FINA Committee Meeting

STANDING COMMITTEE ON FINANCE

COMITÉ PERMANENT DES FINANCES

EVIDENCE

[Recorded by Electronic Apparatus]

Friday, October 17, 1997

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[English]

The Vice-Chair (Ms Paddy Torsney (Burlington, Lib.)): I call to order this meeting of the finance committee. It's a pleasure for all of us to be here in Winnipeg. We look forward to hearing from you, the presenters, who will give us your ideas in this pre-budget period.

I have a couple of PSAs off the top. You will each have five minutes to present. At four minutes I'll give you the signal, and at five minutes I'll have to turn off your microphone. We have to keep to that, because we have a large group. There will be a question and answer session at the end. If time permits, I'll allow everyone to do a one-minute wrap-up at the end. Again, it will be one minute or less.

You're under no obligation to take your full five minutes. I encourage you, if you've given us a long brief, not to read the brief but to “top-line” it. As well, be careful; we do have translators with us today. When people read their briefs they tend to go very quickly. That creates a problem for anyone trying to listen en français, and vice versa, of course.

First of all, I'll introduce everyone: Ms Nembhard, representing the Canadian Federation of Students; Wayne Helgason, representing the Social Planning Council of Winnipeg; Jim Finlay, from the Community Action on Poverty organization; and Theresa Ducharme, chair of People in Equal Participation.

[Translation]

We will then hear Messrs Boucher and Robert, from the Société franco-manitobaine.

[English]

Then we have Pauline Riley, president of the Manitoba Action Committee on the Status of Women. We heard from your sisters yesterday in Saskatchewan.

We have Mr. Harris, a spokesperson for Cho!ces—A Coalition for Social Justice; Mr. Doyle and Mr. Hilliard of the Manitoba Federation of Labour; Albert Cerilli, from the Manitoba Federation of Union Retirees; Evelyn Jacks, from the Jacks Institute; Ms and Mr. Johannson, representing the Canadian Association of the Non-Employed; and our thirteenth presenter, Kenneth Emberley, from the Crossroads Resource Group.

I welcome the presenters, and begin with Ms Nembhard.

Ms Kemlin Nembhard (Provincial Field Worker, Canadian Federation of Students): Thank you.

The Canadian Federation of Students represents over 60 college and university student unions across Canada, which includes a little more than 400,000 students across Canada. United across the country, we advocate a national plan for a post-secondary education system in Canada that is of high quality and is universally accessible.

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I am pleased to have the opportunity to speak to you today on behalf of the Manitoba component of the Canadian Federation of Students on the questions put forward by the committee, the funding of post-secondary education in particular.

The first question was on the pace and method of deficit reduction that the government has taken over the last mandate. As with many other organizations, we have been very vocal in our opposition to the path the federal government has taken with regard to reducing the deficit. While the federal government has followed a fiscal policy of deficit reduction through reduced social spending, we have witnessed how the effects of the cuts have been borne on the backs of those who can least afford it—youth, the poor, students, the working poor, the unemployed, the underemployed, and so on and so forth.

We believe the paths to fiscal responsibility and social equity are very closely linked. Fiscal policy is reflective of social policy and can be used as an essential tool to ensure an equitable and just society. Therefore, we believe the federal government could have chosen different ways and methods to reduce the deficit that would not have affected education, health care or other social services.

Specifically regarding post-secondary education, the chronic underfunding has had an overall negative effect on access to education and the quality of post-secondary education available nationwide. Across the country over the past three years we have seen drastic decreases in enrolment.

For example, here in Manitoba, all of the universities have decreased between 5% and 10% over the last three years. To give a specific example, Brandon University has decreased by a quarter over the last three years, from 4,000 to 3,000 students. That's not the only university that has decreased that amount. A huge amount of people are leaving the system. It's hard to track them. We don't know where they're going. They're just not going to school.

As the government takes more and more money out of the system, universities and colleges are becoming more dependent on tuition fees to make up an ever-increasing portion of their institution's overall budget. Tuition fees went from covering 10% to 15% of operational budgets in the 1970s and 1980s to currently covering between 25% and 40%.

For instance, at the University of Winnipeg, approximately 40% of the tuition fees cover that much of the university's operational budget. For the years between 1994-95 and 1996-97, that three-year period, tuition fees rose approximately 50% across the country. That's a huge amount for students to take up, especially when you look at the job market. The rate of inflation isn't anything close to that, and neither are the jobs there for them to even be able to make the money to pay for the fees.

Students in the system already have been harder and harder hit in terms of making ends meet while more and more potential students are being shut out of the system. Many of the students already in the system, and those who have entered since the massive cuts and fee hikes, have been forced to take on an ever-increasing amount of debt.

The average student debt load anticipated for a graduating student at the end of this academic year is approximately $25,000 a year. That's going to drastically cut the amount of economic freedom and the general future of students coming out of school with that amount of debt load.

The Vice-Chair (Ms Paddy Torsney): You have one minute left.

Ms Kemlin Nembhard: We've seen support services cut, which are critically important for all students but are especially so for students with disabilities and students from other marginalized groups...to the best of their abilities. Funding cuts have also meant a decrease in quality. Library collections are not being replenished, professor positions are being cut or are not being refilled when professors leave, and some institutions in Manitoba have faculties and departments made up of only two professors. Class sizes are increased and student-teacher ratios have been decreased.

What would we like the priorities of the federal government to be in the coming years? We see that the need for post-secondary education has never been more critical for people today, especially for young people, to be able to have access to employment, especially meaningful employment. Universal access to education is one of the marks of a truly democratic society.

The federal government must work toward removing barriers to post-secondary education to ensure that it becomes more accessible across the country. We encourage the finance minister to increase transfers to the provinces, thereby increasing direct funding for post-secondary education.

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The issue of the student debt crisis must be addressed, not through debt management but through debt reduction measures. We recommend that a comprehensive system of grants for students be established to help reduce the amount that poorer students have to borrow to finance their education. As well, we recommend that a loan remission program be established to minimize the debt load upon graduation.

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

Mr. Wayne Helgason (Executive Director, Social Planning Council of Winnipeg): Thank you, Madam Chair and committee members. Welcome to Winnipeg.

My name is Wayne Helgason. I'm the executive director of the Social Planning Council of Winnipeg as well as an executive member of the Aboriginal Council of Winnipeg.

I've left some documents with you that hopefully you will have at your disposal for review. One is Standards for Social Assistance, Health Care and Post-Secondary Education. Another document, fairly recently established, is called Acceptable Living Level. It looks at income adequacy circumstances. It was developed by people in that circumstance, upon review and research. I think it will be useful if we're considering measures to ensure that those among us who are poor somehow have access to an adequate level.

As well, there is a recent United Way publication, Community Focus—Investing in Social Capital, which has some practical examples of what I'm going to talk about in my presentation.

Thank you very much for the opportunity to be consulted on this process. With reference to the questions you asked, the process of deficit reduction has been fast-tracked without sufficient accommodation for the support needs of most-vulnerable families, children and special populations such as aboriginal people, persons with disabilities, and single parents.

In the beginning, the process left insufficient time or opportunity for the federal-provincial planning and co-operation process to respond to the impact of the federal funding cuts. Also, the unresolved dispute regarding the responsibility for off-reserve aboriginal people between the federal and provincial governments has caused additional stresses for urban communities with growing numbers of aboriginal people. This particularly affects Winnipeg.

With reference to your priorities, we believe the absolute singular, top priority should be to address the current child and family poverty crisis. Debt reduction should not be at the expense of support programs for those assisted by what is left of the social safety net.

The tax system is one of the easiest tools of income redistribution. Relief for low-income individuals, families, and children could be accomplished through a more progressive tax system. The taxation system must recognize that corporate profits are increasing with the growing economy, while individuals in the labour force are not benefiting on a comparable level.

The taxation system could be a mechanism for remunerating unpaid activities or efforts in the absence of work or jobs—for example, dependant responsibilities and other activities in relation to neighbourhood revitalization. Some of the discussion recently on social capital, I think, might give some evidence as to how that might be achieved.

Financial investment in communities should stimulate the development of social capital, not the creation of dependency, but should build on community capabilities and support local initiatives.

Finally, the funding of federal government programs often has constricted time commitments by three or five years.

There are also issues of service jurisdiction. This may be avoided by considering endowment arrangements that provide long-term assurances and commitments; facilitating the participation of other sectors, that is, provincial, corporate, or community partnerships; and having the local capacity ensure that the trust conditions of such endowment processes are achieved. A more permanent legacy is also a product of this process.

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This arrangement may be most applicable to new initiatives that are being considered, such as the Centre of Excellence for Children's Well-Being, in which Winnipeg is actively pursuing development, the Canada Development Corporation's community economic development initiatives and inner-city foundations, and many of those recommendations that have been put forward by the recent Royal Commission on Aboriginal Peoples.

On a last point, there's considerable interest in looking at having to deal with the insecurity of a short program whereby the provincial government is reluctant to participate because of the termination that may be inevitable and the pick-up. So I think some new financial mechanisms, some new creative ways for support on a longer-term basis are absolutely essential in the new thinking on the reinvestment.

Thank you very much.

The Vice-Chair (Ms Paddy Torsney): Now we will hear from Mr. Finlay from the Community Action on Poverty organization.

Mr. Jim Finlay (Community Action on Poverty): I'm Jim Finlay.

The social service system of Canada should be completely scrapped. A national standard equalization guaranteed income would be more sensible. In two letters I have, both Paul Martin and the human resources development minister said it would be too expensive, but if they cut it down by 15%, 20%, or 25% to a national standard equalization income, it should work.

If they cut it by any more than 25%, that would be decreasing it below the Manitoba living guides of 1997. For example, in 1997 in Manitoba, a single person is at $1,620 per month. Social service rates do not meet that. For a family of two, it's $1,890 monthly. For a family of three, it's $2,859 monthly. For a family of four, it's $2,977 monthly.

By saying it's too expensive for the national standard equalization guaranteed income, we've taken special steps of decreasing it by 15%, 20% or 25%. It should work. I've got the documents all worked out. I sent these to them, and I got these replies too.

This way will cut down crime and the cost of health care. Dr. Rey Pagtakhan of Winnipeg North—St. Paul could see it clearly with the meetings I had with him. He's been trying to get this guaranteed income put through too. Social Services of Manitoba is not following inflation at all. My lawyer and I have been suing them for not following the shared-cost agreements. We won the case, which gives every citizen the legal right to sue the government for not following its duties.

