FINA Committee Meeting

STANDING COMMITTEE ON FINANCE

COMITÉ PERMANENT DES FINANCES

EVIDENCE

[Recorded by Electronic Apparatus]

Tuesday, November 4, 1997

• 0904

[English]

The Vice-Chair (Ms. Paddy Torsney (Burlington, Lib.)): I will call this meeting to order. We are the Standing Committee on Finance, and we're here listening to witnesses on the pre-budget consultations.

With us this morning from the Canadian Real Estate Association are Pierre Beauchamp, chief executive officer; Gordon Taylor, director; and Gregory Klump, senior economist. Welcome.

From the Heritage Canada Foundation, we have Brian Anthony, executor director; and Doug Franklin, director of government relations. Gentlemen, welcome.

The way these sessions will work, you have five minutes to make a presentation. When you've spoken for four minutes, I'll put up the one-minute finger. You should wrap up within that minute, hopefully, and we'll move on to the next presenter. Then we'll have rounds of questions from the various MPs who are gathered here.

So start your engines. Mr. Beauchamp, I think you are presenting.

[Translation]

Mr. Pierre J. Beauchamp (Chief Executive Officer, Canadian Real Estate Association): I would like to take this opportunity to present our most recent research document. We have already exchanged suggestions with our colleagues from the Heritage Canada Foundation.

• 0905

[English]

Madam Chairman, while we represent quite different constituencies, we expect to have an interesting discussion this morning and we hope it will be useful to you.

The Canadian association represents about 70,000 members who are involved in all aspects of the real estate industry, in the sales, brokerage, development, appraisal and property management fields.

Because it's related to one of our major points, I'd like to draw particular attention to our commercial division this morning. It's known as the IC&I council, it has about 4,000 members in Canada from coast to coast, and its purpose is to provide specialized services for those members who practise in industrial, commercial and investment real estate.

With me is Gordon Taylor, who was the 1997 chairman of the IC&I council; and Gregory Klump, who was introduced earlier as our senior economist.

Madam Chairman, I will comply as fully as I can this morning with your request of October 23 that we address certain topics that are of concern to the Minister of Finance.

First of all, we congratulate the minister on the success of his fiscal policy. In 1984 the association advocated the kind of strategy that Mr. Martin initiated in 1994. On numerous occasions the minister has pointed out the benefits of lower mortgage rates to homeowners. We believe the government's number one responsibility in terms of housing is to manage the economy in such a way as to sustain low interest rates.

Madam Chairman, our members give the minister full credit for getting the fundamentals right. Our concern has been with both the annual deficit and the mounting debt. We urge the minister to implement a systematic attack to reduce the debt year by year. Until the debt is cut back, there is little room to increase spending. Instead, we think now is the time to take some measures that can only add to consumer confidence and economic strength.

For three years, Madam Chairman, we have said that the Canadian consumer should have the right to prepay a mortgage and the assurance of fair penalty for doing so. As you know, the government decided last year against amending the Interest Act as we had proposed. Instead, regulations are being drafted more or less as we speak today in an attempt to achieve our goal by other means, in other words, through regulation.

The intention is to require the lender to disclose whether a mortgage may be prepaid and the cost of prepayment. We are seeing several things, Madam Chairman: first, the disclosure must be in the mortgage document itself, not in promotional material; second, it must be prominent and in plain language; and third, the cost must be spelled out so that consumers can understand it. Printing a complex formula would be meaningless, in our opinion.

If all that is done, the result would be a major improvement over the current situation, which is a lot of confusion and uncertainty amongst consumers as reported by our members. This is a measure that costs the government nothing but does contribute to consumer confidence, which, of course, underpins healthy housing markets.

Madam Chairman, you know I had the opportunity to participate with the Toronto Real Estate Board at your hearings on October 21 in Toronto. Their presentation focused on our mutual concerns about seniors' benefit. Today I simply draw attention to our concerns about both the RRSP program and the seniors' benefit, which are fully explained in our submission.

We favour indexing RRSP contributions, and we also favour an end to almost annual changes to the RRSP rules. We're concerned that the seniors' benefit will have a grossly unfair impact on taxpayers who have been saving for their retirement. The benefit will be fully clawed back at a much lower level of income than the clawback level of the current old age security program. That, combined with the taxation of all other income, would deliver a double-whammy punch for many taxpayers.

We encourage and support the government's approach for public hearings and for input from all the groups that have made very strong points in that area. As you well know, our concerns are for Canadians in the income range between $26,000 and $50,000; and when I say retirement income range in that amount, I mean all income.

Our submission outlines the economic as well as the social benefits of maintaining the homebuyers program as a permanent instrument of housing finance. I turn now to our major new proposal, which builds on the principle of the homebuyers plan.

[Translation]

You asked us to talk about changes to the tax system that would enable the government to achieve its priorities. We do not believe that there is a magic solution.

• 0910

Several progressive measures can, however, be implemented in order to stimulate economic growth. The proposal that we will make in the next few moments in an example of that.

[English]

The homebuyers plan basically established the principle of limited investment of RRSP funds in real estate.

Today we are asking you to support the option for Canadians of investing RRSP funds in small-scale commercial and residential projects. Our proposal would greatly expand investment in those sectors, with significant job creation and other spin-off benefits throughout the economy. The current rules, in our opinion, are unduly restrictive. They ignore the record of real estate in creating jobs and growth.

We have distributed a sheet this morning containing five simple illustrations of how the proposal I'm advancing would work, and I ask you to kindly refer to that sheet.

The first chart refers to the millions of Canadians who contribute to their RRSPs, thus creating a $200 billion pool of capital.

Chart number 2 shows that we are proposing that RRSP holders or the corporations they set up for real estate investment be allowed to borrow from their RRSPs to invest in residential rental or commercial real estate. The loan would be at a specified interest rate, perhaps the five-year conventional mortgage rate.

Chart number 3 shows that a form would be submitted, providing information on the market value of the real estate and the sources and amount of financing, which, by the way, cannot exceed 75% of the value.

Then, as chart number 4 indicates, the title and mortgage of the property are held by the individual or the corporation set up to invest in the property.

As chart number 5 shows, the loan would have to be repaid to the RRSP over a period of no more than 20 years and, to comply with existing rules, at the latest by the time the plan holder reaches 69 years of age. At that time, the funds would have to be transferred to a RRIF or income tax would be payable.

Several safeguards are built into the proposal, Madam Chairman, to ensure that the RRSP's purpose of providing retirement income is not compromised.

[Translation]

The aim of this proposal is to reduce the discrimination against real estate built into the current RRSP regime and put real estate on a more equal footing with some of the other investments of comparable risk and liquidity.

[English]

Most important, it would give RRSP plan holders a broader choice of how to invest their funds in Canada, thus supporting Canadian job growth and the Canadian economy.

Thank you very much. We're ready to answer your questions.

The Vice-Chair (Ms. Paddy Torsney): First we'll hear from the other group. Hopefully they'll be a little closer to the five-minute limit.

Thank you very much for your presentation, Mr. Beauchamp.

Mr. Anthony.

[Translation]

Mr. Brian Anthony (Executive Director, Heritage Canada Foundation): Thank you, Madam Chair.

[English]

I'll try to be right on the five-minute mark.

Perhaps I should briefly introduce the Heritage Canada Foundation. The foundation was created 25 years ago by the Government of Canada as a non-governmental, not-for-profit, charitable foundation. It was created by way of endowment, so we're financially independent as well as politically independent. The minister of the day who created this organization is now the Prime Minister of Canada.

We are governed by a board of 12 individuals representing each province and territory who are elected by the members of the foundation.

On behalf of this foundation, I would like to thank the standing committee for inviting us to participate in this pre-budget consultative round.

Last year on this occasion, we were pleased that the Standing Committee on Finance supported the issues that we brought forward on behalf of all Canadians who want to see their heritage preserved.

In the last federal budget, the Minister of Finance saw fit to implement one important recommendation in our brief which this committee supported, namely, the change in regulations that allow for relief from capital gains to those donating depreciable property, including heritage buildings, to a registered charity. We applaud this initiative and thank you again for the support you showed.

We believe the federal government could do more, however. To repeat what we said last year, at the very least the federal government should remove the terminal loss provision in the Income Tax Act which encourages and rewards the demolition of older buildings. We bring this issue to you again, in the hope that the Minister of Finance will also support it.

This committee asks us what economic assumptions, including prudence factors, should be used in 1998 and 1999 in planning for the 1998 budget.

In response, we would suggest, based on statements by the Minister of Finance, that the federal government appears to be moving speedily towards a balanced budget. This should have a positive effect on the economy.

• 0915

We can agree with those in business that the private sector will be poised to make new investments in Canada if the federal government continues to work to create the right climate. We must still assume, however, that unemployment will remain unacceptably high. Today, we would like to address this issue, at least from our perspective.

Given the positive news in the 1997 budget about the tax treatment of donations of depreciable property, there still remains a fundamental unaddressed issue that we would like to emphasize to you today. That issue is the treatment of revenue-producing property in the federal Income Tax Act.

While it is clear that provincial governments have the principal jurisdiction in matters relating to privately owned heritage property, the federal government also has jurisdiction through the Income Tax Act, and therefore has considerable policy influence on the way such property is treated for tax purposes. In Canada, there are approximately 66,000 recognized or listed heritage properties, of which approximately 13,000 are income producing and thus subject to the tax act.

In response to your second question about appropriate new strategic investments and changes to the tax system that would allow the government to best achieve its priorities, the Heritage Canada Foundation offers an answer that would benefit all Canadians: change the federal Income Tax Act to encourage owners of heritage buildings to improve their properties and increase employment.

We have said for many years that the federal government should officially sanction as current expenditure the cost of maintaining the character of duly recognized heritage buildings. We predict that a boost in building restoration activities could encourage youth to learn and apply marketable skills and make a dramatic improvement to the face of urban and rural Canada. We offer you the blueprint of an ideal project in co-operative federalism, to work with the provinces, and to encourage the private sector in an area proven to be labour intensive. And I should mention here, as I've mentioned in the past to this committee, that restoration of older buildings creates twice as much employment as new construction, and requires a higher degree of training and skills.

Our blueprint is not elaborate. One of the essential and vital objectives, for example, is to make the Income Tax Act recognize the dynamics of restoring the original fabric of heritage property. If owners of such properties had a greater measure of predictability, there would be more economic activity, and this—to answer your third question—would create a wide range of job opportunities.

You specifically asked how the government can best support Canadians in acquiring the education and skills needed to thrive in a knowledge-based economy, and how government can best foster the application of knowledge across the economy. Our answer to this question is also straightforward.

During the past thirty years—since our glorious centennial in 1967—Canadians have come to know more about and better appreciate their history and heritage. Since this watershed of pride in Canada was tapped, we have surveyed and studied our heritage places. Through the Canadian Inventory of Historic Buildings, the federal government has worked with all provinces and territories and has created a huge database of more than 200,000 early buildings. For many years, this precious repository of Canadian identity has been underutilized. Through this and other worthy heritage initiatives, the Government of Canada has already invested in creating a body of knowledge. Let's now put that knowledge to work for the benefit of more Canadians.

