FINA Committee Meeting

STANDING COMMITTEE ON FINANCE

COMITÉ PERMANENT DES FINANCES

EVIDENCE

[Recorded by Electronic Apparatus]

Thursday, October 16, 1997

• 1538

[English]

The Vice-Chair (Ms. Paddy Torsney (Burlington, Lib.)): I'll call this meeting to order and I will welcome our guests.

Ms. Cancino, Ms. Richard and Ms. Sekhar are here from the Council on the Status of Women.

Mr. Belliveau, I believe you're here from the Roadbuilders and Heavy Construction Association of Saskatchewan. Welcome.

And Mr. McLachlan, you are also with the same organization? Terrific.

Mr. Ottenbreit, you are here as a private citizen.

And Mr. Reichert, you are here representing the Regina Food Bank. Thank you.

I will start with you, Ms. Sekhar, if that is okay. Again, five minutes or less if possible. Thank you.

Ms. Kripa Sekhar (Executive Committee Coordinator, Saskatchewan Action Committee on the Status of Women): Do you want me to go through all this in five minutes?

The Vice-Chair (Ms. Paddy Torsney): You don't have to. We all have the document in front of us, so you're more than welcome to top-line your comments and we'll fill in the gaps.

Ms. Kripa Sekhar: Okay. I'm here to represent the Saskatchewan Action Committee on the Status of Women, which is the largest grassroots provincial feminist organization, representing 66 member groups and many more individuals across the province.

This year we have been very busy. We have focused on a number of issues arising out of the inequities that women have faced, whether it's the issue of prostitution, violence against women, the number of women who were murdered in the province last year, major concerns around sexual and racial discrimination, or poverty. These have been our areas of focus this year. We have particularly worked with aboriginal people and young women in the universities.

• 1540

There is no doubt that the Saskatchewan Action Committee, along with other women's organizations, does invaluable work for the community of Saskatchewan. SAC, like so many non-government organizations, is the conscience of our society, reflecting our many needs and identifying priorities based on issues of social justice.

September 1997 marked the second anniversary of the fourth World Conference on Women, held in Beijing, and 183 member states, including Canada, announced to the world their determined commitment to advance the goals of equality, development and peace for women.

The Canadian government has recognized the increasing poverty of women and children and has reaffirmed its commitment to the equality rights of women as human rights, as reflected in the charter and the Convention on the Elimination of All Forms of Discrimination Against Women, as well as the Declaration on Violence Against Women and the Declaration on the Right to Development.

Despite all of this, approximately 70% of women and children are still poor or living in poverty.

I will go quickly to the three areas you talked about; you can read the rest of it.

The first is debt reduction. While we do believe debt reduction is an issue of concern, it seems to me it can no longer be a priority, considering that the deficit has been reduced at a jet-set speed, creating hardship and agony for many. Canadians, particularly women of all ages and backgrounds, have faced those hardships. Now that there seems to be an environment to move forward, we should improve the lives of Canadians by focusing on social spending and putting back money where it really belongs.

Next is spending increases. In 1973 the Women's Program was created to provide support for women's organizations to promote the status of women in Canada. We came out of the Royal Commission on the Status of Women. However, the recent changes in program funding are going to affect us greatly, and most of the marginalized women in Saskatchewan will not have a voice because of those changes, which will impact on our funding criteria directly.

In terms of tax relief, we support the principles of fair taxation, because we believe tax structures should be equitable. Those who profit by the system should return some of those profits to the system. However, tax dollars rarely get reinvested in the communities. We support the view that there should be community reinvestment initiatives such as job creation and support measures for small business growth generated through these funds.

What I'm saying is that the money going back to the government sometimes doesn't get back to the people. Banks need to reinvest in the community through job creation initiatives, which has not happened.

Corporations, financial institutions and banks are making huge profits and should pay their fair share. The belief that putting tax dollars into one's pockets would somehow induce a shopping spree is a myth, because in these new capitalist days, the poor hardly see those tax dollars.

In terms of recommendations, we demand that women's program funding administered through Status of Women Canada be doubled to $16.2 million. This represents approximately a loonie per girl or woman in Canada. At present Canada spends about 50¢ per woman or girl in Canada. When you consider that Canadians are spending $9 billion in defence in 1997, it is a shame that women's organizations get so poorly funded, women's organizations that are promoting equality rights for women. Also, if there's money to buy helicopters, then women deserve better.

We want the universality of pensions to be maintained. We support the CPP as a publicly controlled, pay-as-you-can, employment-based and fully portable social insurance program. The present plan works for women because it adjusts to the life patterns of women in the labour force, including part-time and self-employed women.

We also recommend that there be no changes to the CPP, OAS or GIS until there has been a grassroots feminist analysis. The reason touted for these changes is the unfounded notion that funding is in serious financial crisis. This has been challenged by renowned Canadian economists such as Monica Townson.

The most recent announcement about the Millennium Fund will not address the needs of poor women students and single parent mothers who need access to post-secondary education now. The federal government must provide access to education at all levels through grants now, and not wait until later. The inequities between men's and women's access to education and employment will be even greater in 2000.

• 1545

The child tax benefit helps working-class people, and not people on social assistance, who need it most. Canada needs to recognize that women raising their children on social assistance contribute to the nation's economy through their unpaid work.

The Canada health and social transfer has eroded our society and women have felt the greatest effect. Multi-disadvantaged women have felt it the most. Enhance spending on social programs and create a policy like the Canada security act that will restore the four fundamental principles.

Today is World Food Day, and the most recent statistics indicate that the number of Canadians using food banks has doubled since 1995, to 600,000. What a shame. This should be a serious concern for a country that has been credited by the United Nations as the best country in the world in which to live. Canada is also one of the richest countries in the world.

