policy allows us to -

Mrs. Brushett: So you feel we're going in the right way with that approach?

The Chair: I as chair face a great dilemma. We're already three minutes over time with these witnesses and I have two more members who wish to ask questions. I leave it in your hands.

I understand from Mr. Walker that we have a vote in about 25 minutes. It's a question of procedure in the House of Commons. I'm going to suggest that we probably move on and go as far as we can and get back here as quickly as possible and try to readjust in that way.

Some hon. members: Agreed.

The Chair: Agreed? Merci.

You're very important to our future. I'm not sure I understand what you're saying to us. You're saying we must maintain a presence, we must not abdicate the whole field. I think what we're doing is maybe cutting back; we're not abdicating. We're not losing a presence. I take it it's your concern that down the road, if we continue for years and years on this course, there might not be any federal presence left. But I don't see how the last budget abdicated or lost our presence in the field of post-secondary education.

Would you agree with that?

Dr. Leggett: I think our reading of the bill and the trajectory we're following is that by roughly the year 2000 you will have lost your presence. That's pretty close.

The Chair: You mean there'll be no more Centres of Excellence, no more student loans, no more transfers to the provinces?

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Dr. Lajeunesse: That's right, Mr. Chairman. I think this budget does not address the issue of student assistance. We are wondering. Students are entitled to know what the federal government's intentions are.

The Chair: Okay, I understand that.

Dr. Lajeunesse: There is no research infrastructure.

The Chair: We have the NRC and the Centres of Excellence.

Let me also say this. It's very interesting that not every group representing education, including the students' groups, has supported the income-contingent repayment loans.

Anyway, this is part of the great national debate we're involved in and you are a critical part of it and all of us thank you for being with us. We appreciate it.

Our next witness is Laurie Beachell, national coordinator of the Council of Canadians with Disabilities.

Mr. Laurie Beachell (National Coordinator, Council of Canadians with Disabilities): Thank you. I'm pleased to appear. We had hoped that our national chairperson, Francine Arsenault, would be able to attend as well. She took ill last night and is unable to be here.

I understand the time constraint you are under, and therefore I will try to summarize our position fairly quickly and move to questions fairly quickly as well.

Ours is an organization of persons with disabilities. We have been around since 1976 and we have been actively involved in promoting the improved status of Canadians with disabilities since that time. We have worked in areas of transport, employment, housing, human rights, economic policy, social policy, etc.

Basically, our concern with this federal budget is twofold. While we recognize the need to get Canada's house in order, we also recognize that the deficit was not the creation of people with disabilities. Most people with disabilities live on incomes of less than $10,000, and it was not they who created our problem, nor is it their dependence upon services that has created the problem, in that disabled Canadians remain significantly disadvantaged. In fact, statistics show that while there have been incremental improvements over the last two decades, the economic situation of Canadians with disabilities has not substantially changed.

Our general concern with the budget was that at the same time as reducing transfer payments, the move towards block funding has created a new climate, a new situation in which disabled Canadians and the services upon which they depend are in competition with health care dollars and with education dollars. Our concern is that with diminished dollars, with a block funding approach, and with no process in place for federal government to determine how those dollars are spent or to track those dollars, you place vulnerable people at significant risk.

We know that health care dollars are increasing; we know that educational needs are increasing. At the same time, to provide those support services that Canadians need in order to participate in their community and in the economy, we are placed in competition.

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Cost-shared programs previously had separate pots of funding that established certain priorities in service delivery in this country. That is not the case as we move towards the block-funding issue.

The case also could be made that the only standard that is enunciated in Bill C-76 is a non-residency requirement. That is not anywhere near the standards that were established within the Canada Assistance Plan, the standard that said that assistance would be provided on basis of need; that there was an appeal mechanism if you were refused assistance that would be guaranteed; that there was no work there; that in order to receive assistance you did not have to go out and work for your municipality or whatever as part of that.

There is no leveraging now of dollars from the federal level into services that we think are essential for Canadians to become a part of their community.

If there are three things we want you to know, they are that Canadians with disabilities remain significantly disadvantaged; that federal leadership in the area of disability policy has been critical to the incremental advancement of social policy for people with disabilities; and that block funding without national standards puts at risk the equality of opportunity for people with disabilities that we had hoped to see coming forward.

Certainly our organization has worked collaboratively with government in the past, and I think it is understood that Canadians with disabilities have sought incremental improvements. We know the changes are not going to occur overnight. We know that the disadvantage, the poverty, the isolation, the institutionalization of people with disabilities will not change overnight. However, we feel that the progressive attitude, the progressive movement towards incremental change, is put at risk by diminished levels of funding and by a block-funding approach to services.

We have listed a number of concerns related to block funding: it creates competition for resources among various disadvantaged group; there is no mechanism in place to ensure the funds are spent in a way that we would all support. All we have in the bill is a minister's invitation to the provinces to a meeting, to discuss the possibility of mutually agreed-upon national standards.

In today's climate we are not hopeful that a consensus can be reached. You will be striving to meet election deadlines in provinces; you will be striving to meet deadlines of referendum debates, and other issues within that climate. Developing pan-Canadian standards are unlikely, and I would advise that there has to be some federal leadership exhibited in areas of social policy that are critical, and we think people with disabilities are within that area.

We spoke against devolution of powers during the Charlottetown Accord, yet we are now seeing, not in a constitutional framework but in an economic one, that we continue to devolve responsibility to the provinces. We thought Canadians had voted against it, and we as Canadians with disabilities did encourage voting against the Charlottetown Accord.

In guaranteeing the standards of medicare, there is a positive initiative that we as Canadians with disabilities want to see medicare standards ensured; but by ensuring those standards and nothing else, you put everything else at risk when there were standards in place under the Canada Assistance Plan or the Vocational Rehabilitation of Disabled Persons Act.

Central also to the health and social transfer, we believe, must be a process that involves Canadians in the discussions with the provinces, and it needs to be a fairly open discussion. We know the debate between the provinces and the federal government will be difficult, but we believe there is need also for Canadians to have an opportunity to express their desires in that debate, and to date we see no mechanism being put in place.

I would also suggest that there is a need to develop, within this context, a mechanism for what we might term loosely a social audit, a way of determining as a nation how dollars are spent. If you are transferring funds to the provinces, will they go to needed social services, or will they go to sewers and roads, and is that what you as a nation wish to do?

Canadians with disabilities have benefited from federal leadership, and that remains critical to our achieving full status as equal citizens in this country. There have been federal initiatives since 1982 that have been important to us. We would like to see that continued.

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At the same time as the budget has changed the climate relating to transfer programs, also the human resource investment fund is of great concern to us. As yet, there is no consultation mechanism in place in regard to the human resource investment fund. My understanding is that you as members of Parliament will have to make decisions about it in early June, and there has been no discussion as yet with the community as to how that will happen.

We see a continually devolving federal presence happening in the area of disability, and frankly it is frightening to us. We have members who suggest that they will now seek those provinces with the best social service systems and move there. We have experience that says people are already moving from some provinces to others.

Do we wish to have a nation in which we find people who are vulnerable having to travel the country, as they did in the 1930s, seeking either part-time employment or support? That is not the Canada we had as a vision. That is not the Canada we believe in, as enunciated in the Canadian Charter of Rights and Freedoms.

The bottom line, I guess, is that we want to see disabled persons' involvement in the discussion around the Canada Health and Social Transfer and how we will ensure a social audit process. We want to see the development of pan-Canadian standards in relation to the CHST. We want to see national standards that ensure portability, resource allocation based on need, a guarantee of appeal mechanisms for those who are refused assistance, a commitment that assistance will be sufficient to meet basic needs, a prohibition against workfare, and a development also of the social audit evaluation mechanism.

We also believe there is a need for a federal strategic initiative in the area of disability. It has been; we have seen that since 1982. We would like to continue to see that.

As a last resort, if we do not see standards developed, the only opportunity disabled Canadians have is to challenge in the courts legislation that does not provide adequate resources or that prohibits the participation in the community - to challenge in the courts inaccessible buildings, election polling stations that are inaccessible, transportation systems that are inaccessible, unequal access to employment, etc. That is not our preferred route. We do not believe that the courts necessarily will render the best decisions, but we find ourselves more often in the courts.

Frankly, among the disabled community there is a climate of fear and -

The Chair: Mr. Beachell, could I interrupt you for a second?

We have a possibility of pairing if Mr. Speaker feels like staying, and we would keep two of us here and carry on, or we can break and come back to hear Mr. Beachell further.

Mr. Speaker: Could I be advised as to what the vote is on?

The Chair: Something procedural.

Could a person from the whip's office tell us what it's about?

Mr. Walker (Winnipeg North Centre): I was wondering if Laurie could, for the record, introduce his colleagues who are not at the table but are here with him.

The Chair: That would be excellent.

Mr. Beachell: Traci Walters is the executive director of the Canadian Association for Independent Living; George Simpson works for the Independent Living Centre here in Ottawa; Lorne Daley works for the Canadian Association of Independent Living, as does Michael Horne.

I believe they will be presenting to you on Thursday afternoon. I also believe the Canadian Association for Community Living will be presenting to you next week. So a number of disability groups are coming forward.

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The Chair: We now continue with the meeting. We still have a quorum, and that's wonderful.

I'm glad we can carry on, Mr. Beachell, because this is very important to all of us. I apologize for the interruption.

Mr. Beachell: No problem. I understand the need. We have appeared before numerous parliamentary committees, and this happens.

I said that within our community considerable anxiety is being expressed at the present time. That anxiety is related to the block funding issue, but it is broader than that in that we have seen a number of particular flashpoints around disability issues, and one where debate on assisted suicide, euthanasia, has been of great concern to our community.

We intervened in the Latimer case in Saskatchewan. Our membership has been quite distressed by some of the public support of Mr. Latimer in the murder of his daughter, who was a child with a disability.

Those kinds of issues begin - for our community - to paint a picture that we have not advanced as far as we had hoped in the last two decades. We still have a major portion of the population who see Canadians with disabilities as less than full citizens and, even with support, suggest that when a person with a disability is murdered the sentencing for that crime should be less than it would be if the person had been non-disabled. That is abhorrent to our organization and causes a great deal of stress.

I don't wish to overemphasize this piece, but it is a part of a general perception that the federal government, which has played a significant role nationally and internationally in leading on disability issues, is now moving away from those.

We continue to hear expressions of goodwill from various departments, from meetings with Mr. Martin, with Mr. Axworthy and with other members of Parliament. However, in the current climate it appears that the focus on disability is slipping away while other issues continue.

We are hearing from organizations that have had employment training programs where their funding is being cut because they do not serve persons who are on UIC. If our programs now in the employability side of things are focused only on those who are on UI, we know that people on social assistance, disabled folks, single moms, etc., are not going to be in the workforce.

I would leave it there and just say that it is not only within Bill C-76 that we see this concern. We see this concern also in a longstanding issue around transport, with a devolution of responsibility to privatization of airports, etc., downsizing of the department from 2,000 to 300 - a move that we now will have to deal with, numerous jurisdictional authorities to ensure equality of access to transportation in this country.

It is not just the one piece of legislation that causes us concern.

It is a general perception of our community that the federal government seems to be moving away from a commitment to ensuring equal access for all citizens, and the disabled community is much distressed by that.

I think you will hear from others over the next few weeks. We hope to be able to meet with members in their constituencies and on the Hill as well to express concern. I shall leave it at that and ask if you have questions.

The Chair: We do have questions. Thank you, Mr. Beachell, very much.

Mr. Speaker.

Mr. Speaker: It was a good presentation. I certainly appreciate your point of view.

On the last statement you made, with regard to the penalty of the person you are referencing, I appreciate that point. As legislators we need to be reminded of that at this point in time, because that decision seems to be floating closer to being reality before it's in Parliament.

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Mr. Beachell: Yes.

Mr. Speaker: In terms of the basic question that's on this table right now - you raised it and the presenters who were here just prior to your presentation also raised it - in terms of national standards by the federal government maintaining certain funding levels, maintaining certain legislative authority, the presentation you made to us would indicate that you feel this should be maintained, and even strengthened versus provincial autonomy, jurisdiction and responsibility.

Could you just help me with regard to that? Municipalities, provincial and federal governments and private business have all had to downsize in terms of their revenue capability, which reflects on their expenditure results. Could you indicate any specific things that are happening across Canada right now that show this lack of compassion - a legislative thrust or budgeting pattern that has reflected on your organization, or on people with disabilities right across Canada, in a more specific sense that may help out a bit?

