FINA Committee Meeting

STANDING COMMITTEE ON FINANCE

COMITÉ PERMANENT DES FINANCES

[Recorded by Electronic Apparatus]

Tuesday, October 21, 1997

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[English]

The Vice-Chair (Ms. Paddy Torsney (Burlington, Lib.)): Order, please.

Each group will have five minutes to speak. If you choose to divide that time up, that's fine. We will start with you, Ms. Beaton, and then we'll go through everyone at the table. We will then go into questioning from the members of Parliament. If you're asked a specific question, hopefully you'll choose to answer that question. If you need to add something to someone who has actually posed the question, you could just indicate. I will keep the speakers list and we will go through it.

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We are trying to do the questions in five-minute rounds. If the members of Parliament choose to use the whole five minutes to make a statement rather than ask a question, we will have to figure out what to do at that point, but it would be preferable if they pose a question and that we answer and include as much time as possible for everybody who is interested in speaking. As well, if the answers could be as short as possible, that would really help us.

When you are making your presentation, after you have spoken for four minutes I will give you one finger, meaning you have one minute left. At five minutes I will ask you to stop speaking. So perhaps you could look up from time to time.

I find it easier to use a finger because it is not as obtrusive to people. People tend to look up anyway as they are making a presentation. It is not as noisy. I also have this gavel, so if you want me to use that, I can, but I prefer not to.

This meeting is scheduled to wrap up at just past 3 p.m. We will now begin.

We are pleased to have with us the second round table in Fredericton for our cross-country hearings for the pre-budget. We are the House of Commons Standing Committee on Finance.

By way of introduction, we have members from all of the political parties represented in the House right now. We have Mr. Ritz, Mr. Perron, Madame Vautour, Mr. Jones, Mr. Gallaway, Mr. Iftody and myself, Paddy Torsney. We are from Saskatchewan, Quebec, New Brunswick, Ontario, Ontario, Manitoba and Ontario, if that is of any interest to people.

I will introduce our panel today. From Les Futurs sans-abri de Restigouche, we have Susie Beaton and Charles Matte; from Pictures Plus, we have Diana Alexander; from the Saint John Board of Trade, we have Tom Gribbons; from the Saint John Construction Association, Patrick Darrah; from the Fredericton Chamber of Commerce, Dave Neal; from the New Brunswick Student Alliance, Robert Prince; from the Société des Acadiens et Acadiennes du Nouveau-Brunswick, Pascal Robichaud; and from the Association acadienne des artistes professionnel(les) du Nouveau-Brunswick, Jeanne Farrah.

[Translation]

Susie Beaton or Charles Matte, you have five minutes.

Mr. Charles E. Matte (The Future Homeless of Restigouche): I would like to make my presentation in French.

The Vice-Chair (Ms. Paddy Torsney): Okay. This is how things are done from time to time.

Mr. Charles E. Matte: This document is a photocopy, because it is not complete. I will read only the introduction. It is a brief that was presented to the New Brunswick Minister of Finance.

This document is the result of public consultations that The Future Homeless of Restigouche initiated on September 23, 1997, in Campbellton, New Brunswick.

During the meeting, people facing difficulties caused by government program administrators talked about their situations, which were sometimes dramatic.

During the discussion, participants mentioned the statements by the New Brunswick Minister of Health, Russell King, who said that there was no way to scientifically assess most of the aspects of the reform undertaken by his department since 1992. According to the minister, it is preferable to build on the health system that is currently in place.

I think that a gratuitous statement like that is outrageous. The Future Homeless of Restigouche decided to focus on common sense instead of non-existing scientific methods to assess the impact of cuts to social programs.

The comments we gathered will help people realize that there is no lack of means to assess the problems caused by cuts to social programs, but a lack of political will to carry out a reform that will be beneficial to everyone in society.

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During the meeting on September 23, a participant said the following: if we are poor, it is because there are rich people. Rich people are the main cause of poverty in the world. There are five billion human beings on this planet. Five hundred million of them live comfortably and 4.5 billion suffer in poverty. Rich people offset their numerical minority with their billions of dollars. The combined wealth of the richest 350,000 people in the world, who are billionaires, is higher than the annual income of half of the world's poorest people, who number roughly 2.6 billion.

Deputy Commander Marcos said in Le Monde diplomatique in Paris, in August 1997, on page 4, that the fourth world war had begun. Not only are rich people primarily responsible for poverty, but their control over political power gives them all kinds of economic advantages that they refuse to give to the most underprivileged people in society. With the help of comments from the people, we will show the injustices that exist in our society. The Future Homeless of Restigouche believes that it is the duty of Minister Edmond Blanchard and his Liberal government to rebalance politics and the economy in favour of underprivileged families. Irving, McCain and the politicians who served them have no right to preferential treatment, while the poor people must survive on the government's leftovers.

As long as there is injustice, there will be no social peace in New Brunswick. We'll tell you about cases. They are not statistics, they are facts. These are people from Restigouche and the surrounding areas who live in this system.

I would like to give the floor to my colleague, Susie Beaton, who will describe the situation for you.

[English]

Ms. Susie Beaton (Les Futurs sans-abri de Restigouche): The request we have today is not a request for money. It is not a request for anything material. It is a request for conscience. It is the request that as the 1998 budget is being made, put together and presented, with each item that is formed in that budget, you ask yourself: What is going to be the cause and what is going to be the effect to the people? How are the people on income assistance going to be affected?

For instance, we have in place already what is called economic unity. When a person that is on income assistance wants to have someone else to live with them, they are given an extra $46 a month. What happens in this case is that often, because the person cannot afford to support somebody on $46 a month, this person ends up homeless, on the street.

So while you are preparing the budget, what I ask is cause and effect. What is the cause going to affect? What is it going to do? To whom is it going to do it? Have a heart. Thank you.

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

Ms. Alexander.

Ms. Diana Alexander (President, Pictures Plus): Thank you. The deficit reduction measures of the past four years were essential for the financial health of our nation. Now, however, the end of the deficit is in sight and as a country we must decide where our priorities lie.

Our struggle is not over, for while the deficit may be tamed, the debt-to-GDP ratio is still too high. It is important that the government continue to work towards debt reduction so that the future of all Canadians may be secure. It is also important that the government address legitimate concerns that the social safety net has been damaged in the cause of the deficit reduction.

I believe the government should continue to reduce the debt-to-GDP ratio. At the same time, it should provide selective tax expenditures to help those segments of the country that were disproportionately affected by the deficit reduction measures. Measures to promote stable, long-term employment will increase tax revenue over time and reduce the demand on employment insurance. This will help reduce the debt-to-GDP ratio. Measures to selectively repair social programs will restore confidence in our country. Both activities are important.

Canada should never again be placed in a position of uncontrolled spending. It is also important that it not turn its back on the disadvantaged.

Today I offer two suggestions for consideration when the next budget is prepared. The first deals with employment.

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I believe Canada needs to establish a national shipbuilding policy, and that's definitely a concern for us in Saint John. Atlantic Canada has been hit disproportionately hard by the deficit reduction measures. Atlantic Canada also has Canada's most modern shipyards, but they are unable to compete in the world market. Canada is unusual among the developed nations in that it does not have a national shipbuilding policy. This places Canadian shipyards at an unfair disadvantage. Our shipyards need the opportunity to compete on an equal basis.

As the Canadian patrol frigate program shows, Canada has the facilities and the skills to produce world-class shipping. The talent exists, but the economic environment to use that talent does not. A stable, long-term national shipbuilding policy will provide steady employment throughout Atlantic Canada. The demand for ancillary services would multiply the effect of direct employment in the yards. Properly designed, the tax expenditure necessary to stimulate this activity would be recovered through increased income taxes and lower demand on the employment insurance program. I suggest that this would be a net gain for the country. Ship construction can be stimulated in several ways, two of which I'll offer now.

Domestic ship construction can be targeted by creating an accelerated CCA class for new vessels. This will encourage Canadian corporations to purchase in Canada rather than offshore. Demand from both foreign and domestic customers can be encouraged by providing interest rate relief on ship construction costs. This will help level the playing field relative to the support other countries offer to their shipbuilding industries.

It's not an unreasonable request to seek support for this industry. Quebec has benefited from federal support of the aerospace industry. Ontario owes much of its economic strength to government support provided in the auto industry. It's time to play to one of the natural strengths of this region. Atlantic Canada needs a stable, long-term national shipbuilding policy.

The second suggestion that I offer today deals with our social safety net. As a result of the deficit reduction measures, the federal government's contribution to health costs as a percentage of total health care expenditures has declined dramatically. This threatens the national standards of health care that are so important to Canadians. As the provinces grapple with their own deficit reduction programs, the federal government stands in danger of losing its moral position as guarantor of national health standards. This is not acceptable to Canadians.