No doubt a number of the poor are women and their families, and while the government is haggling about how to spend the surplus, people in our country are now without food, which is a basic human right. The work of our organization is to create awareness of these issues and concerns and to provide women from the grassroots a forum to bring out those concerns. Our work is at the real grassroots, which we believe is supporting women and their families living in poverty or struggling because of discrimination. These are the people SAC reaches out to as ordinary grassroots Canadians.

Thank you.

The Vice-Chair (Ms. Paddy Torsney): Thank you, Ms. Sekhar. Mr. McLachlan.

Mr. Manley McLachlan (Executive Director, Saskatchewan Construction Association): Thank you very much.

Whenever I'm given a timeframe to deliver a presentation it always reminds me of a little story overheard in church a while back about a little fellow who was quizzing his dad about what was going to take place during the mass. When the minister went to the pulpit and brought out the good book, the little fellow said “What does that mean, Dad?” He said “Well, he's going to read the gospel.” When that was finished and the minister pulled out his sermon the little fellow said “Dad, what does that mean?” He said “Well, he's going to deliver the sermon.” When the priest took his watch off and laid it on the pulpit the little fellow said “What's happening, Dad?” His dad said “Not a damn thing.” So I'll try to stay within the five minutes here.

I'm sure when a presentation is to be made by the Road Builders and Heavy Construction Association, there is anticipation of what the content of that presentation is going to be. I'm going to speak a little about the example we've seen here in Saskatchewan of the importance of the highway system, and of any highway system. The situation in Saskatchewan is probably the best example of the importance of highways. Saskatchewan has the most extensive road system of any province in Canada, with 195,000 kilometres, or 22% of the Canadian total.

Saskatchewan's socio-economic development and diversification are dependent on road transportation. A deteriorating transportation system is a constraint to our ability to compete, both nationally and internationally. The Road Builders and Heavy Construction Association of Saskatchewan has supported a national highway program for Canada for more than a decade. There is a growing recognition among the Canadian public of the deterioration of our highways and of the importance of investment in revitalizing and maintaining an infrastructure that is critical to our economy.

We've seen a growing increase in the performance of Saskatchewan's economy, and as that economy picks up we see the benefits begin to spiral. We believe the highway system is an integral part of that experience and the benefits we're about to accrue. The national infrastructure program has had a positive impact but has not been able to prevent substandard road conditions nationally. In 1994 the federal Minister of Transport challenged the provinces to commit to funding for a national highway program. In fact, nine out of ten provinces committed to $2.6 billion. However, the federal government did not step up to the challenge. It seems that everyone knows the words to the song but nobody knows the tune.

• 1550

Road transportation is key to economic development and diversification. Our economy is dependent on the ability of people, goods and services to move quickly, safely and efficiently throughout the province. Highway improvements can reduce transportation costs, reduce order lead times, improve reliability and reduce the risk of shipment damage, not to mention driver safety. The roads and highways are necessary to deliver timber into the sawmill sites and the pulp mill sites and move finished products to market.

Tourism brings approximately three-quarters of a million people to the province of Saskatchewan each year, and 95% of them use the road system. Annual expenditure and the amount needed to properly maintain the road system would employ some 5,000 people directly and a further 7,000 individually.

Approximately $20 million annually would be saved by reducing the cost of property damage due to highway accidents. An upgraded highway system would result in vehicle operating savings of some $360 million annually. Depending from which perspective you want to look at it, that figure could be viewed as a bad road tax that's currently being imposed on the people of this country. As a perfect example of this, I understand there's a gentleman roaming the halls of the legislature today with a big chunk of asphalt in his arms, looking for the minister of highways. He has a $1,400 repair bill that he incurred when he struck this slab of asphalt.

Insufficient funding has significantly reduced the amount of work in our industry over the past seven years, and as a result Saskatchewan has experienced a drop in qualified and experienced labourers and trades people. The cost to the public through replacement and retraining, inefficiencies and quality of workmanship cannot be ignored.

Federal money for a national highway program would allow more provincial money to be spent on highways and rural roads. It's critical that any influx of federal funds be matched provincially, and a national highway program could establish conditions that would allocate funds proportionately and equally.

It will take upwards of $20 billion over the next 10 years to bring the 24,500 kilometres of key interprovincial and international roads up to date. Funding has to come from related revenue. Tax revenues in Saskatchewan are over $330 million in provincial fuel tax, $150 million in federal fuel tax, $88 million in auto registration revenue, and $95 million in sales tax on motor vehicles, parts and supplies, plus additional millions in federal and provincial income tax from individuals and companies in the construction industry.

We believe that people are not only willing to accept that gas taxes fund the national highway program, we believe they expect them to.

Private-public partnerships may be another option that could be explored. Without investment in our infrastructure, our economy fails to grow and be competitive.

The Road Builders and Heavy Construction Association of Saskatchewan believes that the federal government must commit to a national highways program. We would recommend that the federal government pass legislation that designates a national highway system in Canada, that the federal government implement a national highway program to rehabilitate and maintain Canada's national highway system, and that funding for the national highway program be supplied by dedication of road-user taxes and fees collected by both levels of government.

In reviewing Minister Mitchell's comments yesterday in Vancouver, I believe our position is very much in line with his. We're not saying to open the taps on spending. Investment in highways, particularly in the national highway system, is an example of the sound fiscal management he talks about. It's an investment in the economy that pays big dividends—and we've seen that in Saskatchewan—and an opportunity for the government to act where it can make a difference.

An investment in highways needs to be regarded as part of Minister Martin's second option of focusing on economic growth. Our position on a national highway system speaks to Minister Martin's call to raise the level of debate from the narrower focus to much broader national issues.

