FINA Committee Meeting

STANDING COMMITTEE ON FINANCE

COMITÉ PERMANENT DES FINANCES

EVIDENCE

[Recorded by Electronic Apparatus]

Thursday, October 25, 2001

• 0903

[English]

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

As you know, pursuant to Standing Order 83.1 the finance committee is undertaking prebudget consultation. As many of you may know, we've been travelling the country. Actually, this is our last stop outside of Ottawa. We have three more days of hearings in Ottawa, then we engage in writing the report to the Minister of Finance, who, I think, has decided to deliver a budget before February, so we'll have a couple of weeks to put the report together.

And of course we look forward to your comments this morning. Many of you have appeared before the finance committee and know how we operate. You have five to seven minutes to make your presentation. Thereafter, we'll engage in a question and answer session.

We have the following organizations represented here this morning: the Congress of Union Retirees of Canada; the Association of Manitoba Municipalities; the Regional Health Authorities of Manitoba; and Asper Foundation Incorporated.

We'll begin with the Congress of Union Retirees of Canada, Mr. Al Cerilli, executive board member at large, and president, Manitoba Federation of Union Retirees. Welcome.

Mr. Al Cerilli (Executive Board Member at Large, Congress of Union Retirees of Canada; President, Manitoba Federation of Union Retirees): Good morning, and welcome to Manitoba. It's certainly a pleasure to see you and your members again.

We'll get right into it, because I think it's an important day for us to head right into what we conceive, anyway, as a prebudget—a real budget process.

• 0905

I hope we can suggest some of the things we want to stimulate the economy, particularly putting money back into the retirees of this country, because they are stimulating the economy every day, in their efforts to go shopping, do volunteer work, and so on.

The September 11 terrorist attack on New York continues to inflict fear on our ways and means of production of goods and services. We understand the need to deal with and adjust to the uncertainty and call on you to recommend the following for the next budget.

CURC repeats the need to address poverty in Canada so as to move this back to being the best country to live in and allow all Canadians to age in dignity and security.

You'll find our full brief is attached to this five-minute statement, and there we deal with some of the issues. But I wanted to highlight some of the areas I think are important and need to be addressed, not just glossed over.

Medicare, for example, if you look at page 2 of our main brief, needs modernization of the infrastructure and equipment delivering diagnostic services, the financing of training of health care professionals and doctors, and replacement of those retiring. That's a key issue, because many doctors are my age or of my generation, and their skills and techniques are not being passed down to other professional doctors who specialize in various things. Our concern is that this needs financing from the central government, and we urge you to promote that.

There is a need for the two levels of government to cooperate towards central standards. A national, universal pharmacare program is a necessity to control drug costs. I think for far too long we have seen the increasing of drug costs hinder the ability of certain people to meet their commitments. One drains the pocket of the other, and as a result many seniors are suffering. Home care is an example of an area where the federal government could get involved in setting some standards across the country.

Full recovery from acute care to community services is an area where we certainly have experience in our age group. Oftentimes we're released from a hospital and find nowhere to go but an expensive unit to recover from some serious ailment.

I think those areas speak for themselves. We will be making a presentation, as pointed out in the main brief, to the Romanow commission. We didn't have an opportunity to present to Kirby, but his report is already out, and it contradicts some of the areas Romanow may be dealing with. I think this committee must continue to play a significant role in financing and dealing with the financing of medicare.

Concerning pensions, we want to start off with the point—and you'll find this on page 3 of our main brief—that there's no way we are going to sit back as a generation of retired people and see the age of retirement reach 70, as suggested by so many of the kites many people are flying. If this federal government, like the previous Mulroney government, wants to have another fight with the seniors, go ahead and touch pensions again. We want you to touch pensions only in the way we outline here, so the money goes back into the pockets of seniors and retired people.

Concerning the need to recover pension plan surpluses through employer contribution holidays, I was shocked the other day. Many of my fellow seniors do a lot of volunteer work. We go all over the province and the city. Lo and behold, not only is my pension plan being double-dipped with employer contribution holidays, but the banks are dipping into their employees' pension plans. They brag about the billion-dollar profit they're making on the backs of people, and yet they're double-dipping into pension surpluses. Can you imagine that? Yet we had visionary people in the House of Commons in 1947 who said that pensions are a trust for retiring people, and the surpluses cannot revert back to employers for their bottom line and profit-making.

It's a tragedy that in this day and age we see people bragging about these commitments who do not meet their commitments at all. They're double-dipping into the surplus. We want you to stop that, and we recommend that this committee recommend to Revenue Canada, and through the Minister of Finance, that provisions be made to to allow that surpluses go back to the retirees so they can stimulate the economy, as pointed out earlier.

• 0910

We're also seeking ways and means for retired people to sit on pension boards and trustee boards so they can protect their end. I've seen too many court cases come about simply because of employers thinking they have the unilateral right to dip in there and challenge the retirees' organizations to take them to court. What a bunch of crap! I've never seen anything in all my life like the recent cases I've witnessed right here in Winnipeg in that regard.

It took a crown corporation like Manitoba Hydro to offset that process when they purchased Centra Gas as part of the crown corporation, because the private corporation was simply saying to the retirees, “Go to court and do what you can. See where it takes you.” I just wanted to point that out in relation to pensions. We highlight those areas in the full text, with our recommendations in regard to what is needed.

The other area we want to revisit, and that this committee must revisit along with the federal government and all the parties in Ottawa, is the work of women in the home. I want you to think about it. None of us would be here today if it weren't for our mothers, sitting at home and guiding us through the days when we came home from school, and so on. I think it's an important area, and recognition of that work is needed.

