FINA Committee Meeting

STANDING COMMITTEE ON FINANCE

COMITÉ PERMANENT DES FINANCES

EVIDENCE

[Recorded by Electronic Apparatus]

Monday, October 20, 1997

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[English]

The Chairman (Mr. Maurizio Bevilacqua, Vaughan—King—Aurora, Lib.): I call this meeting to order. Pursuant to Standing Order 83.1, the committee will continue its pre-budget consultation process here in Toronto.

As you may know, the committee has been travelling across the country to listen to Canadians from coast to coast to seek input on what measures the federal government should take to deal with the new economic and fiscal reality. As you know, a balanced budget is on the horizon and eventually there will be a fiscal dividend associated with the budget. What should our priorities be as a country? What are the choices in this new economic reality?

We want to thank Canadians who have participated in this process. Thank you for attending this morning's session. We look forward to your contribution to this process.

We will begin with the representative from Growing Up Healthy Downtown, Karen Serwonka.

Ms. Alison Kemper (Executive Director, Growing Up Healthy Downtown): I am Alison Kemper. Karen Serwonka is not here.

I spent the weekend struggling with software on presentations, so I have these lovely transparencies. It goes to prove you shouldn't count on technology. It is even a graphic. It's quite impressive.

The Chairman: I want to give you some guidelines as to how this is going to work. You have five minutes to make your presentation, and afterwards we will engage in a question and answer session.

Please give us the highlights of your presentation within the five-minute span, and everything will work out fine.

Ms. Alison Kemper: Fine.

Growing Up Healthy Downtown is a community action program for children. It is a sound Canadian investment in kids and families. Reversing the threatened cuts to this program last year brought strong returns on the Canadian investment.

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The evaluation has come out. It shows that small investments in communities make big differences in people's lives. In fact, the people who gain the most are the people with the most to gain.

One of the bits of evidence you can see of the continuing strength of this program is that the City of Toronto is opening a new community centre in Harbourfront this Saturday. This is because Health Canada and other funders joined with residents to make programs happen in the most isolated corner of Toronto.

We know it works. With the next two and a half years of stable funding we can build on this base. The families and staff can work together toward new ways to make our communities healthier for children.

So this year we're not coming here to cry poor. We thank you for our funding, and we point to the issues we cannot address without you.

What are the key issues? What has happened to families in Toronto since disentanglement, budget cuts, and the elimination of the Canada assistance plan?

You all know that welfare rates have been cut 22% from 1994 levels. You may not know that, according to a recent article in the Star, the result of schools drastically cutting their services is that we now have class sizes bigger than anywhere in North America, except the poorest of southern tier states like Georgia, Alabama and Mississippi.

Evictions of families in Metro have skyrocketed. Fourteen programs for low-income families were cut in 1996. This is one of the biggest cuts to any sector.

On Friday I got a report from Metro that there were 1,000 more families in the Metro hospital system this year than at the same time last year.

Metro is considering a mass emergency housing facility for 800 families. It will be like a hockey arena with 800 families sleeping in cots.

Reported child abuse levels have doubled in Ontario in the last five years.

The evidence is in. On Friday the quality of life index was released. It reports a decline in Ontario over the last six years.

We also know that children's health and development are largely determined by their families' level of income, housing, employment and education.

As these get worse and worse for the lowest quartile of our citizens, we can expect to see more child abuse, illiteracy, aggressive behaviour in children as young as three years of age, a higher accident rate, a higher adolescent suicide rate, and higher levels of youth unemployment. The cost to the government of five years of cuts will start to be repaid in all these areas.

The situation is critical, but something can be done. The Canadian Centre for Policy Alternatives just released data that demonstrates that 60% of the reduction in the deficit was due to lowered debt-servicing costs. Only 40% was due to program cuts.

There is room in the budget to repair the damage of the last few years. The Government of Canada can bring in a housing policy, national standards on welfare and child care programs. None of the changes of the last five years are irreversible, but the lives and opportunities of children are. With the opportunity we have now, we need to invest in our children.

So I'm suggesting to you today that because kids in Toronto, and probably all over Canada, are poor and hungry, you can adopt a children's strategy.

Metro Council just did that this year. It basically says that the situation of children must be improved, all public policy must not adversely affect children, and all policy and budgetary decisions must be evaluated in terms of the impact those decisions will have on young children.

We urge you to adopt such a policy, a children's strategy, in this budget revision. You can ensure that the Government of Canada listens to the voices of its most vulnerable citizens.

Thank you.

The Chairman: Thank you very much, Ms. Kemper. We will now move to the representative of Campaign 2000, Rosemarie Popham. Welcome.

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Ms. Rosemarie Popham (Co-ordinator, Campaign 2000): Thank you. Campaign 2000 is a national coalition of 16 partner organizations across the country. Our major focus is on monitoring the 1989 all-party resolutions to end child poverty by the year 2000.

You may be familiar with our report card, which we put out on November 24 of each year. If you're not, I've brought copies that I would like to share with you.

The most recent report card shows that Canada has the second-highest rate of child poverty in the industrialized world. It's a stunning reminder that we have failed to strike a balance between putting our financial affairs in order, and caring for families.

The federal government is now projecting a balanced budget. Some segments of the population are demanding lower taxes as a reward for enduring the difficult period of fiscal restraint.

General tax cuts disproportionately benefit those who are better off. The emphasis should now be placed on children. The partners in Campaign 2000 believe that the time has come to make social investments in children and family the national priority. A country with the national wealth of Canada cannot continue to ignore child poverty by pleading collective poverty. It just won't wash any more.

We are pessimistic about the prospect of generating the needed social investment for children through increased general government expenditures. A new approach is needed now.

Canada currently has designated funds for two out of three life-cycle periods, EI for vulnerable working-age adults and CPP for pensions. There is no such designated fund for children.

We propose that as a nation we redirect 2% to 3% of GDP to create a social investment fund for children by the year 2003. We propose that the finance committee recommend that the federal government take the leadership role in announcing this fund in the upcoming budget.

The objectives of the social investment fund would be five-fold. First, it would create a floor of decent living standards for modest- and low-income families.

Second, it would endow all young children with stimulation and care for a healthy start in life.

Third, it would provide parents with family-time options during formative periods in their children's lives.

Fourth, it would protect the living standards of children when parental separation occurs.

Fifth, it would assure every academically qualified child in Canada financial access to post-secondary training and studies without having to incur massive life debts.

In addition to the fund, if government is serious about investing in children it must undertake to increase the supply of good jobs and release a clear strategy to address both the shortage of social housing and the increasing cost of rental housing relative to family income. Children must have first call on this fiscal dividend.

The principal features of the fund will be a comprehensive child benefit system. We would begin by building on the commitment of $1.7 billion already made to the national child benefit strategy.

We estimate that this strategy could provide an additional $210 to $600 per child, depending on the number of children in the family. Well, welcome; this falls far short of the $4,400 below the poverty line in which poor children now live. We have a long way to go.

Second, it would need to bolster the living standards of modest-income families, benefit those on welfare, and be fully indexed.

We indexed the benefit for seniors in 1966; we do not index the benefit for children.

There would be a national envelope for provinces to develop a comprehensive, early development child care system.

There would also be a national youth education endowment plan, which would tell every young person, particularly those from working families, that if they succeed in high school and qualify for a post-secondary education, an endowment will be set aside for them.

Mr. Chrétien's announcement of his millennium project in his response to the throne speech is an excellent first step in establishing this fund, and will require an additional annual investment of $1 billion for sufficient numbers of young Canadians to benefit.

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We estimate that the total cost of a well-balanced, mature social investment fund for children would be about $16 billion. This is not an unrealistic amount considered in the context of total provincial and federal expenditures in excess of $330 billion, nor in contrast to the $20 billion we already spend well for seniors.

We would recommend that we finance the fund through three sources: government contribution, beginning with the fiscal dividend, to preserve and enhance current programs for children; personal contributions; and corporate contributions. We recommend that children have first call on the fiscal dividend. We insist that at this time their needs ought to be put first. There's no evidence that general tax cuts will deliver for those who are most vulnerable.

Those of us in the social sector are always pressed to demonstrate the positive impacts of what we do and what we recommend. We have documented again and again the negative consequences of poverty for children and society, and we are drowning in the research that attests to the benefits of investing in them.

On the other hand, in response to those who argue that tax cuts will stimulate the economy and raise all little boats, there is no evidence. Research from the Applied Research Branch of HRDC indicates that between 1983 and 1989, while the annual average change in GDP was up 4%, poverty increased about 6%. At the same time, between 1980 and 1994 there was an almost an inverse relationship between the GDP per capita and the index of social health. This is similar to the report that Alison talked about, which is a report on infant mortality, teen suicide, drug abuse, etc.

Those who recommend to you that the fiscal dividend should go to tax cuts must be required to provide for you evidence of how this will benefit our most vulnerable population, our children. It is not appropriate for advantaged populations in Canada to demand a fiscal dividend that belongs to the next generation.

The projected tax cut of $6 billion in Ontario is a reassignment of public revenue from poor to non-poor. When scaled to Canada, it equals $13 billion. That would be enough to lift all children out of poverty two times over. This is not a question of what we can afford. It is a fundamental issue of who has first call on our nation's vast wealth. To date, children have stood near the rear of the line.

Campaign 2000 urges the finance committee to use this opportunity to ensure that children and youth have first call on the fiscal dividend. Canada is at a crossroads. We cannot afford to have a generation grow up in poverty and a country split into haves and have-nots. Sound fiscal management requires us to invest where essential. As Mr. Chrétien stated in his response to the Speech from the Throne, “We must invest in our children, our most precious resource.” We urge the finance committee to begin by recommending a social investment fund for children.

The Chairman: Thank you very much, Ms. Popham.

Now we will move to the representatives from World Vision Canada, Ms. Linda Tripp and Matthew Scott.

Ms. Linda Tripp (Vice-President, International and Government Relations, World Vision Canada): Thank you.

Mr. Chairman, committee members, ladies and gentlemen, it is a privilege to appear before you today. In doing so I represent not only World Vision Canada but also the 350,000 Canadians who regularly support us financially. I also speak for the hundreds of thousands of children and families around the world who benefit from our programs each year. In fact, in looking at the roster, I think we're the only organization today that is bringing an international message.

World Vision is a Christian relief and development organization that has raised $114 million in our last fiscal year, ending 30 September. Of this amount, only 8%, or less than $10 million, was from government, from CIDA.

I share this fact with you to emphasize that in spite of what some polls or the media would have you believe, there is in Canada a sector of society that still believes Canada has an important international role and an obligation to support ongoing relief and development efforts in the least developed parts of the world. These Canadians speak in tangible terms, with their own resources, and they expect the government to do the same.

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In the few brief minutes I have, I want to highlight three areas in which we believe some of Canada's resources need to be allocated.

The first is children. Children know no boundaries, and the needs of children globally are the same as those of children in Canada. Children are always the most vulnerable in any society. Yes, charity does begin at home, but it should not stop there.

During the election campaign World Vision was encouraged by the emphasis all parties gave to the needs of children, and now the government has an opportunity to put those words into action. You can do this by identifying the basic needs of children, both nationally and internationally, as a top priority in the allocation of resources, and you can ensure that in any fiscal restructuring the needs of children are not sacrificed to meet fiscal demands.

Our second point is partnership. For NGOs, non-government organizations, partnership has become a verb. We partner with our donors, with communities, with other NGOs, and with CIDA. These partnerships create synergy, which has known many successes, and where there was less success there was valuable learning.

Over the past four years we have accepted the cuts to ODA as part of Canada's fiscal restructuring, but as a result, Canada has fallen behind as a partner in development. Our current contribution of 0.31% of GNP is less than half the UN target of 0.7%.

Let me give you a concrete example. For six years Canada partnered with NGOs and the ministries of health in at least twenty countries in an immunization program designed to achieve maximum coverage of children against six communicable diseases: TB, polio, diphtheria, tetanus, measles, and whooping cough. The second objective of that program was to build the capacity of the ministries of health in those countries to achieve sustainability in the long term. World Vision partnered with other NGOs and the ministries of health in six of those countries. Success had been achieved in both coverage and capacity building at the district levels. We were just beginning to have an impact at the national level when the program was cut. Without the national capacity the achievements at the district levels are not likely to be sustainable. Again, the victims are the powerless and the vulnerable—the children.

Our point is not to debate aid over trade. Both are necessary and important. But if Canada has improved her fiscal situation as a result of increased world trade, does it not follow that Canada also has a responsibility to again be a partner and assist those least able to also become partners in the global economy? One positive move would be to reconsider the planned 8% cut to ODA in fiscal year 1998-99.

Third is the effective use of resources. A key recommendation of the foreign policy review was that 25% of ODA target basic human needs. While most NGOs felt even that was too small an amount, it soon became apparent that within the 25% were funds targeted for emergency relief, such as for Rwanda. The North-South Institute calculated that after subtracting emergency funds, only 13% of the total CIDA envelope was left for basic human needs.

Basic human needs are the foundation for a stable society. It is imperative that Canada improve its allocation to this arena.

A second area that needs immediate and long-term attention is de-mining. All of us can stand proud, both NGOs and government, in light of the unparalleled success of the Ottawa process and the grassroots movement that culminated in the recent awarding of the Nobel prize for peace. But until every mine is removed from fields that lie fallow, from roads that lead to schools and hospitals, and from pastures where children tend their animals, we cannot assume the battle is won.

Ladies and gentlemen, I have walked along rice paddies that have been mined and I have stood beside the bedside of land-mine victims. No words, not even the horrific pictures, can accurately translate the hideous and long-term impact these weapons of terror have on the economic and social health of individuals, families, and communities.

Mr. Axworthy has acknowledged the need to de-mine and has pledged that Canada will be there, but our plea is this: do not take funds for de-mining from the existing aid budget. We need all of those resources for existing programs. Rather, as Canada increases her role in peace initiatives around the world, we suggest that a beginning is to target some defence funds for this worthy effort.

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Land-mines started out as a weapon of the military. They have become weapons of terror against civilians. Surely military budgets should be the first place to go to access the resources that will be needed in this long-term effort to de-mine.

Mr. Chairman, committee members, ladies and gentlemen, you have before you a unique opportunity. Canada is a strong and rich nation. Yes, we have our challenges, and we also have a responsibility to ensure that Canadians have a safe and secure future, but that future cannot exist in a world where people are hungry for food, thirsty for knowledge, and fearful for their very survival.

Thank you.

The Chairman: Thank you very much, Ms. Tripp.

Now we will move to the representatives from the Canadian Association for Community Living, Cheryl Gulliver and Diane Richler.

Welcome.

Ms. Cheryl Gulliver (Vice-President, Canadian Association for Community Living): Thank you. With me is Diane Richler, our executive vice-president. I'm sure you've met her before.

On behalf of the Canadian Association for Community Living, I would like to begin by thanking you for the opportunity to participate in this round table consultation.

Mr. Chairman, you and many of your committee members know from our communications with you in different contexts that CACL is Canada's national association dedicated to promoting the rights of people with intellectual disabilities to lead active and productive lives in aspects of their community. CACL is a federation of 10 provincial and 2 territorial associations, comprising 428 local associations and 40,000 members, including people who have themselves been labelled as having an intellectual disability, parents, families, professionals, friends, and advocates.

We come to this consultation keenly aware of the different pressures this committee and Minister Martin will face in mapping a course for the next budget and for the next few years of this government's administration.

On the one hand, there is a strong and powerful voice calling on the government not to ease up on deficit reduction as the main thrust of this administration. Others are arguing that it is time to put some money back into the system. Among the latter there is an equally heated debate about where the money should be reinvested, which groups and who should be targeted as the recipients of savings that have been achieved. The danger is that all of these pressures and voices will simply drown each other out.

It is time we took a step back as a country and examined our goals as a society in the economic, social, and political systems that have evolved over time, more by incrementalism than by strategic demand.

Over the past years we have presented numerous submissions and recommendations to this committee and to others that outline what we believe is a very logical argument: quite simply, it costs our society more to keep people unemployed and segregated than it does to include them.

In this government's first budget, Minister Martin announced a project in Prince Edward Island, in partnership with our organization and the Government of P.E.I., which is designated to demonstrate that by using current resources we can more effectively support the participation of people who have a disability instead of their exclusion. The project is currently moving into a new phase.

A recent study in British Columbia shows in that province alone keeping people outside the labour market is costing B.C.'s economy, both directly and indirectly, $3.6 billion a year. If left unchecked, these costs could soar to $30.5 billion by the year 2006, as a study by the National Institute of Disability Management and Research states. Although these figures reflect the economic costs, the human and social costs to workers and their families cannot be ignored either.

Health Canada estimates the indirect cost of long-term and short-term disability to the Canadian economy at nearly $56 billion. That was in 1993. This figure is based on the estimated productivity loss, which includes the value of government and private sector pension for disability.

As Minister Martin has recently acknowledged, there is a debate among economists about the jobless rate. The presumption among those who believe the jobless rate will not fall much further is that our social programs are too rich. What is missing from this debate is the real analysis of the structure and effect of those social programs as they currently exist.

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For people who have a disability, the programs are an all-or-nothing proposition. If you require any kind of disability-related support in your life, whether you're attending school, working, or simply participating in your community, very often you are forced to seek income support from the welfare system.

CACL has argued, and is attempting to demonstrate, that it is not the amount of money in the system that is the problem, but rather the way in which the system is structured. I think that's really, really important. This should not be misconstrued to mean the support that people who have a disability in their families receive is adequate or appropriate; rather, it is a call to re-examine the way in which public policy is actually trapping people. I think “trapping” is the key word there as well.

Internationally, Canada is emerging as a leader in a new approach to development initiatives. A recent report, which our association completed for the Inter-American Development Bank with the support of CIDA, identifies barriers to inclusion and the cost associated with the marginalization of people who have a disability.

Minister Martin, in commenting on the report, stated:

No government or nation can afford to exclude people who have a disability from the economic, political, and social systems of the country.

Without their contribution and the contribution of all groups in our societies, a sound economy and a strong democracy cannot be sustained. CACL's report provides a blueprint for governments, financial institutions and the organizations of civil society to forge new partnerships which will permit persons with a disability to enter the labour market.

