FINA Committee Meeting

STANDING COMMITTEE ON FINANCE

COMITÉ PERMANENT DES FINANCES

EVIDENCE

[Recorded by Electronic Apparatus]

Thursday, November 4, 1999

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[English]

The Chair (Mr. Maurizio Bevilacqua (Vaughan—King—Aurora, Lib.)): I'd like to call the meeting to order.

As everyone knows, today we are here to hear witnesses on the pre-budget consultation process.

It's our pleasure to have with us representatives from the Canadian Association of University Teachers: Mr. David Robinson, director of public policy; Mr. James Turk; and Mr. Bill Graham.

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From the Canadian Co-operative Association, we have Mr. Bill Turner, president, and Lynne Toupin, chief executive director.

From the Assembly of First Nations, we have Chief Phil Fontaine, national chief, Chief Clarence—or Manny—Jules, from Kamloops First Nation, and Mr. Jack London, legal counsel.

You've all been here before, so you know how this committee operates. You have approximately seven to ten minutes to make your introductory remarks. Thereafter, we will proceed to questions and answers.

We will begin with the Canadian Association of University Teachers. Mr. Bill Graham, welcome.

Mr. Bill Graham (President, Canadian Association of University Teachers): Good afternoon.

The Canadian Association of University Teachers represents about 30,000 university teachers and academic librarians in every province across Canada. Our position here and our advice to you is to repair the damage being done to the social programs in Canada and to, especially in our case, the post-secondary education sector.

The federal government has cut the funding for these programs in the name of deficit reduction for a number of years and has shifted the burden onto low- and middle-income families. We have reached in the post-secondary education sector a crisis of core funding. That is, much of the funding that has come toward post-secondary education in the past few years, and what seems to be headed our way in the immediate future, is targeted funding rather than the funding that is going to relieve the burden on families and students and that is going to result in high-quality programs in post-secondary education as well as meeting the needs of the people who work and research at our Canadian universities.

The situation with regard to transfer payments has been such that we are at the lowest level of investment in post-secondary education in more than 30 years. Federal cash transfers to post-secondary education, when measured in constant dollars, have fallen by 44% since 1992, from just under $3 billion to just over $1.5 billion.

This, of course, has resulted in increasing tuition fees for students. Tuition fees have risen about 126% over the past nine years such that it is now bringing the problem of accessibility into the public press. Students are facing now an average debt upon graduation from our universities of about $25,000, which means that students from multiple families or from lower-income families are increasingly going to be unable to participate in post-secondary education.

In addition to that, the faculty-student teaching ratio has been increasing because our universities have been cutting back on the number of university teachers in order to face their budget difficulties. We have lost about 10% of faculty in the last ten years. Our position with regard to compensation for not only faculty but also academic librarians and support staff is very uncompetitive, and growingly uncompetitive, in relation to our neighbours south of the border. This poses a serious problem for us in terms of hiring and retaining the very best people we possibly can to support our teaching and research programs.

In addition to that, the academic libraries in Canada have been slipping, according to the studies that have been done by the Canadian Association of Research Libraries and the Association of Research Libraries in North America.

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Only one academic library in Canada, the University of Toronto's, ranks among the top research libraries. All the rest of the universities, including such major research universities as UBC and McGill and others, have slipped very badly in the ranking.

All of this goes to show that the core funding for post-secondary education, which also supports not only quality programs for students but also could address some of the difficulties with either tuition or uncompetitive compensation levels, expresses itself very badly in terms of infrastructure support at our universities.

So we are here to suggest, and it's been the position of the Canadian Association of University Teachers, that the federal government should repair the damage that has been done to our post-secondary education services in Canada, to our publicly funded institutions, by creating a post-secondary education fund, a fund that is separable from the CHST.

The CHST is not a good vehicle for funding post-secondary education, as I think has been shown since the introduction of the CHST. We therefore propose a stand-alone fund for post-secondary education, governed by a post-secondary education act analogous to the Canada Health Act.

This act would set standards for post-secondary education and ensure federal and provincial cooperation, which would provide access for students, public accountability for the funds transferred by the federal government to the provinces, and support our research needs in both basic and applied research.

We also believe the government should set up an arm's-length committee to report to Parliament on the status of post-secondary education on a regular basis.

Those, distinguished members, are our proposals.

I would just add that in terms of the fund itself, our proposal is that the fund should be established and maintained at 0.5% of the gross domestic product. In fact, there have been times when funding for post-secondary education was higher than that, but that was the level at which it was around the end of the 1970s and beginning of the 1980s. We propose that the government should go back to those levels and maintain them.

If you'd like to calculate it, that would represent an investment of about $2.7 billion in the coming year.

Thank you very much.

The Chair: Thank you very much, Mr. Graham.

We'll now hear from the Canadian Co-operative Association. Mr. Turner, please proceed.

Mr. Bill Turner (President, Canadian Co-operative Association): Good afternoon, and thank you.

Mr. Chairman, honourable members of Parliament, members of the House standing committee, fellow witnesses, we're pleased to participate in this pre-budget round table. Lynne Toupin and I will be sharing this brief presentation and then the round-table discussion.

I'll tell you a little bit about who I am and where I come from. I live and work near Regina, Saskatchewan, where I am a farmer, and have been a farmer for the last 30 years of my life. In today's environment, I don't know, you might consider that to be good news or bad news. At any rate, we're part of a small rural community about one hour's drive away from Regina.

I've been a member of and an active participant in the cooperative movement all my life. I've simply seen how cooperative enterprise in our small communities has made a huge difference to the quality of life for people in those communities.

I'm past president of Credit Union Central of Saskatchewan; past vice-chairman of the Co-operative Trust Company of Canada; and an active member of both my local credit union, the Saskatchewan Wheat Pool, and my local retail co-operative.

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Before sharing with you our thoughts on the budgetary process, I would like to provide a little background on the Canadian Co-operative Association and the co-operative sector in Canada.

I understand you have all received copies of our pre-budget submission, so I will be brief. In addition, we've brought some information packages for you that will give further details of our organization and the co-operative sector.

CCA is the national trade association for the English-speaking co-operatives in Canada as well as the credit union sector in that part of Canada. We bring together co-operative organizations from across the country. Our members are mostly what we define as second tier, or federated kinds of co-operative structures that represent several primary co-operatives at the local community level. These organizations operate at the regional and national level and some of them operate internationally. They represent a diversity of sectors, including financial services and insurance services; agriculture and agrifood; wholesale and retail; and the service sector, which includes housing, health care, child care and worker co-operatives, to mention a few.

We do indeed have a breadth of activity from coast to coast to coast in this country. We work very closely with our francophone counterpart, which represents the co-operative sector in the French-speaking part of Canada, on matters of mutual interest. Taken together, our two sectors include over 10,000 co-operatives representing 15 million memberships, employing 150,000 Canadians and 70,000 volunteers who serve on various committees and boards of directors to bring governance and direction to our various organizations. Our combined assets are somewhere in the neighbourhood of $170 billion.

Now I'm going to ask our CEO, Lynne Toupin, to make a few more comments before I continue.

Ms. Lynne Toupin (Chief Executive Director, Canadian Co-operative Association): Thank you, Bill.

Essentially, we want to highlight some of the key points that are further detailed in our September 10 submission to the committee. It's important to note our submission reflects CCA member feedback to our annual pre-budget questionnaire as well as public policy priorities that were clearly identified at the 1999 annual general meeting that took place in June.

With respect to tax reductions, our members believe the finance minister should adopt a phased approach, balancing the needs for cuts to personal income taxes with the requirement for strategic investments. Basically we approve of the government's 50-50 split. With the achievement of growing surpluses, the millennium budget must include a debt reduction plan with specific annual targets. We urge your committee to recommend that the 2000 budget feature a clear strategy and timetable in terms of both tax reduction and tax reform. As noted in last year's appearance, we also urge the government to reduce EI premiums.

The federal government should also re-examine the CHST in collaboration with the Council of Ministers of Education to ensure that Canada's strategy on post-secondary education adequately addresses access and quality issues.

In addition, we believe the federal government should amend its tax policies to allow all students with post-secondary loans from financial institutions to qualify for tax credit on the interest paid on these loans. Currently this tax credit is only eligible for those under the Canada student loans program.

As per our submission, as health and home care needs are being analysed and researched by federal authorities and agencies, CCA urges thoughtful consideration of the merits of the co-operative health care and home care models as a cost-effective, citizen-centred approach.

Mr. Bill Turner: One of the best examples of our success in social infrastructure building is our 25-year partnership with the Canadian International Development Agency. Matching CIDA dollars with financial and in-kind contributions from our members and our co-operative organizations and credit unions, we are active in more than 40 projects around the world in 26 different countries.

We are indeed pleased that the throne speech signalled the government's intention to increase its official development assistance commitments, given that the spending on ODA has dropped over the last few years.

Just let me say I just returned from two weeks in China, where I was able to observe some of the micro-finance projects we've been involved in that provide small loans to women, in particular, to start their own small businesses. I was also able to talk to some of the large co-operative organizations in China about trade links between our co-operative organizations here in Canada and those in China.

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Our financial services co-operatives are also entering the new millennium, and indeed need to have changes to their legislative and regulatory frameworks to make them competitive and relevant in the new millennium. They are working in a larger marketplace, and are dealing with increasing competition. They need new legislation and a new approach in order to continue to serve their members and their communities.

I urge the federal government to enact this legislation, and to listen closely to our member organizations, the credit union centrals, whom you will hear from during your deliberations, to take into account what they have to say and to make the necessary changes to legislation.

I want to make a few comments about the current farm income debate. I mentioned that is where I come from. A number of our members are agricultural members, and of course their members are farmers themselves. Both Agricore and Saskatchewan Wheat Pool will be appearing before you, I believe on November 22 and November 24. I urge you to listen to their stories and to the proposals they have to deal with the problem we face. We fully endorse their positions. We also want to urge the federal government to take the initiative to look for a long-term solution to agriculture and the agricultural problems that the present farm income crisis is only a symptom of.

We have in our association four principles on which we think that long-term program should be based: we think we should target those that are in greatest need; there should be some permanency to the program so that everyone can count on it in the future; it should be trade-neutral; we should not fund it from existing safety net programs.

We support the agriculture minister's initial negotiating position on the World Trade Organization round two. I just want to underscore the importance of the successful outcome of this round of talks at the WTO for Canadian agricultural co-operatives, for other co-operatives that are affected by the economic vitality of the agricultural sector, and of course for our farmer members.

Ms. Lynne Toupin: The co-operative sector has requested federal funding for a national co-operative development partnership program. We believe this proposal resonates with the throne speech emphasis on building and rebuilding communities across Canada. Designed as a community capacity-building initiative, the co-operative development proposal is formulated to respond to emerging and ongoing social and economic needs, such as employment and training, health and home care, housing, and value-added agriculture, particularly through the development of new-generation co-operatives.

We also want to focus our efforts on developing communities in Canada's north, working in partnership with the aboriginal communities, and also in the inner cities. All of this connects to the social infrastructure and productivity issues that were raised in the committee's pre-budget letter. We believe a co-operative development partnership program will result in many new co-operatives, new and maintained jobs, increased government tax revenues, economic multiplier effects, and strengthened communities in rural and urban Canada. In short, it would be the kind of strategic investment that governments seek.

To conclude and summarize our position quickly, we want to see a 2000 budget that reflects a balanced and equitable approach to tax reduction debt management and strategic investments. We hope these investments and commitments will feature solutions to the farm income crisis, improvements in access to quality post-secondary education, an enabling legislative and regulatory environment for the financial co-operative sector, and a partnership with the co-operative sector for new co-operative community capacity building.

Thank you for your attention. We welcome comments, and we certainly look forward to participating in the discussion.

The Chair: Thank you very much, Ms. Toupin and Mr. Turner.

We'll now hear from the Assembly of First Nations, Chief Phil Fontaine.

Chief Phil Fontaine (National Chief, Assembly of First Nations): Thank you very much, Mr. Chair. We are very pleased this afternoon to be able to share with you our perspectives on fiscal matters and the proposals we believe will lead to a better and more secure life for first nations people.

First of all, I would like to introduce my colleagues, who have already been introduced, but to add a bit more information. Chief Clarence Manny Jules of the Shuswap of Kamloops is also co-chair of the Assembly of First Nations national table on fiscal relations, which is currently working with the federal government on establishing a new fiscal relationship with first nations. Mr. Jack London is legal counsel for our organization.

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We welcome the opportunity to participate in this committee's new approach of holding regional workshops. It will give us all an opportunity to present our views. Our interests and plans for working together to achieve first nations goals and objectives are not always well represented by others, and as a result are not well understood by the public.

First nations should be represented when changes in fiscal policy are considered and introduced. Until we are represented in the fiscal planning process, the transfer system will continue to be compromised, and appropriate national standards will not be established. Also, comparability, which is regarded as a principle of Canada's social infrastructure, will remain an unfulfilled promise.

First nations believe we share the same objectives. The objectives of first nations are to create a healthy financial climate, support an expanded sustainable economy, and achieve comparability in the programs and services that are offered to all Canadians.

In the debate and process on fiscal policy, the participation of first nations fosters stability and encourages greater economic growth. We are not the problem; we are a large part of the solution. In addressing the social and economic crises facing our communities, first nations must be involved in the process. Empowering first nations is the only viable solution to dealing with the current social and economic crises in our communities.

An analysis of first nation demographics reveals one indisputable fact: we cannot bear the cost of doing nothing. The underdevelopment in first nation communities translates to economic losses and increased social costs. This impacts all Canadians. This situation is not acceptable and has attracted attention on the world stage.

We need to close the productivity gap that currently exists between first nations and other Canadians. As the first nations population grows in relation to the rest of Canada, not only will first nations remain mired in poverty, but the resources needed to cover social costs will push federal government funding beyond what is currently required.

Recognizing first nation governments in the modern-day context must be the main objective of the Canadian government. We are proposing a multi-year plan that builds first nation governments and national institutions, and removes the current barriers to compete in the global economy. This plan also provides the foundation for first nations to compete for emerging employment opportunities.