Our position is to stay the current course on deficit and debt reduction. Only when our fiscal house is in order will we be able to address the narrower issues that I believe this committee will be hearing about over the course of its meetings.

Thank you very much.

The Vice-Chair (Ms. Paddy Torsney): Thank you, Mr. McLachlan.

Mr. Ottenbreit.

Mr. Ralph Ottenbreit (Individual Presentation): Thank you, Madam Chairperson and members of the committee.

I'm here on my own behalf, and as a citizen I come with no particular economic expertise. I am a taxpayer and I have an interest in what is going on. I also may have to leave early because of some wrong information I received that this was on tomorrow. I have made some commitments for today and am unfortunately otherwise committed later in the afternoon.

• 1555

I want to approach it from the viewpoint of general principles. It's pretty well as set out in my note to my submission. There are specific questions that the committee has asked, and I dealt with those in turn.

Has the progress in deficit reduction been too slow or too fast? I say, generally, the rate of deficit reduction is satisfactory. A concern I have, however, is that recent news in the last day or two suggests that the deficit targets are actually being met faster than had been anticipated, which is a good thing.

The concern I have arising out of that is that one wonders what sorts of mechanisms are in place to gauge those things and what measurements the minister has taken with regard to reaching those targets. If one can be off in a large way on the good side of reducing the deficit, one wonders whether those same mechanisms that are in place cannot also be often on the bad side.

In other words, if we're out more than a small margin of error in measuring these things, we lucked out this time because things are actually better than we thought, but I worry a little bit that proper mechanisms be put in place to measure these things and that I as a taxpayer get the proper information. I would have expected that the minister would have said we're almost dead on in our predictions, or we're slightly above or slightly below, rather than way above or way below.

That's just a comment on the measurement mechanisms. Perhaps it's the people who are providing the minister information; I don't know.

Have the methods of deficit reduction been appropriate? Generally speaking, I think they haven't been appropriate from my point of view. It's a good thing to reduce the deficit, but in our view the government has concentrated too much on reducing the deficit by way of tax increases. The main burden of reducing the deficit has been on the backs of taxpayers by way of tax increases.

It's my view that there should have been other ways found to reduce the deficit, by streamlining things, by generating savings rather than by the substantial tax increases that we've suffered over the last number of years.

So in that respect, I think the priorities regarding deficit reduction have been wrong. The net result is not bad, per se. Generally speaking, I think as we look at other countries around the world we're doing okay, but we're not doing great. We're certainly not doing as well as the United States, for instance.

I read the news release that is out on the table here. Yes, we're doing well, or the best in the G-7 group on certain indicators. But I'm looking at the whole picture and the whole economic program. I think, on par, we've done fair to middling with what we've been given. The result is that the standard of living of most Canadians has been reduced. Those who have higher incomes suffer a little less than those who have lower incomes, I guess. Low-income people especially have fallen prey to this as a result of things.

Insofar as the methods are concerned, I think the bottom line on the methods is that over the last number of years, yes, the deficit has been reduced, but it has been reduced on the backs of hard-working people. Canadians are really being squeezed more or have to work harder in order not to fall behind.

That's my view on deficit reduction. It's a good thing, but perhaps done the wrong way.

The last question was how should the government set its priorities with respect to debt reduction, spending increases, or tax relief. I say any surplus the government has should be allocated 25% to debt reduction, 25% to new spending, and 50% to tax relief.

If it indeed is a fact that the deficit has been reduced on the backs of taxpayers, then I think it's only fair that when there is a surplus there the government give back to those same taxpayers who have had the burden over the last number of years the tax relief they deserve.

One can say yes, we've created a surplus, and now what we're going to do is take all that extra money we have as a surplus and we're going to put it into a whole bunch of brand-new programs or reduce the debt substantially. That's all fine and well, but I think as a matter of fairness those people who have borne that burden should get the benefit of that to some extent.

• 1600

That's not to say that low-income people and people who are in need should not have some form of relief as a result of that. Perhaps that can be addressed by the 25% to be allocated to new spending, spending in ways that will help Canadian society as a whole and increase the standard of living of those people.

I would say any money that will be spent should be spent on programs that will enhance the competitive position of Canada in the world, make us more competitive, because we have all kinds of people nipping at our heels in terms of marketing and the products they are trying to sell internationally. I think the 50% tax relief that would be allocated to Canadians, us here at home, would generate substantial economic activity that can only help to increase the standard of living in Canada.

Those are my submissions.

The Vice-Chair (Ms. Paddy Torsney): Thank you, Mr. Ottenbreit.

Mr. Reichert.

Mr. Stephen Reichert (Education Co-ordinator, Regina and District Food Bank): I guess it's kind of fitting we're at a deficit meeting. I would like to thank the committee for hearing me earlier than I am supposed to be presenting. The Regina Food Bank is actually supposed to be presenting in Edmonton tomorrow morning. So I guess we're starting deficit reduction now by not flying me to Edmonton tonight.

It's also kind of fitting that the food bank is represented here today, given that it's World Food Day. I received notice of this topic on Friday, and I actually got the topics and what I was supposed to be addressing on Tuesday over the fax machine. So I'm a little bit unorganized and feeling a little bit overwhelmed.

It seems that since the topic centres around the deficit, I feel inadequate to actually make any sort of a budget commentary on this. As a result, and because I did want to come and make my views known at this meeting, I decided my project would not only involve some analysis but some self-reflection.

In this I mean that the deficit, for me, resides in the world of finance and in the minds of big business. With this in mind, I decided that it was quite interesting to examine the mystique and abstraction of the deficit not from the perspective of a commercial bank or big business but rather from a food bank.