Mr. Beachell: Sure. As the federal government downloads what we consider its responsibility to be, we also see provincial governments downloading to municipalities. Municipalities in many instances have not had a long history of delivery in this area and therefore do not have programs in place or the infrastructure in place to support those kinds of things.

What we're seeing in many instances is a remedicalization of what we consider to be citizenship community supports so that everything for disabled persons again comes within a medical framework. We think that is an extremely expensive framework, because doctors cost money. We believe that those supports could be provided more adequately by community organizations than through medical professional organizations.

The other thing we are seeing across the country is a focus on what we would call creaming. By that I mean a focus on the least disadvantaged, the bang for the buck, where you can get your numbers up fastest in order to show that you're getting people back to work. The people who are more significantly disadvantaged are not receiving the same kind of support.

Everybody is playing a statistical game, and I would say that those who are more severely disabled are not receiving the same kinds of support as they had before.

We're seeing a diminishing in home care across the country, so people are not able to remain in their homes in the way they have. We're seeing transportation systems that were expanding and growing to provide greater access to community and jobs, etc., being cut back. People are now finding a training program they could go to, but it is unlikely because there is no transportation that will get them there regularly on time.

An example of federal leadership in the disability area might be in the transport piece. We have seen significant progress in accessible air travel, in accessible bus and accessible train and those kinds of systems, and even support at the federal government for municipalities to purchase accessible vehicles.

Where we have seen virtually no progress is in the interprovincial busing system, which is the cheapest transportation system in the country. It is not accessible. I would suggest that it is not accessible because the federal government, in 1954, gave up jurisdiction over interprovincial busing to the provinces.

The provinces have never been able to agree on standards. A year ago they agreed that they would establish a national accessibility standard, but it would be governed by 13 different jurisdictions. If you get on a bus in Winnipeg and go to Thunder Bay and you have a problem, you might have to register your complaint with the Motor Vehicle Act in both Ontario and Manitoba.

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Both of those systems are different from the federal system. With the federal system you can lay a complaint easily; with those systems you have to retain legal counsel in order to lay a complaint. It is a system we do not wish to see in social services, where we have twelve or thirteen jurisdictional orders that we have to design.

For example, we have a student who came from Saskatchewan to Carleton University to get her master's in social work. Here in Ontario she was able to get the attendant care support built into her program so that she could attend university and do her master's. She wishes to go back home and live at home in Saskatchewan to do her practicum in social work, but in Saskatchewan she can't get the attendant care. If she goes back to Saskatchewan for her practicum, she will have to hire and pay for her own attendant to go do her four-month placement.

We know those inequalities exist. We believe they will get worse.

Mr. Speaker: Mr. Chairman, I have no defence for that. I think that's a good example of where the standards would be inadequate under just a straight provincial jurisdiction.

Mr. Beachell: Also, the only standard we have in this act is non-residency. That just means you're free to travel to find the best system you can, and we think that is like riding the rails in the 1930s. We don't think that's the kind of Canada we want.

Mr. Speaker: The argument I was going to present to you was that the local jurisdiction or the provincial jurisdiction closer to the needs of the people in that respective area should respond better than, say, someone from a national level of government.

As a former minister of health and social development, I know that when I initiated policy as a minister, I never thought about the federal government. You just bulled ahead and did what you had to do under the circumstances, and then I had four or five people who brawled in a back room to share under the Canada Assistance Plan. That's what we did. We did it first and argued later.

That was the argument I was going to present to you, and I'd like you to reflect on that. That's the way it's going.

Mr. Beachell: We're not suggesting that the former models were perfect. We're not suggesting that the Canada Assistance Plan or VRDP or Established Programs Financing was perfect, but we think they may end up having been better than what we're moving toward right now.

Local autonomy and jurisdiction are wonderful. There are imaginative, creative things that can happen there, but only if that community is able to see a broad picture and can be supported in a way such that it can take advantage. I've worked in small communities, some of which you go into and there is tremendous leadership and potential for creating new, innovative solutions. I've gone into other communities where absolute depression reigns and there is no hope, without some kick-start from somewhere else, that the community is going to be able to respond.

If the provinces and the federal government could come together and agree to some national standards and appeal mechanisms, etc., we'd be fine with that.

Mr. Speaker: That's part of the breakdown, as you say, as to where the provinces, in terms of transportation standards, have not agreed and have tried to.... They each have their own little innovation, which makes it very difficult for the person trying to travel through one province to another.

Mr. Beachell: We're not optimistic that in this climate federal and provincial governments will be able to develop mutually agreeable standards of substance.

Mr. Speaker: Are each of the provinces developing this transportation policy from a legal standpoint rather than an access standpoint?

Mr. Beachell: Yes. There was an agreement for a national standard. Guidelines and regulations were drafted and were put forward to the Minister of Transportation and discussion at the federal-provincial ministers level. Those regulations are now coming back and the message we're getting is that there is a desire to move toward a voluntary system of compliance, not an enforceable system. That's not acceptable.

Mrs. Stewart: We agree that the system we have hasn't stopped the differences, and the concern you have is that, by golly, if we go in this way, maybe it will get worse instead of better. But there is a window to find these kick-starts that you refer to, some kick-starts that maybe could take us in a different, more positive direction. You may have highlighted one of them in your presentation with regard to what you call the social audit process, which I think has great potential.

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What we're trying to find here are maybe opportunities where the federal government can play a very significant role in facilitating access for all Canadians to programs, a role that doesn't include just cash. Maybe it is that the federal government through some process could actually do this social audit province by province and make that highly available. Those kick-starts might be the kinds of things that would project us into a system that is better.

Just on that particular strategy, how would you see that? Would a good parliamentary committee or a joint committee be an audit? Have you thought about what venue we might use here for that?

Mr. Beachell: We haven't really given that a whole bunch of thought. The bottom line is that if you don't know as a government how your dollars are going to be spent, how do you know that issues are being addressed?

Mrs. Stewart: Clearly, in the system we have right now, we give the money and we have the guidelines, as you point out. But you're still pointing out the difference, so it's not right yet.

Mr. Beachell: No, it's not right yet.

Mrs. Stewart: SCHST in itself has not been the solution, and even standards haven't been the solution. The optimist in me says there have to be 21st century strategies that we haven't tried yet and that, by golly, might make a real difference to us, and that the federal government can play a role on a different level. Your notion of this social audit is a darn good one, I think.

Mr. Beachell: I think it has a great deal of potential and what has to be explored is how you would determine the quality-of-life issues within a variety of different jurisdictions. It is going to be absolutely essential that this piece be fleshed out in some way so that we know who -

Mrs. Stewart: But it could be a review of parliamentarians presumably having the provinces all come in and respond to a set of questions: okay, tell us about this, this, and this.

Mr. Beachell: Yes, it could be a parliamentary process, it could be a committee process, it could be.... We do analysis through Statistics Canada of a variety of other things, as well. There are ways of doing those kinds of analyses. We do comparative studies, or somebody does comparative studies, of various countries and what -

Mrs. Stewart: - our position is vis-à-vis that.

Mr. Beachell: Yes.

Mrs. Stewart: But that's something we could maybe work on together to determine something that's acceptable to the community and that would give us a method of testing.

Another thing, too, is that when we talk about transport, maybe it is legislation. Through the criminal law, through employment equity legislation, through the ability to legislate in the area of transport, we still have an opportunity to say, at least to those companies over which we have some jurisdiction, ``You have to provide standards. You have to meet standards here''. So we aren't losing that. In fact, we could increase that role.

Mr. Beachell: Yes, we could increase that role. The federal government has played a strong role in the transport area and has required by act that carriers not unduly restrict the mobility of persons with disabilities. It has provided a mechanism, the National Transportation Agency, to receive complaints, etc. I think yes, we want to see that.

We have no position on privatization. We do not take a position. We want to ensure that whether it's government or a private business that's offering the service, we can get in. When airports or various pieces of the transportation industry are taken over, we want to see that in those contracts or in the sale or whatever, there is a guarantee of equal access for all Canadians, and particularly for Canadians with disabilities.

Mrs. Stewart: I have one more brief comment. I just want your response. Recently the Minister of Human Resources Development presented some changes to the CPP disability program. They've been extremely well-received by the disabled constituents I have, and I'm hopeful that there aren't people who are interpreting this as a workfare sort of strategy, but quite the opposite; we need to provide support as well as recognize that we don't take a medical approach to disability, but a proactive one. Is that how you're interpreting that?

Mr. Beachell: The CPP changes have been positive. We think they move in the right direction and we're quite pleased to see them give support to individuals to retain their CPP disability benefits and continue working for a period of time. We see that as positive.

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There are other pieces that could be done that would allow people to work part-time. Many individuals with disabilities can work part-time. They don't want to be labelled as permanently unemployable. They want to be able to work part-time and receive a portion of that, not have every dollar grabbed back by welfare as well.

There are a number of progressive changes there. For the disabled community, the critical factor is not any one program. It is the interconnectedness of the program.

Mrs. Stewart: The provisions.

Mr. Beachell: You can have targeted training resources for people with disabilities, but if the support services of attendant care, interpreter services, materials and alternate media for those who are blind, etc., are not there, the training program will not work. So for our community it's interconnectedness of services that is critical.

We're fearful, in the block transfer, that in the competition for health dollars, education dollars, social assistance dollars and social services the piece that may really fall off the table is the social services piece. As provinces have to deal with escalating health and education costs, we think the community support services that will get some people into those systems are at risk.

Mrs. Stewart: It sounds to me as if we just have to work harder at it. There are some other solutions, but we have to work darn hard at finding those and making them work.

Mr. Beachell: There has to be a commitment. I think that commitment has to be expressed politically. That commitment has to be expressed in a national vision and initiative. That commitment has to be expressed in legislation and regulation that will require that we address these issues.

We believe that's what we got in 1982 when the Charter of Rights and Freedoms was brought in and the provision against discrimination on the basis of physical or mental disability was there. We're surprised by the number of times we're still having to go to the courts to challenge existing legislation. That's not where we want to be. We don't want to be hiring expensive lawyers and trying to sue whichever government. That just doesn't make sense for anybody.

Mr. Speaker: Don't you find at the provincial level now there's a lot of talk about community level volunteer programs, that kind of thing? Are those the new buzz-words of the provincial level? The implications are that there isn't any funding with it but there's supposedly a volunteer group that's got to pick up, that you're one of the groups, that they've got to pick up the services you formerly had.

Mr. Beachell: Many of the volunteer organizations are stretched to the limit at this point. Their volunteer resource is diminishing as well, because our communities have changed. You do not have the same people available to volunteer, frankly. Do not term this as a sexist comment, but 15 years ago it was many of the women in our communities who were running our organizations and providing massive support.

Families do not exist on one income any more. Families are struggling on two incomes, and beyond that the time they've got left goes to their children. There are not the same people out there to run voluntary organizations who there were 15 years ago.

Those organizations are being asked to take on a greater and greater responsibility and find more and more corporate dollars. We don't want a country in which we have to do telethons weekly in order to cry on somebody's shoulder and say our situation is so God awful that you've got to send us your $10 in the mail. That's not what we believe Canadians with disabilities deserve as citizens in this country.

Therefore it means commitment at all levels, at the municipal, provincial and federal levels. Some collaborative strategy is being developed in that way. It means enunciation of a vision.

The federal government has done this in the past. We believe it must continue to have a role and we are concerned the devolution of powers really may diminish that role substantially.

Mr. Speaker: Under the Canada Assistance Plan the provinces have had a lot of autonomy in terms of self-determination of policy thrust programs and expenditure priorities. I don't know how far your experience goes back, Laurie, but in the years from about 1975 to 1982 there was a continuous growth in government expenditures. We're partly paying for that today, because we just haven't been able to keep up the pace.

During that period of time did you find that the provinces in their policy direction were able to meet more of the needs of the disabled? Were we doing a better job as a country then?

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Mr. Beachell: I'm not sure that we were doing a better job. I think there were dollars that were being spent. I'm not sure they were being spent as wisely. The mid 1970s was really the emergence of the consumer movement of people with disabilities and we were still spending a majority of our dollars on institutional medical-based care.

I think there are options now of direct cash transfer to individuals to purchase their own service who have economies. I think those kinds of models exist now that we can actually.... I don't want to steal Mr. Martin's line, but we can do better with less or with the same. There are different ways of spending those dollars.