We're proposing to you that even if you put a minimum-wage figure on that work, based on averaged-out hours.... The work day—and you ask your daughters how much time they spend at home looking after their children while they're going to school—is an average of 12 to 14 hours a day.

So even if you averaged that out to a minimum wage, you would give them something to retire on. We're talking about those women who can't start at work, and can't go to work afterwards because of age and inability to cope with the workplace, and because of the provision we have in the Canada Pension Plan and the Quebec Pension Plan—the drop-out provision concerning children under seven. That time counts as long as those women work before or after.

I point this out in our main brief as well as in the five-minute presentation I'm making to you. Certainly, those women should be recognized as having contributed to the well-being of this nation.

We want you to seriously look at it and recommend to the Minister of Finance that it's time the pension schemes were revisited on the basis of that—not the family income kind of proposition you put to us before, where the old age security and Canada Pension were going to be combined with all other incomes, and women would have been kicked in the butt. We're saying, do something serious this time; look at them seriously and have that work contribute too.

You know, we're simply saying it's time to right this wrong on behalf of all women in this country, who make up over 50% of the population.

We just want you to know, concerning item three of our presentation here this morning, the housing and transportation of seniors—this is research information, and it's in the body of our brief—that there are 800,000 volunteer seniors who contribute to the country by one means or another, by giving up their time at home, leisure time, and so on. However, to talk about women, 19% of women retiring live at or below the poverty line because of what we just talked about in relation to pensions. I wanted to point that out, that 19% of the women are not receiving proper treatment.

The other area I want to congratulate this committee and the federal government on is the ability to reach out to retirees through the OAS. The 1-800 number they're advertising on TV has had significant play. We suggested this about four years ago. It's finally coming about. Out of almost one million people who were being deprived of the guaranteed income supplement to their old age security, half are now receiving it. It must continue to invest in that kind of PR job on TV.

• 0915

We talk about housing and transportation and strike a serious note in this regard. On page 4 of our brief it states that seniors are going to be living in some form of deprived housing away from transportation—transportation that would make it possible for them to still go shopping, to take the bus and so on, and we want you to seriously look at our presentation on this.

On item four, on the environment and the quality of air, I don't have to remind you what has happened simply because of cutbacks. If we're going to have water treatment plants in this country...and the ministers of the day said ten years ago that we needed $14 billion to put the thing right; today we're looking at another $14 billion because we didn't invest the first $14 billion in our infrastructure for water, sewers, water quality, and the environment. I think it's a bloody shame.

We brag about having a quarter of the world's water or more, which people are going to be fighting wars over pretty soon, and yet we're not looking after it. Our people in the communities are not being treated right, and it's a cost to our health care system simply because of the water quality we're looking at.

The Chair: Mr. Cerilli, I am going to ask you to wrap up because we have other....

Mr. Al Cerilli: All right.

On education and students' health, we want you to seriously look at pages 6, 7, 8, and 9 in our brief. We want to tell you that obesity in school children is because of cutbacks in education, which have taken away the physical education component, just as an example. Diabetes is the number one killer of those students who have no activity whatsoever.

On top of this, if you look at those pages on which we contributed a considerable amount of time, there are reports out there now telling you there must be a reinvestment by this government, in this committee's recommendations, so that the schools in communities across this country can get back into educating and put physical education back into our school system.

Thank you very much.

The Chair: Thank you very much. You'll probably get a chance to expand on some of those points during Q and A.

Now here from the Association of Manitoba Municipalities, the president, Wayne Motheral.

Welcome to you.

Mr. Wayne Motheral (President, Association of Manitoba Municipalities): Thank you very much. Good morning.

As you know—or maybe you don't know but I will relate it to you—we represent all 201 municipalities in Manitoba, both urban and rural. We have done this for three years. You have copies of the presentation from our association. You probably have had this pamphlet handed out. I am only going to highlight a few of the things in it.

For the sake of time, the number one issue we have and the priority of course is infrastructure renewal. It's been one of our highest priorities we for several years. I would dearly love to come to one of these venues some year and say thank you very much to the federal government for finally putting fuel taxes back into highways.

We continually try to strive for this, and I know it has been a position we've taken for several years. It has been recognized that $17.4 billion is needed in Canada to correct the current deficiencies in highways. In Manitoba alone, $768 million would be needed.

We need to have a fuel tax coming into highways, whether it be in a dedicated fashion or as an equivalent amount, because there's a reluctance to dedicate any taxes back to certain things. But we need this money coming back into highways—$145 million is taken from Manitoba every year on fuel taxes. Across Canada, it is close to $5 billion, and we feel this needs to be going back into highways.

The United States, our neighbours to the south, have recognized this: $35 billion annually goes into highways in the United States. I live right on the U.S. border myself, and it's not very hard to recognize that its major roads are in far better shape than ours. The little state of North Dakota alone has three four-lane highways; we don't even have a four-lane highway going across Manitoba.

Airport funding is another key infrastructure program we're concerned about. The federal government has reduced the funding under the airports capital assistance program. A lot of municipalities have had to take these airports back into their own authority. It's been very difficult because of some regulations they're trying to push through right now, especially the regulation CARS-308, which will increase the level of firefighting requirements for local airports with no funding provided to meet these new standards. We believe regional airports must receive adequate funding under the airports capital assistance program, and if the regulation CARS-308 proceeds, new funding will be required to implement it.

• 0920

If there isn't any action on this, airports run by municipalities will not be able to survive, and it's very, very important that they do. Airports are an economic tool for many northern communities in Manitoba, and this must be addressed.

A water infrastructure program is also very key, especially to rural Manitoba. We need to develop a program to get water into rural Manitoba. We have been approached by the Prairie Farm Rehabilitation Administration, the PFRA, asking us to lobby their own government to try to get more dollars coming into that particular program.