I'll start by providing some perspective as to where I'm coming from, because I think it's very important in my overall analysis of this. I am a sociologist by trade. At work I wear three hats. I am a sessional lecturer at the University of Regina. I am also a social policy researcher. My social policy research has led me down a number of paths, including the evaluation of federal and provincial training programs that are delivered by all levels of government, including community organizations. My most interesting and rewarding job takes place at the Regina Food Bank, where I work as the education co-ordinator. In this capacity, I have a unique job. I mean unique because it's one of a kind in Canada.

The food bank now boasts a full educational unit, complete with classrooms, job training facilities, overhead projectors, TVs and VCRs. It's a complete working unit. We also have facilities for job training, and we offer programs that range from adult basic education and wellness programming to job skills training.

I realize this is not an opportunity to propagate food bank programs, although I'll take it whenever I can get it because we do take donations. But I believe by the end you will see how this fits into the deficit.

Our most recent job training project had an 80% graduation rate and a 100% employment rate. I believe it's the highest in Canada, the highest I've even seen in any other project I have evaluated.

The wellness project is bringing women living in poverty together to discuss and identify health issues that are relevant to living in poverty. At the conclusion of this project, these women will sit down with the help of doctors and rewrite a wellness manual so that it makes sense to women living in poverty. In other words, it deals with the issue.

Our literacy program is an attempt to contact people who have been missed elsewhere in the system and provide instruction that will eventually allow them to enter mainstream adult basic education programming.

• 1605

Why is the food bank taking a role that has been left to the institutional level? This is something that government and the public sector has maintained. The answer is in our food lines. The food bank in Canada opened its doors in 1981. The Regina Food Bank opened in 1982. Since that time we have provided in Regina over 7.4 million food-days worth of food. In fact, we are feeding the equivalent of a large elementary school every day of the week, every week of the year. It's a lot of people.

Food banks were supposed to be temporary relief, providing assistance where the system failed, essentially on the fringe of social assistance. We are now mainstream, an institution. We are once again picking up where the system has failed. We are now becoming part of the educational system. We are doing this because our food lines are growing and we are running out of food.

How are we doing? Well, from the outside it looks like miracles are happening. From where I sit, the food lines are getting longer, not shorter, and it's not because of a lack of effort on our part, or the people who come to the food bank. Laziness is not an issue.

We had a young man in a training project last year to become a commercial cook. He remained on assistance while in the 12-week program. His assistance level was $380 per month. He was provided with a $30 rehabilitation allowance—and I couldn't find anything wrong with him physically or mentally—to provide him with transportation money. It didn't cover the cost of his transportation, so he ended up walking. This course took place in the middle of winter. He never missed a day, never was late, and now is working. He was not on social assistance because he was lazy.

The problem is, no matter what we do there are fewer and fewer jobs, real jobs that pay real, living wages. Last week the Leader Post reported that Saskatchewan saw an increase in thousands of jobs and has one of the lowest unemployment rates. The question I ask then is, why do we have one of the busiest food banks? People are not coming to take advantage of the system and get a free rotten green pepper.

Now that you know where I'm coming from, I'll tell you where I'm going. In terms of economics I can only go to home economics, because that's the only economics I know. Economics 101 was a very bad class for me. At the end of the month, when I'm about to pay my bills, I usually end up thinking to myself that I need to make more money. I have the opportunity and ability to do that. In other words, my immediate reaction is not to slash and burn my spending. That depresses me. Rather, I want to increase my revenue. Again, rather than reduce my demand I increase my supply. This makes me happy, it makes Revenue Canada happy, and it feeds the deficit at the same time.

How does this relate to the federal deficit? Media reports and political overviews point to social spending as an area that needs cutting or is of concern. Social spending has now come to include health care, social assistance, and education. The catch-phrase is job creation. This is the same catch-phrase I used to hear when I was in high school, which was about the same time the first food bank opened.

This has been the answer for at least fifteen years now. Everybody knows it. If you increase employment, you decrease demand on social programs and increase revenue through taxation, resulting in a reduced to nullified deficit. This sounds simple, and I often wonder why, if we put our heads together, we couldn't figure out how to accomplish this.

The hard world of business and corporate finance offers the answer. Last March—and I'm not quite sure of the date here—I read a story in the Globe and Mail that really stands out in my mind. The story reported that the United States had a record growth in employment that month of 700,000 new jobs. Whether or not they were actually created and what kind of jobs these were is not the point. The point is, this was bad in some way for big business, as stock prices were falling as a result of it.

As I mentioned earlier, I'm not an economist, nor do I profess to be one, but this struck me as kind of odd. In conversation with an actual economist I learned that full employment did not mean everyone had a job and that real full employment would be detrimental to the economy. This again struck me as kind of odd. Our social policies have the effect of blaming people for being poor, yet those of us who are making a living actually benefit from people being poor.

Living in this confusing economic climate has made me realize more than ever how lucky I am to have an education and to come from a background that supported not only my good ideas but the bad ones too. For now, I'm safe. I won't be in line at the food bank. This is a background not everyone shares. In fact, it is a background that increasingly large numbers of people do not share.

• 1610

I've never had to base my career prospects on a training project I received at the Regina Food Bank or any other institution such as the food bank. I had well-paid professors, although some of them may argue that, I guess, guiding me along the way.

Don't get me wrong. We attempt to provide the best we can at the food bank, and it seems to be working, but people are treated differently. The instructors are not of the same quality. They have the heart but not necessarily always the knowledge. Yet this is the trend, to give programming back to the community—they know better than government—and in the same swoop save money, because it costs less at the community level. Well, it costs less because we are not provided with enough money.