I've been making documents with Winnipeg Harvest on the cost of food. The latest was $327.49, yet Social Services only provided $153.80 a month for food. Right there, they're not meeting today's updated cost. So we are looking into charter challenging the Social Service rates, because as the charter challenge program stated clearly, we have the merit to charter challenge and sue them for not meeting Statistics Canada's average retail cost, which is $3.68 per meal; Social Services gives only $1.69 per meal.

In the same way, they've taken special needs off people. Workers are lying to people by saying there's no more, but the special needs are still carrying on—I got the new law through access to information—completely.

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Second, if you want people to look for work, you have to count transportation and phone costs as basic needs. Right there is the most extreme, life-threatening discrimination that the system is causing people. It causes more medical harm and increases medical costs.

Plus, they're penalizing people on work incentives, which should not be. Even if they earn $20,000 a year, not a cent should be deducted, which forces people to not look for work.

Thank you.

The Vice-Chair (Ms Paddy Torsney): Thank you very much, Mr. Finlay.

Ms Ducharme.

Ms Theresa Ducharme (Chair, People in Equal Participation Inc.): My name is Theresa Ducharme. I represent People in Equal Participation Inc.

I would like to present our views on the government's next budget. PEP stands for “pester every person” until you win, and we don't move until we win.

Our first standard is to maintain standards of health care for all citizens equally and without prejudice, because we cannot be here unless we do have our health, and we must be in the company of all those who wish to maintain their health. My chair is not covered by the Auto Pact, and I can run over anybody's foot quickly, and they can be in the same boat as I am in. So that's not a threat but a promise, dear.

Now, certainly government should have the initiative to maintain the standards of education for all. Right now, it only has it for elementary schools. As the student group mentioned earlier, it has no initiative in maintaining students, in the acquisition of education for all students or anyone who wishes, whether an adult or not, or in the creation of positive action—we all wish to be educated—or positive changes for ourselves so that we can be an asset to our country.

At the same time, minimum wages should be increased so that people on welfare could afford to get a job and maintain a standard of living, as Mr. Finlay said. Why keep us on welfare? If we can't afford to get off welfare, how could we ever possibly bridge that gap and get off it if you're not going to demonstrate the avenue for us to do so?

I've been on both sides. Right now, I'm going to show you how to get off that.

We wish to offer tax relief to small businesses so they can afford to stay in business, thus creating more jobs and improving the economy. Increasing the number of businesses that can pay tax will increase tax revenue in kind. This is instead of removing them and having them pay the debt, all costs, and expenses.

We wish to offer a program to enable the disabled to have viable employment and to provide initiatives to businesses to hire and make the workplace accessible. Why punish them by saying that if you wish to hire this person with special needs, then this is your tax punishment, this is what you're going to have to do, and this is how you're going to have to accommodate that?

The government is responsible for that. The finance department had better clean up its act, because Ms Ducharme is running in the next election. So watch out for me.

Extend home care programs to community care services to enable the disabled to have full employment opportunities. Why keep us in our homes when you want us to contribute to our community, and also to create tax revenue and become employed?

That's why I ran in the last federal and municipal elections. I'll be running in the provincial election, Sunshine, under the Progressive Conservative Party. Whether they like me or not, they're stuck with me now.

At the same time, I would like to say that this is how those who are handicapped have to work: I'm selling these ballpoint pens for $3—no tax—to help our PEP organization. Non-profit organizations are all going to have to rebuild, some sooner rather than later, so we can be nice to the community, and they'll be nice to us. Everyone has to purchase one or they can't leave this room; that's their punishment.

Hold my book up, please. This also has to be sold. Life and Breath is my autobiography. If you don't buy one of these books, you won't have either life or breath, dear. Lloyd Axworthy wrote the preface. He's in office. You must take it back to the Minister of the Environment, otherwise we won't have an environment.

Ms Ducharme wishes to congratulate you for coming all this way and making it possible to hear all our representatives. This is done with a smile because it takes less muscle power. Ms Ducharme is very happy to be here. I'm very thankful that my lovely nurse, Mary Ann, woke up early enough to smile all the way through. She deserves a compliment.

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I'm going to say amen, because at the same time I'm doing research right now and I would like a complementary response from your finance committee. I would like to know what it costs the taxpayers from our tax dollars to maintain the House of Commons. We bust our butts to make every dollar pay and pay the wages of all the politicians, federally, provincially, and municipally, and the senators, their offices, their pensions, and their GST; you name it. I want to know about the total budget. It's access to information, yet I haven't been able to receive it. Mr. Finlay has shown me how to sue the government, and that's the next step if we don't get it to change.

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

I want to clarify one thing. The information about the costs is available in the Public Accounts in the library.

Ms Theresa Ducharme: What I have seen is ten years old.

The Vice-Chair (Ms Paddy Torsney): There is no GST in anything we get. Trust me, I pay my GST.

Ms Theresa Ducharme: Oh, but the wages are phenomenal, and that's what we're working for: to pay our politicians. That's what Madam Ducharme wishes to change.

[Translation]

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

We will now hear the two witnesses from the Société franco- manitobaine. Mr. Boucher.

Mr. Daniel Boucher (Chief Executive Officer, Société franco-manitobaine): Thank you. Good morning and welcome to Manitoba.

My name is Daniel Boucher and I am the chief executive officer for the Société franco-manitobaine. I have with me Mr. Léo Robert, who is director general of the Division scolaire franco-manitobaine; he will speak after me.

We welcome this opportunity to defend the interests of our community before the Standing Committee on Finance. The minister of Finance announced earlier this week that he would be able to balance the federal government budget. We think this is excellent news for all Canadians.

As you know, the official language communities and related programs receive a lot of support from the government. But because of the budget cuts made since 1992, that support has been substantially reduced, by 30% for intergovernmental cooperation, especially official language instruction and provincial services promotion, by 24% for support to community organizations and institutions, and by 22% for promotion and dialogue programs such as language skills development, justice administration and support to linguistic duality.

We have assessed the cuts affecting the programs and organizations of the Franco-Manitoban community. With inflation, we have seen since 1992 a total decrease of 25% in the support we used to receive from the federal government. Those cuts have caused the elimination of jobs and programs useful to the Franco-Manitoban community. The community structures and institutions of French- speaking Manitobans have therefore been seriously eroded.

We are still convinced that those cuts adversely affect the recognition of our country's linguistic duality and that their consequences could jeopardize national unity. Those reductions create uncertainty about the survival of bilingualism in Canada.

Considering that erosion of the funding granted to the official language communities, we have to wonder about the will of the government to recognize and support the development and fulfilment of those communities.

Several elements have to be taken into account in the discussions about the funding extended to our communities and to relevant programs. The federal government is using devolution to the provinces as a means of reducing its deficit. But those transfers of responsibilities have often been contrary to its obligations under section 41 of the Official Languages Act.

Several federal-provincial-territorial agreements have been signed without any obligation to earmark the transferred moneys to the development of our communities. In that sense, the deficit has been reduced in violation of the Official Languages Act. Moreover, how can we make sure that the guarantees afforded by the Official Languages Act are respected when funding responsibilities are transferred to the provinces? Clearly, it is now time for the government to reinvest in supporting official language communities; it is an investment in our national identity, in our country's linguistic duality and in Canada's unity.

In Manitoba, we have a dynamic community structure thanks to an agreement signed by Canada and the Franco-Manitoban community, which allowed for a five-year diminishing funding and depended on different interdepartmental initiatives to make up the shortfall. We believe this agreement can work as long as there is a realistic financing to that effect.

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We believe the interdepartmental initiatives can work if there is a will, and budgets. We would therefore like to renew the funding agreement we have signed with the government since it benefits all parties.

We are also very concerned about the cuts at Radio-Canada and we hope it will be possible to reinvest in that tool, which is absolutely crucial to our community.

I will now leave the floor to Mr. Léo Robert, who will talk to you about the insufficient funding of our French schools in Manitoba.

Mr. Léo Robert (Director general, Division scolaire franco-manitobaine, Société franco-manitobaine): Good morning. I am director general of the Division scolaire franco-manitobaine, the only school division administered by the francophone minority in Manitoba.

The mandate of the division originates in section 23 of the Charter of Rights and Freedoms, and also in two Supreme Court decisions on the interpretation of that section 23.

Our division has the same obligations and the same operational costs as any other school division in Manitoba. On top of those regular costs, it must also bear some extra costs related to additional obligations it has been imposed under the Charter of Rights and Freedoms, the Supreme Court decisions and the provincial law that created us in 1993.

What we are looking for is adequate funding to allow us to fill our legal obligations towards our constituency, the francophone minority; we need sufficient funds non only to keep what we already have, but also to develop our programs and our curricula, and even to open new facilities where we could serve our clients better.

We are also looking for a long term financing of minority language instruction in Manitoba so that Mr. Boucher and I don't have to repeat today's experience every two, three or four years. Thank you very much.

The Vice-Chair (Ms Paddy Torsney): Thank you. We will now hear

[English]

Pauline Riley, who is a representative of the Manitoba Action Committee on the Status of Women.

Ms Pauline Riley (Provincial Coordinator, Manitoba Action Committee on the Status of Women): Thank you very much for the small window of opportunity in which to present what is rather a complex analysis of the situation.

You probably noticed that our brief is very similar to one that was before the committee last year. It is the same one. We feel little or no action has been taken on the issues we raised. I am actually presenting on behalf of both Women for Equality and the Manitoba Action Committee, and we're resubmitting this brief with the hope that the committee will consider anew the concerns of women.

Canadians are told that deficit reduction is a priority, and that to achieve this reduction we are reducing and even eliminating social services and national standards. We are losing our social and civil legacy, and we are shortchanging future generations. Women for Equality and the Manitoba Action Committee on the Status of Women believe Canada can fund its social programs and reduce the deficit. It is a matter of priorities.

We have at least four pages on the revenue side. Just to briefly touch on them, how could the revenues be increased? We believe the short answer is to obtain them from wealthy corporations and wealthy individuals who are not paying their fair share. The long answer does involve four pages of options, of which I hope the committee will take note.

One of the things we are really concerned about is children in Canada. We would like to remind you that Canada internationally committed itself to the principle of First Call for Children, and we have signed the plan of action from the 1990 world summit.

Children are one of our first priorities. The mental and physical growth of children cannot be asked to wait until interest rates or commodity prices fall. The ethic of First Call, to which Canada has agreed, does not demand that protection for the lives and development of children should be a priority. Well, it should be a priority.

We should fight poverty and improve child benefits. We should implement a national child care program, as promised in the government's election campaign. We should formally recognize social programs as an investment in Canada's future. We should recognize that the best form of income assistance is a secure, decent-paying job and an emphasis on jobs not profits. We should close the wage gap between women and men. We should increase the transfer payments to provinces.