Canadians have accepted that the deficit must be eliminated. They have accepted reduced program spending and increased taxes. They accepted that healthy Canadians and those who are working must share in the effort to restore our country's economic health. However, Canadians can no longer accept that further cuts must be made to programs that affect the ill and disadvantaged. In fact, it is time to make selective investments in these programs.

Understanding that Canada cannot return to the massive spending programs of the past, it is important that targeted investments be made. Just as targeted investments in the economic sector can have a significant impact on employment, targeted investments in the health care sector can have significant impact on the nation's health and confidence. This is important to all Canadians.

As the budget process continues, I urge you to include health care in your priorities. By working with concerned citizens groups and other government departments, you have the opportunity to identify and to act upon selected areas of health care spending without endangering the fight against the deficit. It is time to balance fiscal prudence with compassion to our citizens.

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

Mr. Gribbons.

Mr. Tom Gribbons (Saint John Board of Trade): Thank you very much.

The Saint John Board of Trade appreciates this opportunity to appear in front of this committee. I believe it's our third opportunity at a round table like this. My presentation really has three major themes. The first two are economic: debt and deficit reduction.

In our opinion, the real fiscal problem is not the deficit. We seemingly have conquered that, although a number of the reasons behind why we have conquered it may be due to favourable markets and interest rates in the last few years. However, the major problem that faces us economically in the nation in the next few years is the high level of debt in the country, and our ability as a nation to finance it. Canada's current debt-to-GDP ratio is approximately 74%. I believe the newspaper I read yesterday said it was down to 73%. We're gradually making headway, but it's still the highest it's been since the 1940s. Before 1984, the debt-to-GDP ratio ran under 50%, and I might add that the average for the G-7 nations is approximately 45%.

Our suggestion on this would be to set a target for the debt-to-GDP ratio. We've had targets on deficit reduction in the past. Let's now start to look at the next problem, and that is the debt-to-GDP ratio. Although this may be conservative, we would suggest going for 60%, but let's get a target so that we can reduce it from the current 75%.

Restrict increases in program spending by slowly phasing in any significant reduction in taxes, and develop a debt reduction plan and a plan for tax reduction over the next ten years. Essentially, hold the course, reduce the debt of the nation, and gradually phase in tax reductions to our citizens.

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The second area is payroll taxes. We recognize that we have a problem throughout this country, and especially in this part of the country, in job creation. Payroll taxes are probably, in our opinion, the number one cause for many of our unemployment problems. We believe that payroll taxes kill jobs. In my own business, every time a person is hired, you automatically, through payroll taxes and other benefits, add 25% onto the cost of employees for a company.

The Canada Pension Plan changes that are coming up, we believe, are going to be very serious and very detrimental to the creation of jobs in this country.

We have a couple of ideas. The disability component of the Canada Pension Plan overlaps and duplicates the compensation programs of provincial workers. We think this should be reformed. We think that gradual increases in the age of eligibility in the Canada Pension Plan should be made so that it is back to where it originally was when the CPP was introduced, that is, have it start at the age of 70. Do it gradually. Remove the disability component of the plan and make it into a separate program, invest CPP investment funds according to prudent investor rules, and remove barriers to the foreign investment of funds.

I might add that Canada has a great example of how to invest pension funds on a public basis: the Quebec Pension Plan. The QPP has been managed very prudently and well. It's invested back into the Canadian economy. That's an example we can look at.

Consider employment insurance changes. The EI surplus is estimated to be at about $7.1 billion by the end of this year. Surpluses of this magnitude cut into the employer's ability to hire more people. Currently there is no method for monitoring employer overcontributions to the EI program. We believe the surplus should never exceed $5 billion. Any excesses should be given back to employers and employees in the form of lower premiums. Move toward an equalized contribution rate so that a 60% reduction for employees is reached by January 1998. Implement a tracking system for employer overcontributions.

The third one, if I might just close on this, is the unity issue. All bets are off economically if this country does not stay together. I think that has to remain the number one issue for our federal government. It doesn't matter where in the country we live; the Rocky Mountains won't defend Vancouver if the country breaks apart.

Thank you.

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

We have Patrick Darrah from the Saint John Construction Association.

Mr. Patrick Darrah (Saint John Construction Association): Thank you very much, Madam Chairman and members.

I think it's the third or fourth time in New Brunswick that I have appeared, but I've appeared before the committee eight times over the years. I want to take this opportunity to congratulate the government in reducing the deficit. We recommend that you proceed to get that budget balanced.

The second priority we place here today is that you should firmly attack the $600-billion debt. Otherwise the long-term financial condition of the country will be permanently damaged.

We are of the opinion that tax loads could be adjusted with regard to small business so that this entrepreneurial area must be in a position to help us lower our unemployment rate. The discretionary spending on benefit of government should be controlled with an iron fist. The reason for this comment is that if we choose to loosen the grip, we will find that the red ink will show up rather quickly.

If there is some particularly glaring example of expenditure cuts that have damaged Canadians as individuals, we suggest that a careful look at these particular target areas are is in order.

Here is another major concern we have. We believe you should not use EI to lower the deficit. If you're going to move EI, it should be paid to the CPP. Since this is an employer-employee contribution, it belongs to individuals.

We also believe the provinces should pay back the $32 billion they owe the Canada Pension Plan. We believe this should be done immediately.

The finance committee should be very careful in making recommendations to the government that would change the direction that Mr. Martin has followed. I think we want to take a very careful look at switching the EI to the CPP. This would help lower the employer tax load, as the previous speaker has stated. This is where small business creates employment, and employer or employee taxes are a detriment to this particular avenue of creating employment. As I said earlier, let's just make the comment that small business really is the generator of employment.

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We look to the past, where errors were made in the projection of the growth of the Canadian economy. We want to congratulate the Bank of Canada for forcing us into a fiscal policy that made the government answer to deficit reduction. We just remind you to be very careful when you make up the budget in the next few weeks. We must not fall into the category of overspending again and place this load on the next generation.

Thank you.

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

Mr. Neal.

Mr. Dave Neal (Fredericton Chamber of Commerce): Thank you very much.

My remarks today are geared to the clerk of the committee, and to the request that was sent out regarding comments on profits and deficit reduction, and on the priorities in the government for the upcoming budget year.

The chamber movement, both nationwide and on a local basis, has continued to be a vocal advocate to all levels of government for deficit and debt reduction. Federally, we consider that deficit reduction has been progressing at a good pace, but we believe the steps in this process have impacted the Atlantic region harder than the remainder of the country, particularly in such things as EI reform.

Deficit reduction must continue and the government must not stop there. It must focus on debt reduction at a sustainable level. This process must also articulate to the Canadian people that we are not out of the woods yet, but are at least on the path out of the woods. I don't believe the majority of Canadians understand the magnitude of the debt problem that we have in the country. They are just focusing on a zero deficit and take no account of the $600 billion in debt that we have and the billions of dollars it takes every year to finance that debt.

Regarding reductions and expenditures, Canadian businesses believe the government must always continue to deliver services on a more cost-effective basis. That is to say, decrease the cost to government. Most of us believe the government is in place to lead and, in turn, to provide health care, education and a social safety net that is prized by most Canadians and envied by the rest of the world.

At the Atlantic fishing conference in Moncton, it was emphasized that the elimination of business grants and subsidies must be a part of expenditure reduction, especially those grants that assist competing businesses within Canada. Support must be maintained for businesses that focus on research and development of new products and/or services, however.

Regarding the devolution of powers to decrease expenditures, the simple devolution of powers down to the provinces is not always the best method. Atlantic Canadians believe in a strong federal government. We see that national standards in programs must be maintained, and these standards in many cases are more appropriately done or maintained federally.

There must be a negotiation process with the devolution. It cannot simply be the federal government saying that this is the provinces' responsibility. It can't just be a focus on expense reduction. It has to be on who or what level of government best provides the service. There's only one taxpayer, so if you're going to download it to the provinces, we're still going to be hit with taxes.

The government has to consider privatization of services where national standards are not compromised. Those studies must be continued and privatization must be undertaken in those areas. There is no room for tax increases in any way.

Regarding revenues, as I said, there are no increases acceptable for taxes, either personally or corporately.

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The recently introduced CPP increase will kill jobs and not create the environment for any new jobs. The business owner is a taxpayer, just like the employees on the payroll. Neither can afford nor have they the desire to shower more tax dollars to any level of government. The CPP increases, along with the EI increases, stifle job creation in a globally competitive environment.

Government must not create the jobs. They must establish and maintain the environment to allow private business to grow. Higher taxes only drive our knowledge and our business ownership offshore to those same people who control our debt.

On the matter of tax relief, we believe this must only be done when the deficit is gone and debt reduction is under way. Tax cuts must not be across the board. I've been in many groups where we've seen that targeting tax cuts to individuals can put that extra money back into the economy, thereby stimulating it.

Immediate tax relief should be in the form of EI premium cuts to eliminate overfunding. Elimination of the CPP increase is not a tax relief but will be a step in the positive direction.