Let us take pride in our communities—and thus our Canadian identity—as we never have before, by cherishing and preserving those heritage places. We have indications that each and every province and territory would co-operate with the federal government in adopting standards for heritage restoration that would be workable and fair.

I should mention here that we recently held a national conference in mid-October on such matters. It was attended by heritage professionals from all across Canada, from sea to sea to sea, both from the private sector and from all three levels of government. We will be providing members of this committee with the proceedings of that conference, as well as the results of a survey that we put out.

I should mention, too, that our conference reinforced the mandate of this organization to press for change in this area. That mandate is supported by not only federal and provincial heritage ministries and organizations, but by the mayors of key municipalities from all across the country. I'd be happy to share with you correspondence and background papers in that regard.

Members of the Standing Committee on Finance, we have shown you our blueprint in brief today. We will be following up this brief presentation with a more detailed letter and further material. I would like to close by encouraging us to work together in using our rich past to strengthen our economy and build our future. We believe the preservation of our past is an investment that will yield dividends, both social and economic, now and in the future.

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

We'll now move to questions, and hopefully we'll keep those to five-minute rounds.

[Translation]

Mr. Ritz, you have five minutes.

[English]

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

Thank you for your presentations this morning, gentlemen.

I have a short question for the gentleman from the Canadian Real Estate Association. We're using RRSP funds now for purchasing. First-time homebuyers and so on can borrow against their RRSPs. We had a presentation from a fellow in Winnipeg—I believe that's where it was—who talked about using that same type of format for large-scale renovations.

• 0920

Is that a workable type of entity or is that strictly a pipedream?

Mr. Pierre Beauchamp: We have not addressed the question of large-scale investments here. We are talking, as I pointed out earlier, of smaller-scale projects. There's a very valid reason for that.

I would like Mr. Taylor, the chairman of our IC&I faction, to outline that for you.

Mr. Gordon Taylor (Director, Canadian Real Estate Association): At the current time, small investors have an option of investing in the stock market—which can be, as we have seen recently, very volatile—or they can go into GICs or interest-paying types of investments.

We feel there's a real gap in not allowing them to build or purchase a six- or twelve-unit residential building where they can walk down the street, see what they've bought, and they're certain of the income, with some degree of control. As a result, a lot of RRSP funds have been channelled into the stock market to the detriment of the commercial real estate market.

Commercial real estate generally in this country has been in a recession for over seven years now. It's just starting to come out of it. We feel that this could be a real benefit in terms of generating new jobs and taxes and growth in the country.

Mr. Gerry Ritz: I certainly agree with that premise. I have a background in construction, and I could see where it would create a lot of employment in that sector.

But my question—I guess I didn't word it very well—is, this gentleman was saying that as a lower- or middle-income type of person, he has either the money to invest in RRSPs on an any given year or he can renovate his home. He needs a new roof. He needs siding, a window package—whatever. He can't do both.

Is there a vehicle, such as the RRSP contributions being used as a down payment on your new home...can that same type of thing be applied to a renovation project? Is that a workable type of situation? Can you see any faults with that? What I'm saying is, it uses RRSPs or borrows against them with the repayment schedule, the same concept we now use with housing down payments.

Mr. Pierre Beauchamp: I think there is an inherent danger when you start extending to all kinds of other areas and you attack the integrity of the very fundamental purpose of RRSPs, which is a long-term advantage for retirement purposes. The government in its wisdom saw fit to limit the involvement at this stage for first-time homebuyers. Whether renovations and so many other schemes that have been added on or suggested up to now are valid is a different question. We have not studied, as I mentioned earlier, whether or not there would be a huge advantage in doing as you suggest. We have not seen the proposal from Winnipeg.

What we are proposing is that you apply basically the same rules and basic principles for the homebuyers program to commercial investment. In fact, we are making the rules more rigid. We are suggesting, as I said in my presentation, that the amount that can be borrowed should be limited to 75%, which means that the individual or the corporation that would be set up for that purpose would have a good amount of equity at the beginning, and obviously limiting the risk in the future.

So, no, we can't answer your question specifically, because we have not studied it. It may have merit, and it may be something for the future.

Mr. Gerry Ritz: Thank you.

[Translation]

The Vice-Chair (Ms. Paddy Torsney): You have no questions, Mr. Desrochers? Mr. Jones.

[English]

No questions? Mr. Szabo, please.

Mr. Paul Szabo (Mississauga South, Lib.): Thank you, Madam Chair.

Thank you very much for your presentations.

I want to ask you, Mr. Beauchamp, about the seniors' benefit. You've taken quite an interest in the subject. I see from your brief that you've aligned yourself with other organizations in regard to that. I'd like to ask some questions simply for background information.

The current old age security is a taxable income, and the proposed senior benefit is not taxable. On that basis, would you assume maybe the cut-off or threshold at which a clawback commences would reduce for the seniors' benefit because it's a non-taxable versus a taxable amount?

• 0925

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

Mr. Pierre Beauchamp: Basically, what we have found is that ultimately the rate of taxation with the seniors' benefit within the retirement income range of $26,000 to $50,000 increases dramatically because the clawbacks increase very quickly when compared with the current program. We've had concerns with that element. We agree with the government that—

Mr. Paul Szabo: I asked a simple question. Maybe we should try to deal with.... We'll get on to some of this other stuff, but about a threshold at which a clawback would commence, if you have a taxable item on one side and a non-taxable item on the other, what would be the tendency, in your view, in whether the threshold should stay the same or be lowered?

Mr. Pierre Beauchamp: My response, and I have to stay with that approach, is that the analysis we have done looks at the bottom line: what happens after all taxes and all clawbacks? What we have found is that both for singles and for couples you end up in a worse position in the total income range of either both spouses or single individuals in the ranges between $26,000 and $50,000.

We have concern with that. We see the marginal tax rate going up to 50% to 75%, in some cases. So we're looking at the bottom line.

Mr. Paul Szabo: The reason the effective tax rates, as you calculate them, are up so high: is that basically because you assume every dollar of clawback is a dollar of tax and therefore if you made $100,000 a year and you had all your seniors' benefit clawed back.... In that calculation you're assuming the income tax rate on non-taxable income will be 100%.

Mr. Pierre Beauchamp: Well, no, not 100%. We don't look at it that way. We just look at the—

Mr. Paul Szabo: In determining the average, though?

Mr. Pierre Beauchamp: —relationship that exists with the OAS versus the condition that exists with the proposed seniors' benefit. In the end, we just look at what is left. It's as simple as that.

So to answer your question specifically, yes, we do translate and include as tax the actual amount of the clawback, because it means that of the $18,000, as a matter of example here, for a couple, if it's clawed back to $5,000 or $6,000 or $2,000 or nothing, that's an amount that is not going to be available. It's as simple as that.

Mr. Paul Szabo: Since the maximum tax rate in Canada federally is, what, 29%, plus you have the provincial, let's say roughly 50% is the maximum anybody making any amount of money could ever pay. If you were to make the seniors' benefit taxable, raise the amount to account for the taxable status, and do the same calculation you did, what would be the maximum income tax rate that would be exigible from the seniors' benefit?

Mr. Pierre Beauchamp: I honestly can't answer that question, because I would have to look at—

Mr. Paul Szabo: It would be 50%.

Mr. Pierre Beauchamp: That's right, but I would have to look at the—

Mr. Paul Szabo: So in fact this idea that somehow the effective tax rate is 50% to 75% is simply smoke and mirrors in the presentation of the data...the fact that it's non-taxable.

Mr. Pierre Beauchamp: I beg to differ. It's absolutely not smoke and mirrors if you're a senior who looks at the situation in the year 2005 and you find out your total income in the year is going to be $6,000 less.

Mr. Paul Szabo: But you do agree that if the seniors' benefit were taxable and ratcheted up, grossed up, to account for the taxes—

Mr. Pierre Beauchamp: If the bottom line changes, I agree with you.

Mr. Paul Szabo: —then the maximum tax rate anybody would ever pay on any other income is in the range of 50%; it couldn't go higher.

Mr. Pierre Beauchamp: Yes, I agree with your statement.

Mr. Paul Szabo: I have one question, Madam Chairman, for the other witness.

• 0930

With regard to Heritage Canada Foundation, it's twigged my interest in the recommendation that the terminal loss provision should not apply to recognized heritage property. It's the first time I have considered it, so let me ask a naive question. Since a terminal loss has to do with basically the velocity at which write-offs of a property are made, which are at the discretion of the owner, they can go for the max in terms of CCA or, for other reasons, they may not be able to claim it or may prefer not to because of the risk of losing a loss carry-forward or something like that.

Given those circumstances, do you not think that a terminal loss could be artificially created with regard to heritage property simply to make the value of the donation higher and therefore get a higher benefit from the generous provisions of transfers of charitable property?

Mr. Doug Franklin (Director, Government Relations, Heritage Canada Foundation): If this pertains to the donation, I presume, of a revenue-producing heritage property to a registered charity, then, yes, I think that could certainly be invoked. We're talking about a broader use, of course, of the terminal loss provision, whereby the owner of a heritage property is able to take a massive write-off at the time of demolition while there is a heritage designation on that particular property. The community now is simply very confused about that, because a great deal of care and attention is put into identifying and recognizing these properties; when the tax act, through a different set of eyes, allows a rapid write-off, the public are then very confused and say, well, here's one government saying these buildings are important while another one obviously, through the tax act, is allowing an incentive. This is our primary concern.

But to return to your question, yes, that could be an innovative way of looking at it.

Mr. Paul Szabo: Do you have any opinion on resolution 21, which has to do with the transfer of properties from private debt and securities, private companies?

Mr. Brian Anthony: No. I must plead complete ignorance of resolution 21. I'm sorry.

Mr. Paul Szabo: That's all right.

Mr. Brian Anthony: I could add just one quick comment in response to the question. We recognize that the terminal loss provision has been moderated somewhat over the years and was not intended to have the effect that it has had on heritage building stock. Our colleagues in the Department of Finance tell us that it is no longer the great menace that it once was, but there is still an anomaly here in that it still does exist and we have in effect policy dissonance at the federal level. We have one body of the federal government going about, as Douglas mentioned, duly researching and designating heritage properties, and on the other hand we have an instrument in the hands of the Department of Finance that still has some encouragement and reward for the destruction of those selfsame properties. What we're asking for is a sort of conceptual tidying up of the federal policy regime.

The Vice-Chair (Ms. Paddy Torsney): Before I go to Mr. Ritz, I just want to be clear. These are federally designated buildings—or is the problem occurring because they're provincially or municipally designated buildings?

Mr. Brian Anthony: They're both. Because of the shared jurisdiction, buildings can be designated by the federal government as well as by provincial governments, but the process is very much the same and the issue is very much the same. I mentioned the instance of buildings that are designated by the federal government only to demonstrate that there is an anomaly or a bit of dissonance here that we'd like to see tidied up, but that also has an effect on the next layers of government as well.

The Vice-Chair (Ms. Paddy Torsney): Are the buildings that are designated by another body registered with you or with the federal government so that you could easily identify which ones shouldn't ever qualify for a terminal loss?