We're really reluctant to say that the disabled community, which has been underserviced for 20 years, can do better with less. When you look at a population that wasn't getting what it needed 20 years ago or 10 years ago or 5 years ago or 2 years ago, how do you say we're going to do better with less?

We would basically say that for the federal government to restore its fiscal house on the backs of the disadvantaged in this country is ill-advised in the long run. We do not wish to see, across this country, a Yonge Street in every major urban centre, where people with disabilities sit on the street with a tin can begging as they did 40 years ago. That's not the kind of Canada that we have a vision of, yet that is what's happening.

I would just reiterate, I think it is the most vulnerable within the disabled community who experience that. It is the people with more significant disabilities, severe disabilities; if the support is not there, they have very few options but to depend totally upon family and friends or upon a charity, pity appeal. That's not what equality of citizenship is all about.

Mr. Speaker: You're talking about a vision you have of all of this in terms of today's economic circumstances. Do you want to elaborate on that any further?

Mr. Beachell: Sure.

Mr. Speaker: That's a very broad question, but I think in the context of the funding today it's...[Inaudible].

Mr. Beachell: Much of that vision empowers individuals. Much of that vision transfers responsibility to people with disabilities, allowing them to take risks. We know of individuals who have sat for many years in hospitals or nursing homes where that type of care was the only option. We know if those same dollars were given to the individual to purchase their own system, they could probably purchase a better system for less and be happier with it, a system that allows them to live in their own apartment with an attendant live-in or a system that allows them to hire their next-door neighbour for five bucks to come in to cook a meal or something.

It is a system that allows the individual flexibility that we have not had before. Part of our vision is that.

Mr. Speaker: I appreciate that.

Mr. Beachell: Part of our vision is communities that continually do a process of barrier removal. This means they continually identify barriers and say how can we remove these and make it better.

Mr. Speaker: Individually you're saying they can make a judgment if they have some financial guarantees. Would you see that under the start of the social assistance program, or would you see that as...? There was the other block fund that the disabled could receive; it was called H, if I remember it correctly. How would you see it? I remember that the question that was always raised was in terms of the dignity of those funds. Is it a hand-out or is it a support system with a little bit of respect?

Mr. Beachell: Our vision would say that Canadians with disabilities should not have to bear individually the cost of the disability. We believe there must be mechanisms for society as a whole to bear that cost. We would suggest one of the mechanisms is a tax structure that allows for the offsetting of additional costs of disability.

Many of us have disability insurance through private plans, through work, through workers compensation, etc. We all pay a great deal of money in this country to protect ourselves against becoming disabled. There are companies that make money on that. Our vision would say we want a comprehensive disability insurance program in place for all Canadians so that your standard of living is not based on how you became disabled.

Right now if you're hit in a car accident you usually have somebody to sue and you can end up with some decent money, hopefully to continue an active life. If you're disabled at work, you may have long-term disability insurance or worker's compensation, etc. If you're born with a disability, you have welfare. That's basically the way it sits right now.

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Our vision would also say the Department of Finance should look, through its tax system, at ways of offsetting additional costs. There have been incremental approaches to that. We think we need to study that larger vision of how it might be done.

The Chair: I would hate to be disabled. I would hate, even more today, to be poor and disabled. I think you've made a very eloquent plea for the fact that those among us who are disabled have a claim on the conscience of all of us. I want to thank you very much for a very forceful presentation.

Mr. Beachell: Thank you.

The Chair: I understand from Mr. White that he would prefer to wait until perhaps more members come back from the vote. Why don't we set maybe a five-minute limit on it? I understand the vote is over now. We'll take a five-minute break.

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PAUSE

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The Chair: Order.

Our next witnesses are from the Canadian Labour Congress: President Bob White; Cindy Wiggins, senior researcher; and Andrew Jackson, senior economist. They are no strangers to our committee.

We always look forward to your presentations, and thank you for being with us. Unfortunately, we're going to have to abridge your time somewhat, but we'll try to be as generous as possible,Mr. White.

Mr. Robert White (President, Canadian Labour Congress): I'll be as direct as I can. That will avoid taking some of the time.

First of all, Mr. Peterson and members, thank you for the opportunity to appear before the committee.

I'm going to be very candid and direct this morning, because we have some very strong feelings about the budget bill. We've put together a full brief. I want to make some opening remarks, and hopefully leave some time for questions and answers.

We're back here again because we think that Bill C-76 is a bombshell on the Canadian people. We don't think the public has thought out the enormous implications of Bill C-76.

We appeared before this committee pre-budget. We said at that time that the most pressing issues facing Canada then were high unemployment and the resulting social and economic consequences. We urged the government to make job creation its first priority, and not to go the way of previous governments by trying to deal with the deficit in a one-sided way through massive spending cuts.

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We think credible alternatives to that approach would include reducing the deficit to 3% of GDP in a stable and balanced way. I would argue that's exactly what the government promised to do when it was running for election.

We went a step further in 1994. We worked with an organization known as the Choices Coalition in Manitoba, the Canadian Centre for Policy Alternatives, and a number of economists across the country. We prepared an alternative federal budget - not a wish list, but a budget that adopted the government's own target of reducing deficits to 3% of the GDP.

We showed that jobs could be created and a modest investment in social programs could be made on the basis of a credible approach to taxation and monetary policy. Unfortunately, when I said that to Mr. Martin in the first meeting I had with him after the budget, he listened only with his right ear, because it seemed to us that most of those suggestions, from the progressive groups across the country, were totally rejected by Mr. Martin in his budget.

Bill C-76 - and I think more people are coming to realize this - is not just a budget. It's very much about the future of Canada. It charts a course that will fundamentally restructure the country and radically alter the values and principles on which it has been built.

The implementation of this bill will lead to a decentralization of federal powers in the social policy field, to the introduction of the Canadian Health and Social Transfer, where national social programs for health, social assistance and educational will disappear. By ending the national scope of these programs, two key principles that have been the cornerstones of Canadian society will disappear.

One is the responsibility of the federal government to act in the national interest and the other is the principle of collectively providing for the economic and social security of Canadians. National social programs are visible representations of those two principles. The withdrawal of that, along with massive downsizing in the public service and reduced support for agriculture development and transportation, sends very clear messages to Canadians.

The federal government is prepared to relinquish its responsibility for promoting equality of economic and social conditions from region to region, family to family and person to person. The important goal of redistributing income and wealth fairly is set aside. The government is also prepared to abandon an important crucial role in helping to stabilize the economy by recession-proofing future spending.

I want to put it in its context in terms of where we are economically today. Bill C-76 comes at a time when Canadians are facing a prolonged time of economic and social insecurity. Corporate downsizing through permanent layoffs and workplace closures is still happening daily. Since the budget you've seen Bell Telephone, Petro-Canada, Unitel - and the list goes on and on. As Mr. Peterson and I talked about in the hallway just a couple of minutes ago, there are some ripples in the auto industry.

The growth in non-standard jobs and the emergence of just-in-time workforces have meant fewer full-time, well-paid, secure jobs, and the average family income is virtually the same as it was about 15 years ago. At the same time, federal policies of high interest rates and massive spending cuts have been a major cause of high unemployment. Today these policies remain unchanged.

The economy is performing pretty badly when it comes to job creation and growth. We had a good year in 1994, if I looked at the numbers, but when you look at what has happened since November of 1994, job creation has almost been stalled. The numbers show that the lack of jobs is discouraging workers, who are stopping to look for work. The job numbers, I think, are about 9,000 new jobs actually created from December of 1994 through until April of 1995.

The Conference Board recently said that consumers are reeling from an anxiety over jobs. We think the federal government must bear a major responsibility for this growing insecurity among Canadians.

The budget, which made massive cuts to social programs and cut 45,000 public sector service jobs, has Canadians running scared. They know they will face a ripple effect from layoffs at the provincial governments, local governments, school boards, hospitals and private sector. Everybody's talking about it out there. Everybody's talking about how they have to downsize, and that means loss of jobs for a lot of people.

The markets have not rewarded the government for the slash and burn budget. Interest rates are still, even in spite of what has happened in the last couple of weeks, incredibly high in relation to inflation. More Canadians than ever are poor. Child poverty is at 21%. It's higher than it's ever been. A lot of youth see themselves as a lost generation. Seniors, particularly women, face the risk of inadequate income retirement. Workers are losing their jobs and are less able to collect UI. Poverty among single-parent women, already intolerably high, is increasing.

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On the other side of the equation, productivity is up, corporate profits are up, executive pay and bonuses are up, the income gap between the wealthy and the poor is getting wider, and still the budget seems to take us on a course that is going to make that even worse. We have no choice but to question the vision the federal government is giving us that is incorporated in this budget bill, because we think it does reflect a political ideology, an ideology that puts the markets, the banks, and the bondholders at the centre of the ideology, not the people of Canada.

I want to cut this down, because I know we're a little short of time here, but I want to get to the Canadian Health and Social Transfer, because I think that's one of the key points of what's happening here. In the past, because it has such an impact on social programs, it wouldn't have been before a finance committee, but it's all wrapped into the one bundle here.

We don't think that's merely tinkering with social programs. It makes fundamental changes to the principles that have governed social policy in Canada for over 50 years. Key among those are federal-provincial cost sharing, universality, national standards, and right space programs, which preserve the dignity of people.

The process begins with a whopping 40% cut in cash federal transfers for health, education and welfare over the next four years. That will mean cuts to provincial programs, as well as lost jobs in the public sector.

The funding mechanism for the CHST ensures that federal cash transfers for these programs will end, likely within the first decade of the next century. The implications of this for medicare are huge. The cash transfer is the only lever the federal government has to enforce the five national standards in the Canada Health Act that keep medicare universal, comprehensive, accessible, portable and public. Without this enforcement the federal government will not be able to maintain medicare as a public, not-for-profit system.

There's a claim going around that has been talked about and repeated by people for some time now that health care costs are out of control and non-sustainable, that 10% of GDP is too much to spend on the health of Canadians. Let's set the record straight. The facts are that while the total share of health care spending is 10% of GDP, only 6.8% is due to public spending. The level of public funds devoted to health is right in line with that in every other country in the OECD except the United States, and I don't know who in their right mind would want a system like that. The statistics really show that the fastest rise in component health care costs is due to private health expenditures, particularly the cost of drugs and private health insurance for extended health care reasons.

The CHST eliminates the Canada Assistance Plan and with it the 50-50 cost-shared approach to social programs. The principle behind CAP is one of those principles which defines the Canadian identity. It stands for the principle that no one ought to be left destitute, without food, without shelter, without the basic necessities of life. The elimination of CAP eliminates a law that guarantees every Canadian the right to these basic necessities. The law that will govern the CHST does not include that right. It's an outrageous, indefensible action, and one for which there's absolutely no justification.

The national standards contained in CAP were left out of the CHST, we think, for one reason and one reason only: to make a trade-off with the provinces. In return for fewer federal dollars, provinces are to be given greater flexibility to pursue innovation and social programs, and in many cases these code words mask a very serious implication for social policy in Canada. It's called ``no strings attached federalism''.

Without national standards for CAP, there is no guarantee that the federal funds will even be spent on social programs. The funds could be spent on roads and bridges. The 50-50 cost-shared approach guaranteed that every province had a social assistance program. No such guarantee exists under the CHST. The absence of the requirement to provide assistance on the basis of need alone means that provinces are free to decide who is deserving among the poor.

The CHST gives the provinces the freedom to impose workfare. Workfare is a concept that has no place in a progressive society. It's humiliating, it's degrading, and it makes absolutely false assumptions about the character of people who are in need. Those who are fond of workfare know of the lack of jobs, the need for affordable child care, the inadequacy of minimum wages, disability, and life circumstances that force people into poverty. Quite frankly, workfare is the product of the self-righteous and the mean-spirited, and the most outspoken supporters of it are those who have wealth, power and privilege.

Workfare is a part of another agenda, one based on a low-wage strategy. Workfare will not create jobs; it will only create competition in a job market where already too few jobs exist. There are only two possible outcomes, both of which will hurt workers. Workfare will displace workers from jobs and put downward pressures on wages throughout the economy.

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This is a strategy we reject outright. Quite frankly, it's a strategy that I think a number of economists around the world argue is part of the problem with the economy in terms of income for people.

By eliminating the 50-50 cost-shared approach to welfare, the federal government is abandoning its responsibility for stabilizing the economy, particularly during recessions. As well, as access to UI is restricted, more people go on to welfare for economic survival.

In the CHST the federal government would not be there to share in the increased burden of welfare costs, costs that automatically occur in recessions because of high unemployment. To the extent that CAP provides a stabilizing role, CAP is an economic program as much as it is a social program.