In conclusion, I urge the government in their budget considerations to be consistent. Stay on the same course for a balanced budget. Work to eliminate the debt. Do not go on a spending spree once the deficit is gone. The financial situation in the country will improve with a strengthened economy, no new taxes and no measures to pass the tax burden down to the provinces. As I stated before, there's only one taxpayer. Your priority should be to educate, provide health care, and govern in a way that a positive climate can exist for controlled, continued growth.

Thank you.

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

Mr. Prince.

Mr. Robert Prince (New Brunswick Student Alliance): Thank you, Madam Chair. Before I begin I'd like to say that the New Brunswick Student Alliance is the only provincial student organization across the country that can actually claim to represent every single one of their provincial students. We represent 22,000 New Brunswick students and we are fairly proud of this.

When I was first approached about participating in this discussion, I must admit I was surprised and thrilled. The results of cuts to provincial transfer payments to universities are undeniable. Universities have two main sources of revenue: tuition fees and government funding. Reduce one and, if you want to maintain services, the other must rise. In our case tuition has spiralled upwards, and that scares many of our students.

The fact that we're participating in this dialogue tells me that perhaps students aren't alone in facing these realities, and perhaps someone else cares. But for all of us to understand fully the impact of past policies and to prepare for future policies, let's look at what it's like to be a student currently. We'll notice two obvious problems.

A few years back it always seemed that every year the same ritual would occur. The students would get upset over increases in tuition. Pickets would be raised and students would scream in front of universities and legislatures. Their message was simple: students would eventually be forced out of the system by rising costs. Universities would reply that they had no choice, that governments were curbing their spending habits, and the federal government would say that these cuts in spending were necessary.

With some New Brunswick universities having reported stagnation in enrolment and with some others such as the University of New Brunswick actually reporting drops in enrolment—this year dropping 300 students—we must consider the possibility that the cuts to transfer payments have in effect had deleterious effects on financial accessibility to post-secondary education. That would be our first problem.

So how does the federal government address this issue? Well, the re-establishment of stable-based funding for post-secondary institutions would probably be the best way to mend the broken system. Couple that with stern directives in the form of tuition regulation to the universities, forbidding them to raise tuition haphazardly. There would then be less likelihood of repetitive ever-increasing tuition hikes year after year.

The millennium scholarships are a fine way of addressing the problems of low- and middle-income students entering the post-secondary system. Making sure our universities have sufficient funding levels guarantees that all students receive an affordable, quality education.

We would be remiss if we were to ignore the concurrent issue of student debt loads. When I tell you that the average Canadian graduate will be carrying a debt burden of $25,000 upon graduation, you can see pretty clearly what our second major problem is.

I would also ask you to note that in May of this year one of Canada's major banks cited heavy debt loads and poor employment conditions as the reasons for its pulling out of the Nova Scotia student loan program. Students owed too much, and the mortgage-style payments were forcing them to default on their loans. If we weren't sure of what amount of debt was too much, we got the answer awful clearly.

It would be important for the federal government—and by this I mean both the departments of human resources development and finance—to remedy this problem with a new, innovative, more flexible student loan system. New Brunswick's Department of Advanced Education and Labour has developed a plan for student loan repayments. It addresses the faults of the current program by introducing the following: repayment based on income, but with a system of deferred grants that assists students incapable of making payments; and a length of repayments that is limited to between twelve and fifteen years.

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Students in New Brunswick do not wish to ask for handouts, or even for free tuition—as other student groups have done. We instead ask that the detrimental cuts to post-secondary education be addressed and remedied quickly but reasonably. Instead of allowing students to run into a wall of debt, we ask that they be assisted as they graduate and enter the Canadian workforce. As post-secondary education becomes more and more essential to personal and social success, we ask that the federal government assist in eliminating financial barriers to access.

Thank you.

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

[Translation]

Mr. Pascal Robichaud.

Mr. Pascal Robichaud (First Vice-President, Société des Acadiens et Acadiennes du Nouveau-Brunswick): Good afternoon, Madam Chair and members of the committee.

The Société des Acadiens et Acadiennes du Nouveau-Brunswick is a non-profit organization whose goal is to enhance the New Brunswick Acadian community by ensuring its development, as well as protecting and promoting the rights and interests of New Brunswick Acadians.

We agree that Canada is brimming with resources. The presence of francophone and Acadian communities is one of these resources. In New Brunswick, the Acadian community is the cornerstone of the province's francophonie.

Today, the Acadian community is flourishing and has been working since 1996 on putting together an Acadian comprehensive development plan, that we call the CDP, to ensure our society is viable, modern and prosperous.

The SAANB feels that the Acadian community has suffered the consequences of the federal government's efforts to restore health to public finances. In all honesty, we did the necessary streamlining. Over the years, our needs have increased, whereas resources have decreased.

The current situation is such that we devote all of our energy to saving existing programs and to drumming up funding, instead of devoting it to community development. How can we develop the community if the means we need to do so are eliminated?

We have to change the current situation that forces us to react and fight for the so-called existing programs so that we can use them to work on development. The SAANB realizes that the budget must be balanced, but would also point out to the federal government that it has responsibilities with respect to francophone and Acadian communities pursuant to the Official Languages Act.

The federal government is responsible for protecting, developing, enhancing and promoting the two linguistic communities in Canada. This responsibility must be reflected in the budget. The budget cuts of recent years have lightened this responsibility for the government, and the communities have ended up with a bigger burden to bear.

The Acadian community must focus to a larger extent on its development and must devote considerable energy to its comprehensive development plan, but it needs the means to succeed.

In the context of a budget surplus, the SAANB recommends a series of measures that should be included in the next budget.

First, we recommend that the Official Languages Assistance Program at the Department of Heritage be maintained and that additional funds be invested in the Acadian community. These initiative programs have taken a hard hit since 1990.

Under the assistance programs for official language community organizations and institutions, the Acadian community ratified a Canada-community agreement with the Department of Heritage for 1995-96.

However, we feel that this agreement should be improved, because in reality, it is a bare minimum. The community has many needs and requires more investment. These organizations, through their action, helped the federal government fulfill its mandate with respect to Acadian and francophone communities in Canada. We are not talking about grants, but investments.

All organizations benefitting from the programs have been hit hard by cuts to grants. By way of an example, the SAANB has faced a 39% budget cut over the past six years; the budget went from $675,000 in 1990 to $440,000 in 1996.

Secondly, we recommend that the categories used to define charitable organizations be broadened to enable non-profit organizations, like the SAANB, to obtain a charity number. Organizations are encouraged by the federal government to diversify their funding. In October 1996, the SAANB launched its campaign for the future. All kinds of individuals and businesses were contacted, but they favour organizations that have charity numbers and can give them receipts for income tax purposes.

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Thirdly, we recommend that any administrative agreement designed to transfer powers to New Brunswick or the private sector be accompanied by funding earmarked for the Acadian community. It is essential, in all framework agreements between Canada and New Brunswick that an appropriate mechanism be put in place to ensure that the funds invested benefit members of the two linguistic communities in the province equally.

Next, we recommend that the budget for the Court Challenges Program be increased, not cut.

Considering that access to... [Editor's Note: Inaudible]... is a fundamental part of Canadian democracy...

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

Mr. Pascal Robichaud: I will let the arguments in the document speak for themselves.

So we recommend that the Court Challenges Program be enhanced; that education remain a priority; that programs be designed to support job creation in the rural regions of New Brunswick, since a large part of the population is rural; that funds be invested in promoting Acadian tourism; that funding for arts and cultural programming be increased; that programs for young people be a priority; that scheduled cuts to funding for the CBC be cancelled and that community media be funded; that the federal government support the Acadian community's international initiatives, like the Acadie-France and Acadie-Belgium agreements; and finally, that the federal government continue to invest in health by promoting programs such as Healthy Communities, a joint Department of Health and Heritage Canada project.

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

Ms. Farrah, please proceed.

Ms. Jeanne Farrah (Association acadienne des artistes professionnel(le)s du Nouveau-Brunswick): We would like to thank the Standing Committee on Finance for giving us the opportunity to make a presentation a part of the pre-budget consultations.

Before making our presentation, allow us to say a few brief words about the nature of our organization.

The Association acadienne des artistes professionnel(le)s du Nouveau-Brunswick is a non-profit organization whose mission is to promote and defend the rights and interests of artists. Founded in 1990, it has been actively working on developing all artistic disciplines.

We have been participating in this process for three years, and as we have done each year, we will try to explain the importance of investing in arts and culture in the next federal budget.

This presentation will focus mainly on how governments should set their priorities regarding spending increases.

We feel that it is appropriate for the federal government to focus its priorities on job creation. Given the nature of our organization, we feel that many of these jobs should be created in the arts and culture sector.

The first topic we would like to address deals more with funding the arts than with job creation.

Over the past few years, people have lost a lot on the national level. The federal government continues to withdraw. Moreover, Statistics Canada stated that over the past six years, funding for the arts has been cut by 7%, not including the catch up work that was required for funding in this area in certain regions outside the centre of the country.