About $5 million comes annually to western Canada. Of that, Manitoba gets $1.1 million, and it's been recognized that there's a need over ten years for $180 million, around $18 million a year, for both rural water distribution infrastructure and for waste water infrastructure.

Under the infrastructure program we presently have, I happened to have had the pleasure of being one of the selection committee in for this particular program. In the first round there were 116 applications for rural water infrastructure projects totalling $152 million; in Manitoba we have $54 million to distribute over five years. You can see the need for it.

With what's been happening in recent months and over the past year in Saskatchewan and in Ontario—and actually in Newfoundland now; it's happening all over—we need to recognize that we have to have clean, potable water to distribute to all our residents.

The last point I'm going to bring up is on the agricultural and the rural community crisis. I will also have the pleasure of meeting with Mr. Vanclief and Mr. Andy Mitchell on this, this coming Monday. I'm travelling to Ottawa and will address this issue with them. As for the finance committee here, the major thing we have to bring forward is to try to get the federal government to recognize that there is a problem out there in rural Manitoba.

In rural Canada there's a problem. A lot of communities now have lost tax bases through the loss of elevators, through the loss of branch lines, etc., and they're having a very difficult time trying to make ends meet. We are not a farm lobby group; we are a community lobby group, but we're having a problem with our communities in rural Canada because of the farm crisis.

We seem to be losing even the social fabric in our communities. There's less volunteer time because more people need to be working to support the farms. We notice a lack of volunteers in anything you go to in rural Manitoba now. It's happening all over the place.

Our major task here, as I say, is to attempt to convince the federal government that there is a problem, and solutions will be in vain if we cannot get this recognition. We are prepared to bring forth solutions. For instance, if we took the tax off all off-road farm equipment, it would bring $175 million back into the hands of farm people.

European governments and our neighbours to the south of us, the United States, have recognized this and are doing something about it. We need to look at our farmers as land stewards looking after the land. And we believe that if nothing is done soon, it may be too late for Canada.

With that, Mr. Chairman, thank you for the opportunity. I just gave you some highlights, but we hope you do look our presentation over, take it seriously, and on behalf of municipalities, again, thank you very much for listening to us.

The Chair: Thank you very much.

We'll now hear from the Regional Health Authorities of Manitoba, Kevin Beresford, chair of the council of CEOs, and Randy Lock, executive director.

Welcome to you both.

Mr. Kevin Beresford (Chair, Council of Chief Executive Officers, Regional Health Authorities of Manitoba): Good morning. Welcome to Winnipeg.

Thank you for the opportunity to present. We're certainly pleased to be here speaking on behalf of the Regional Health Authorities of Manitoba.

• 0925

To give you a little background, Manitoba has 12 regional health authorities, 10 in rural and northern Manitoba, one in Brandon, and one in Winnipeg. Collectively, we represent the health system in Manitoba, with the exception of Cancer Care Manitoba and the Addictions Foundation of Manitoba.

The RHAs are responsible for the direction, operation, coordination, and provision of the full continuum of health services. This continuum includes everything from facility-based acute and long-term care, as well as the full spectrum of community services, including mental health, public health, and ambulance services.

Our main mission is to foster the development of an efficient, effective, integrated, interregional health care system that meets the needs of all Manitobans. As the Manitoba member of the Canadian Health Care Association, the Regional Health Authorities of Manitoba were involved in developing the CHA's funding brief that was submitted to the committee in August under separate cover.

Let me begin by saying that it's our opinion that the system of health care we have today is not sustainable, in its current form, into the future. The need for change is real and immediate. The bigger question of how we make the required changes is a real challenge, as there appears to be no consensus forming as to what changes are required. Before we can undertake dramatic and sustainable reconfiguration of the system, which we believe is needed, a stable and ongoing funding framework must be assured.

Some of the basic infrastructures of our health care system have suffered serious erosion over the past decade as a result of stop-and-go funding methodologies by both federal and provincial governments. Therefore, one of the first priorities must be a significant and sustained federal cash commitment to restore stability to the existing health care system and ultimately renew confidence in the health care system.

There is also an urgent need for the federal government to explicitly commit to an annual escalator to be applied to this funding commitment. A cash floor at $19.8 billion will just meet existing needs to ensure roughly comparable services and health outcomes within Manitoba and across Canada. The annual escalator will provide some assurances that long-term sustainability of our health care system in the face of economic growth, changing demographics, and other factors, will be possible.

Finally, health human resources are and will continue to be a major issue for the RHAs in Manitoba. The challenges of having inadequate numbers of appropriately trained and educated providers are being faced on a daily basis and will continue to have significant impact on the system's ability to provide timely, quality care for many years to come. Federal funding and guidance is needed to enable the development of short- and long-term solutions to address the many health human resource issues.

We've attempted here to focus our presentation today on only a couple of aspects of the changing health care environment in which we find ourselves. We do take this opportunity again to thank you for allowing us to provide this brief presentation to the committee.

Thank you very much.

The Chair: Thank you very much.

We will now go to the Asper Foundation, with Gail Asper, its managing director and the president of the CanWest Global Foundation. Welcome.

Ms. Gail Asper (Managing Director, Asper Foundation Inc., and President, CanWest Global Foundation): Good morning, members of the committee, Mr. Chairman, and welcome to Winnipeg. Thank you very much for taking the time to traverse the country and listen to the issues of Canadians. We really appreciate it.

I'm Gail Asper, managing director of the Asper Foundation and president of the CanWest Global Foundation, both of which are private foundations. With me today is Moe Levy, executive director extraordinaire of the Asper Foundation; and also with me is Norm Promislow, a tax guru with Pitblado, Buchwald, Asper, and legal counsel to the Asper Foundation.