So our key messages for you today are that we need to reform the system of support we have in place in this country to meet our goals as a society; we must bring together new partners and engage all Canadians in a process of achieving those goals; and we must provide support to individuals and their organizations in order to ensure their participation.

Specifically our recommendations for the next federal budget are:

1. That the federal government develop a national disability benefit program in co-operation with the provinces and territories that would offset the costs associated with a person's disability. Using the successful model developed for the national child benefit, this program would assist the provincial and territorial governments to reform the systems of support they have in place for people who have a disability, in a way that would result in savings for the provincial and territorial systems and the national economy. The federal government should then reinvest these savings in a national fund, which would be used to provide direct support to individuals for the costs associated with their disability.

2. That the federal government take the lead in bringing together business, civil society, and government in a new form of partnership that acknowledges that a strong economy and democracy depend on the participation of all groups in society. Specifically, we would welcome an opportunity to participate in an employment summit for people who have a disability.

3. That the federal government support and strengthen the capacity of the organization of civil society to contribute to the new partnerships and capitalize on opportunities to develop policy alternatives. The participation of all segments of our society is critical to the economic and social health of our country. The organization of civil society provides a vehicle for those whose voices go unheard to become engaged in the economic, social, and political process. The benefit of this work will be the creation of strong local and regional economies and sustainable economic and social participation.

Thank you for listening to us.

The Chairman: Thank you for your input.

We will now move to a representative from Kids First, Cheryl Stewart.

Ms. Cheryl Stewart (Representative, Kids First Parent Association of Canada): Thank you.

Good morning, Mr. Chairman and committee members. The Kids First Parent Association is a national charitable grassroots organization concerned with the care and well-being of children. We have been promoting the healthy development of children through parental involvement, and promoting social policies that give parents support and recognition and that protect the choice of raising children in a family setting.

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Kids First has been working on the issue of tax discrimination and the single-income family for 10 years now. This discrimination has been documented and acknowledged by chartered accountants, provincial governments, the federal tax court and the federal finance department. Incidentally, the federal finance department commissioned a working paper on this issue in 1996 at the request of several provincial governments, and that report clearly illustrates the blatant penalties levied against families with a parent at home.

Several days ago we heard from a chartered accountant who had just relocated here from the United States. She expressed her outrage and shock at how entrenched this discrimination is within the Canadian tax code.

Why does this problem continue to exist? Why does the federal government continue to defend its tax policies, all the while acknowledging its discriminatory aspects? How can Mr. Martin say the status quo must be challenged, that the federal government must ensure fairness and equality, and that frugality would never be used as an excuse to deny fairness, and yet refuse to discuss or consider any initiative that might in fact accomplish this for single-income families?

If families with a parent at home were identifiable by race, ethnicity, religion or language, the present tax policies would scream prejudice. The Kids First Parent Association of Canada has the misfortune to represent parents of many religions, single-parent families, two-parent families and parents of many cultural groups. Because they choose a form of child care that requires one parent to drop out of the paid labour force, they are no longer valuable to this government. Never mind that the majority will return to work outside the home once their children are in school; this government has determined that their efforts are not worth much. In fact, their efforts are worth discouraging to the point of deliberately costing those families thousands more in taxes than dual-earner families at every income level.

In Canada we support students in their efforts to educate themselves through student loans and special dispensations and a recognition that although their market value is low, this is a sound investment in the future of this country. We support seniors through pensions and old age security and recognition of their valuable past and continuing contributions to society. It is sad that we do not extend this philosophy to young parents wishing to commit themselves to the full-time care of their children during the critical developmental years of zero to six. We used to do that.

The majority of single-income families exist at lower income levels, with their average income $26,000 below that of double-income families. According to the Canadian Council on Social Development report, The Progress of Canada's Children, 1996, many parents go to extraordinary lengths so that one can be at home when the children are young, often living below the poverty line to do so. In desperation, some families end up cheating the system in order to make ends meet, much like Mr. Chrétien. When he was working as a lawyer he was able to have his wife included on paper as working at his firm, but in reality she was at home caring for their children. The Chrétiens were thereby able to reduce their family's tax burden by splitting his income.

The child care expense deduction is available only to those using outside receipted child care. It has an inverse relationship to need and unfairly benefits the wealthy. The Liberals had the audacity to raise the age limit of this deduction to 16. Given that no day cares accept 16-year-olds, how many kids' hockey camps and artistic endeavours are we subsidizing? Yet we are told there is nothing that can be done, that we should consider ourselves lucky that we can make this choice. However, for the majority of us who have made considerable financial sacrifices and who incur severe penalties in order to be home, luck has had very little to do with it.

Taxation policies are not neutral. They are used to direct behaviour and encourage people to make certain choices. One would assume, therefore, that if the behaviour encouraged was beneficial to Canadian society, consistency between all government policies would be the norm. But this is not the case. We are told repeatedly that the individual must be used as the unit of taxation, yet the child tax benefit is calculated on family income. We have an inconsistent and contradictory approach between policies instituted by Finance and those of other departments.

Health Canada promotes the importance of breast feeding. It stresses the immense value of parental bonding and nurturing and counsels women in dealing with high levels of stress to re-evaluate and reassess their lives, recommending lifestyle changes that may include choices involving jobs or home situations.

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In its 1997 committee report Towards Well-Being, Health Canada urges the finance department to provide equivalent tax benefits to families who choose at-home parental care and those with caregivers for their children.

The justice department acknowledges the link between parental attachment in the early years and reduced levels of crime. It emphasizes the ability of parents to provide a secure and nurturing environment for their children.

Human Resources Development, by the national longitudinal survey on youth and children, points to the importance of resiliency in children at risk. This resiliency derives mainly from the experiences of positive parenting, thereby stressing the tremendous protection factor positive parenting provides to children.

Status of Women have made statements committing themselves to valuing unpaid work done in the home, taking great pride internationally in demonstrating the progressive attitudes of the federal government in dealing with this issue. It is a blatant contradiction to stress the importance of nurturing, promote its benefits and protective factors, and then by its tax policies punish parents who make a full-time commitment to it.

The Liberal government is proposing a caregivers tax credit exactly along the line requested by the Paul Szabo petition and passed as a motion in Parliament before the June election, except the credit will only be available to those at home caring for family members who are elderly, chronically ill or disabled. The one group that will not have access to the credit is parents at home caring for their young children. This is morally reprehensible.

If one stays home to care for an elderly grandparent, a tax break will be given in recognition of the value of the work provided, yet if a parent stays home to care for their young child, a tax penalty will be incurred, sending the message that this work is not of value. Where is the logic?

Kids First is currently offering our support to a long-time member who has filed an official human rights complaint with the United Nations citing Canada's unfair treatment of homemakers. The UN has committed to a serious investigation of her complaint. It is sad that a citizen of Canada must now turn to the international community in a quest to end discrimination against at-home parents. It comes only after years of frustration in dealing with federal governments who respond with empty rhetoric and broken promises.

We sincerely hope you will give your full attention to this matter—not to argue why it is justifiable to continue tax discrimination against single-income families, but to examine how fairness can be achieved for Canadian families who make the choice to have a father or mother at home providing parental child care during their children's early years.

Our specific recommendations with regard to taxation are listed behind our summary of notes. Thank you for this opportunity to be here today.

The Chairman: Thank you, Ms. Stewart.

We will now move to the representative from Women's Health in Women's Hands, Frumie Diamond.

Ms. Frumie Diamond (Promotion Co-ordinator, Women's Health in Women's Hands): Thank you very much. I'm speaking on behalf of Women's Health in Women's Hands, a community health centre mandated to provide services for women in the metropolitan area who face increased barriers in accessing appropriate health care and services.

In particular, we serve immigrant and refugee women, women of colour and women with disabilities. As a women's organizations we are particularly concerned about budget decisions, because women bear the brunt of many of these decisions in obvious and indirect ways.

My remarks reflect the reality experienced by the women we serve. I do not represent a “special interest group”. We represent real people facing real problems who are experiencing real suffering.

You asked us to comment on the process of deficit reduction. Has the progress to date been too slow or too fast? Have the methods been appropriate? But the question that needs to be asked is, what is the impact of deficit reduction in people's daily lives?

I ask you to look beyond the wealthy—they are doing very well, thank you very much—and look at the impact on not only the average Canadian, who is starting to lose ground, but also those who live at the margins of our society—the single mother, the disabled woman, the child living in poverty, the unemployed. And the list goes on. Those living at the margins are also citizens. Their lives are valuable and their quality of life is rapidly deteriorating.

This past Saturday the Toronto Star reported on the new release of the quality-of-life index. The report found that there was a serious deterioration in quality-of-life indicators.

For example, the rate of low birth-weight babies has increased. This is an appalling fact in a country as rich as Canada. A low birth weight indicates that pregnant women are not receiving adequate nutrition. This reflects the increasing levels of poverty women are subjected to and the poverty these children will be born into. The consequences of low birth weight last a lifetime. This is something that doesn't get better once the deficit is fixed.

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It is certainly our experience at our health centre that women are tumbling further into the depths of poverty. The effects of this spiralling downwards are obvious. Women are coming to us with more severe illnesses, with more mental health problems, with more social problems. Violence against women and children is increasing.

In these difficult times women are subjected to more and more forms of blatant racism, and racism does affect health. Disabled women find it harder and harder to claim damages and support themselves. Our staff are having more problems assisting these women because there are fewer and fewer resources available. The women we serve are directly impacted in negative ways by deficit cutting. There is nothing theoretical or abstract about budget cuts. The results hurt people.

Coming back to your question of debt reduction, in the process of destroying the deficit monster you have also destroyed our Canadian way of life, which has included a healthy public policy that reflected the well-being of all the members of our society. It recognized that there was a public good.

In particular, the debt has been blamed on expenditures in the area of health and social welfare for spending money on policies that ensure the well-being of the population. To this end the federal government has eliminated transfer payments to the provinces for social services and health care, and this in turn has allowed provincial governments to gut our social safety network and our health care system.

While the federal government claims to have the deficit under control, the real cost of deficit reduction has been transferred to the provinces, which in turn have downloaded it to the municipalities. But it is we, the people, who live in our communities, who end up paying for the debt, whether it is at the federal, the provincial, or the municipal level. If our taxes are cut we end up paying for the services that have been cut. People who don't have the money don't end up having the services.

Why is it so heretical to ask the wealthy to pay for their share of taxes? Everyone, including the wealthy, will benefit in the end, as I will go on to show.

I'd like to go on to the priorities the government should be looking at. Sound financial planning needs to be based on principles that strive to achieve equity in health. What do I mean by equity in health? The health of individuals is determined by many factors, including the social and physical environment. It is not just people of genetic endowment.

The most important indicator of overall health is not individual factors, it is the gap between the rich and the poor. There are many studies internationally to show this. The narrower the gap between the rich and the poor in developed countries, the higher the level of health for all individuals.

At the moment the gap between the rich and poor is growing in Canada. The rich have increased access to goods and services while the middle class and the poor have less. In practical terms this means it is increasingly difficult for increasing numbers of people to secure an adequate income. This means an increasing number of people are having a difficult time finding adequate housing, securing enough nutritional food, and finding adequate employment. All these factors impact negatively on physical and mental health.

The increase in human suffering cannot be measured in dollars and cents. However, if we are talking economics, a healthy economy is based on having a healthy population. There have also been numerous studies to show that investment in the well-being of the population saves money in the long run.

If we get back to the economic talk, it is wise to invest in those areas such as housing, employment, child care strategies, and equity issues that contribute to the health of the people of this country and therefore to the health of our country. We urge you to put public health policy first and at the forefront. The benefits will be felt throughout our society and not just at the level of the wealthy.

Thank you very much.

The Chairman: Thank you, Ms. Diamond.

We'll now move to the representatives from the Canadian Council for Refugees, Barbara Treviranus and Ali Gholipour.

• 0920

Ms. Barbara Treviranus (Conference Co-ordinator, Canadian Council for Refugees): Mr. Chairman and committee members, thank you for the opportunity to address this committee.

The Canadian Council for Refugees is a coalition of 145 groups from across Canada that are concerned about refugee rights and the integration of refugees and immigrants.

As Canadians, we have been asked this year to comment on how the government should set its priorities with respect to debt reduction, spending increases, or tax relief; in other words, how to spend the fiscal dividend.

As the committee will hear from concerned Canadians throughout the country, the process by which the federal government has reduced the deficit has had a deep impact on the vulnerable sectors of Canadian society, among them newly arrived refugees and immigrants.

We come before this committee with a simple message: to focus on one specific tax that has been imposed as a deficit reduction measure. This is a most unfair and discriminatory tax, an exorbitant flat-rate tax that is charged on individuals who are least able to shoulder its burden.

I am referring to the $975 right-of-landing fee, or head tax, imposed on all refugees and immigrants landing in Canada. We call on the federal government to immediately eliminate this tax.

The right-of-landing fee was imposed as part of the February 1995 budget announcement. Each and every adult refugee and immigrant, no matter what their circumstances of flight or country of origin, whether a business investor from Hong Kong or a tortured refugee from a camp in Rwanda, must pay $975 to be landed in Canada. This fee is on top of non-refundable processing fees, which generally start at around $500 per adult for refugees and family-class immigrants.

Since its imposition, protests and calls for the elimination of this unfair, discriminatory, and counterproductive tax have come from across the political and social spectrum within Canada; from members of all your political parties; from the Canadian Human Rights Commission; and from the UN organization responsible for refugees.

Just the latest national call to eliminate the head tax is a private member's bill introduced by the Reform Party's deputy citizenship and immigration critic. In his words, his bill is a first step in alleviating some of the economic burden on those individuals who have applied to become Canadian citizens.

The cost of moving to a new country is enough of a burden on someone, especially if they are coming from a low-income country. Knowing what contributions immigrants can make to our society, I think it is a shame that we are setting up unrealistic barriers, primarily economic ones, with our immigration policy. In effect, the right-of-landing fee is creating a two-tiered immigration system. This is simply unjust.

The head tax creates economic discrimination against immigrants from low-income countries. Canada's human rights commissioner raised the same concern two years ago.

Don't forget that all adult immigrants are required to pay the same amount, $975 Canadian, regardless of their life situation, regardless of their country of origin. This is a very unequal burden of taxation and obviously a discriminatory system. The same $975 might just be a few weeks' pay for an accountant from Italy, but for an accountant from India it might be several months', if not a full year's, pay.

Concerns raised in the Reform Party bill echo the Liberal Party of Canada's resolution passed last year. It urged the federal government to reduce or abolish the head tax, as it creates an impediment for those with large families wishing to immigrate to Canada and places a heavy burden on those who are seeking to integrate themselves into the Canadian economy. Opposition to the head tax crosses all party lines.

The worries are real. The head tax hampers family reunification, negatively affects integration, and delays the very self-sufficiency for which newcomers strive and upon which our economy depends. Immigration is an investment, and immigrants and refugees ultimately contribute more to the Canadian economy than is spent on them.

According to Paul Martin, the federal government's goal has been to build a country that provides opportunity and security, that has fairness and compassion as the cornerstones of its civil society. Charging a head tax is simply counterproductive.

The head tax is charged on all refugees and immigrants. No other country in the world—no other country—charges a fee on refugees to protect them from persecution. As Canadians, we are proud of our humanitarianism. Our government often speaks of its commitment to refugee protection, but Canadians should be profoundly ashamed that their government charges the head tax on refugees.

• 0925

A refugee is someone who has fled persecution, war or gross human rights violations. The United Nations High Commissioner for Refugees has raised concerns that the head tax might make refugees' access to protection hinge on whether they're able to pay fees.

By charging the head tax, you're saying, sure, we'll protect you, you can stay—but you have to pay $975, and by the way, if you wish to bring your family members to safety, you not only have to prove to us that you can pay all their costs but you also have to pay us $975 each.

Don't forget that for refugees recognized following determination in Canada, this is $975 on top of a processing fee of $500 per adult, $100 per child. Refugees and immigrants selected overseas are already responsible for the costs of their own air fare and all their processing overseas. They pay their own way in Canada.

The $975 is an extra fee, a true tax without representation charged on those who cannot protest.

My colleague, Ali, will give you an example that has a human face.

Mr. Ali Gholipour (Member, Canadian Council for Refugees): Thank you.

In the course of my work over the past 12 years with refugees and immigrants in Canada, I have met many people whose lives were touched and changed by laws, regulations, and lately by the head tax.

I would like to introduce you today to Mr. Saïd. Mr. Saïd was 40 years old, an Iraqi professor who was prosecuted, jailed and tortured, and finally made it to Canada. He was then granted refugee status, and came to my office where I used to work, the Canadian Centre for Victims of Torture. I sent him for treatment at that time.

He quickly recovered, and started working. He had a part-time job in a restaurant. He was trying to find his wife and four kids, whom he had lost while he was in jail.

One day in 1995 he came to my office and said he had found his family. He had saved enough money in Canada to move them from Iraq to Turkey, and he did so.

But he was so happy those days, during that summer of 1995, that one day he came back and said he was disturbed seeing our front door painted in black. He wanted to change the paint, because he didn't see Canada as black, and that was the door of his hope when he used to come into the office and get all his help.

I bought him the paint, and he changed the colour of the door to green. That was the colour he had seen in Canada.

But that changed immediately. The prospect of Canada had changed, because he applied for landing for himself and his family. He had to produce $3,350. With his part-time job, he couldn't do it.

So he told me he wanted to move from his apartment in order to save money. He moved out of his bachelor apartment. He rented a shelter, and spent a few months in the shelter. Calculating the money he was making, and the money he was already spending, sending it back to Turkey for his family's food and shelter, he figured he would have to spend another five years to save enough money to apply for landing for himself and his family.

Finally he decided it was not a life he would want to have. Although he was a refugee, his loan was declined, because no one thought a professor of history would be able to make money in Canada, especially when he came from Iraq. He made his final decision, that he should leave with his family and face his fate.

But he said one important thing to me that I will never forget. On his last day, in his last visit to my office, he said he wanted to go back because he thought that protection in Canada was for people who could afford it, and he could not.

• 0930

The head tax is fundamentally unjust, and should immediately be eliminated in this fiscal climate. Refugees start their lives in Canada with a debt. Families are separated and people go hungry so they can pay their head tax out of welfare cheques. Integration is delayed and potential immigrants to Canada continue to be discriminated against on the basis of their country of origin. We call on the Government of Canada to abolish the head tax.