I have one more point to make on giving programming back to the community. I think it's a very good idea, but only if you know who the community is. This is a difficult question. It's a question that's never addressed. Do people who are poor constitute a community? This is where sociology comes in. If you asked for my response, I would say definitely no.

To this extent we need to spent time and money in an effort to develop communities. We do it at the food bank. We have a program that is specifically centred around developing community and developing programming, because our programs are client centred. By that I mean they are driven by ideas that come from the clients. I use my educational background to make their ideas legitimate and to run the programs, get the funding for them.

Why is this important? Because people who feel connected to a community can find solutions. To this extent, if people, including us, know where we are situated, we will also know what to do.

I've made four recommendations for spending. They are recommendations for spending, not recommendations for cuts.

First, look for ways to create sustainable and liveable jobs. That may require investing in co-operatives and innovative forms of economic development, some of which may fail.

Two, provide adequate funding to community organizations so that people have training that allows them to work today and tomorrow. Do not make poor people subject to substandard education.

Three, provide support to organizations so that communities can develop.

Four, mandate policies that are equitable for everyone. There is no such thing as a special interest group if everyone is a part of one.

These points may in a way sound a little bit Keynesian in that they're structural, but if we are going to attempt to build an economy for everyone we need to start at the bottom, which is where poor people reside and social policies begin.

Thank you.

The Vice-Chair (Ms. Paddy Torsney): Thank you, Mr. Reichert.

Mr. Stephen Reichert: I'm sorry, I took too much time.

The Vice-Chair (Ms. Paddy Torsney): We'll now go to questions. We'll try to keep them within a five-minute grouping. Mr. Ritz.

Mr. Gerry Ritz (Battlefords—Lloydminster, Ref.): I guess the underlying message I'm hearing from all of the presenters at this point is that everyone is looking for a quality, sustainable job. Whether you're building a road or whatever you're doing, you're all looking for those jobs.

I would toss out to you, who should create those positions, and how will it happen?

Ms. Kripa Sekhar: In the month of September we presented a paper to the task force on the future of the Canadian financial services sector. I know the belief is that the small business sector is going to create those jobs. However, by the banks' own admission, those small businesses have not been able to create jobs, because those small businesses have not had equitable access to lending by the banks.

According to a study by Thompson Lightstone, a Toronto-based company, there was an indication that, on average, a woman running a small business has a credit of $60,000 while an average male has a credit of $300,000. This discrimination is difficult to prove, because banks are not required to disclose their lending patterns. It is in every sense a failure to accommodate, and therefore a violation of, a person's rights.

If one is rich one can borrow money and start a business, but if one is poor there is no hope. In the U.S.A. the Community Reinvestment Act requires disclosure on lending patterns. But I'm going to go on here, because I don't want to focus so much on this.

According to business credit statistics, small businesses created 35% of Canada's gross domestic product while receiving only 7% of total business credit extended by the banks. So although the number of big business clients has decreased, they have been extended greater credit.

• 1615

The banks have failed, as financial institutions, to provide capital when it can be used to provide employment and be an empowering tool for the Canadian economy. Canada's big seven—

The Vice-Chair (Ms. Paddy Torsney): I wonder if you might just submit that, rather than read it all out to us. Remember that we're in a five-minute round. Mr. Ritz asked a question, and each of you needs to answer it.

Ms. Kripa Sekhar: I would just like to end this one point, okay?

I would like to say that we have seven of the 25 most profitable banks in the world. They need to put back money into the community. They need to reinvest in the community. That is not happening now. Job creation, yes, is a priority, but in the meantime, it becomes a government responsibility.

The Vice-Chair (Ms. Paddy Torsney): Did anyone else want to respond to Mr. Ritz's question?

Mr. Manley McLachlan: If I could very briefly, the position we're taking here is relative to job creation, but it is geared more toward the development of a national plan and policy that we believe will ultimately create jobs not only in the road-building sector, but in the additional spin-off effect from manufacturing and with the importance that transportation plays in that whole area.

Mr. Gerry Ritz: Right.

Mr. Ralph Ottenbreit: If the issue is whether the government should put programs together to create jobs versus letting the economy or business create the jobs, it's my view that you should let business create the jobs.

I'm not a great fan of governments putting a lot of programs together. There may be special cases in which that's necessary. For instance, I agree with the first speaker that small business probably doesn't have the same access to capital as big business, so there should be some help there. But by and large, I'm not in favour of government-created programs to make this happen. I think simple tax reduction, putting more money in the hands of the people, will cause the economy to take off, and that will create jobs.

Mr. Stephen Reichert: I guess I'm going to have an opposing viewpoint here. I'm going to suggest that there are jobs being created by the small business sector, yet those same people who are working in the small business sector might be there partly because small business is under-financed.

I hadn't actually thought of that before, but it raises a new question for me. These people are typically paid at a very low rate that does not provide for sustainable living. They do end up coming to the food bank in the end anyway. So if we're going to provide jobs then I think there needs to be input from government in order to provide actual jobs, real jobs that pay real money.

[Translation]

The Vice-Chair (Ms. Paddy Torsney): Mr. Perron, you have five minutes.

Mr. Gilles-A. Perron (Saint-Eustache—Sainte-Thérèse, BQ): Thank you, Madam Chair.

[English]

Those are tough questions. I'm amazed that none of you guys didn't challenge the government on the way it did some lousy spending. I'm going to give you a few examples of how we politicians can be good administrators.

For example, in 1995 our finance minister, Mr. Martin, mentioned that the navigation system we had in Canada was worth $2.6 billion. A month later, the Minister of Transport evaluated the same system at $2.4 billion. So we could average it to be worth $2.5 billion. It was sold to NAV CANADA for $1.5 billion. It gave a thousand million dollars as a gift. Why didn't we ask any questions about that?