When governments share the vision of first nations, we can make that vision a reality together. First nation economies are underdeveloped because their governments lack the necessary decision-making, and therefore lack the certainty that is necessary to attract business investment. First nations lack resources and adequate land base, physical infrastructure, and the recognized jurisdiction over land and its wealth-creating capacity. Until first nation governments can compete for business investments on a level playing field, their accountability regime will be undermined.

First nation governments should evolve within a framework of national institutions that will ensure administrative efficiencies, enhance the Canadian economic and social union, and further promote accountability. The real solution is to build first nation governments and give them a voice in the governance of this country.

First nations must share in the high standard of living all Canadians enjoy. First nations must be represented and protected by first nation institutions of government.

First nation children require the same opportunities that other Canadian children enjoy. First nations require adequate housing, health care and education to compete for jobs. First nations have distinct interests that are not accounted for in federal-provincial priority-setting exercises.

Our strategy is not a plea for special rights; we are simply asking you to recognize that the most effective strategy is to empower first nations to help themselves. Stronger first nation communities will mean a stronger Canadian economy, from which everyone will benefit.

We would like to thank the committee for the opportunity to present our views on fiscal matters. Thank you.

The Chair: Thank you very much, Chief Fontaine.

We will now proceed to the question and answer session. We will begin with Mr. Epp. It will be a ten-minute round.

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Mr. Ken Epp (Elk Island, Ref.): Thank you, Mr. Chairman.

Thank you all for coming to share your points of view on how we're doing financially in this country. I have some questions for each of you, so I'll see whether I can get through them in the time allotted to me.

First of all, with respect to the university teachers, you have a very legitimate concern about the cost of education, the ability of students to pay tuition, and so on.

I am becoming increasingly aware and concerned that the educational program of our country is increasingly being limited to those who have some sort of independent financing. We'll end up giving our students not only the gift of a $20,000 share of the federal debt to pay, but also $25,000 to $40,000 of personal debt when they graduate. I think those are both terrible heritage gifts to give to our students on graduation.

You talked about tuition fees, and I'm embarrassed, coming from Alberta, that my province has the highest rate of tuition increases. I think that's atrocious. But how should we solve this? Do you have any ideas on how it should be done? Should it be done through more direct funding to universities? Would you be open at all to having something like a student voucher system? Students would get vouchers from the federal government, which they could apply to their tuition fees, books, or whatever. How would you do that?

Mr. Bill Graham: Thank you, Mr. Epp.

Before I answer you, I want to introduce my two colleagues. David Robinson is the director of research and communications at CAUT, and Jim Turk is the executive director.

Our longstanding view is that vouchers do not solve the problems students face. What we need is core funding to the universities themselves. We've seen the portion of federal and provincial funding for post-secondary education dropping, and the portion of private funding increasing.

Unfortunately, universities are long-term businesses, not short-term businesses. It takes 20 to 25 years to mount a program in a university. If you hire a faculty member, you are hiring somebody for 30 or 35 years. You cannot mount a program unless you have a corps of people to whom you have committed substantial resources and substantial amounts of time. It's therefore very difficult for universities to play a game with how many students they are going to attract, with their vouchers in their back pockets, so to speak.

A much more rational and reasonable method of funding students is to put the money into the universities themselves and ensure, through what we called a post-secondary education act, there will be public accountability on the part of the universities to spend part of that money to reduce the debt load of students by reducing tuition fees.

We're not asking for a blank cheque to universities; we are asking for a fund that contains rules and structures, so there can be a reasonable distribution of those funds, with a substantial portion going to reduce the tuition fees of our students.

Mr. Ken Epp: Thank you. I want to rush on, because one-third of my time is gone now, and I want to get to the others as well.

It has been expressed to me, and I think it has some merit, that the voucher system would have built-in accountability, since the university that's doing a good job and producing a really good graduate will attract more students. The good old law of supply and demand would sort of give an accountability. That also has some down sides, and I've heard those arguments. Because I'm not going to give you a chance to reply, I'd better stop on that topic.

I want to go now to the co-operators. I guess it's appropriate for me to identify myself as one of Bill's friends. We've never met, but I've been a co-op guy ever since I was this high, because my dad used to take us to the co-op store in Swift Current, where I grew up, just 150 miles down the road from where you live. My dad's now 87, and even to this day he still brags about all those years that he was on the board and on the credit union and everything. And I personally have been a credit union member for some thirty years. In fact, it's over that; I'm getting old.

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I'm just introducing myself to him. I like to do a little bit of warm fuzziness here before we get going.

I'm particularly interested in your recommendation about the EI premiums. It's an issue we've been on. It's our view that the EI fund should be an insurance program to help people between jobs, and that it's somehow being taken hostage—I suppose that's a word I could use—by the government for general revenues. When you talked about reducing EI premiums just in passing, how high is that issue in your whole priority of things? If you talk about the budget itself and the expenditures or the use of the surplus, roughly in what proportion would you suggest that we use the money for paying the debt, for cutting taxes and for what you call strategic investments?

Ms. Lynne Toupin: Again, to reiterate, we agree with the 50-50 proposal that's currently being put forward by the federal government, with 50% going to debt and deficit reduction and 50% to strategic investments. So we hold on that one.

Regarding the employment insurance issue, I'll just refer you to page 6 of our submission. This is an ongoing issue for our membership, and they would like to see reductions. They've been asking for this for some time. And the other point to consider here is a continued request to allow for the EI program to transition to an independently managed, self-financing fund that is also separate from consolidated general revenues. That has also been an ongoing position of the CCA for some time.

Mr. Ken Epp: Okay, good. Thank you. I appreciate that clear and succinct expression of those views.

Now, to the Assembly of First Nations, I appreciated your presentation. I wrote down ten points here, and I can't find a single one I would disagree with. It seems to me that you have a real vision for taking your people out of the morass in which they have found themselves over the last hundred years, even though I wasn't here, since I'm a first-generation Canadian. I personally haven't been involved, nor have my forebears, because we're immigrants into this country. I'm very interested in the approach you're taking, however, and I really do wish you well in forging a new future for your people.

I suppose the question I have has more to do with you than it does with the financial budget. These are pre-budget hearings, but I want to know what your vision is for your people with respect to collective rights versus individual rights. I know a number of first nations people, some of them in my riding, who have done very well, but they've done so only after they broke out of the reserve system. I think that system has held the first nations people down for a long time. Do you have a vision for your individual members being able to own property and do the same as the rest of Canadians? I've never heard it expressed from you before.

Chief Phil Fontaine: The position the Assembly of First Nations takes is something that is consistent with the position taken by first nations clear across the country. Our relationship is with the land, and that speaks to the facts that first nations people were here first, and that there is a recognition on the part of governments that this fact has to be addressed. In various forms, that has been recognized and accepted, particularly when we speak about treaties and the treaty relationship between first nations and the federal crown.

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There is no doubt in our minds that land is a collective right, and the exercise of our government recognizes this fact. The first nations that exist as distinct entities would never deviate from this position. It's a right that's recognized by the Constitution, and that is something we hold firmly.

Mr. Ken Epp: If I may interrupt you, I've asked you a question that you have not really answered. I'm asking you whether or not your long-term vision is to give individual people the right to own their own property. I think that's critical. At this stage, I haven't heard that from you.

Chief Phil Fontaine: I'm going to call on Chief Jules to describe how his community operates.

Chief Clarence (Manny) Jules (Kamloops First Nation, Assembly of First Nations): The community of which I am the chief does have individual ownership. Unfortunately, it's under the Indian Act. So there is a method under the existing legislative regime for individual ownership. Now, whether or not that would ultimately transfer into something other than a certificate of possession ownership and something equivalent to indefeasible title would remain to be seen, based on the discussions the national chief talked about in terms of where we head in the future, based on the individual treaty discussions, as in British Columbia, and based on recent court cases about how they would be applied, and particularly Marshall. It's one of the challenges first nations definitely have to grapple with.

As an example, we have a labour code in our community, yet we have individuals who have chosen to join the British Columbia Government Employees' Union of their own initiative. You therefore have a conflict immediately between the collective jurisdictional operation of the community and how that would interface with the individual. As I mentioned earlier, this type of thing is one of the greatest challenges that we as first nations are going to face in this upcoming new millennium.

At the same time, as the national chief very clearly pointed out, the foundation we're building on—first nation governments—is a collective interest, a collective ownership, if you will. How that would transpire across the country would be through individual first nations making up their minds about how they would approach it. Even under the existing legislative regime, you have differences of approach right across the country. As an example, you have Westbank that's pretty much all individually locatee owned, but you have other communities right across the country that have traditional forms of ownership.

One of the bases of this has to be the development of a first nations land registry system, so that we can take all of those into account. That again goes to the point the national chief was making about creating national institutions that would help facilitate, on the ground and in a very real way, what self-government is.

Mr. Ken Epp: My time is up, Mr. Chairman. I wish I could have more time, but maybe I'll get to come back if it goes around again.

The Chair: Thank you, Mr. Epp.

[Translation]

Mr. Loubier.

Mr. Yvan Loubier (Saint-Hyacinthe—Bagot, BQ): Yes. Mr. Chairman, I have three questions. The first one is for the Canadian Association of University Teachers.

You said that the damage caused to the education sector had to be repaired as early as this year. In your opinion, what is the monetary prejudice that was caused by government measures during the last four years?

Second, you talk about a distinct fund for post-secondary education. At what level should this transfer fund for higher education be located, initially?

[English]

Mr. David Robinson (Director of Public Policy, Canadian Association of University Teachers): Thank you very much for that.

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In terms of the amount of money we have proposed, we have looked at the existing transfer arrangement and have tried to develop something that would be a bit simpler than previous transfers. We simply said that in looking at where transfers for post-secondary education were historically, one-half of one percent of gross domestic product would be an appropriate level to begin the process of repairing the damage. By pegging it to GDP, you then don't have to worry about how the transfer falls out each year. It automatically rises as long as there is growth in the economy. We think one-half of one percent of GDP is a relatively modest proposal in terms of the significant benefits that post-secondary education provides.

In terms of the amount of money that would actually be required, we estimated based on the previous ways in which the funds to the provinces were broken down. The current level of federal cash transfers to the province is about 0.2% of GDP, so we'd be looking for an increase of about 0.3% that could be done in one shot. If not, it could be phased in.

[Translation]

Mr. Yvan Loubier: Ms. Toupin, you mentioned the obligation we have to reform taxation. I'd like you to tell me what kind of taxation reform you'd like to see for individuals and businesses; I imagine you're talking about both. You mentioned this in your presentation.

Ms. Lynne Toupin: We haven't yet chosen the priorities, but for our members the matter of a decrease in taxes for individuals comes first.

On the other hand, the most important principle to remember is the balance there must be no matter what the process of reform or investment. I made a mistake earlier. We recommend that 50% of the surplus be used to decrease the debt and taxes and that the other 50% be reinvested in programs.

We also shared our concern, as did our colleagues, concerning the post-secondary education system. I know that our members are very concerned as to the burden the students have to bear at this point. They're also worried about the fact that there is less and less access to education. High tuition fees limit access to higher education.

Mr. Yvan Loubier: Thank you.

Mr. Fontaine, I'm somewhat surprised that my Reform colleague didn't ask your opinion on Bill C- 222 which was tabled for first reading last October 15 by a Reform MP to set up a First Nations' ombudsman position whose foremost mission would be to investigate irregularities, bad management, allegations of inappropriate financial management and electoral irregularities.

I'd like you tell us what you think about this bill. As his party introduced this bill, my Reform colleague could have put questions to you on that, but I'm putting the question to you: what do you think of that kind of bill?

[English]

Chief Phil Fontaine: Let me state for the record that first nations and first nations governments embrace important principles having to do with accountability and transparency. I would argue that first nations are probably the most accountable group in society. We have to account for every single penny we receive.

In terms of our governments demonstrating accountability to their people, the problem that exists with this particular matter is that the first point of reference is of course the government. That's the nature of the relationship. It's something that doesn't sit well with first nations, and for that reason we entered into an arrangement with certified general accountants to support us in developing our own systems of accountability. It's a two-year initiative, and we will be in a position to report very soon to the assembly of chiefs. Hopefully we will be in a position to establish our own standards so that our people at the local level will feel and believe and accept that their governments are delivering good government to them.

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The other part of this is that we have looked at the issue of people feeling aggrieved for various reasons. Many people feel their governments are not being responsive to them. So we've looked around at how best our governments can deal with this, and we've talked about two possibilities.

One, we could establish our own office of the auditor general so that we can put into effect the systems that will be developed through this joint initiative with the certified general accountants. As well, we've talked about establishing an office of the ombudsman. In fact this is something we proposed some time ago, and it's under consideration now.

Once we're in a position to consider in some detail the proposition that will come from the joint initiative, we'll be in a position to deal with this issue.

Chief Clarence Jules: On the issue of accountability, I want to cite the example of the recent social union between the federal government and the provincial governments. In this pact, the federal government transferred to the provincial governments some $60 million and $70 million, particularly to Saskatchewan and Manitoba. Yet they're using first nations numbers to reach those thresholds. They're also using the poverty levels first nations people are experiencing within those first nations communities in those two particular provinces.

So part of the dilemma we have in trying to determine who is accountable for what is determining with some finality the jurisdictional questions that give the whole underpinnings of national institutions some jurisdiction. It's only when there's a new fiscal relationship that involves first nations that we ultimately will address who is accountable and to what.

On the particular question about the recently introduced legislation, one of the things I find really ironic in all pieces of legislation that involve first nations is that we weren't involved in the process. It's an issue we all have to address. We're here saying let's work together on these. So we're prepared to work on this issue of accountability, but let's not use one particular party approach; let's involve the people who have to implement this on the ground, and that's us.

[Translation]

Mr. Yvan Loubier: Thank you.

[English]

The Chair: Thank you, Mr. Loubier.

We'll go to Mr. Szabo, followed by Ms. Bennett and then Ms. Leung.

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

I want to ask Mr. Graham a couple of questions about the student situation.

First of all, Mr. Graham, your comments related to cash transfers from the federal government. You are aware of tax points?

Mr. Bill Graham: Yes, we are.

Mr. Paul Szabo: Okay. In fact the way the system works is that as the economy grows, the amount of revenues a province collects increases, and the cash is expected to go down.