Thank you.

The Chairman: Thank you very much for your intervention.

We will now move to the representative from Low Income Families Together, Josephine Grey.

Ms. Josephine Grey (Director, Low Income Families Together): I had to send my children to school this morning, so I wasn't able to bring a brief, but we've come here nonetheless to speak for Low Income Families Together. We are a low-income organization of people working to address the causes and effects of poverty. We work in the areas of community economic development, popular education, and social policy development.

For the last several years we have been deeply distressed by the actions of the finance department and the federal government. We find that while there has been some success in eliminating the deficit, it was wrong to take away the Canada assistance plan, which was a fiscal and legal framework that allowed Canada to comply with the United Nations Charter on Human Rights, the fiftieth anniversary of which is next year. The elimination of those standards has created a rather desperate situation, particularly in Ontario. I think it's very important that this government take a look at what exactly is going on here.

The Ontario government, in addition to introducing a major cut to basic needs and social assistance, has introduced new legislation, called Bill 142, or the new Social Assistance Reform Act. This reform act has given the ministry and the cabinet unprecedented sweeping powers to be able to eliminate entire classes of people from social assistance, set time limits, and change laws and make regulations without notice, debate, or consultation. They have created a situation where welfare can be turned into a loan, where they can require people to pay back their workfare benefits from future income, and where they can put a lien on people's homes. It has created a situation where they can actually deduct other government debts from a person's basic income, such as parking fines, OSAP—you name it.

They're trying to put in place a law that would state that, for example, they could appoint a trustee to take care of somebody's income and the trustee would not be required to report. The trustee would be appointed, but the recipient would have no right to appeal that decision. They can pay direct the rent and other portions of the social assistance to other debtors, again without right to appeal.

Welfare workers or review officers, unfortunately, will have new powers, new police powers, to get a search warrant and search people's homes, to arrest and fine people for fraud, and to interrogate friends and neighbours or associates of people on welfare. If they refuse to give adequate information, people who are associated with people on welfare can be arrested, jailed, and fined for impeding an investigation.

None of this could have been possible without the elimination of CAP. I believe this is ultimately the federal government's responsibility. There has been no bill in any western democracy that has created such a situation of unprecedented power and such a violation of basic human rights.

This federal government continually says that all those kinds of things are provincial jurisdiction and therefore not our problem. My question is, what on earth is this government for if it's not your problem? I believe the well-being of Canadian citizens is indeed the federal government's problem and something has to be done about it. We've been waiting for quite some time now to see what kinds of standards would be introduced to replace the Canada assistance plan that was removed, which as far as I can see there was absolutely no reason to do.

• 0935

When I asked Paul Martin what he was going to do to protect the rights of people on social assistance, he said “We have a deficit to fight.” So he had no answer. There was a social reform process that produced no results. There is now a provincial-federal council of some kind that is allegedly examining some kind of new arrangement, yet none of us have any access to it. We don't hear what's going on and nothing has come of it yet, other than an apparent intent to address some of the issues of the new child benefit.

Speaking of the child benefit, it is absolutely and fundamentally immoral to separate working poor and unwaged families, benefiting the one and punishing the other. First, there are many families that receive both social assistance income and working income. Unfortunately, most of the jobs now available to people are jobs that cannot support families, so they require a top-up from social assistance. Families that are in both situations at the same time—I have yet to hear an answer as to how the child benefit affects those families.

In addition to this, many people on assistance cycle in and out of social assistance from the labour force over and over again, and to suggest that a federal system can somehow adjust every few months, or however long it takes—it usually does not take very long for someone to get a job, lose a job, get job, lose a job—it's ridiculous. It doesn't work that way.

All children have the same needs, whether their parents are working or not. They need to have their needs provided for in the home, the community and at school, not in the child welfare system. We have an increase in children being taken by or given to Children's Aid because families can no longer provide for their basic needs at home. This is fundamentally wrong in a country this wealthy.

It is also extremely discriminatory because we live now in a new kind of economy, a post-industrial economy, which is extremely unstable and where 45% of the workforce can be out of work over a three-year period. It's time to modernize social programs—as Mr. Chrétien said in his acceptance speech after the election—to recognize the new realities that we face today.

In order to do that there has to be some kind of basic security for all citizens. We have to stop stripping people of their assets every time they become unemployed. Only 37% of people are eligible for employment insurance, yet everybody pays into it, and that's wrong. As a result, when your EI runs out or if you can't get it, you lose everything you've ever worked for, and after that you have no future.

The major difference between the middle class and the poor is that one can plan ahead, can determine their own destiny, while the other can see no further than the next three to four weeks. What that means in Metro Toronto is that evictions have tripled. Motels and shelters from here to Niagara Falls are jam-packed to the rafters with people, particularly single parents, immigrants and refugees.

We deal with these people on a regular basis. One of the most distressing things is the number of people who have done everything in their power to gain education, to do everything they're suppose to do, to take employment assistance and engage in every kind of program available, yet they have achieved no results. These people are now homeless and are punished and their children are taken away from them. There is something fundamentally wrong with a society that says anybody who can't make the grade risks losing their children.

If you fail to address increasing poverty and violations of human rights in this country, it will become increasingly obvious that the alleged best country in the world is failing to comply with the United Nations Human Rights Charter and a whole host of international agreements that this country helped design and put together with other countries, and which it has signed on to.

If this government can't make a commitment to eradicating poverty of children, can't make a commitment to investing in the well-being of its citizens and can't make a commitment to preventing travesties of justice like Bill C-142, then it's time you publicly withdraw from the international commitments you have signed. Otherwise, you are governing in a state of utter hypocrisy.

Next year you'll be reporting to the Economic, Social and Cultural Rights Committee of the United Nations. The report you have submitted tries to end in 1994. This is prior to all the downloading of an avalanche of services and basic needs onto municipalities. There's no way that committee is not going to know what's really going on in this country. Many of us are committed to ensuring they know what's going on in this country.

• 0940

There are others who have made very strong recommendations. I support them, particularly the Citizens for Public Justice, who you will hear from in the next session.

My message to you today is that the hypocrisy is creating a lot of social chaos, pain and panic, and it's wrong, unnecessary and has to be addressed immediately. We will be challenging you next year during the fiftieth anniversary of the UN Human Rights Charter to either comply or publicly withdraw. You can no longer continue to claim best country status.

I'm actually very upset about this. It's hard for me to talk to it.

Above all, I want to make sure you understand that the youth we deal with are well-educated and capable immigrants whose potential is being totally wasted. All of the people we work with on a daily basis expected something better from this country. The youth are angry. The immigrants are hurt. They don't want to say anything. They feel they shouldn't because they've been welcomed into this country. But those of us who can do so will continue to speak on their behalf. We will not give up and will continue to escalate the pressure until something changes.

Thank you.

The Chairman: Thank you, Ms. Grey, for a very thoughtful presentation.

We will move on to the representative from the Older Women's Network, Helen Riley.

Ms. Helen Riley (Chair, Older Women's Network): Thank you, Mr. Chairman.

Members of the committee, thank you for this opportunity to meet with you. However, we do deplore the short notice that was given. We hope that future invitations will give us more time to prepare our remarks and that we will be provided with financial information and budget options. In the absence of specific information we can only make general comments.

The Older Women's Network works to overcome injustice and inequities, particularly ageism and sexism. We speak not just for older women but for everyone, giving the advice of elders from the benefit of our members' long experience.

The Government of Canada has an obligation to protect and serve all citizens. You are responsible for our present well-being and for the well-being of future generations. What does that well-being require? It requires a fair and just society, spreading the wealth so that all may share in its benefits, as well as clean air, pure water, safe and plentiful food, affordable shelter, education, meaningful employment and adequate income, protection against all forms of violence, health promotion and care of the sick, human dignity and respect for human rights, democratic and accountable government.

What does this have to do with the budget? Everything. The so-called short-lived budgetary crisis was not caused by excessive social spending but by compound interest payments on borrowed money.

First, it was irresponsible to allow the debt to pile up so high, and second, it was unforgivable for the government to then use the deficit as an excuse to slash social spending. We need to return to the traditional Canadian values of a caring society—a balanced budget and the services Canadians want and need.

To keep a balanced budget and at the same time ensure the well-being of all Canadians, the government can and should do three things. One, it must ensure that future borrowing in the public interest does not require huge interest payments to private corporations or individuals, particularly to those outside Canada. Can you explain why the Government of Canada turned over its right to create money to the private sector, resulting in enormous profits to private banks and huge debt loads for the government? I can't.

Second, it must raise the funds needed for social programs and for debt reduction by some combination of raising corporate taxes to earlier levels and reinstating a more progressive personal income tax system—lowering tax rates for the lowest income groups and raising them for the highest, taxing financial transactions, the Tobin tax—taxing casino and lottery winnings, and wealth inheritance taxes on the rich.

Third, it must maintain democratic control over our future—our environment, our working conditions and wages and our public finances—by refusing to go along with the proposed multilateral agreement on investment, and by reviewing the impact of NAFTA and other free trade agreements.

• 0945

Regarding social spending, we have the following recommendations. First, restore the universality of all present and future benefits to seniors, families, and children. This is administratively simpler, it gains more public support, and benefits can be taxed appropriately from higher-income individuals.

Second, in calculating benefits, use individual incomes, not family incomes. Women lose out when their financial situations are hidden in family incomes.

Third, maintain full indexing of pensions. This is particularly important to women who have lower pensions to start with and who live longer than men.

Fourth, implement the recommendations of the National Health Forum for home care and pharma care programs and restore funding for food and drug testing. Health care continues to be a high priority for all Canadians, but particularly for seniors.

Fifth, invest in and subsidize public transportation, rail as opposed to roads, for passengers and for freight. This is environmentally sounder, more energy efficient, more democratic, more future-oriented.

Sixth, enforce national standards for health and social services by increasing provincial transfer payments contingent on provincial commitments to access, equity, and targeted use—for example, child care programs.

Seventh, meet Canada's commitments to women made in the Beijing Platform for Action and in the United Nations Declaration of Human Rights and ensure that women's organizations are adequately funded on an ongoing basis. Keep your commitment to publicly release gender analysis of all government policy proposals.

Eighth, increase Canada's foreign aid for disaster relief, humanitarian assistance, and investment in small-scale self-help community projects. Women and children continue to be the poorest of the poor, the victims of war, racial violence, and famine. For example, immunization programs for children that have recently been cut should be immediately restored, if only in our own self-interest. The world is too small to contain disease and unrest in far-off places. Money should be our servant, not our master. Make sure you are good stewards of the responsibilities for public welfare that have been entrusted to you.

Thank you for inviting our participation in this pre-budget consultation. We look forward to further discussions with you over the next few months.

The Chairman: Thank you very much, Ms. Riley. You've certainly given us a lot to think about vis-à-vis our priorities.

Now we go to the last intervention of this round table with representatives from the Canadian Association of Food Banks, Susan Cox and Julia Bass. Welcome.

Ms. Julia Bass (Executive Director, Canadian Association of Food Banks): Thank you.

We are the national umbrella group for food banks in Canada. We have members in every province. Our primary function is the distribution of food. We now distribute food nationally on such a large scale, in the millions of pounds, that we have had to recruit the kind services of both Canadian Pacific and Canadian National railways to ship food across the country coast to coast. We're talking about millions of pounds of emergency food relief in one of the richest countries in the world.

We are an independent organization. We receive no government funding and no United Way funding. We are funded by our members and by our fund-raising efforts.

Although our primary purpose is food distribution, we also feel we have an obligation to report on what we see and to conduct research into the state of hunger in Canada. In this connection, ten days ago we released the results of our 1997 hunger count. This was a survey of all food banks in Canada, with an attempt to come up with a total number of food bank users. This was the first time that a national survey of this kind had been conducted for eight years.

What we found was that in the period between 1989 and 1997, food bank use in Canada has doubled. The number of communities in Canada relying on food banks has tripled, from 150 in 1989 to 479 this year. The number of Canadians who used a food bank in March 1989 was 329,000; this year it was 669,000.

• 0950

This has been a hidden problem. People who use food banks for the most part do not advertise that fact. Everybody in this room probably has a neighbour, friend, or relative who uses a food bank. We are aware of people using food banks who don't tell the members of their own family that they are doing so.

Families in Canada make every attempt to cope. Use of a food bank is a last resort.

In the current atmosphere of downloading, support for families in Canada has moved from the federal to the provincial level, from the provincial to the municipal level, and from the municipal level down to us.

We are here to tell you that we cannot cope with this. The food banks in Canada do not have enough food to feed the people who are coming to them. There is a growing hunger crisis in this country, one of the great food baskets of the world. This is completely unnecessary.

I'm accompanied here today by the vice-chair of our association and the head of the largest food bank in Canada, Sue Cox of the Daily Bread Food Bank. She will be making some remarks on the situation in Ontario.

Ms. Sue Cox (Vice-Chair, Canadian Association of Food Banks): Thanks very much. I will say briefly that Josephine Grey spoke very eloquently about the circumstances of the families she deals with. That's something that is echoed right across the province.

It is the devastating impact of downloading beginning at a federal government level. You opened the process with the reduced transfers to the provinces and with cuts to UI. The provinces themselves have responded with cuts to welfare, and in Ontario these have been quite draconian. Now more programs are being downloaded onto municipalities, and subsequently onto charitable sectors. That means food banks when it comes to meeting basic needs.

So what we have right now in the province of Ontario is a new unemployment insurance program. It's called welfare, because most people get welfare if they're unemployed, not UI any longer, and we have people in extreme hardship conditions. Every month there are well over 300,000 people in the province of Ontario who use some kind of food relief program, if it's a soup kitchen—and most soup kitchens are served by food banks—or an actual food bank of some kind.

I think there's something else, though, something rather sinister going on. That's a movement toward providing tax advantages to support charities that provide for basic needs at the same time as the government backs off actually attending to the needs of people directly. So as you withdraw from UI and withdraw from transfer payments, you instead make it more tax-advantageous to support charities.

I'm here to tell you, please don't go there. Please don't go there. That happened in the U.S.A. What we saw there is that in fact with the tax advantages, the charities supported—and this is just fine—were hospitals and universities. But people did not choose to support programs that provided for the poorest people.

Right now in the province of Ontario we do see some sign of how this privatization of welfare simply doesn't work. We see that just looking at the food hampers that are provided right across the province.

In some areas a community can only afford, or perhaps is only willing, to supply enough food for two or three meals in a hamper. In other communities, there's a week's supply of food available. This is not the... The charitable sector is not the place to provide consistent and assured support for low income people in ways that maintain their health and well-being.

So I think this is a very dangerous direction the government is moving toward, and in Ontario we see its impact in some really quite alarming places.

Thanks.

The Chairman: Thank you very much, Ms. Cox. Now we'll move to the question and answer session, beginning with Mr. Solberg.

• 0955

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

I want to start by commenting on the whole concept of tax relief and its effect on the social sector, especially its benefit to low-income people. Primarily those are the groups that are represented here. I regret that Ms. Popham is gone, because I would like to have asked her a question about some of the comments she made.

It occurs to me that Canada has probably the least generous personal exemptions of any country in the industrialized world, which primarily affects low-income people. If those exemptions were raised considerably, that would help lift many low-income people completely off the federal tax rolls.

I noted that Ms. Stewart and others commented that although they have reservations about tax relief, several of them have said that tax relief is appropriate for low-income people. I guess I would open this up to general response, but I noted that Ms. Stewart said in her recommendations that the tax burden on families should be reduced significantly.

I'm just wondering if people would like to comment on the social benefits of tax relief, particularly the tax relief of the kind I'm talking about where you raise personal exemptions so that in many cases people who currently pay thousands of dollars in tax and are on the low end of the income scale would all of a sudden see that tax disappear.

Ms. Alison Kemper: I think if you do the math, something I do every April, because I'm an upper-middle-income earner for a woman I would get a disproportionately higher break, as somebody in a $50,000 area, than somebody in a $15,000 area. If I have an extra $3,000 or $4,000 of exemptions, that brings down my marginal tax rate much more than it would for a very low-income person.

I mean, I'd love it, but I don't like what it would mean in terms of the kind of situation I would see day to day in my office if I got a disproportionately big cut of that. That's the math we've been doing for a long time here in Ontario. We know the cost of that kind of math.

Mr. Monte Solberg: I want to make sure I understand you. Are you saying that somebody who is making $25,000 would not benefit tremendously by raising—

Ms. Alison Kemper: I'm sure they would benefit tremendously, but I would benefit more.

Mr. Monte Solberg: A disproportionate amount?

Would anyone else like to comment on that? Ms. Stewart?

Ms. Cheryl Stewart: From my perspective in dealing with single-income families, increasing personal exemptions would definitely be very beneficial. Single-income families are most commonly found in the lower-income levels. To reduce their taxable income would certainly be of assistance to them in being able to provide for their children. It would also provide an opportunity for parents who long to be at home or to have one of the parents at home raising their children to do so. From our perspective that would be a priority and in the best interests of the children.

Ms. Josephine Grey: I'd just like to comment that while it's a laudable idea, with people in the very low income brackets there's not a substantial increase in the amount of money they have each month if they have that kind of a tax break. It will make a bit of a difference, but the problem right now is that so many things are being privatized and there are user fees attached to so many of the public services that as long as we continue to privatize and restructure the way we are, it won't end up giving anybody much of an advantage. We have to take a broader approach than simply tax cuts to lower income people in order to make any difference.

Ms. Cheryl Gulliver: Of the people we represent and advocate on behalf of, 75% live below the poverty line. While I think it's wonderful, and I really do support everybody else's position around better tax breaks, we would just like a lot of our people to pay income tax.

• 1000

That makes you laugh, and I'm sorry it does. But it would be a real treat of my daughter could work, okay? That's a really big issue. She would love to give up her family benefits allowance, pay rent and feel like a participating person without being penalized around benefits such as drugs.

At one time her drug bill was $300 a month, without the cost of a wheelchair, which is prohibitive for us without ADP, the assistive devices program. We are really in a bad strait. If she didn't live with me on a nice, middle-class street, she would be living very poorly with very little.