Look at another one. Two or three weeks ago, Mr. Gagliano said that about 35% of total contracts given by this government were given without any quotations. Mr. Desautels, the vérificateur général, mentioned that if a job is going to the quotation system, we save about 40%. Look at the amount of dollars we spend. Why don't we, the people, ask the administration to do a better job to save money? Could I have your comments on that?

• 1620

Mr. Stephen Reichert: I guess I don't look at the deficit in the same way. I agree there is waste. There is waste in the private sector and there is waste in government, and $1 billion is a lot of money to waste. I agree that we should be questioning that. We could operate the food bank for approximately a hundred years on that.

I simply look at the deficit as a problem with revenue. The amount of money that we're bringing in does not cover our costs. One of the areas that I see as a problem lies in the fact that we aren't taxing the huge corporations at the rate at which they should be taxed.

I saw a memo—I forget where it came from—that said the Bank of Montreal had announced how much income tax was paid. At the bottom, they had a little note on it that said “paid by employees”. Maybe we should look at where the huge corporations are being taxed and where that money is actually going. Look at it from a revenue standpoint as opposed to a spending standpoint. That's where I'd really like to see us focus.

The Vice-Chair (Ms. Paddy Torsney): Ms. Sekhar.

Ms. Kripa Sekhar: I think I agree with him on that. The view of the Saskatchewan Action Committee is that we don't really want to see the existence of food banks. We really don't believe people should have to rely on food banks. We believe that the fact that the number of people having to use banks has doubled since 1995 should create an alarm in the minds of people. A large part of this is poverty. A large part of this is because of high unemployment. A large part of this has to do with the youth in our country and the kinds of support systems they are not getting.

When we talk about jobs and full-time employment, what we mean is that while the business sector can create some jobs, they may not necessarily be quality, secure jobs. We believe the public sector should also create jobs because they provide long-term, stable, secure jobs. That is our point of view, at least in terms of job creation.

The Vice-Chair (Ms. Paddy Torsney): Thank you, Ms. Sekhar.

Mr. McLachlan, your comment will be the end of this round.

Mr. Manley McLachlan: I think it's fair to say there is a litany of horror stories, be they from provincial government, federal government, or municipal government. I agree that as citizens we should all be concerned about that.

The point I want to make is in regard to the amount of federal tax that's derived out of fuel sales and how much of that tax is put back into the road system. Maybe it's another example of something that fits along the lines of the other horror stories. Something in the neighbourhood of $8 billion is collected federally, and less than 13% of that goes back into the highway system. It's definitely something that needs to be considered, or reconsidered, and we believe that is where some of the funding can come from for the suggestions we're making.

The Vice-Chair (Ms. Paddy Torsney): Thank you, Mr. McLachlan.

Mr. Nystrom.

Mr. Lorne Nystrom (Qu'Appelle, NDP): First of all, I want to welcome all people before the committee today as witnesses. I have two very quick questions.

Mr. Reichert, you were talking about cutbacks in terms of the federal and provincial governments. Maybe I can summarize your comments. I think you're saying that in solving its deficit problem, the government is creating a sort of food deficit in this country. It has transferred some of the problem to the poor people in Canada. You were saying that the number of people in food banks has doubled since 1995, I believe. Have you done any studies to determine how much of that is because of government cutbacks, because of the offloading from the federal government to the provincial governments to the municipalities? Part of it is because of growing unemployment, low wages and so on, as well. But how much is due to the fight against the deficit? Of course we have to fight the deficit, but again the question is how to do that. That's one question.

My other question is for you. One of the biggest issues we'll be dealing with as a problem very shortly is the Canada Pension Plan. There's going to be a massive overhaul of the CPP, and very shortly there will be a massive overhaul of other senior retirement incomes, with the abolition of the old age pension, the GIS, and the seniors tax credit and replacement of all of that with what's called a seniors benefit and the ending, I guess once and for all, in this country of universality.

• 1625

Again, I have a concern there that this is going to create a means test and a stigma of turning this into a welfare program and the political support for aid and assistance to seniors will disappear. My main concern is the impact on women of that, and also on the CPP.

Mr. Stephen Reichert: In addressing your question, I guess its going to come back to a comment I made in the presentation.

I would love to know that. I would really like to know that. I'm a social researcher and that would be very interesting stuff for me. Unfortunately the food bank does not have the money actually to do a study, but if you were interested in commissioning a study on that, I would be very interested in doing it, because I think it would provide us with some very valuable information.

My sense is that we can directly link some of the increase we've had at the food bank to the changes in unemployment insurance in terms of eligibility, which pushes people onto social assistance more quickly. In some cases we have people on social assistance who have worked all of their lives and have never taken a dollar from the system. At the same time, they are now being told they must collect welfare.

There could be a whole range of things, but it would be a very interesting study. The data is there; it just needs to be looked at.

Mr. Lorne Nystrom: Now CPP.

Ms. Kripa Sekhar: Before I go on to the CPP, there is something else. I'm glad you raised that point about the cutbacks that in fact have affected those people who are most marginalized in our societies, as well as those who have had secure working jobs and have now had to go on such things as lay-offs.

When the government talks about the great big surplus it has created because of the debt and deficit reduction, part of the reason why that has happened is that people have had to give up so much because of the cutbacks to social programs, because of the cutbacks in jobs, etc. It has affected people. Now that there is money, that money should go back to where it belongs, and that's what we are recommending.

We are also recommending.... In terms of the CPP, I know there are plans to do some sort of study. We want to make sure that no changes to the CPP or to the old age security or to the guaranteed income supplement or other seniors pension income credits should go forward until there have been full country-wide public hearings. This means informing organizations—not one working day before the presentation, but in fact giving them enough time.