Mr. Bill Graham: David, do you want to answer that one?

Mr. David Robinson: Sure, I'll try.

Mr. Bill Graham: I'll let my colleague, David Robinson, answer this one.

• 1630

Mr. David Robinson: In terms of the tax point transfers, you know that was a fundamental component of the old EPF formula. With the CHST, we have a cash floor that's built in, but since the cash floor isn't growing, with the exception of the one-time infusion for health care, that results in a real decline each year, with the effects of inflation.

The tax points were transferred over to the provinces with in fact no strings attached. Money went into general revenues, but there was no accountability over how it was going to be spent.

Mr. Paul Szabo: You're quite right. That's a point I was hoping to get out. The provinces get transfers for a number of reasons under CHST, but exactly where they spend that is at their discretion. So there's that problem to deal with.

I raise it only because in your charts here, you're showing cash transfers to GDP, which really doesn't take the whole economics in. I think it would help your case enormously—enormously—to look at the total economic flows available for post-secondary in terms of the formula calculation and in fact what is transferred. If that were explained much better, I think your case would be enormously stronger. So I raise that point with you. If you can do a little work, I think the committee will accept a subsequent submission. It's well worth your consideration.

I'm only trying to help out, because I've had one child go through university, I have one in university, and one more is to come yet. I know what it costs. The average debt of a student is $25,000; we hear that an awful lot. What percentage of all students have any debt whatsoever?

Mr. James Turk (Executive Director, Canadian Association of University Teachers): I don't think we have the answer to that question. We know a significant percentage do have debts.

Mr. Paul Szabo: Yes, it's 25%.

Mr. James Turk: Who have any debt whatsoever?

Mr. Paul Szabo: Any debt whatsoever.

Mr. James Turk: That's certainly not the figure I've seen.

Mr. Paul Szabo: Most families don't qualify for student loans in any event. That's something you may want to clarify.

I don't want to debate this with you, but I will tell you we went through this in some detail in the last round. Rather than you trying to come up with the details, let me tell you what I think the numbers are. Of all students, 25% have debt. Of those, only 10% do not repay their loans on time. That means of all the students who ever had any debt, only 2.5% have problems.

Subsequent to a lot of this evolving, there have been some very significant changes, such as interest relief and interest deductibility, and in fact even an interest write-off. This means a tremendous investment has been made for those who have difficulty. As well, the repayment terms are geared to income.

These are all things that have happened. If they were on the table, and if we can get the numbers updated from you, and even if you tell the story with this detail, which maybe isn't as powerful as you'd like it to be, but putting it in the context of getting all the facts on the table, the argument as a whole still is very sound in terms of making a legitimate request for additional attention.

Your numbers also do not take into account that there is an education amount of tuition deductions of the non-refundable credits, which parents can take from their students. There are other offsetting flows. It's worth about $800 to $1,000 a year in cash in your pocket, which would affect the effective economic burden on any family.

I raise these with you only because I really do believe you have a good case, but by ignoring some of the facts that aren't as helpful to your case, you tend to diminish it generally.

Mr. James Turk: Mr. Szabo, you paint a particularly rosy picture of the situation of students, which is certainly not our experience as we talk with our colleagues and with the Canadian Federation of Students as to what's actually happening out there. The only thing in your rosy list that you didn't mention is your government's own program, the Canada Millennium Scholarship Endowment Fund, which is also portrayed as a significant benefit, but in fact will only be available to 7% of university and college students.

Mr. Paul Szabo: I can tell you my wish would be that the millennium scholarship fund would be available to no university students. I would hope it would be available to students who complete high school and can't otherwise afford to go to university. I would say 100% should go to those who need it, just to get there.

• 1635

Mr. James Turk: My point, however, is that what's left out of your suggestions is the differential impact of dealing with increasing tuition levels, which is that there's a differential of class-based impact on the willingness to undertake debt. Especially for low-income families, the prospect of significant debt.... They don't appear in the statistics—they just opt out of incurring that, because they have so little prospect and so little life experience of being able to pay back debts of that sort.

Mr. Paul Szabo: I agree with you. It would be a very powerful part of your argument, but you didn't present it. I'm glad you raised it.

I hope you will take up the invitation to maybe make a supplementary submission to the committee to make sure that.... I think you would probably have access to the numbers. Please help us to get the facts on the table, and I believe it will help your case.

Mr. James Turk: There's another thing. We're talking almost exclusively about the burden on students, but part of what Professor Graham also presented is what the impact of budget cuts has been on the actual infrastructure of the university, the ability to hire and maintain faculty. We really do have a system that's bordering on being in crisis at the very time that we're going to be losing, over the next decade, 40% of the faculty in this country due to retirement.

Our salary levels are significantly lower than in the United States because of a significant reinvestment in post-secondary education in the United States, in contradistinction to what's happening in Canada. We're on the edge of a very difficult situation, which this government can, I think, take some action to prevent from happening. There's little indication that we're going to be able to maintain the system we have if we don't take that action.

Mr. Paul Szabo: I hear you.

I have one last information request. Could you advise us, if you don't know at this point, what percentage of post-secondary education cost is covered by tuition and what is actually covered by the taxpayers of Canada?

The Chair: Thank you.

Ms. Leung.

Ms. Sophia Leung (Vancouver Kingsway, Lib.): Mr. Graham, I'm interested in your point concerning brain drain. You indicate that Canadians who do leave Canada, mainly concentrated in health and professions, leave not because of tax, but because of the lack of job opportunities.

As you know, the government has increased many different opportunities to improve R and D, etc. I'd like to know how we can improve these to provide professionals, health care professionals or professors, with more opportunities to remain here.

Mr. Bill Graham: Thank you very much.

I don't like the term “brain drain”, because this is one of these loaded terms for which there's no research backing it up and so forth. But certainly we do know that people leave academic life for elsewhere—partly for the private sector, partly to go to our sister country below the border—for work in university sectors, as well as in the private sector in the United States. As a matter of fact, a recent article in the United States Chronicle of Higher Education was showing certain people leaving even United States academies for the private sector.

None of the studies have shown that this has any relationship to the tax levels. These are, in fact, moves that are made by people, particularly in certain areas such as health care and engineering, or certain high-tech or biotech areas, for better job opportunities, for higher compensation perhaps. Also, however, a major factor is better research facilities.

We have the disadvantage to some extent of living next to a very powerful neighbour who has been able to fund research, laboratories, and infrastructure to a much greater degree than so far Canada has been able or willing to do. We need to make major investments in universities for infrastructure support.

It's one thing to create professorships in particular areas and fund them in terms of salary or whatever. It's another thing to set up infrastructure systems to support those particular professorships and chairs. The cost of doing so is at least 40% of the cost of maintaining a particular chair or professorship. Unfortunately, neither resources from the universities themselves nor from either the federal or provincial governments have been sufficient to do those in very good ways.

• 1640

For example, I have a colleague at my university who was attracted to the United States because they offered to set up a million-dollar laboratory for him. Salary wasn't even the big issue, and taxes certainly weren't the big issue. The big issue was his work, that he could do better quality work in a laboratory that was well funded. I think that's what we need, to establish quality work in our higher education sector.

Ms. Sophia Leung: I want to ask Chief Fontaine a question. We talk about social infrastructure. What is your first nations' priority for the different kinds of social programs, such as children, education, technology, health, and the environment? Perhaps you could just briefly mention what is your priority.

Chief Phil Fontaine: One of the things I would like to point out, first of all, is that our desire and overall objective is to establish self-sufficient communities, because we've come to understand that when we talk about self-government or self-determination, we can only establish that in a very real sense if we have self-sufficient communities. The situation first nation communities now face suggests to us that if we proceed at the current pace of development and if we continue to approach the challenges that are faced by first nations in the same way as has been done over time, we will never establish that. So the challenge really is to ensure that first nation communities develop their full potential so that we have the capability to govern ourselves in a very real way, much like others do. That's taken for granted, of course, in society generally.

Take, for example, the situation regarding infrastructure. There is a great hue and cry about the amount of money allocated to first nations by government. It's in the order of $7 billion a year. This is a figure we've taken from the Department of Finance and the Department of Indian Affairs. Once it touches down in our communities, 80% of that immediately disappears. What that tells us, of course, is that there's very poor infrastructure in our communities. We're very dependent on the outside for all of the goods and services we need in our communities.

Quite clearly, one of the biggest challenges we face is the eradication of mass poverty in our communities. When we speak about poverty, that includes so many issues, such as housing. I think what is needed now, when we talk about new housing stock and major and minor improvements to housing, is 25,000 units. We have unemployment that ranges anywhere from 40% to 90%, and too often it's at the high end. There's also the issue of poor health.

But in spite of all of those impediments, first nations have come to achieve great success in so many areas. The most significant has been in the area of education. In 1969, 30 years ago, we had approximately 80 people in post-secondary institutions. In the short space of 30 years that number has jumped to 27,000.

• 1645

Clearly, the future of first nations people is dependent on a continuation of the kind of support government is obligated to provide to first nations in a whole number of areas. Education is the example I've used here to illustrate the way first nations have been able to succeed once we were allowed to exercise control over the delivery of such a program at the community level.

The challenge we face is to ensure that first nations people are empowered to deal with all of the challenges, whether we're talking about child welfare, health, infrastructure, or unemployment. If you take just one example, Canada's economy operates at a 3% or 4% growth rate. If you were to include aboriginal people, first nations people in particular, and we were to jump that up 2%, it would take us 42 years to attain comparability. Here we are talking about fairly significant surpluses. Obviously, the biggest challenge we face is to find out how we can empower first nation communities so that they can attain their rightful place.

There isn't one particular area that takes precedence over the other. There are a whole number of areas. In our view, if you couple education with economic development opportunities so that we can establish sustainable economies in our communities, take full advantage of the potential in our communities, and focus on a local reliance, then we will be in a much better position to secure our rightful place.

Clearly, it's jobs, economic development, and sustainable economies. That should become the mantra of all of us around this table.

Ms. Sophia Leung: Thank you.

Chief Clarence Jules: Just to add a couple of comments, in the budget submission the assembly has put forward, we've talked about a two-pronged approach. The national chief is absolutely correct in saying that you can't approach one without the other. So what we've proposed is building a first nations' national economy; building institutional development; setting up national governments; settling the land claims, particularly the specific claims; and dealing with fiscal infrastructure and economic development.

Going back to Mr. Epp's point about individuals, this is where we also have to balance our approach in that we have to build the national governments, but we also have to take care of our citizens. Within that context we're talking about education, youth, culture, health care, social services, justice, housing, and human resource development. They all go to the fact that if we are to change the horrendous predicament first nations find themselves in right now, there's going to have to be a real investment in your future as well as in mine. What we have to begin to realize is that we all have to share not only in searching for the truths and the solutions but also in the responsibility to get it done.

The Chair: Thank you, Ms. Leung.

Dr. Bennett.

Ms. Carolyn Bennett (St. Paul's, Lib.): Thank you, Mr. Chair.

I would just like to follow up on Sophia's question. In your brief it's pretty clear that the exclusion of first nations has meant that many critical issues of national policy have been addressed without their input, and as a result, programs have failed to deliver the benefit to first nations. The examples you cite are a national infrastructure program, child welfare, and education.

• 1650

In the context of the social union and the framework of best practices, accountability, and transparency, and with the children's agenda coming, supposedly for all the kids, I am extraordinarily interested, if we move to the new tools of government, which are results-based management, setting outcomes, performance indicators.... The aboriginal people's report card is a huge embarrassment to this country in terms of what has happened, whether that's suicide rates or child poverty or any of these things.

How do we, in the context of the social union or in self-government, share best practices? In regard to the solutions you find in your communities, how do we share those with the rest of the country? We know that infrastructure programs—having been in the north both summers—done per capita will never ever help the north; there are just not enough people there. Yet they need the roads and the schools. We end up with this very linear-thinking way of funding things in this country, which has not been good for aboriginal people or for anybody in remote communities.

There are many examples, whether it's sentencing circles, healing circles, alternative dispute resolution, or the native peoples' sustainable environment. There are so many things you have been able to teach us. How do we share best practices, transparency, and accountability? How do we set outcomes? How do we move forward together on all of these things we all care about? Or do we have to do the self-government first?

Chief Phil Fontaine: I'll speak to this issue in general terms. Chief Jules may wish to add some specific examples of the approach that's being taken.

Ms. Carolyn Bennett: Let's take the children's agenda just as an example. Are there things being done in concert or should there be a separate bit of money just for aboriginals, hopefully including urban aboriginals? How do we move on a children's agenda for all the children of this country and make sure that the aboriginal children are looked after?

Chief Phil Fontaine: First of all, I wanted to make one point. As you know, we made a concerted and determined effort to be included in the social union framework discussions. For whatever reason, we were excluded. We felt that we had a real and significant contribution to make to those important discussions. The point here is that we have to be included in all of the discussions. We have the same needs and desires and aspirations.

I think we're doing a terrific job in terms of spending wisely. In the main, our governments deliver good government to our citizens. The big challenge here, as we have tried to point out in our submission, is that there has to be a recognition that the current way of doing business with first nations isn't working to the best advantage of first nations people and society in general.

For example, it's completely unacceptable for us.... Look at the way government allocates its resources in terms of supporting economic development for first nations. Out of Industry Canada, the annual allocation is $30 million. From the Department of Indian Affairs, it's in the order of $50 million, which is really directed to ensuring that first nations have people who can actually do the necessary coordination, planning, and organizing at the community level. So we're looking at something in the order of $80 million for economic development. Compare that with what is now being expended in terms of social development, primarily welfare. We're talking in the order of $1 billion.

What we have here is an intolerable imbalance. We will never be able to establish the kinds of economies that our communities need with that kind of investment. We have to change that. We have to ensure that there is some balance here and that first nations have an opportunity to take full advantage of all of the resources that are around many of our communities.

• 1655

So we're talking about access to resources. That's why decisions such as Marshall are of such critical importance to first nations people, as well as being of significant benefit to society in general, because what we're dealing with here is certainty. There's absolutely no wish or desire on the part of first nations people to take sole control of the lobster fishery or of gathering, as the case may be. There's never been any argument, for example, by first nations in the Atlantic about the fact that there ought to be a regulated fishery. That's something that they established very firmly early on.