Mr. Doug Franklin: Yes. In fact, the federal government has made inroads in this particular area. About five years ago they created a Canadian heritage registry working with all of the provinces to develop this master listing. As we mentioned in the brief, it was nearly 30 years ago that the federal government created the Canadian Inventory of Historic Buildings, anticipating such co-operative effort between the provinces and therefore the municipalities and the federal government.

• 0935

But the pattern over recent years has been that more and more properties are being protected, including entire districts of heritage properties. Therefore, again, we believe that policy concordance in this area is absolutely vital if Canadians are going to benefit from having this stock of heritage properties.

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

It would probably be better if they dealt properly with the dispute over whether or not it is a heritage site before they demolish it and then claim the loss.

Mr. Ritz.

Mr. Gerry Ritz: Thank you, Madam Chair.

To the gentleman from the Heritage Canada Foundation, you mentioned in your presentation that restoration of heritage sites is, of course, a long-term type of thing. It's a very specialized type of construction. I am wondering how you correlate this to increased employment when the youth sector and so on that you mentioned may be an unskilled labour force.

It is highly specialized work. There is a much higher degree of difficulty, if you will. Even the demolition has to be done with an eye to salvage, because you want all those parts and pieces to go back together again. How do we target that employment with the training and the skills that are required? Is it up to the construction people on the site to take an unskilled labourer and train him or her to do that type of thing or are there programs we should look at that would target that availability?

Mr. Brian Anthony: Thank you very much for that question, Madam Chair.

I'm glad you asked this, because we have, I think, an abundance of training opportunities or training programs in existence, both formal and informal, which can provide those skills to people working in the building trades so that they can either acquire those skills or upgrade existing skills.

Let me cite one example. The Perth campus of Algonquin College, for example, has a heritage program that trains people in the specialized fields of restoring and maintaining older buildings. They teach them the early construction methods and restoration methods. For example, in the trowel trades they teach them what kind of mortar to use and how to apply it and so on.

The training capacity exists. Annually we publish a heritage directory, and this year we are including a chapter on heritage training opportunities at the post-secondary level. We would be happy to share that with you.

What we are trying to argue for, I guess, is that given the existence of those training opportunities and given the interest of many young people in acquiring more sophisticated skill sets, there is an opportunity here for them to apply those skills in the workforce if we have the appropriate tax treatment of restoration costs. We believe there would be a great deal of investment in the restoration of older buildings and we feel, therefore, that there would be much greater employment opportunities.

Let me say that there is a precedent for this in the case of Nova Scotia, I believe. Until the recent harmonization of the sales tax regime occurred, the costs associated with the restoration of duly designated heritage buildings were sales tax exempt. In the harmonization process it continues to apply. The Province of Nova Scotia has demonstrated that this actually works. It encourages the restoration and maintenance of older buildings and creates employment opportunities and training opportunities at the same time. We feel this could be a good model for a national set of federal-provincial initiatives.

Doug, did you want to add something?

Mr. Doug Franklin: Yes. If I might, I'll just add a brief word on that, Madam Chair.

In fact, we are now poised with some new information about that. We've been conducting a survey of training needs in this area relating to youth unemployment. We have looked at models in other countries and we will share this data with you. It demonstrates that across Canada there is a very high rate of acceptance, something in the vicinity of 90% among educators, people involved in building renovation, the construction industry, provincial authorities, and so forth. They would like to see greater activity in this area, including more pilot projects.

As Brian suggested, the fact is that many of the existing training institutions could increase their efforts enormously using their existing rather small-scale programs. They could torque it up, if you will, enormously, and really address this area of youth unemployment in a very concerted way.

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

Mr. Gerry Ritz: That was all I had. Thank you.

• 0940

The Vice-Chair (Ms. Paddy Torsney): Before I go to Ms. Redman, I had a supplementary on this one too, because that was going to be the question I asked.

When they were restoring this building, there were certainly problems with finding skilled stonemasons and what have you. They had to look abroad for some of those skills.

Do you have a data bank on the age of some of the skilled workers who do some of the specific restoration? Is the skills transfer occurring to the younger population so that we'll still have these skills resident in Canada?

As the buildings—hopefully—continue to exist, they will continue to age and to need repairs, and if everybody's already 60 years old and there's nobody coming up the line, it's a problem.

Mr. Brian Anthony: I'll ask Doug to speak to some of this in detail, perhaps, but I should say that you're right, there was a slow and steady loss of those kinds of skills. I think we lost at least one generation.

However, there is a sufficient pool of expertise left to train the younger generation, and there is uptake among the young now through post-secondary institutions like Algonquin College and like Holland College in P.E.I., for example, where heritage buildings have a particular set of characteristics and where the climate has.... There is a great deal of interest. I don't feel it is a lost cause.

I appreciate that the scale of the restorations here may have demanded the importation of foreign expertise, but we feel that in the long run if we continue to encourage our post-secondary institutions to provide training opportunities and if we can provide employment opportunities for those people graduating, we will be able to maintain that basic pool of talent.

I should say that in Quebec, for example, the Economuseum movement has helped restore skills that in many instances were lost, skills like stonemasonry and ironmongery and things of that sort. There's a newfound pride among young people in working on projects that have taken old buildings in a state of decay and restored them to their original glory. These people have acquired the skills to actually do something about their built heritage, and there's a resurgence of interest and a small but important industry that's grown as a result of what at the time seemed to be small demonstration projects. But these projects have created a trained employment set of opportunities for many young people.

The Vice-Chair (Ms. Paddy Torsney): I think a youth service project in Halifax built a lighthouse in a specific heritage building.

Mr. Doug Franklin: If I might add a word to my colleague's response, we certainly appreciate the work that's taken place here and the work that's continuing over the next few years. It is an absolutely magnificent restoration and we extend our very best wishes to the government on this project.

I have a couple of quick remarks on that, however. Let's face it, this is one of the pre-eminent heritage sites in Canada, with peculiar problems and so on. Very few buildings, for instance, have copper roofs, although I might add that many churches now are being restored in the maritimes and in Quebec using these revived techniques.

I would like to talk about scale for a moment. We discovered through our own hands-on experience in demonstration projects over the years that the average restoration of a storefront, for instance, a typical older storefront in Canada in a Canadian community, only costs about $8,000 to $10,000. Many of the skills needed are actually very fundamental and very basic, but they're specialized. It means that people must learn the vocabulary. The young people who are learning the trades must learn how to work in these particular materials and so forth. It tends to be specialized, but there is a great deal of interest in this now.

And yes, unfortunately many of the well-skilled and well-trained people are reaching retirement. However, even the federal government itself, through Public Works over the years, has encouraged the apprenticeship system. Various techniques have been used.

In just one example, for instance, our friends in the U.S. have started the Youth Build project, where they give young people who haven't completed their education the skills training in preservation work along with completion of their secondary- and college-level training. This has proven to be very successful. There are many models to draw upon.

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

Madame Redman, pour cinq minutes.

Mrs. Karen Redman (Kitchener Centre, Lib.): Thank you. My question is for the heritage group.

You mentioned changes to the Income Tax Act. Did I hear you say in your presentation that you will be more specific at a future date? I was wondering what specific changes you see.

• 0945

Also, you mentioned in passing about heritage properties being managed by charitable, non-profit organizations.

I represent the city of Kitchener. We have St. Jerome's College there, and we're having a battle trying to save it. One of the projects is looking at having it refurbished and being a heritage theatre—it's actually designated internally—and I would see how that could fit into your proposal.

One of the other proposals to save the structure was actually live-work space for artists, which I don't see quite falling into those lines. I wonder if, when you looked at that, you looked at those accommodations as well.

Mr. Brian Anthony: Let me speak to your first question.

The two changes we would like to see and hope to see in the forthcoming budget relate to the terminal loss provision. We would like to see it eradicated. Our colleagues in the Department of Finance say it's not that much of an incentive any more, but if that's the case, then let's dispose of it entirely. The other, of course, is the tax treatment of restoration costs of heritage buildings.

I must say we've been having very good discussions with the Department of Finance and with Revenue Canada on that particular provision, and we are hopeful we'll be able to find some accommodation in the near future. But it's important that we continue to enjoy the support of this committee, because it certainly helps keep the discussions going.

In terms of the second question, Doug, perhaps I could ask you to speak to that in more detail. But I should say that we exist to serve the heritage community, and in instances such as the one you mentioned where you do have problems, please encourage those who were actually involved to get in touch with us, because we can provide help.

Doug, did you want to speak to the committee?

Mr. Doug Franklin: Perhaps I might mention one example of this kind of thing, which we see more and more often, and that is that the private sector is willing to invest in many of these projects along with registered charities. If the circumstances are right and there is some level of predictability, the private sector wants to become involved more in building preservation activities.

With charities, of course, they have a very, very limited income and it's difficult for them to embark on big projects. However, we have seen some creative enterprises across the country where community centre spaces and performing arts centres have been done through partnership arrangements, and so on. I'm thinking of some rather interesting and difficult projects involving old hockey arenas, for instance, where they're looking very, very creatively at some very difficult buildings in order to bring investment and, at the same time, bring about community uses.

I don't know if this helps in your answer.

Mrs. Karen Redman: Yes. Part of that sentence in your presentation talked about jobs and employment as being sort of a residual by-product of saving these heritage buildings, and I see this as being very viable.

Also, I would like to clarify that I think I may have said St. Jerome's College. I would hate to give the people at home apoplexy. It's St. Jerome's High School. The college is intact.

The Vice-Chair (Ms. Paddy Torsney): The college is not that old, actually. I was thinking: Really? It must have been in the wrong place.

Mr. Szabo, do you have a quick last question.

Mr. Paul Szabo: Going back to the seniors' benefit, this is going to be a really hot issue for us; you know that. Seventy-five percent of seniors with incomes up to $40,000 will receive the same or higher benefits under the seniors plan than under the current system. Yes or no?

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

Mr. Pierre Beauchamp: The study, which we had done by an actuary—and actually the outcome of that study is supported by many other actuaries in Canada—demonstrates that Canadians in 2001, when the seniors' benefit would go in place, would be worse off if their total retirement income were between $26,000 and $50,000.

The figure you advance may or may not be in line with what we suggest, but we have reason to believe that the research we have done is solid.

Before we get lost in figures, what we are very concerned with and the very serious point we're trying to make is—and I think the government has responded to a lot of the pressure you have heard from Canadians—is to allow for public hearings, to allow for a clear expression of ideas from different groups like ours. I thank you for doing that today, by the way.

• 0950

There are some misunderstandings as to where we're going. I think the main point in all of this is for Canadians to better understand the retirement system in Canada. There are three components to it, and I think it's very important for Canadians to be able to do long-term planning in those areas.

I don't want to get lost in my figures versus somebody else's figures. I think there has been ample evidence up to now to justify hearings, which I understand are going to take place, to allow Canadians to have full input on this particular topic. Like all associations and all groups in Canada, we are very concerned about setting up a plan from which Canadians can do long-term planning as opposed to tinkering with RRSPs one year and then a seniors' benefit that replaces something else the next year and so on.