You all have a copy of my submission, which was sent to the clerk some time ago. I'm not going to repeat all the issues outlined there. I would like to commend the government for its recent wonderful announcement with regard to actually making permanent the capital gains rules concerning gifts of appreciated shares to public foundations.

I'm deputy chair of leadership giving for the United Way this year, and I can tell you that for the major donors to the United Way, these provisions are extremely important and are being taken advantage of regularly. And the fact that it was done well before year end is also incredibly great for estate and financial planning, and really timely. So bravo for that.

• 0930

I would like to ask the committee to explain again, in as clear terms as possible, the basis on which it continues the discrimination against the taxpayers who support public foundations versus those who support private foundations. I'm really going to urge the committee to consider finishing the job.

For years we've been meeting, writing, calling, making submissions, and supporting numerous other submissions in an effort to right the obvious and really harmful wrong that's being perpetrated by the government against taxpayers. I'm speaking, of course, about the fact that when you implemented the laws regarding favourable tax treatment of donations of public shares, you wilfully and knowingly declined to afford the same favourable tax treatment to one group of taxpayers who wish to donate public shares to private foundations.

I know this was wilfully done because I met with the Department of Finance tax bureaucrats, and we went through the whole thing a few years ago. They really felt it was not appropriate to allow gifts of appreciated shares to private foundations. But I have yet to really hear the cogent logical argument as to why this is so. I'm hoping someone can enlighten me at this hearing.

You may know that 84% of the 1,372 foundations in this country are private. Private foundations are legal entities, approved by the government. They carry the exact same charitable obligations as public foundations, the same disbursement quotas, and the same distribution rules. When you donate cash to a public foundation, it's treated the same way as if you donate cash to a private foundation. So they're equal on that basis.

For some reason, when you donate shares there's an aberration. If you donate shares to a public foundation, there's a favourable tax treatment. If you donate shares to private foundations, they don't get the same kind of favourable tax treatment. So all I can conclude is that there's some will to penalize private foundations. I really am curious to know the reason why.

I'm sure the universities, United Way, food banks, and children's theatre groups that are affected would also like to know why there's a will to impede the growth of private foundations.

In the last year, our family has donated about $35 million worth of shares to public entities, inspired by your favourable tax treatment rules. We'd like to do more, but we want to give the shares to our private foundations so we can undertake larger, more expansive projects that can really make a major difference to our communities.

If we don't see improvements in the tax laws, we're not going to be able to build the foundations. I think that will just end up being very bad news for all the charities that are affected. Then instead of us coming to speak to you, it will be the charities themselves, who will have found themselves adversely impacted by our growth.

A couple of nights ago my dad, Izzy Asper, was honoured with the Edmund C. Bovey Award, which is a national award from the Council for Business and the Arts in Canada, for extraordinary philanthropy and commitment to the arts in Canada. Through his private foundations he has supported the cultural scene in Winnipeg. A public stage was built in Assiniboine Park for free concerts for the public, a children's theatre was built in The Forks in Winnipeg, and numerous other groups have been supported. Without the private foundations, this couldn't have happened. We would have a different cultural landscape in Winnipeg.

In addition, millions of dollars have been given to support universities, community centres, and youth education programs, and we're contemplating more major donations in the fields of medicine and human rights.

We need to see more favourable tax laws so that this work can continue and grow and benefit our communities. Your insistence on treating private foundations differently is directly responsible for our inability to expand our good works in the way that we see is the most effective.

Again, I'd like to hear, if we can, some explanation for the discrimination, and hopefully some thoughts on when it can be eliminated. Given the vast amount of cutbacks the government has had to undertake over the last few years, which we applaud—we feel the government has been fiscally prudent and it's been the sensible thing to do—we still need your encouragement of private sector support for charity. It's urgently required. Your extension of the favourable tax treatment of gifts of public shares is long overdue.

There are numerous other points I have raised in my submission. Please feel free to ask me or Moe Levy questions about them. Moe is an expert in the work of our foundations and private foundations in general. Norm Promislow is an expert in the area of tax issues relating to foundations.

With that, Mr. Chairman, I conclude my remarks. Thank you.

The Chair: Thank you very much, Ms. Asper.

We will now proceed to the question and answer session. We'll have a six-minute round for all members.

We'll begin with Mr. Epp, followed by Mr. Nystrom.

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

• 0935

I'd like to thank you all for being here and for giving us your collective insights into changes that are needed in the country. I'd like to begin with the Association of Manitoba Municipalities.

I would like to ask you about your work, in terms of the infrastructure money that comes from the federal government. As you know, that's administered by the province and you all have to sort of divvy it up, put in your applications and everything. Has that worked okay in the past? Would you suggest changes to that?

Mr. Wayne Motheral: I'm pleased to say that in Manitoba, as far as the municipalities are concerned, it has worked well, although there are many people in the municipal field who feel an infrastructure program should be ongoing instead of an ad hoc deal.

We're pleased we were able to be participants in it. The municipalities had a pocket of money, although it wasn't the whole lot. The provincial government chose to take 40% for themselves in a strategic fund. The remaining 60%, of course, was divided evenly between the City of Winnipeg and the rest of Manitoba.

With that, our selection committee and everything has worked well. The money has flowed. The municipalities are pleased. We're sticking to the guidelines that were given to us in selecting green projects to start with. The municipalities are in about 95% agreement that it not go into buildings and recreation facilities. It needs to go into hard-core infrastructure.

I may be getting beyond what you asked me. It's working well. I guess that's the short answer.

Mr. Ken Epp: Okay. The next question is on water. This has become an issue of great prominence in our country in the last year or two. I'm just wondering whether this is a case of infrastructure that exists now and has deteriorated because of the large amount of time since it was first built. Is it just a normal routine need now to replace this, or is it special because of the risks of water contamination, of which we are now so much more aware than before?