But what we're talking about here is first nations government. First nations governments have to be given the full opportunity to establish their capability to regulate themselves. Where necessary, we can begin to talk about co-managing resources.

That holds true in all areas. So we are saying to government that we need to sit down and effect better arrangements. Those arrangements have to be established at the table. We have to be able to negotiate them. We can't be forced to go through the courts, as we've been forced to do too often. We all end up having the courts decide what is best for all of us. That's too often a last resort for us. Fortunately for us, recent decisions have been relatively beneficial to first nations. But as I said earlier, the benefit here is that it provides a higher degree of certainty than was the case prior to these decisions.

Chief Clarence Jules: I will just add some comments to those of the national chief, specifically on children. We all have to recognize that at one time we were all babies. We were all infants. We were all children. We were all part of a community. One of the things that happened in many of our communities is this horrendous Indian Act that allowed the Minister of Indian Affairs to go in and seize children from our communities and put them in residential schools. Now we're having to deal with the fallout from all of those issues.

The importance of providing stable environments for our collective future is absolutely important. How we begin to share our successes and, ultimately, our failures with one another is very important for the future generations.

Ms. Carolyn Bennett: When we're planning a budget, though, what is generally the same is.... Okay, everybody has heard that there might be a kids' budget, that there might be a productivity budget, that there might be.... How do we get some money out of a kids' budget or out of a productivity budget? How do we find more pockets of money to do the right thing so that it's not only the transfer that comes from the Department of Indian Affairs and Northern Development or those sorts of things? On those things where there's a cooperative theme, how could we get a recommendation in our report that would see you with some dollars in a children's budget or a productivity budget?

Chief Clarence Jules: The important thing is what the national chief said: that the Assembly of First Nations, as a national institution representing the governments of first nations in this country, has to be there. The responsibility of the parliamentarians in this particular case, in looking at the potential surpluses right now and over the next decade, but potentially on the downside because of the aging population, a dramatic reduction in terms of the productivity of all of our—

Ms. Carolyn Bennett: Suppose we wanted to push for a fetal alcohol effects fund. Say that there was some neat thing that we could get everybody to raise the flag for. Are there some other things that we could be doing to help, that would help all of the kids of Canada?

• 1700

Chief Phil Fontaine: There is a tendency now, when we talk in general terms, to have first nations interests lost in the blend.

Ms. Carolyn Bennett: Yes.

Chief Phil Fontaine: So it makes far better sense if there is a specific and dedicated allocation for first nations. And we're talking here in budgetary terms of a line item in every single area or sector that's dedicated to the interest of first nations.

Ms. Carolyn Bennett: Mr. Chair, I have a question on this great idea of having, like the Canada Health Act, an accessibility act for education, or post-secondary education. I think all of us had thought that people can raise tuitions such that all Canadian kids may not have the same accessibility. It strikes me that the Prime Minister's Office, or the federal-provincial people, might have a little trouble, in that we were going to from the top down try to impose yet another thing. So I want to know, what kind of work have you done on the provinces to actually get this through the social union process?

Mr. Bill Graham: Of course our association doesn't deal directly with the provinces. Our member affiliates, which are provincial associations, do in that case. However, it's certainly our view that the CHST is not the proper vehicle to be used for transfer. For one thing, federal politicians get no kudos for amounts of money that are poured into the CHST on a blanket basis, without assurances that the money will filter through into post-secondary education, and as to exactly where it will go into post-secondary education.

We certainly believe that the Council of Ministers of Education of Canada have opened up the discussion in this field by establishing a set of guidelines for post-secondary education. It's the first time in Canadian history that they have attempted to work out some set of guidelines and expectations for post-secondary education. It seems to me that this is the perfect moment for the federal government to enter into discussions with the provinces and to ask, how can we better spend our money and ensure that our post-secondary education system in Canada is going to maintain top quality, and also accessibility to all of our students?

So I believe this is the moment for federal politicians to enter into that, and it's also something the federal government could take a certain amount of pride in, because it would be a new initiative on their part, and it wouldn't simply be adding more money to a black hole, as has sometimes been described.

Jim, did you want to add to that?

Mr. James Turk: Could I add a quick comment, Dr. Bennett?

There's really a dilemma right now. The federal government is in a box, partly of its own making, with the CHST, and you have provinces that are going to yell and scream about any initiative you take other than just giving them money to do with as they want. I think the response of the finance minister and of the government has been to create separate identifiable what are derisively referred to as “boutique programs”, whether it be the Canada Millennium Scholarship Endowment Fund, or the recent announcement after the throne speech of these 1,200 research chairs, which are all nice things, but are little bits isolated from everything else and don't address the central problem.

Any way of addressing the central problem requires the federal government. And remember, back in the 1950s when the federal government got into the funding of post-secondary education, which had been a provincial responsibility, the federal government had to get into it because there were such differences across the country and such inequalities that our system has only been able to be maintained because of the federal role. I think there is no simple way in which you're going to avoid federal-provincial difficulties on this. If you do anything more than what you're currently doing with these little carefully chosen programs, which, not to offend, aren't solving the problem but are still costing you money, then you're going to have to address it.

So you can either address it by trying to get the premiers to sign in blood, as they claimed to do around the health transfer, that, yes, we'll spend it on post-secondary education, about which when we met with a finance minister he said really wasn't a go in his caucus or in cabinet, or you say we're going to have to look at some other method, such as the one we're proposing, where you actually have a fund and some national principles to guide that fund, and you get the credit for it and we end up with a post-secondary system all of us can be proud of.

• 1705

The Chair: Thank you, Dr. Bennett.

Mr. Brison.

Mr. Scott Brison (Kings—Hants, PC): Thank you, Mr. Chairman.

Thank you, all, for your interventions here today.

Dr. Graham, I have a question on the brain drain issue. You were saying it has more to do with the quality of jobs and quality of opportunities than it does with the tax issue. Why do you think the jobs and opportunities existing, for instance, in the U.S. are better than those that exist here in Canada? Why do you think that is the case?

Mr. Bill Graham: There have been many better federal and state programs for funding post-secondary education in the United States, along with federal programs, and state programs in some cases, for dealing with accessibility and student debt loans. There's been simply a much greater influx of money into the higher education system in the United States than here in Canada.

Mr. Scott Brison: So you're saying that the brain drain issue for the university sector is due to these opportunities, but would you acknowledge that taxes are playing a role in the private sector—for instance, these jobs and opportunities that exist might exist because companies are paying more because they're paying less in taxes, that in fact the corporate tax structure and personal tax structure is less oppressive?

Mr. James Turk: Actually, the interesting thing on this whole brain drain debate is that there's precious little indication that there's a brain drain. There are only two reliable sources of empirical information, one the StatsCan data on immigrants and emigrants, which show that apart from the health care sector, where there is an identifiable trickle, particularly the highest percentage is among nurses and secondarily among doctors. Otherwise, there's very little. In Ottawa there's hardly a day that goes by when we don't hear from the head of one or another of the high-tech companies talking about the loss of people. There are 170,000 computer scientists in Canada. The last year for which we have data, which is 1996, from StatsCan, we lost 148 computer scientists to the United States and we gained 113. So we had a net loss of 35 people out of 170,000. So it's hardly quite the huge issue it's made out to be.

Some, like the Conference Board of Canada, have claimed the problem is that this is only looking at permanent immigrants and emigrants, and not looking at people who go on temporary work visas or NAFTA visas. The only reliable data on that comes from the U.S. Census Bureau and the U.S. current population survey, which does a yearly survey of the number of Canadian-born residents in the United States. And the remarkable thing from those data is that the number of Canadian-born residents in the United States has fallen from 1980, when it was 842,000, to under 600,000 in 1997. It's at the lowest level on a per capita basis in 100 years. And there's been a total of 77,000 Canadians, and this is counting not only people who have left for jobs, but families, since 1990. That works out to such a small number—

Mr. Scott Brison: But the Conference Board of Canada also, in a study last summer, noted that the numbers grew between 1988 and 1998 from 17,000 to 86,000.

Mr. James Turk: Yes. The Conference Board data are data that almost no responsible organization or scholar has ever been willing to use. The data are based on U.S. Immigration Service figures on people coming across the border. So if I'm a computer consultant in Ottawa and I fly to San Francisco for a week to do consulting, and then a month later I go to Dallas and a month later I go to Boston and a month later I go to New York, I count as four immigrants to the United States. Canadian data only count people, no matter how many times you've crossed.

• 1710

Those data are so fundamentally flawed that all of the scholars who do this research can't rely on them, because they're fundamentally unreliable. That's the only way the Conference Board was able to generate the numbers it generated.

Mr. Scott Brison: You're saying that Nortel losing 300 to 400 software engineers per year to the U.S.—

Mr. James Turk: All of the brain-drain argument has been sustained by anecdotes, and the plural of anecdote is not data.

Mr. Scott Brison: The notion that smoking causes cancer perhaps started anecdotally. For a long time the tobacco company said that in fact smoking didn't cause cancer. I expect that even today, if we asked a thousand doctors, we could probably find one of them who tells us that smoking does not cause cancer. In the future we'll probably consider that analogous to how we're treating brain drain currently. I believe there's an awful lot of those anecdotes out there that are quite real.

Mr. James Turk: All of us know there are a lot of the anecdotes. Certainly in the university sector, the more educated you are the more likely you are to be mobile. So we all have anecdotes, but the fact is they're also data. So the only two reliable sources of data both tell the same story. There's a very small cross-border migration, and it's primarily in the area of health care, where there have been the biggest cuts here.

Mr. Scott Brison: You're saying that full professors in Canadian universities are paid about 14% less than their counterparts in the U.S. Depending on tax brackets, the difference in marginal tax rates on a personal tax level would make up that difference.

Mr. James Turk: They're paid less in Canada to start with.

Mr. Scott Brison: If we were to lower our personal income tax rates, that disparity in an after-tax sense would be addressed.

Mr. James Turk: I don't think that's what we're saying. What's remarkable also in all these studies is that taxes as a cause of whatever outflow there is don't show up very much. A very interesting Statistics Canada study was done of all the university graduates at all levels in 1995. The first reason that people left was for better job opportunities, the second was for marriage, and the third was to go to school. They commented that almost nobody mentioned taxes as a factor of moving to the United States.

Mr. Scott Brison: Where do better job opportunities come from is my point. They typically come from more profitable companies.

Mr. James Turk: No. The better job opportunities come primarily in terms of research and in medical care from the greater proclivity of the federal and state governments to invest in those areas.

Mr. Scott Brison: The fact is that government spending in Canada is actually significantly higher as a percentage of GDP than that in the U.S. However, the tax burden is significantly less. Debt as a percentage of GDP is higher in Canada. You're saying that if we spend more money in Canada, we can have as good an economy as the U.S. This is counter-intuitive, frankly. The numbers are in fact indicating that we in a global environment are poorly positioned because we're spending too much money now.

I'm even looking at the numbers of people directly within your field. I don't know what the average salary for a full professor would be in Canada. What would it be?

Mr. Bill Graham: It varies considerably now, depending on whether you are dealing with so-called research-intensive universities or universities that are primarily devoted to undergraduate education or even some post-graduate education. It also varies considerably by area of country.

The University of Toronto is probably at the top of the heap. The average salary for a full professor there is somewhere around $100,000, assuming that the majority of these people are over 50 years old and are also living in the highest cost-of-living area in Canada. So the average take-home pay or disposable income is really a better factor there.

Nobody likes to pay taxes. In Canada our taxes are supposed to pay for such things as health care, education, and other social services.

Mr. Scott Brison: The U.S. spends more as a percentage of GDP in terms of public funding on health care than we do.

• 1715

Mr. Bill Graham: You have to look at the overall picture. The fact is that from 1993 until the year 2000 the amount of income that has been generated through taxes has risen by 1.4%. The amount that has been cut back in terms of social services is 4.6%. It's a 3:1 ratio.

The reason Canadians are suffering in relation to other people is because of the cuts in our social services. They've been having to make up for them by increased pricing and increased user fees. For example, one of the increased user fees brought about by the under-investment in our social programs is tuition fees.

Mr. Scott Brison: We probably need more time for this, but I would appreciate meeting with you at some point to discuss this further.

Mr. Chairman, I would like to ask one more question of Chief Fontaine.

Let us compare the economic position of the first nations to Atlantic Canada, where I come from, or to Ireland, for instance. Look at where Ireland was 25 years ago and some of the tools that were used to help make that economy successful. Is there a particular strategy to combine education and tax policy in a global, knowledge-based society to try to create, for instance, technology clusters within the realm of the National Research Council? This morning we heard the council is working with the communities to form technology clusters that can create significant long-term opportunities.

I see this as being particularly relevant with the first nations because the geographic elements are no longer necessarily a factor with the depth of distance as a determinant in the cost of telecommunications. The quality of the education and the access to those levers of economic opportunity in a knowledge-based society can clearly be there with planning in the future.

I'd be interested to hear what strategies are emanating from the first nations now to take advantage of those opportunities.

Chief Phil Fontaine: Here again I will approach this in two ways. I'll give you a general overview and then I'll ask my colleague, Chief Jules, to speak to the details of this.

I want to preface my response by sharing with you something that really challenges us as a community. It has to do with messaging and what is appropriate for the decision-makers. I include politicians here, members of Parliament, government and the like.

The challenge here is to be clear in our own minds as to what is marketable. For the longest time we've concentrated on describing the very difficult circumstances first nation communities find themselves in. We've lamented the sorry state of affairs and we've gone on this way for the longest time. So we have of course wondered about the value of approaching our situation in that manner.

The other thing we've tried to do, and I've given you an example of that today, is we've described the impediments that face first nations people. At the same time, we've talked about all of the achievements we've realized in spite of all of these impediments. The idea here, of course, is to tell governments and the people of influence to take a look and imagine what we would be able to accomplish. Can you imagine the successes we'd be able to achieve if governments were to allocate substantial additional resources to first nations people? The progress we'd be able to achieve would be just tremendous and would be beneficial to all. That's one point.