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

First of all, I will make sure your information on the seniors' benefit forms part of those consultations. There was always a plan to have consultations, so please don't think your comments or anybody else's suddenly motivated the government to think about public consultations. That was always part of the plan.

Second, I want to draw it to your attention that there have not been yearly changes to RRSPs. In 1994 we made a change to not increase the limits. We made a change from 71 to 69 for the RRIFs. The only other change was in 1997, when we allowed a carry-forward to continue indefinitely, which was probably an improvement for a lot of people.

So I think we should be careful about the language we use when we refer to changes to the RRSP system. It has not been almost yearly, unless you have other incidents I'm unaware of where there have been changes.

Mr. Pierre Beauchamp: The only point I was trying to made, Madam Chairman—

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

Mr. Pierre Beauchamp: —was that when you change the rules, even if it's one year, or in this case two years in a row, it makes it very difficult for Canadians to understand what it is they should be doing in the future.

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

Mr. Valeri, for a quick summation.

Mr. Tony Valeri (Stoney Creek, Lib.): I have a closing comment on the seniors benefit. I did have the opportunity to sit in on a number of pre-consultation meetings that went on with respect to the seniors' benefit. I would agree with you that the overriding message, and one that came through loud and clear, was with respect to the need for a much broader dialogue with respect to the retirement income system and a discussion of the three pillars of the retirement income system and an opportunity for input in any future changes.

So I would concur with you that in fact that is what we heard and that is what the government's intention is once the consultations kick off on the seniors' benefit.

I thank you for that intervention.

Mr. Pierre Beauchamp: I would simply respond to and acknowledge what you're saying. We are a member of the Retirement Income Coalition. We are making representation on behalf of over one million Canadians through that particular artery, and it's doing exactly as you suggest. We are looking for a system that will include the three pillars so that Canadians can, in the future, do planning.

The Vice-Chair (Ms. Paddy Torsney): To our witnesses, thank you very much. We'll take up some of the details with departmental officials to cost them out. Certainly your suggestion on the commercial investment needs further study on our part.

We appreciate your submissions and hope you have a good day.

I will suspend this meeting until 10.30 a.m.

• 0954

• 1033

The Chairman: I call this meeting to order and welcome everyone. As you know, pursuant to Standing Order 83.1, the finance committee is conducting public hearings to get input from Canadians. You know that we've travelled across the country and heard some very interesting views on the way the fiscal dividend should be divvied up. We also heard a lot about the priorities and expectations Canadians have for the upcoming budget.

This morning we have the pleasure to have representatives from

[Translation]

the Fédération des femmes du Québec,

[English]

the National Council of Women of Canada, the National Association of Women and the Law, from the Canadian Congress for Learning Opportunities, from

[Translation]

the Association des collaboratrices et partenaires en affaires and the Regroupement des centres de femmes du Québec,

[English]

from the National Action Committee on the Status of Women and from the Canadian Research Institute for Advancement of Women.

As you know, you have approximately five minutes to make introductory remarks. Thereafter we will proceed to a question and answer session. The first presentation will be made by Madame Françoise David and Ruth Rose from

[Translation]

the Fédération des femmes du Québec. Welcome.

Ms. Françoise David (President, Fédération des femmes du Québec): Is it possible to change the order of the presentations?

[English]

The Chairman: Yes, that's possible. We're quite flexible.

[Translation]

Ms. Françoise David: Yes. We would like Ms. Grant-Cummings to begin. I will speak last.

[English]

The Chairman: We can do that. Go ahead.

• 1035

Ms. Joan Grant-Cummings (President, National Action Committee on the Status of Women): Good morning. We are pleased to be presenting once again. But it is also a bittersweet pleasure, because we have been presenting for the past number of years and we feel as the years go by that the recommendations women's groups have made, especially over the last four years, have not been heard in terms of implementing the recommendations, or reflected in the federal budget.

We want to base our presentation on how the economic policies and the global economic policies have impacted women in Canada, specifically women's social and economic rights. Over the last four years the government has talked about how wonderful it is to cut the deficit and now we're reaping the dividends. But women, especially women living in poverty, aboriginal women, young women, older women, women of colour, immigrant and refugee women, women with disabilities, have not seen most of these dividends. At every stage of our life cycle we seem to be actually the highest representative group in terms of people living in poverty. Of the 5.25 million poor people in Canada, 70% are women and children.

We feel the government's current embracing of the corporate global economy is actually gender biased. It has not worked for women in the way in which it has worked for corporations or for the government's political agenda. We want to draw your attention to a number of statistics and then focus on some of the recommendations from NAC this year.

Canada currently has the second highest level of low-paying women's jobs of the OECD countries. We think that is very indicative of the fact that women in Canada are not the beneficiaries of the dividends from this global economy. One of the things that has actually impeded Canadian women's ability to exercise our economic, social and political rights has been the cuts to women's programs funding.

There were four pillars coming out of the Royal Commission on the Status of Women that the government agreed would be necessary to advance women's equality in Canada. They included a well-funded Status of Women Canada department, a women's programs funding body. We needed to have a national lobby group for women. We also needed to have an arm's length monitoring, evaluation and research body. That was the Canadian Advisory Council on the Status of Women, which the government cut just a few months before the Beijing conference. Right now we do not have a body to even implement or monitor the government's implementation of the Beijing Platform for Action.

In addition to that, women's so-called unpaid work, which actually fuels the economy globally and in Canada, has increased. It has increased in terms of what we're doing in the home, in the communities—because we are the ones who have picked up the slack from the cuts to health, education, social programs, etc.—not to mention the political work that we have to do, continuously unpaid, as well as being underemployed. By that I mean we are overrepresented in the part-time workforce. We are filling 70.4% of those jobs, even though the majority of us who choose to work outside the home want to work full time. For those of us who are working full time, our salaries certainly do not compare to our male counterparts' salaries. We also have to work a higher ratio of unpaid work to keep our jobs, to ensure promotion, to play the game just to keep our jobs. That is a backward step, and it is an erosion of women's economic, social and political rights.

In terms of recommendations, I'm going to go to our first recommendation. I have said that the government's commitment to women's equality has been put on the back burner the last four years. We want to see it back on the front burner. In terms of women having access to those dividends that the wonderful finance minister has said exist, we want the government to spend at least $2 per woman and girl-child in this country. We want the women's program funding to be increased to $30 million from the measly $8.1 million that it is currently.

• 1040

That works out to roughly 50¢ being spent in Canada per woman and girl-child. This is a right; this is our fair share.

We also want to see the government invest in democracy and invest in women's participation in the political, economic and social life of Canada. In addition to that $30 million, we want to see the crime prevention budget, the new $30 million that the justice minister has talked about, in existence. We want to see that invested in women's grassroots anti-violence services. That is a crime prevention strategy.

To help stamp out women's and children's poverty, we feel that the government must implement the recommendations made by the National Council of Welfare in its 1995 report on poverty, namely, that it requires $16 billion to alleviate poverty in Canada. It's not a sum that is out of the realm of reality at all, given the moneys the government takes in each year. It's a matter of prioritizing.

In terms of real support and respect for aboriginal people's rights, in particular aboriginal women, we feel that Human Resources Development Canada must commit to aboriginal women's access to the training and employment programs they currently run. Up to last year in the National Women's March Against Poverty, that was one of our key demands. That demand still has not been met by the government, and aboriginal women remain alienated from this pot of money they need to develop themselves.

We have real gender-biased trade, investment and economic strategy in Canada. To make it gender neutral, or on the road to making it gender neutral, we're suggesting certain things. One is that the finance minister, in association with the foreign affairs and international trade ministers, immediately call a meeting with national women's organizations and other women's groups to look at how the trade, investment and economic policies of this country are impacting women, because we do not believe the impacts have been gender neutral. We feel that a gender mapping is necessary of Canada's trade, economic and investment policies so that women can truly participate in the economy and can truly be part of the benefits of this wonderful economic boom instead of propping up the economy with our unpaid work.

The last thing we want to say is that when the finance minister is constructing this budget, we want him to keep something in mind. We think this is a very direct, very serious and very women-focused solution that he should remember. If in doing the budget there is no line for social development, in particular to advance the cause of women's equality, he needs to understand that if the budget is not appropriate for women, it's not appropriate for Canadians.

Thank you.

The Chairman: Thank you very much.

We will now hear from Ms. Philipps.

Ms. Lisa Philipps (National Steering Committee Member, National Association of Women and the Law): Thank you very much for inviting us to come today.

First, I want to speak briefly about budgeting assumptions, since that was one of the things the committee wanted us to focus on. The overarching theme of NAWL's presentation today is that the government's priority should now be the elimination of the social deficit in Canada. By the social deficit, I mean that social spending cuts have contributed to a more polarized and unequal society, higher poverty levels, greater economic insecurity and general social distress and conflict.

Economists who have looked at the last couple of decades have concluded overwhelmingly that social spending did not cause the fiscal deficit, and our view is that social spending has been cut far too deeply in trying to manage the fiscal deficit.

The social deficit has been substantially worsened by the abolition of the Canada assistance plan, especially the loss of federal leverage to insist on high-quality social programs in the provinces and territories, also in the loss of designated funding for social services that benefit women. For some of the reasons outlined by Joan Grant-Cummings, women bear the cost of social spending restraint and the social deficit especially heavily.

• 1045

NAWL would also like to make the point that the social deficit is far more threatening to the short- and long-term prosperity and quality of life of Canadians than either the level of taxation in Canada or the accumulated public debt. Indeed, the public debt will decline steadily on its own in relation to the size of the economy without any special measures to pay it down, and furthermore, Canada's overall level of taxation is still low in relation to other OECD countries and should not be reduced at the present time until we've addressed the crisis in social funding.

Finally, in terms of budgetary assumptions, I'd like to emphasize that all budgetary decisions should be assessed from the perspective of how they will impact on women. We hope that the 1998 budget will include a gender impact analysis in keeping with the federal government's commitment, both domestically and internationally, to assess economic policy from the perspective of women.

I'd like to speak next to strategic investments that I hope the finance minister will make in his next budget.

First of all, NAWL would like to see the restoration of designated federal funding for social assistance and for specific social services that are essential to the equality, liberty and security of women. In particular, NAWL has a special concern with the funding crisis in civil legal aid, that is, legal aid for non-criminal matters, including family law matters. In addition, there's a need for designated federal funding for child care services, for shelters and other services for women fleeing violence and abuse, and for attendant and respite services for disabled people and for those caring for disabled people.

Unlike the Canada assistance plan, the current Canada health and social transfer provides absolutely no earmarked funding for these particular services, which are essential to women's autonomy and security.

We'd also like to see the government restoring its overall level of health, education and social spending to levels prior to the 1995 budget at least, and we see this as essential for the federal government to regain the leverage that it once had over national programs and ensuring that they meet a decent minimum standard.

NAWL also joins in the recommendation made by several groups today that there's a great need for additional funding for the women's programs branch of Status of Women Canada.

Finally, I'd like to make a few comments about the tax system. As a matter of fact, I teach taxation law at Osgoode Hall Law School, so it's a particular pleasure to get a chance to speak to the committee about this.