She is fortunate. In Canada she has a family and people like the CACL to advocate on her behalf, because she doesn't have a chance.

Ms. Alison Kemper: I want to apologize. Most of us deal with people who would be very lucky if they were able to pay taxes. Most of the folks we work with along this table have such a marginal income that they barely reach the threshold of paying any tax.

So we laughed. I'm sorry.

Ms. Cheryl Gulliver: That's okay.

The Chairman: Ms. Diamond.

Ms. Frumie Diamond: I'd like to reframe the question. Why is it always giving a tax break to the low-income people when in fact there's adequate evidence that shows that many of the corporations and the very wealthy owe millions and millions of dollars in back taxes? I think that's the real issue, and that's what needs to be brought to the forefront.

The Chairman: Thank you, Ms. Diamond.

We'll have to move to the next question, from Mr. Riis.

Mr. Nelson Riis (Kamloops, NDP): Thank you, Mr. Chairman.

I think it is fair to say that what has emerged this morning is a clear indication that tax relief or tax breaks are not going to do very much at all to alleviate the problems that have been articulated by almost everybody this morning.

Obviously, I think what's emerging is a clear picture for us as committee members of a horrendous level of poverty in this country, a level of poverty that actually is increasing, the whole aspect of child poverty.

I appreciate the comments. They will be instructive for us in terms of making our report.

I forget who mentioned the fact that motels and hotels from here to Hamilton are jammed full of evicted families and others.

Was that you, Josephine? I wonder if you could elaborate on that. I think that offers clear, empirical evidence of something we haven't encountered so far in terms of the theme that's developed across the country. So that's one question.

Just to state that 52% of people who are working in Canada make less than $20,000...and I think working people who make less than $20,000 aren't paying much tax. Those are the working people. It puts that into some context.

I also have a question for Linda on your land-mine issue. Canada currently has, I think, $4 million set aside for the removal of existing land-mines. To put that in context, the Canadian Auto Workers has set up $1 million as one union, and the country of Norway has $140 million set aside. Would you comment on the appropriateness or the adequacy of our contribution?

Perhaps Josephine can go first.

Ms. Josephine Grey: First of all, when the Minister of Community and Social Services continues to crow about the number of people who are off welfare, unfortunately, a number of them are off welfare because they're now on a municipal personal needs allowance in a shelter. I think it's a really important indicator of what you have to examine in terms of the cost of the downloading. What in fact is happening is that the costs are being shifted to other systems, to the municipal tax base. This is a great example.

When you have somebody who is receiving social assistance or some kind of small income top-up to their wages—you know, they cost maybe $1,000 a month, or $800 or $900 a month—once they're off the system and into a motel or a shelter all of a sudden that family costs an awful lot more. The property tax base is supporting that, which is just a totally unsustainable situation.

The amount of people ending up in motels has a lot to do with the number of evictions, which has a great deal to do with the lack of affordable housing but also the province with a tenant protection act, as they so cynically call it in this province, where people are increasingly being shoved out. They no longer have any protection from discrimination in housing either; that was also eliminated in their Bill 96.

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So this marvellous provincial government is creating a situation where they can boast about the number of people off assistance, while dumping the costs onto other people and dramatically increasing the costs of supporting those individuals who were formerly on assistance.

The other best example is a child who is in the home on social assistance; you have about $100 a month. Once their family is tossed out into the street, they are broken up, and they end up in child services, they suddenly cost $700 or $800, or if they are in institutions, several thousands of dollars a month. We have to start looking at the real cost-benefit analysis of what is going on here.

The Chairman: Thank you. Ms. Kemper.

Ms. Alison Kemper: If you'd like, I will leave these with you, Mr. Chairman. This is the report adopted last week by Metro Council on the homeless crisis in Metro showing that the current capacity is 2,500 for families. The way they are going to get more capacity in the system is by opening this massive congregational shelter for families with cots for 800 families. It is like the worst of wartime. We are going to have refugees in our own communities.

The other interesting thing that happened last week in Metro Council is that they adopted a proposal to declare every single site where a single mom is about to be evicted as an emergency hostel so they can access provincial funds for hostels. That will cost less than having that family evicted and put into a motel.

So right now the situation is critical here. We have massive homelessness of families. I would be delighted to leave my copies here. You can make copies, but there is a lot of information...

The Chairman: Thank you very much. Now we will move to Mr. Jones.

Sorry, Ms. Tripp, do you have a comment?

Ms. Linda Tripp: Yes. Mr. Riis asked me to comment on landmines.

The Chairman: On landmines, that is correct.

Ms. Linda Tripp: You commented that Canada has committed $4 million. Just to put things in context, the United Nations department of humanitarian affairs has calculated that in order to remove the 100 million landmines that are currently buried in several countries in the world, it will take $33 billion and 1000 years, based on the current technology of mines removal.

Obviously the $4 million Canada has made as an initial commitment is a drop in the bucket. That is why part of our plea is to make sure these funds do not come from the existing aid budget. When Mr. Axworthy allocated $10 million for the new peace initiative, that came out of CIDA. The ODA did not increase by $10 million. In other words, we are finding ourselves in a situation where we are having to take from Peter to give to Paul.

After the treaty signing in December we are going to face not just de-mining, but mines awareness programs, in which World Vision is very active in countries like Mozambique, Angola and Cambodia. There will also be long-term mine victim assistance, in addition to the very slow process of de-mining.

The Chairman: Thank you, Ms. Tripp.

We will move to Mr. Jones.

Mr. Jim Jones (Markham, PC): Thank you, Mr. Chairman.

I know all you people have thought out your presentations, and you are living with the problems. I appreciate that. Over quite a few years maybe this country has lived beyond its means on a year-to-year basis. I do not think any of you sitting here have not paid your mortgage every month. Or you pay your mortgage every month, and you do not have 10 years of not paying your mortgage. By doing that eventually you would lose your house.

Well, over the last 27 years the federal government never balanced their budget. They kept borrowing money. We are talking about the problems we are having. I do not know why we want to continue to pay money to the large banks and offshore banks in interest payments.

We are paying $44 billion, $46 billion, $48 billion—you cannot really know the right figure—a year in interest payments to service the debt. That is the largest department in the federal government. We are paying close to $10 billion a year in Ontario alone to service the debt.

Just think if we didn't have both of those departments—technically they are departments, and both of them almost the largest departments in both governments. Look at the programs we could have.

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I think there is a misnomer. The question we're asking is what will we do with the fiscal dividend when we balance the budget. That is not the fiscal dividend. The fiscal dividend is taking the surplus we're going to have when we balance our budget and generating it, starting to pay down the debt so we can free up the $48 billion to restore our health and education programs, our social programs, and maybe also programs to help the other things. That's when we're going to get the fiscal benefit.

I think it's also a misnomer to say that a lot of the corporations in the private sector have suffered too. A lot of people have lost 10% or 20% of their salary or they've lost their jobs, because unfortunately we live in a world in which the private sector has to make a profit and return a profit to the shareholders. That's the dilemma we're in. I think it's important that we now start to live within our means, balance our budget, and pay as we go.

I think on the whole the Canadian people are caring people and will look after it. I take my hat off to Mr. Martin for being the first finance minister to come close. I believe we're going to have a balanced budget and probably a surplus this year.

Ms. Linda Tripp: Perhaps I could comment.

No one here is advocating that Canada become a third world country. As I said in my presentation, ODA took an inordinate percentage of cuts. I think I'm the only voice around the table here speaking from an international standpoint. At the same time, we strongly support the messages of our more Canadian-focused colleagues around the table.

The fact is the government has made the cuts. There was tremendous human cost in certain areas, both in Canada and overseas. We can all give the human stories. The government is now by its own admission ahead of its plans. I for one am glad that Canada is not continuing in a downward spiral or we will become a third world country, but the fact is you've got to balance both.

You can't put your fiscal criteria above human interest. We've heard the pleas for children. The future is in the hands of our children. If we make the cuts too fast, in a draconian way, and get to the point at which we have the $48 billion, we will spend so much time catching up in terms of people who have fallen through because the safety nets haven't been there, whether that's here or overseas.

I guess our plea would be yes, Canada has to be fiscally responsible, but at the same time do it at a pace and in a strategic way so that the poorest and the most vulnerable don't fall through the way they have been. I think that's the position we would take.

The Chairman: Thank you, Ms. Tripp. Ms. Richler.

Ms. Diane Richler (Executive Vice-President Canadian Association for Community Living): I'd like to build on the international example. One of the great ironies to us is that other countries around the world are looking to Canada for the successes that we've had. One of the big successes we've had is the social cohesion in this country because of the fact that we've invested in programs that have tried to minimize the gap between those at the two ends of the economic scale.

Cheryl Gulliver made reference in her presentation to a contract that our association recently had with the Inter-American Development Bank. International financial institutions recognized that social cohesion, which is one of the prerequisites both of democracy and economic stability. This is something that Canada has been noted for. Yet we see Canada promoting the kinds of policies that have allowed for that social cohesion while we see it disintegrating across the country.

I think it's very important that economics isn't just a question of every individual situation. There are also the gaps that exist in the country and the kind of environment that's created to have the kind of stability we've had. What we see in other countries, whether it's just south of the border or around the world, is that people become more and more marginalized because they don't have access to the benefits of their community. That's when civil unrest starts, and that's when you start to have the kind of environment that wreaks havoc on whatever economic gains have been achieved.

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So I think it's very important not to look at the economics in very narrow terms but to look at the country as a whole and what Canada stands for.

The Chairman: Thank you, Ms. Richler. I think the next comment is from Ms. Riley.

Ms. Helen Riley: As we said in our presentation, we think poor management got us into this situation in the first place. However, to then fight the problem on the backs of the most vulnerable members of society is absolutely outrageous. While you were busy lowering corporate taxes you were busy cutting things like the Canada Assistance Plan and then the health and social services transfer.

The deficit reductions that have been achieved have been to a large extent—according to an article I just saw in the Toronto Star—due to the increase in the economy and lowered interest rates. The whole question of interest rates is something I believe this committee should be tackling. Repatriate the Canadian debt and make the Bank of Canada pay off the debt so we're not paying off foreign investors and we are not at the mercy of the bond-rating agencies.

There are many ways to solve these problems and increase the well-being of Canadians if you will only look beyond the very narrow framework that the present finance people seem to have set for themselves. We're just asking for a little common sense, a little of the experience of housewives who learned how to balance budgets on practically nothing. It can be done.

The Chairman: Thank you, Ms. Riley.

We will hear very briefly from Ms. Bass and Ms. Kemper, because we also have members of Parliament who would like to address some further questions.

Ms. Julia Bass: I just wanted to say that any economist knows that once you have eliminated the deficit, the debt will automatically reduce just by the functioning of the economy. Even the Globe and Mail has a chart showing how this works, and it's not usually seen as a radical socialist publication.

I would like to endorse the remarks of the other people who have spoken on this point and just say very sincerely to Mr. Jones that if he were aware of a neighbour on his street who had achieved the great feat of paying off the mortgage on his house, but in the course of this the children upstairs had starved to death, would that be a completely upstanding achievement as a citizen?

Ms. Alison Kemper: I just wanted to point out that the Star, that bastion of left-wing sentiment, reported on the Canadian Centre for Policy Alternatives this morning—I just mentioned it briefly in my presentation—that only 40% of the reduction in the deficit could be attributable to cuts. More than 60% is attributable to the lower cost of debt servicing because of the Bank of Canada rate going down. Because our interest rates are at historic lows—even if there was a little glitch last week—we've been able to do it. I think we have that 60% to work with, to bring back the programs that have been cut. It's not just program cuts that have done it, and I think we can restore programs.

Mr. Jim Jones: I know the other people want to ask questions, but I think we're making a lot of this very simplistic. I think we also have to recognize that one of the issues here is jobs and the other issue is that Canada is no longer an island. We're competing against the rest of the world and lower-cost jobs, and if we want to create more jobs we have to get our costs down.

Ms. Alison Kemper: Why don't you invite us back to talk about the MIA?

Ms. Frumie Diamond: Why don't you work to make sure environmental issues and standards of work are included in those kinds of international agreements?

The Chairman: Please identify yourself prior to responding to a question. We'll now move to Mrs. Redman.

Ms. Karen Redman (Kitchener Centre, Lib.): I really appreciate the sincerity of everybody who came here today. Please accept our full assurance that we are sincerely here to hear what you have to say.

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Government, in my view, is not anything more than an incredible balancing act, and I'm very proud of what this government has done as far as putting our fiscal house in order. You're here pointing out to us that it has not come without a cost. A lot of what you're saying today is similar to themes we've heard in other provinces.

Both Ms. Diamond and Ms. Grey talked specifically about the federal cutbacks in transfer payments. And while Ontario did suffer a $1.2 billion transfer at one point, I believe the Harris provincial government has passed on more like a $4.9 billion cut to the welfare and social services you talked about.

In a former life I sat on municipal and regional councils, so on a first-hand basis I'm well aware of both the downloading that you're talking about and the cracks that are widening in the social safety net. But in other provinces, we heard about a real skepticism about this partnership between the federal and provincial governments and how it provides for the needs of the people in the communities that we all live in.

So I have a question that I would ask Ms. Diamond and Ms. Grey to respond to. Somebody mentioned returning to CAP. Again, that is something we've heard in other provinces. Do you have any other insights or specific recommendations you would give to the federal government in looking at how we partner with the province to help safeguard the kinds of services that are obviously needed and are going unmet right now?

Ms. Frumie Diamond: I actually believe in a strong federal government. And I actually believe that the federal government has a really important role to play in maintaining national standards. When you get rid of the transfer payments, you lose any kind of power. I think that everybody is out for power, including the provinces, and I'm not sure... We are the people at the bottom, we are the recipients. And it doesn't matter whether it's the federal government or the provincial government that is struggling over the power, we are the ones at the bottom who end up feeling the impact of policies.

It's really important for the federal government to maintain that kind of a strong leadership role so that, as I said, national standards can be maintained, particularly in terms of health care and in the social services. Otherwise we have such inequities going on across the country that we create a third world country.

The Chairman: Ms. Grey.

Ms. Josephine Grey: There are a number of very concrete things the federal government can do at this point. I think we're in one of those periods of history where opportunity can come from chaos.

I attended the World Summit for Social Development in Copenhagen in 1995. I was actually Canada's official observer for domestic issues, as useless as that's turned out to be. However, I did note some things. Canada has made a commitment to try to help adjust the indicators by which we judge our economic health and our society's health, and to that end has started by adding a question to the census. That has to go a lot further. Looking at genuine progress indicators would actually help decision-makers to include more serious issues when making their decisions, issues such as the health and well-being of the families and the environment.

Canada is a world leader in many ways in these areas, and no, Canada is not an island, but Canada is a leader. For example, there was a commitment to bring the idea of an international transaction tax to the G-7 summit following the world summit. However, that was knocked off the table by our finance minister, unilaterally, as far as I know. So looking at some of the issues among the OECD countries that could start to redress the imbalance between the corporate sector and the rest of the population would also be a good idea.

There's another thing, though, that I think is really vital if Canada is to maintain its reputation and its ability to provide an example to the rest of the world. I think it's high time that we actually tried to introduce social and economic rights into our charter and our Constitution. And that can be accomplished; we have the wealth, the resources and the ability. We know in this country how to be a rational, humane country with a strong, healthy, stable economy. We just have chosen not to do that. It's one thing to be a poor country that can't cope or that's in hock to the World Bank. We're not. We have choices, and we can make those choices.

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Social and economic rights would be part of what would hold provinces accountable. Finding other ways to strengthen accountability mechanisms so that things are properly monitored and evaluated, so that there are actual penalties to levels of government and to delivery agents of social programs who fail to meet and achieve the basic human rights and basic needs of their population would be really important. Those can't be negotiated on an equal basis by the provinces and the federal government because, as far as most things and politics in this country are, they are not a matter of compromise, but of struggling to see who wins and who loses.

The federal government, as long as it's in a win-lose system, is unfortunately going to have to impose its greater power to say “Excuse me, we are the ones who are here to uphold the Constitution and human rights, and we determine that you're not going to get transfers unless you comply with those things”.

You should see Ontario's report to the economic and social affairs committee. It's just hilarious. It's a joke, and it's not going to stand. But the only people who can hold Ontario—or even your government—accountable at the moment are NGOs. That's pathetic. You should have your own accountability mechanisms and it's time to start introducing them. A social and economic rights framework would allow you to do that. Social and economic indicators that actually reflect the health of society would give you the data and the proof that you need in order to uphold the rest of what we're talking about.

The Chairman: We'll move to Mr. Szabo for a very quick question and an even shorter answer.

Mr. Paul Szabo (Mississauga South, Lib.): I'm sure we would all thank you very much for your sincerity. I want you to know that what you have said here today is very spot-on with what we've heard in other places. I think it's reflective of our need to get back to fundamental family and Canadian values. As long as there's a hungry person, a homeless person, a disabled person, someone in most need, they should get help first. I think that's what you've told us.

I want to share with you one fact though. I know it's tempting to throw criticism, but the fact is that the CHST reduction represented only about 1% of the revenues of the provinces, and it amounted to about $1.2 billion in Ontario. Balance that against the tax cut that the province of Ontario gave across the board at a cost of about $4.9 billion. These are the kinds of things we have to be aware of—that tax cuts, particularly across the board, are extremely expensive, but to an individual it will represent a very modest amount of money.

So I think that what we've heard from you is that we have to be prudent and target those benefits, whether they be tax cuts or whatever. If there's anybody here who disagrees with targeting as opposed to universal across the board, I think you should tell us right now.

Ms. Alison Kemper: Universal social benefits?

Mr. Paul Szabo: No, universal tax cuts, across-the-board tax cuts versus targeted to the most needy.

The Chairman: Mr. Ianno, a final comment.

Mr. Tony Ianno (Trinity—Spadina, Lib.): First of all, thank you very much for participating. It's people like you who help to keep society on the right track. I think a lot of the work that you do is not just from the paid perspective, especially with the many volunteers who participate in keeping our social structure and our faith in society very strong. I commend you on that first and foremost.

If several billion dollars were available down the line at some point and members of Parliament were able to push the finance minister to direct some of that money especially towards the low-income Canadians, how would you best recommend that we accomplish the goal most effectively? Is it the working poor? Is it by giving more to the provinces? Is it by giving it to the individuals directly? Do you have any ideas in terms of how to most effectively accomplish the goal that serves your clients?