Also, there should be no changes to the CPP, OAS, or GIS until there has been an independent feminist gender analysis that is then incorporated into the new plans on a gender equity basis.

I've already stated our position on the CPP, the OAS and the GIS, and I think we are challenging the position that there is no funding in this. We don't believe that is true.

The Vice-Chair (Ms. Paddy Torsney): Thank you, Ms. Sekhar. May I just let you know that Bill C-2 has been referred to this committee. Bill C-2 is the bill that will make the changes to the Canada Pension Plan. We will be beginning those hearings on October 28 and continuing through until roughly November 18 or 19. I encourage you to make sure that we have your submission on that.

Sometime between now and the end of June we will also be doing the seniors benefits, so you might want to start preparing your analysis.

Of course it already has been gender-analysed according to federal government standards that were brought in around the time of the Beijing Conference on Women. So that analysis has been done. Whether it's available I do not know, but we will certainly be looking for your input on that front as well.

Ms. Kripa Sekhar: I'm just going to ask you a question. I guess I'm talking about the feminist gender analysis, which is more equitable-based.

The Vice-Chair (Ms. Paddy Torsney): Mr. Brison, for five minutes.

Sorry, did you want to say something?

Ms. Erika Cancino (Saskatchewan Action Committee on the Status of Women): I just want to add something. Although Kripa Sekhar will be sending facts, she said before that there are 56 organizations. One of them is my organization, Immigrant Women of Saskatchewan.

• 1630

As for the comment made by Mr. Perron, I am no researcher. I came here as a refugee from South America and what I see is that no matter how much money the government spends, without monitoring where the money goes to.... For example, there are many refugees coming here who have professional degrees that are not recognized in Canada. This is one of the things that puts those people into poverty. They have to go on welfare. And in order to have their degrees recognized, they have to pay $2,000 or $3,000 for tests, which is money they don't have.

Also, there is the improvement of ESL languages, so that these people can be helped to integrate into this society and be more productive. I think those things have to be taken into account in order to see where we are investing so much money. That is why we are concerned about the cutbacks to an organization like ours, for example. We are trying to provide those skills to those people, those women and families, in order to integrate them into the society and to minimize the costs to the government.

The Vice-Chair (Ms. Paddy Torsney): Thank you, Ms. Cancino. We also heard Ms. Lara from the Immigrant Women's Society this morning. You echoed her sentiments exactly.

Mr. Brison.

Mr. Scott Brison (Kings—Hants, PC): Very briefly, I come from Atlantic Canada and over the past 30 years we've had a pretty good opportunity to view the impacts of federal involvement in our economy. I can say from personal experience in the Atlantic Canadian community that the federal involvement in trying to create employment with direct government spending has been an abysmal failure and has done more to hurt the people in Atlantic Canada than it has to help them. It has created a cycle of dependency that is really unacceptable.

From that perspective, and also if we look at the reasons why we reduce deficits, part of this—over a period of time—is to make us more competitive internationally. Our ability to compete internationally with a country that now has 40% of our GDP in trade is linked to our ability to create jobs.

You are right, Ms. Sekhar, when you say that small business does not have access to capital in this country. In particular, women running small businesses are disadvantaged by the current Canadian banking system. I'm very interested in micro-lending, for instance, and in examples where that has been successfully addressed.

As well, part of the reason that small business has not created jobs is taxation. I'm not talking about general tax cuts; I'm talking about payroll tax cuts. Currently, payroll taxes—and EI taxes in particular—are preventing businesses from hiring people.

I think it was Churchill who said “Give us the tools and we will finish the job.” I think that across Canada there are a lot of people who want to start small businesses, who want to have access to capital and who want to hire people, but government and banks are standing in the way.

In 1983 the Netherlands had a 14% unemployment rate. They now have a 6.5% unemployment rate. They reduced payroll taxes and they reduced regulations for a lot of businesses as well as cutting spending, but they still continued to invest strategically in social spending, in education and in health care and those areas. That's just an example.

I'd appreciate your feedback on some of those comments, because I think we have to be very careful not to return to what were effectively the bad old days.

The Vice-Chair (Ms. Paddy Torsney): Thank you.

If you want to comment, you have one minute.

Mr. Manley McLachlan: Thank you.

I'm going to wear my Saskatchewan Construction Association hat. We have some grave concerns about the surplus in the EI fund. We believe, in fact, that it is a perfect example of a payroll tax. The fact is that in March alone over $1 billion in surplus, I believe, was derived from that fund.

We're hoping that isn't some of the money that's being calculated into the mix here to show our situation as being improved, because in fact that money was paid in by employers and employees. Our position would be that this money should be channelled back into the industries in training, education, or the enhancement of the industries.

• 1635

The Vice-Chair (Ms. Paddy Torsney): Mr. Reichert, you have thirty seconds.

Mr. Stephen Reichert: I have three points. I guess it will be ten seconds each.

Just a comment. A lot of literature was written about Atlantic Canada quite a few years ago, and one of the main consensus ideas that came out was that no entrepreneurial spirit existed in Atlantic Canada. I know quite a bit of sociological and economic development literature was written around that.

I would like to comment that we in Atlantic Canada and Saskatchewan have very similar economic bases, in a sense, in that the economy of Atlantic Canada is not based entirely on industry, and neither is Saskatchewan's. A lot of that comes out of some historical developments which created it. So I might offer that what wasn't a solution in Atlantic Canada may in fact be a solution here.

It sounds convoluted, but.... Maybe it's not the fact that the federal government was involved but the methodology they used. Their involvement was one thing, but if they had changed their methods it would have been another thing.