On social programs in Canada, Canadians value social programs through the creation of the social safety network that guarantees shelter, food and education, health care and employment. Canada has built an inclusive society and a society of civility of which we are proud. Unfortunately the greatest threat to this legacy is government cost-cutting.

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We recommend that the government create accessible and affordable housing through new building and retrofitting, and introduce legislation enshrining the national standards for social welfare programs, which we need to lay out again. I don't want to go through all those, but they are in this brief and I draw the committee's attention to them. It should use the large surplus in the unemployment insurance fund to restore the benefits to pre-1990 conditions of coverage and duration. It should strengthen Canada's publicly funded pension plans.

Our conclusion is that the war on social programs is not about deficit and debt reduction, it's about our priorities. We can fund our social programs and reduce the deficit.

Canadian corporations enjoy one of the lowest tax burdens in the entire world. In 1992 corporate revenues as a percentage of the GDP were lower than those in 24 industrial countries, including Britain and Japan.

The next federal budget should recognize that our spending on social programs of 18.8% in 1980—and I'm not at liberty to have time to research more recent figures—is lower than most other industrialized countries.

We leave you with the following thought: It isn't peace just because one is not at war. It isn't peace when the strong and wealthy steal from the poor or when children don't have the health care, education or job opportunities to help them flourish in the 21st century. When people are forced into workfare or thrown out to starve it is not peace, it is conquest.

I thank you for your time.

The Vice-Chair (Ms Paddy Torsney): Thank you, Ms Riley, for putting it so succinctly.

Mr. Harris.

Mr. George Harris (Cho!ces, Coalition for Social Justice): I'm the spokesperson for the coalition for social justice called Cho!ces, here in Winnipeg.

You may be familiar with our organization, but annually we work on producing an alternative federal budget. I'm certainly not going to read all 403 pages in this document to you. Five minutes is a bit limiting. I will emphasize that the process we go through is far more engaging than the process the current federal government is engaged in here. It involves more people all across the country. It's not a perfect document that we produce, but it is one that works for people and not against us.

It does not have to be this way—the way the federal government is doing things. That was the heading of our release on this, and you each got a copy of that. I'm not going to go through the contents of it. I'm going to speak to the issues, so I will basically give you context from my comments.

There are a couple of things I'd like to note. Today is the International Day for the Eradication of Poverty, and I really want us to emphasize that. This government is doing nothing to eradicate poverty. People in poverty are still in poverty. They were in poverty when this government came in and they continue to be in poverty. There is a constant state of depression in spite of all of this nonsense we're hearing through the media and from our governments that things are getting better in this country. They're getting better for only a very few people. I just want to emphasize that.

If this government simply took this budget, without cherry-picking, it would be a start. This budget also has to be improved a great deal and we're in the process of preparing our 1998 budget, which we will be taking directly to the Minister of Finance.

Today is also significant because the remains of Che Guevara are being buried in Cuba. He was a person who had to go to extreme means to get rid of the oppressive wealthy people in his country. He was working for Cuba, although he was an Argentinian. It is a tragedy when ordinary people, doctors like Che Guevara, have to go to extreme means to get the very wealthy leeches to listen.

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You have two questions here. Is the process of deficit reduction your process here? It is doing nothing for the poor of this country. It's doing nothing for the working poor. What people are getting is more “McJobs”—more telemarketing jobs, more McDonald's jobs. We are told we cannot get the other jobs because we don't have the education, and we can't get the education because we can't pay for it. And when we do get the education, “Oh no, those jobs have gone somewhere else”, because of the kinds of policies this government is upholding.

This government promised to renegotiate NAFTA and did nothing. And now they're secretly negotiating a multilateral agreement on investment. This is going to be a further assault on the poor and will pour more and more money into the pockets of the very wealthy.

When there is one person in poverty in this country, it should be a crime for a billionaire to be living here. It should be a crime. That's what I want to emphasize next. Wealthy people create poverty. Wealthy people create poverty, and poverty kills. That's tantamount to murder, but it is not counted as murder because the people who make the rules in this country are the very wealthy people. They're the ones who pull the purse-strings of the politicians, and the politicians make the rules to suit them.

The Vice-Chair (Ms Paddy Torsney): Excuse me—

Mr. George Harris: Oh no, I'm not finished.

The Vice-Chair (Ms Paddy Torsney): Well, I'm sorry; your five minutes is completed at this point. I've been very careful in allocating fair time to everybody.

Mr. Hilliard, you're presenting. Thank you.

Mr. Rob Hilliard (President, Manitoba Federation of Labour): Thank you very much.

Intended or not, the federal government's economic strategy over the past few years has resulted in sustained unacceptably high levels of unemployment in an economy that is generating great wealth for large corporations and the people who own or invest in them. There has been great pain for the poor and insecurity for working families and their children.

Not only have the federal government's policies failed to reduce the number of jobless workers, they have contributed to them. Since 1994 the federal government has wiped away 45,000 public sector jobs. It has maintained a high unemployment policy as an inflation control measure. It has altered the UI fund structure so it benefits fewer unemployed workers at lesser amounts of money for shorter periods of time.

The official number of unemployed Canadians continues to hover around the 1.5 million mark, the same level it was when the Liberal Party formed government in 1994 with a mandate to reduce unemployment. This official unemployment rate overlooks many jobless workers. It does not include discouraged workers. It does not include involuntarily underemployed workers. One Manitoba economist, Dr. Robert Chernomas, estimates that if those workers were included in official statistics, the unemployment rate in Canada today would be closer to 17% of the workforce.

A voice: Shame.

Mr. Rob Hilliard: The federal government's economic strategy has wreaked havoc in Canada's health care and education systems. The reductions to transfer payments have been particularly burdensome in provinces such as Manitoba, where the cutbacks in health care and education have been extensive.

From the outset, federal government program spending was identified as a relatively minor factor in the overall debt and deficit equation, yet the federal government has cut social program spending by $14 billion since 1994. By far the more significant factor in increasing debt has been the government's multi-year high interest rate policy as an anti-inflation measure. This has resulted in the transfer of $47 billion of taxpayers' money to banks and bond traders in 1996 alone.

Earlier this week, Finance Minister Paul Martin announced that while he has no immediate plans for tax cuts or program spending increases, in the long run budget surpluses will result in both. Our advice to the federal government is think more about living up to your social policy responsibilities to Canadians and less about tax reduction, which inevitably benefits those who don't need it more than those who do.

The time has come to deal with some other deficits: the employment deficit, the education deficit and the many other social deficits that the unacceptable growth of child poverty creates. This quality of life deficit that has grown up in Canada is unacceptably high for very many people. They are not sharing in the economic successes, only in the painful remedial sacrifices.

I'd like to propose a couple of very specific things that perhaps the government could pursue in terms of addressing some of these other deficits: increased public investment in roads, bridges, sewers and public transportation, that is, the physical infrastructure; increased investment in the social infrastructure, in health care and education; increased public investment in environmentally friendly retrofitting of houses for energy conservation, structural stability and improved indoor air quality; increased public investment for not-for-profit child care; increased research and development grants for granting councils.

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Also, establish what we call an enterprise development bank—this is actually lifted from the alternative federal budget—which allocates very small percentages of total resources from banks and creates a fund that can be used for investment in community enterprise, small business and growth and development of the Canadian economy.

Spread out available work by reducing the hours of work to less than 40 hours per week in the federal labour code and by allowing workers in the federal jurisdiction the right to refuse overtime. We could also add that prorated benefits for part-time workers ought to be legislated, as well as providing legislative protection for temporary and contract workers.

If these measures were instituted, we estimate that approximately two million good-quality jobs would be created over the next five years, and this is approximately 800,000 more jobs than the current government predicts over that same period of time.

Thank you very much.

The Vice-Chair (Ms Paddy Torsney): Thank you very much. Thank you for keeping to the time allocation too, because it was exactly five minutes.

Now we will have Mr. Cerilli from the Manitoba Federation of Union Retirees.

Mr. Albert Cerilli (Manitoba Federation of Union Retirees): Thank you, and good morning.

I'm going to start by quoting somebody other than J.S. Woodsworth, Tommy Douglas and Stanley Knowles. I'm going to go right to the heart of the matter of what has been started here this morning by an industrialist by the name of George Soros, who wrote an article, “The Capitalist Threat”, in Atlantic magazine. While referring to a national or international code of ethical behaviour, here's what he said:

In any case, there is something wrong with making the survival of the fittest a guiding principle of civilized society. The main point I want to make is that cooperation is as much a part of the system as competition, and the slogan “survival of the fittest” distorts this fact.

As retirees, we have a role to play in this society, because we thought we had left it in pretty good shape, but it appears that the present governments, federal and provincial, don't even know how to maintain it. So I'll go right into my text, and I want to pick up from youth unemployment and the employment policy of this government and past governments.

Youth unemployment started to grow to 11.4% by 1990. By 1991 it had risen to 15.8%. During each May reporting of Stats Canada, youth unemployment for the year, from 1992 to 1997, remained above 17% or higher. The unemployment official numbers of Stats Canada remained at 9%; the unofficial number of unemployed—that includes those who have stopped looking—may be above 15%.

The January 1996 report of the Standing Committee on Finance, on page 31, stated:

Concern about unemployment was expressed in every part of the country. This concern arose in two distinct different but related ways, as a fear held among the large portion of employed and as a destructive reality lived every day by the unemployed.

That's the end of a quote from the very report, and we've appeared in practically every standing committee that has come through this town.

So that we will drive this point home to this committee, we also wish to quote from the Bank of Nova Scotia, the spring 1997 issue of the Scotia Plus newsletter, which quoted a report by the Canadian Mental Health Association stating that 47% of Canadians report that they are chronically stressed out because of the unemployment pressures.

On October 16, 1997, was the UN food day conference in Quebec City, while 1.4 million Canadian children living in poverty are still living in poverty and are going to bed hungry—that is, if they have a bed.

Post-secondary education costs for students and increased tuition are creating a two-tier education system, not only in post-secondary education but also in the public system. As well, educators, who continue to mould learning and freedom of thought, are under constant government pressure to give up their rights and freedoms because of the cutbacks in funding for education.

This, as you have heard, is in both languages.

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At a meeting in June the Prime Minister admitted that our environmental conditions in Canada are not meeting the standards that were signed by the previous government. The environmental conditions of air, land, and water are getting worse, causing untold respiratory health and other diseases in humans as well as wildlife.