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Ms. Josephine Grey: I think it's vital not to give it to the province—particularly this province, please.

Mr. Tony Ianno: So you agree with the reduction in terms of what we were doing with the social transfer, but giving it more directly to the people as compared with the provinces.

Ms. Josephine Grey: Given the lack of a framework of standards, you'll have to give it to individuals. They're not going to reinvest savings from child welfare to poor families, that's for sure.

Another thing you could do with some of that money would be to start investing in local initiatives to regenerate or revitalize local economic development. That's a form of job creation, actual redistribution of the means to create wealth that would have—

Mr. Tony Ianno: Similar to CAPC?

Ms. Josephine Grey: Somewhat, yes, but a bit more in depth and a bit more long term. I think you have to make a commitment to following a local initiative and to injecting funds when required at different points along a strategic plan. That is one of the ways in which we can actually create jobs instead of depending on foreign corporations to drop a couple of little jobs here and there.

As well, you have to start looking at assets of people, not just their income. I'll never have a mortgage as long as I live. I'm a single parent with four children. I'm living in, thank God, rent-geared-to-income housing. I have huge holes in the ceiling, but I'm safer and more secure than most. So housing is a really vital investment.

It's time for you to start registering the assets of the country against the debt and also looking at the assets of individuals. I think all children should have a savings plan for their education that accumulates over time, from the beginning. It can be used as investment until they use it for university.

There is a host of other socially useful assets government could contribute to building, which could be used for local economic investment and could secure the stability of families in the long term.

Mr. Tony Ianno: They have to spend a lot more than several billion. What I'm trying to get at is whether you can give us some concrete... Pick a choice. If you want the investment in the community in job creation, that's one. If you want it on the housing, that's another. Try to pick something that is going to best affect your clients so that we can try, from a realistic perspective in this next budget, to push for some recommendations.

Ms. Josephine Grey: Investment has to be in low-income families and children so that they can eat, basically.

Mr. Tony Ianno: Okay.

The Chairman: I'm going to take two final comments, one from Ms. Tripp and the other from Ms. Richler.

Ms. Linda Tripp: If you're talking about a few billion dollars I guess I would also make a plea that some of that be allocated to international assistance. I think it's totally unfair and unrealistic to pit the needs of children in Canada against the needs of children internationally and to say, okay, choose one or the other. Both are extremely needy.

Canada's legacy of compassion, generosity and mediation have positioned Canada at the international table. While we address, espcially around this table this morning, the needs of children, women, the elderly and the disabled in Canada, we must not ignore the global village in which we live. A healthy and secure future for Canada's children is also dependent on healthy global markets.

So helping the least developed countries achieve a more equitable position within the global market will benefit all of us and will help establish a solid foundation for all children in Canada and in the world.

I think the strongest message this morning is that we cannot do it alone. We are doing a lot. We are doing it with volunteer effort, we are doing it with private donations, but we can do a lot more if we have a genuine partnership with government.

The Chairman: Very quickly, Ms. Richler.

Ms. Diane Richler: I made reference earlier to our concerns about social cohesion in the country, and I think this is another place where that's relevant. Our concern is that with such complex problems one can't expect simplistic solutions to meet them. While we do recognize that there is a role for the federal government to provide direct benefits to individuals, there is also an important role for the social union. We can't ignore the provinces in thinking about social issues.

So there needs to be a greater building of co-operative mechanisms whereby there is an agreement between the federal government and provincial governments that their programs are going to complement each other, not pull in opposite directions, which we are at risk of doing. That's why we would be very interested to build on opportunities that exist, such as the interest of the first ministers to look at income programs for people with disabilities, recognizing that there may be a role for the federal government in the income component and for the provinces in the service component that's necessary to support people, and similarly, calling upon a bringing together of people of the voluntary sector, business and government to solve problems together rather than always having bilateral discussions.

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It's very interesting that it's government talking to social groups here. There'll then be another opportunity when you'll talk to business groups. All of those discussions happen one at a time, separate from each other, rather than bringing people together to solve problems together.

The Chairman: Thank you very much.

On behalf of the committee, I'd like to thank you all for your very thoughtful presentation. I feel the work you do in our communities is very important and addresses real needs.

I want to leave you with this message: we're more or less driven by the same agenda every Canadian is driven by. The recommendations we make to the Minister of Finance will speak to the issue of improving the quality of life for people. That is essentially our mandate, and we will act accordingly. Thank you again.

I'm going to suspend the meeting for five minutes.

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The Chairman: Could you all kindly take your seats?

We have a number of presenters here today. As you know, we have approximately an hour and 45 minutes to deal with approximately 12 presentations. As chair, I really don't like to interrupt people. In order that it does not happen, you'll have to keep your comments within the five-minute allocated time. Also, I ask the members of the committee that when you place your questions, kindly place them to the point. I would say the same thing with regard to the answers.

The first speaker is from the Chinese Business Association. Yolanda Chan, welcome.

Ms. Yolanda Chan (President, Chinese Business Association): Mr. Chairman, I wonder what happened to improving the tax relief for small business. That's to say, we have had the $200,000 incentive for the last six years. Are we going to do something about it for the next couple of years?

The Chairman: Well, Ms. Chan, what would you like us to do about it? The idea here is to get input from you on what issues we should be dealing with now that we're dealing with a new economic reality in Canada. We would like to hear from you what your priorities are.

Ms. Yolanda Chan: Yes. Should we increase the $200,000 incentive program?

The Chairman: You should be giving us a presentation on that.

Ms. Yolanda Chan: I guess what our community is saying is that in order to improve small business or entrepreneurship, we should increase it from a $200,000 tax bracket to a $500,000 one.

The Chairman: Is that it?

Ms. Yolanda Chan: Yes, thank you.

The Chairman: Thank you very much.

We'll now move to Gerald Vandezande, from Citizens for Public Justice.

Mr. Gerald Vandezande (National Public Affairs Director, Citizens for Public Justice): Thank you, Mr. Chair and members of the committee, for again allowing us to appear before you. I assume copies of our presentation have been distributed. It's entitled “Use Fiscal Dividend to Eliminate Poverty: A Call for a New National Investment Priority”.

The process by which the federal government has reduced the deficit has caused serious and lasting damage to our country. The government's one-sided emphasis on the fiscal deficit caused new, dangerous deficits that directly affect our human and national well-being—namely, our economic, educational, environmental and social well-being, including health.

The commendable goal of fiscal deficit reduction, however, has been used to justify arbitrary methods and bad policies. One of the worst of these was the unilateral abolition of the Canada Assistance Plan, along with its historic commitment to people in need and its national standards. Josephine Grey, of Low Income Families Together, spoke eloquently about that, and I'll have more to say about it later.

The government replaced CAP with a much weaker Canada health and social transfer, and drastically reduced payments to the provinces and territories. In our view, the government must now act on Finance Minister Paul Martin's public affirmation—and I quote—“that Canadians look to their government to be more than the keeper of good books. They want it to safeguard a caring society.”

In Mr. Martin's own words of last week, “Some see the discussion ahead as a financial debate only. It is not. It is a debate about values.” We couldn't agree more. The question is, which values?

Citizens for Public Justice believes the stewardship ethic must be applied consistently. This ethic requires that we do not balance our fiscal books today by ignoring problems whose financial cost must be paid in the future. Just as we may not allow a fiscal deficit to be passed on to future generations, we may also not allow economic, educational, environmental health or social deficits to be passed on to our children and grandchildren.

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Chronic unemployment, rising tuition fees, spreading pollution, inadequate health care, increasing poverty among Canada's children and their parents, and the worsening plight of our first nations, as well as the horrifying hunger abroad, are grim reminders that economic inequities and social injustices are the costly consequences of the widespread neglect of the main core values. These gross distortions in our economic, environmental and social relations demand immediate attention from all concerned.

The human cries of despair—and you've heard some of them this morning—demand concrete actions of hope. Action needs to be taken by both our federal and provincial governments. They have the public responsibility to give us visionary leadership that makes a decisive difference for the common good of all people, particularly the poor and the powerless.

CPJ agreed with the finance minister when he said:

It is very clear that the country is approaching the point where more forceful, responsible investment in the future is desirable and possible. We also agree that until the dividend is large enough to support meaningful reduction in the overall tax burdens safely, the most responsible course is to bring a targeted relief where the need is the greatest.

Those are Mr. Martin's own words, and his next budget should indeed translate those words.

We all know that the gap between Canada's rich people and poor people has been widening due to chronic unemployment and lower unemployment benefits.

I hear the bell now, so I will jump to our recommendations.

The Chairman: Go ahead. You have one minute. It's a good time to get to the recommendations.

Mr. Gerald Vandezande: Let me read them carefully so they become part of the record.

Our recommendation is that the elimination of poverty become Canada's national investment priority. We recommend some first steps.

First, immediately eliminate the federal income tax now payable by all whose income is below the poverty line.

Second, substantially increase the national child benefit so that all of Canada's children and families living in poverty will benefit equally.

Third, substantially increase the refundable GST credit payable to all whose income is below the poverty line.

Fourth, substantially increase the cashflow of the CHST to the provinces and territories, coupled with shared substantial standards and an effective enforcement mechanism that also applies to all income assistance and social security programs. And that should include standards to ensure that no one in Canada lives below the poverty line.

Fifth, immediately eliminate the $975 head tax for refugees and low-income immigrants and immediately restore funding for overseas development, eventually to the point of 7% of GDP.

CPJ further recommends—also in light of the comments made during the first session—that the finance minister move quickly to organize a broadly based advisory council representing the full range of views on Ottawa's budget premises and policy priorities. Its purpose would be to forge an effective, multi-sectoral consensus on what the government's core guidelines and budget goals should be in shaping our nation-building together. National unity includes ensuring that there is economic and social equity and justice for all Canadians. The current division between the rich and the poor is as serious as, if not more serious than, the current debate between Quebec and the rest of Canada.

Thank you.

The Chairman: Thank you very much.

We will now hear from the representative from the Canadian Association of Retired Persons, Lillian Morgenthau.

Ms. Lillian Morgenthau (Representative, Canadian Association of Retired Persons): Here I am.

The Chairman: Welcome.

Ms. Lillian Morgenthau: I have a list here of all the people who are on the second round table, but I do not have a list of the people who are the MPs and the chairs. Is it possible to get that list?

The Chairman: Yes. I'm the chair. The others are the members of Parliament.

Ms. Lillian Morgenthau: In writing.

The Chairman: Yes. Of course we'll provide that to you.

Ms. Lillian Morgenthau: There is a verbal representation that I think you all have and there is the full one that will be given to you to peruse later in your own time.

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I do thank you very much for this opportunity to present to the House of Commons finance committee on the pre-budget 1997.

I have appeared before this committee at the same time as the pre-budget many times. I hope this hearing will not be just window dressing. The issues are serious and they must be taken seriously.

I am president of the Canadian Association of Retired Persons, representing over 320,000 members across the country—50 plus, retired or not. In the five minutes allotted to me I will present a résumé of the issues detailed in our longer brief to the committee. This brief, revived for this committee, was previously presented to Mr. Martin when I met with him and officials from the Ministry of Finance in CARP's national office on September 4, 1997.

First I will answer the two issues the government should address in the 1998 budget. Then I will present CARP's specific recommendations for the inclusion in the budget.

The process of deficit reduction has been too fast and the message used has been too drastic. The same goals could have been achieved in a more gradual and more humane way. For example, the transfer payments to the province did not have to be cut so dramatically. In turn, provincial governments may not have cut back and reduced so severely essential programs in health, education and social services. Priorities for 1998 should be balanced among debt reduction, spending reinvestment and tax cuts. Debt reduction is essential, but it does not have to be done tomorrow. A gradual decrease will allow Canadians to adjust more easily to the new financial environment. Even if tax cuts are symbolic, they may create a positive feeling among Canadians.

More specifically, CARP recommends that the contribution rate to employment insurance should be lowered. In our brief we suggest that the percentage of contributions to EI can be lowered by increasing the ceiling—that is, the year's maximum pensionable earnings. CARP also agrees with Mr. Martin's suggestion that the GST should be reduced to 5%. Both these measures will stimulate the economy by increasing spending, productivity and jobs.

Finally, spending should be increased by increasing the transfer payments to the provinces, which in turn can increase funding for health, education and social services within their own jurisdictions. Provinces have certain requirements for their own particular areas, and we should be cognizant of the fact that not everything is good for everyone. However, the five principles of the Canada Health Act must be maintained.

Also, CARP recommends that current policies regarding mature Canadians should be re-thought in the following manner.

First, in his speech last week in Vancouver, when he described the areas for the prudent investment of spending, Mr. Martin made no reference to seniors. We trust that this oversight will be rectified in the budget to our benefit.

Secondly, many of the proposals that were introduced in Mr. Martin's 1996 budget and which are now being implemented are no longer valid. The current state of our economy has overtaken the fiscal situation that existed in 1996. Mr. Martin has stated to me that his proposed changes to public pensions for seniors were not motivated by the need to reduce the deficit. Nevertheless, Mr. Martin's policies have greatly reduced the deficit, which will be eliminated next year. Therefore, a different approach to policy and the set of priorities regarding mature Canadians is now called for.

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Regarding the CPP, in this budget Mr. Martin should make it clear that in the second round of consultations with the provinces in 1999 serious consideration will be given to raising the ceiling on contributions above the current $35,800. CARP recommends that the ceiling be raised to $39,000, that the base of $3,500 be indexed, and that at least one-third of the seats on the arm's-length panel of experts that will advise on the investment of CPP funds should consist of representatives from the contributors—that is, the employed and employers.

On the subject of seniors benefits, although legislation has not been introduced into Parliament, CARP recommends that in this budget Mr. Martin should announce that the proposed seniors benefit will be thoroughly overhauled, including the elimination of basing it on combined family income.

I tried to find the two letters that I really wanted to bring. We have received an enormous number of letters from people who are very unhappy about the combined income. We had one that I thought was rather good. It was from a chap who wrote us—a member—who had been married 53 happy years, although I don't know how you can be married 53 happy years; there are always ins and outs. I've been married 47, so I'm an expert. I can tell you that he wrote me about the combined family income. He said that his wife heard about it, came to him and asked, “Harold, how much does a divorce cost?”

I feel that the combined family income, from the letters that have been coming in, is against marriage. I think it encourages common law, and we have enough trouble keeping them married. With four married children, I can tell you it's much harder to keep them married, and this is certainly not going to help.

The Chairman: Ms. Morgenthau, you're doing quite well for time, give or take three minutes.

Ms. Lillian Morgenthau: I still have three minutes?

The Chairman: No, you don't. You're well over the five minutes. Go ahead, if you can kindly wrap it up in thirty seconds.

Ms. Lillian Morgenthau: All right, because you know three minutes is not even a long phone call.

We want the family income out. We want the elimination or complete reform of the clawbacks, restoration of universality—which won't happen. And the taxation of income on an individual basis, since they are being taxed on an individual basis, should continue. We want the increase in the amount of pensions for lower-income seniors beyond the proposed $10 a month. Moreover, a change of the magnitude represented by the seniors benefit should not take place for at least 20 years.

I'm going to skip a few things.

In the area of health care, Mr. Martin should announce funding for a special national forum on health care for seniors, including experts and consumer groups. This forum should review the current state of health for seniors, with recommendations to enhance the quality of care in institutions and in homes and assurances of proper funding to implement these recommendations. Also, voluntary or family caregivers of frail seniors should be given an adjustment to their CPP such as those enjoyed by parents caring for children as well as increased tax credits.

Thank you, and I'm sorry about the time.

The Chairman: It's not a problem.

Ms. Lillian Morgenthau: I really have timed this, you know.

The Chairman: We will now move to the Canadian Federation of Students in Toronto and Mr. Wayne Poirier. Welcome. We heard from Brad Lavigne.

Mr. Wayne Poirier (Ontario Chairperson, Canadian Federation of Students in Toronto): Thank you. I'm sure that you're going to get a consistent message from the Canadian Federation of Students from across the country.

I'm here today on behalf of the more than 110,000 members of the Canadian Federation of Students in Ontario, representing more than 25 post-secondary institutions across the province.

I apologize, first of all, for not having an official brief, but the notes you have in front of you are a few of the documents that highlight the problems we are having with accessibility to post-secondary education and the demise of the universal system of post-secondary education that Canada once enjoyed, more so in the past than it does today. In addition, I have appended the appendix from A Blueprint for Access: Strategy for Change, which highlights a truly visionary way to achieve fully accessible post-secondary education systems.

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I'd like to start briefly by talking about the context for the previous term and what it has done for post-secondary education in Ontario and across the country.

We've seen massive increases to tuition. Though not a federal responsibility, the federal government must take direct responsibility for the levels of funding for post-secondary education, and that's what has been happening to the levels of tuition across the country. Ontario now has the second-highest tuitions in the country, and as a result, we are seeing many students being turned away from post-secondary education.

The context we have seen has resulted in a $400 million cut to post-secondary education and an increase in the level of contributions that students pay towards their post-secondary education. We had previously seen a contribution of approximately 25%, where we now see the contribution to the operating budgets of universities and colleges as high as 50% at Nipissing University, and on average 40% across the board.

The institutions we are seeing are more and more becoming publicly assisted rather than publicly funded, and it is a trend we would like to see stopped. We would like to see a revision made towards a fully funded post-secondary education system.

One of the previous speakers, and many of the previous speakers from LIFT, stated that there has been a social deficit as a result of deficit reduction, and it is a trend we would not like to see continue.

I'd like to move on to Strategy for Change, which is truly a visionary document that would provide the means to come to a fully accessible post-secondary education system where no students are excluded by virtue of their income. Though we realize this is a bold step and something this government will likely not take, we would like to put out that this government has taken similar steps in other areas. As part of our full document, for example, the Department of National Defence provides free education for individuals enrolled in the armed service. In addition, the aims of Strategy for Change can be implemented in smaller degrees and with some results that would improve accessibility to post-secondary education.

The main problem we have been facing at the federal level is an increase in debt load. We are now seeing students graduate with an average of $20,000 debt, and that is expected to rise to $25,000 by 1998. These levels are completely unacceptable. They are higher than the international standards. We find that even the United States is graduating students with less of a debt than are Canadian institutions.