Mr. Wayne Motheral: Thank you. My answer there will be mixed because it's a combination of both. There certainly is crumbling infrastructure and it does have a life cycle. A lot of the projects that came forth to the infrastructure committee were to replace water lines.

Mr. Ken Epp: You're here before a committee of the federal government, and the federal government doesn't generally deal directly with municipalities. Usually they work through the province.

Are you suggesting that perhaps the equalization payments that go to the provinces should be increased, so the provinces have more money to allocate for water infrastructure renewal, or are you suggesting some other method of administering that?

Mr. Wayne Motheral: In our presentation here, Mr. Epp, we work with the PFRA, the Prairie Farm Rehabilitation Administration. That is the water connection to the federal government, and they have a program. They get $5 million every year in western Canada, and I mentioned that. That's not nearly enough.

Our government in Manitoba has guaranteed us they will match any funding from the federal government for water infrastructure, and the municipalities will match that, so it is a tripartite program. We're just asking for that to be expanded.

Mr. Ken Epp: You mentioned that PFRA is out of money on this.

Mr. Wayne Motheral: Their money has been cut back over the last number of years.

Mr. Ken Epp: That wasn't their original mandate, was it—municipal water supplies?

Mr. Wayne Motheral: It became their mandate. It escapes me when, but it is the water group from—

Mr. Ken Epp: It's water management, but I didn't realize that was specifically the infrastructure to deliver that.

Mr. Wayne Motheral: On the tripartite program, yes.

Mr. Ken Epp: I need to move along to the Regional Health Authorities of Manitoba.

• 0940

During approximately the last ten years, due to the cutbacks in the health system, have you lost a lot of staff, medical doctors, nurses, as well as other staff, who you now are having difficulty replacing? Is that why you need more funding? Is this the basis for your call for stability in health care funding?

Mr. Kevin Beresford: That's one component. Certainly over the past decade we have seen significant erosion of funding in health care. As a result, 80% of our budgets are directed toward a staffing component. When we're cutting back on expenditures, that is obviously one of the first areas we have to tackle in order to reduce costs. So an answer to your question is yes. Over the past many years there was certainly a cutback in staffing. There was a cutback in the training programs associated with that staffing component as well. Those two elements have put us in the position we're in right now as far as the human resource element in health care.

Mr. Ken Epp: How widespread have been the exits from the province of your health care professionals? Is it significant?

Mr. Kevin Beresford: There have been some recent studies taken by the Winnipeg Regional Health Authority. To a certain extent, we believe the migration has slowed. However, I think over the past several years, particularly with differences in the ability of provinces to fund health care to a higher extent, the inequities in salaries have certainly been a contributing factor for Manitoba in losing its health care professionals.

Mr. Ken Epp: Okay. I have to speed along here.

One quick question for the Asper Foundation.

Ms. Gail Asper: If I could, I'd like to answer something about the health care migration of professionals. Speaking personally, there has been a terrible loss of health care professionals in our province. They're all living one hour across the border in Fargo and making a lot more money, and they seem to be quite resentful of having to do that. But that's not my area of expertise, sorry.

Mr. Ken Epp: Well, we've heard that before.

I want to know something about a private foundation. I have never had any involvement with that kind of a foundation directly. I've just heard about them. How do you decide who is the beneficiary of your ability to give charity?

Ms. Gail Asper: Well, it's usually the decision of the managing director or the president, with input from the board. Of course, any recipient of the funds has to be a registered charity. Norm will correct me on all the appropriate verbiage here. But there's a disbursement quota that the government requires a private foundation to meet. It must be to registered Canadian charities.

So there is a whole menu of registered Canadian charities. The decision about who would receive funding is made simply in the same way you would decide your own personal money. When you get your phone call from the Liver Foundation at six o'clock on a Tuesday night, you might decide to make a donation, and that would come from the Ken Epp private foundation.

Mr. Ken Epp: Do you give money only to registered charities? Or can anybody write you a letter and say, I'm a needy person, so send me some cash?

Ms. Gail Asper: No, they definitely have to be registered charities. If you can't get a tax receipt from them with their registered number, then you're not able to meet your disbursement quota.

Mr. Ken Epp: I'm almost out of time, so please be very brief. I have one more real quick one.

My last question has to do with the whole issue of this required disbursement. We've heard from other witnesses that they would like to have that changed, especially because interest rates are low. Some of these foundations are now being asked to actually reduce their capital in order to meet that quota. But you didn't mention that. Is that because it's not a problem for you? Why was that omitted in your report?

• 0945

Ms. Gail Asper: It hasn't been a problem, although it's interesting. This is the first year with the investments, as they are, that a lot of foundations—public and private—are having a really difficult time making enough money to meet the disbursement quota. So it does mean that you actually start eating into the capital. There might need to be a change for the formula.

We started the Asper Foundation in 1983, and it hasn't ever been a problem earning enough money. You need to earn about 10% to cover administration costs and inflation to actually just get to your 4.5%. By the time you earn 10% and pay financial advisers and administration and inflation, you're really left with 4.5%. All the studies in the world say don't spend any more than 4.5% because you'll be eating into capital. So if you earn 3%, you're in trouble.

We may be back next year. Depending on how the market goes, depending on what interest rates are, this might be an issue. We're hoping this is just an aberration.

Moe, did you have any comment?

Mr. Moe Levy (Executive Director, Asper Foundation Inc.): I was just going to add that precisely the reason why we're asking the committee to recognize this major issue you've put forward is we believe we can manage our funds better than smaller public foundations to whom we actually grant some of these funds. We've noticed that our ability is significantly better and our returns better than some of the other foundations. Hence, the need for us to actually—I hate using the word “control” because it has a negative connotation—manage that asset.