Again, NAWL feels very strongly that it's not appropriate to reduce the overall level of taxation in Canada at this time in view of the pressing need to re-fund social services. Certainly, NAWL is opposed to any across-the-board income tax cut. In our view, any targeted tax reductions should focus on eliminating regressive and inequitable elements of the current tax system.

To highlight a couple, I would include the need to index the child tax benefit and the GST credits fully to inflation to ensure that the value of those benefits is not eroded each and every year. At the present time, people are knocked off those benefits every single year simply because of the effects of inflation.

We also need to enhance the level of benefits provided through these refundable tax credits, and not only to low-income families earning market income. We have a particular concern with the focus on increasing the working income supplement component of the child tax benefit. The problem is that increasing this component of the benefit excludes, for instance, single women with children who are relying on child support or on government transfers to make ends meet. The title of this benefit and its design implies somehow that these women are not involved in productive activity.

Economists unanimously acknowledge that women's unpaid caregiving labour has economic value and it seems perverse to us to extend an extra benefit that leaves out these women who are making an enormous contribution to the Canadian economy through their caregiving work.

Finally, income tax changes should also focus on broadening the tax base and eliminating tax expenditures that disproportionately benefit high incomes. There are many examples of this, but one that is of particular concern to NAWL is the current tax incentives for retirement savings.

• 1050

Private retirement savings incentives are currently designed in a way that benefits high-income people most and benefits men more than women. This is because the potential tax savings rise as market income rises and as your marginal tax rate rises. So for these reasons women are, for instance, less likely to participate in a registered pension plan, an employer-sponsored pension plan. When they do participate, they accrue lesser benefits because they have lower wages than men. They have less financial capacity to contribute to a private RRSP, a registered retirement savings plan, they receive less tax savings per dollar contributed when they do contribute because they often contribute at lower marginal tax rates, and they get less benefit from the tax-sheltered accumulation of investment income from these plans.

So this mode of delivering retirement assistance through the tax system entirely fails to address the need for retirement security for women or to address the very high level of poverty among older women compared to older men.

This is especially inequitable when we consider that the tax incentives are granted at the same time that we are seeing reductions, cutbacks, and clawbacks to more broadly based and inclusive public retirement savings schemes like the OAS, the GIS, the CPP, and I would include the proposed new seniors' benefit.

I would just conclude by emphasizing that NAWL opposes any cut to income tax rates until the government has addressed some of the regressive elements in the current tax system.

Thank you very much.

The Chairman: Thank you, Ms. Philipps.

Ms. Webb, welcome.

Ms. Pat Webb (President, Canadian Congress for Learning Opportunities for Women): Good morning, Mr. Bevilacqua.

Our organization is the Canadian Congress for Learning Opportunities for Women. I wanted to make sure that correction got into the record.

I'm going to respond to the three focus questions that were set up by this committee, beginning with the economic assumptions, including prudence factors. Investing now in developing Canada's future capabilities is more important than reducing our national debt. Increasing the wealth of high-income earners while reducing resources available to poorer Canadians, as we've done for the past several years, has disastrous long-term potential for the stability of society. But increasing the percentage of economically self-sustaining adults in Canada will enable us, with more tax revenue and fewer demands for service, to restore the quality of our social safety net. Then foreign debt can be repaid. Domestic debt repayment can follow more slowly. Tax reduction could parallel debt reduction.

Domestic debt, after all, is the Canada savings bonds that I buy. I don't think there's any rush to pay that off; they're a good investment for Canadians. I think the focus should be on foreign debt so nobody can say to us it's the bankers in New York who are affecting our policies.

Second, what are the appropriate new strategic investments and changes to the tax system that would allow the government to best achieve its priorities? The next budget should allocate significant capital to improve citizens' capabilities to be economically self-sustaining over the long term—invest in equipping a much larger percentage of the Canadian population for the knowledge-based economy. This doesn't make making the knowledgeable more knowledgeable; we're talking about increasing the percentage of our population that is capable.

A strategy for this is to target areas of the population that could contribute most to increasing the total number of economically self-sufficient citizens. Clearly, children and youth are part of this, but the federal government, in spite of the recent announcements on education opportunities for youth, has pretty well given away control of that to the provinces.

Gender analysis shows that most adults who are not economically self-sufficient and self-sustaining are women and that social practices raise unique barriers not faced by men, as you have heard from Joan and Lisa. These gender barriers to self-sufficiency are slowly being addressed. Most of the awareness and many of the policy solutions have been advanced by voluntary women's organizations like the ones that are here today and many others.

Support for women's equality-seeking groups is an investment that's had high leverage. Barriers to women's economic development include violence, isolation, family care responsibilities, inappropriate education practices and workplace discrimination. Lowering these barriers progresses primarily because of the persistent advocacy and practical support of women's groups like those here today. A relatively small investment of federal and foundation dollars supports a very large number of volunteer hours. Because of national budget decisions, public investment in this work has fallen away.

• 1055

While this is not the whole strategy, naturally, a renewed solid investment in such groups would continue to move women to the same footing as men in attaining self-sufficiency. We ask for a specific allocation for this purpose to the Status of Women women's program amounting to $2 for each woman in Canada.

What is the best way government can help ensure there's a wide range of job opportunities in the new economy for all Canadians? This is the third question. There is more than enough useful productive work for everyone in Canada, but only some of this is paid. Men and women do unpaid work, but because of Canada's cultural values women do more it than men. Responsibility for child or invalid care often becomes a barrier to economic self-sufficiency.

We are seeing the results of the incorrect assumption that unpaid work does not contribute to the economy. Consider the current shortages in community health care and child care. Adults have joined the paid workforce and reduced the unpaid commitment to the family and community. There's a gap there that they have left behind. Their previous unrecognized work has left service gaps. This is one way to create jobs. Is it the way we want?

If any government is bent on achieving income redistribution, which is one of the jobs of our government, primarily through job creation, it's going to need to name all productive and service work as jobs and see that those jobs are paid for. But no country can afford this.

Investing resources in supporting involuntary, unpaid work so it is more equitably distributed might be feasible. It's going to be tough to do this. Getting it right will be a worthwhile policy challenge. If Canada is able to provide such resources, women can free themselves from sufficient unpaid work to build and maintain their earning capacity in the knowledge economy; or they can choose to continue the unpaid work and invest the resources for the time when their child care or other family responsibility ends.

The Chairman: Thank you, Ms. Webb.

Ms. Saravanamuttoo.

Ms. Helen Saravanamuttoo (Vice-President, National Council of Women of Canada): I would like to introduce Ruth Brown, who will be addressing our part on seniors; and because I have to leave early, she will be taking over the last part. I do apologize for this.

First of all, I would like to say it's very interesting that in the Ottawa Citizen last night there was an article saying the economy is on the upswing but social health declines. I think this is very telling. When we looked at the economic assumptions that are current in the general media way of looking at things, often also the way in the government, we have really wanted to challenge these too. The index of social health has been going down since the 1970s. Children have particularly been hit.

Our first assumption is that a strong country pays attention to equity. Income disparity is very bad for the economy but it's worse for citizens in the economy. In fact, a study in the U.K. shows that as income disparity increased all sorts of things happened, such as increasing addictions, increasing family break-up, increasing school failure, increasing bad health. This was at a time when actual poverty levels, the extent and depth of the poverty in the U.K., had actually been decreasing.

It's quite telling that it's income disparity. I think it's very important that the finance department recognize the role social programs have played in equalizing income.

The next assumption we would like to put forward is that an equitable society recognizes unpaid work. We know there were some questions about housework in the last census. There is no indication of how that will be integrated into government policy, and there's no indication that the government is serious about instituting really new measures by which unpaid work will be formally recognized. Statistics Canada and Human Resources Canada are doing work on this. We urge you, as the finance committee, to look at this more strongly, and to question how we measure growth. Growth does not equate with a strong society, and a strong society keeps Canada together.

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A third assumption we'd like to put forward is that women need a strong voice to counter the impact of media concentration, which in turn is part of globalization. Women's voices are not being heard. Their perspective is not being put forward. We need to be able to meet and to have funding to be able to do so.

The last assumption we put forward is around the prudence factors—inflation measurements and high interest rates. There is a lot of evidence that inflation measurement is overestimated, and that interest rates have been unnecessarily high just because of this. As we know, their impact on the economy has been very severe. They put Canada in a recession in the early 1990s and have kept it there.

The improvement in the fiscal situation has occurred since the Bank of Canada lowered its interest rates, so we really push you to look at the impact of high interest rates. We encourage you to work with the Bank of Canada and Governor Thiessen to maintain the lowish interest rate regime—and I say “lowish” because the interest rates are not that low in historic terms. In our brief, which isn't quite complete yet, we will give you some indication of the actual figures. It's low compared to the 1980s, but it isn't low overall—that's the real interest rate.

On new strategic investments and changes to the tax system, we would first of all like to recommend that with respect to families and children, families should be the first priority of government. We've had a figure mentioned today, a $16 billion contribution to take children out of poverty. We applaud the initiative of the national child tax benefit, but we think it's nowhere near enough. There must be some way to share the benefit with families on social assistance. We'd also like to put the point that what has been proposed in the Speech from the Throne would in fact just replace what has been lost, since the present child tax benefit and family allowance have not been fully indexed to inflation.

We'd also like to underline the important contribution of social programs. I've already mentioned this, but we think adequate transfer payments must be reinstituted. They should be targeted, and there should be some accountability with respect to the provinces. We do not agree with just decentralizing and letting the provinces decide how they will spend the money.

On the tax system, we are concerned about lower-income taxpayers. Income tax brackets have not been indexed to inflation, and we think this should be done immediately. We think government benefits like the GST credit and the child tax benefit, which I've already mentioned, should be fully indexed to inflation. We want the unpaid work really recognized. And we fully support a strong voice for women in government. The funding should be increased significantly, and we'd support the $2 for each woman in Canada. Also, gender analysis is a priority.

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We made a presentation to the task force on financial institutions. Addressing the investment in local communities rather than investment by the big corporations is really important.

Following on our theme of unpaid work, we would like to develop collaborative initiatives to support family caregivers.

I'd now like to ask Ruth to talk briefly about the situation facing seniors.

Ms. Ruth Brown (President, National Council of Women of Canada): Thank you.

Our members feel quite strongly that seniors' incomes have already taken severe cuts and that perhaps seniors have done their share against future increases in deficits and shouldn't be a party to further cuts.

Presently seniors with very little more than middle incomes will have lost the age credit and will lose the pension income credit. Previously the interest income credit was taken away, and higher-middle-income seniors have had their old age security clawed back for many years. These people have no way of adjusting if there are further cutbacks. Even future middle-income seniors will face cuts from what they had expected and planned with the coming seniors' benefit, and ones who are getting close to retirement will have very little time to adjust their plans for retirement.

Our members also feel that accepting family income as a basis for receiving benefits will have a detrimental effect on many. We've had resolutions on that subject for 25 years or so: taxes should be based on individual income and not families.

Thank you.