Some of the immediate steps this government must take are as follows.

Eliminate the pursuit of income-contingent repayment plans, which only foster an increased indebtedness for students upon graduation, particularly for groups such as women, sole-support parents, students with special needs and low-income individuals.

As for the Prime Minister's announcement, though welcome, that he is intent on spending money in the form of scholarships, we believe this is the wrong avenue to be taken. Scholarships are not the avenue that will improve accessibility. Directed grants are the means by which accessibility will be improved. In particular, grants to sole-support parents, students with special needs, low-income families and first- and second-year students are the most reasonable ways to ensure that accessibility is maintained and improved.

In terms of employment solutions, we've seen that students are increasingly having problems with massive levels of unemployment, and as a result it is making it more difficult for them to save for their education during summer employment. The summer employment plans implemented by the government must have special emphasis on ensuring that they are full-term employments for complete 16-week periods at full-time employment and with reasonable pay that is at market value, not minimum-wage jobs, which are unable to provide students with the means to provide for their post-secondary education. In addition, the levels of money spent on such programs must be improved.

Finally, in terms of taxation policy, the Canadian Federation of Students would like to make it extremely clear that we do not favour across-the-board taxation cuts. Similar mechanisms have been seen in Ontario, and we have found that the benefit is more and more for the wealthy and is not a benefit for the entire province, and they have not resulted in increased spending. Any taxation cuts that go forward should only go to low-income individuals to help them provide direct spending into the economy.

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

Now we'll move to the representative from the Halton Social Planning Council, Mr. Michael Cushing. Welcome.

Mr. Michael Cushing (Board Member, Halton Social Planning Council): Thank you, Mr. Chairman.

We want to venture a particular thanks to the member for Burlington, Paddy Torsney, who ensured that we were part of today's agenda.

Probably a lot of people around this table are familiar with some of the communities in the Halton area, in particular Burlington and Oakville, which are well known across this country as being among the better places for families to live and certainly among our more affluent communities.

I would like to note for your consideration that even in a community as affluent as Halton, groups such as the District Health Council have been compelled to put top priority, in their planning around health needs, on issues of child and family poverty.

Mr. Martin himself acknowledged in his Vancouver statement that the accomplishment in relation to the deficit has come through a number of forces: strengthening of the economy, lower public debt charges and what he called “unprecedented restraint measures”, going back to the late eighties. Those measures are really the focus of this presentation.

We think it's been very instructive, particularly for organizations and individuals who might be cynical about the capacity of government to really get something done, to see the accomplishment of the federal government over the past few years in bringing an end to deficit financing. There's an important lesson there: we can do things as a nation when we act with a clarity of purpose and some sincere resolve.

We have to recognize, though, that the accomplishments in relation to the deficit have come about at a very significant social cost to a great many individual Canadians, to important institutions and to understandings. The math is still a little slippery, because some of it came out at the time of the last election, in terms of cuts yet to come, but in relation to the capping of the Canada Assistance Plan under a preceding government and then the moves made around the Canadian health and social transfer, something between $11 billion and $13 billion has been lost from the social envelope on the federal side of things.

In particular, our most vulnerable citizens—the poor, seniors, the disabled and children—have borne a disproportionate share of that struggle of wrestling the deficit to the ground.

We're also concerned, though, about the programmatic changes that were made; it's not merely the financial. In particular, the substitution of block funding for federal-provincial cost-sharing has damaged the Canadian social safety net. It's significantly reduced the capacity of the federal government to speak for all of Canada and to lead in ensuring that we have a social security system in this country.

The questions the committee has asked—Were things done too quickly? Were the means appropriate?—are largely academic. We suggest that with those now behind us, our attention as a nation really has to be redirected to attending to the social deficit now that we've dealt with the fiscal deficit.

The challenge before us is to mount a national campaign against the social deficit in at least as concerted a fashion as the campaign for which the finance minister received kudos.

In terms of specific recommendations, we believe rapid remedial efforts are called for to address Ottawa's waning importance as a guarantor of the social security of Canadians. Since you're here in Ontario, I'm sure you're hearing from others that with the end of things such as conditional cost-sharing, provincial governments are afraid to institute their social vision and to inflict it on the populations they serve.

For instance, here in Ontario we're seeing the responsibility for social housing dumped on municipalities that aren't equipped to meet the challenge, and we're proceeding towards the disentitlement of populations on social assistance, in defiance of fairness and natural justice.

A second suggestion for the committee—and I'm moving quickly to a close, Mr. Chair—is that in relation to the pressure the Commons faces to institute broad-based tax cuts, it would be our hope that the government will not move in that direction. Perhaps strategic and specific tax reductions are appropriate where it can be demonstrated that meaningful jobs will be created.

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Again, we have to bear in mind that the economic upturn did not raise all boats, and those who bore a disproportionate share of the cost of deficit reduction now should have some prior entitlement to a share in the dividends we anticipate.

I know you heard from Campaign 2000 earlier this morning, and we would also recommend that you accelerate the fight against child poverty. Surely what we see with one Canadian child in five or more than that living in poverty is a profligate waste of our future potential.

We spend a lot of time dealing with changes in our trade arrangements and training of our population. We're not dealing with the most fundamental questions. There are some programs, like the Canadian action plan for children or the prenatal nutrition program, that are moving in the right direction. We need more along those lines.

Finally, in terms of the role models Canada looks at, we urge you to not look solely at our neighbour to the south. God knows they're significant to us, but other nations have taxation systems, employment strategies, and social support systems that we should be modelling on in a more global world. Once again, attention to our social deficit and reinvestment in our human capital is overdue.

We thank you for the opportunity this morning. It's been a privilege.

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

Now we'll move to the

[Translation]

Regroupement des intervenantes et intervenants francophones en santé et en services sociaux de l'Ontario, which is represented by Diane Plante and Claudia Lebeuf.

Ms. Diane Plante (Regroupement des intervenantes et intervenants francophones en santé et en services sociaux de l'Ontario): Good morning. We have filed documentation containing our recommendations, as well as a brief overview in English describing our organization.

We would like to thank you for inviting us to appear before you, Mr. Chairman. First allow me briefly to introduce the Regroupement des intervenantes et intervenants francophones en santé et en services sociaux de l'Ontario. Our organization was founded in 1990 and its membership consists of individuals and associations of Francophone professionals working in health and social services. It is funded under a federal-provincial agreement between the Department of Canadian Heritage and the Ontario Ministry of Health and Social and Community Services. Our aim is to be self-funded within five years.

We have a database of 15,000 names of Francophone case workers who can serve our clients in English and in French and who represent the vast majority of health and social services disciplines, including 12 professions. It is a model of cooperation and partnership in health and social services that is unique in Canada.

RIIFSSSO's aim is to promote communication among its members and to improve the delivery of health services in French in Ontario. Although we are a provincial umbrella organization, we also work at the national level. Last spring, we organized the first national meeting of Francophone health and social services professionals outside Quebec. At the request of all the provinces, we have established a national case worker network. This is a large project with a promising future.

We are also proud to be able to say that RIIFSSSO has been described by a number of case workers in the field as one of the most dynamic and efficient organizations in the Franco-Ontarian community. We have a reputation for getting things done, and getting them done well, and we want to build on that reputation and to deserve it.

Since we represent a majority of clinical workers, educators and health and social services managers, our comments and recommendations today will focus on the health care and social services system.

Like all Canadians, we are delighted to see that this year's national deficit is the lowest in 20 years, and for that we offer you our congratulations. As regards the deficit and national debt reduction process, however, we would also ask you to beware. While it is important to reduce the deficit and the national debt, it is essential, in your efforts at fiscal responsibility, that you not only maintain health and social programs, but also ensure that health care and services are developed and improved. And French- language college and university programs should also be included.

It is unacceptable, for example, that Francophone health and social services professionals in our universities should be forced to use English-language books. French-language books are so expensive that they cannot afford them. To perpetuate a situation that should not even exist at the dawn of the twenty-first century is to condemn us to mediocrity and assimilation.

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The lower deficit has been achieved in part through reductions in transfer payments to the provinces. When the cuts were made, the federal government took no steps to ensure equivalent services would be provided to Francophones. As these reductions have caused serious problems for the provinces, they have had to adjust their own budgets through major restructuring efforts in health care and social services.

Governments appear to have considerable trouble understanding or accepting that, when cuts are made to Francophone minority services, the result is not merely a reduction in services, but the total disappearance of some of those services. In a number of cases, Francophone minorities clearly have lost a great deal because the principle of equivalent minority services has been left to the discretion of provincial governments.

On this point, we cannot help pointing to the unfortunate example of Montfort Hospital, which has lost three-quarters of its active care services. This has seriously undermined our sense of being full-fledged citizens of this country. Canada cannot afford to sacrifice the future and socio-economic development of its Francophone minorities by allowing health services, or even institutions that provide a vital minimum, to be eliminated. We must not balance the books by diluting the essential nature of this country.

It is essential that the federal government, which has a moral and legal responsibility to protect minorities, react immediately and vigorously to reverse this trend.

RIIFSSSO recommends the following measures:

1. That the federal government use a portion of any budgetary surplus to improve health and social services for the Francophone minority;

2. That the federal government, by virtue of the principle of equivalence, make a firm and irrevocable undertaking to protect health and social services in French, and that the principle of equivalent services for the Francophone minority apply to transfer payments to the provinces as an essential condition for federal contributions;

3. That the principle of equivalence be complied with in all health and social programs funded in whole or in part by the federal government, such as programs for preschool children, that is to say day care programs, youth assistance programs, that is to say, in the current circumstances, the prevention of suicide among our young people, and transitional care for seniors in the community in particular;

4. That the federal government take measures to ensure that Francophone minorities in health and social services, both professionals and students, have the same access as the majority to high technology and validated training and information tools in their language so that they can better serve their clientele;

5. That the federal government set aside transitional funding for the development and introduction of new delivery models for health care and social services.

We feel the federal government has a significant role to play, particularly now that national unity is so fragile. It has a responsibility toward Francophones outside Quebec.

We are counting on your support to help us improve the delivery of health and social services provided in French outside Quebec.

The fact that we are here today is already an indication of your receptiveness to the Francophone fact. We thank you for affording us the opportunity to suggest a few solutions.

Thank you, Mr. Chairman.

The Chairman: Thank you very much, Ms. Plante.

[English]

The next intervention will be made by the representative of the Ontario Coalition for Better Child Care Network, Martha Friendly.

Ms. Martha Friendly (Council Member, Ontario Coalition for Better Child Care Network): Thank you. And hello to all of you I've seen before on committees and in other venues.

I'm a policy researcher at the University of Toronto. I represent the National Action Committee on the Status of Women on the Ontario Coalition for Better Child Care Council.

For those of you who may not know what the Ontario Coalition for Better Child Care is, it's a coalition that was founded in 1980 to advocate for a comprehensive system of early childhood education and care services. Its membership includes about fifty province-wide organizations and local coalitions that represent parents and teachers.

Many of us were intrigued by the inclusion of readiness to learn in the recent throne speech, and by the finance minister's recent statement about the importance of the early years in education. I think I'd like to use that as the jumping-off point for my presentation.

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For many years we've proposed concrete policy solutions that could take these ideas from the wish list of throne speeches into the reality and action needed to make Canada into the kind of knowledge-based but caring society that will flourish in the new millennium. Accordingly, I'm here today to propose once again that it's time to get on with an action plan to translate these wishes, ours and now the finance minister's, into reality.

Over the weekend a friend said that I should call this presentation “Put your money where your mouth is”.

In 1994, at the time of the social security review, there was a really excellent federal discussion paper—Mr. Bevilacqua will remember this—which identified child care as central to three themes: working, or employment; learning; and security. It characterized child care as lying at the heart of the three areas as a critical support for employment, but more than an employment measure and as a way to provide children with a good environment in which to grow and learn.

This report very accurately captured what we've long suggested, that early childhood education and care services, if organized coherently, can meet a number of goals at one and the same time. If you've got the material I passed out, you'll find this in your package, and I suggest you might take a look at it. I've been using this to describe the comprehensive possibilities in early childhood education and care. However, across Canada today, what we have instead is a tangle of early childhood education and care programs with related purposes that concentrate on different populations.

We have regulated child care, kindergarten, a community action program for children, Aboriginal Head Start, an aboriginal and Inuit child care initiative, the child care expense deduction, dependent care allowances and several others. These involve a number of federal departments: HRDC, Health, Finance and DIAND.

Our long experience with this policy incoherence tells us that it's ineffective to try to address early childhood education and care in this disjunctive manner for targeted sectors of the population. These are sectors like the welfare mom, the high risk child, the aboriginal child care on reserve, aboriginal children off reserve, affluent families who want early childhood education for their child, employability, or business expense. This kind of targeting and fragmentation means that segments of the population are not served; goals and needs are not met; and, perhaps most important for your committee as a finance committee, public funds are used very poorly. Few children and few parents get the services they need, although considerable public funds are spent. Canada's approach to early childhood education and care means that we get the least bang for the buck.

In point form, recent research shows us that these services are deteriorating right across the country. As federal withdrawal from social programs stepped up in the 1990s, the funding and regulation commitments of provincial governments began to dwindle as well.

What steps can be taken to remedy this situation? I'd like to depart from some of the other speakers by focusing first on what you can do with what you've got before I address expansion.

The first thing you need to look at is within the context of the national children's agenda that's coming along. What we really need to support children and families in this country is a coherent system of early childhood education and care, and a manageable first step would be to develop this kind of coherent approach within your own federal departments. We hope the initiative of the two ministers who are working on the national children's agenda, Ministers Rock and Pettigrew, will be a beginning.

A necessary next step for realizing the goal of an effective system of early childhood education and care would begin to add additional financial resources, beginning with restoring the funds you've already cut in this area. According to How Ottawa Spends 1997, about one-third of the federal dollars that previously went into these kinds of programs are now lost.

We're well aware of the constraints engendered both by the precaution with the deficit of the last five years and by the demands of the new social union, but we submit in response that early childhood education and care should not be considered merely to be a public cost, but a public investment.

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Secondly, we believe that unless we learn to resolve issues of national importance like this one, the new social union we develop may mean we have invented a Canada that cannot work.

In this area I'd like to echo what Michael Cushing said about that mechanism as well as funds being important, that substitution of block funds under the CHST, replacing the Canada Assistance Plan, and conditional cost-sharing have had a very significant effect on our ability to have these programs at the community level.

So to finally wrap up with a response to the two specific questions your committee asked, no, we believe the methods used to reduce the deficit have not been appropriate. We believe that although fiscal deficit reduction has proceeded, so too has Canada's social deficit. The child care coalition believes the Government of Canada's deficit reduction has been achieved in part by downloading social costs to the provinces, many of whom have in turn downloaded them to local governments and ultimately to individual children and families. Accordingly, we propose that the federal government should reassume some of these costs by increasing social spending.

Thank you very much.

The Chairman: Thank you very much for your very thoughtful presentation.

We now move to a representative from the United Way of Greater Toronto, Robin Cardozo.

Mr. Robin Cardozo (Vice-President and Chief Operating Officer, United Way of Greater Toronto): Thank you, Mr. Chairman.

Let me say at the outset that we are grateful for the provisions in the last budget that sought to provide new incentives for charitable giving.

In my five minutes to you I will offer a few words about the United Way of Greater Toronto. I will paint a picture of the environment our agencies face. I will make a couple of comments about the trends in philanthropy we have been observing, and that will lead me to the topic of incentives for charitable gifts.

First, about the United Way of Greater Toronto, United Ways and Centraides across Canada are hoping to raise this year in excess of $260 million in donations in support of some 4,000 member agencies of the social service and community health sectors. Although many more charities will benefit from our donor choice program, the 4,000 agencies in the human services field are at the core of what United Ways and Centraides fund. The United Way of Greater Toronto, the organization I represent, is hoping in 1997 to raise $54.1 million in donations. That's about 20% of the national total.

Secondly, regarding the United Way member agencies, in Toronto we have about 205 funded agencies in the human services field, and most of them today are facing an uncertain future. Their uncertainty stems from the following: one, reductions in federal transfer payments to the provinces, placing the burden on the provinces' capacity to fund human services; two, the Ontario government's major cuts in welfare and social services, which have resulted in the elimination or cutting back of numerous programs that helped the most vulnerable in the community; and three, the human crisis for many in this community.

The United Way's recently issued report, “Metro Toronto: A Community at Risk”, which some of you may have seen, pointed out a number of alarming trends, including the fact that almost 19% of Metro Toronto's residents live below the poverty line and 36% of children aged 10 and under live in poverty. In the context of these realities, the role of United Way has never been more urgent.

Thirdly, I will turn to the trends in philanthropy. The United Way of Greater Toronto's annual campaign has held its own during the last few years, with small increases every year in total funds raised. We can never compensate for government funding reductions, but thanks to the generosity in the community we have been a stable source of agency funding. Our analysis of the campaign, however, suggests trends that are not positive for the long run. Very simply put, fewer donors are giving more. In 1996, for the third consecutive year, we observed a decrease in the total number of donors to our campaign.

So how should we respond to those trends? I would suggest in two ways: one, we must recognize the reality that in the current economic climate the strongest potential for growth and philanthropy exists with individuals at higher incomes and personal asset levels; two, for long-term success, we must attempt to reverse this decline by broadening the base of donors, which leads me to what we believe the government can do.

As I stated at the outset, we in the sector are very grateful for the changes in the last budget, most notably the reduction of capital gains tax for gifts of publicly traded shares. We are also grateful that the Department of Finance officials engaged in the process of consultation with representatives of the voluntary sector round table during the months leading up to last year's budget.

Our message today is simple. Please do not stop there. We have much to do, and if you can help us with the tools, we are confident we can do the job required of us.

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I will mention two very specific proposals. One, encourage philanthropy from private corporations and foundations. This can be done by withdrawing for further consultation resolution 21 in last year's budget. Even as amended, this resolution is a deterrent to the gift of private shares, which are often a donor's major source of wealth.

I'll just give you two examples. At the United Way, for example, we recently had an individual who wanted to donate private shares valued at more than $200,000 but chose not to proceed specifically because of resolution 21.