• 1720

The other point I wanted to make has to do with the issue of whether we invest in first nations communities or not. Because if we don't invest, we've accepted the premise that first nations are a burden on Canada, and of course we don't want to be. We want to be a real contributor, and I think we have been, in many circumstances, when we've been given an opportunity to do so.

When the report of the Royal Commission on Aboriginal Peoples came forward with its 440 recommendations, it talked about the kinds of investments that were needed on an annual basis over 10 years, I believe, if not 20. I think it called for about $1.6 billion a year. Alarm bells went off all over the place, right? This was far too much; it was going to become one more part of this burden that's imposed on society by first nations people.

But in addition to the report, the Royal Bank, through its chief economist, John McCallum, came forward with a pretty compelling argument that if governments didn't act now, it would cost the Canadian treasury in the order of $7 billion to offset the cost of maintaining this situation, and $1 billion of that would be for social assistance. So who do we want to burden with that kind of pressure?

In our presentation we didn't speak in any detail of the kinds of allocations we believe are necessary, so I would like to read that into the record very quickly. I want to make one point before I do, which is that we're not talking about anything but catch-up, to attain comparability. So bear this in mind.

For building first nations economies, we recommend the following: institutional development, $50 million—and this is for fiscal year 2000-2001; nation governments, $50 million; specific land claims settlements, $350 million—which is so fundamentally different from the $200 billion we've read in the Globe and Mail, which is really, in our view, designed to scare people, because it's not realistic; fiscal infrastructure, $200 million; and economic development, $350 million. So when we're talking about building the first nations economy, specifically capacity-building, we're talking in the order of $900 million annually.

For building foundations for first nations individuals—and that would include the point raised in the question by our honourable member who's no longer here—we recommend for education, youth, and culture, $300 million; health care, $100 million; social services, $100 million; justice, $25 million; housing, $200 million; and human resource development, $150 million. This is a total of $975 million in this area, for a combined total of $1.8 billion per annum.

I think that's a worthwhile investment decision to be considered by government.

Thank you.

Chief Clarence Jules: Ultimately, communications within our communities are so critically important to build the kinds of economies that are going to be required. If there are budget allocations, and jurisdictional questions are ultimately resolved—we can't resolve all of them within the next little while, there are going to have to be processes to do that—that would put first nations in a position, as you were suggesting, to be able to invest in areas that we feel would be important for us to invest in, and be in a financial position to do that. Right now, first nations just cannot.

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Mr. Scott Brison: Thank you very much.

Mr. Chair, I have to speak in the House. I have to head off now.

Thank you, witnesses, for your interventions.

The Chair: Thanks, Mr. Brison—for your questions, not for leaving.

Voices: Oh, oh!

Mr. Scott Brison: I'll be back.

The Chair: On behalf of the committee, I'd like to thank you all. This has been a very interesting panel.

Chief Fontaine, it strikes me, looking at the brief we received, that in essence what you're saying is that you basically need some funding to help you with the levers of generating wealth. Judging from the challenges you face, and I say they're important challenges, what makes it particularly....

I'm a full believer that in order for a country to achieve its full potential, the people who reside within that country must achieve their full potential as well. It's pretty hard when within the first nations, the average level of unemployment is around 50%. You also say that the average income is only 60% of the national average.

I also note—and correct me if I'm wrong—that it's a very young population, so it's going to require a lot of investment from the general society at the beginning vis-à-vis education and everything else.

I was just wondering if you could explain to me this issue you referred to as a “line item”. Did you mean this to be by department, or a line item as in the budget?

Chief Phil Fontaine: We were talking about the budget. We were talking about a line item that would address in the various sectors the budgetary requirements for first nations people. The problem, as I noted earlier, is that there's a tendency, if there's a general pot, for first nations to get lost in the shuffle. So what we're calling for is a dedicated allocation for first nations.

The Chair: Is that across the board in the sense of government departments, or are you just saying in the overall budget?

Chief Phil Fontaine: Well, in all departments, because then you'd have the aggregate by government. There's a tendency now to focus on what the Department of Indian Affairs has in terms of its obligations. That's fairly specific, but when you start talking about other ministries, the picture becomes a little cloudy.

What we are seeking here is an undertaking on the part of government to look at its entire operations and figure out where each of the various sectors can be addressed through the different ministries. That's why we're calling for a dedicated line item for first nations requirements.

The Chair: Okay.

Once again, on behalf of the committee, thank you very much for your input. You have certainly added value to the discussion on how we're going to allocate this surplus.

You know, in many ways this exercise is much more difficult than the one we had previously, when we were trying to reach a balanced budget. Now the challenges and choices are many, and I can tell you, this is really going to define the type of future we're going to provide to Canadians.

Thank you very much.

I suspend the meeting.

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• 1801

The Chair: I call the meeting to order and welcome everyone here this evening.

It's our pleasure to have with us the following representatives: from the Canadian Museums Association, Mr. John McAvity and Mr. Richard Darroch; from the Canadian Library Association, Leacy O'Brien and Vicki Whitmell; and from the Heritage Canada Foundation, Mr. Brian Anthony.

Welcome to you all. As you know, you have approximately seven to ten minutes to make your presentations. Thereafter, we'll engage in a question-and-answer session.

I think we're going to begin with the Canadian Museums Association. Mr. McAvity.

Mr. John G. McAvity (Executive Director, Canadian Museums Association): Thank you, Mr. Chairman.

We're very pleased to be here tonight. In the past when you've invited us, it's always been on my birthday, so even though tonight is not my birthday—and I say this with a bit of facetiousness—I ask you to think of my birthday wishes in these deliberations.

We do appreciate the opportunity to appear before you concerning the future of Canada's museums. You have already received our submission, which is in front of you, so I will not reiterate or go through it. It is aimed at ensuring the long-term stability, indeed the survival, of Canadian museums. I'd be pleased to answer any questions you may have about this after the presentation.

Instead, my purpose this evening is twofold. First, it is to underscore the CMA's concern about the present and future capacity of museums to continue to collect, preserve, and interpret the tangible heritage we hold in our collections. It is also to convince you that the time for discussion of this issue has passed. We have appeared before this committee for six years with substantially the same message. In the interim, the already severe conditions within the community have only further deteriorated.

For evidence of this, I refer you to the House heritage committee report, which was tabled at the end of June following extensive consultations across Canada. The committee observes, in some detail, the serious issues facing the museum community, issues stemming in large part from declining government support. They have recommended firm remedial action by the federal government.

We strongly endorse the recommendations contained in that report, for your consideration.

Time permitting, more evidence I could cite concerns museum closings. Many museums have closed their doors permanently. They have laid off staff or they've reduced service levels. More ominously, however, some museums are even selling their collections. Others lack the basic resources to ensure proper storage and protection of rare and delicate artifacts. Crumbling buildings, declining morale, and volunteer fatigue threatens national treasures. These are all too often part of the landscape we see.

• 1805

We were heartened by the Speech from the Throne, in which the government commented specifically on the cultural sector, including the promise of increased resources. At the same time, we cannot help but compare those ambitious commitments with the present reality. As we applaud the objective of creating a virtual museum, we do well to remember there are many museums, in fact probably over 50% in this country, that do not even have a computer, let alone staff that is qualified to use one.

The fact is, ladies and gentlemen, that museums in the heritage community in this country have languished too long on the margins of government priorities. Even given the recent and welcome commitments, we clearly have a long way to go.

Realizing the federal government cannot act alone in this field, we feel, however, it must take leadership. The museum community, for its part, must take responsibility for its own well-being as well; we recognize that. So we're here tonight to make a proposal and a commitment to you—to work in partnership with you to effect a museum renewal strategy whose purpose is to put in place the infrastructure and the processes over the next five years that will stabilize our museums financially and establish a firm base for the long term.

These basic elements of a strategy are described in our brief. These elements include information technology, which will extend the reach of our museums—in effect, strengthen their connection to one another to define their place within the Canadian story. They also include the professional development of the many thousands of museum workers, including those who volunteer their time and energy to keep museums afloat. In fact, for every one museum worker paid in this country, there are five volunteers; that's how dependent we are on the volunteer sector. We also wish to point out the necessity of preserving our priceless collections and the tangible evidence in the museums of our country toward the heritage of our country.

Finally, our focus is on building alternative funding arrangements through partnerships with government, through endowment building, through innovative fundraising strategies, tax incentives, and building the capacity of our museums to be stronger in the long term.

But, ladies and gentlemen, to be frank, achieving these long-term goals requires your help now. We are in effect asking the federal government to boost its current investment in heritage on the promise of a major downstream dividend. That dividend is not only about money, it is about faith and pride: faith by the museum community itself that the government will recognize our important role as your voice explaining the Canadian story; faith that your commitments will be translated into action; and ultimately it is about pride, the pride all Canadians have in the richness of their heritage and as a legacy for the future.

To conclude, let us hope that when we appear before you next year, we will bring you good news—not news of more museum closures or lost collections, but tangible evidence that, having worked in partnership with you, we will have achieved firm strategic goals on your behalf and, through you, on behalf of all Canadians.

Thank you very much.

The Chair: Thank you very much.

We'll now hear from the Canadian Library Association, Ms. O'Brien or Ms. Whitmell. Welcome.

Ms. Leacy O'Brien (Associate Executive Director, Canadian Library Association): Thank you.

The Canadian Library Association, commonly known as CLA, is very grateful for the opportunity to participate in the pre-budget consultation undertaken by the House of Commons finance committee. This is the first time CLA has participated in this undertaking. I would like first to provide a very brief introduction to the association, its mission and its goals.

CLA is the national English-language library association, representing Canada's 58,000 library workers. It was founded in Hamilton, Ontario, in 1946, incorporated under the Companies Act in 1947, and is a registered charity, governed by an elected council, advised by over 30 interest groups and committees. We have five constituent divisions: the Canadian Association of College and University Libraries, CACUL; the Canadian Association of Public Libraries, CAPL; the Canadian Association of Special Libraries and Information Services, CASLIS; the Canadian Library Trustees' Association, CLTA; and the Canadian School Library Association. We do publish a dictionary of acronyms as well.

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The majority of CLA members work in college, university, public, special—all libraries are special, but we mean corporate, non-profit and government—and school libraries.

A growing number of our members are entrepreneurial consultants, offering a wide range of library and information management expertise to their clients. Still others sit on the boards of public libraries, work for companies who provide goods and services to libraries, or are students at the graduate level or in community college programs. We also boast a growing number of friends of libraries within our membership.

The mission of the Canadian Library Association is to promote, develop, and support library and information services in Canada, and to work with all who share our values in order to present a unified voice on issues of mutual concern.

I would like briefly to quote from a document prepared by the Saskatchewan Library Association on the role of public libraries:

Public libraries are essential social agencies in Canadian communities. In a democratic society, public libraries exist to satisfy the information needs of all citizens and to protect citizens' right to know. They do so by acquiring, organizing and archiving information created by society and keeping it in the public trust. Information at the public library is freely accessible to all citizens, regardless of their capacity to pay. Public libraries typically do not charge user fees because they violate the principle of free public access to information.

For Canadians, the public library is the most frequently used of all government-supported cultural institutions. A recent EKOS study showed that 19 million Canadians hold library cards, and they visit their public libraries regularly, making more than 30 million inquiries and borrowing 276 million publications each year. These Canadians use print materials, but more and more are turning to the Internet to get the information they need to conduct their day-to-day activities. Increasingly, Canadians are turning to public libraries to get information on their government and its programs and activities.

In a recent survey of Canadian experiences and attitudes with respect to the level of service provided by public and private institutions, Canadians ranked the services of the local public library as second only to that provided by the local fire department. The public library is the campus library for those pursuing self-directed studies in today's environment of lifelong learning, and the corporate information centre for the small-business person and Canada's ever-increasing number of independent consultants working in a knowledge-based economy. It is the career resource centre for those entering the labour market for the first time, as well as for those re-entering the workforce. It is the centre of discovery for new and experienced readers of all ages. It is the repository of valuable local history documents and memorabilia, as well as a centre delivering public education programs on topics that include Internet search skills, media awareness, Internet safety guidelines for parents and children, copyright and other legal information, as well as health information.

Access to information through public libraries creates an informed citizenry; fosters social mobility and economic development; encourages citizens to engage in lifelong learning; fosters meaningful social interaction and information exchange in communities; maintains a record of the society's collective history; provides opportunities for cultural development, recreation and entertainment; and ensures that our society is not divided between the information-rich and the information-poor.

We might also note that other types of libraries such as the academic, school and specialized libraries are also important information providers to their unique user communities.

At this time of pre-budget consultation, we would respectfully request that the matter of sustainability for citizen connectivity to the Internet through access points in public libraries be addressed as a priority.

We believe this recommendation responds to your committee's question, “What should the government do to ensure Canadians benefit from these new challenges and opportunities, with the growing importance of the Internet and other technologies and increased integration of domestic world markets?” We believe that ensuring that all Canadians have free access to Internet training and to a vast and growing array of information resources in the safe and welcoming environment of the public library will ensure that Canadians can benefit from the new economy wherever they live and work.

• 1815

In the Speech from the Throne delivered last month, the Canadian government announced its intention to make Canada's government the most connected to its citizens by 2004. The government noted:

It is essential to better connect Canadians to each other, to schools and libraries, to governments and to the marketplace—so they can build on each other's ideas and share information.

If libraries are to support this federal connectivity agenda, they will require sustained resources to secure high-speed bandwidth at no cost in order to provide public Internet access, as well as additional funding for the associated training, the upgrading of hardware and software, staffing, research, development, and contents support.

The libraries of Canada, and most particularly the 3,400 public libraries, have embraced the opportunity to play the pivotal role in the federal government's success in achieving the goals of the “Connecting Canadians” agenda. Through their participation in Industry Canada's community access program and other federal, provincial, and municipal initiatives, some 3,100 public libraries now provide Canadian citizens with free, non-commercial access to the Internet. The imminent announcement of the urban component of the community access program is expected to increase the number of access sites in public libraries to almost 4,000, located in almost every Canadian community, large and small, urban and rural.

The mandate of most Canadian public libraries now typically includes a commitment to ensuring that all citizens have access to the information resources on the Internet. We would like to emphasize that public access in the library setting also includes access to the information management skills and Internet search expertise of professional library staff. These are generally unparalleled in other public access sites. Public libraries also play a role in ensuring that important societal information on the Internet is preserved and made accessible for future generations.