The Chairman: Thank you, Ms. Brown and Ms. Saravanamuttoo.

Madame David.

[Translation]

Ms. Françoise David: Good morning. I am the president of the Fédération des femmes du Québec. There are four of us here this morning, but we only have one text to present and I believe you already have it.

We are going to address three issues: employment insurance reform, the employment crisis and federal policies, and finally, the issue of funding for the program for the advancement of women.

On the issue of employment insurance, we would like to start by saying that when reforms to the employment insurance program were undertaken, the Fédération des femmes du Québec came to Parliament to say that the reform would discriminate against women. We now see that that is exactly the case. I invite you to take a close look at the appendices to our document, especially appendix 1.

You will note that the number of women who have access to maternity leave has decreased since the reform was implemented, and you will also note that part-time workers, two thirds of whom are women, are facing discrimination with respect to access to employment insurance benefits as compared with other workers, since benefits are now calculated on the basis of the number of hours worked and not the number of weeks worked.

So in Canada there are many women working part-time who pay employment insurance premiums as soon as they start working and for whom it takes a ridiculous amount of time to perhaps one day be eligible for benefits. At any rate, these benefits will be lower than those for men having worked the same number of hours, but full-time.

If you want me to expand on that later, I will be pleased to do so.

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So the employment insurance reform, which is in fact one of the federal government's main deficit reduction instruments—in my view, the government should not boast about it—discriminates against women and has already had tangible effects on women's living conditions.

The entire system must be reviewed in detail, and we are asking the Canadian government to return to a system where access to employment insurance benefits is calculated based on the number of weeks worked, taking into account each hour spent at work.

We also ask that the Canadian government reinstate the 60% salary replacement rate and revert back to a standard of 10 to 14 weeks worked, depending on the regional unemployment rate, for people to be entitled to benefits.

I will now give the floor to Ms. Irène Marais, President of the Association des collaboratrices et partenaires en affaires, who will say a few words on the peculiar situation of women who run a business with their husband.

Ms. Irène Marais (President, Association des collaboratrices et partenaires en affaires): Our association is very concerned about this, because family businesses in Canada now play an important role in Canada's economy. In 2 million family businesses in Canada, you will find more than a million female associates who hold unpaid jobs. For some of them who could be one of the businesses' salaried employees, the law discriminates against them because as soon as there is a family tie, they are automatically shelved and denied benefits. That is how officials treat them when they enforce the Act.

Nearly 90% of all paid female associates give up before making an appeal. They have 90 days to do so, but it is a complicated matter and they must always fight. Sometimes it takes 18 months to reach an agreement, and often the associates who work for a business, be it a farm or small business, have already made two applications for unemployment insurance before their case is reviewed. Sometimes it takes 18 months, and 99.9% of the unfortunate few who do appeal, namely 10%, do win their case. Those who do not appeal lose everything.

Let me give you a very specific case. There was a woman who worked for a furniture business in the Eastern Townships. She had paid her premiums for 12 years, and she was refused employment insurance. She was told: it shouldn't bother you because in any case, your contributions are reimbursed. But unemployment insurance did not reimburse 12 year's worth of contributions. It reimbursed just two years' worth. If the woman had not appealed, she would have lost all her rights.

We feel this is an important matter. Ms. Helen spoke earlier about unpaid jobs that are not recognized. In family businesses, there are nearly 1 million spousal associates who are not paid but who work for the firm. So we would like the Employment Insurance Act to be amended so that the provisions apply to family business associates, both children and spouses.

Ms. Françoise David: Let me move on to the second point, which is the employment crisis and federal policies. I will not lecture you on the high unemployment rate in Quebec and Canada. We know that this is a sad reality. We all know that poverty in every province is increasing instead of decreasing. We know that the middle class is paying high taxes and feels it is not longer getting the public services it deserves. We also know that federal cuts to transfer payments have had a significant impact on the quantity and quality of social and health services as well as on the social safety net and education.

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It is also important to remember that when there are major job cuts in the public service, it is usually women who are affected, both as workers and as users of those services and also because women are expected to look after the children, seniors, the sick or handicapped because the government has decided it no longer wants to take care of them or is much less willing to do so.

So we are asking the Canadian government to reinstate the provincial transfers for health, post-secondary education and social services at a level that will ensure all citizens get the quality of services they are entitled to and at a level that will help create permanent jobs.

We are asking the government to re-index the tax system, to set the personal exemption at $7500, which is its value in constant 1988 dollars, to replace the surtax with new tax brackets such as 32% for incomes of over $100,000 and 34% for incomes of over $150,000, which would translate into 775 million dollars' worth of additional revenue for the federal government.

Finally, we ask that the government re-index the child benefit and the threshold at which it is clawed back. I will now give the floor to Michèle Asselin, who is the coordinator of the Regroupement des centres de femmes du Québec, who will say a few words about the program for the advancement of women.

Ms. Michèle Asselin (Coordinator, Regroupement des centres de femmes du Québec): Good afternoon. I would like to draw your attention to a tiny $8 million program that gives back for more to Canadian society than it takes out. Over 400 women's groups throughout Canada are sharing the crumbs while doing an exemplary job of helping women in trouble, analyzing their needs and finding solutions for them, encouraging governments to introduce policies that meet the specific needs of women, heightening awareness of the continued injustices women suffer and supporting women in their quest to become independent.

My colleagues gave you a good description of the situation Canadian women live in. You are no doubt convinced that there is still a great deal to be done if we are to ensure equality, justice and fairness for women. The groups share the daily grind with women. I would like to draw your attention to our network, the Centres de femmes in Quebec. The network consists of 89 women's centres who have managed to transform the deep feeling of injustice women feel into concrete action to promote women's citizenship and equality.

We need financial support if we are to continue our work. There are many women's centres in Quebec, as there are across the country. I know a few of them, because two or three years ago, we tried to form a network of centres throughout Canada. Unfortunately, that network never came to be, due to lack of funds. That is most unfortunate, because I think it is important, indeed, a priority, to support the establishment of such networks throughout the country.

In our view, it is unconscionable for a government that signed the Beijing declaration. I had the opportunity to go to Beijing and I saw how proud the Canadian government was of the efforts made in Canada to ensure equality for women. I know the Canadian government is proud of that. So why is it that so little attention is given to supporting women's groups? Repeated cuts have virtually destroyed the Advancement of Women Program, even though it had been very successful for many years. There were program evaluations, and the assessments of the benefits of the program were all positive.

Bear in mind that in Quebec alone, the total amount the government gave to the Advancement of Women Program dropped from $2,034,274 in 1986-87 to $1,316,700 in 1997-98. The situation is serious, especially since the new criteria for the Advancement of Women Program will mean that as of 1998, a greater number of groups will have access to funding. The program therefore urgently needs a budget that will allow it to adequately support the tremendous amount of work being done by these women's groups.

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We are asking the federal government to give the Advancement of Women Program $2 per Canadian woman, which is $28 million. This amount represents less than 0.5% of total military expenditures in Canada. Women want their fair share, nothing less. It is just a matter of equality, fairness and justice.

The Chairman: Thank you.

[English]

We'll move to Ms. Lise Martin.

Ms. Lise Martin (Research Officer, Canadian Research Institute for the Advancement of Women): No, I'm not making a presentation.

The Chairman: Oh, okay. So I guess we'll move to the question and answer session. We'll begin with Mr. Ritz.

Mr. Gerry Ritz: Thank you, Mr. Chairman. I just have two short questions for the ladies.

Thank you for your presentations. You've done a tremendous job in getting your points across.

One I'll toss out as a general comment and see if anyone would like to address it. Are you seeing a gender differential in our chronic youth unemployment or underemployment, as you want to classify it? And in the debt loads of secondary education students, are we seeing more women coming out of secondary schools with debt loads than we are men? Is there a gender differential there?

Then, as a specific question to Ms. Webb, in the third point in your presentation, you talk about reallocation of resources and so on. Are you thinking of a model out there in the world somewhere that we should be looking at, or are you breaking new ground with this concept?

Thank you.

Ms. Joan Grant-Cummings: In terms of young women, we definitely are. I don't know if you have seen the briefs or the workings of the Canadian Federation of Students, which clearly have pointed out that in particular young women are disadvantaged in the current economic climate in terms of the cuts to education. Young women more than young men are choosing to drop out or they're taking much longer to complete their first degrees. They are not preferentially hired as compared to young men, and when they are hired, of course it's mainly the lowest-paying jobs: jobs in mall stores, etc. So a lot of young women are choosing in some cases not to do this.

The other group of young women who are even more adversely affected by the cuts to education are young single mothers. We know that for young unattached people, already the poverty rate is 83.1%, according to the last stats from the National Council of Welfare. For young single mothers it is also as high.

So we're definitely seeing an erosion of young women's economic stability in this country and of their advancement in education and economic equity. The women's movement made the strong point in the sixties and seventies that education was one of the routes by which women could advance. If in our generation we're already seeing young women choosing not to go on to post-secondary institutions because they cannot afford it, something is clearly wrong.

In our brief we have asked that the Prime Minister, if he wants to really leave a legacy to future generations, should implement the Millennium program now. By the year 2000 we will have lost thousands of young women who will not be able to enter post-secondary institutions.

The Chairman: Ms. Webb.

Ms. Pat Webb: One of the concerns we have about adolescent men is that their drop-out rate from school is very high. Certainly that's a concern to men and women both. The work that needs to be done in that area is primarily with education, which is the province of the provinces and territories. I just wanted to put in that it's not going unnoticed.

In answer to the other question on the reallocation of resources for unpaid work, a number of things are going on now or have been thought about, but there is no co-ordinated effort, at least not that I know of, on these. This means anything that has to do with women in the home being able somehow to contribute to a pension plan and being able to get some income that is theirs, even though they are in essence working for their husbands, if they're looking after children—those kinds of things.

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I think it needs a task force, and that's why I put in that it's got to be a policy challenge. It needs a lot of work. We would certainly be willing to contribute to those kinds of discussions, but do I have an answer? No.

Ms. Lisa Philipps: I wonder if I could add something to that response.

The Chairman: We'll go to Ms. Saravanamuttoo first and then we'll go back to you, Ms. Philipps.

Ms. Helen Saravanamuttoo: The implications of not measuring unpaid work are so wide. For instance, there are cuts in social programs to family caregivers, and these go unnoticed. They're just a decrease in the budget of the provincial governments, but we don't see any cost. What it means is the unpaid work is not being measured, and this is a real cost, not only in terms of income to families but in terms of health and mental health. A number of studies from Health Canada show that the health of caregivers goes down significantly. So I would urge you to look at that.

I would also like to support Mr. Ritz in his flagging of the youth unemployment and the post-secondary education. We are not aware of differences ourselves in our organization, which doesn't mean they don't exist. We hear horrendous stories of young people's debt loads when they come out of post-secondary education. And as we know, youth unemployment really is very severe.

The Chairman: Thank you.

Ms. Philipps.

Ms. Lisa Philipps: Thanks. I just wanted to take this chance to point out that we already know about two very clear ways to allocate more resources to the recognition of women's unpaid work.