Newly available financial resources in the next budget must be used to give the arts and cultural sector as well as the regions outside the centre of the country their fair and necessary share of the funding.

In accordance with sections 41 and 42 of the Official Languages Act, the federal government is responsible for ensuring that francophone and Acadian communities in Canada receive their fair share of the funding.

In order to give you an idea of the economic impact on the arts and cultural sector, we will share some statistics with you.

Considering that the average income of an artist is $6,000 and that of the average worker is between $25,000 and $50,000 per year, and considering the more than $11 billion in economic spinoffs from arts and culture, why would the average salary of an artist not be brought up to that of an average worker?

In terms of job creation, there were roughly... [Inaudible]... direct jobs in this sector. Since 1984, there has been a 122% increase in job creation in the cultural sector.

It goes without saying that investing in arts and culture is more than just profits, as it is also investing in our identity, our present and our future.

We recommend that the government increase its contribution to arts and culture, particularly to francophone and Acadian communities.

We would also like to take this opportunity to share our concerns regarding the adoption of Bill C-220. It is a private member's bill currently under consideration in the Senate. We join the Canadian Conference of the Arts, which has approached the Senate Standing Committee on Legal and Constitutional Affairs, to recommend that the wording of this legislation be amended.

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We feel that it would be dangerous to adopt the Bill C-220 in its current form, as it would amend not only the provisions of the Criminal Code, but also those of the Copyright Act, thus violating freedom of expression.

We recommend, therefore, that the House of Commons and the Senate do everything necessary to ensure that the wording of this bill does not exceed the initial objectives behind its creation.

Canadian content in broadcasting, is currently under consideration by the federal government. We feel that the government must take into consideration the fact that cable companies are currently lobbying for the use of new distribution technologies and signals that they have developed.

In our view, in order to save our Canadian identity, the federal government must continue to act in this area.

We recommend that the government pursue its efforts with respect to cable companies to ensure that they are aware of the importance of maintaining or increasing minimum quotas for Canadian content when marketing their products.

In conclusion, we would like to remind you that at the dawn of a new millennium, we need to take some time to reflect on what we want to accomplish as a people, and as a country in the future. In our view, that involves government support for artists.

The Vice-Chair (Ms. Paddy Torsney): I suggest we take a five-minute coffee break. That will allow you to

[English]

stretch your legs for a couple of minutes.

• 1257

• 1309

The Vice-Chair (Ms. Paddy Torsney): A couple of presenters have mentioned things specific to the Canada Pension Plan. The finance committee will be doing those hearings starting October 28. We'll make sure to forward a copy of your comments on that subject to the researchers who are doing it, and your comments will form part of the research and comment on the CPP as well.

If MPs want to question about that particular aspect, it's their choice, but hearings on the CPP will start October 28. If individuals want to present on that issue or send in information, they're more than welcome to do so.

Mr. Darrah has a question.

• 1310

Mr. Patrick Darrah: Will that committee go across the country too?

The Vice-Chair (Ms. Paddy Torsney): No.

Mr. Patrick Darrah: So we will have to go to Ottawa.

The Vice-Chair (Ms. Paddy Torsney): We always take written documents and submissions. For a lot of people that's helpful. Also, you can always write to your member of Parliament for free. It's the only deal going.

I'm going to limit it to five-minute rounds. Mr. Ritz will start us off.

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

Again I'd like to welcome all of you. You've done an excellent job on your presentations. I look forward to the questions and comments.

I have two questions that popped up during the round.

Ms. Alexander, you made a good point on national shipbuilding policy. I'm from the prairies, and ships don't mean a whole lot to us out there. But you're talking about our being unable to compete in the world market, and I'm wondering what we're lacking to develop and maintain a sustainable shipbuilding system in the maritimes. What is the demand for the finished product? Is it a sustainable market? Are there things we should be doing as a government to help it? I'm asking about these types of things. I need just a little more information.

Mr. Gribbons, you talk about changing the CPP to age 70. I'm wondering what tools we would need for people who wanted to retire earlier than that. Are you talking about more privatized pension plans and larger RRSP contributions? You talk about doing away with the CPP disability portion of it. Where would those people go? What type of vehicle do you see operating for them?

The Vice-Chair (Ms. Paddy Torsney): Ms. Alexander first, please.

Ms. Diana Alexander: It would take me about two hours to do lab work on the shipbuilding policy, but—

Mr. Gerry Ritz: Give me the headings.

Ms. Diana Alexander: Yes, there are some very definite things the government can do immediately to change the finance act to have a significant impact on shipbuilding. Particularly in Atlantic Canada we'd love to see it, but across the country these are significant changes.

What they need to do is change the capital cost allowance so that companies can depreciate Canadian-made ships, as they do in other countries. In other countries they're allowed to depreciate more quickly the cost of producing ships, which gives a distinct advantage. For Canadians there is no advantage to buying Canadian right now, so that would be a significant change for us and—

Mr. Gerry Ritz: The railways made the same point.

Ms. Diana Alexander: Exactly. It's exactly the same principle, and it would have a significant impact on the shipbuilding industry in Canada.

The other thing is cabinet suggested—and I think this is something that should be considered—reducing the interest rates for companies that are investing in shipbuilding in Canada. It's not something particular to Atlantic Canada, but obviously we have a lot of shipyards here. We have some of the best shipyards in the country, and even in the world. We proved with the Canadian patrol frigate program that we can produce some of the best ships in the world, and we'd like the opportunity to do it.

Right now in Saint John we have a shipyard that's sitting empty and not producing anything at all. It went from almost 4,000 employees, when the frigates were being built, to none. That technology is there and we need to be using it. There is a significant impact on Saint John and on Atlantic Canada to have those yards not producing.

The government has the ability to make changes that can make our shipyards much more competitive, and all we're asking for is an opportunity to be competitive so that we can produce more.

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

Mr. Tom Gribbons: It was a good question, Mr. Ritz. A lot of the discussion on the Canada Pension Plan has been around the funding side of the equation and not on the benefits side, if I can put it that way.

There's an opportunity here that probably will not be there when I'm a retiree. Demographics show that by the time the baby boomers are retired, the segment of the population that will be 60 or 65 years of age or older and very active voters will be so large that they will probably get their way in a lot of things politically in this country. The baby boom generation has done that through their entire life spans. If we are going to make a change to the Canada Pension Plan on the benefits side, the opportunity is in the next two years, not ten or fifteen years down the road.

• 1315

With regard to the disability component, we believe there's duplication between federal and provincial jurisdictions. There is provincial jurisdiction over workers' compensation. Simply, we're suggesting we somehow simplify that procedure and decide whether it is going to be taken care of federally for the CPP. If not, hand it over to the provincial governments to do.

With regard to changing the eligibility to 70 from 65, I think the RRSP programs, the individual retirement plans, have to be enhanced. We have to get away from the notion that comes around every year at budget time that maybe the federal government is going to change the way these plans are treated. The ability to defer tax until retirement age has to be taken completely off the table, and then allow Canadians to distribute more money on their own behalf into the pension plans.

There is one other thing, and that is the amount Canadians can invest in pension plans outside the country, in the CPP program, in the QPP, or in private plans such as RRSPs. Currently only 20% of that money can be invested outside the country. I think that should be increased to obtain better returns and allow Canadians to provide for a better retirement.

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

[Translation]

Mr. Perron, five minutes.

Mr. Gilles-A. Perron (Saint-Eustache—Sainte-Thérèse, BQ): About 30 years ago, businesses contributed roughly 23% of government revenues, and at present, they only contribute about 10%. As for individuals, they currently contribute roughly 57% of government revenues. In the case of businesses, and these figures come from the Department of Finance, tax expenditures on deferred taxes cost the government 1,000 million dollars.

[English]

—that's $1 billion—

[Translation]

the capital gains exemption costs 1,500 million dollars, small business deductions cost 1,900 million dollars and it is not even said how much the government looses when business subsidiaries are set up in tax havens when no taxes are paid. Given that there has not been a major reform of the Canadian tax system since 1962, do you think it would be time to do one and how would you comment on that?

My question is for any of the panelists who would like to answer.

[English]

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

Mr. Patrick Darrah: I'm not a tax expert, Mr. Perron, but I think you have to realize the tax load on Canadians and Canadian business is all they can absorb. I think if we're going to do anything about the unemployment of this country...the burden is great enough now.

You realize, I'm sure, that it is the small businesses in the country that create employment. The opportunity is created only by the fact that we've all mentioned here today—the employment taxes that are a burden to those people. So if we're going to generate income for the country, we have to address those things, not literally add taxes to them.

If there's a review of the Canadian tax system—a review hasn't been done since 1962—I think we should also look at getting out of the employment tax business. Employment itself will then generate the revenue. The private citizen will have enough money to pay those taxes. The individual is still the biggest benefactor of the Canadian tax system.