I've been saying this all across the country. Income that comes from CAP and other social programs is not wasted money. It's spent in local communities, stabilizing local economies and preventing an even deeper recession and job losses. Eliminating CAP is a bad economic policy as well as a bad social policy.

The process in Bill C-76 in terms of the massive downsizing of federal government operations sees 45,000 public employees losing their jobs. Chunks of government will be handed over to the private sector; other services will be discontinued; and user fees will be greatly expanded, as some people are already finding out.

To achieve this downsizing the federal government will legislate away, through this bill, the collective bargaining rights of its workers. Parts I and II override and gut the collective agreement of the federal public service unions in flat violation of the promises made by the Liberal Party during the last election and in flagrant violation of the ILO convention regarding the right of free collective bargaining.

We regard this as an attack on all the rights of workers. It sends an incredible message to employers across the country that collective agreements are expendable.

The government can't talk out of both sides of its mouth, on the one side talking about labour-business cooperation and on the other side talking about violating the sanctity of the collective agreement it has with its own employees. Imagine what would happen if the labour movement woke up tomorrow and said it didn't like the collective agreements signed with its employees, and it ripped them up and forgot about them. We'd be jailed and taken to court all over the place.

We think the federal government has an obligation as an employer to respect the right of collective bargaining and to work out the problems, as other employers can do in these very difficult times.

The government has called this policy direction ``getting government right''. It's impossible to square this vision of Canada with the one the government put during the election campaign. At that time the policy of the Liberal Party was to work toward greater equality of social conditions among Canadians - to negotiate, not legislate; to provide people in need with social assistance and not abandon the health care field.

It was also clear that the Liberal government had run on the basis of rejecting the previous government's programs because that way, they said, led us to a path of becoming a more polarized society divided between rich and poor. As well, the Liberals promised that job creation was the most important priority for government as the way not only to deal with the deficit but also to give Canadians hope and dignity.

By any standard we think the 1995 budget bill is a betrayal of that vision. The minister boasted that spending as a share of the economy will be lower than at any time since 1951. That dubious and ill-conceived boast crystallized the government's real vision of Canada: a country in which social security is as minimal as possible, in which people's economic security is dependent on the whims and inadequacies of the market-place. Ultimately with this bill Canada will regress to being a country where individuals are expected to provide economic and social security for themselves and their families as best they can.

I want to say I think we've been there before. We've been there in the Depression, when there were no social supports and the victims of the Depression were powerless to provide for themselves. There was no such thing as social assistance, no public health care system, no unemployment insurance system, no Canada Pension Plan. Canadians were on their own. When I hear economists all around the world telling me about this whole new agenda we're talking about, there's not a lot new about the dangers we envisioned by this.

Surely no one on this committee can deny the quality of life in Canada today, even with all of the difficulties for many people. Our cleaner cities, our lower crime rates, our levels of education, our low infant mortality rate and our good health are due to social programs and public services. Nobody can argue that the Canada we had before those social programs was a better place in which to live, yet we think the direction charted out here is taking us back to a time when national programs did not exist.

There's something else that I don't think anybody on the committee can deny.

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We did not anticipate, nor did anyone appearing before the pre-budget consultations, that the Minister of Finance would include in his economic statement the magnitude of a program such as CHST, which radically shifts the foundation for social policy in this country and effectively ends national social programs. We did not address that in our pre-budget consultation, because that was not an issue.

Up until now, Canadians have not really been told about the serious implications for health, education, and social assistance programs this has. I understand that in spite of a lot of requests from people - and we've got dozens of them - the committee is not going to travel, go into the various communities, to discuss this most critical piece of legislation.

Now I am going to say very frankly and candidly that I think this is really a question of democracy, a serious question. As I've heard the Prime Minister say, in response to people I think in the bond market, the Government of Canada is not a corporate boardroom and it has a responsibility to govern by taking into account the views of Canadians before it acts. I want to argue that trial balloons running up to the budget and polls after the budget do not count as democracy.

We believe the massive restructuring contemplated by the CHST in this bill warrants an extensive and full public debate, because we think it is just as important as the debates that went on before we entered into the free trade agreement, the Meech Lake debate, and the Charlottetown accord. We're talking about a significant restructuring of federal ``fiscalism'' here.

We want to make a proposal to the committee, a serious proposal, that a commission should be established on federal and provincial partnership and national social programs of eminent persons, in the same manner in which it was done on the Macdonald commission, the Carter commission, the Hall commissions, the Marsh commission, and the Rowell-Sirois report.

We're not naming people; we're saying that we believe the implications for the future social policy of Canada need to be looked at. There is time here. This doesn't have to be implemented even on the old timetable for one year; it could be two years. Surely there are some eminent persons in Canada who are not prepared to leave this to the political leadership of the provinces and the federal government, some people outside the political system who are prepared to do the necessary work in the country, hear from people, and look at what we are really doing here with the social programs, the fabric of the country. Are we by a budget bill just going to wipe out what has been so important to Canadians for so many years?

We make that as a serious proposal to the committee this morning. We ask you to include it in your report to Parliament.

Thank you. It was a chance for me to be direct and candid, and I was.

The Chair: You spoke just as you did from your book.

We have less than twenty minutes and I would like to recognize four people, one of whom is from the Liberals. That's less than five minutes each.

Mr. Tremblay.

[Translation]

Mr. Tremblay: Thank you for your presentation.

I would like you to tell us more about the discussion recommandation that you have made, mainly the establishment of what amounts to another Macdonald Commission. Have you thought about the make-up and the prospect for this commission, in particular the whole issue of federal-provincial relations?

From a Quebec standpoint, and I believe that this is true for other provinces, the federal government is contributing less and less money, but still wishes to partly maintain the illusion and also very strong management powers that make things difficult for the provinces.

I agree with you that the campaign conducted by the Liberal Party during the last election gave no indication of the type of budget that was to be presented. On the contrary, we were told about job creation, not cuts.

With regard to that commission, do you have any proposal that is more developed than this one? Have you thought about the make-up of that commission and the role that the provinces would play in all this? It is often the case that big federal commissions have a tendancy to set the provinces aside.

In a field such as this, the provinces will in the future have a high degree of responsibility. I am attempting to envision how this federal-provincial idea could be developed, because large federal commissions of enquiry are frequently a prelude to the imposition of the views of the federal government on the provinces, and not joint federal-provincial participation. In Quebec, commissions of enquiry are often set up to respond to federal commissions of enquiry. Here, I am thinking primarily of the Rowell-Sirois Commission. In the area of taxation, from the provincial standpoint, large federal commissions of enquiry have always been a source of concern.

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[English]

Mr. White: My view in life is one of fairly simple processes. Several years ago, when medicare was under attack and there was a great deal of concern about it, the government of the day appointed Justice Emmett Hall to look at medicare. He went across the country and heard about medicare from a number of organizations, provincial and federal governments and made a report to the federal government.

I don't see this as a big federal-provincial-constitutional forum that goes across the country. That's the last thing we want to do. I think there are some eminent persons in the country who could take a look at what is being proposed for the restructuring of Canada's social network. I am talking about how you fund it; where the decisions are made; how you maintain the standards; what you do about things in medicare for the future; a fairly simple way of doing it.

Go across the country and get input from, I guess, provincial governments, but also organizations in the field, as to what this means. Then come back and make a report to the federal government in terms of the implications of this before the legislation is put into effect which makes this happen. Once we start down this road and this gets entrenched, this is going to get bargained around a federal-provincial table. Trade-offs are going to be made and we know in this country some provincial leaders have more commitment to health care than others. There are some who want to implement workfare programs, and others...and surely we have to wake up in the morning and ask ourselves, does this make sense - this short-term gain for long-term pain for the country? Shouldn't we have somebody take a look at what we're doing here in terms of this brand-new...which I say really has been done in a way that we couldn't have contemplated before the budget?

I think it can be very simple. Obviously we don't have the right to appoint those people, but there are people around who are not in this for any political gain and who would take a look at these proposals and what their implications are for what has been the fundamental social safety net of Canada, which I think is going to be equally important in the future. It makes no sense to me for us to tear this down for the next generation to rebuild it again, because that's exactly what's going to have to happen.

The Chair: Mr. Speaker.

Mr. Speaker: Mr. Chairman, I appreciate Mr. White's presentation and also the walk through the battlefield of broken and bombed Liberal promises. It is interesting. The only thing is some of us have caught the right ear of the minister and possibly it's difficult to debate some of the things that have gone on.

You raise a question that is fundamental to this whole thing. The provinces have had fairly significant autonomy in terms of the Canada Assistance Plan. They could take a social thrust and deal with it, although there were certain criteria in terms of accessibility, portability; you could move from one province to another and still maintain basic rights as a Canadian. But do you feel the provinces, even politically, could abandon that responsibility at this time if we gave the provinces more autonomy, even without the funds?

Mr. White: Quite frankly, I didn't think politically we could abandon a lot of things that seem to be getting abandoned. Again, in a serious way, because if you look at what happened leading up the budget, speeches from Wall Street and Bond Street and the business community, talk about loss of jobs and the country meeting a debt wall...if you scare people so badly, what do you expect people to expect if they don't think we have any choices? I know there are people abandoning systems in this country that were fairly valued and they're running very high in the polls. Maybe you can do that.

Let me make my point here, if I can make any point today. I think this is much deeper than the political question. I'm sure you realize what we're talking about here is a significant restructuring of Canada as we have known it.

Mr. Speaker: I understand that and I agree with that.

Mr. White: We had a big debate about Meech Lake and about the Charlottetown Accord, even though I was on the side supporting the Charlottetown Accord. There were large debates about people saying the Charlottetown Accord was leading to a dismantling of federalism in the country. To be fair to those people, I think what they're seeing here is that in terms of fiscal federalism. All I'm saying is I would like to take this out of the political arena for a while and let some people look at this on the basis of the history of Canada's social programs; the basis of where we are today as a country.

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What does this mean for us now? If the government of the day says ``This is what it means, but we still intend to proceed with it'', I guess they have the majority to do that.

I would like to take this up. I will say this in fairness to all of you. I don't think any of us have understood totally the implications of what this is going to mean for us down the road.

The Chair: Thank you, Mr. Speaker.

Ms McLaughlin, please.

Welcome to our committee, Ms McLaughlin. We look forward to having you here as a regular member.

Ms McLaughlin (Yukon): Thank you, Mr. Chair, for allowing me to ask a question. I'll be fairly brief.

I too agree that this bill is more than a simple change in funding arrangements. It is a restructuring of the country in a very profound way.

If we can have committees that study Canada's blood supply because we feel that's such an urgent matter, and indeed it is, surely to consider seriously the idea of a commission appointed - not a huge, royal commission, but, as has been suggested by the witness, a commission that would simply study the implications of this - makes very good sense.

My question is related to a point made that social and health programs are not just social programs, they are in fact economic programs. My question is related to that economic aspect.

We hear a lot about competitiveness and how Canada must be competitive and so on. As an organization, you've been very involved in negotiations. It seems to me our social and health programs have made us very competitive economically, because in fact they provide a basis and a framework in the business community that some of our competitors don't have, namely the United States.

I'm wondering if you could comment on that.

Mr. White: Again, I've been out of it for a while, but I don't think the numbers are much different in the auto industry. Lee Iacocca, to take a name everybody knows, used to talk in the United States about the enormous advantage health care provided for the Canadian plants. It provides enormous benefits for labour costs in terms of the delivery of the health care system. I don't think it was by accident that one of the major employers in the United States joined with Clinton on the health care system, because they see their health care costs exploding in the United States in terms of the costs of collective bargaining. They're much more inclined to look at a system like ours.

It's a major competitive advantage for Canadian employers to have a health care system and fund it the way we have been doing it here.

Again, nobody's talking about not changing the health care system or having new innovations. When you look at the costs of privatization - when you look at Blue Cross taking on more costs because of cut-backs - the private side of the costs is going up.

The Chair: Mr. Campbell, please.

Mr. Campbell (St. Paul's): Thank you, Mr. Chairman.

This is an extremely important debate, and I appreciate your presentation this morning. It's also very important that we have clarity. There's been much rhetoric in the debate on both sides, including this morning, sir, in your presentation, with statements that we are wiping out social programs and the like. I want to try to bring some clarity and then ask a couple of questions that follow on from that.

You spoke about CAP guaranteeing shelter. Is that the case under CAP?