The Canadian tax system is a joke, with corporate wealth getting wealthier and average Canadians paying the freight. You may have a desire to correct some of these systems and to implement a fair tax system for all Canadians, including corporate Canada.

Repair the health system before it's destroyed, so the sick and the mentally challenged are not thrown on the streets of our cities. Ease the pressure on young parents by introducing a universal affordable day care system.

Now we find the government is taxing Canadians, and Canadians are getting wise to the government, with taxes disguised as user fees. The unprecedented tax grab through the OAS clawback is compounded with a CPP increase in premiums and augmented with a proposed change to OAS and GIS of the seniors' benefits. It's scheduled to start in the year 2001. Well, let me tell you, that's a violation of my charter of rights, under section 15. You're going to get a challenge on that, and you can tell the minister that.

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

Now we'll hear from Evelyn Jacks.

Ms Evelyn Jacks (President, Jacks Institute): Good morning. I'm the president of the Jacks Institute. We're a national private career college specializing in income tax preparation training for taxpayers and their advisers. I would like to address the two issues brought forward in your outline, first the general philosophy on deficit reduction and secondly priorities on debt reduction, spending increases, and tax relief.

To the first issue, we would like to say that as a general philosophy deficits should not be run by governments. Governments should spend a specified percentage of tax revenues received on programs that Canadians want and need and apply the rest towards debt reduction. Our goals should be to run governments efficiently enough to create surpluses that begin to pay down the debt over a specified period of years.

Now to priorities. First of all, on debt reduction, an orderly plan for debt reduction should be proposed along with program spending and tax relief or both. This generation, my generation, does not wish to burden its children with a debt problem of such magnitude, particularly because the tax base will be smaller in the future.

On spending increases, we need to ensure that the sick have ready, accessible, and competent health care from caregivers who are well treated by society. Doctors, nurses, and others in the medical system must be valued for their work and dedication. They must have access to human resources and treatment options to allow them to do their work. Demographically speaking, I think it is in our best interest to spend money on the prevention of illness as well as the treatment of illness, as we cope with the aging of the baby boomers. Young Canadian doctors should be encouraged to become leaders in the field of medicine and to stay in Canada in order to do so. Families who care for their sick and dying should be recognized for their contributions, as should the disabled who strive to be self-sufficient and self-supporting.

In short, as Canadians we want to be there to help those less fortunate than ourselves, particularly those who try not to burden others. With the surpluses in the employment insurance fund there's room for the encouragement of research, job creation, and innovation in health care services.

Now to tax relief. Some targeted tax relief is long overdue. The proud Canadian middle class, the primary contributors to the tax base today, face uncertain futures in retirement. Many will receive reduced public pensions or none at all under the proposed seniors' benefit. Yet at the same time they face the prospect of saving for their retirement under the highest marginal tax rates of this century. Those who do sacrifice today to be independent in retirement should be able to count on more tax assistance.

I have a few suggestions for how this might be done. For example, we should allow all Canadians to contribute a higher percentage of their earned income to RRSPs, but leave high income caps in place to limit tax benefits to the very rich.

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We should consider expanding tax brackets to lift the tax burden off the middle and upper-middle classes and we should index the brackets fully into the future. This would provide for the investment opportunities Canadians need to save outside their registered plans and could also go a long way towards curtailing the underground economy.

Third, we should reconsider the severity of the clawback under the proposed seniors' benefit, along with its phase-out levels. Married seniors should be able to earn $104,000 together before losing all benefits, similar to the maximum singles' income limit, and the clawback rate should be reduced.

Finally, we should consider removing the 3% net income limitation on medical expenses and we should continue to respond to the many new medical treatments used by Canadians and their medical practitioners, including alternative medicine. And 100% of full-time attendant care cost should be fully tax deductible without affecting the disability tax credit.

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

Our next presenters are the Johannsons, representing the Canadian Association of the Non-Employed.

Ms Joan Johannson (Chair, Canadian Association of the Non-Employed): Good morning, ladies and gentlemen. I'm here to report on the effects the last four years of Liberal budgets have had on the Canadian people and to make recommendations for the budget in the coming year.

When people look at budgets, all too often what they see is numbers and the bottom line. May I remind you that budgets are really about people and about communities? I'm sure that you entered public life to serve the community. However, something has gone terribly wrong with your best intentions. For millions of Canadians, life is now a horror story of lack of work, lack of money, lack of resources for their children, and lack of self-esteem.

This would be a heartbreaking state of affairs for one person, and if it were one person suffering, I am sure you would all do all you could to alleviate that suffering. Unfortunately, we are talking about millions of men, women and children who are your fellow citizens, and rather than being helped, your fellow Canadians are being pushed further and further into despair.

How did this happen? I can tell you the answer: deficit reduction.

Deficit reduction in itself is not a bad thing. In fact, we could all agree that it's a good thing. Where we differ is in how it's carried out. The Liberal government has chosen to beggar large portions of the Canadian public in order to achieve deficit reduction. And no one in the top tax brackets and no large corporations have suffered in order to bring down the deficit. Here's what I read in The Globe and Mail yesterday: “Buyers swarm dealers for new Mercedes”.

It is only we, the ordinary people, who have suffered. There have been massive government lay-offs in government departments and in crown corporations. At the same time, there has been a continual slashing of employment insurance. With the CHST there has been slashing of the social safety net that previously was there to protect people. Federal cuts have resulted in provincial cuts, such as the 10% cut in provincial social assistance. The result of these policies has been thousands of Canadians dependent on rotten fruit and stale buns to survive.

Whatever the intention in choosing the methods that you have for deficit reduction, the result has been tragedy for many of us.

Where do we go from here?

As long as you look only at the figures and not at the people, your decisions will be flawed. Let me give you an example of what I mean.

There is constant talk of the natural rate of unemployment. Is it 5%, 7% or 8%? Every economist has an opinion. Mr. Martin is reported in The Globe and Mail as saying that no one knows the level. However, no one considers what happens to the 5%, the 7%, the 8% of the population that is unemployed. No one, including the federal government, takes any responsibility for these people and for their children, who through no fault of their own are unemployed or are working at minimum wage. The discussion is revolving around artificial numbers that no one can even agree on.

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Once you decide your priority is rather to make sure that every citizen in this country has the opportunity to work at a living wage and that those who cannot work have an adequate income, you will begin to make different decisions around the budget.

I'm just going to skip here because of my time. I just want to comment on the new child tax credit system. This means we're going back to the 19th century idea that some people living in poverty are deserving and some are not. Will you please explain to me how a child whose mother is on welfare does not get that little bit extra that a child whose mother works receives?

Finally, as we all know, the questions we ask determine the answers we are given. May I suggest that a question asking how the economy is doing will get a positive response. The question asking how the people are doing will be answered with the response that the people are starving.

The Vice-Chair (Ms Paddy Torsney): Thank you very much, Ms Johannsen.

Next is Mr. Emberley, representing the Crossroads Resource Group.

Mr. Kenneth Emberley (Spokesperson, Crossroads Resource Group): Thank you, Madam Chair. I have a presentation, but I have also prepared four other papers. I would ask for permission to have them distributed at the end of the meeting.

This is the most exciting and horrendous thing, this public consultation with citizen activists, who are now called “stakeholders in a corporate society”. Most of us are only hamburger holders, not stakeholders, lacking in all power in a very carefully structured private room, usually with space only for 25 to 40 of Manitoba's citizens. For 10 or 15 years, you've been broadcasting the House of Commons as a propaganda program on cable television. Every time we ask for the confidential, secret information in this room to be revealed to the people in Manitoba on cable television, you refuse us our basic human rights. I protest again at the falseness and the hypocrisy of this whole meeting. There won't be one hundredth of one percent change in federal policy because of anything that goes on in this room today.

I would suggest that the federal finance department, which is so powerful within the government, revise several key policies: the Uruguay GATT of 1980; free trade, NAFTA, and MAI, which is to be passed this year. Each of these four secret treaties has transferred 15% of my constitutional rights and 15% of my children's constitutional rights to groups of transnational corporations. I submit that this is not acceptable.

The government debt is the biggest fraud in the history of the world. Last year, I gave you Bronson's paper, Profit Parasites. The United States government has only not had a debt in five years since 1929, four of them in the first Great Depression. Canada has had a big debt since the 1960s, as corporate taxes were cut from corporations paying equal income tax—that's in the graphs that Mel Hurtig presented to the Senate—to the time in 1988 when individual, private citizens paid $55 billion in taxes and corporations paid $5 billion in net taxes. The only other taxes corporations paid were for their own subsidies and grants.

The deficit, the debt and the overspending are lies, lies, lies, and the propaganda network of the CBC and the mass media is as effective as the one they had in Germany under Hitler and the one they had in Russia under Stalin. We have a mass media that operates as propaganda. There are just two books on it, The Glass Teat, whatever that means—it's called the television screen—and Sultans of Sleaze, one of four books by Joyce Nelson. They tell you about the fraud of the thing.

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The debt is a totally false thing. Corporations owe more money than the government debt. The corporations aren't paying off their horrendous debts. Whenever they go bankrupt they are bailed out by the government; and the deliberate policies to favour the rich, to increase the banks' earnings, deliberate policies carried out by the government, caused the debt and the debt of corporations and private individuals. Why don't they take all the people who are spending next year's income and supporting the banks by carrying a $30,000 debt on their credit rating? Why wasn't there any honesty on the part of business to pay off business debts and pay off private individual debts?

There's no religion more false than the problem of government overspending and overtaxing. For forty years we have had increasing power to the private individuals and the corporations. Paul Martin is a major corporate owner, with all his companies and the head office in a Caribbean island, so he doesn't pay any Canadian taxes. We all know that. The biggest, most powerful men in Canada....

There's one other thing: the 0.4% of the people in Canada making over $100,000 a year doubled their incomes in the last fifteen years. The minimum wage and social assistance people had their incomes cut in half. The standard of living of the lower class has been lowered by one-half on the orders of the 12 richest families and the 150 corporate CEOs in the Business Council on National Issues. Tom d'Aquino spoke on television last night, acting as if he were the vice-president of the Northwest Territories, saying we cannot have laws that will affect the environment or affect the prices of corporations. That's exactly....

Most people don't know that FDR faced a fascist revolution, organized by Irenee duPont of General Motors and J.P. Morgan's bank. It's all told about in the book called Trading with the Enemy, by Higham. They said Franklin Roosevelt was feeding the starving unemployed in the Depression and that makes him a communist, because no Christian or capitalist would do that. We have identically the same kind of businessmen in power today, setting the policies of our government. It doesn't represent the people of Canada.