The Vice-Chair (Ms. Paddy Torsney): Mr. Neal, Mr. Gribbons, and Ms. Alexander, does anyone wish to add to this? Mr. Neal.

Mr. Dave Neal: We've addressed that taxes are a major concern, and taxes we consider to be the user fee...the money is given to the government. As Pat has said, any increases just can't be accepted. You grow the economy and you increase the tax base by increasing jobs, increasing prosperity.

• 1320

The province of New Brunswick has made great strides in exporting knowledge. We have gotten away from our resource-based sector and we've exported our knowledge more, but we do not want to export that. We want to have that knowledge base here. We do not want the students who are educated here leaving for the States, where they find better tax havens or whatever you might want to call it.

So I think it's important that the government consider that taxes are at their maximum level. And as I said earlier, don't just pass things on to the provincial and municipal levels, because they're more than willing to pass them along to us too. Take responsibility where it lies, and if you want to reform them, that's fine. I was born in 1962, so it gives me an indication of how long it has been.

The Vice-Chair (Ms. Paddy Torsney): That's not that long ago.

Mr. Gilles-A. Perron: It's over thirty years.

The Vice-Chair (Ms. Paddy Torsney): I was born that year, too.

An hon. member: What year was that?

The Vice-Chair (Ms. Paddy Torsney): 1962. It was a good year.

Ms. Beaton or Mr. Matte.

[Translation]

Mr. Charles E. Matte: I would like to talk about the deficit, that has been balanced. It was balanced primarily by people who live in poverty. Today, when you look at what is happening, you can see that there are a lot of large companies and multinational corporations that do not pay their share of the taxes.

Take the case of people living on income support. Single persons receiving $267 a month and having to pay for all sorts of things are still taxed on that amount. They cannot manage. At the same time, big business and multinational companies are not paying their fair share of taxes. I think that is unfair, and that the government should ensure in the budget that they pay their share of taxes, just like everyone else.

We are all Canadians. We live from the same resources. We use the same roads and I think that it would be fair for everyone, without exception, to pay their taxes. That must be stated. You have to go to Ottawa and state publicly that everyone should pay their taxes. If everyone did so, Canada would become a prosperous country. Everybody would benefit from that and poverty would decline very quickly. That's where the money is.

We are told that Canada is supported through taxation. If everyone paid their taxes, there would not be any problems.

Taxes are not paid fairly. It is the poorest who are the most vulnerable. They are the ones under the most pressure to pay their taxes.

If an individual receiving $267 a month must pay tax on that amount, there is a problem somewhere. If multinationals and big business do not pay... It has to be absolutely clear that everyone must pay their taxes.

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

Ms. Vautour, five minutes please.

Ms. Angela Vautour (Beauséjour—Petitcodiac, NDP): I would like to thank everyone who has made a presentation. I have strongly defended workers and the unemployed over the past three or four years, and I am here today as a member of Parliament. It is interesting to listen to what people have to say.

This morning, I heard people who thought very much like Charles, Pascal and the other young people. I see that there is a big difference between someone who does not have very much and someone else who has more. I wonder whether the various groups meet and speak with one another often.

• 1325

First, I would like to tell Charles that I realize that it is the unemployed, seniors, the sick and people receiving unemployment insurance who have paid for most of the deficit.

I start to feel confused when I hear representatives of the Chamber of Commerce state that unemployment insurance premiums should be reduced in order to create jobs.

Meanwhile, we see that the banks, who have made billions of dollars in profits, have cut jobs.

This leads me to conclude that, even if they make more money, they will not necessarily create jobs. There are still many industries against the cuts implemented by the government. They are going bankrupt because the people living in our various regions have lost their purchasing power. In rural communities, those people who go for three months without any income because of cuts to the unemployment insurance fund, because the Liberals have cut 45 000 jobs around the country, no longer have any money to spend.

I believe that job creation is the only way of resolving this problem. However, it will not be resolved by taking money away from those people who will be buying your products. Would someone try to explain to me how they see the situation? Are you concerned about people living in poverty, about children who have nothing to eat for lunch today?

I'm trying to understand whom the Chamber of Commerce represents when it says that the debt problem is the number one priority. Some companies tell me that they are ready to fight so as to ensure people have more money to spend.

In my case, my salary has tripled. I was earning $20,000 a year. Today I'm earning $64,000. I have bought a car, had my house repaired and I'm spending money in my community. Therefore, after getting a job, I am helping my community today. If I had gone onto welfare, I would be in the opposite situation.

In addition,

[English]

it's the first comment she made after the Atlantic caucus, when the Atlantic NDP members met and our party was... [Editor's Note: Inaudible]. There was a problem with that.

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

Ms. Beaton, would you like to start?

Ms. Susie Beaton: Yes, I have a comment to make with regard to a statement you made.

I think a big part of the problem is that there is no awareness of how serious the issue of poverty is. I think the awareness needs to be extended—the degree of it, the extent to which people are committing suicide because they have no place to live or food to eat, the extent to which people have to become heartless because they cannot afford to take their brother into their home. The awareness has to be there.

I think that's where it's coming from. People are not seeing it. Maybe it's because they don't want to, because if you see it you have to do something about it. Either way, that's what's there. Thank you.

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

Mr. Gribbons.

Mr. Tom Gribbons: Thank you.

On Friday I was asked to participate in a rally against poverty in Saint John that was organized by a number of community groups in Saint John. I was flattered because for the first time they thought to include a business group in something like this.

I spoke with a counterpart of yours, Elizabeth Weir, and Pat Riley spoke at that rally. I said it was very important that business was asked to be there because no one group, no one segment of society, can cure the ills of something as large as poverty.

Business has a lot to offer and a lot to say there. We come to it, though, with a fundamental belief that if one creates wealth in our communities, if one creates opportunity for businesses, those businesses will continue to grow and expand. They will hire people, and that's the best way to take people off the poverty rolls, for lack of a better word.

To respond to your comment about whether we talk to people, yes, we do. The lines of communication are opening. This isn't a class or political distinction. All of society has to look at these issues, so you raise a very good point.

• 1330

But please don't get caught up in the rhetoric—what about the banks, what about this company, what about that company? Remember, those companies all pay huge taxes. They employ thousands and thousands of people. If this country had a poor banking system it would look more like a South American country than a strong North American country. What would we rather have as a model—the Swiss banking system or the Argentinian banking system?

We have to have successful organizations, be they banks, shipping companies or construction firms. We must prosper and have success and promote success in this country if we're going to create wealth and be able to fund the arts community and fund support for various programs. You have to create wealth.

I have a point on EI. What my group is talking about with regard to EI is not further cuts to the recipients of EI. We're talking about the amount of money that employers and employees contribute to the EI program. We feel that too much money is being taken from individuals' pay cheques and from employers, and that kills jobs.

So we're not asking that less money go to the recipients of EI. What we're asking for is.... It's fully funded, in fact funded far too much. Less money should be coming out of the economy so that there's more money there and we can hire more people. So we're not talking about cutting EI back any further.

The Vice-Chair (Ms. Paddy Torsney): Mr. Neal and then Mr. Prince.

Mr. Dave Neal: That is also what we're saying—EI premium cuts, not EI cuts. With regard to social costs, if the government doesn't address the debt now, then we won't have a government with the ability to do anything about social programs to have any more expenditures. I believe we want the same end, but we just have a different way to get there. I believe the way to get there is to create prosperity, to create growth and increase the tax base. Then we will have a government that's in a position to maintain the social programs we have now and have been proud of, and take care of our health and our children's health and educate us for the jobs that will be there as we go.

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

[Translation]

Mr. Robert Prince: You present some excellent arguments when you talk about poverty, and Ms. Beaton presents an excellent argument when she says that people have to become more aware of the problem of poverty. I know that UNB noted that there was an increase in the number of people using the food bank in Fredericton. Therefore, UNB had to set up what is known as the anti-poverty foundation.

When it was realized on the campus that there were food banks, foundations to fight poverty had to be set up. That was the signal that there was a serious problem. We often meet students who have students loans. More often than not, those people who establish student loan policies did themselves have student loans 20 or 30 years ago. They say to themselves: with my first student loan, I bought a pair of skis. That is no longer the reality of the situation. Students have student loans because they are simply trying to continue their post-secondary education, something which is absolutely essential today. In the light of your recommendations, the Department of Finance should make changes to this program, particularly as regards students working part-time. When students receiving such a loan have an income of $600, they should begin to repay their debt.

If students work part-time, it is because they need to put bread on the table. It is not just to buy a pair of skis or a 12-pack. Often, students have children, dependents. The situation is difficult for students today.

[English]

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

[Translation]

Mr. Jones, five minutes.

[English]

Mr. Jim Jones (Markham): Thank you. I'll put my question to Diana.

Mr. Ritz asked a lot of the questions, but it struck me when you said that Saint John has a world-class shipbuilding facility and there are 4,000 jobs that people are not being utilized for. Who is your competition? Are you price competitive? Is there a market for shipbuilding? Are these markets being protected? If they are, what incentives would you need from the federal government to undo these protections so that you can get into those markets?