Ms Cindy Wiggins (Senior Researcher, Canadian Labour Congress): Under the CAP legislation, the provincial programs must give people who are in need financial support for the basic necessities of life, which are defined at a minimum as food, shelter, clothing and other things people need to maintain their person - laundry soap, etc.

Mr. Campbell: Second, you spoke about the CHST imposing workfare. Did you mean to say that?

Mr. White: I suppose the terminology ``imposing'' is probably.... What it does, we think, is open up the door, certainly, for much more workfare.

Mr. Campbell: Well, terminology is very important here. We're trying to have a debate. We're deeply concerned about these issues.

Mr. White: Well, if you want to debate on that word, if that's the most troublesome thing.... It certainly opens the door wide open for it.

Mr. Campbell: Why would that be, Mr. White?

Mr. White: Because it will do away with the implication, clearly established, that people do not have to work to get social assistance.

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Mr. Campbell: Your concern is -

Mr. White: More provincial control.

Mr. Campbell: - that the provinces would impose a work requirement in order to qualify for welfare. That is your fear.

Mr. White: Yes.

Mr. Campbell: Why is there such a lack of confidence in the provincial level of government to do what is right for the people of those provinces, including NDP governments, for instance?

Mr. White: It's not a lack of confidence. It's a question of where are we going with all of this. It's not a question of lack of confidence. It's a question of what is happening in our society today when we are totally preoccupied with debt and deficits. Regardless of how you're doing this, we're still taking out of the people at the bottom.

Mr. Campbell: Do you expect the provinces to be responsive to the needs of their workers, to the needs of their poor, to the needs of their children?

Mr. White: I'd like there to be more response than I've seen up to now.

Mr. Campbell: You don't have confidence in the provincial governments being able to do this. You look to the federal government to do that.

Mr. White: Let me say this. If we call ourselves a country...we believe in our movement, which is a movement made up of provincial federations...you'll hear from two of them after us that the best way to do that is through national standards, as we've done with medicare, as we've done in the past -

Mr. Campbell: Medicare began as a provincial program.

Mr. White: We did it with national standards. I know how medicare started. I was there. I remember how it started. We established national standards, minimum standards, universality, across the board, province to province. We don't want to Balkanize that, quite frankly. We don't want provinces playing off...as has happened now, where Alberta cuts welfare numbers, welfare amounts, and people move somewhere else to draw welfare. That's not very good for our society. It may help Alberta, but it's not going to help our society in the long term...or the system where we had major payments to Atlantic Canada from some of the richer provinces to make sure we had a semblance of equality. Those would be not be done on a province-by-province basis. They had to be done by a national government.

The Chair: Mr. White, what is the connection of the CLC with the OFL; the Ontario Federation of Labour?

Mr. White: The Ontario Federation of Labour is a charter body of ours. They have autonomy in Ontario.

The Chair: All of us around this table are concerned that cutting programs, programs that have worked.... It is not with a great deal of alacrity that we approach this task. We've always been looking for solutions. One of the solutions proposed by Gordie Wilson before us last week was that we could lower interest rates, we could patriate our foreign debt, and all we had to do to accomplish that was for the Bank of Canada to buy back the $300 billion of Canadian debt that is held by non-residents. Do you believe that's a viable approach to monetary policy?

Mr. White: I haven't seen Mr. Wilson's presentation.

The Chair: I don't say this with a view to driving a wedge. This is not the point. All of us would like to think there are solutions which would preclude us having to make cuts.

Mr. White: The magnitude of the numbers sounds pretty high to me. But let me say this, Mr. Peterson -

The Chair: Or even a portion of it.

Mr. White: - we think the Bank of Canada can play a much greater role in interest rates than it has in the past. I think any person who looks at history will realize a high interest rate policy...and it is still preoccupied with inflation today; still preoccupied with inflation. I think the interest rate and the Bank of Canada...and again, as we said in our brief, we're encouraged with the Prime Minister raising the whole question of international capital at the G-7, because that's part of my role-playing there. I haven't seen Mr. Wilson's numbers of the $300 billion, but certainly -

The Chair: Or even a portion.

Mr. White: - bringing back more foreign debt in our country, moving down from the 20% we allowed for RRSPs outside the country...some of those things are very important and the Bank of Canada has a role to play in that.

The Chair: Thank you very much. Once again before our committee, the CLC and you,Mr. White, have established why you're one of the major, most important voices in the critical national debates that face us right now. We look forward to ongoing participation by you in our deliberations. On behalf of all members, I thank you very much.

Mr. White: Thank you very much.

The Chair: Our next witnesses are the Canadian Association of University Teachers, again no strangers to this committee: Joyce Lorimer, president; Donald Savage, executive director; Robert Léger, government relations officer.

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Thank you very much for being with us. We look forward to your presentation.

You are going to start, Ms Lorimer.

Ms Joyce Lorimer (President, Canadian Association of University Teachers): You introduced us, so I won't take any time on that.

For those of you who are not familiar with CAUT, it was established in 1951 and it represents currently some 32,000 university teachers, academic librarians and researchers across the country. Our members include faculty associations at universities in every province. Our policies and procedures are determined by a representative governing council that meets twice a year, so what I present to you has been through and comes from our representative governing council.

You have our brief and a French translation. You also have an executive summary, which was shown to me this morning and which I saw has some errors in it. I don't have a copy directly in front of me, but on page 1 of the English version sections 4(a), (b) and (c) should have been obliterated. Section 4 should begin with the text that is on the top of the second page of the executive summary.

Sections 4(a), (b) and (c) are for the search-and-destroy mission on the computer. It was not searched and it wasn't destroyed.

The Chair: I move that it stand as it is.

Ms Lorimer: I will be speaking mainly from the text of our fuller brief. For those of you who want to follow my comments, I'll begin probably on page 4 of our brief and, first of all, speak to what CAUT comprehends to be the magnitude of the cuts to the EPF transfers and the impact of Bill C-76 on Canadian universities.

The federal government argues that the cuts to transfers to provinces - including equalization - under Bill C-76 are not great and come to some 4.4% for 1996-97 as compared to 1994-95. This figure, CAUT would argue, is arrived at by some very contestable arithmetic. The government calculates this figure by merging the cash transfer with the tax transfer of 1976. This is done, we feel, to disguise the magnitude of the cash cuts.

In 1994-95, to make clear our understanding of what is happening to those cash transfers, the cash transfers for post-secondary education will be $2.37 billion. They will drop by about $189 million to $2.18 billion in 1995-96, which is a reduction of 8% in just one year.

Let's look now at the effect of Bill C-76 on those cash transfers. Effective 1996-97, the EPF transfers for health, the EPF transfers for post-secondary education and the Canada Assistance Plan will be replaced by a single transfer called a CHST, the Canada Health and Social Transfer. In 1995-96, the sum of cash transfers for those three programs will be $16.3 billion. In 1996-97, the new CHST will amount to $12.83 billion. This amounts to a huge reduction of $3.47 billion, or minus 21.3% compared to the previous year.

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In 1997-98 we estimated the CHST cash transfer again to be about $110.33 billion, a further reduction of $2.53 billion, or minus 19.7%, compared to the preceding year. From 1994-95 to 1997-98, the total cut will be of the order of $6.61 billion, or 39.1%. In other words, each year, starting in 1997-98, there will be $6.61 billion less than in 1994-95.

To remind you of the comments on a previous federal budget made by the former Quebec Minister of Finance, Gérard D. Lévesque, he talked about the federal government ``shovelling its deficit in the yard of the provinces''. This is exactly what is happening here, only on a larger scale.

The second point I would like to speak to is the effect of these cuts on the quality and accessibility of post-secondary education in Canada. Cuts of this magnitude will inevitably have a dramatic effect on higher education in Canada. One cannot make such cuts and assume that nothing significant will happen in the affected sector. One way or another the system will have to reduce accessibility, whether by charging much higher tuition fees or by reducing its intakes, or both.

Already you can see what is happening. Already increasing fees have helped to flatten the demand for university places and to reduce the enrolment of economically vulnerable students significantly. The most economically vulnerable are those who are part-time.

If you look at the enrolment of part-time students, that has declined in the past two years by 6.46% and 5.29%. In 1994-95, about half the universities experienced a decrease in their first-year enrolment. This situation, no doubt, will accelerate already existing trends to such a decline in student numbers in science.

Such large cuts will inevitably have a significant effect on the quality of universities. Higher-education institutions will find it more difficult to maintain existing scientific equipment and to buy new state-of-the-art apparatus. More universities will have to refuse research grants because they do not have the infrastructure to maintain them.

In the United States, there are already indications of the beginning of a trend to eliminate such programs as chemistry and physics. Why? They're too expensive, given the number of students involved. Such departments would then be limited to the teaching of elementary service courses for non-science students.

In addition, as we have already seen the trend in the last 10 years, class sizes will increase again, student contact with academic staff will decrease, in flat contradiction to the Smith report, which stressed the importance of teaching. Most politicians and bureaucrats praise that report. Library collections have been and will continue to decline in quality. Subscriptions to journals, particularly scientific journals, which contain the most up-to-date scientific information, will be cut because subscriptions are very costly.

Post-secondary education has been subject to under-funding for over a decade, so universities and colleges have no resources to offset the abrupt decline of federal support. The consequence, then, is the students of today and tomorrow will get an inferior education.

While it is true funds under the EPF transfer are not tied, no one expects the provincial government will do otherwise than pass on the federal cuts. Furthermore, as the federal government made quite clear in the green paper it issued last fall, virtually all the cuts in transfers are intended to fall on post-secondary education. This position, we feel, is confirmed by the name of the new transfer, the Canada Health and Social Transfer. We feel it's no coincidence that ``education'' is left out of the title. These cuts mean Canadian universities will become less competitive in a world where globalization of knowledge is proceeding at breakneck speed. It is a direct repudiation of the letter and the spirit of the red book.

The position of the CAUT.

First of all, at our annual general meeting held at the end of April, the meeting vigorously condemned the cuts in transfers, not just for post-secondary education but also for medicare and social assistance. The general meeting of council authorized its executive to demand the continuation of an explicit federal presence in the financing of post-secondary education, in line with our established policy positions.

Advocates of the health professions are urging the federal government to designate a specific sum of money for health within the new transfer arrangements.

CAUT supports this. We support it and we consider that there also should be designated funds for post-secondary education and for social assistance. In fact, we think the transfer should be called ``CHEST'', the Canada Health, Education and Social Transfer. We believe only in this way can there be true accountability for the funds.

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We very much doubt Canadian taxpayers will be much interested in defending the right of provinces to use federal funds, funds originally budgeted for post-secondary education, health and social assistance, for roads or for patronage projects.

The annual general meeting also reaffirmed - to make our third point - its earlier policy, namely, that some of the funds previously generated for post-secondary education under the former EPF arrangements should be used to finance specific federal programs in areas such as student aid, research and support of academic libraries.

Attached to the brief is appendix A, which contains the precise wording of the motion that came from council.

In summary, then, CAUT reaffirms our policy that the federal government should maintain an explicit federal presence in the funding of federal post-secondary education. We call on the federal government to designate separately the funds for health, post-secondary education and social assistance within the proposed new transfer arrangements. We reaffirm our policy that EPF funds formerly transferred for post-secondary education should be redirected to finance a cluster of programs, including research, academic libraries and student aid.

In my final comments - and perhaps I speak here more as an historian, which is my own profession when I am not serving as president of this association - I would like to get particularly the Liberal members on this committee to think about the record of Liberal governments since World War II.

Since World War II Liberal governments have ensured that the federal government would be a key player in financing post-secondary education. They believed post-secondary education was not just an expenditure but also an investment, an investment in the future of Canada, and a way of ensuring all Canadians would have access to quality higher education.

They thought universities should have a vision that was not circumscribed by provincial boundaries in, for example, the study of international affairs and international economic systems, or research involving the oceans or polar regions. They recognized that many of the markets for higher-qualified persons were national or international and that local taxpayers and the provinces might baulk at using provincial funding directed to ends that were not completely and obviously bound to provincial objectives.

I must say it is becoming clear in the present day, if one reads carefully the Roblin report in Manitoba, that the provinces - and this is what the report says - should fund university research only of direct interest to the province.

The financial support, then, of the federal government over the years has helped ensure that international and national concerns, as well as local and provincial, can be addressed by post-secondary institutions. In a world where the globalization of knowledge is dramatically speeded up, most industrial nations recognize this and know the importance of higher-education systems. It seems to us now that Canada has begun to march, very curiously, in the opposite direction.