Clearly, the new environment necessitates significant resource allocations in library budgets that are already stretched by budget reductions at the provincial and municipal levels. Rising costs of telecommunications services, particularly in rural Canada, coupled with the requirement for ongoing upgrades of hardware and software, expanded physical facilities and the staff training that public Internet access requires, must be balanced within the library budget for traditional information products and services, recreational reading material, public education programming, and support services for lifelong learning endeavours. The paper I recently quoted, “Discussion Paper on Sustainable Internet Access”, from the Saskatchewan Library Association, demonstrates that the ascendancy of the Internet in the mid-1990s has quickly made it the paramount medium for transmitting and exchanging information.

It's our position that as libraries assume increasing responsibility for the delivery of government programs, information and services, and as they also undertake to develop important Canadian content on library websites, all levels of government should accept some responsibility for ensuring that libraries receive adequate funding to provide the high quality of services that Canadians expect and deserve. It would seem appropriate to us to direct a portion of the savings achieved through the federal government's electronic delivery of information and programs toward building and sustaining a library-based public network that ensures all citizens of Canada enjoy the same quality of access to information. Without equality of access, we will see an increasing gap between those who have access to information resources and those who do not, making those without less likely to be able to function and compete in our very complex, information-driven society.

It is with the conviction that public libraries of Canada are an essential part of the government's connectivity goals that we strongly recommend that the 2000-2001 federal budget allocate additional funds to the Industry Canada community access program budget in order to allow existing CAP sites to upgrade and maintain the valuable public services they provide.

Your committee has also raised the question of social infrastructure. What more should government do to further strengthen Canada's social infrastructure? What are the priorities for social investment? In response, we urge the federal government, under the leadership of those departments that work most closely with libraries, to allocate financial and human resources to developing a multi-year plan for a government-wide strategy to provide federal funds for library development.

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A first priority should be long-term sustainability of public access to the Internet in libraries, developed in consultation with the library community, provincial and municipal government partners, and with consideration of the research currently being undertaken within the LibraryNet program at Industry Canada.

This recommendation is supported by the findings of the Standing Committee on Canadian Heritage, which recently issued its report, referred to by my colleague from the museums. We support their recommendation that the Department of Canadian Heritage work jointly with key federal heritage institutions and federal departments to ensure that community-based heritage institutions—in our case, libraries—continue to be an access point for information about programs, services, and initiatives of relevance to Canadians offered by federal heritage institutions.

This afternoon we received the government's response to the standing committee's report, Connecting to the Canadian Experience. Although we've had no time to review it in detail, we are pleased that the government is prepared to take action on our recommendation for a government-wide strategy for public access to information in community-based heritage institutions.

Your colleagues on the heritage committee have also pointed out that the federal government's contribution to the funding of public libraries is small compared to those of provinces and municipalities. Our investigation shows this to be dramatically so in comparison to resources available to museums through the Department of Canadian Heritage museum assistance program and to archives through the Canadian Council of Archives.

Yet the committee points out that heritage institutions are part of Canada's cultural sector in much the same way as highways are part of Canada's transportation network. They note, “All Canadians share in the cost because all Canadians benefit from them.” When it comes to libraries, we heartily agree.

Thank you for allowing us to participate in these consultations and thank you for your interest.

The Chair: Thank you very much, Ms. O'Brien.

We will now hear from Mr. Brian Anthony, from the Heritage Canada Foundation. Welcome.

[Translation]

Mr. Brian Anthony (Executive Director, Heritage Canada Foundation): Mr. Chairman, I'd first like to thank you and your colleagues for this invitation to participate in the pre-budget consultation process.

Mr. Chairman, I brought gifts for you and your colleagues. These are information kits containing my original brief, my notes for tonight and other information on the Heritage Canada Foundation.

[English]

This is my fifth annual appearance before this committee as the executive director of the Heritage Canada Foundation, and I want to thank you for the interest and the support this committee has shown during that time.

[Translation]

As you know, our Foundation's goal is to promote Canada's built heritage and, as you also know, we are firmly convinced that thanks to different amendments to the federal tax system, it is possible to have a profound and beneficial effect on the preservation of our heritage, and our previous communications to your committee as well as our present brief state this fact.

Your committee openly supports the recommended changes and I thank you for that. Other organizations who came before you such as the Canadian Federation of Municipalities also suggest tax reform to encourage the preservation of the built heritage of our country. Such support has greatly contributed to the progress I can see in our efforts to solve these important problems.

We are firmly convinced that tax policies more favourable to the preservation of our built heritage will stimulate investment by the private sector, job creation and social and economic revitalization of the historical centres of our bigger and smaller communities all across Canada.

[English]

But while I am before you again this year to stress the need for our proposed tax changes and to again seek your support for them, I also want to put these tax proposals in a larger context.

It is clear to us, for example, that federal officials would understandably not wish to contemplate tax changes for heritage preservation unless the universe of eligible buildings was defined. This requirement, given jurisdictional consideration, would necessitate federal, provincial, territorial, and municipal cooperation in determining a master list of eligible properties, in the process creating, in effect, a national inventory of heritage properties.

I am certain that federal officials would also want to see well-defined eligibility criteria for determining inclusion on that list, an exercise which would also necessitate federal, provincial, territorial, and municipal cooperation.

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If, as we propose, certain restoration costs are given favourable tax treatment, criteria will also have to be developed to assist in determining which restoration activities are or are not eligible. National standards, too, would be necessary.

If, as we also propose, capital gains tax is waived on the donation by an individual or a corporation of a heritage building, as we propose and is the case with such movable cultural property as art and artifacts, then a body capable of officially receiving resultant donations would have to be mandated for that purpose, as is also the case with movable cultural property.

[Translation]

Our tax reform project thus entails different other related and interdependent measures which, in and of themselves, would be just as desirable. So that is the context for our tax proposals.

Besides the indirect aid to heritage conservation our project would entail with the relevant measures, in our opinion there should be direct aid in this area. We should reinforce federal heritage programs which already exist, such as the national cost-sharing program, if we want to have real and useful influence in the matter of the conservation of our built heritage.

In our opinion, better use should also be made of non-heritage programs with the possibilities they offer in the area of our built heritage. In the brief we sent you this year, we raised the possibility of the federal infrastructure program being used for restoration and conservation activities in the area of Canada's built heritage. In Quebec, good use has been made of this program's funds to restore historical churches. We would like this kind of federal aid to be used in the same way in other areas, not just for churches but also for all heritage buildings.

Finally, we should mention that other non-heritage sources could be used, such as regional economic development aid, with a view to having them serve for heritage conservation activities.

[English]

In sum, then, we believe there is a need and an opportunity to develop a coherent and comprehensive array of direct and indirect interrelated measures, which would significantly strengthen our national capacity to preserve the built heritage of Canada. A piecemeal, half-hearted approach will not suffice. Rather, a concerted effort is required, embodying all of the examples cited above and, indeed, more measures.

Our built heritage is the most visible, tangible, accessible form of our cultural expression, and it is all around us. But it will not always be all around us unless we develop and implement the complete array of powers that the preservation of our built heritage needs and deserves.

Recently, the federal Minister of Canadian Heritage observed that we lost 20% of our built heritage in the last 30 years due to demolition—20%. If we are to reverse that trend, as we must, and preserve what remains of our built heritage for current and future generations, we must act, and we must act now, bringing to bear all the powers at our disposal in support of this worthy objective.

That is what we've proposed, Mr. Chairman, and that is what we hope you and your committee colleagues will support. Thank you.

The Chair: Thank you very much, Mr. Anthony.

We will now proceed with the question-and-answer session. I guess we'll go with a ten-minute round. Mr. Epp.

Mr. Ken Epp: Thank you, Mr. Chairman.

I thank you for your presentations. They have given us a good oversight, quickly, of where you're coming from. That was good.

Let me just go around the circle and begin with Mr. McAvity.

I want to ask you about the use of computers in museums, because you indicated that about 50% of the museums don't even have computers. Is there software available? Are museums that have computer capability able to make good use of it? What is the purpose of having a large amount of computer capability in museums?

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Mr. John McAvity: First, let me just emphasize the financial reality most museums are facing. Within a very short distance of this building, we have the national museums here in Ottawa. They are very large, sophisticated, popular institutions, of which we're very proud. Most of our comments are really on the non-federal institutions across Canada. There are a little over 2,000 non-profit, publicly run museums in this country. The vast majority of those are very small, seasonal, volunteer-run, community labours of love. These are the institutions we're really desperately concerned about. Their financial situation is not good, and there have been a number of closures of medium-size and small institutions.

Why do they need computers? I suppose it's for the same reason almost any activity in this country needs computers: for efficiency and effectiveness. We have huge collections in the museums, and these collections used to be kept in little three-by-five card files and so on. That approach is really not very efficient.

Mr. Ken Epp: That's my generation.

Mr. John McAvity: So computers have been a great boon to help us document what constitutes Canadian heritage—what we have and where it is located—and also add research information about that. It helps provide access to Canadians, by knowing what our collections are and where they are. Otherwise, it's just not possible to access that collection.

The other point I want to make on that is that the lion's share of museum collections are not on public display. What the public sees when they go into a gallery is really the public face of the institution. Behind those walls, however, are storage rooms, storage vaults, research staff—the infrastructure that's required to collect, preserve, and study the collections we have. Museums are educational institutions, and they're very complex and dynamic institutions. In short, I think that might help you.

I could also cite that in some other countries there are some very advanced technology applications in museums for storage facilities that are highly automated. They are similar to warehouses that major corporations would run here, with trucks and devices to effectively store materials. Yet in Canada, we haven't seen as elaborate applications put into our institutions.

Mr. Ken Epp: I have a question on the funding of museums. You mentioned there are some 2,000 small museums—labours of love, you called them. I'm familiar with a number of them myself. Do they get funding from the federal government now, or are you asking for new funding to start what hasn't been done before?

Mr. John McAvity: There is a funding program. The only funding program that is specifically designed for museums is called the museum assistance program, or MAP. It was started by Gérard Pelletier in 1972 with a total budget of $7.5 million. Today, close to 30 years later, that budget stands at $9.4 million. This funding is totally inadequate. It has not grown with inflation. If it had grown simply with inflation, that fund would be at $32 million today.

We're not coming to you asking for large hoards of money. We realize the limitations and the issues that are at stake. We simply feel that program should be brought up to where it used to be and where it should be. That's the figure we recommend to you. The program has been higher than it is right now. It has been cut back by well over 60%, and today sits at $9.4 million. We had a small increase in the past year, for which we're very grateful, but we're simply not meeting the potential. That is not a lot of money to be spread out over 2,000 museums in this country.

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The museums themselves have reacted by becoming much more dependent on volunteers and by soliciting donations, support, and sponsorships. That's well and good. We're proud of that. We've become much more entrepreneurial. My association, on behalf of the museums, publishes a mail order catalogue we distribute to over 500,000 people called Selections. We distribute it so the public can participate by purchasing quality reproductions and gifts from museums.

This past week we opened a new initiative. We opened a store at the Ottawa airport, which I highly recommend to all of you. It is a non-profit activity we have undertaken in order to promote better understanding and appreciation of museums, as well as offer quality products and hopefully make a few dollars for museums.

We're very entrepreneurial and have taken a lot of steps. The question really at hand is for the government to restore the funding to the museum assistance program, at the minimum, to the level it was at when it was first established. This would take it, in modern-day terms, to $32 million.

Mr. Ken Epp: Would you be happy if the budget just gave $32 million to the Canadian Museum Association, to distribute as they wished?

Mr. John McAvity: No. We're not the distributors of that; it's the Honourable Sheila Copps. It's a program of the Department of Canadian Heritage. The funding is not distributed as we wish. It's a very elaborate formal program with built-in evaluations, peer juries and so on. That money is very thoughtfully and well spent. The point is there's just not very much there.

Mr. Ken Epp: Now I will go to the Canadian Library Association.

You should know I could almost attribute the greatest stress on my marriage to libraries, since I used to get lost there and forget to go home at supper time, and things like that. You can tell I didn't forget all the time, but....

You indicate you represent some 58,000 library workers across the country. I presume that includes those in school libraries as well as in public libraries. If I think about it, I see municipal libraries and school libraries almost exclusively operated by municipalities, at best with funding from the provincial government. What do you see as the role of the federal government in promoting libraries?

Ms. Leacy O'Brien: As we mentioned in our brief presentation, we are finding that more and more federal government information services are being delivered through libraries. People are accessing federal information, which is increasingly only available in electronic formats, through their public libraries.

Libraries are also hosting HRDC employment information centres. The community access programs of Industry Canada are very heavily supported by libraries. We have been spending a lot of time talking to Industry Canada staff about the sustainability of these sites. Their suggestion is that essentially all levels of government should be compensating libraries for the work they've taken on.

Mr. Ken Epp: Are you looking at a sort of fee-for-service thing? If you have a kiosk and an Internet site that cost money to maintain and buy, should the federal government give you a grant to provide funding for that directly, or are you looking for this to go through the provincial government stream?

Ms. Leacy O'Brien: We certainly recognize it needs to be a multi-level government partnership. In fact, that is the case in many of the initiatives under way at the moment. In the CAP program there is certainly partnership with provincial and municipal governments. We're asking for a government-wide strategy that addresses the matter of compensation for the delivery of the federal government services.

Mr. Ken Epp: I'm really supportive of libraries and information, especially in the remote parts of the country. We've now turned a corner on what we can do for those people who, years ago, could only listen to anything they could get on their shortwave radios. Now, with satellite communications and telephone hookups and Internet accessibility, really our world is shrinking at an amazing rate, and I commend you for being a part of it.

• 1840

Lastly, to the Heritage Canada Foundation, I take it that your interest is primarily in buildings. You kept talking about built heritage. So you're looking at historic buildings. Do you represent different organizations throughout the provinces, or are you the organization in the country? What's your structure?