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

I don't know about everybody else, but I wouldn't mind a three-minute break.

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The Vice-Chair (Ms Paddy Torsney): The meeting is now back to order. How this will work is that we will have approximately five minutes. I encourage the questioners to keep their questions to the point and to direct their questions to somebody specifically. Yesterday we had some “pre-rambles” rather than preambles, and that doesn't lend itself to getting the most out of the witnesses we have before us.

If you are asked a direct question, hopefully you will choose to answer that. You do not have to; that's your choice. But if you would like to tag on to somebody else's question, I encourage you to give me a signal and I will try to keep track as best I can.

Again, answers should be as succinct as possible; questions must be as succinct as possible.

We will start with the Reform Party, with Mr. Ritz.

Mr. Gerry Ritz (Battlefords—Lloydminster, Ref.): Thank you, Madam Chair.

Ladies and gentlemen, I would like to compliment you on your excellent presentations. From what I am hearing, the consensus around the table seems to be that the methods the government has chosen for deficit reduction were severe, and actually there was more hurt than good at this point.

I would like to know from your own organizations and yourselves what changes you would have made and what different areas or types of taxations you would have liked to see implemented or tapped into, keeping in mind that from our standpoint reductions had to be made in order to get this thing under control.

I will toss that out generally and ask for comments.

The Vice-Chair (Ms Paddy Torsney): Do you want someone specific to address it initially?

Mr. Gerry Ritz: No, not really.

The Vice-Chair (Ms Paddy Torsney): Mr. Johannson.

Mr. Robert Johannson (Research Director, Canadian Association of the Non-Employed): When I first began making presentations to the committee four years ago we were discussing basically two options that were presented before us. The suggestion for the budget was either to reduce the deficit by doing away with the exemption on interest payments on RRSPs and other such funds, or with reducing spending. I think the proposals by the finance department, which are heavily documented about the kinds of money that could be raised by eliminating that particular tax loophole, are one of the ways you should look.

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

Mr. Cerilli.

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Mr. Albert Cerilli: Well, I think the question can be very broad and that's why we stayed away from the trap of the conditions of the letter that was communicated to me Friday by fax—and of course, I didn't have a lot of time to do that. But over the last four years or so you sort of got used to the fact that there are some certain things we've suggested over the years. I think the MFL, through Mr. Hilliard, touched on a couple of things earlier this morning.

One was the reduction of the 40-hour work week. The second was banning of overtime. We don't have any, for example, code of ethical conduct for corporations. They're tinkering with it with the government and so on. Labour rights, workers rights, and human rights are really being trampled on.

My closing remark would have addressed that. I'll try to summarize it in an answer to you. But those are two prime examples of where....

I personally was involved in a strike for a shorter work week in 1950, from 48 hours to 40 hours. Believe it or not, that sort of eased off the unemployment situation.

Right now, France will not back off the other countries' push towards an extended work week. France is simply saying they went through this nonsense, the citizens are up in arms, and in fact they're even looking at a shorter work week.

So those are a couple of things that would have happened.

What's really happening with the unemployment situation, besides the underground economy that we touched on in one of our briefs here a couple of times ago, and so on, is that the structure as laid out under the unemployment situation...and I mentioned this morning that 47%, almost 50%, of Canadians are under stress because of the extended work week, the unpaid overtime that employers are forcing workers to do particularly in the non-unionized shops, and so on.

But what has really happened is that as retirees we are concerned about our children, our grandchildren and great-grandchildren, simply because the way we're heading towards this thing they have nothing to look forward to, and the country's being pulled apart with these kinds of policies when there is no future for jobs.

We can see that the automation—and I've been through a lot of automation—has really done some things to correct the problem of easing the work, but in another sense, we haven't dealt with the real issue of the unemployment yet. That's where we should be heading.

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

Ms Riley for one minute.

Ms Pauline Riley: I'd like the finance committee to take a look at where the burden of balancing the deficit has been placed in the last few budgets. I'd like to see that burden shifted from the poorest and most vulnerable people in this society, and I'd like you to start looking at corporations and wealthier Canadians, because there is an awful lot of money in there that is not being taxed. I don't want to go into figures and things like that, but it would seem obvious to me that you cannot continue to balance this budget off the backs of the poorest people in the country. You have to start looking at the fairer share.

So there are several recommendations laid out in my submission, and I really urge you to take a look at that.

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

[Translation]

Mr. Perron, for five minutes please.

Mr. Gilles-A. Perron (Saint-Eustache—Sainte-Thérèse, BQ): Good morning, madam, and thank you. Let me take this opportunity to make you practice your French this morning.

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

Mr. Gilles-A. Perron: Since the minister of finance, Mr. Martin, has found most of the money he needed to reach his zero deficit thanks to cuts in the social programs run by the provinces, which represents almost 54%, and since he has dipped into the employment insurance fund—as it is now called—in his efforts to balance his budget or to reach that zero deficit, do you think it would be appropriate for him to transfer his future profits to the provinces so that they can put that money back into social programs and into the employment insurance fund? Should the federal government stop meddling with provincial affairs? Are the provincial governments, since they are closer to the people, in a better position to run all those programs?

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My question goes to Mr. Hilliard, who is right in front of me, on the other side of the table.

[English]

Mr. Rob Hilliard: In the area of the pillaging of the UI fund, we're very much opposed to that. We believe that the unemployment insurance fund was initially set up to be an insurance fund to cover off periods of times of joblessness. We think that was a laudable objective and it ought to stick to that and not complicate things with anything else. The money is intended for that purpose and it should be used for that purpose only.

On the issue of transfers to the province, we have to be very careful there. Part of the difficulty is the way transfers of power and authority have gone on so far. This devolution process from the federal government to the provincial government has been primarily characterized as a transfer of authority without a transfer of equitable resources. For a majority of provinces—and certainly Manitoba is one of those—more often than not that results in inequitable and inadequate services compared to what was previously provided at the federal level.

So we have to be very careful that when we talk about devolution of powers, we're not talking just about powers but also about the ability to deliver those programs. A large number of provinces simply don't have an adequate tax base to do that. I would go down that path with a great deal of caution.

Ms Pauline Riley: The transfer to provinces needs a caution attached to it, because unless there are national standards attached to those we'll end up with a patchwork of programs across the country, especially around the issue of social assistance. I'm very concerned that if there are no national standards for these programs, then each province will, according to its means, determine that. There would be no standards, so each province would be quite different and citizens in each province would be treated quite differently. That's something to be aware of.

Mr. Jim Finlay: All the finances that have been transferred to provinces are being mismanaged completely. I've got it on statement of court.

When the shared cost agreement was signed on the Canada assistance plan in 1967, five provinces were not following the agreement, and Manitoba was the worst one of all to misuse the finances for road repairs instead of for health and social services, as they were to be used. That's what's going on today too; it's these, such as training programs.

I had a training program that was a shared cost between the federal and provincial employment program, but when Social Services heard about it, they went and deducted its study as an overpayment, which was illegal. That's the bottom line that no one is looking at at all.

Mr. Kenneth Emberley: About the unemployment insurance fund, there's a surplus, but they carried on for five years a program of cutting all the benefits that people receive from it so they wouldn't spend as much. They keep cutting the benefits, and all of a sudden they say, “Oh, hey, look, there's a surplus”. It's a dishonest surplus. It's money that was stolen from the people that should have been paid in benefits.

I want to try to encourage a group of people to form an organization to reconvene the Nuremburg war crimes tribunals for the people who are dismantling all of the social programs that nurture the nation and nurture the people and nurture the culture of our country.

This privatization and deregulation are a false religion, the same one that was promoted in the 1930s that caused the giant depression.

This depression is identically the same. Until you read Dr. Raveendra Batra's book, The Great Depression of 1990.... In 1987 he told us a seven-year depression would be coming in 1990, exactly on schedule. It's the fifth big one.

Ms Joan Johannson: I think one of the things that's happened with the unemployment insurance fund and one of the reasons why it has a surplus at the moment is that there is a large group of part-time people who are paying—and their employers are paying—into the fund but are not covered. You now need 600 part-time hours, which means you have to work at least 12 hours a week to get unemployment coverage. But if you work one hour a week or three hours a week, you still have to pay.

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[Translation]

The Vice-Chair (Ms Paddy Torsney): Mr. Robert.

Mr. Léo Robert: I agree with most of the comments that have been made about the transfer of funds to the provinces. However, I believe certain elements are sometimes missing in the transfer agreements. There should normally be a follow-up to make sure the provincial governments are using the funds according to the objectives established in the first place.

Therefore, there should be not only criteria, but also a follow-up and an assessment of the way the provinces have used the funds.

[English]

The Vice-Chair (Ms Paddy Torsney): Thank you. I've let this round go a little bit longer.

Mr. Helgason, please be very quick.

Mr. Wayne Helgason: There are two things. On the transfers to the provinces, I think when as Canadians we vote, we do expect, and did expect, leadership on a national basis to secure our identity as Canadians. In the absence of the strong influence on national standards for the things we are identified by, it would be a great mistake to simply roll out responsibility and/or resources to the provinces in the absence of debt.

The other point is that you should recognize, of course, that the federal government maintains and can't delegate, in the view of aboriginal Canadians, their responsibilities. That's a very important ingredient in the considerations on devolution of authority to the provinces, and I'd be very cautious in that regard.

The Vice-Chair (Ms Paddy Torsney): Thank you very much, Mr. Helgason.

Mr. Martin, representing the New Democratic Party, welcome to our committee. This is your first day with us.

Mr. Pat Martin (Winnipeg Centre, NDP): Thank you very much. I have a number of questions. I'd ask the chair if we are going to go around the circle again, ask one question per member and then continue.

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

Mr. Pat Martin: Great.

The first issue I'd like to raise is one I'd like to direct at Mr. Helgason and then invite any others to comment.

In your presentation, Wayne, your third point mentioned the tax system as one of the tools we can work with toward a more equitable redistribution of wealth. There have been a lot of calls for tax cuts as a way to stimulate job creation. Could you comment on or clarify the juxtaposition of both sides of this argument of using the tax system as a tool for equitable redistribution of wealth?

Mr. Wayne Helgason: It's certainly our view that in terms of tax revenue and the variety of the GST and others, people of lower income are involved very highly in the delivery of taxes to the federal government, partly because of numbers but also very significantly, as the ALL, or Acceptable Living Level, document shows, even a person who at this point in time makes a living below the low-income cut-off or the acceptable living level, there's still a fairly significant tax burden on that very low income.

So in terms of relief from taxes, we were suggesting that the floor be reviewed so that those who may be avoiding taxes would be the ones with the low income, rather than some of the loopholes that have been brought up by earlier speakers.