One is simply to fund the social sector adequately, because that is one of the major ways by which women's unpaid caregiving work has been transformed into paid work that's part of the formal economy, by employing women in health care, education, and social service sectors.

Another way is simply to ensure that government benefits are delivered to stay-at-home caregivers as well as to those with low market incomes. Things such as the working income supplement again tend to discriminate against those who make their contribution to the economy by doing unpaid caregiving work.

The Chairman: Thank you.

Madame St-Hilaire.

[Translation]

Ms. Caroline St-Hilaire (Longueuil, BQ): I would first like to thank you for taking the time to come to speak to us this morning. I think it is interesting for all of us.

First, I would like to tell you to continue your fight. I think that you still have a lot of consciousness-raising to do. I would like to thank Ms. Marais for her information on the partners. This was information that I didn't personally know. If she has something to add, I would invite her to do so.

I have a specific question for Ms. Davis. If the others want to answer, there is no problem. I often hear that there are too many women's groups and too much money given to women. I would like to know what you think about that.

Ms. Françoise David: Too many women's groups?

Ms. Caroline St-Hilaire: And too much money given to women. You surely do not agree, but I want you to tell me why.

Ms. Françoise David: I would like you to introduce me to these people. Seriously, there are thousands of women's groups in Canada, and that's a good thing because there are thousands of problems.

Reforms are carried out, like that of employment insurance, and dozens and dozens of women's groups come to tell the Canadian government to be careful, and that it is implementing, perhaps inadvertently, a reform that discriminates against women workers. If there were not these dozens of women's groups to say it, no one would do so. One tends to think that there should be still more groups to say these things, since the government undertook its reform anyway, without taking into account what it was told.

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For this reason, not only will it be necessary to strengthen our groups, but our groups will have to make themselves heard one day, perhaps some other way than in these insulated, calm and polite rooms where we try to explain what should be obvious.

It is very sad that, two years after implementation of the reform, we are bringing you evidence that we were right. We took the time to do serious analysis. We are not always against the governments. We try to help them study bills and policies from the point of view of their impact on women. We are therefore going to have to reinforce our groups so that we can help governments more and so that we can form women's networks across Canada.

It is also necessary to allow women's groups to continue their work in the field. Women's groups are often community groups, that is groups that provide essential services to hundreds of thousands of women experiencing major difficulties, wether these stem from violence, health problems or difficulties entering the workforce. They also defend women partners who have no access to unemployment benefits, immigrant women, single parent mothers and aboriginal women. It is extremely important for women to be able to continue to do this work in the field every day.

Of course, the day when there will be true equality between men and women and when we can say that women in Canada as a whole and the Canadian public live in a truly fair and equitable system, we will be pleased to change jobs, but this will not happen tomorrow.

The Acting Chairman (Mr. Paul Szabo): Thank you, Ms. David.

Ms. Irène Marais.

Ms. Irène Marais: I would like to give you an additional piece of information about the Association des collaboratrices et partenaires.

For the past 11 years, I have been very actively involved in the association because family businesses are our lives, the lives of women. A study carried out by the Federal Development Bank showed that 90% of all multinationals, down to the smallest business, are family businesses, and that family businesses generate 55% of the gross domestic product in Canada, account for 50% of all wages paid in Canada and generate over 66% of all job creation.

Consequently, as a representative of an association speaking on behalf of women business partners, I feel politically frustrated when I see that we have to set up a women's association to talk about the experiences of women partners in family businesses, while the association representing our spouses, given that it is a major political and economic player in Canada, finds itself seated right beside Mr. Jean Chrétien. In fact, we are talking about the president of the Canadian Federation of Independent Business.

If you look at the agricultural sector, you see the same thing. In Quebec, we have the UPA, the union of agricultural producers. However, we do not want to compete as an organization in these sectors.

[English]

The Acting Chairman (Mr. Paul Szabo): Ms. Martin.

Ms. Lise Martin: I would like to thank the person who indicated the perception out there that there are too many women's groups and that women's groups receive too much funding. It is definitely a perception.

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As you may or may not have heard during our presentation, through the women's program women are receiving 50¢ per woman and young girl throughout the country. I am wondering to what extent MPs would say the same thing about environment groups or sports-related groups. Do you feel that there are too many environment or sports-related groups and that they are receiving too much funding, and that it is very much a question of perception?

Ms. Lisa Philipps: May I also speak to this question of too many women's groups, too much money for women's groups? I think it's apparent that there is a certain amount of denigration or dislike out there at the moment about political lobby organizations generally, and some have characterized women's groups as special interest. But I would like to really emphasize that these grassroots political organizations are essential to women having any kind of meaningful democratic voice in Canada.

It's very difficult for isolated individuals, especially if they're operating in conditions where they're economically marginalized or socially marginalized, to first of all identify and perceive what are the systemic changes that are needed, and then to work in any effective way to achieve those.

Women's organizations have been cut to the bone. It's really starting to bite. It's really affecting our ability to come and make presentations to legislative committees and to respond quickly and effectively to new law reform initiatives, to judicial developments and so forth, speaking for my own organization.

All organizations have tried to expand their private fund-raising, as we've been told to do, but the fact is that the activities we undertake are not supported by the private market. That's why state funding for women's advocacy groups was developed in the first place. We need that public support in order to continue functioning.

The Chairman: Ms. Grant-Cummings.

Ms. Joan Grant-Cummings: I don't know; if we have so many groups, I wonder why it has been so difficult for women's groups to have a meeting with the Prime Minister. Thomas d'Aquino from the BCNI can meet with him any time he needs. This monstrous power that we seem to have in numbers somehow doesn't seem to translate into political power.

For example, in a few weeks' time we'll be hosting 17 other countries from the Asia-Pacific Rim area in terms of APEC. So far, as far as we know, at least $50 million have been spent by the Government of Canada to facilitate the participation of businesses and heads of state.

We're holding a parallel women's conference in the spirit of what we have done in Beijing, Copenhagen and Cairo. We have asked for $57,000 to be spent just to facilitate women even getting to Vancouver. Our unpaid workers organized this conference. To date, we have not received a response from the Government of Canada as to whether or not we will be supported.

We have told women that we're presuming that the Government of Canada is not supportive of women's participation in APEC. We have a democratic right, I think, to speak to trade policies that will impact us.

Globally, we contribute $11 trillion, according to the latest United Nations human index report, of unpaid household work alone. That doesn't cover subcontracting work to multinationals, agriculture, the informal sectors. This is only about household work. It doesn't cover the fund-raising we're doing in Alberta and Ontario to buy textbooks and desks and chairs for our schools. It doesn't cover that stuff. It only covers what we do in the house right now. So I'm having a hard time trying to figure out where NAC's power is right now.

We are demonized by many MPs. Even presenting here becomes a chore for us. MPs' reactions to what women's groups say, clearly...and I can see already today, on some MPs' faces, the denigration of the issues we're bringing forward. It's women's groups who are trying to hide women from violent male spouses. Canada's progress in terms of eradicating violence against women has regressed, according to the UN Commission for the Status of Women.

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In the meantime we are defunding and drastically cutting women's shelters, transition houses, rape crisis centres. We're cutting women's community health and prevention centres across the country. The CHST has given the provinces the power to prioritize women, and that is why in the Royal Commission on the Status of Women those very able MPs said we had to fund women's democratic, political participation in Canadian life. In terms of advancing women's equality, we had to have some control over our life.

We live in a world where still 99% of the globe is owned by men and 1% by women. Just 10% of the global economy is controlled by women, 90% by men. We perform 70% of the unpaid work. These are not figures that the women's movement pulled out of its hat. The UN has the money to spend to do these studies. We're going by their figures, which they have said are conservative estimates. Canada is a UN member state. We gladly embrace those figures.

The women's movement also put Canada on the world stage in terms of gender development. We are leaders in gender development. In this APEC conference, we're leading in terms of our gender expert that women's groups have given to the Canadian government.

We don't have policy analysts at NAC. This report was finished at 10 o'clock last night. The president of NAC has to write this report. That's the bottom line.

So equality isn't something we're prepared to give up. The fight for equality we're not prepared to give up, no matter how hard it becomes for us, because we know that this means women's lives are at stake. That isn't a slogan or rhetoric for us. That actually happens in our communities.

MPs need to step into the shoes of some of the women in the east side in Vancouver, downtown Toronto, Montreal—you name it—in Newfoundland, to see where this massing of women's groups is and the enormous hidden power that we all have. But, hey, we are worth only 50¢ a woman and girl-child in Canada.

Ms. Ruth Brown: I too would like to speak briefly to that question of too many women's groups.

Our organization is largely made up of volunteers across the country. They're interested in community issues and provincial issues. Surely that's the kind of group that makes good citizens who really contribute to the fabric of this country. But because this is a huge country, the only way the efforts of those thousands of volunteers can be co-ordinated and used is through a minimal office. I do mean absolutely minimal. Funding for that is now about to disappear. It really makes one wonder what the priorities are.

The Chairman: Mr. Jones.

Mr. Jim Jones (Markham, PC): I've enjoyed all your presentations. It's really difficult to try to ask the right questions.

As we move into the new economy, the intelligent economy, do you see a better hope and opportunity for equality, and especially economic opportunity? Or are the pins still not in place to allow you to achieve this?

I believe, as we move into the intelligent society, that intelligence has no barriers. It doesn't matter what colour, religion, or sex one has; everyone should have equal opportunity. If they don't, please explain why they don't.

Ms. Joan Grant-Cummings: That could take us the rest of the day, actually.

I think first of all we're presuming something. We're presuming equality. Right now, in terms of the global market, economists and our government and other politicians have agreed with those who lead in the global market that markets will right things and that markets don't see gender, markets don't see race, etc. I think that has been proven to be false.

Mr. Jim Jones: I'm talking more about moving into the economy where you use your brains and—

Ms. Joan Grant-Cummings: Yes—and let me tell you women have no lack of brains.

Mr. Jim Jones: That's right.

Ms. Joan Grant-Cummings: What we have are barriers to equality.

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I think what we're trying to say is that the construction of this new economy is not being done with a keen gender analysis and a gender mapping of the impact of this new economy on women. In terms of equality architects, where are we in developing this global economy? That's what we're saying, and that's why we feel—

Mr. Jim Jones: Let's just say the “intelligent economy”.

Ms. Joan Grant-Cummings: No, we can't presume that equality is there. We cannot presume that is what the problem is. That is why globally—and not only in Canada—we are seeing the increase in poverty, we're seeing women's pay go down, we're seeing the increase in trafficking of women and girls, etc.

Free trade was supposed to mean women could stay in their countries and get the dividends from this. Why has there been an increase in migration of women seeking economic security in other countries? I think those are the kinds of discussions we want and need to have with the Prime Minister, the Minister of Finance and Lloyd Axworthy, because we believe there are elements being left out that actually make this intelligent economy already biased against women.

The Chairman: We have two more individuals who want to jump into this: Ms. Rose, followed by Ms. Phillips.

[Translation]

Ms. Ruth Rose (Economist, Fédération des femmes du Québec): A few years ago, when I started to become active in the feminist movement, we were asked the same questions. It was true that women often had less education than men.