Mr. Brian Anthony: We were created by the federal government 27 years ago, but as a non-governmental body—a national body to promote the preservation of the built heritage of the country. We have individual members, but we also have organizational members—provincial, territorial, and local heritage organizations—with whom we work and who we represent at the national level. Heritage Montreal, for example, is a huge so-called local heritage organization, bigger than most provincial ones, that is solely occupied with the preservation of heritage of place, if you will—built heritage mainly, heritage buildings. That is our primary purpose.

I'm glad to be here with my colleagues in the heritage field tonight, and I want to thank the committee for putting us together. It's a nice affinity group.

One of the frustrations we have is that people think—although not adequately enough, as Mr. McAvity has referred to—about the importance of preserving art and artifacts, but they don't think of our heritage buildings, our heritage architecture, in the same sense. That is one of my challenges and, as I say, one of my frustrations as well.

Reference was made earlier by my Library Association colleagues to the government response to the cultural policy report of the Standing Committee on Canadian Heritage, your sister standing committee. That report had a fleeting reference but no serious recommendations about the preservation of the built heritage of Canada. However, the government response today, I am glad to see, does make reference to that important subject area and gives us something upon which we can build.

As I mentioned in my remarks, Minister Copps not that long ago noted we had lost 20% of our heritage building stock in the last 30 years. Do the math. We don't have to go too much further down the road before we lose another fifth of our heritage building stock, unless and until—and we have to do this now—we put in place all the measures needed that comprise a comprehensive national strategy for dealing with our heritage buildings.

I'm talking about not just the grand examples of our built heritage, such as this. This is Canada's premier heritage site. But in communities large and small, all of those landmark, community-defining buildings such as the banks, the churches, the post offices, the railway stations—all of those—are under threat. Unless and until we put in place the kinds of measures we need to preserve them on a ongoing basis, we are going to be losing, at the rate Minister Copps referred to, more and more of those things that define us physically as communities and as a country.

Mr. Ken Epp: I'm going to have to come to a halt really fast, but I just want a few more things here.

I support your idea of a capital gains exemption when a property is donated. I think universities have that right now. If there's an endowment of something of value, there's an exemption from taxation. We've heard of prime ministers being able to donate their heritage and get a tax exemption for their letters and things such as that, so I don't think that would be inconsistent.

What I'd like to know though is this. I know of several instances where buildings that were marginally heritage were owned and a developer wanted to put a nice, big revenue-generator in the same location, so very quickly, with a minimum of notice, he put the building down, afraid that it would be called a heritage site and he would lose a tremendous economic opportunity with no financial compensation for it if it were labelled a heritage site. Do you deal with issues like that? Do you have funding available?

Mr. Brian Anthony: We deal with issues like that every day. In communities large and small across the country, we get daily requests for assistance in matters of the sort you've just described.

The reason it is economically desirable and feasible for developers to tear down older buildings and erect glass and chrome replacements that are deemed theoretically to be more efficient is that the tax and the regulatory mechanisms at all levels of government that affect our building stock are loaded against the preservation of older buildings and are in favour of demolition.

• 1845

A couple of years ago there was a good example of two inter-war buildings here on Sparks Street—the Kresge and Woolworth pair of buildings—that had been bought by a developer who had then gone bankrupt. The buildings reverted to the ownership of the lending bank. The lending bank tried to sell them at fair market value and couldn't, so it tore them down. It was not out of spite, and not because they couldn't have found a way of developing a sensitive, adaptive re-use of those buildings, with perhaps a low- to mid-rise new building in the parking lot behind. It was because if you tear down a building like that, you immediately reduce your tax profile.

Mr. Ken Epp: You're taxed on a parking lot.

Mr. Brian Anthony: You turn it into a parking lot and you also develop a revenue-generating stream, which is also taxed at a lower rate than rental of office space. Those are the kinds of issues we grapple with.

We're here today primarily to talk about the federal government, but we're encouraging all governments to look at how we can use the tax and regulatory powers at their disposal in order to preserve our older building stock. We feel the federal government can and should take a lead in this, and we know from our consultations with other levels of government that this would send out the right signal and enable them to persuade their ministers of finance or equivalents or their local financial authorities to put in place similar measures.

Indeed, I should say that to their credit, some provinces and municipalities have already taken some innovative steps in this regard. The City of Victoria has provided not only a modest direct-grants program, but also a tax relief program to encourage owners of historic buildings in the heritage centre of Victoria to seismically upgrade their buildings so the apartments or spaces above the stores in question can be used for residential purposes. That is desirable not only from an economic point of view, but also from a social point of view, because you are breeding new social life, reducing social problems in the city core, and so on.

As I said, we grapple with these issues on a daily basis, and I look forward to the day when I don't have to grapple with them any more.

Mr. Ken Epp: Thank you very much.

And thank you, Mr. Chairman; you've been very kind to me.

The Chair: Thank you very much, Mr. Epp.

Mr. Cullen, followed by Ms. Leung.

Mr. Roy Cullen (Etobicoke North, Lib.): Thank you, Mr. Chairman.

Thank you, panellists.

Ms. O'Brien, help us cast our minds 30 to 40 years hence and paint us a picture of the library of the future, and—I'll be the devil's advocate—convince me that we should spend more money on connecting libraries if they are an institution that may be of the past.

Mr. Ken Epp: Where would I go when my wife goes shopping?

Ms. Leacy O'Brien: There are some wonderful models in Alberta of libraries that are doing great things, so I know you've been trained well.

I'm not sure about 30 or 40 years in the future, but certainly when we look at the government's agenda toward 2004 of achieving connectivity—I believe they are setting 2004 as the date when we will be the model for G-8 countries, as far as connectivity is concerned—our research shows that at that point, only about 63% of Canadian households will be online. That still leaves us, the library community, with a large percentage of the population relying on public access to the Internet in institutions like schools and libraries. In the long-term forecasting we've been able to do, we see a great need still. There is a great need for training of users of the Internet, which is also being handled at the library level on a wide scale.

Mr. Roy Cullen: As an association, or as an industry, if I can call you that, have you ever done any sort of painting a picture of what the library will look like in 30 or 40 years?

• 1850

Ms. Leacy O'Brien: One of the things we're asking for when we look at a government-wide strategy on library development is support for research into future use of libraries. The library as a physical place may or may not exist in the future environment, but we expect that the library as a service will continue to thrive well into the future. Granted that Canadians are becoming highly information-literate, but there is still a desperate need for the kinds of information management services people who are trained in this field can provide in the local libraries.

Mr. Roy Cullen: In your brief you say that libraries will require sustained resources, and I assume you're looking to the federal government for some of that. I don't see any mention of how much or what shape that would take. What are you looking for?

Ms. Leacy O'Brien: Again, I think one of the things we're looking for is support for the kind of research needed to determine what the needs are. I think the heritage committee report certainly emphasizes the need for research into the needs of heritage institutions. That's one of the items. Although we haven't had time to study this report in detail, we would like to see some action taken.

Mr. Roy Cullen: Mr. Anthony, a number of groups around town are looking for similar treatment in the waiving of the capital gains tax, such as ecologically sensitive sites and perhaps in the context of habitat for endangered species, a whole host of things. Presumably, you would support their proposal. You may not have any comment, but what other groups might we as a federal government expect to come forward if the capital gains tax were waived, as you have suggested, for heritage buildings?

Mr. Brian Anthony: Let me answer the question second, if I may, and make a comment first.

In answer to the question from Mr. Epp, I said that I looked forward to the day when I didn't have to grapple with these problems any more because all the problems would have been solved. I hadn't thought—and it was your question that stimulated this—about the fact that the library of the future may not exactly be in a building, which means that 30 years from now I'm going to have all of these empty heritage library buildings to worry about.

Mr. Roy Cullen: That was the kind of idea I was pondering. You may have more buildings to deal with.

Mr. Brian Anthony: With reference to the capital gains tax issue, I must say that the discussions we've been having with the Department of Finance in recent years have been very helpful in this regard. We're moving at a gradual pace, but I believe we have some constructive discussions under way.

If, as is the case, for tax purposes we treat gifts of significant art or artifacts to the state in such a way not only to give a tax credit up front that can be used against income but also to waive the tax on any capital gains that might have occurred during the period of ownership, then it's not that much of a stretch to treat heritage architecture in the same way as we treat art and artifacts that are significant. We're not talking about a huge universe of buildings. There isn't going to be a run on the fiscal situation. So I think we're dealing with a very small and manageable number of buildings.

The Cultural Property Export Review Board works very well, and I think it is a good model for a way of dealing with heritage buildings. In fact, it would be of interest to you to know that even though the Cultural Property Export Review Board is theoretically only established to deal with such movable property as art and artifacts, it has certified four buildings of cultural significance. Now, theoretically, buildings are not movable cultural property, but I suppose the theory is that if you apply enough force to a building, it can be moved. Indeed, in the negative sense we see that on an almost daily basis. So, as I say, there already is a precedent there, and there is already a sort of affinity.

With reference to environmentally sensitive lands, I know that's an issue for those groups that are concerned about the safeguarding of our natural heritage. There is certainly an affinity between the cultural or built heritage of Canada and our natural heritage.

In response to your question about any other groups I'm aware of that might be asking for similar treatment, I can't think of any at the moment. Given that our focus is primarily on the built heritage and because, as I say, there is a precedent and a link to the Cultural Property Export Review Board, I think our request is a fairly modest and reasonable one.

• 1855

Mr. Roy Cullen: Mr. McAvity, for information purposes, what are the four national institutions? Are they all in Ottawa?

Mr. John McAvity: They are the National Gallery, the Canadian Museum of Civilization, the Museum of Nature, and the Museum of Science and Technology. These are the four main ones, and some of them have submuseums.

Mr. Roy Cullen: In your recommendation you say that the federal government should approve an increase in MAP funding to a minimum of $31.8 million, and you say that the federal government accounts for roughly 26%, a figure that is matched by provincial governments, and municipalities provide 13%. Are you proposing the $31.8 million to be a federal contribution that would be matched in roughly the same percentages you've indicated, or is that the total amount of funding to be cost shared?

Mr. John McAvity: The present federal funding does include the $130 million for the budgets for the four national museums in Ottawa. So roughly $130 million is being spent on the four museums in Ottawa, and only $9 million for the rest of the country. That's the imbalance we're addressing.

Mr. Roy Cullen: So you'd go from $9 million to $31 million.

Mr. John McAvity: That will simply catch up to what the value of that program was in 1972.

Mr. Roy Cullen: What would be the role, then, of the provinces and municipalities? Is that part of that?

Mr. John McAvity: No. That's what we're asking from the federal government. That is a federal initiative. Any grants that come out of that program are, generally speaking, matched and tripled. They don't fund 100% of any activity. They're project grants for short-term projects. They're not long, ongoing operational support. In all cases they are matched by the provinces, the municipalities, or the private sector.

One of our major concerns, however, is that although a grants program is fine and dandy, it's providing just remedial support for short-term activities. What we would like to do is have the federal government step back and take a look at the bigger picture and at long-term stability. That's when I referred to some long-term initiatives such as endowment building and tax incentives, which could be used to help the museums become more financially self-sufficient. It's in their interest, and it's in your interest. There are models where this has been done. In Ontario matching funding was provided to the universities for endowment building. I think this is creative, positive, and doable. That's really the thrust we wish to bring to you today.

Mr. Roy Cullen: Thank you.

The Chair: We'll now turn to Ms. Leung, followed by Dr. Bennett.

Ms. Sophia Leung: Thank you, Mr. Chair.

I'm sorry I missed your presentation, but I have a few questions to ask. I have served as a volunteer board member for art and cultural organizations in Vancouver for many years, so you know I'm quite sympathetic about museums.

I'd like to ask a basic question. Mr. Anthony and Mr. McAvity, you stressed heritage. Can you define for me what Canadian heritage is? I want a short and simple answer.

Mr. John McAvity: In ten words or less.

Ms. Sophia Leung: In twenty words or less.

Mr. Brian Anthony: I can speak to that question from the perspective of my organization. We are in the business of promoting the preservation of—

Ms. Sophia Leung: Would that maybe be bicultural? When you talk about heritage, are you talking about Anglo-Saxon, native, or what? I want to know.

Mr. Brian Anthony: No. We deal with heritage buildings of all sorts, whether it's the Viking settlements at L'Anse-aux-Meadows—although I gather now that whether that was the first Viking settlement is under dispute—or native habitations. There are some great sites that date back to 3,500 years ago and the medicine circles. All of those things constitute the built heritage of Canada.

• 1900

As I mentioned in my opening remarks, we realize that if federal officials are to countenance any tax concessions or incentives for the preservation of our built heritage, heritage of place if you will, then we will have to have in place a national inventory of eligible buildings and we will have to have in place national standards and national criteria. That would involve all levels of government, right down to the local, and would involve all parts of the country. So it would be, as far as I'm concerned, a very all-embracing inclusive set of definitions and standards and criteria. It would get me off the hook of having to define “heritage”.

Mr. John McAvity: I'd like to answer too.

Ms. Sophia Leung: Sure, you give your version.

Mr. John McAvity: First, just in the narrow sense of museums, we have museums of all different types and sizes. We have museums that are either general community museums such as in Windsor, Ontario, a museum that covers the geographical community of Windsor. But we also have museums that are very specialized, either on ethnicity or on technology. We have a shoe museum, for example, and we have technology museums and telephone museums. So they come in all kinds of different sizes and shapes.

I think the question you are asking is what is heritage. It's an intangible thing. It is a sense of place; it's a sense of roots and a sense of identity. I think we're all very concerned that in Canada we need to have a stronger sense of the identity of our region or our community, as well as our country as a whole. I think that museums and heritage libraries all contribute to this.

If I can speak on a personal level, for a second, one of the things that alarms me a great deal is that there are so many Canadians who do not have an appreciation of art, who do not have creative art hanging on their walls, who do not have a sense of their roots or their past. Sure, they may come to visit our museums, and I hope they take something away from that, but I think ultimately our mission is to develop that sense of identity.

Ms. Sophia Leung: I'm sure you have an educational program.

Mr. John McAvity: Yes.

Ms. Sophia Leung: I know I support that very much for educating the public. Again, I want to point out that Canadian culture is also changing.

Mr. John McAvity: Yes.

Ms. Sophia Leung: We should have a celebration of diversity.

Mr. John McAvity: And we do.