• 1335

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

Ms. Diana Alexander: I guess I can't answer all of the questions. There's no question that we certainly need help to be competitive.

Mr. Jim Jones: But you said you are a world-class shipbuilding facility.

Ms. Diana Alexander: Yes, in Saint John, and I think that's true for Canada. We've proven that with ships like the Canadian patrol frigates. Those are world-class ships. They are not something other people wouldn't be willing to buy if we were competitive.

The federal government can certainly help us to be competitive. By doing some of the things that I have suggested, it will make our yards much more competitive. Right now we are competing with Japan and many other countries producing ships. They are doing so at a lower cost, and that doesn't make us competitive. Some of the changes that I've proposed will make us a lot healthier, stronger, and much more able to compete on the world market.

As I said, we originally had 4,000 people working through the frigate program. Those people have now moved away, are unemployed, or whatever, and that makes it very tough. And there's not only the Saint John shipyard, there are several others in Atlantic Canada. Somebody else can give me the numbers probably, but I think there are six right around this area.

So that's something we need to be able to build on and make more competitive. I think the government could do a lot to help us to do that.

The Vice-Chair (Ms. Paddy Torsney): Mr. Gribbons, did you also wish to comment?

Mr. Tom Gribbons: Yes, thank you.

We're the only G-7 nation without a national shipbuilding policy in place right now. The capital cost allowance, or the ability to depreciate ships a little bit earlier, is something that our American competitors use, and all of the other G-7 nations also allow their shipbuilding industries to do so.

Yes, there are many markets out there. There are tremendous opportunities in building a smaller range of tanker vessels—especially those that have to go into the United States because of the double hull policy that the Americans now have—and also in the container ship area.

In Saint John, and also in Halifax and a number of other areas in Atlantic Canada, we have very competitive shipyards. There's also a very competitive one in Lévis, Quebec. But these Canadian shipyards have difficulty in exporting outside of the country because of the fact that we just don't really have our act together.

It has not been a national priority to put together a shipbuilding policy. It has been and continues to be a national priority to emphasize automobile construction in southern Ontario. Great for them. Nobody takes that away from them. But we think we need some kind of program like that. I'm not looking for handouts, I'm not looking for dollars to come down here to subsidize. But the money, the $8 billion that was spent in the Saint John shipbuilding program for the frigates, shouldn't be wasted. Right now, though, a lot of it is being wasted because the brains are moving away and we're losing the opportunity of maintaining this centre of excellence. If we don't get something going, we're going to lose it.

The Vice-Chair (Ms. Paddy Torsney): Mr. Darrah and Ms. Alexander.

Mr. Patrick Darrah: My only comment is that if you take the Far East countries—Taiwan, Japan and Korea in particular—there's a combination of what they have in terms of tax write-offs. They also have a technological program that assists those yards in being more competitive. When you take the tax item that Ms. Alexander and Mr. Gribbons have mentioned, you have to take it in relative sense to the other combinations that the Korean yards and the Japanese yards have put into place. That is in fact the policy that you then have to frame to get into that market.

I only speak for Saint John and Halifax, but the other thing is that in a technological sense, both those yards have been modernized right to the hilt. They have the best technology, they've spent that money, they've made those investments, but you can only push it so far when you in fact have to have the other things that were previously mentioned in the comments I made about the technologies and the other things that go with it. It's a collective thing in the Atlantic region. You have to put them in place, and then match the difference.

• 1340

Look at the comment about poverty. The member mentioned this earlier. Say you have 4,000 people who aren't working. Think of the spin-offs. I think it's important that we take a serious look at what this does in all the regions. I think there are something like 15 yards in the Atlantic provinces, give or take one or two.

When you put those together from around the region, then the economic output that Madame Vautour brought up is on the other side of this coin. That's where a shipyard policy.... There are a number of other policies—I'm going to get on my horse here, because I'm going to get it off of my chest anyway—that you have to look at that have to be designed for the Atlantic region.

We tend to make policy at the national level. I've been around this thing for a long time, but if the shoe fits in southern Ontario, it hurts like hell in the Atlantic region. All I'm saying is that there are a number of things as we go through this. The shipbuilding one is a clear example that's been out here today. That's why we're saying to you, in the whole process of what this budget is like, that these are the things you have to look at. Please don't give us all the same size of shoe.

Ms. Diana Alexander: What I was about to say was on number two. I own a small business in Saint John, and my husband works at Saint John Shipbuilding, so I know first-hand what the effects are of losing 4,000 people. It had a serious affect on my business, and continues to do so.

As Pat said, that's something that in Atlantic Canada could have significant trickle-down effects. We all hire fewer people when there is less money. Say we can get more people back to work. I think that's something in Atlantic Canada in which we have a strength that we can capitalize on, with a little bit of help.

The Vice-Chair (Ms. Paddy Torsney): Thank you, Ms. Alexander. Mr. Gallaway, for five minutes, please.

Mr. Roger Gallaway (Sarnia—Lambton, Lib.): Thank you. This has been a most interesting afternoon for me.

The Vice-Chair (Ms. Paddy Torsney): I'm sorry, Mr. Gallaway.

[Translation]

Mr. Robichaud.

Mr. Pascal Robichaud: I would like to make one comment quickly. There is a view that policy had to adapt to reality, particularly to the reality of the southern Ontario shoe which is squeezing the toes. In the Atlantic region, that reality could also apply to language communities in many respects. A shoe which fits one foot well may be too tight for the other.

People working on construction sites in the St. John region are an example of this. It has to be pointed out that the rest of New Brunswick does not live as a result of construction sites, certainly not the Acadian and French-speaking regions.

In our area, federal policies do not always correspond to reality. They have not always been developed for our people and we often have to find ways of indirectly bringing minorities within such programs, because basically those people were ignored when the general policy was developed.

We often see the effect of this in our communities. There are major national infrastructure programs, but they do not meet the needs of our reality because our situation is not the same.

The people are not the same as in other parts of the country. We do not have the same aspirations or the same economy. We do not have the same poverty, and our community is quite different. Therefore, it is difficult to apply the same policy and implement it in a standard way to two very different communities.

I would like to deal indirectly with the questions raised by Ms. Vautour, whom we greet as a fellow New Brunswicker. I would like to address the specific impact on the French-speaking community of New Brunswick of the reductions and transfers in employment insurance and the devolution of the federal programs to the provinces.

It must be understood that we have our problems in the rural French-speaking community. In many cases, our economy is almost primitive. We are not primitive, but the economy may be. Our reality is quite different from that of Toronto, Montreal or St. John, New Brunswick, and we certainly have to deal with a substantial loss of benefits.

• 1345

This has not been a gradual, but rather a sudden loss. In the case of employment insurance, there are many other ways they could have used to address the problem, which would have achieved the same financial results without the same impact on the community. For example, the same financial benefits could have been achieved, but without the same impact on the community, if they had decided that benefits would not be available to anyone above a certain level of income. That would have protected the poorest people using the system, but that was not done.

Any negative impact on the community is doubled in the case of minority communities.

For example, my colleague spoke about post-secondary education and stated that students had been hit. That is true, but when you compare students receiving perhaps 20% of their needs in the form of financial assistance with students from the University of Moncton who need 85%, you are no longer talking about the same level of need.

When you talk about students attending UNB, which has been in existence since 1785 and has a trust fund built up by subsequent generations, you are not talking about the reality of an Acadian whose father may be a wood cutter or fisherman, and who is the first in his family to go to the university.

This has to be taken into account in federal programs. When the federal government develops a national financial policy, it must take these factors in consideration, as well as sections 41 and 42 of the Official Languages Act, which give it not only responsibility for protecting language equality, but also require that it promote linguistic communities. Such an obligation must be supported in every budget, and not just by the Department of Canadian Heritage.

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

[English]

Mr. Roger Gallaway: Thank you.

[Translation]

The Vice-Chair (Ms. Paddy Torsney): I would like to note that Mr. Jones made a short statement, but that the others are making longer ones. That is a good change.

Mr. Roger Gallaway: Are you finished?

The Vice-Chair (Ms. Paddy Torsney): Yes, I have finished.

[English]

Mr. Roger Gallaway: Okay.

I wanted to ask a follow-up question on what Mr. Jones was talking about, because I think we're talking about the same thing in many respects. We've heard from the group here that it would prefer that transfers are increased. We've heard from the Acadian association that it wants more money. We've heard from the shipbuilders, who in one sense want more money through a change in the capital cost allowance. And in all senses, there is a cost to the federal treasury.

I think the question has to be this: if there is in fact a change to the rules of the game, is there going to be a beneficial effect? For example, if we tax corporations more, that extra money in the federal coffers could presumably be given by way of increased transfer payments somewhere or another, but what does that really mean in the end? What does it accomplish in terms of employment in this part of the country? Does it in fact do anything? You know, we all love to bash banks and we wish they'd pay more and employ more, but in the end, what does that really mean in terms of change in this part of the country? I would like to know, because there are many industries in this country.