In terms of the efficient distribution to individual Canadians, the Revenue Canada and benefit programs, including the national child benefit contemplated for July 1998, form a decent delivery system, and could be progressively used to ensure that financial resources find themselves quickly into the homes and onto the tables of low-income Canadians on a universal basis with respect to all Canadians, including aboriginal people who live on reserve.

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

Mr. Harris, Ms Johannson, and then Mr. Hilliard.

Mr. George Harris: The first thing I'd like to say is that the system right now is certainly not working that way.

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I'll cite the example of the family trust that shipped $2.2 billion in assets out of the country, which the Liberal government didn't do anything about after it was identified by the Auditor General in his 1996 report.

The second thing is that the very wealthy in this country are becoming very in your face. My anger comes from that—very much in your face.

In Toronto on October 17 there will be a conference for high-net-worth individuals. One of the workshops is on moving money out of Canada. They're so blatant about it. This is organized by an organization called the Strategy Institute.

I think a comment made earlier was that there should be a clear analysis of the burden of this deficit and debt reduction, and where it is being placed. I guarantee that it will be shown that it is the poorest and the most vulnerable in this society who are paying the shot.

Voices: Hear, hear.

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

Ms Joan Johannson: The Liberal government has made a tiny step toward doing something about tax fairness. Unfortunately, it is just a backward step.

I want to reiterate something about this new child tax credit. The way it is put in is that if you're working at minimum wage, or part-time, or in some way, your child will get this extra bit of money. However, if you are unfortunate enough not to have a job, as are 1.5 million or 2 million Canadians, your child does not get this money.

I cannot understand how the government can say to a child, sorry, dear, your mom is on welfare, so you stay in poverty; we're just going to help those who happen to be fortunate enough to have a little bit of income. This is a devastating way to push the very poorest of the poor in our society even further down. There's no reason why this should be, except to punish people, blame people, because they don't have work when there is no work. We all know there isn't enough work. Because of the technological changes in our society there is not enough work, and you create a tax system to blame the people who don't have work.

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

Mr. Rob Hilliard: On the issue of the tax burden, it's certainly an inequitable tax system we have here in Canada, where the middle- and lower-income citizens of this country bear a disproportionate share.

I'm reminded of a phrase I've often heard at the bargaining table with employers. Employers will constantly tell us—and I've heard it a thousand times—that whatever the financial package is, it has to be based on the ability to pay. For some reason we don't have a tax system that's based on that principle. It's not based on the ability to pay.

Voices: Hear, hear.

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

Mr. Rob Hilliard: Wait a minute. I didn't mean to stop there.

The Vice-Chair (Ms Paddy Torsney): I'm sorry. Continue.

Mr. Rob Hilliard: I want to make one further statement on the issue of tax cuts. We would be adamantly opposed to an across-the-board tax cut, which will disproportionately benefit the wealthy of this country and benefit very few middle- and lower-income people. The upper-income level of this society has already benefited through this transition to a new economy. They don't need any more tax breaks, frankly.

However, there certainly can be tinkering within the system. I want to relate a couple of statistics here. If government had $1 billion and they were to spend it on direct hiring, they could create 56,000 jobs in this country. If they spent that $1 billion on buying goods and services, the indirect spin-off would be the creation of 28,000 jobs in this country.

If they cut the payroll tax, however, as the CFIB is constantly telling us is a job-killing tax, the best information is that the most jobs that would be created would be 9,000 jobs. The payroll taxes in this country are not job-killing taxes. In fact, the payroll taxes in this country are amongst the lowest in the world compared with other OECD countries.

That ought to be the very last tax of all. When we have all debt gone and we have a burgeoning, terrific society, with everybody living above the poverty line, then we can look at reducing payroll taxes, and not before then.

A voice: Right on!

The Vice-Chair (Ms Paddy Torsney): Mr. Emberley, a short comment.

• 1200

Mr. Kenneth Emberley: It's so difficult; it's so complicated. When business people lobby, they lobby hard and powerfully that they need money, they're short of money. The government gives them money; they find a way, tax cuts or some way. But when the government says there's poverty....

The minimum wage, which is $6 an hour or less, should be $12 an hour. It's been eroded by inflation in the last 15 years. Every single poor person in Canada is robbed of $12,000 a year on the minimum wage by the rich and powerful people, who took a doubling of their incomes and demanded, and ordered, through their control of the government and business lobby groups, that the lower-class people have their incomes cut in half. Until we elect a democratic government where the 90% of people who vote who aren't rich have some power.... Then you raise the minimum wage.

The minimum wage should be raised $1 a year every year for the next seven years. That's all you need to do to cure poverty.

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

Mr. Iftody.

Mr. David Iftody (Provencher, Lib.): Thank you, Madam Chairperson.

Thank you very much for the presentations here this morning. As a Manitoba member of Parliament, I welcome everyone here.

I was interested in a number of comments. I have a number of questions, but I guess, time permitting, I'll just ask one for now. It is directed to Monsieur Boucher from the Francophone Society.

You mentioned in your presentation—and Monsieur Robert, you can respond as well—that the Government of Canada was in breach of its responsibilities through section 41 of the Official Languages Act. I asked you during the intermission to clarify that somewhat for me. I was not particularly familiar with that. Could you very briefly speak about that obligation in a summary form and then give me some instances where that breach, in terms of a transfer of resources to your organization, has occurred?

[Translation]

Mr. Daniel Boucher: First of all, under section 41, all federal departments and Crown corporations must foster the development and fulfilment of our communities. It is very clear. In 1994, in Moncton, Mr. Chrétien stated that he would ask his departments to work towards the development of our communities. Since then, we have had very poor results in applying section 41. It is a major concern for us.

It was very obvious last year, during the negotiations with the province of Manitoba about labour training and the devolution of powers. It is a major concern.

You must know that our relationship with the province is not always easy. It is even difficult to get services in French from the province. When the federal government transfers a power which gives us certain rights, without transferring at the same time the obligation to offer programs and services in French, it is a major concern.

We went directly to Ottawa last year to lobby the government about that, which should not have been necessary, because it should be quite obvious. We met officials in 17 departments, politicians, senators, all kinds of people. Not one of them knew about the federal obligations. The federal government makes transfers, but forgets about its obligations towards certain groups under the Official Languages Act. Things go very fast. It is a big concern for us when we have to work in that context.

Therefore, we believe that the obligations under section 41 have not been transferred to the province.

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

You have three minutes left, Mr. Iftody.

[English]

Mr. David Iftody: Okay. I would like to address my second question to Mrs. Johannson.

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In your introductory comments, Ms Johannson, you talked about the unemployment rate in Canada and Manitoba here, I believe, and you mentioned that since we've begun the deficit reduction process, it's created a lot of unemployment because of the cutbacks in social services, in transfers to the provinces and that sort of thing.

How do you account for the fact that, I think it was in January 1994 or the spring of 1994, when we started this process, unemployment was close to 12% in the country and now it's down to roughly 9%? Also, in the province of Manitoba here, it's at 6.5% or 6.6%. How do you account for the fact that through this deficit reduction process—and there have been cutbacks...? I'm a little confused about this. Why at this same time would there be a reduction in the unemployment rate in the country?

Ms Joan Johannson: The point of my whole presentation is let's stop playing with figures. I don't care if one person is unemployed and doesn't have enough to eat; one person is too many. That's number one.

Number two, the whole issue of the unemployment rate is nonsense. It doesn't take into account discouraged workers, and we know how this works. When unemployment is high, workers stop looking for work. Then they're not counted as unemployed. You're only counted as unemployed if you have actively looked for work. So you stop looking for work and the figures go down. Then when the official unemployment rate goes down, people start saying, “Oh gee, there must be jobs”, and then they start looking for work again and the figure goes up.

The unemployment figure doesn't count people who are working part-time at minimum wage. It's a game, playing with statistics. And I don't care if it's 6%, 9%, or 10%; it's too much, no matter what it is. People need to have some kind of meaningful work at an amount of money that they can live on. So let's not get caught up in numbers.

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

Ms Riley.

Ms Pauline Riley: We're obsessed with counting numbers, and I agree with Ms Johannson that the numbers are very deceiving. Lots of people are taking part-time jobs. They're no longer considered unemployed. I myself work part-time, not because I choose to, but because I have no option at this point. So there's a whole class of people who are underemployed.

Governments are introducing training programs under social assistance, which remove people from unemployment, from social assistance, into training programs. So people are being moved and bumped along quite constantly, and it actually ends up going round and round, and people go back into social assistance or into unemployment.

I don't think the unemployment figures are correct anyway, because they don't count it accurately. I really think you should take into consideration the amount of people, and for the sector I'm coming from, women, the underemployment is absolutely enormous.

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

Mr. Johannson, Mr. Hilliard and Mr. Helgason, and that will close this round.

Mr. Robert Johannson: Let me take it on the technical level on which I hope you intended it.

First, if you look at the stimulus to the Canadian economy over the last few years, it can generally be understood as resulting from the American policies. The Americans took exactly the opposite tack to the deficit from the one we are taking. Instead of cutting programs, they increased taxes. They put in one of the most massive tax increases that the United States has ever seen. They fought the deficit that way and they fought the recession that way. They have reduced unemployment in the United States to the lowest in the last 50 years.

We didn't. We have some of the spin-off benefits of the stimulus they applied to the economy, and if you look at the figures, you will see that most of the growth in the Canadian economy has been in the export economy to the United States. The domestic economy is still in serious recession.

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

Mr. Hilliard, briefly.

Mr. Rob Hilliard: I just want to point out one thing in terms of the statistics and how they can be manipulated. Other speakers have mentioned a number of other factors, but frankly one of the things that's happening in this country a great deal is the elimination of full-time jobs and the creation of part-time jobs. To lay off one full-time worker and create two part-time jobs is not job creation, in our view.

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The Vice-Chair (Ms Torsney): Thank you. Mr. Helgason is next.

I am sorry, I missed Ms Ducharme earlier. She will be the last speaker on this round.

Mr. Wayne Helgason: I know we are certainly becoming more and more skeptical of numbers. We hear about new jobs being created and that's probably true. I have a friend who has three of them.

There's another line item beside the unemployment rate and it's the participation rate. Fewer people are participating in our market economy and we see evidence of that on the streets of Winnipeg.

The concerning circumstance is with our young people. It should be no surprise that their participation in other kinds of economic activity—gangs and what not—is a consequence. To think that as a society we are allowing that age group, which is starting families, restricted access to resources is unconscionable.