Ms. Sophia Leung: Including everyone. I serve on a board, and if you don't mind, I won't say which one. I serve on quite a few. It tends to have a hard time in moving according to time. I think this is what I want to point out. You have my support, but I want you to constantly redefine what you are supporting, what you are promoting, and who you are educating—our young ones too. It is important.

Mr. John McAvity: In fact, we have an initiative on cultural diversity and museums, which challenges at times some of the bases of museums and helps them look in a broader way. In fact, in Vancouver we are sponsoring a seminar on November 24 and November 26 at one of the museums in Vancouver, on cultural diversity in museums.

Ms. Sophia Leung: I think the local government also should contribute. In other words, if a station is in Ottawa there should be some part. Also, in Vancouver we certainly do. Vancouver supports the local museum and its involvement.

I wanted to comment to Ms. O'Brien, I certainly support the library because I think it is very basic for our daily life. And also you are providing very good services. I think this is something we need to continue. Thank you.

The Chair: Dr. Bennett, a final question.

Ms. Carolyn Bennett: My question is mainly for Mr. Anthony.

Yesterday the environmental groups were pitching for an ability to retrofit companies, obviously, but buildings as well. Obviously you would love more funding for the heritage properties, but would a fund such as that, whereby buildings could make themselves more environmentally friendly, whether through insulation or solar panels, all of that, help as well? It would be a different pot of money. Would that help maintain some of these buildings in terms of not ending up a parking lot?

Mr. Brian Anthony: It would help enormously, and as I was saying in my early remarks, we feel there's an opportunity to use infrastructure money not just for roads and bridges and sewers, but for upgrading our older building stock. It makes sense from an environmental perspective to do so. If you upgrade our older building stock you reduce the amount of debris that ends up in landfill sites. A third of landfill sites are occupied by debris from demolished buildings. A third—that's a lot of rubble and a lot of dead buildings going into our landfill sites and cluttering up our environment.

• 1905

Also, we're in the business of encouraging the preservation of built heritage, but I don't mean to suggest that we want to preserve it in aspic. One of the best ways of preserving older buildings is through their adaptive reuse. Find a new use and new users for them and upgrade them without destroying the integrity of the heritage fabric. You can do that and you still can have the past with you but in a living and in a new sense.

I'm sure you can all think of examples of buildings that were once banks but have now been turned into very nice restaurants and bars and so on. We encourage that sort of thing because it guarantees the ongoing viability, social and economic, of these buildings. Certainly from an environmental point of view it makes a lot of sense, and particularly in the downtown core, where much of our older building stock exists. If you can encourage a socially and economically vibrant downtown core with people actually living in buildings that perhaps have had some other vocation, a warehouse or a factory, but have been adapted to upscale condominium use, you then actually have people living downtown, spending money downtown, and you've reduced the amount of travelling to and from the downtown core by those people and therefore greenhouse gas emissions and the wear and tear that vehicular traffic causes generally. So yes, that fits in with our thinking.

What I should do is send you a copy of a document we published about two or three years ago called Natural Partners, which was a discussion guide to try to find and build on those links between environmental preservation and heritage conservation.

Ms. Carolyn Bennett: Ms. O'Brien, as you know, we're led to believe that there might be a children's budget in February. What part of a children's budget would you be looking for? Has your organization or any of the organizations been working with the people working on the national children's agenda or the early childhood development theses to be able to recognize what we're doing in terms of brain malleability in the zero to three, in terms of stimulation? Do you see that you could find yourself part of this program?

Ms. Leacy O'Brien: Yes. Certainly the zero to three range, although they are not typically library card holders.

Ms. Carolyn Bennett: Zero to six is fine.

Ms. Leacy O'Brien: Zero to six. No, we have a project for zero to three that at the moment is taking shape in partnership with publishers and we hope government, and that is the books for babies program that encourages family literacy at a very early stage. Book bags are delivered to new mothers in the hospital with gift certificates for library cards and borrowed books that, in our opinion, start them off and nourish the mind as well as their bodies and souls from the day they are born. That certainly would be one aspect of it. And I think we're all familiar with the four-year-old who can take the mouse away from the mother and show her how to point and click and get to the right direction.

There is a good deal of Internet training that can be done at very early ages. There are some wonderful websites being developed by libraries that direct children to great sites for kids on the net. There is a great deal of media awareness that's going on in librairies, and we will be seeking support for some initiatives along those lines. We're working very closely with the Media Awareness Network to promote safe and comfortable Internet use by young people.

• 1910

Ms. Carolyn Bennett: Do you see that some day there would be a way for parents to know what's a good site and what's not a good site? Certainly in health care I would love to have sites that have a little red maple leaf on them, like Betty Crocker or something, to say that this is a good site or a bad site. Do you see that for kids?

Ms. Leacy O'Brien: Oh, yes. In fact, those are the kinds of things that libraries are doing now. I was trying to get to my own library site to renew my overdue books the other day when their server was down. I found myself browsing through a number of Ontario library sites, which have basically created wonderful portals to the Internet that direct children to great study sites and to sites that have games that are interactive and not necessarily focused on online marketing. There are also sites that direct them to award-winning Canadian children's books.

That's the kind of thing we would like to see as part of this development approach so that libraries can more quickly get good content for young people—and for adults too. The libraries are part of the entryway to the Internet.

Ms. Carolyn Bennett: How are these special programs funded?

Ms. Leacy O'Brien: A lot of this is probably being done by library staff in their so-called spare time. Some of it in libraries is funded through the Department of Canadian Heritage program, Young Canada Works. This is a program that the CLA administers in cooperation with the heritage department.

If any of you would like to sit on a jury someday and see the wonderful range of projects that are being chipped away at by students each summer when libraries can get grants...and that includes some excellent local history.

We would encourage a government-wide approach to this. There are other departments that probably have shared goals that are happening, perhaps in parallel or perhaps separately in some cases. That is one of the reasons we'd like to see more integration in the development of these products.

The Chair: Thank you, Dr. Bennett.

I have a question. As you know, this committee is trying to assess the priorities of Canadians. I ask this question more as a way for you to get this on the record than anything else. When you look at your libraries, your museums, all of these issues, how important do you think they are to Canadians? If you were to go around the country and ask Canadians to list priorities vis-à-vis the budget, where do you think you would stand?

Ms. Leacy O'Brien: That's one little bit of research that we actually have been able to do. As I think I mentioned, Canadians did rank libraries as second only to fire departments in terms of valuable public service, so we certainly feel that people would strongly support enhanced library services.

The Chair: At the community base, particularly, right? Right where people live and learn and—

Ms. Leacy O'Brien: Yes.

The Chair: —play. That's a very important essential.

What about you, Mr. Anthony? Are Canadians really into this heritage business?

Mr. Brian Anthony: Very much so. And once again, it's at the community level, where people live, where heritage buildings exist. We know this because we get calls, as I mentioned earlier, on a daily basis. Citizens of a particular community—large, small, urban, or rural—are concerned about the loss of a significant building. It need not be some grand piece of architecture. It could just be a small building that has been part of the fabric of that community, that has defined the community for a century or two. We get those calls on a regular basis, usually at the last minute, and they try to engage our support to help them prevent the loss of that building.

Let me put this in a local context. Wherever you come from, look around the communities you live in and just pause for a moment and imagine that none of those buildings are there any more. Imagine waking up one morning and finding them all gone or finding all the key, landmark, community-defining buildings gone. Imagine the prairies without grain elevators or the coasts without lighthouses. I refer you to the excellent magazine I've included in the information kits, which deals with issues like that.

It's difficult for people to imagine that those things disappearing, but they are, every day. Canadians are really concerned about those things. That's why we get the calls. There is a lot of interest out there, which is why I say there is a need and an opportunity for us to act.

• 1915

If we don't act now, at the rate the Minister of Canadian Heritage referred to earlier when she mentioned that we'd lost 20% of our historic buildings in 30 years, that trend will continue and we will have nothing, no landmarks to refer to.

The Chair: People with architectural knowledge much deeper than mine, of course, tell me that this building we're in now is a very special place in the sense of architecture. Yet when we invested some money to upgrade and to help with the structure and what have you...you can probably recall some of the reaction from Canadians vis-à-vis the expenditures for the upkeep of this building. Can you make the case, for example, as to how important it is to maintain these landmarks? Even though it didn't have public support, I recall that: when we announced the expenditures for upgrading this building, everybody was saying it was too costly and asking why we would do it.

Mr. Brian Anthony: I appreciate the problem you are grappling with. Maybe it's the case that everybody loves to hate Ottawa.

On the other hand, look at the visitor statistics, at the number of Canadians from all across the country who visit this building and who would be very upset if you just let it become rundown. They would complain that the federal government had turned the House of Commons into a dump. If you didn't do it, you would be criticized, so you might as well do the right thing and weather the criticism. It's case of damned if you do and damned if you don't, I suppose, but you would be particularly damned if you didn't. We would support you on preserving what is Canada's premier example of built heritage.

When you talk to Canadians, as I say, about the communities in which they live and the buildings that mean something, those buildings need not be grand examples of architecture.

I'd like to go back to the question from Ms. Leung. Communities are very good at being able to define those buildings that mean the most to them. The railway station in a small town from which the first draft went off to the First World War, one-third of which came back, and ditto in the Second World War, may not be a grand piece of architecture, but it means something to that community. As was mentioned earlier as an example, there is the grain silo that served a particular small town in Saskatchewan. It's about to be torn down because it's no longer an efficient and effective use of grain storage techniques and transportation technologies.

All of those kinds of things have deep meaning to Canadians. When you tap into that, you will find that there is a great deal of support for the ways and mean. John was referring earlier to the number of volunteers in the museums field; we have more volunteers in preserving our heritage buildings than I could recount. People give freely and lovingly of their time to help re-shingle the local railway station and so on.

As I say, it may not be grand architecture, but it means something to them. I think that when you put it into the context of those community-defining buildings and it means something to them, Canadians all across the country will respond favourably.

The Chair: Mr. McAvity.

Mr. John McAvity: Ditto. Canadians clearly are very enchanted by museums. Every year, 55 million visitors attend museums in Canada, says Statistics Canada. As well, 56% of Canadians regularly attend museums; I would like that to be higher, but 56% is a significant figure. It's more people than attend professional sporting events in Canada. I've heard some other comparisons that—

The Chair: The percentage of Canadians that—

Mr. John McAvity: Yes.

The Chair: That's very high.

Mr. Ken Epp: What, once in a lifetime? Or once a year or...?

Mr. John McAvity: Regularly, or on a regular basis.

The Chair: What's regular?

Mr. John McAvity: I believe that it's annually. This is in our brief to you, on page 3, as a matter of fact.

Ms. Carolyn Bennett: More than once a year?

The Chair: More than once a year.

Mr. John McAvity: More than once a year. We have 45,000 to 48,000 volunteers working in the museums right now. I think this gives you a real indication—

Ms. Carolyn Bennett: That's certainly more than goes into soccer.

Mr. John McAvity: Or hockey.

Mr. Roy Cullen: The Ottawa Senators—

Mr. John McAvity: These are statistics from Statistics Canada.

But if I could just take a second, there is an aspect I'd like to touch on in terms of charitable tax policy. I know that's been a great interest of this committee in the past, and I commend you for many of the recommendations that have come into being thanks to your area of interest.

• 1920

One of the areas we're concerned about is the area of tax breaks for the lower-income Canadian taxpayer. For many of the tax breaks for higher incomes, there have been some substantial changes in terms of raising the ceiling and so on. We've made a couple of recommendations.

One recommendation concerns memberships in museums, or for that matter, in any cultural activity. One way in which Canadians can participate or vote is by joining their local art gallery, museum, or historical society and so on. We would suggest that those membership fees be tax deductible, with a certain ceiling in place. This is actually the policy in the United States. The IRS has brought this in, up to, I think, $75 per year. But do you know what it is? It's a way for people to be able to personally say, yes, I want to support an institution, I want to support preservation of my heritage in some way, simply by taking out a membership. These are usually the $25 kinds of memberships.

Another recommendation in our report concerns volunteers. As I said, there are a lot of volunteers. The year 2001 is the international year of volunteers. We would like to see ways in which volunteers can be better recognized for their work. That may involve some tax considerations. We're not suggesting that their time should be deductible, but we think the out-of-pocket expenses they legitimately incur in their volunteer activities should be—like parking, let's say. These could be easily documented and controlled and it would be an incentive for them to continue to give their time and their expertise.

Another area that interests us a great deal is the removal of the $200 threshold for charitable donations. As you will recall, it used to be a $250 threshold; you would have to give at least that amount before the deduction could be made. Mr. Martin brought it down to $200. We would suggest abolishing that altogether. Our tax advisers estimate that it is not a lot of money, but it would be a great encouragement towards having average Canadians and Canadians with lower incomes become more active charitable givers in this country.

Those are just a few of the suggestions we have. We do have another one in here about the estates of artists. In fact, we do have a letter from Mr. Martin saying that he is going to take action on that front, so we're very pleased.

I did want to take this opportunity to introduce some innovative tax ideas for your consideration. Thank you.

The Chair: Thank you.

Mr. Epp.

Mr. Ken Epp: Speaking of tax, I'm really surprised that Mr. Anthony didn't draw our attention to the fact that some of the eastern provinces give an HST rebate on building materials used for restoration and are wondering why the federal government doesn't give a rebate on its portion. I'm surprised that he didn't bring that to our attention, so I did.

The Chair: Mr. Anthony.

Mr. Brian Anthony: Thank you.

Briefly, I believe that we did bring it to your attention in our original brief of September.

Mr. Ken Epp: Yes, in the written brief.

Mr. Brian Anthony: Let me just remind you for the record that we say: “While some provinces, such as Nova Scotia, have already embarked on a program of sales tax relief in this area, the federal government could create a harmonized tax relief program” for materials used in the restoration of heritage buildings.

Thank you for reminding me of that and giving me the opportunity to remind your chair and your committee colleagues of that as well.

The Chair: I just want you to know that we did read your brief, and we knew that all along.

On behalf of the committee, thank you. As always, these round-table discussions are very interesting. You bring to light many things that perhaps sometimes escape us. It really adds value to the report we will be presenting to the Minister of Finance during the week of December 10.

The meeting is adjourned.