Just a comment on EI being a deterrent. Historically, unemployment insurance has actually been a benefit to business, because they have been able to lay off people in large numbers in large factories and they have been able to keep those people in that area and to recall them whenever they wanted. In other words, it was of great benefit to business to have these people waiting there to come back to work.

The Vice-Chair (Ms. Paddy Torsney): Two seconds.

Ms. Kripa Sehar: I have a question I'm going to throw out. About the way Canada is going right now, I know about the Atlantic provinces and their problems, because we have interacted with women from there, particularly in fisheries.

My question goes back to Mr. Perron. When there is such a crisis of unemployment, of poverty, in the country, because we know that children are poor because their mothers are poor and families are poor—somehow we've tried to dissociate those factors—can the government really justify spending $9 billion on defence? Then I don't know how much they spend sending people off into space; the space technologies and the kinds of things that happen around there. For me as a woman, that is a concern. When people are starving, do we really need to be focusing on those kinds of space-age technologies? We're really not going to be going up to the moon very soon.

The Vice-Chair (Ms. Paddy Torsney): Thank you for that.

I have a question, and it will be the final round, unfortunately, folks. We'll try to rein everybody in in Winnipeg.

Mr. McLachlan, you've highlighted the benefits of the infrastructure program. I'm a huge fan of that program, having run on it in two elections. Clearly it has made a difference for communities right across this country. But one of the things it might not have done much for, except in spin-offs, is in fact the women of this country, because generally construction, particularly the road construction industry, has not got a lot of women in its employ, although there have been some great improvements in that area. What do you say to Ms. Sekhar and the women who are here about their turn for some support and how we can work with the federal government on giving the money to municipalities and to provinces to enforce employment equity guidelines, which are clearly there at the federal level and don't necessarily exist in each of the small communities where the money goes?

Mr. Manley McLachlan: Rather than targeting the money to specific communities, we really need to take a look at the type of training required. I know there are some programs for women in trades technology. That may come as a bit of a surprise to some people, but I think it was relatively well accepted by the industry, particularly here in Saskatchewan.

You're right. The traditional people working within the construction industry have been males, some of that being because of the nature of the work, if you will. But this industry is changing as dramatically as other industries.

• 1640

In one of the presentations I make, I talk about the construction worker of the future and I say that she's going to be able to lift a 24-foot 10-inch I-beam into place because it's going to be made of carbon alloy that will make it very light.

So the whole industry is changing, maybe not as fast as we'd all like to see. But it's very difficult to take somebody, just because of their gender or their status in life, and plug them into the industry. I think we have to ensure that the training is correct and that the introduction to the industry is made in a correct way.

So to put the money into a specific community.... Maybe I'm misinterpreting what you're saying, but I think we have to guarantee that somehow the end-product of the training is something the industry has some input into and that product is something that's going to be usable.

The Vice-Chair (Ms. Paddy Torsney): I take it, then, that you who are in the industry would support whatever means you're currently undertaking, and what have you, to ensure that when that money is invested in infrastructure, that helps everyone in our community; when that money is going to support jobs specifically in your industry, which generally benefit men—although they're part of a family, so that certainly does help—that you will be doing everything you can to look out for ways in which we can improve the participation and the flow of that money more equitably through our communities.

Mr. Manley McLachlan: I think I can give you that undertaking. I know that the Canadian Construction Association does support initiatives in that area. The Saskatchewan association supports that as well.

I have just one point in regard to the infrastructure program and job creation. One of the things we've seen in Saskatchewan, particularly in Regina—and my understanding is that this has cropped up across the nation—is that the job creation impact of some of that money is greatly diminished when the local municipalities take on the capital works themselves. It's something the federal government should be very aware of.

In Regina particularly, of three projects undertaken under the infrastructure program, only two were let out to industry. One was undertaken by the municipal government itself, and I think—and this is the position that our association and the road builders certainly take—is that that really diminishes the job creation element. It's something that should be reviewed prior to the next program.

The Vice-Chair (Ms. Paddy Torsney): I'll make sure the minister gets that information. In my community it was let out to private tender.

Thank you very much for coming before us today.

Colleagues, thank you for participating.

Please ensure that those of you who are visitors to this committee have received a copy of the package of information that is there for you. It certainly provides to you some additional information on the minister and on his statement about priorities and values, and it will be guiding the work that this committee does.

Mr. Lorne Nystrom: I have just one short point. I wonder, Madam Chair, if we could have our researchers check to see if a study has been done on the point I raised to Mr. Reichert, whether or not there's a correlation between the increase of usage of food banks and the cutback of social programs. There may be some study done that might be of use to the finance committee and to people like you. If not, then maybe we should look into the possibility of commissioning one. That's for discussion later on.

The Vice-Chair (Ms. Paddy Torsney): And commissioning it here in the province of Saskatchewan, no doubt, Mr. Nystrom.

Ms. Kripa Sekhar: I just want to say thank you for giving us the opportunity to present.

I'm very glad you raised the issue about gender, because look at the MPs around us. Every one of them is a man.

The Vice-Chair (Ms. Paddy Torsney): Yes. Well, we look forward to your participation on that point as well.

Ms. Kripa Sekhar: Well, that's still underrepresented.

The Vice-Chair (Ms. Paddy Torsney): This House has a dramatic increase, you should know. We're up over 20% now.

Ms. Kripa Sekhar: It should be 52%.

The Vice-Chair (Ms. Paddy Torsney): I know. We're doing better. Some parties didn't do that well.

Mr. Scott Brison: I'm a member of the Conservative Party, and we were the only party to have achieved.... During the last session, 50% of our caucus was female.

A voice: Gender equity.

A voice: That's correct.

The Vice-Chair (Ms. Paddy Torsney): The meeting is adjourned, but if you could just rest for a couple of seconds, BBS wants to get a little bit of footage.