You have one opportunity in the next three years to respond to the Convention on the Rights of the Child and eradicate child poverty. That age group must be focused on. It is the public trust that Canadians gave the federal government to undertake. You have three years to do it. Hopefully this process will be meaningfully different from your earlier efforts.

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

Ms Theresa Ducharme: Speaking of the disabled and the employed, we've gone through the International Year of the Disabled, which was recognized to encourage the disabled to become employed and part of society and to be more than just welfare recipients and stay-home people. That was 1981.

We've already established the Decade of Disabled People, but we haven't changed employment standards for the disabled to become employed and to also be accepted as contributors to society and taxpayers instead of just welfare recipients.

As I mentioned earlier, home care originated in 1968 and we're still under home care without community care services being established so we can have assistance. You didn't see my hand up because my nurse didn't have it held high enough. Now you'll see it higher, because I'm going to be running next to everybody else in this room in the next election. I tell you over and over again, that's the only place I can find a job, because they can't stop me from running or participating as a contributor to society.

The Vice-Chair (Ms Torsney): Thank you, Ms Ducharme. Mr. Gallaway.

Mr. Roger Gallaway (Sarnia—Lambton, Lib.): It has been interesting to hear the continuum of opinion here this morning. One of the things I believe Mr. Johannson alluded to was the American situation. In two provincial jurisdictions in Canada at the moment, Ontario—that's where I am from—and Alberta, I've heard reference to decreasing the length of the work week so there will be a spin-off in terms of creating more jobs and opening up the market to more people.

In Alberta and Ontario there is a movement afoot at the moment to go in the opposite direction. In Ontario, Mr. Harris is proposing that the work week be lengthened. He's going to amend the labour code so that can occur, because we live in a world where we must compete with others and have a work week that is comparable with other jurisdictions, namely the United States. If we do not have that competitive edge, all will be for nothing because we'll never have a vibrant economy in Canada that will be able to compete with the United States.

I would like to hear your thoughts on that.

Mr. Robert Johansson: Let me address the whole question of competition and international competition. This is a major policy. If we assume we're going to compete head to head with the Americans, this is an insane policy. There is only one thing we can compete head to head with the Americans on, and that is natural resources. We could become hewers of wood and drawers of water. That's what we are becoming. If that's the kind of economy you want, the kind that The Globe and Mail recommends, with more and more low-wage jobs, we can build that kind of economy. And we are building it.

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If we want to build a modern economy that has a high-tech economy, then we have to put into place the kinds of protections and subsidies that are necessary to produce that economy. An international economy, with a total free market economy in the international world, is going to reduce our country to penury. That's just the way the market works.

The Vice-Chair (Ms Paddy Torsney): Mr. Emberley.

Mr. Kenneth Emberley: We must compete with the United States. But we only compete in the hardhearted side of economics. We never compete with niceness. We never try to outdo them in niceness. Holy mackerel, we can outdo them in niceness!

Some hon. members: Oh, oh.

Mr. Kenneth Emberley: We had a conference just a week ago. Fifty years after my graduation in agriculture we had a reunion. There we had a top civil servant who was working on the flood committee planning for the next big flood. He said he was in Los Angeles and visited seven cities coming up the west coast, and every newspaper had headlines about what is it we have in Canada and in Manitoba that produces people who work together and help each other and produces a government that serves the people, with the people working with the government to look after each other. The newspapers were asking where the hell Canadians find people like that and why they are so different from Americans.

For the last five years, the whole of western Europe has had a higher standard of living than we've had. They've had higher wages, longer holidays, shorter work weeks and a better government system of unemployment insurance. That's why those people wouldn't immigrate here. We had to get immigrants from third world countries.

As for trying to outdo the Americans, at the time of the free trade fight the minimum wage in Montana was $1.40 an hour and in Louisiana $1.60 an hour. It was $2.50 an hour here and they were shipping the jobs out to Mexico.

Now we've installed free trade slave zones all over the world. The United States did it in the 1960s when the people tried to revolt and stop the Vietnam war and things like that, and when Martin Luther King wanted freedom and the workers wanted decent wages. They cancelled and closed all the factories in the States and set up free trade slave zones all over the world. They worked so well that now they're installing the free trade zone in Canada and in the United States and in Mexico.

For God's sake, doesn't anybody know the theory of democracy, where the 90% of the people...if you can't join a trade union as easily and as freely as joining the Chamber of Commerce, you don't live in a democracy.

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

At this point, it is approximately 11.20 a.m. This is scheduled to end at 11.30 a.m., but we're going to be a little bit late because I want to give each participant one minute to conclude his or her thoughts.

Please remember that you're more than welcome to send us additional ideas. We will be starting to write our report on approximately November 6, 1997, so I encourage you, either through your own member of Parliament and his or her own pre-budget meetings, which I hope will be taking place in great numbers in Manitoba, to participate in those processes. You're more than welcome to send us other ideas if you haven't had a chance to raise them today. As well, there will be CPP consultations, so please give those thoughts to us afterwards as well.

Ms Theresa Ducharme: Will we get a report of your findings?

The Vice-Chair (Ms Paddy Torsney): Yes. That report will be given to the minister later in November. I think it's due on November 28, 1997. There will be copies available through your member of Parliament or directly from the committee. All of you will be listed as participants and your ideas will be included in our recommendations to the minister.

Ms Nembhard, for one minute, please.

Ms Kemlin Nembhard: I'll go through the rest of my brief since I didn't get a chance to get to the end.

The need for post-secondary education today has never been more critical, especially for young people. When we look at young people and just people in general having access to employment and specifically to meaningful employment, it's an issue that's topmost in everyone's minds: actually having employment for people, and meaningful employment for people.

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It's of the utmost importance that the federal government work towards removing barriers for post-secondary education and ensuring it becomes a system truly accessible to everyone. We encourage the finance minister to increase transfers to provinces for all social programs, of which education is one.

The issue of the student debt crisis must be addressed, not through debt management but through debt reduction measures, through the establishment of a national grants program to help students so they don't incur huge amounts of debt while they are in school, and through a debt remission program to help with students who come out of school with debt, so they are not burdened by huge amounts of debt when they leave school.

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

Mr. Wayne Helgason: I guess the challenge before you, before us, is really a challenge of leadership. I believe and I hope that in the balance of your term you will take on the challenge. We're beginning to hear even from the private sector...Courtney Pratt from Noranda was talking about child poverty and talking about the voluntary sector. Please pick up on that. Make that issue primary in all your considerations, because I think that will do more to solve the national unity discussion or crisis we're facing than any other issue. Family and child poverty being eliminated by the year 2000 is a goal I think all Canadians can assemble behind.

The Vice-Chair (Ms Paddy Torsney): Mr. Finlay.

Mr. Jim Finlay: Last year when you did this financial report we didn't receive it. I didn't get one. I even tried to get it from my MP.

You should work on the cost of living and see that this covers all of Canada, to be an accurate income. As the federal Minister of Finance states, we're all entitled to a standard income, but no citizen is receiving it completely. Yet he says in the letter I just got from him.... As the federal Minister of Human Resources Development says, for it to be adequate today would cost far more. We have to challenge them to meet today's actual costs. Otherwise there's no decent worthwhile working life—which violates several sections of the charter of rights and section 36 of the constitution.

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

Ms Theresa Ducharme: I would like to mention that nobody mentioned that people like me depend on persons who must care for us, and the only emphasis that is brought to my attention is that they are here as casual employment. They are here only for today. Tomorrow they may not be here. The next day they are gone. That has to change in all the services you're providing through health care services, because you can't make the word “casual” when we are here as guaranteed citizens with the guaranteed right of existing and being participants and also protecting our life in the community.

The next thing I would like to mention is what Mr. Finlay said, and everybody else said, that the members of Parliament get a report. Well, it's hard even to communicate. Once they are elected, forget about them, because they are gone for the next term and you don't even see them. You talk to everybody but the member of Parliament. So would you please take my name as a registered participant here, in with this in full form. As I told you, your seat won't be full next year, because my seat may be there, because I'll be looking for employment and somebody had better hire me. It had better be a politician. I'm up for grabs, so you can hire me.

The Vice-Chair (Ms Paddy Torsney): I'll issue that alert to all my colleagues in Manitoba. It's a little far to go to Burlington.

Ms Theresa Ducharme: I'm looking for full-time guaranteed employment.

The Vice-Chair (Ms Paddy Torsney): Thank you, Ms Ducharme, and I'll make a note of both your and Mr. Finlay's comments about not receiving reports in the last session.

Mr. Boucher.

[Translation]

Mr. Daniel Boucher: I have only one comment. You must be fully aware of the real needs in our communities.

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As members of Parliament, you know your constituencies and your constituents, but as our elected representatives in Parliament, who have to make decisions, you are not always aware of what is really going on in our regions.

You should also think about the impacts of your decisions. Some of those impacts might not be really obvious to you, but they certainly are to us. So think about those impacts and assess them before making decisions which could have harmful effects on everybody here around this table.

It is also time to reinvest in our communities and in the people who make them work. We are all assets here, not burdens. It is about time you start thinking about Canadians as assets.

Finally, I would like you to do something concrete, again in the national unity context. National unity is not only a matter of political debate between Quebec and the government of Canada. There are concrete actions to be taken to unify the country, such as the ones we have discussed today. It is important to broaden the discussion. Thank you.

The Vice-Chair (Ms Paddy Torsney): Thank you very much, Mr. Boucher.

We will now turn to Ms Riley.

[English]

Ms Pauline Riley: I've submitted an eight-page brief and I ask that the committee will take these recommendations under consideration.

I'd like to remind the committee that in 1976 Canada signed the UN International Covenant on Social, Economic and Cultural Rights, and at this time the government is in violation of that agreement.

I'd also like to draw your attention to the economic and fiscal update in the presentation by the Hon. Paul Martin, pages 18 and 19. These priorities, I would submit to you, are clear. First, we must preserve and improve the valued programs upon which all Canadians depend, such as health care, education, pension systems, etc. Secondly, we must work together to enhance learning and training opportunities. It goes on in the third, fourth, fifth, to the end. Next, we must set our priorities. Some may feel that these priorities are at odds with giving Canada the strongest balance sheet and the lowest tax rate possible. They're wrong. A strong economy is dependent on a strong society.

I hope these comments are worth the paper they are written on, because on the issues laid out, the first, second and third here, we must foster and seize on the opportunity to make Canada a leader in a modern knowledge-based economy and all those things, but the issue of preserving and improving our programs is the most important one, and it is the first one that Paul Martin writes here.

Thank you very much.

The Vice-Chair (Ms Paddy Torsney): Mr. Harris.