In the second example, United Way's largest single donor, the Apotex Foundation—and it doesn't mind me mentioning its name—has informed us that a combination of legal challenges against so-called loan-backs and the impact of resolution 21 are severely constraining the ability of the foundation to consider further donations.

My second recommendation is to introduce the stretch credit proposal. The idea of an additional incentive to donors who increase their gifts from one year to the next was recommended in last year's report from your committee. We understand that Revenue Canada may have some concerns about the implementation of the proposal. We certainly respect its opinion, but we would be more than happy to meet with government officials to explore solutions to any administrative concerns. It is our belief that this proposal would be seen as an incentive to the $100 donor as well as to the $100,000 donor. For this reason, we urge you to recommend it again.

I will conclude by reiterating our fundamental request. Please do not stop with the changes to date. We face massive challenges in the human services sector, and some of my colleagues have spelled many of these out. If you can help us with the tools, we believe and are confident that we have the passion and the modern management skills in the sector to really make a difference.

Thank you.

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

We will now move to the representative from Let's Talk Science, Bonnie Schmidt.

Ms. Bonnie Schmidt (Let's Talk Science): Thank you, Mr. Chairman, for the invitation to address you today.

For those of you who don't know Let's Talk Science, we're a non-profit organization working to develop a society that's scientifically literate and globally competitive. We exist because we're convinced that the talent base of our country will not be able to meet the demands of the next century unless some pretty major changes take place soon.

Let's Talk Science has a variety of programs. I'll just run through them very quickly. We train teachers to teach math and science. We work with children as young as three years old to teach them the excitement of discovery and help them understand career opportunities. We conduct research to understand why our programs are effective and to learn the best ways to teach science.

We have learned that even a small intervention can have quite a sustained result. We believe that all Canadian youth deserve the best science education possible in order to appreciate the wonders of the world, to participate fully in our democratic society and to develop the skill base to broaden their career options.

Thanks to small seed grants from the federal government, we've been able to persuade the private sector, universities and foundations to become involved in elementary education. Specifically, with a total of about $100,000 from Industry Canada over the last four years, we've been able to leverage more than $2.25 million from the private sector.

In the last four years we've grown from a very tiny outreach organization, driven by graduate students and faculties of science and engineering at one university in Ontario, to a national organization with hundreds of volunteers in twelve universities and staff in three provinces. We're now reaching annually more than 100,000 young people and their teachers. However, the demand for our services in the different provinces, coming from the teachers themselves, is currently exceeding our resource base.

Working from the premise that education has become the quintessential infrastructure for everything else, as quoted by the finance minister in his presentation to you last week, I'm delighted to see renewed interest by the government in post-secondary education. I agree that education must become a national priority and we have to invest in our young people. However, the investment must begin before they reach university and college.

Scholarships, bursaries and tax credits are important, but the kind of education that's really needed to build a society of innovation, a society of entrepreneurs that will actually thrive and prosper in a knowledge-based economy, has to begin before the age of 18. To grow the talent needed for Canada to remain the best country in the world in which to live, we must begin with the education of our children.

There are about 5.5 million students in the K-to-12 educational system in Canada, and about 1.5 million are in post-secondary education—and that's any type of post-secondary education. That's only about 30% of the total pool of students. What about the other 70% of our young people? Do you think they're leaving high school right now prepared to contribute meaningfully to our economy? Probably not, given the high youth unemployment rates right now.

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While I do not think everybody should attend university, I do believe we must ensure that all young people graduate from high school and be better prepared to survive and to meet the rapidly changing world. It's a very different world from what you faced when you graduated from high school.

The federal government can't continue to wait until our children graduate and leave school before they begin to address their needs. In order for them to survive, let alone prosper, Canadian students must acquire new basics. The Conference Board of Canada, among other groups, has done a lot of work looking at the new types of employability skills that our kids have to have. They include problem solving, decision making, and critical thinking, communicating, information technology, planning and organizing, risk-taking, numeracy, and many more. This is a lot more than the reading, writing, and arithmetic of our traditional education system.

A good science education does address all of these basics. It also helps to prepare our children for work in some of Canada's highest-growth sectors. However, few elementary teachers have a background in science. They do not know how to teach science. Our own research has shown that they have little confidence in teaching science, and many will avoid it if at all possible. Students usually say they hate to study science because it's boring and they're never allowed to do anything that's hands-on or do experiments in the classroom. When compared to American elementary teachers, Canadian teachers have a lower sense of personal efficacy. There's little wonder, then, that many students drop science and math as early as they can, usually early in high school. Once that happens, it's very difficult for them to go back and their career options continue to decline rapidly. They're Canada's lost youth.

While K-to-12 education is considered to be a provincial matter, education has to be a national priority. The provinces and territories are working together with this in mind. In fact, a new national framework for science education that was developed by the Council of Ministers of Education was just released on Friday, and there was a big write-up on it in the Star on Saturday. It proposes radical change from the science education that's taking place right now in schools. Unfortunately, the resources are not actually available to implement this new framework.

It is time for the federal government to demonstrate its commitment to life-long learning. I'm asking you to be the leaders and to ensure that the resources will be available to our children and their teachers. In fact, we have seen other countries excel when education becomes a national priority. Take Singapore as an example. Ten years ago, Singapore used to do very poorly in international assessments. Today it's leading the world. And I understand that Singapore just announced a 40% increase in education spending. The best are working pretty hard to get better.

Should you accept this challenge to help our youth before they become unemployment statistics, you won't be alone. The private sector and the voluntary sector are ready to work. As you've heard today, the voluntary sector definitely wants to partner with you.

Never before has industry been so willing to think long-term in its philanthropic giving. In fact, two of our corporate sponsors have invested $1 million in Let's Talk Science, and another one has invested $500,000 to improve elementary education. So they're not thinking short-term on graduates. They recognize to invest in our children.

We're all committed to working with you to meet and to establish achievable outcomes. We really do have to work together for the good of our future.

Thank you for this opportunity.

The Chairman: Thank you very much, Ms. Schmidt.

We will now move to the representative from Frontier College, John Daniel O'Leary.

Mr. John Daniel O'Leary (President, Frontier College): Thank you, Mr. Chairman. I would like to thank members of the committee for inviting me to be with you.

I am a teacher and I am president of Frontier College. It is a national literacy organization founded in 1899. We recruit and train volunteers, and match them with adults, children, and teenagers across the country who need to improve their basic reading and writing, their basic literacy skills.

This follows a significant time for me as an educator because it was ten years ago, in 1987, that this report was published. It's called Broken Words: Why Five Million Canadians Are Illiterate. It created a huge amount of attention in the country, and it was the first national literacy survey in our country's history. There has been an enormous amount of activity in progress since then.

In 1988 the federal government established the National Literacy Secretariat and started to deliver programs for literacy. 1990 was the UN's International Literacy Year. In 1991 there was a follow-up survey by Statistics Canada that confirmed the five-million figure. In 1993 the government appointed the first-ever minister with special responsibility for literacy, Senator Fairbairn, who achieved a huge amount during her tenure in that position. And last year we saw publication of an international study on international adult literacy, which showed Canada is providing a leadership role in organizing.

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In these ten years, we have made enormous progress. I want to emphasize that. Ten years ago there were a few dozen, maybe a couple of hundred, literacy programs for adults across Canada; today there are more than two thousand in place.

There are new programs for children and families to prevent illiteracy in the future, and there are exciting new initiatives at the workplace and among special-needs groups, such as those of the first nations, for whom illiteracy is a serious issue to this day.

I want to acknowledge the interest and support of this committee. Last year I appeared before this committee. Some of you were on it. As a result, there was a significant increase to the funding to the National Literacy Secretariat, and that has been very helpful. I acknowledge and appreciate that. Also, the relief from the GST on articles and training materials, used by groups like mine in training our volunteers, has been very helpful.

For the future, I ask you to consider how important literacy is when you are looking at all forms of public policy. Health is a literacy issue. Justice is a literacy issue. Employment and training are obviously literacy issues. Crime prevention, and so on, are all dependent upon people getting, receiving, and understanding print information.

I also want to acknowledge something. As a teacher, I found it interesting to see the Minister of Finance talking last week so clearly and articulately about the importance of education and knowledge for the future of our country. I think this is something we are all coming to understand. We need to be undertaking some additional action.

The role of the federal government in education, I believe, is to mobilize the resources of the entire community in support of learning and literacy. This is being done through partnerships with business, labour, and community groups of all kinds.

I was in a meeting last week. The Canadian Public Health Association is organizing workshops for public health nurses to help them understand that when they're working with families living in poverty, many of the parents are not able to read and understand print information. They have to know this in order to properly inform them about health issues.

I have four recommendations.

First, maintain the support to the National Literacy Secretariat—it's part of the human resources development department—and consider an increase for next year.

Second, as I said, ensure that all government policies and programs include attention to the literacy issues. We have to understand that many Canadians are not able to easily read and understand print documents.

We've just come through an election in which every one of you passed out written information. I'm sure many of you, or all of you, would have constituents who would not be able to read easily and understand the information you gave to them. Our democratic process is dependent on literacy.

Third, agree to undertake some personal action as a member of Parliament. Last month each one of you received an information kit from the National Literacy Secretariat about what you can do as a member of Parliament. I urge you to look at that and undertake some action in your riding.

Finally, as I said, I recruit and train volunteers as literacy tutors. Every week I get applications from across Canada from young unemployed teachers. These are teachers who are not able to find employment in the classroom. I would like to organize a literacy corps, for want of a better term, across this country whereby I would hire young unemployed teachers with Frontier College to provide training and literacy skills, not in the classroom, but in the streets, factories, and hotels like this one.

People often ask where we see illiteracy. It's in hotels like this one, where there are men and women who don't have high-level literacy skills. Also, because of their employment situation and personal circumstances, they can't get into a more formal training opportunity. What I can do is train the hotel workers here who can read to tutor those who can't.

I am also working on a project some of you may be able to relate to. It's called “cab college”. Many taxi drivers across Canada need to improve their reading and writing skills, and in some cases their speaking of English or French. They work 10 to 12 hours a day, seven days a week; they can't get to a formal classroom. That's the kind of thing we can do in mobilizing the community in support of learning and literacy.

Thank you.

The Chairman: Thank you very much, Mr. O'Leary. You have some ideas worth noting.

The next presentation will by Mr. Daniel Bogue of the Etobicoke Brighter Futures Coalition.

Mr. Daniel Bogue (Representative, Etobicoke Brighter Futures Coalition): Good morning. I am here to replace one of my colleagues who asked me on Friday to come and present on behalf of our coalition.

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The Etobicoke Brighter Futures Coalition is a cross-sectoral coalition of various service providers, community groups, ethnocultural groups and parents in Etobicoke who are interested in improving the development and well-being of children zero to six years old. Our mission also includes developing a network of all these different partners.

We started about four years ago and were initially supported by CAPC Health Canada funding. Since then, we've received some multiple funding. One of the things we've been able to achieve is to bring together all the different partners from established agencies, community programs, health clinics and so on, as well as parent's groups, to look at these issues.

We want to make three points today.

First, here's where we're coming from. The people we work with are really the casualties of the war against the deficit. Successful deficit cutting has been achieved at a great cost to the quality of life of many children and families. This is not a new message but it is one we think worth echoing.

Economic growth that produces wealth at a cost of social inequalities and a widening of the gap between the haves and the have-nots does not create healthy communities. The indicators are numerous: increased dependency on food banks, more sole-support parents raising their children in poverty, one out of six young people who cannot find work, a larger waiting list for social housing, a rise in the incidence of low-birthweight babies, a decrease in the availability of high-quality child care, and more children taken into the care of the Children's Aid Society.

We work with all these children and families. To use a medical analogy, we feel that we are at a dangerous point where the side effects of the remedy are becoming more harmful than the original problem.

What do we want to say? One of our messages is that investing in the well-being and the development of young children is investing in the social capital of tomorrow. The importance of the early years has been well documented by various organizations, which I believe you've heard from as well, organizations such as Voices for Children and Campaign 2000.

We are also aware that recently the finance minister suggested that funding be made available to strengthen our knowledge and skills for the new economy and to help “build the infrastructure of ideas and information on which financial growth and jobs depend”.

We want to make the point that not only do future citizens need to learn skills that are related to jobs, but their ability to do that depends on the kinds of nurturing, caring and supportive communities that these people came from in the early years. Both are necessary.

Healthy communities are not made up only of citizens who have competitive skills or the ability to achieve, but of citizens who can also work co-operatively and who value caring, interdependence and compassion.

Investing in children is not only providing good educational skills; it is also the providing of a caring, nurturing family and community context at a very early age.

This past weekend a colleague of mine who also consults for big companies was telling me that there was a new study... I don't know what the sources are, but I can certainly find out if anybody's interested. We all know the old categories of types A and B. They did a study to see whether the major CEOs in this country are type A or type B. Everybody expected them to be type A. Interestingly enough, 63% of them were type B. Initially, everybody was surprised. On second thought, to me it's not so surprising, because, in a way, people who contribute a lot in our society are people who also have those skills around relationships. They're able to communicate and to work interdependently in a team. And those are the kinds of things children learn at a very early age.

The first of our recommendations is really a visionary one, a visionary policy, not a specific recommendation. We think we need to work towards creating an environment and a culture where entitlement of pre-schoolers to the types of services and programs they need is the same kind of entitlement we've have created for school-age children, where at least we all know they go to school and at school we can start seeing how they're doing. We should provide the same kind of entitlement for pre-schoolers.

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That means that high-quality child care, home visits for the newly born, health promotion, prevention and early intervention programs for children at risk must become an entitlement for preschool children in the same way as we've done it for school-age children.

The second one is we think it's very important that the federal government stay involved, have a role to play in all of these areas. It should not all be downloaded to provinces.

A good example is the kinds of experiences we've had in our community, where Health Canada's CAPC programs have provided programs where you can have innovative and diversified approaches to addressing some of these issues. This is not to compete with the notion of being integrated, cohesive and part of a network, but can still allow for areas of diversity.

It's very much with the conference that's been going on this week in Toronto, the Jane Jacobs Conference, that programs cannot be replicated in the same way in every community. They need to reflect the uniqueness of each community. I think diverse funding also allows for that.

We want to thank—I don't know who—the last budget. There had been talk about the CAPC program being ended. We think that would be a mistake. We actually think it should be continued and increased, to continue to support some of these innovative programs.

Thank you.

The Chairman: Now, for the final intervention at this round table, from the Ecumenical Coalition for Economic Justice, Mr. Jim Marshall.

Mr. Jim Marshall (Ecumenical Coalition for Economic Justice): Thank you for this opportunity to present the views of the Ecumenical Coalition for Economic Justice.

ECEJ is a national project of the Anglican, Roman Catholic, Lutheran, Presbyterian and United Churches in Canada. Our mandate is to assist member churches in their mission for promoting economic and social justice in Canada and throughout the world.

First, we oppose across the board tax cuts, as these would disproportionately benefit the wealthy and are a very inefficient means of job creation. Direct government spending is a much more effective way to stimulate employment, due to the multiplier effect that occurs as government spending results in increased demand for goods and services produced by the private sector.

While we oppose across the board tax cuts, we would favour reinstating additional tax brackets for those earning more than $100,000 per year and using tax credits to put more income into the hands of the working poor.

Now that the federal deficit will almost certainly be eliminated during the next fiscal year, we once again strongly state the need to turn our attention to Canada's social deficit: the crying need to address child poverty, the urgent need for good jobs, and commitment to restoration of social services.

The finance department set specific targets for eliminating the federal deficit. We believe that it is essential that Mr. Martin now set focused targets to reduce, and then eliminate, child poverty. Child poverty has increased by almost 50% since 1989, the year in which the House of Commons unanimously pledged to eliminate child poverty in Canada by the year 2000. Even a modest target committing to a 50% reduction in child poverty within five years, which would bring us back to where we were in 1989, would be a welcome start.

In addition to targets, we need a comprehensive strategy to fight child poverty, one that includes an enhanced child benefit, a national child care program and job support. We are encouraged by proposals of many other agencies that include elements of such a comprehensive strategy.

These include, first, allowing people on welfare to keep 50% of the enhanced child tax benefit. It is unfair to punish children whose parents are on welfare just because their parents are unable to find work. Many of the poorest children in Canada are those living in families on welfare, and the major barrier for getting off welfare is the lack of jobs or adequate job training. Second, a national child care program based on quality and affordability, in keeping with the government's 1993 election promise to create just such a program. Further, strong federal-provincial planning to develop guidelines to ensure that provincial child poverty programs will be developed and funded by money freed up by the enhanced federal child benefit, instead of being used for building roads or paying down the provincial debt.

Women have also felt a disproportionate impact from the consequences of social spending cuts resulting from the reduced transfers under the CHST program. In light of this we suggest that new spending made possible by the fiscal surplus give special attention to programs that will benefit women, including federal transfers for social assistance to benefit women living in poverty.

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In order to ensure that we stay focused and on target in addressing Canada's social deficit, we need a regular accounting of the nation's social health. We have all kinds of economic indicators that seem to be driving the government's economic agenda and it's time we had something similar for our social agenda.

We propose the development of a genuine progress indicator along the lines of that being examined by Statistics Canada. We also urge in-depth discussions with the NGO and social sectors in Canada to provide input to the development of such an indicator.

According to a study being released today in Ottawa by the alternative federal budget committee, in which ECEJ participates, nearly 60% of the reduction in the federal deficit since 1995 resulted from the effects of lower interest rates, which reduced the cost of servicing government debt and stimulated economic activity, which in turn led to higher tax revenues.

Cuts to federal spending made a less significant contribution to the balancing of the federal budget than is generally assumed. In other words, the finance minister could have reached his professed deficit reduction timetable simply by freezing program spending and waiting for the benefits of continued growth and lower interest rates.

We are concerned that the economic recovery we are now experiencing and the prospect of continued budget surpluses may be short-circuited if the Bank of Canada raises interest rates again. With very low inflation, an official unemployment rate of 9% and real unemployment, counting discouraged workers and involuntary part-time workers, of 13% to 14%, there is no justification for raising interest rates. Higher rates would reward the already wealthy and reduce the size of the fiscal dividends before any meaningful improvement in job creation and reduction in the social deficit.