Today, women form the majority in faculties of medicine, law and administration. They outnumber men in obtaining undergraduate degrees, and soon this will be true for the master's and doctorate levels as well. Women have worked hard to get more education.

In Quebec, the Department of Education carried out a study. It found that two years after leaving university, women already earned 10% less than men in the same occupation, with the same diploma and the same amount of experience. And this is at the beginning of their career. There is still discrimination against women at the highest levels.

I agree that we are entering a new technological economy, but we must remember that we still need social workers, nurses, people in traditional lines of work.

This is one of the most important aspects in our quality of life. This is where the majority of women were concentrated in the past, and this is where they are still victims of wage discrimination.

These are nonetheless areas that require training and intelligence. Just because we want to open up new fields, we must not forget to maintain these areas that are essential to our quality of life and that have always been underpaid. That is the claim being made.

[English]

Ms. Lisa Philipps: You're absolutely right, of course. There is no reason that women shouldn't be able to participate equally and fully in a knowledge-based economy. Many of us have grown up with assurances from our parents and our teachers that this is a time when we are entering a truly merit-based society, and that women can do whatever they're qualified to do. But let's just talk about one of the major barriers to actually participating in that new economy, and that's the lack of affordable, safe child care.

It's striking to me that we haven't discussed child care very much in these presentations. Frankly, I think women's groups have become weary of coming to this government to ask for a national child care program. We've become skeptical that we're going to see any substantial movement in that regard. I would argue that it remains the single most significant barrier to women's participation in paid labour, in higher education, and so forth. It simply is not possible to go out and partake of the new opportunities in today's economy if one is also carrying out responsibilities for unpaid caregiving and there aren't options out there for ensuring that your children are cared for. Until that's addressed, it's just not realistic to expect that women—whatever their brains may be—are going to be able to partake equally.

The Chairman: Thank you.

Mr. Assad.

[Translation]

Mr. Mark Assad (Gatineau, Lib.): I listened to the witnesses from the Fédération des femmes du Québec and I had a discussion with Ms. Marais. I would have a question for her. During the consultations in the fall of 1994, your federation presented a brief, I believe.

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Ms. Françoise David: On employment insurance reform.

Mr. Mark Assad: Yes, and I remember that you entitled it "Projet de société" (blueprint for a society), I think.

Ms. Ruth Rose: I have a copy of it here.

Mr. Mark Assad: You even have a copy? The question I wanted to ask you is this. You gave a very clear presentation to the people who wanted to know what sort of work you do and how you defend women's rights. Like you, Ms. David, I say that the more numerous you are, the better you will be able to defend the interests of women and fight the inequities in our society for women who work and those who stay at home to raise their children.

I was saying to Ms. Marais that in my riding office, I had seen many cases of women who had been business partners with their husbands. When it came time to receive employment insurance benefits, the problems started. You say that 99% of those who appeal win.

Ms. Ruth Rose: Yes. Where we are.

Mr. Mark Assad: I find these women extraordinary. Here in the committee, we could certainly make a recommendation. I think that this shortcoming could be corrected with the federation. I do not think we need special legislation to take into account the reality of things.

Ms. Françoise David: In fact, what is a bit unbelievable is that the Act enables women who work with their husbands or for the family business to contribute. They pay employment insurance premiums for years. It is totally illogical that when they lose that job they are refused benefits. That is totally inconsistent. There is an aberration in the application of the Act.

You are right. In fact, Ms. Marais's association has been fighting this issue for years. She has to be given credit for that. I think the Canadian government could resolve the matter very easily.

Mr. Mark Assad: Have all the changes that have been made to social programs across the country resulted in a setback in that women who enter the workforce have more trouble obtaining assistance?

Ms. Françoise David: The answer is yes, and I think that we cannot say it enough. Each time the federal government reduces transfer payments to the provinces, there is obviously a ripple effect. So the provinces have been forced to make cuts in health, education, social assistance, income security and social services, and everyone is affected. Of course, women are not the only ones to be affected, but we are here this morning to talk about them. Other people will be able to tell you about other problems. But it is clear that this affects women.

Women are at the heart of all families' lives. If a child has trouble at school and because of cuts there are almost no more support services for teaching staff—there is a shortage of psychologists, social workers, teachers and monitors in the schools—the troubled child will face more serious difficulties like becoming a drop-out, or a delinquent, etc. This is a direct result of cuts that started at the federal level and that resulted in cuts at the provincial level that were felt in the field.

The same is true in health: there were cuts, cuts and more cuts. So waiting lists are getting longer and that creates a system were women are again penalized. Equality has not been achieved in families. Women quickly take in people who are released from the hospital, they take care of them. They look after elderly parents while continuing of course to look after the children. They look after the extended family, and it is an enormous burden for them. What happens? Some women can no longer cope and decide to work part-time, to reduce the number of hours they spend at work each week.

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That has another consequence: less buying power. Women don't accumulate as much in their pension plans. If they apply for employment insurance, their benefits are lower. That is how we end up with a disproportionate number of women who work part-time and who did not make that choice just for the fun of it. And that is without taking into account that these days many businesses offer only part-time positions. That is a whole other ball game. As for cuts to the social safety net, I could write a thesis on that.

Yes, it affects women, their families and their children. I am convinced that the same is true throughout Canada. In Quebec, women and children on social assistance are currently getting poorer and poorer. Why? Because of all kinds of cuts that have been made to income security, cuts that are for the most part due to reduced transfer payments to the provinces.

Yes, women are bearing the brunt of those cuts. I will give you one figure. In Quebec, three quarters of single parent mothers with children under the age of six live on social assistance. They have been subjected to several cuts over the past two years. Obviously, we are also asking the Quebec government to increase benefits, but we are here today to ask you to stop cutting; also, now that the deficit has almost been eliminated and that this has been done for the most part on the backs of the unemployed and the poor, we are asking you to return to the poor and the unemployed what they are entitled to. Stop making them poorer. Try to help these people out of poverty, because the situation is unbearable.

I will conclude by saying that a good way to help these people, the men and women living in poverty, in particular the women who are victims of a lot of discrimination, is by supporting our groups so that they can come back and reiterate this next year and in subsequent years. Two dollars for each Canadian woman is not a lot, is it?

The Chairman: Thank you, Ms. David.

[English]

Mr. Pillitteri.

Mr. Gary Pillitteri (Niagara Falls, Lib.): Thank you, Mr. Chairman.

For your information, I run a family business, and as I say, it's not always that the women are underpaid and so on in the family business. It is my daughters who set the standards of pay, so I know they're equal or even possibly higher. I just want to throw it on the table to say that it's not the case in all family-run businesses that the women are being underpaid. In my case they establish the wages and, as a matter of fact, I think they even get more money.

Let me ask a question of Ms. Phillips. You say in your presentation that there is a need for child care. You also said this government should re-establish the transfer payments at least to the 1995 level, with no tax cuts, and should index the child benefits and the GST.

Specifically, since the provincial government of Mr. Harris came in in Ontario and cut 20% across the board in CAP there, in social assistance, he cared to finance the deficit rather than putting money in education and other things. I recall also that there was no way he wanted to be any part of the child care program. As a matter of fact, there were some cuts there, too. If we were to restore things back to 1995 levels, how could you be assured that this money would go toward education, toward social assistance, and even toward indexation? How can we be assured that those moneys will be going specifically to the lower-income individuals and to women?

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Ms. Lisa Philipps: I could start a response, and Joan may have something as well.

There's clearly a need for the federal government to reassert itself in the area of standards for social programs. One of the great tragedies of the abolition of the Canada assistance plan was the government's decision no longer to be involved in setting and enforcing standards for decent social programs.

Another serious tragedy was the loss of funding designated for those programs. I think when the federal government puts money on the table and it's money that's specifically for social assistance, child care, or whatever, few provinces would say, well, no, we don't want that money. Few provinces or territories would say, we want control over our spending so greatly we won't take federal money.

For federal leverage over the nature and quality of services to be restored, funding must be restored. Those two go hand in hand. One of the recommendations many people are starting to put forward is that we need new legislation, a Canada social security act, that will set out national standards for social programs, standards the federal government will have a direct role in enforcing.

Mr. Gary Pillitteri: I want to clarify something. There were no national standards before. Each province had its own standard within CAP.

Ms. Lisa Philipps: Let me just point out that in the Canada Assistance Plan Act there were a number of conditions for federal funding and federal funding could be withdrawn if those conditions were not met. They included that everyone is entitled to social assistance on the basis of need alone, regardless of the reason for the need. They included a guaranteed right of appeal when social assistance is denied. They included that provinces must take into account the minimum requirements of living in setting their welfare rates. The abolition of those standards has directly allowed provinces to scale back social assistance to really inhuman levels.

Ms. Joan Grant-Cummings: I would add that for women across the country what is very chilling is the fact that the federal government seems to be writing itself out of history. As I think Jim Peterson, the past chair, said last year, no money, no clout. That is what is happening with the provinces.

About using the provinces as the stumbling block for why we don't have a national child care program, etc., we can imagine that if the federal government had taken that position with medicare we would not have this health system to boast about—and we're about to lose it if we don't wake up. I don't think the provinces have anything to do with the federal government exerting some leadership and responsibility for the people of Canada right now.

The Chairman: Madame Rose.

Ms. Ruth Rose: I'm an economist. I've worked in this area for a number of years. I think it is quite clear that all the provinces have sufficient pressure from public opinion that if the federal government put that money back in, the population would make very sure it went back into the social programs, where everybody is hurting, and particularly education and health.

As Lisa Philipps pointed out, although each province did set its own scales for social assistance, until the federal government began making signs that it was going to abolish the Canada assistance plan they all provided minimum levels of income. They were required to. In other words, the basis on which the Canada assistance plan was set up in 1967 was that people were entitled to receive amounts necessary to ensure basic survival. That is no longer true in many provinces. Every time we think they have hit the bottom of the barrel, they find some new way to cut.

On the child care issue, I'm a member of the Child Care Visions technical advisory committee, so I followed very closely the negotiations when Mr. Martin announced he would put another $720 million back into child care. The problem was that first he cuts the amount that is already going into child care through the Canada assistance plan. Then he goes to the provinces and says, I will give you for three years, with no guarantee of an increase afterwards, some more money for child care if you put in new money—whereas the provinces are all scrambling to make up the money the federal government has just withdrawn. I think that was an example of a very hypocritical move by the federal government, to look as if they were finally going to do something about child care.

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I was also on the Katie Cooke child care task force back in 1984. There we were promised a new child care plan, and we didn't get a single penny out of it.

Mr. Martin promised the money and that money was never spent. You can't blame it on the provinces, because the provinces were trying to make up the money that the federal government had already taken away. If the federal government really wants to spend money on child care, the provinces will take it if it isn't tied in with so many strings.

The Chairman: Thank you very much.

It has been a very interesting round table. I want to thank you because you bring to the committee a perspective that I think is very important for us to have as we write the report and also attempt to give wise recommendations to the Minister of Finance for the pre-budget hearings.

On behalf of the committee, once again, thank you.

The meeting is adjourned.