Mr. Ken Epp: Thank you, Mr. Chairman. I will defer to other members of the committee, and if there's time, I have more questions.

The Chair: Mr. Nystrom.

Mr. Lorne Nystrom (Regina—Qu'Appelle, NDP): I'd like to welcome the witnesses here this morning and ask about three different questions.

The first one is to Ms. Asper, if I may. I understand that the British government has made some changes similar to what you're advocating. Do you know what the results have been in Britain as to the effect of these changes in terms of charitable donations?

Ms. Gail Asper: I can't speak about Britain. I know that in the States that has been the case. As a result, they've had an ability to grow a huge amount of private foundations, such as the Kellogg Foundation. Some of them are extremely important in running huge charitable activities. So from my experience with the States, I'd say it has only been positive. University professorships and scientific research and everything are now.... My husband's a scientist, and they actually are applying to U.S. private foundations for funding. He's a Department of Fisheries and Oceans scientist actually, and they now apply to the American foundations for their research here in Manitoba. I think it would be nice if he could apply to some Canadian foundations for that kind of funding.

Mr. Moe Levy: May I just add, in terms of the Canadian experience in the last five or six years since this rule was made for public foundations, the community foundations alone have reported $140 million in increased income as a result of this measure. So there's some very hard data in terms of the Canadian context, which we believe, if it's extended to the private sector, could be quite dramatic actually.

Mr. Lorne Nystrom: It would be useful to have the data.

Mr. Cerilli, you're talking about women and the problems they have in terms of low incomes and so on. Are you in favour of the federal government, with the appropriate agencies, looking at a homemaker's pension, or would you be looking at a guaranteed annual income for all Canadians? Which would be the best route to go, or do you have something else in mind?

Mr. Al Cerilli: The first thing we have to do is recognize women's work at home, other than trying to juggle work, then have a family, and then try to get back to work. We're grappling with that very question ourselves. That's why we approach it through the Canada Pension Plan rather than to create a new system.

For example, the dropout provision of the Canada Pension Plan is not known really by a lot of people. Women can apply for the time they have spent at home to raise children. The specific rule is that it is counted towards your benefit. I think that would be more adaptable for the system right now, so that women can get their recognition. Also, when they are 65 and retired, even though they haven't gone to work, they will in fact receive some kind of a Canada Pension Plan benefit. The provision in the present form is pretty specific, really. It asks what a child-rearing drop-out provision is, how it works and how you apply. So with regard to registering for the Canada Pension Plan, I think that system will apply more adequately to women.

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Mr. Lorne Nystrom: What about the idea of a guaranteed annual income? That's been raised in the past, by people on both the right and the left. You may remember that Robert Stanfield, the former leader of the Conservative Party, supported the idea a number of years ago.

Mr. Al Cerilli: I think that's the kind of ideal situation that we look at from a union retiree's perspective. Our organization represents 500 other organizations: CARP, One Voice, and all these other ones. They're pretty right wing, and all supported to some degree by funding from government and other industries.

Last year in Ottawa, when we met with 13 organizations of retirees, representing over 2 million people—and they certainly came across to our way of thinking in terms of an equal distribution of income in order to beat the poverty line. But that's in the long term. I think the coming generation of women can't wait that long just because of the ideology of different groups of people on the questionnaire.

Mr. Lorne Nystrom: A question to the Association of Manitoba Municipalities.

I come from rural Saskatchewan, so I understand some of the infrastructure problems in terms of highways and so on. In terms of help for the farmers, what do you think the finance committee should recommend to Mr. Martin?

Right now, we have very unfair competition. We get around 9¢ on every dollar coming from the federal government to help our farmers. The Americans get about 38¢ on the dollar and the Europeans about 55¢ or 56¢. So there's a tremendously uneven playing field.

Our treasury isn't as rich as the European or American treasuries, in terms of massive farm support and subsidies. But we have to do something. What level of support for rural Canada in the prairies do you think is needed, and what can we afford?

Mr. Wayne Motheral: As I said, we are not a farm lobby group. If we need to, we will certainly come up with solutions and work with the farm associations.

As I mentioned in my presentation, recognition is the number one issue. The people in power still don't seem to recognize that there's a problem out here in rural Canada.

I gave one solution—it doesn't have to be a large amount in some cases, but I think we have to approach it as land stewardship. I don't like the statement I've heard so often that Canada doesn't have the treasury to do this. We have the money to do it if we recognize the problem. On a per-capita basis, $2 billion to $3 billion is not out of line—it's not any different from $10 billion to the U.S. treasury. We hear that statement a lot, but we don't buy it.

Along with the recognition that there is a problem, I think somewhere along the line there needs to be a long-term safety-net solution to keep farmers on the land. The stewardship of land is very, very important. Maybe we need a whole new functional system that would keep people on the farm.

The Europeans and the Americans have recognized that problem and are doing something about it. But every time we or the government try to do something, the question comes up, is this green? Does this fit the GATT rules? You know what I'm talking about. We seem to be doing everything right as far as the GATT rules are concerned, but our farmers are going broke.

Mr. Lorne Nystrom: A number of trade experts have said that we could actually put another $2 billion or $3 billion into prairie agriculture without violating the trade rules. So I think we do have the flexibility to move—not as far as the Americans and the Europeans have, but certainly a long way towards where they are.

One other question. Regarding the national highway plan, what level of support do you think the federal government should provide for highways in this country? The Americans provide, what, $35 billion? Most countries in the world have a transportation policy or a highways policy at the national level—and we don't. So roughly what should we expect from the federal government in terms of cost sharing? What's your recommendation?