I'm from southern Ontario and I'm not offended by what you say, but even in southern Ontario there are many industries that would like to see changes in terms of the CCA. Do you think tinkering with the CCA—I shouldn't call it tinkering but in fact making substantive changes to it—would be enough to give your industry a boost? Or is it more than that?

[Translation]

The Vice-Chair (Ms. Paddy Torsney): Mr. Robichaud, followed by Mr. Matte.

[English]

Mr. Roger Gallaway: I was trying to question Mrs. Alexander, to start.

Ms. Diana Alexander: There are a lot of different things that need to happen, but I think that will be a significant start.

And yes, you're right, giving money doesn't always help, I agree. I'm also very concerned that we do not go back into debt, but that the deficit be conquered, and that there are not across-the-board tax cuts. I'm the last person to recommend any across-the-board tax cuts. I don't agree with the idea, because it doesn't help anybody. If you have a 1% reduction in your taxes, it's not going to make a significant difference. But I think this can make a significant difference.

• 1350

I'll tell you, when 4,000 people are put to work, it will make a big difference in my life and in the lives of the people here, and not only those who are working and paying taxes but the people who buy goods. If you put 4,000 people out of work in a community, that's a huge burden on our community.

Mr. Roger Gallaway: Absolutely.

Ms. Diana Alexander: I think the changes to the CCA will make a significant impact across the country, not only in Atlantic Canada but in the Quebec yards and other shipyards.

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

[Translation]

Mr. Robichaud.

Mr. Pascal Robichaud: We put them in the category of people who wanted much more money.

We must not fall into that category. At first, we thought that our colleagues in the private sector would present the argument for reduction, and that the focus would be on what is to be done with part of the surplus.

In fact, in the press release issued by the Department of Finance, there is indeed a sentence indicating that about half of the surplus will be reinvested.

This interests us. We want to have some input on what is considered to be a priority in Canada. I would like to inform you that the effort to reduce the debt is as great a concern to us as to anyone else in this country. No one knows better than we do the hardship associated with reducing a debt. Frankly, we don't want to go through that again.

However, if you were to take one thousandth of the annual profit of a bank to fund all francophone organizations in the country, we would be one hundred times richer than we are now. What we are asking you is almost insignificant in the general context of federal spending.

The organizations to which I am referring, non-profit organizations, are often seen as bodies to which the federal government is making a gift. It is as if we are being told that the money given to us is a charitable donation.

That is not the case at all. What we are doing at the grass roots level is to carry out the responsibilities which the federal government itself has undertaken through legislation. The government is not doing 100% of the work on the ground; it gives a mandate to local organizations to do the rest on its behalf. A good part of what we do is the result of federal government mandates.

Is there a relationship between what we are doing and job creation? Yes. We do not believe that we are simply screaming for language rights. We do this, but we do other things as well. We intervene at the grassroots level and we provide people with technical knowledge.

When we promote culture at the grassroots level, we create jobs in the cultural economy. This also exists in the field, with artists and theatre in various areas. We also invest in the economy of our small communities. We know all of our small communities, and we know how to invest there. We're capable of doing this as well. We undertake local development in our communities. Jobs result regularly from this type of thing.

We develop concepts with departments and we say to these departments: I know my community better than you do; if you give me the money that you want to invest, I can create more things with it in the community than you can. We reach an agreement with the federal government on this issue.

We aren't simply handing out money willy-nilly. It has a direct impact on our communities. The economy will never be stronger than its weakest link. In Canada, the minorities, especially the linguistic minorities, are a weak link in the economy. If we don't do something to improve our lot, the rest of the economy will always have a ball and chain around its ankle.

Is that what we really want? Who knows the community better than we do? We can tell you how to proceed in our communities.

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

Mr. Charles E. Matte: My comment is for Mr. Gallaway.

We never talked about money when we made our presentation and provided you with our comments. We are not here for money, we are here for social justice. Why are we here? We are here on behalf of all the people who live in Restigouche and the people who are living in poverty. We are not here to get your pity, but to get justice.

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As far as the 1998 budget is concerned, we simply want the government to think about the people who live in Restigouche, the neediest people.

We don't want the cheque to be bigger. If the government wants to increase the amount of the cheque, that would be great. However, this is not what we're asking for, we are seeking justice. When it is said that people form an economic unit, the cheque gets reduced. So we have to at least leave it at the same level. We have to improve people's lives, not diminish them. We are not here for money, but for justice.

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

Mr. Darrah, please.

[English]

Mr. Patrick Darrah: Thank you, Mr. Gallaway. I want to make a couple of comments. I represent the Saint John Construction Association. We've been around for a little over 100 years and I've never asked for a cent to pay for our own industry. I have to tell you, we are likely in worse shape and have taken a worse beating than anybody else in this room.

This industry in this region has an unemployment rate greater than 70%, and I didn't come and ask.... What I think we've asked for.... I'll take the shipbuilding one as an example. If we had 4,000 people working in shipbuilding in Saint John, the return in ordinary taxes to the federal government and to the Province of New Brunswick—or to any of the provinces—I think would offset the faster tax write-off.

I think it's important that when we change a policy—I think this is where we've asked you to look at specific things, so the cause and effect works. I will take Mr. Matte from Restigouche County. If there something in Restigouche County that has a cause and effect that creates employment.... I could take the same thing for the Acadian community in the Caraquet coast, as I call it. I travelled there many years ago and have been there recently. It is a cause and effect.

As Mr. Matte said a little while ago, don't just throw money at me, throw me a reason that I have an opportunity. When we look at the shipbuilding policy—in Saint John we have a huge, modern yard, and we can stand up here and talk about it, but those things in all the smaller yards around the Atlantic region, in the St. Lawrence and the west coast.... When you create employment, then you create wealth and you address the things Madame Vautour talked about earlier, and you work those things out.

We don't want to ask you to throw money at it willy-nilly. We've had a lot of that. It's been thrown at us by the truckload. My good friend Allan MacEachen used to say it's Friday night with a pick-up truck full of money. I was around in the early sixties with the Liberal Party of Canada, so I know all about it.

What we're saying is that when you do something and you look at the budget, look at the return you're going to get on your investment. Second, look at the return people are going to get. That's what we are driving at in the shipbuilding policy, because we think there's a direct return. And it is the same thing for anything else you want to do.

I'll say no more.

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

Before we go to the one-minute wrap-ups, I have a question. Is there a made-in-New Brunswick effort to link investment with cultural agencies? We all know that very small investments have huge spin-offs in the community. People in the cultural industries make sure the money goes a long way, if you look at their wages and the spin-offs.

Whether it is Marie-Jo Therio or somebody busking on a street corner, there is a lot of culture happening in this part of the world. A lot of it is being exported, and the language issues are very important to Canada's success internationally—the advantage of having two or three languages in our country. Is there a tie-in? Pictures Plus has some relationship with the arts community, since you're probably framing whatever they're producing.

Is there something with the chambers or something to focus the efforts and co-ordinate the activities? Is there something the federal finance committee can do in making a recommendation to make the money go further, or to make the industry that much more successful here for the benefit of all Canadians?

I'll throw the floor open. Madame Farrah.

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[Translation]

Ms. Jeanne Farrah: If I had one recommendation to make, it would be as follows: that the federal government, in its next budget, ensure that the arts and culture sector gets its fair share of the funding that it is due.

We have been working on this issue for 10 years. We have never even received the amount of funding that we were supposed to get.

We were hit with a 7% cutback over the past few years, and we haven't even got to the national level. That would be my main recommendation.

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

[English]

Ms. Diana Alexander: I deal with a lot of artists in my business and I'm very involved. I have framing and a gallery. I am also president of Festival by the Sea, which is a ten-day festival in Saint John. We bring performers from right across Canada, so they are involved in that end of the performing arts. So I deal with a lot of artists in different ways, and they are probably the least-paid group of people for what they do. It's a group of people that is always asked to give more, to donate a painting because it's just artwork and it really isn't worth while.... I think the federal government has a significant part to play in recognizing the worthwhile efforts of our arts and cultural community.

In Saint John we just had a thing called Communities in Bloom. That's a bottom-up sort of thing, and getting artists involved in projects like that where they're contributing something.... For what they contribute, Heritage Canada benefit significantly from that. They put in a small amount of money, but it gets everyone in the community involved. I think projects like that will be significant because they take very little money but get everybody involved and help the whole community to recognize the worth and talents of the artistic community, both the performing arts and visual arts.

[Translation]

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

Mr. Pascal Robichaud: I will say that part of the answer lies in the relationship that must exist between the private sector, the arts sector, etc. It's also a question of decentralization.

Partly because of the budget restriction exercise, we realized that it is very difficult to develop a culture out of Ottawa, not because of any ill-will on the part of people, not because the programs don't exist, but because the expertise is found at the local level, within the community.