If the cuts to transfers are implemented, CAUT believes - in fact, we would very much echo what Mr. White said before us - that we are not looking at just budgetary measures here; we are also looking at a reconstruction of fundamental social beliefs and social rights established in this country after World War II. The cuts will deprive Canadians of a fundamental individual right upheld and celebrated by successive Liberal governments since World War II, the right that all qualified citizens, regardless of resident social class, should have access to quality post-secondary education.

If, as many of you have argued, the key to the development of sustainable wealth in the 21st century is knowledge, then Canada's universities must be nourished as powerhouses for the creation and dissemination of knowledge. If Canada is to survive as a unique model of compatibility in the face of regional and cultural diversity, then its federal government must not abdicate its responsibility to ensure equitable opportunities for education at its universities for all its qualified citizens.

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I was watching the Prime Minister speaking the other day in reference to VE celebrations. He assured Canada's veterans that the government would not let them down. I would remind members of this panel that whatever right-wing interests and ideologues may now characterize as ``special interest'', the veterans who fought in World War II characterized social rights.

I think we would agree with the CLC that what is under attack here is a series of social rights. Although we in our paper suggest that the committee might want to hold seminars on the implications of Bill C-76, we actually think Mr. White's suggestion for some kind of panel of thinkers or experts to go across the country and debate with the country the implications of these fundamental changes to Canada's social support system should be put in place.

Thank you.

The Chair: Thank you very much, Ms Lorimer.

[Translation]

Mr. Tremblay, please.

Mr. Tremblay: Since it appears that most of these comments are directed at Liberals, I will give them a chance to speak.

The Chairman: Good. Perhaps later we can come back to you if you have any questions.

Mr. Speaker, please.

[English]

Mr. Speaker: Do you think the thrust of your brief fits into the current fiscal circumstances?

Ms Lorimer: Yes; if the context of your question is who can pay for it.

Mr. Speaker: Basically what you're saying is to maintain the status quo. This is what I'm hearing: maintain the status quo. Doing even that means an increase in funding, if you take into consideration inflation, etc. That's the brief you are presenting.

If you're saying you have a priority, you can't be touched - and I've tried to sit down and look at all the functions of government and ask what can I leave alone...education is one that in the minds of Canadians is a high priority for the least amount of reduction. But even doing that...it's difficult not to touch this area somewhat. Do you feel it can be untouched?

Ms Lorimer: I think there are several comments that can be made. You have made the first and the most important of them, and that is the sense of priorities. If the objective is to improve the health of Canada's economy and develop and sustain it, to create a situation of sustainable economic development, then I think you have to understand how that is generated.

I think my first point in answer to your question is that universities play a significant role in generating that wealth. One has to be very careful then to distinguish what kind of investment is necessary to generate economic wealth and what will damage it. That is my first point.

The second point is similar, in terms of cuts. I would like to point out to you that these kinds of cuts are being imposed on a system that has already had a long period of under-funding. It is very difficult then to say to us that we must continue to generate in the light of these new cuts, when we already feel we have been substantially carved and are already operating at the bare bones.

My third point is that I didn't touch on our last point in the brief, which is on who will pay. CAUT has supported the work of Choices, which is an alternative budget, and I would recommend that to you for looking at some of the budgetary alternatives for this government.

We also, last fall, pointed out to the finance committee that some parts of the tax system needed to be closely looked at. We pointed out to the finance committee that the taxes that were forgone by not taxing the winners of lotteries, gambling, and the like, even according to the finance department's own figures, equalled virtually the entire budget of the three federal research councils.

The Chair: How much was that altogether?

Mr. Donald C. Savage (Executive Director, Canadian Association of University Teachers): It was around $800 million.

The Chair: The finance department subsequently reneged on that -

Ms Lormimer: It did.

The Chair: - tax expenditure figure for the taxation of lotteries and gambling.

Mr. Speaker: I see from the brief a distrust of provincial politicians; that they will build roads and highways and patronage projects. That's a lot of suspicion. Do you think the general public will let them get away with that and ignore our quality universities?

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Ms Lorimer: There are two things to say to you. We have a long history of concern with the relationship between federal and provincial funding. Under the present EPF arrangements funding was not legally tied, but it was designated in prospect of 28.3% of the budget for post-secondary education. It was not legally tied, but it was morally, and provincial governments could be morally and politically held to account in this system.

We have histories in the past of provincial governments that have used that money for other projects. We have a very real concern that if the federal government removes itself entirely from this process, then it has no leverage.

We had this discussion before when we talked on the human resources committee. I have never understood the position of a federal government that hands money over to the provinces and makes no effort to designate how it could be spent. I cannot imagine how any business person would adopt a similar attitude, handing it over and saying there are no strings attached; we think you should spend it for this, we think you should spend it for that, but we're not in the least bit interested in ensuring that you do.

The CAUT is in many ways very representative of the nation and it has representatives from all provinces and it has its own provincial associations as constituent members. We have just signed a protocol with the FQPPU. We very much reflect the body of the country and we are sensitive to provincial and federal sensitivities. We understand the constitutional relationships.

We're not saying the federal government should put its money in and manage the education programs in the provinces. What we're saying, however, is there is a distinction between financing and managing. All we're saying is if you're giving it to the provinces, designate it for post-secondary education. It doesn't mean you have to say to the province, these are exactly the programs you should follow, but it does say spend it on post-secondary education.

The Chair: Mr. Tremblay.

[Translation]

Mr. Tremblay: In that respect, I can tell you that we do not share your opinion at all. The explanation is very simple. We are talking here about taxpayer money, not federal government money. So, the comparison with private enterprise... I can give my own money to whomever I wish, but taxpayer money is money that has come from taxpayers and this is a decision that should be made here or directly by the provinces. If we get to that stage, it is precisely because we have spent too much money elsewhere.

The Chairman: On the other hand, to add something, equalization is not -

[English]

Ms Lorimer: I'm sorry, I missed something.

[Translation]

The Chairman: Equalization is not controlled, but it is given to the provinces. But -

[English]

Mr. Walker: There are a number of points I'd like to explore. We have said to other witnesses, this is an issue we're all very sensitive to, because we're going on a new track and we want to be careful we're doing the right thing. It seems to me one has to be very, very careful not to romanticize current conditions.

Ms Lorimer: CAUT is going to be guilty of that.

Mr. Walker: No, I've been hearing that from CAUT since I became a member of Parliament, and of course I was a member of your association for 15 years before that.

The Chair: Did they drive you out of it, Mr. Walker?

Mr. Walker: They have a well-known coalition to drive me out of it. I can tell you, as a member of CAUT -

The Chair: It's just gone up incredibly in my estimation.

Mr. Walker: If I thought the CAUT membership was fully endorsing Choices, I'd be stunned beyond belief. If I thought for one second the Manitoba universities endorsed it as you just said...I cannot comprehend that was said in the permanent record. It's beyond belief that a group like that...which I happen to know, because the person whose office was right beside me for 12 years ran it. To give it the national credibility you're doing, with the corners they cut in their presentation, is just beyond belief.

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Second, you talk about looking at tax concessions. The chair has already alluded to the reality of lotteries and gambling, which are a provincial jurisdiction from which, indirectly, we already receive about $95 million. We are loathe to become more involved because there are some of us who feel very strongly the last thing you want to do, after supporting charities, sports and health off gambling, is to add education to that list. I am surprised the membership throughout the country would feel that way.

Third, when you relate your new name and describe it as ``CHEST'', if you would like to have on the record that this has been endorsed by the provincial associations throughout the country and that there's a strong willingness in all 10 provinces to have the federal government specifically mention the word ``education'' - not just ``post-secondary education but education'' - as one of the ways we directly designate money....

Mr. Savage: On the matter of Choices, if you read the last page of our brief you will see that we recommend something similar, but perhaps a little less grand than what Mr. White told you, namely a series of seminars to examine such proposals as that of Choices and the Centre for Policy Alternatives. In other words, we have given some support to the process. Our council has not endorsed the results in one way or another, but we think those results should be examined in the way either we suggested, or the way Mr. White suggested, which was the first time we had heard about it, this morning.

On the matter of lotteries, we did discuss that before. It has been suggested to us that the amount of money the provinces pay to the federal government might in fact disappear as a consequence of this. But the finance department's own report indicates the net gain in terms of taxation is enormously greater even if those provincial payments cease. That has been a part of our briefs which has been endorsed -

The Chair: The report of which finance committee?

Mr. Savage: The report of the finance department.

The Chair: Oh, sorry.

Mr. Savage: That was part of our brief last fall. All of these have been endorsed by our organization and I don't think there's been any argument or disagreement about that approach; not that I'm aware of, at any rate.

Ms Lorimer: The third point, on whether the provincial associations endorsed it...in fact, the motion that is an appendix to our report was created after a caucus with all provincial representative associations at CAUT over a week ago.

Mr. Savage: The Quebec representatives felt quite comfortable with having us designate education under a national transfer program.

Ms Lorimer: As I told you at the beginning, we just signed a protocol last week with the FQPPU. Its representative was at our council. It is united with us in the concept of under-funding. It has starkly taken the view that if federal money is being generated for PSE or research, Quebec should have its share. We have four direct Quebec members on our council. Because we have just signed the protocol, we have not had a chance to have a lengthy discussion with them on it.

Mr. Walker: In other words, they haven't responded on the name?

Ms Lorimer: No.

Mr. Savage: No.

The Chair: Mr. Fewchuk.

Mr. Fewchuk (Selkirk - Red River): As a former young municipal official in the 1970s... and getting into Ottawa, I sit back and think of the early 1970s, and nothing has changed here. It basically ends up as a problem that starts at the local level with the teachers and the boards and the province not supporting it. It never was a federal thing when I was at the local level. We knew the money was coming. It was a problem with the provinces. I sit here and think of all this paperwork and I think I have tonnes of it.

The other thing that surprises me is at the local level we don't see groups like you three people here at the municipalities threshing out your point. The municipalities are very frustrated. All we get is the bill and let's pay through the mill rate; then we turn around and the province sends the taxpayer another bill for education, and the federal.

There's no limit to it.

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I think the federal government is not solely to blame for this. I think 90% of it should be going right back to the province - they have to be responsible - and that's recognized at the local level.

Mr. Savage: We've always recognized that since World War II there has been a shared responsibility between the provinces and Ottawa in terms of financing post-secondary education.

About local government, of course post-secondary education doesn't come under the school board spending and the kind of revenue that's raised in local school taxes, but I think it's fair to say that across the country universities and local municipalities have in fact cooperated more, talked to each other more, and promoted each other more than ever before in the last decade.

Municipalities know that universities are key to their economic livelihood. If the universities disappear, then they are in really serious municipal trouble locally. I think most municipal politicians maybe 20 years ago or 25 years ago, when money was relatively available, didn't have to think about that, but now they do. You see coordinated campaigns that involve the mayors and councils of cities and towns across this country in support of their local universities for that very reason.

Mr. Fewchuk: I'm not saying I don't support it. I'm just saying it's the same old question again. Nobody is concerned. Here are a lot of problems that start with the organization and the local people who are doing it. The cabinet ministers can't tell the teachers what to do, it's at the local school boards - and this is where the problem lies. I don't hear anybody saying they're trying to go there to correct the situation.

We all know that we're paying 60% to 80% of the municipal budget as school board cost and it's going up. Nobody seems to be asking why we're not starting at the local level, asking if we can do some help there, maybe recognizing with the teachers' associations and the unions...to work together, to ask if we can get a better education and what system we want, to the direction of the province. The provinces are the ones policing this.

Mr. Savage: We have never hesitated to put our views as strongly to provincial governments of any political stripe about their responsibilities, if not more strongly.

The Chair: Mrs. Brushett.

Mrs. Brushett: In the east there are probably more universities per capita than anywhere in this country, perhaps even in the world. However, you've left us this paper with the fact that chemistry departments, physics departments, the sciences, are disappearing.

I guess I take exception with that, because we've given the challenge to the many universities in the east to ``get your own house in order''. You can't all be doing chemistry, you can't all be doing physics. You have to excel. You together know what you can do best, so one will excel, so we can afford the most modern and up-to-date equipment. You can't all have it. The same goes for hospitals. Everybody can't be doing the MRIs and brain surgery. You have to gather the expertise in areas so we are not duplicating and having redundancy.

The second point on that is the books, the stacks. Today we have Internet. I'm still a university student myself, part time, and my children are. They're on Internet more than they're in the library. The book is out and they have only three days and they can't get it back, so they're using other sources. Don't you believe that's the appropriate step that we at the provincial level can take to get better value for that dollar?