Mr. Wayne Motheral: Our recommendation is to put the fuel tax back into the roads. That's $5 billion a year, and that's huge. But there also needs to be a $17 billion influx right now, just to get things back to where they should be—because we have a deficit on that.

Mr. Al Cerilli: On that question, as you know, I come from a transportation background. I'm used to dealing with these areas with farmers and municipalities right across Manitoba and the country.

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Years ago I was asked to speak at a conference of business transportation interests. I was the only labour leader there—I don't know why they picked me, but they wanted that kind of input. So I suggested the idea of a formula for the dedicated fuel tax that the federal and provincial governments gather, which would reinvest it not only in highways but also in the infrastructures I talked about.

I didn't include that here, but we've been on this for many years. I certainly think the federal government has to look at this formula for the dedicated fuel taxes, and the idea of sharing that with the rest of the country. Some provinces have already looked at the question and some already do that.

The Chair: Thank you, Mr. Nystrom. Mr. Cullen.

Mr. Roy Cullen (Etobicoke North, Lib.): Thank you, Mr. Chairman, and thank you to the presenters.

I have a comment for Ms. Asper, a question for Mr. Beresford, and a question for Mr. Cerilli, if we have time.

Ms. Asper, the committee hasn't yet advised you of the rationale.... I'm not sure I have the magic answer either—perhaps my colleague Sue Barnes does—but I do know that members of the committee are very curious about this, and very interested.

I've just completed a two-year term as parliamentary secretary to the Minister of Finance, and I was involved in discussions on eliminating the sunset clause. Frankly, I don't remember the distinction between public and private foundations. I may have missed that meeting. But I will undertake—and I'm sure others on this committee will also undertake—to follow up in Ottawa with the minister.

At this point, we've only heard one side of the story, and since we're on the road, we haven't had the time to really check it out—at least I haven't. It doesn't sound as if the rationale is all that strong. But I will undertake to check that out. I think the committee is interested in wrestling with that issue, finding out exactly what the problem is, and seeing if we can correct it.

Mr. Cerilli, on your comment about the CPP and women working, of course you know that CPP and QPP are contribution-based schemes: employees and employers both pay into it. Now an idea that a few of us in Ottawa have been kicking around is that if a woman works at home, for example, she could go to the maximum rate. But I think it would have to be similar, unless you want to get into a prohibitively costly program—basically a subsidy program along the lines of EI, with contributions on self-employed earnings.

What do you think of the idea of the government matching the personal contributions of women working at home? Otherwise it's a very inequitable situation, with only one side of the coin.

Mr. Al Cerilli: I think that's an excellent question. I'd like to give you some background on the pension schemes, which we outlined in the brief. When we talked about the Canada Pension Plan in the sixties, the question of women's work certainly came up. It died off, and some of the things of that nature should have—but that's another argument.

I think the self-employed provision of the Canada Pension Plan is separate and aside. However, the family rearing provision is also separate and aside, because it has the drop-out provision. So I think the government has the means to assess their equalized portion of the contributions, just as employers do, and the women can contribute towards it. If the women can't afford that...that's why we're looking at the minimum-wage part, to contribute towards that.

For some women, I think you have to look at the scale of their contributions and what their means are. You can do that through Revenue Canada. I think at the end of the day you can have a formula for the federal government to match those contributions.

The poverty question could be developed as well. But I think if you go out to the women's groups and businesswomen's groups, you can find out what kind of a formula to adopt. You may never reach that exact formula, but I think you can make that decision based on the equal contribution by the government and the woman.

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Mr. Roy Cullen: So you agree that it would have to be a matched contribution. The question of the level is a thorny one, but I think it's definitely worth doing.

Mr. Al Cerilli: And work out the drop-out provision so there's no contribution made—but the time comes. Why should some women benefit from that and not others?

Mr. Roy Cullen: Yes.

Mr. Beresford, perhaps you can't readily characterize the health care system in Canada, but I'll give you my version: in terms of outcomes, we rank very high; in terms of per capita expenditure, we also rank up there; but in terms of value for money, we don't seem to rank quite so high.

In your briefs, you say that the RHAs are responsible for providing the direction, operation, and coordination of the full continuum of health services. That's actually a favourite bugbear of mine: if you look at the full continuum, right from Meals on Wheels through to an acute care hospital, it seems to me that we should be optimizing people at the different levels of care—not only in terms of patient care but also in terms of the economy.

You heard Mr. Cerilli's comment about lack of long-term care beds. I don't think this is unique to Manitoba: in Ontario, all across Canada, we have elderly people in acute-care beds. That's not good for patient care, and it's not very economical. I agree with you that health care isn't sustainable the way it's going.

If the health care system doesn't get a better handle on how to maximize the use of those dollars and balance the continuum correctly, so that we can optimize our tax dollars, then I think we do have problems. So what can you do—what are you doing—to make sure the continuum is structured the way it should be?

Mr. Kevin Beresford: Again, a very good question. We struggle with that very question. I can give you an example from my region, where I'm the chief executive officer. It's a very large and diverse region, and it has focused on primary care, health promotion, and disease prevention. At the same time, we have a growing population, stagnant funding, and inflationary costs for drugs and diagnostic testing. So we're basically trying to ensure that we're able to deliver the meat-and-potatoes basics—the curative part of the model.

The challenge is to redirect dollars from our global funding to some of the areas we see as critical. That's exactly what you spoke to. We think if we put some money into the front end, we could see long-term paybacks.

Within our region, we've developed some very strong partnerships with other sectors: education, family services, recreation, and so on. We see them as critical players.

In our region, we've also put a lot of money into services for seniors. These programs are grant-funded agencies that operate within our province and our region. We've seen some successes there. So I think we're doing what you suggest.