People living in the community, artists and the people around them, normally have what is required.

In fact, we had regular, constant discussions with the Department of Canadian Heritage, with Parks Canada, and so on, and they recognized that often local groups had expertise different from their own and could work in the field directly, less bureaucratically, and produce concrete results without any need for three, four or ten levels of officials between them and the local people.

That is why, for years, we developed a very good co-operative relationship with these departments. Increasingly, we are beginning to work with other government departments that recognize that it may be better to turn to the community, to people at the grassroots level, in order to have a direct impact. In those cases all the organizations were involved directly, and we felt the results in our community.

So one of the answers is to decentralize, to transfer responsibility to the regions, where the efforts have a real impact.

[English]

The Vice-Chair (Ms. Torsney): Thank you. Mr. Neal, for the final word.

Mr. Dave Neal: The chamber organization itself does not have any direct involvement, but many of our businesses do, whether it be Theatre New Brunswick or different artists that belong to a chamber. That is the connection.

Another thing that comes to mind is that large businesses such as the tobacco industry have been involved over a number of years in sponsoring the arts.

The Vice-Chair (Ms. Torsney): [Editor's Note: Inaudible] ...your statement, I think.

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Mr. Dave Neal: Well, that ability to do so has been cut from them. I'll leave it at that.

The Vice-Chair (Ms. Paddy Torsney): Actually, if you check, I think they're still allowed to. I think it's a question of what advertising is associated with it.

Mr. Dave Neal: The medium is probably not as cost-effective as they would like it to be.

The Vice-Chair (Ms. Paddy Torsney): But donations are still encouraged.

Thank you.

This draws to a close the question and answer period of your presentations at this round table. Each group now has approximately one minute to make a statement. Actually, since we're doing fine on time, I suggest that if you are interested, we'll actually say that there is one minute per person at the table, as we've done with other sessions. So please try to use a minute or less, and we'll start with you, Ms. Beaton.

Ms. Susie Beaton: When we first heard that we were invited to attend this meeting, I don't know what our expectations were. Maybe we were hoping that by coming here today to share with you what we see every day, some difference could be made in some way for all of those people we are watching suffer, that we are seeing go through a hell that I don't think anybody at this table has even come close to understanding. I don't know if you can make a difference, but I pray that you can. I pray that something can be done. At the very least, I pray that your hearts are open enough to have the compassion that these people need.

Thank you.

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

[Translation]

Mr. Matte.

Mr. Charles E. Matte: I would like to make a recommendation to Paul Martin, the Minister of Finance. Last year we took part in the 1997 pre-budget consultations, but we realized that we made a mistake. We brought a pair of ears for Mr. Martin.

This year, I have done better. I think Mr. Martin does have ears. So I have brought him a box of Q-tips. I would like the committee to give our gift to him and the rest of Cabinet so that they can clean out their ears and start listening to people. I think that is where the problem lies. This is not a problem of figures, but rather a human problem.

That concludes my remarks. I very much appreciate the opportunity to participate in this meeting with the others. I hope it will be possible to change things for the Restigouche region. I am pleased to be here.

I hope you will understand that we have to leave. We have a long trip ahead of us and our car is old.

The Vice-Chair (Ms. Paddy Torsney): Can you stay another five minutes?

[English]

I'll make sure the minister gets his Q-Tips, nonetheless.

Madame Alexander.

Ms. Diana Alexander: I'd like to thank everybody for inviting me today. It was great to be here.

Shipbuilding is a great industry, and obviously that has brought up some concerns here. I would appreciate any attention that the finance committee could give that industry.

Again, I appreciate the government's effort in reducing the deficit. I think it's going to make a significant difference to Canadians overall in the long term, and I think only a healthy government will put people back to work and put Canadians back on the right track. It is time for selective tax cuts, perhaps, but not time for giving away the farm through across-the-board tax cuts.

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

Mr. Tom Gribbons: I talked about a lot of different things today, but I guess it's best summarized by hope and opportunity. I hope some of our problems can be alleviated in the country financially with the opportunities that exist. People at this corner of the table obviously have a particular idea on how opportunity can be created, but that's what it's all about.

When you get right down to it, I can't believe that at a federal function I'm the only person to talk about national unity. If we don't—

The Vice-Chair (Ms. Paddy Torsney): We live it.

Mr. Tom Gribbons: Yes, I know you do, but it needs to be mentioned. Everything we've talked about today gets thrown out with the bathwater if this country breaks up. It's vitally important that we listen to all segments of our society and that we do everything we can to keep our country together.

Thank you very much.

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

Mr. Patrick Darrah: I want to thank you very much for the invitation to be here today.

I think we have to take great care in making sure we balance the budget, and we do have to realize that we have a $600-billion debt. If we don't, our children will really pay through the nose.

If we're going to compete in the world economy, as we must, then all levels of government, as much as it may hurt, and we all realize it hurts.... If we're going to have a future, we'll only have it as long as we're not in red ink.

Thank you.

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

Mr. Dave Neal: I thank all of you for this opportunity. I'd ask you to please listen not only to our concerns but to the ideas that have been given to you today.

I don't envy the government; it has a balancing act to do. But remember that in the end we're all working for one thing: we want a better, prosperous, united Canada.

I'd ask you to use the model of the government in the Northwest Territories, where all people work together. It would be nice to see our House of Commons working toward a better end and to have a lot of co-operation between the parties to get there.

The Vice-Chair: Thank you, Mr. Neal. Mr. Prince.

Mr. Robert Prince: I'll echo the sentiments of my co-presenters here. I'll thank you all for allowing me to present today.

The task before you, I think, is going to be pretty difficult, but I would hope that you will keep in mind the need for long-term strategies in Canada.

I thought it was kind of funny or ironic that if you fund the Université de Moncton, then you're promoting the Acadian culture. If you fund universities, you ensure that human resources needs are met. If you fund universities, then universities promote the arts. We don't need to subsidize hugely to ensure our future; we just need to subsidize smartly.

Thanks.

The Vice-Chair (Ms. Paddy Torsney): Thank you, Mr. Prince. M. Robichaud.

[Translation]

Mr. Pascal Robichaud: We too are very pleased to have had the opportunity to appear before the committee. There are two things we should say at the outset. Our organization does not intend to recommend that governments go back to spending as though there were no tomorrow. However, I would like to remind you of what Gordon Robertson said

[English]

that man does not live off economics alone.

[Translation]

At some point, there is also a question of culture and reliability. Our point is that Canada, which we care so much about, is a special place. One of the reasons it is special is that there are two founding peoples, and Acadians make up a good percentage of one of those peoples. This uniqueness will not survive alone. We must promote it if it is to continue to exist. It still needs a little help.

All we are asking for is to become financially self-sufficient, but in order to achieve that, a little attention is required. We have done our part. In our area, we held a fund-raising drive, and we are trying to collect trust funds that will help us out, but we cannot live off the federal government overnight. That is abundantly clear.

I would like to draw your attention to two points in particular. At the moment, the budget provides for a reassessment of the Official Languages Promotion Program.

I would also mention the Court Challenges Program, which provided ordinary people like ourselves with the resources they needed to defend their rights.

I would like to thank you once again. We are counting on this committee, because our voices are not very loud. We hope you will consider the fact that the Acadian community needs special attention.

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

Ms. Micheline Doiron (Executive Director, Société des Acadiens et Acadiennes du Nouveau-Brunswick): I would ask the committee to look at the text we submitted. It is entitled the Overall Development Plan of the Acadian Community. We have many projects in a number of fields.

I would therefore urge you to read it, and to get in touch with me if you have any questions. My business card is there. Thank you very much.

[English]

The Vice-Chair (Ms. Paddy Torsney): All that work should be rewarded with a mention.

[Translation]

Ms. Jeanne Farrah: I too would like to thank you for giving us this opportunity to present our views. Today, we heard from a number of sectors, and it is difficult for a committee to establish priorities.

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Unfortunately, the arts have never been a priority, but we hope they will be in the next budget. It's not just an economic question, even though there are many economics spin-offs. It is also a matter of identity, and a social issue. It is knowing who we are as a people.

[English]

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

To New Brunswickers one and all, thank you very much for taking the time to come here today. We had a terrific round of presentations this morning and this afternoon, and we appreciate your ideas and your energy. If there are things you want to get to us in the next couple of weeks, I would mention that CPP hearings start October 28, and that the finance committee will start writing its report November 7. If you can get anything additional to us by then, we can include it in our deliberations for the report that we will send to the minister. That report is due November 28.

Lastly, individual members of Parliament around the province should be having pre-budget meetings in their ridings some time before November 14. If they're not having them, I encourage you to call them up and ask them why. If they are having them, I encourage you to participate. You're also welcome to host your own meetings and send us the documents from those as well, I suppose.

Thank you very much. I hope everyone has a safe journey on the long ride home. We appreciate your hospitality.