Ms Lorimer: I'm trying to keep track of your points.

Mrs. Brushett: Oh, I'll stop.

Ms Lorimer: First of all, I think if you look at the universities, even before government asked them to, they'd already begun the process of rationalization. In Ontario, for example, my own institution, which I don't very often talk about, Wilfrid Laurier University, works in the close triangle with the University of Guelph and the University of Waterloo. We now have a tri-university PhD program in history, we have a tri-university PhD program in geography, and we have tri-university MA programs. Why? Because that way we don't bring in new faculty. We extend our resources by working together.

When I first came to those institutions 10 years ago, we never met faculty, even when they lived 10 minutes down the road.

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I think the universities are doing that.

Mrs. Brushett: Great.

Ms Lorimer: There are some spectacular places where these things are happening, as it is right now in Nova Scotia, maybe in a more spectacular way.

CAUT has never taken a position that that process should not occur. It has taken the position that when it occurs it should occur properly, judiciously, and carefully -

Mrs. Brushett: Don't you believe it is?

Ms Lorimer: - not by being reactive, but by cooperation and understanding from the institutions themselves, who best know where their strengths and their weaknesses are.

Mrs. Brushett: Absolutely.

Ms Lorimer: It's true that technology is changing the approaches to libraries. But technology costs money.

We talked to Dr. Gerrard just after Christmas. He had this wonderful vision, which we all share, of a unified library system in which if you want to get a book or an article from another library, it will come over the Internet and appear in a Xerox machine in your library. That is wonderful, but it cannot be done for free. Universities need the infrastructures to produce.

Rationalization costs money. It doesn't just save money, it costs money.

Mrs. Brushett: But the point is I think they're very capable at the provincial level of making those decisions that affect them more closely.

A voice: Hear, hear!

Mr. Savage: There's also another aspect. In undergraduate education, which is the area which most students are involved in with universities, in point of fact if a university's going to be a university, it has to offer a full range of the undergraduate curriculum. You cannot say we will stop doing physics or we'll stop doing chemistry or we'll stop doing history.

Mrs. Brushett: We may have to rethink that. I would almost have to challenge that.

Mr. Savage: I don't think so. I would profoundly disagree with you.

It seems to me it is really important. Almost everybody who talks about post-secondary education underlines this: how important it is the undergraduate education should in fact be a broad challenge, where in fact students have the opportunity to go in the particular directions the situation takes them. If one narrows down the undergraduate curriculum, you are doing a grave disservice to Canadian students.

Mrs. Brushett: But this comes to the point. We've deleted Latin from our curriculum...for some of these things, and I believe we have to move on in this 21st century.

Mr. Savage: Move on from chemistry and physics and mathematics?

Mrs. Brushett: But you're saying we have to be all things to all people. I think that's where the challenge comes in.

Mr. Fewchuk: It all starts in kindergarten. I don't hear one saying that. All they talk about is university.

The Chair: Thank you very much, Mrs. Brushett.

Does CAUT support income-contingent repayment loans for students? Yes or no.

Ms Lorimer: The answer is no. Do you want me to speak on that?

The Chair: I don't want you to speak on it. I just asked a very simple question.

One of the very interesting issues we face is that AUCC, which was before us this morning, supports them very strongly. This is why, when the academic community is torn apart, we find it very difficult to come to definite conclusions on government policy.

We're in an era of change; dramatic change. None of us, probably, are very adept at it or welcome the fact that we have to be the authors of this. In helping us make these very difficult decisions, we appreciate very much the presentation you've made to us this morning. I want to thank you on behalf of each member here.

Our next witness is the New Brunswick Federation of Labour, Mr. John McEwen, president, back by popular demand.

The last time we saw you, Mr. McEwen, was in Moncton. You were talking to us about your fund, which was creating all sorts of jobs.

Mr. John McEwen (President, New Brunswick Federation of Labour): It's rather unfortunate we're not meeting in Moncton again. I would be the first one to encourage, as directly as possible, an opportunity for other people outside of the capital to have an opportunity to participate in the important dialogue that is going to be happening surrounding this issue. We believe it's one that cannot be over-emphasized. The opportunity has to be there.

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As you know, the presentation we made in Moncton was well reported in the papers so people had a sense of ownership, a sense of participation that this time around, unfortunately, we're not going to have. We're not going to have that same sense of participation unless we somehow are able to convince the committee and yourself of the importance of going to other parts of Canada.

The other opportunity we see if you travel to other parts of Canada - for example, New Brunswick - is an opportunity for more of the members of Parliament in the Atlantic region to sit with the committee and also hear some of the presentations. As it stands now, the committee - this is from the documents I have - has on it only one presence from Atlantic Canada. Far too often Parliament in Ottawa tends to focus the thinking of the members of Parliament. They seem to focus on central Canada, especially Ontario. We think there are other regions of the country that have a lot to offer.

The Chair: Minister Dingwall would disagree with you in the strongest of terms.

Mr. McEwen: He doesn't want Atlantic Canadians to -

The Chair: No, he would disagree with your view that Atlantic Canada has not been strongly represented, strongly supported, strongly favoured, within our party and our government.

Mr. Tremblay: Maybe Doug Young too.

The Chair: And Doug Young too.

Mr. McEwen: Well, we live in the land of Canaan; only the tough survive down there. When we send representation to Parliament we send the best. They certainly can hold their own.

The Chair: Thank you very much, Mr. McEwen. We think the New Brunswick Federation of Labour probably sent the best, too.

Mr. McEwen: Thank you very much.

We put together a brief. To our mind, a brief should be brief. As you can see, it's rather brief, but there's a lot of meat to it.

At the outset, as New Brunswick's chief labour body, the New Brunswick Federation of Labour is really pleased with the opportunity to present our views to this very important committee looking at the matters relevant to Bill C-76.

Our 38,000 members of the New Brunswick Federation of Labour are drawn from both public- and private-sector unions. Our members live and work in all economic regions of New Brunswick.

Like other provincial and territorial federations of labour, we are affiliated with the Canadian Labour Congress and support the views of that body on Bill C-76. We therefore intend to present today the viewpoint from New Brunswick. We hope it's more Main Street and more at the community level than what a national body has the opportunity to present.

The loss of 45,000 public-sector jobs and accompanying cuts to public programs are unprecedented in this country, and the disastrous human toll inflicted by these cuts is beyond description. In our small province of New Brunswick approximately 1,000 men and women will lose their jobs. In some cases both spouses will lose federal government employment. While the numbers themselves are staggering enough, when you attempt to put a human face behind those numbers and relate to them as a neighbour, brother, sister or friend, coupled with the high level of unemployment in our area, the end effect is mind-boggling.

There are other factors that cannot be weighed. One of those factors is that the civil service of this country is by far one of the best-educated and best-equipped in terms of individuals. When they go to their churches and community organizations they bring with them a vast amount of expertise that helps build, that helps the community or organization grow. Not only is there the loss of the job by the individual, but I suggest also the whole community loses in a fashion that is difficult to weigh but nevertheless has a very dramatic impact on those communities.

In some cases the exact programs have not yet been determined. However, if one looks at the percentage allocated to New Brunswick for program funding in relation to the rest of Canada and assumes the percentage of total dollars cut will be in the same ratio, then it is safe to assume New Brunswick will lose 20% to 25% of its current program funding.

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The labour movement has been unfairly singled out in the cuts for education programs. We will let the Canadian Labour Congress deal mostly with addressing those cuts. However, as president of one of the Atlantic federations of labour, I must speak out strongly on the drastic cuts to the Atlantic region labour education program.

In its proud history the Atlantic program, which is the leadership development program administered by the extension department of St. Francis Xavier University, has seen thousands of trade unions require the necessary skills not only to play a leadership role in the labour movement, but more importantly, to participate in the economic development of Atlantic Canada in a meaningful way. For the current operating year, the federal grant to ARLIC has been cut by two-thirds, and in 1996-97 the grant will be reduced by 85% of the total operating budget and to zero in subsequent years. I cannot begin to impress on the committee how much this program means to the labour movement of Atlantic Canada.

As an ARLIC graduate myself, I cannot sit idly by and let this meaningful opportunity to assist in the development of Atlantic Canada be lost to other trade unions. For your information, this is not labour education as the bulk of the grant that goes to the Canadian Labour Congress is. It's education, skill ehancement for labour leaders. There is a marked difference in it.

In our view, one of the most disturbing things about the budget is the replacement of the Established Programs Financing and Canadian Assistance Plan by block funding known as the Canada Health and Social Transfer. This change will reduce the moneys currently transferred to provincial governments for health care, post-secondary education and social services over the next three years alone by some $7 billion.

Under the CHST, governments will be free to pursue innovation in their social programs with few conditions. Goodness knows, New Brunswick has already seen enough innovation and its accompanying no-result hoopla to last it a lifetime. The cuts, coupled with the ability of the provinces to use the money in whatever area they wish, instead of having amounts designated for specific areas, will effectively mean the end of national programs and standards in these crucial areas.

In earlier discussions the block funding concept was referred to as a ``single drawer'' and was quickly linked by those of us who care about our national programs as typical of the junk drawer that every household has. You've changed the name from ``single drawer'' to block funding, but the concept is still the same - the junk drawer concept, whereby nothing really belongs anywhere and it is not of much use to anyone.

The Chair: Did you make up that term? That's pretty good.

Mr. McEwen: It's one that has been used on myself. I tend to borrow. Silence is sometimes mistaken for wisdom. If you can plagiarize, you can borrow greatness from others quite easily.

The Chair: I will plagiarize and I will be silent and perhaps I will be perceived as being extremely intelligent.

Mr. McEwen: As an example, recently, at least in Atlantic Canada, a lot of media attention in Nova Scotia was directed to the funding that was provided to complete the Trans-Canada Highway through the Wentworth Valley. The money was taken and put over in Cape Breton and now they're going to build a road that should have been the Trans-Canada, funded by the Government of Canada. The money was there, but the money is now over in Cape Breton doing something else. They're now going to build a road and they're going to put tolls on it and the business community is quite disturbed about it.

Trusting the provincial politicians to do the right thing often leads to results that a lot of people are confused about, to say the least.

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New Brunswick already has the lowest rate of social assistance in the country. A couple with two children on social assistance in New Brunswick has to try to survive on an income that is almost $14,000 below our standard of poverty level. Can you imagine what will happen to that couple and the rest of our social assistance recipients when total transfer funds are not only reduced but can be spent in any given area?

Under the CHST, the only condition to funding is that the period of residency cannot determine eligibility for social assistance. All other conditions under CAP have been dropped. I shudder to think of the consequences.

As another example, we only have to look at what happened when the deal was made with the provincial governments on the CPP. CPP isn't a shining example of provincial ability to deal at the national level with national taxes, which actually come out of our pockets.

Under CHST, therefore, there are absolutely no criteria in place for post-secondary education funding. The changes to a block-funding formula, accompanied by no restrictions, will surely see funding for education redirected elsewhere, resulting in higher tuition fees, leaving access to a university education available to the economically privileged few and education, the great emancipator, denied to most ordinary Canadians.

Bill C-76 would amend the Health Contributions Act in a number of ways. It would reinforce the existing medicare principles and add two new ones in relation to extra billing and user charges, although the legislation is not clear on how these new principles will be applied. It could be assumed these provisions will be enough to ensure that medicare and its principles as laid out in the Canada Health Act are preserved; and perhaps so. But when one recognizes that not only will the amount of the block funding be reduced but at the same time the federal cash portion will gradually be replaced totally by tax points, you have to wonder who the losers will be.

In the community I come from, we've recently lost two doctors. The third one is in the process of leaving; my own doctor. We have a system where only so many licences are in each region, so the patients from two doctors are scrambling, trying to get into the existing doctors' offices or on their lists; and now there's a third doctor. It is really difficult, especially, for example, when one doctor in the community holds a licence but doesn't do very much practice and he is in retirement.

New Brunswick health care costs have already been cut to the bone, with some hospital corporations almost totally closing down for a period in the summer to balance their budgets. It is not unusual in New Brunswick for a floor to be closed for budgetary reasons. Others have a backlog for elective surgery that would take three years to clear up if they dedicated one operating room solely to dealing with the backlog.

Further cuts will only worsen an already unacceptable situation. One does not have to be a mathematical genius to realize that cash-strapped provinces will likely be forced to rob other social programs to adhere to the principles of medicare.