Mr. George Harris: It's hard to know what to say at the end of this, because as you may have gathered, I'm very cynical about this process. We have been part of this in the past but we've not really seen any change.

I sincerely hope that something will be done. I sincerely hope that it will not be just cherry-picking and picking the few things that a few of us have said that will benefit the wealthiest within our society.

I would seriously recommend to all of you who are on this committee to pick up a copy of the alternative federal budget that is being prepared by another process with anti-poverty groups, with churches, with unions across this country and take a serious look at it, not to cherry-pick it but to see what a different vision for this country is.

I am sincerely very concerned about the type of society we're building. I think our government is very isolated and is just not in touch.

The Vice-Chair (Ms Paddy Torsney): Mr. Hilliard.

Mr. Rob Hilliard: In the short time left I think I'll confine my remarks to what our advice would be to government in terms of what we should do with the fiscal dividend.

It's our very strongly held view that 100% of the fiscal dividend that most experts are predicting to begin in the next fiscal year ought to be directed towards the social deficit that was created when government dealt with the fiscal deficit. In other words, the money that was taken out of health care programs, education programs and other programs that have been cut back ought to be put back in place.

The social deficit was created in order to deal with the fiscal deficit, and that ought to be the government's first obligation once the fiscal dividend comes in. It is to deal then with that social deficit.

On the issue of debt reduction, I'll only refer to a well-known left-wing publication called The Globe and Mail. In May 1997 they did a very well-put-together editorial on the very little gain that would occur if government started actually putting money down on the debt. The most effective way of dealing with the long-term debt is through economic growth and a reduction in the debt relative to the economy.

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On the issue of tax reduction, there is much that can be done in terms of making our tax system more equitable. It ought to be based on the ability to pay, but in terms of the overall tax intake to government, we don't believe it ought to be reduced collectively in a global sense at all right now. That money is needed to address other issues. Certainly, when we talk about the problems of poverty in this country, of joblessness and of inadequate job creation, those are areas that are much more important to deal with than the provision of a little more money to wealthy people in this country.

I just want to make one comment, too, about the process that we've had here. I'll be very brief.

I think it's unfortunate that you've tended to group us in similar philosophies in the same room. I gather that others from the business side of things will be similarly grouped. I think it would have been much more beneficial if there could have been an exchange of different ideas. We could have debated those ideas, but unfortunately ghettoizing different groups and different thoughts in this country is the way to go.

The Vice-Chair (Ms Paddy Torsney): Thank you, Mr. Hilliard. I'll address that in a minute.

Mr. Cerilli.

Mr. Albert Cerilli: Thank you very much. I'll just conclude with the couple of remarks I had in our paper. I want to share with you the fact of a strong central government.

As retirees with children, grandchildren and great-grandchildren, we are concerned about the future of Canada. We believe and are convinced that the last four federal governments have been reluctant to protect a strong central government. The provincial proposal for a power grab, with this government's desire to offload its jurisdictions with no obligation for long-term stability and sustainability, is a recipe towards dismantling Canada and the end of universality of programs. Canadians of all ages want the federal government to keep one standard of fairness for all Canadians. The only way to ensure this is to have a strong central government that invests in all the people of Canada.

I share the remarks about the process. I've strongly objected to the process in previous committee hearings, and I want to place on the record again that you either change the system or we are simply going to be forced to reaffirm our position that the business community does not hear our concerns first-hand. That's a shame for the process because, as Canadians, we owe each other a free dialogue on all the issues and matters that are important to us.

Voices: Hear, hear.

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

Ms Jacks.

Ms Evelyn Jacks: I would just like to sum up my previous comments.

Overall, on the philosophy of deficit reductions, we certainly don't believe deficits should be run at all by governments. Surpluses from efficiently run governments should be distributed with an adequate amount of balance. I think “balance” is probably the word that would best sum up what I have to say. We have some really significant challenges in this country, both in the short term and in the long term. Probably government's biggest challenge is to strike a balance between those short-term and long-term goals.

I think we also have a problem of accountability. We are all takers and givers in the system at some point in our lives. For some of us poverty, middle income and wealth can be fleeting within our lifetime. Each one of us might have some of each of these at some point in our life. I therefore think we need to be very careful about preserving our resources so that if we ever need them, they are there for us or our children or our grandchildren.

Bad times are temporary and good times are temporary. We have a good understanding of that, and we can plan for the future with that understanding.

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

Ms Johannson.

Ms Joan Johannson: I hope the committee has heard some of what we've said. I am appalled at what's happening to our society, our country, when I see the devastation that's happened to people, to men, women and children who have no hope left.

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I myself am 54 and I have a master's degree. I have no hope of ever getting a job. That's the kind of society we have created. Unless we decide that's not the kind of Canada we want, we want a Canada where every person is included, and unless that's your starting point, unless you say we're going to build a budget and we're going to build an economy so every Canadian is included in some way, then all the rest of it is just tinkering with statistics and numbers. It's not statistics. It's not numbers. It's people. It's individuals who don't have enough to eat, who, as I said, live on stale bread and rotten fruit from the food banks.

The Vice-Chair (Ms Paddy Torsney): Mr. Johannson.

Mr. Robert Johannson: I have two points I would like to make. One is that I will reaffirm a question I asked last year: what are the contingency plans of the finance department in the eventuality of a major stock market crash?

Second, I want to look at the question of child poverty, because that's really what draws me to the committee and makes me really upset. I'm ashamed of my country. We are shamed internationally by the child poverty in our country.

I want to talk to you very briefly about the face of child poverty. About six years ago my wife did a study of mothers in the inner city. She found an incredible number of mothers who did not eat at the end of the month so their children would eat. That has changed. It has got worse.

One of my friends works in a care home. They had a child taken into care and he was astounded by the routine in the care home. He asked, you eat every day? He was young. He didn't know that eating every day was normal. He thought it was abnormal. We're creating a society where there are children in Winnipeg who don't know that it's normal to eat every day.

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

Mr. Kenneth Emberley: I thank you for the opportunity to meet. There are at least six or seven people in this room I've shared meetings with in many, many dialogues.

We are trying to build a humane democracy. We did a little in the 1950s and 1960s, but since 1975, when Pierre Trudeau launched his assault on trade union freedoms, our country has become more Americanized, more brutal, and more cruel, and the class difference is big. You should read Patricia Cayo Sexton's book The War on Labor and the Left.

What I am so ashamed of is that I've been deeply involved as a government servant in my community for 35 years and all I can do is tell you that it's a struggle for democracy between the wealthy—the 12 powerful families in Canada—the 150 members of the Business Council on National Issues, the Fraser Institute, which they operate, the National Citizens' Coalition, and the very powerful and wealthy corrupt politicians. If it was not corrupt, the 90% of people who are poor would have their votes counted and some of the policies they want would be initiated. It's purely a class struggle, and it's not fair.

I want to show you the poster I especially made for my dear friend, Al Macklin. We were going to build a national or provincial park, and I had this prepared for him. This comes from Colleen McCrory and Vicki Husband, the two brilliant women who specialize in trying to preserve some of the forests in B.C.

I want to tell you I'm so deeply ashamed of my country, of the wretched policies and the wretched government. If Atilla the Hun and Jenghiz Khan had gone through North America the way Ronald Reagan and Brian Mulroney and John Turner and George Bush and Bill Clinton have, it couldn't look any worse than this. This is the way I see my country. I am so ashamed.

• 1240

I am waiting for my unemployment cheque.

The Vice-Chair (Ms Paddy Torsney): We'll have one last-minute, one-minute comment from Mr. Cottrell, who was not with us earlier today and cannot be with us this afternoon. He will have one minute at this point. Then I will ask everyone to stay for a couple of seconds.

Mr. Donald Cottrell (Individual Presentation): My comment has to do with the Canada Pension Plan.

In the early 1970s the government took a tremendous amount of money out of it. This money was never paid back. The government should not have authorized such an event. I don't think the government has that type of authority.

Now, with the amount of surplus that is always being announced—and it is very large—how come there have not been any funds put back into it? In this way it would keep the premiums from being raised, as they are today, and it would keep the money in the pockets of the people, and possibly even premiums would be reduced.

The Vice-Chair (Ms Paddy Torsney): Thank you, Mr. Cottrell. We will make sure that this is also a part of our deliberations on the CPP when we start those.

Participants, colleagues, thank you very much for giving us your time and your energy and your convictions this morning. It has certainly been very enlightening, and I know a lot of work went into the presentations. For me, as a new member of the finance committee and chairing this for the first time, I found it exceptionally interesting. I am sure my colleagues will agree that we have got a lot of valuable information.

I wonder if you would not mind staying around the table for a couple of seconds. The media wanted to get some shots. If we can get the cameras rolling now, we can finish that, and then we can all depart.

This committee will sit again in the afternoon and there will be presentations from a number of people. We will sit again at 1 p.m. You are more than welcome to come and observe those meetings as well, and to speak to the individuals afterwards. It is perhaps a bit better if we share ideas, and I will encourage the scheduling to ensure that we have the best cross-section possible.

I wanted to identify a couple of things people had raised that they might be interested in.

Mr. Harris, you might be interested in getting some information from your member of Parliament on the changes that were made to the family trust. That legislation was passed in the last mandate of the government.

Ms Ducharme, I hope you have copy of Mr. Scott's report on disabled persons, because there were a number of changes in the last budget that were made directly because of his presentation and his terrific report that departments are guiding their work as it relates to disabled persons. Hopefully you have a copy of that. If not, please leave me your address and I will make sure you get one.

Mr. Scott has now been made our Solicitor General, and I am sure he will have a big impact in that department as well.

If you guys are finished....

Ms Theresa Ducharme: I want one closing statement.

The Vice-Chair (Ms Paddy Torsney): An additional closing statement?

Ms Theresa Ducharme: Yes, an additional closing statement. Usually we say amen, but this time we will say we thank you very much for including all of us in the category that you have, because we have students, business people, members of Parliament, and the disabled here. I feel very welcome and enthused by having this opportunity at this round table discussion. Merci beaucoup.

The Vice-Chair (Ms Paddy Torsney): Merci beaucoup, Madame Ducharme. Thank you very much. It has been quite terrific to have everybody here.

Mr. Kenneth Emberley: I would also like to thank the chairman for her kind and gentle manner in choosing us.

The Vice-Chair (Ms Paddy Torsney): Thanks. You are a hard bunch to wrestle to the ground, but as well, I thank you for your kindness in treating me well. It has been great to be here and it is always a pleasure for me to be in Winnipeg. Thank you very much.

The meeting is adjourned.