The churches' efforts to fight poverty and injustice in the third world have been hampered by cuts to the Canadian International Development Agency. We call on the government to halt any additional cuts and to restore Canadian official development assistance to its historic range of 0.44% to 0.5% of GDP. Canadian ODA has been cut disproportionately—a 40% cut since 1991-92 versus an average cut of 23.5% on other programs. We must get back on target to achieve the goal of 0.7% of GDP established earlier.

Now that the government's financial outlook is improving, we trust that the members of this committee will be mindful of the plight of the unemployed and impoverished Canadians who have borne the brunt of past austerity policies. We urge you to impress upon the finance minister in the strongest terms possible the need to redress our social deficit as the highest priority for the 1998 budget.

Thank you.

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

Now we will go to the question and answer session.

[Translation]

Mr. Desrochers, do you have a question?

Mr. Odina Desrochers (Lotbinière, BQ): I have a few introductory remarks, after which I will ask two brief questions.

All of Canada is now aware of the sad fate of Montfort Hospital in Ottawa. The day the Harris government announced this decision, the leader of the Bloc Québécois, Mr. Gilles Duceppe, reacted by saying that the recommendations of Ontario's Conservative government in fact amounted to a covert attempt to close the only French-language hospital in Ontario.

Ms. Plante, if it hadn't been for the cuts in transfer payments to the provinces, would Montfort Hospital have been able to continue playing its role? Second, in light of the decision made concerning the only French-language hospital in Ontario, how do you view the federal government's role in defending your claims?

Ms. Diane Plante: Could you clarify your question?

Mr. Odina Desrochers: If the federal government had given you the amounts originally budgeted, could Montfort Hospital have continued to play its present role?

Ms. Diane Plante: We put that question directly to Mr. Harris, who told us that transfers to the provinces had been vastly reduced. He told us that he had to make do with the budget he had and to take the necessary steps to manage it. He then organized a commission to decide on Montfort Hospital's faith.

We were told that no money had been earmarked to defend the rights of Francophone minorities, the result of which was the elimination of three-quarters of the services of the only French- language hospital in Ontario, which had a major training function and provided the full range of health services in French. Montfort Hospital's training function was considerably affected, since the hospital accommodated more than 200 clinical trainees, including doctors, physical therapists, occupational therapists and nurses.

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Students have lost their French-language teaching facility. It was suggested that services be transferred to a bilingual hospital, but we know that the language of work in a bilingual hospital is English. We are very much afraid of assimilation. We feel this is a decision that could result in our gradually being assimilated.

Mr. Odina Desrochers: My second question was whether the federal government can provide any leadership given that...

Ms. Diane Plante: We could see a role regarding the notion of equivalence which would involve really entrenching minority rights in the law and protecting French-language health services. This is a very important factor for us. There is currently no statute protecting Francophones outside Quebec and guaranteeing them services in their preferred language.

Mr. Odina Desrochers: Have you made a request to that effect to the federal government?

Ms. Diane Plante: Montfort Hospital is reviewing various options, including an injunction which it proposes to file for if negotiations to restore certain services are not up to its expectations. The injunction is still on the table.

Mr. Odina Desrochers: Thank you and good luck.

The Chairman: Thank you, Mr. Desrochers. Mr. Riis.

[English]

Mr. Nelson Riis: I have two quick questions. I realize time is running short. I have one for Martha and one for Jim Marshall.

Martha, over the last number of years different federal governments have made commitments for funding child care, but it seems to me that in the last year or two this issue has almost fallen off the table. You don't hear people even talk about child care any more. It doesn't appear in major speeches, throne speeches and so. In light of everything we've been hearing, why do you think this is, that it actually seems to have fallen off the public agenda?

Jim, I appreciate that you are here representing a number of your colleagues, but why aren't churches speaking out more about these social issues? I know the Conference of Catholic Bishops has come out with strong statements, as well as others, but by and large, in my judgment, churches across the country are silent on these major social issues that we're hearing about today. Why do you think that is? Why are churches seemingly so meek in their concern on these major social issues?

Ms. Martha Friendly: I think child care has certainly fallen off the government's social agendas. I don't know if that's what you meant. I think the whole situation in the last Parliament, where there was a limited opposition, was responsible for that.

I think child care has been marginalized within the structure of the federal government as an employability issue. It's interesting to me to listen to the coalition from Etobicoke, the Brighter Futures Coalition, talking about CAPC, which is an early childhood program funded by Health Canada, one of the limited and disjunctive programs that I was talking about. I think what's happened is that what's been put forward as the children's agenda is child poverty. I see this as being very important, as being a much more complex issue than the way it's being pursued, and people have commented on this.

Certainly early childhood education and care, or early childhood development, are very much part of the child poverty agenda, but because of the inability of the federal government to move, or the constraints imposed upon it perhaps by itself or by the Quebec situation, as well as the deficit, child care is obviously a funding and political policy issue. So it's no longer on to fund a new national program.

I think it's fallen off the government's political agenda because it decided not to move forward in the area of national social programs, as was reinforced by the throne speech the year after the Canada health and social transfer was introduced.

I don't think there's any other way to improve early childhood education and care in this country without the federal government actually taking a leadership position. I think that what we've been handed instead of a national child care program are limited bits and pieces, like CAPC, which in themselves are worthy programs but they do only a little piece of what's needed to be done.

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I don't know if this will answer your question, Mr. Riis, but I think it has become inconvenient for the federal government to pursue child care. At the same time, it's inevitable that it will come up again and again. It will come up in readiness to learn, in the child poverty agenda and in international commitments on the UN convention on the rights of children. And certainly as the national children's agenda comes around, this is going to be an inevitable part of it. And I think once again we're going to be confronted with the fact that the Government of Canada has to deal with early childhood education and care.

The Chairman: Mr. Marshall.

Mr. Jim Marshall: That's an interesting question, Nelson.

One of the things I think we should keep note of is that our national denominations have undergone the same kinds of funding constraints and needs to... All of us have experienced reductions in staff and therefore we've been limited in the kind of ability to work independently—as individual denominations—in detail on any of the major issues that confront us as a country.

Over the past five years especially, we've focused more of our efforts at working ecumenically through coalitions such as the Ecumenical Coalition for Economic Justice. And we've been choosing the times that we choose to speak individually a little bit more carefully, so we've had more time to work specifically on those particular policy issues.

Secondly, several of us also have taken a step back to do some long-term constituency building and some long-term educational work and animation work within our own local congregations, recognizing that we're going through major changes as a country, major changes both in the way we define our social fabric and in what we consider legitimate options for the future.

We don't want to continue to speak only on solutions from outmoded or perhaps dated situations for change, so we've worked together with a number of re-education programs. Right now, for example, our coalition is involved with others in a national set of workshops called “Rebuilding a Moral Economy in Canada”. We're working together at listening to a variety of inputs from our grassroots constituency on the kinds of policy changes they would like to see us begin to work on.

The Chairman: Thank you, Mr. Marshall.

Mr. Vandezande, you have an intervention here. Is it a question or a comment?

Mr. Gerald Vandezande: I would like to follow up on the response by Ms. Friendly.

The Chairman: Go ahead.

Mr. Gerald Vandezande: Mr. Riis, I think the reason child care fell off the table is that social justice fell off the table. Contrary to the first red book, the Liberals abandoned their values. Those values fell off the table and only one value remained, namely, fiscal deficit reduction, and that is not just a small technical thing.

That constitutes, in my view, a fundamental crisis of values as to how we think about the future of this country, about the way we live together, about the way we treat children, poor people, families, unemployed, et al. And unless Parliament—all the parties together—begins to see child care, poverty and unemployment as national, non-partisan issues that require non-partisan solutions, we will continue to have these false conflicts on the basis of competing values, and that will get us nowhere.

It ties in partly with the issue raised by Mr. Desrochers. The abandonment of the French community by the provincial government is partly because of CAP. If CAP had not been abolished but strengthened and/or the CHST had included very clear-cut, up-to-date, substantial standards accompanied by an enforcement mechanism, that wouldn't allow the Harris government to abandon the French community and arbitrarily eliminate hospitals. Then we would have something.

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This committee, as it has done in the past, needs to challenge the Prime Minister as well as the finance minister—the finance minister himself has made a very commendable start in his speech in Vancouver—to think in a new way about the kinds of values that should shape this country. It's not a fiscal debate, he said, it's a debate of values. But the question is, what values will this standing committee put forward to Parliament, to the Minister of Finance and to the Prime Minister to indicate that we have entered a new era? These values must also communicate, to both western Canada and eastern Canada, as well as to the province of Quebec, that we want a new kind of vision, a new kind of life together so there is the kind of social cohesion and national unity that makes sense, not only in terms of the political separatism that now threatens our national life together, but also in terms of the deep divisions that there are on the economic and social fronts. Unless those—

The Chairman: Mr. Vandezande, thank you very much.

Mr. Gerald Vandezande: Unless those cleavages are bridged, we face a worst crisis than ever before.

The Chairman: We'll have to give other people a chance to make some comments. Thank you very much.

Mrs. Lillian Morgentau: My comments are very simple. If you have children, they aren't created in a vacuum yet. I'm sure soon we'll be able to have children born and bred in test tubes, but at this time they are bred with parents, either one parent or two parents.

To be very realistic, they are talking about child poverty and other poverty and being against any of that, which I'm not, but it's like talking about apple pie and cheese. You just don't.

When I took economics, my professor got up and said “Ladies and gentlemen, everything but everything is based on economics.” At that time I thought he was really being very harsh, but when you look at it, once we get our fiscal Canadian area in place, then we can certainly say we have enough money for everything else.

What is everything else? I think we should be talking about responsibility. If you have a child, you have a responsibility. If you aren't responsible, then someone else has to pick up the collar. So let's be very realistic. Let's try to teach responsibility and looking after what we produce, whether it's a child, vegetation or anything else.

The Chairman: Mr. Jones, do you have a question?

Mr. Jim Jones: What is the poverty line—I think Gerald mentioned this—in the Toronto area and in Ontario? Define what you mean by the rich. Once you do that, the people who are saying child poverty, what percentage is in those categories? Also, what percentage of the people are incurring these $20,000 to $25,000 loans from the students, after they get out of universities? First of all, give me the definition of rich and poverty.

Mr. Gerald Vandezande: There are different poverty lines for different cities and different areas. The Citizens for Public Justice uses the low-income cut-off lines of Statistics Canada. We don't use the Fraser Institute's because we think they're grossly inadequate in terms of people's needs. So depending on the size of the family—the number of children and the number of adults—those poverty lines clearly vary, depending on the cost of living in each area.

We think the poverty line needs to be met by—

Mr. Jim Jones: What is the number you're talking about?

Mr. Gerald Vandezande: I am sorry, because of a series of mini-strokes I've had, my memory at this point... But I'll be glad to provide it.

Mr. Jim Jones: I can give you the number. For a family of four in Toronto, the low-income cut-off is $31,753. Define what you mean by rich. Who are the rich?

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Mr. Gerald Vandezande: When we talk about “rich”, I want to couple that with an economy of enough and a life that is adequate. In other words, what I'm saying is this constant rat race to continually increase the gross national product in material prosperity at the expense of a quality way of life benefits those who are financially, socially and politically powerful. And the statistics are there to show that. I'm sure the United Way and other agencies that were around the table at 8.30 a.m. can give you more statistics.

What we need to do in the current context is show a new sense of socioeconomic solidarity of well-to-do people with lower-income people and unemployed people. That means, as has been done in other jurisdictions, that we not only have a minimum income, but also a cap on income. We should do what Premier Schryer suggested a long time ago: perhaps have the maximum income be no more than seven or ten times the minimum income.

Many people who are well-to-do say “Oh, the people on welfare can easily get by on the current social assistance rates or on the minimum wage”. Well, if they can, surely the well-to-do can get by on seven times that rate.

This government should introduce a much more progressive income tax structure, a much more generous refundable tax credit structure, so that we close the gap through the income tax structure and the sales tax structure as much as we can and distribute income, and do that unashamedly, because it's one of the core values. Mr. Martin in 1996 said to this committee and in a subsequent interview with the Ottawa Citizen and again in Vancouver that it's scandalous that we have this huge gap between very high-paid executives and very low-income people.

When I walked this morning to the 8.30 hearing, there was a man sleeping outside city hall. This committee may want to interview that man in the sleeping blanket.

The projections are that tens of thousands of people will be sleeping in the streets of Toronto this winter, partly because of the abolition of CAP, partly because of the failure of the Harris government, but it's our communal failure if we don't politically rise up and say we can no longer, in good faith, with a clear conscience, accept this kind of degradation of humanity. If we don't do that, then we can do all the good work internationally on land mines that we may want to, but our reputation as a beacon of hope hangs in the balance.

So I think you, as a Progressive Conservative spokesman, as well as Reform and the New Democrats together with the Liberals should say: “We, for the sake of our national identity and future, need to do something, and we want to support Mr. Martin in his contention that these scandalous gaps must be abandoned”.

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

We'll move to Mr. Valeri.

Mr. Tony Valeri (Stoney Creek, Lib.): Thank you, Mr. Chairman.

I'd like to thank each and every one of you for coming to our committee this morning. We now have an opportunity to discuss the priorities of this country and the values we all share. That discussion has certainly been quite helpful for this committee in directing the priorities in the report.

I have a couple of questions. One has to do with the talk about the approach to child poverty. Perhaps, Ms. Friendly, you might comment on the approach we've taken so far being dysfunctional in some respects.

I wanted to tie in what you have said, Ms. Schmidt, about the need for very early intervention on the educational side and the need for promotion of innovation, since that was all part of the discussion Minister Martin put forward. Perhaps you could provide me with where the linkages are and what kind of role the national government could play in providing the type of innovation support specific to what you're doing.

But before you get to that, the other question I have is more on a technical basis, and it's for Mr. Cardozo.

With respect to the comments you made on the last budget and the support you've given to the initiatives in providing additional moneys to charities, there was very disturbing testimony this morning, I thought, from a local charity. They made the comment that the road we're on with respect to this is somewhat like that of the United States.

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In fact what has been happening is additional moneys have been going to charities, but some of the local charities and groups, such as the local food bank, are having difficulty gaining the support they need to provide for the people in need in their own community. They feel the tax incentive we're providing is perhaps contributing to that. Perhaps I can get a comment from you on that as well.

Ms. Martha Friendly: I think you're asking about the relationship between child poverty and child care and early education.

Mr. Tony Valeri: Early intervention, yes.

Ms. Martha Friendly: Okay. First of all, the federal government has taken one approach recently to child poverty: the new child benefit. I would support that kind of income security approach, although there are details of the new child benefit that I don't agree with. But as a general approach, that's one piece of it.

I kept talking about early childhood education and care because what I'm trying to signal is it's not just care—having somebody else take the responsibility. It is care to the extent that the majority of women are in the paid labour force, but that is not the whole issue that child care relates to. We've learned from research that good-quality child care and good-quality early childhood education should be one and the same thing.

If we were to follow the lead of countries that have done this well, we would see a national policy that takes account of all the components of what young children need to be ready to learn social competencies, which their parents need in order to participate in the paid labour force or not. It's not only a program for those children who have one or both parents in the paid labour force. It has many components, but what we need is a coordinated approach to it. We need that approach at the national level, at the federal level.

That is not to say it should not be a federally managed and delivered program. That's the constitutional situation in Canada, but we have a situation where it has fallen off the federal agenda. We have what I consider very poor public policy in that we have many fragments federally and provincially that you can say don't add up to a hill of beans, because nobody gets what they need.

We don't have the pre-school entitlements Daniel was talking about. We don't have the care parents need if they're to get off social assistance and go into training programs. We don't have the care and early education that middle-income and affluent parents, like many of us around this table, have used and want. We don't have the kinds of community institutions that promote social cohesion that early childhood education and care services have assumed in Europe.

I'm a parent who has used child care; I'm a feminist in the women's movement; I'm a researcher on early childhood education. We're missing a terrific opportunity to build the kind of society that some of us here have talked about.

I was a parent with my two children in child care from an early age. I was a working parent; my husband was a working parent. What my children got were social relationships that you couldn't begin to build in a much more polarized society such as that of the United States, from which I came. They became friends with children from many races and ethnic groups, and the parents got to know each other.

It's the kind of community institution that we're missing a great opportunity to build. That's what I'm trying to say. It can help the child poverty agenda. It's essential for early learning and literacy. There's overwhelming evidence that early childhood education is a factor that, in the chain of lifelong learning, promotes literacy. That's the way I'm trying to present it.

We need to start with some political will on the part of the federal government to really tackle this problem and get on with it. I think we've had a lot of words about readiness to learn, early education, child poverty, and all of these kinds of things. We know that; we want to get on with the job.

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I hope that answers your question.

Ms. Bonnie Schmidt: I do want to echo the comment about needing a national strategy. Education has to be looked at nationally.

What strikes me, as a relative newcomer to the whole field of education, is the government's seeming desire to stay out of the K-to-12 educational fray because it's a provincial mandate. Yet what I've been seeing is that a variety of different federal departments do get involved, and in a backhanded way. So it does become very disjointed, just like the whole issue in early childhood education.

There are pockets of money available, but you have to really understand the system in order to be able to find it. I don't think the federal government needs to get overly involved in K-to-12 education in terms of setting a curriculum or anything like that, but we do need to make sure that the resources are available.

There are schools across Canada that don't have a sink or even access to a telephone line, yet Industry Canada, for example, is putting computers in everybody's school. They don't think about the training that's required in order to actually provide the education for the teachers and the kids in order to use resources that certain departments are making available. I think if there was more of a coordinated approach, then a small amount of money from the federal government could be leveraged to an incredible amount and extent.

As I mentioned in my presentation, industry is really ready to get going, but my feeling is that they definitely want a lead from the government. They want to know that it's okay. We've been able to leverage very large amounts of money, and we're just one small group who can put it to the task.

The Chairman: Thank you very much, Ms. Schmidt. Thank you, Mr. Valeri.

This concludes this round table. On behalf of the committee, I want to thank you very much. I'm sure you will find many of the thoughts and ideas shared here to be reflected in the finance committee's report. Once again, thank you very much.

We will now adjourn until 1 p.m. If the members could just stay here for a second, I want to just give some directions about Bill C-2.

The meeting is adjourned.