One has to be very careful when one makes changes. Recently there was some news surrounding the effects of having the helmet laws for bicycle drivers enacted in many provinces in Canada. I don't know if somebody was trying to create some black humour, but apparently because of the helmets there are fewer organ donors, because people tend not to become brain dead, but there are more paraplegics and quadriplegics. I am sure it's accurate, but it's almost black humour. Sometimes we've made a change that we think will correct some problems in one area and it has an effect on the system.

The New Brunswick Federation of Labour finds the concerted attacks on the public-sector workers, public programs and social programs contained in Bill C-76 unacceptable. Instead of tackling the real problem in Canada, which is the lack of jobs, the government has chosen a slash-and-burn approach.

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The Liberal government has totally forgotten that it was elected on the promises in its red book, one of which was the creation of jobs. An investment in jobs is an investment in the future of Canada. These do not have to be mega-projects. They can start out in a small way.

A good example of this is the investment in developing an aquaculture industry in New Brunswick. In just a few short years this industry has grown to $140 million annually. In addition to this, promising research is taking place that would expand the industry to other species, a very important development at a time when the natural fish stocks are being depleted in many species.

The New Brunswick Federation of Labour welcomes the opportunity to travel to Ottawa and appear before the committee. However, once again we urge the committee to do the honourable thing and travel across Canada to allow the greatest number of Canadians to be heard. It is not only inconceivable but irresponsible that this complex and wide-ranging legislation, which cries out for broad debate, will instead get minimal consultation with the few who have been invited to Ottawa.

The Chair: Is that the end of your report, Mr. McEwen?

Mr. McEwen: I just note that on April 29 The Financial Post had an article by John Meyer. He talks about the focus on quality of jobs, not just the quantity. He articulates in a brilliant way the need to develop a strategy that is not based on low-wage-earners in our economy. I'm sure if the committee wants to explore that, they will easily be able to get hold of that article.

The Chair: What date was that?

Mr. McEwen: April 29, and the article is by John Meyer.

The Chair: Yes, we know him. I'll make sure that article gets distributed to all members of the committee.

Thank you, Mr. McEwen.

Mr. Speaker, would you like to start off, please?

Mr. Speaker: Mr. McEwen, I'm sorry I wasn't at the New Brunswick hearings. My part of the committee was travelling in the west.

Your brief, in terms of overall theme, is similar to the other briefs we've received this morning, in that you want a national presence in terms of legislation, and also funding with strings attached.

One of the reasons I came to Parliament was the fact that for years, as an Albertan and a provincial politician, I always felt we didn't have enough autonomy as a province, we couldn't control our own destiny in policy and budget, and there was this continual intervention by the federal government that took away from what we saw as provincial priorities. So I came to Ottawa on a slogan saying ``The west wants in''. I hear the people in the maritimes saying the same thing. They reflected that a couple of years ago and said ``Look, it isn't only the west. We want the east in Ottawa as well, being part of the decision-making process''.

What you've said in your brief flies in the face of that. It also says to me you have this innate trust in Ottawa and the federal system, more than you do in your local government. You can peer across the street and see your premier eye to eye. The federal government is somewhat faceless once in a while. Yet you have greater trust in this larger system than you have in your local system.

You echo to me a great mistrust of your local, provincial politician, who can deal with these matters as adequately as and maybe more efficiently than the federal politician in the system. I'd really like you to tell me why you feel that way so I can understand you better.

Mr. McEwen: We believe there have to be national standards. For example, there's apprenticeship. You want people with a certain known quality about their work, which apprenticeship programs give you. If you have individual provinces that determine their own style of apprenticeship, someone in Alberta won't know what they're getting if they hire somebody from New Brunswick.

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But under the existing national standards approach, whether it's in British Columbia or Newfoundland, somebody hiring an electrician or a plumber really understands what they're getting, the quality of the work that's there.

What's going to happen in New Brunswick when they help fund the Trans-Canada through New Brunswick? We will rebuild the highway that goes through the second-longest route possible in New Brunswick. That doesn't make a whole lot of sense if you're establishing an industry in the easternmost part of the province or Nova Scotia and you want to get your products to market as quickly as possible. But the provincial politicians are being pushed and shoved by local politicians who will not allow them to make the right decision, and they're forced to make the popular decision.

[Inaudible - Transeditor]

...about the road in Nova Scotia that the federal government was prepared to fund and for which it provided the funds, provincial politicians did the right thing legally. They ended up putting it in Cape Breton. Lord knows, Cape Breton needs help with roads too. But they've taken the money away from there and they're not going to be building the Trans-Canada through there.

I think we have to look at our history. The people in the community I come from made decisions on the type of schooling they needed and the type of hospitals. We build our own schools and we build our own hospitals.

Then a number of years ago we said, well, gee, government, you can do better. We turned it over to them, because we had provincial standards in education and higher standards in health care. In the process of turning it over, we also turned over to them that ability to be involved in the decision-making process. Now all the decisions are being made by people who aren't from the front street, from the community level. I think there's a cry throughout the land for opportunities for people to become reinvolved in that process so they can help determine what types of hospitals we need and what types of education and services we need.

But it should be framed in a national framework so that we as Canadians can go out into the world. In New Brunswick we're one of the highest exporters of all the provinces, on a per capita basis. We have to have a national standard, so when our province goes out into the international marketplace, as we've done for the last 500 years, we want to be able to assure our customers that they're buying with a certain standard. In the electrical field, there's a standard that's stamped on every refrigerator, every hot plate, that goes out of the country.

We need those national standards. It's an economic plus. But that doesn't mean we should be turning over to people at any level of government the full authority to make economic decisions for the people at the community level or at the provincial and national levels. If that were the right way to go, maybe we wouldn't be in the mess we're in.

Mr. Speaker: You could see some change in the current mix of federal, provincial and local autonomy that would be more efficient. There are things we can do better.

About national standards, you're talking about a framework, you're not talking about physical intervention by the federal government as much as may have taken place in the past.

Mr. McEwen: Well, if you're going to be setting a framework, you have to have a policeman; not at every corner, but you have to have someone there who's going to make sure the standard you set is in force. I don't know if very many of us in Canada are prepared to shift authority to provincial and municipal levels, to the politicians at that level, and leave it in the same fashion we have experienced at the national level in the last 30 years.

If we give people the opportunity to get involved, as they do now in setting apprenticeship standards, say, for electricians.... People right from the committees at the provincial level work together to determine provincial standards. It then goes to an apprenticeship board. Then the board sits down with other apprenticeship boards across Canada and they develop a national standard called the Red Seal program, where anybody can go anywhere in Canada and practise their trade as electrician.

We have to be able to have people involved in the process, regardless of the level, and be able to influence it so that it reflects the needs of the people in Canada.

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Mr. Speaker: Could CAP, the Canada Assistance Program, be run in those circumstances?

Mr. McEwen: The intent was that it would be, but so much power has been devolved down to the provincial governments at this point. In New Brunswick, for example, we're on the leading edge of developing workfare.

We're right there, we're ready to go. It wouldn't take much for us to move that extra step. We're very, very close.

If we devolve the power down to the provincial level, they will institute that; there's no question in my mind.

The Chair: Thanks, Mr. Speaker.

Now we turn to someone who does have an interest in national standards as they apply to federal-provincial transfers for road-building, Dianne Brushett.

Some hon. members: Oh, oh!

Mrs. Brushett: Thank you, Mr. Chairman. I think Mr. McEwan said enough on that this morning.

I welcome you here from the Atlantic. It's good to have you and the opportunity to hear your views on behalf of the labour movement.

I want to tell you as well that I have been meeting with labour groups throughout Cumberland - Colchester in Nova Scotia to hear their views. The committee is not travelling, but I've made myself available to hear any of them.

If it's important enough to you for me to come over to New Brunswick, I'm prepared to be very open and cooperative in that way.

I really wanted to make one comment here about the ARLEC in the Atlantic Region. When you spoke about that you mentioned that it really isn't an education per se, but is really a skills-enhancement process you use in the Atlantic region.

If ARLEC's funding is cut - we have to make cuts somewhere, as you're well aware, and some things will be cut - if this one is heading downward, then could we not fund the skills-enhancement process for labourers through the UI offices or through those educational programs so we have upgraded to a level that is acceptable?

Mr. McEwen: There are many possibilities. Because of the way it was treated, the system that exists right now was mislabelled. It was lumped together with a lot of other programs the federal government was providing.

The ARLEC was created because in the old days of DREE people said, look, our people have to be able to compete on the national level. This is in labour. They asked, how do we do this?

We have to give people some of those skills in economics, community involvement, not only for labour but for business at the same time. In this way we become stronger economically.

In economic development strategy it developed that people bought into it and said, let's give it a try. So there was a brief period of time where they had a close look at it and now it is accepted as helping Atlantic Canadians develop the economy of the region by participating in many ways at the community level.

In New Brunswick, for example, after a period of time we've now come to the point where we're setting up a workers' investment fund. We have one or two people - and that's out of 40,000 people - who don't agree with that approach. They figure we're getting in bed with the capitalists. But at the same time we know that because of the experience they had with the socio-economic picture of the Atlantic region our people are telling us we know we can't afford any more to sit around and wait for help from the federal level. It's just not going to come.

We're prepared to be participants and be part of the.... You know, we'll rise again out of our ashes as the phoenix bird did. The Atlantic region was one of the most prosperous areas in the world.

Mrs. Brushett: Indeed.

Mr. McEwen: We were the fourth-best economy, had the fourth-largest marine fleet; and we lost it. Now, that was a hundred and some years ago.

Some central Canadians came down and joined us in Atlantic Canada. We being nice people said, look, we have a plan. The result was we created a larger country.

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Like the phoenix, the land of Canada will rise again, and we want to participate in that resurrection. That's one of the tools we're using.

Mrs. Brushett: Yes, I know the value of it.

Through community economic development and other areas, I guess I'm offering that there may be opportunities to enhance those skills in communication, in community opportunities and whatever else might be needed. The opportunity might be there.

Mr. McEwen: Somebody told me one time a poor man can't afford a second-hand car. What we have to do is make sure we have the proper vehicle for it.

We believe we have the vehicle now. It's called ARLEC. It's structured in such a way that they bring people in from the four Atlantic provinces to sit down together and look at things collectively as presented to them, say, by economists and those sorts of people.

If anyone on this committee sat in on an ARLEC course, he or she wouldn't realize there were labour leaders there, because we're not talking about labour. We're talking about enhancing the skills of labour leaders.

If people look closely at the program, the administrative costs are around 6%, which is incredible.

Mrs. Brushett: Thank you very much.

Mr. McEwen: Thank you for the opportunity.

The Chair: Thanks, Ms Brushett.

Could I just ask you how your labour-sponsored venture capital fund is going? Have you been able to create many jobs yet?

Mr. McEwen: We've now been through the provincial process, which took a fair amount of time, and we're doing the federal one in parallel. We were looking for a repayable loan - and have no doubt about it, a repayable loan - or an equity investment, which would be returned after a number of years, of $3 million from the provincial and federal governments. We were doing them in parallel, but the provincial one was on a faster track because we had to get them on side first. At the end of February we made an agreement with the provincial government that it would provide us $3 million to assist in the start-up of that fund.

I think New Brunswickers have a certain reputation across this country. They're not push-overs. The government's not full of wimps. They sat down and went through the process with us and bought into it. If Frank McKenna is prepared to support, to the tune of $3 million, a province that is being quite careful about its finances, I think it bodes well for the foundation of the concept.

I briefly talked to Doug Young this morning; he's a senior cabinet minister. We're moving the process. It's pretty close federally and we're hoping we're going to be in business by this fall. We're quite excited about it.

The Chair: Mr. McEwen, all of us remember very well your presentation before us on our pre-budget consultations in Moncton last year. That's why we're very grateful to you for keeping this relationship alive. We look forward to seeing you when we do visit your province in the pre-budget consultations next fall.

May I also reiterate what Ms Brushett said. All of our members of Parliament from all parties - all 295 from right across Canada - are available for consultation on a local basis on these very important issues.

On behalf of all members, may I thank you again for another excellent presentation to our committee.

Mr. McEwen: Thank you very much for the opportunity.

You are right; there has been a sea-change in I'd say the last election or two, because the members of Parliament certainly are more amenable to consultation.

Once again, I appreciate the opportunity to be here. Thank you very much for those kind words.

The Chair: It was good to have you.

We adjourn until 3:30 this afternoon. Thank you.