However, it is frustrating to try to balance providing general health care for citizens of Manitoba and of our region, but also to acknowledge that we have to be able to shift some funds to the front end in order to get long-term payback.

Mr. Roy Cullen: This idea of front-end loading comes into play when you talk about promotion, prevention, etc. Because you have all these urgent needs on the treatment side of the health care system, it's been shuffled off to the side now for many years.

On the question of capacity, are there unique financing vehicles we could look at? I talked to someone in British Columbia, and they say that a crown corporation, BCBC, is helping to finance the construction of long-term care facilities on a lease-to-buy basis or whatever. That's a way for them to get around this front-end loading capacity problem to finance the construction. So we have the right mix of care at the right levels—rather than just carrying on having elderly people in acute care beds, which doesn't make any sense at all.

Do you think there are ways of dealing with it? Or are we just bound to live with our misfortune?

Mr. Randy Lock (Executive Director, Regional Health Authorities of Manitoba): Perhaps I can deal with that. I think there are a couple of different types of housing arrangements that are appropriate for seniors, and that's what we're seeing right now.

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In Manitoba, with respect to our personal care home beds, namely those beds that are required for elderly persons who require a fairly significant amount of nursing care, we don't have the types of shortages we would have expected to see eight to ten years ago. However, we are seeing that the people in those beds are much needier care-wise than they were ten years ago. We have differing levels of care for people in those beds, and those levels of care have continued to go up over the last number of years, and will likely continue to remain at very high levels.

As a result of that, there are people requiring lower levels of care who previously might have been in some of those beds simply because those beds were there. Those people are now trying to get maintenance care at home. Not every family is able to support mom, dad, grandpa, or grandma in the home, so there is some call for supported housing alternatives. I think those supported housing alternatives are where we could target some additional funding. There are certainly private interests that are looking at getting into that, and there are public solutions that could be looked at as well, but I think we're looking at differing types from what we previously have had.

The Chair: Thank you, Mr Cullen.

Ms. Barnes.

Mrs. Sue Barnes (London West, Lib.): Thank you, Mr. Chair, and welcome to all of our guests and presenters. Thank you for taking the time and the energy to put your presentations together.

First of all, I have a question for Mr. Cerilli. One of the things we did in a prior census was to measure unpaid work in the home. I think that was really important, because until you know the measurements, you can't design a policy that can utilize that information.

In your presentation this morning you specifically talked about the woman's role in child rearing in the home. What I couldn't understand from your presentation—and I want to give you a chance to clarify it for me—was if you're just talking about people in the home regardless of whether or not there are children there. Maybe it could be that, to give you another example, there never have been any children in the home, yet there could be work such as parent care or volunteer work that is being done. Are you in effect talking about an equalization system regarding unpaid work, whatever it be, so individuals are able to stay out of the normal, paid workforce, or are you actually directing your attention towards child rearing? That's a very important distinction to make.

Mr. Al Cerilli: It is a very important distinction, and I think that's part of the debate that has been lacking in the last number of years. I'm glad the last census took note of that kind of unpaid work.

With regard to parental care, for example, caregivers.... I, for example, volunteer my time for the United Way and in different areas, and I give some personal care to my wife right now because of some of the things I mentioned in my main brief, namely diabetes and hemochromatosis—too much iron in the blood—the kind of stuff that leads to other ailments and costs plenty.

I think what you have to look at on that issue is this: first, deal with the main question, and that's child rearing. I think parental care then has to receive some consideration so that this kind of work can be recognized. If in fact you're saving the health care system a certain amount of dollars because you are taking that work on, I think it has to be recognized.

I'm not trying to discriminate against higher-income families, but putting it all together under the same umbrella would catch those families in there. They might not want to be discriminated against, and certainly they should be included because we are that kind of a country. I think the debate has to specifically aim at the areas you've mentioned but should deal with the main one first. It should ask, how can we include these other people, and how do we accommodate them specifically? We've tried to wrestle with that, yes.

Mrs. Sue Barnes: Thank you very much.

With respect to foundations, I think my eyes were opened to the work of foundations last June just after the House closed. I had the opportunity to travel with one of the ministers to the GAVI Conference, which is Global Alliance for Vaccines and Immunization. Canada at that time had a seat on the board.

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As I watched the proceedings over a couple of days of this meeting, what struck me was that some foundations had seats on the board along with countries. Some, for instance the Gates Foundation, were actually putting more money into this world initiative than certain individual countries, including Canada.

There was a meeting of GAVI in Canada I was just at in the last couple of weeks. What struck me there was that the foundations in attendance in that room were U.S. foundations.

I'd like to hear some words from the two professionals you have with you, Ms. Asper, about the history of foundations in Canada versus the United States' experience in particular. I'd like to know whether the difference is just because they're a more mature society, having evolved longer and having had more time to compound their resources, or whether it's just a matter of comparative size. I'm very interested in pursuing this, as was stated.

This was not the first presentation. In fact, the first presentation on this point came to me from my own United Way and university in London, Ontario, before we even went on the road. Moreover, yesterday we heard from the Max Bell Foundation on a similar point.

I'd like you to give me some of the technical background on this and tell me whether or not—because I'm in my first year as a member of this committee in the process of doing a prebudget—this has been part of the recommendations of other finance committees in the past.

Mr. Moe Levy: I could start.

Traditionally, in the U.S., the tax laws have been far more generous to private foundations than they have been in Canada. Perhaps, Norm, you have some information about U.S. tax laws. I'm not sure. I'm not quite up on it.

But generally, you're right about the history of private foundations in the U.S., which have in fact been quite legendary. The Carnegie Foundation and the Ford Foundation are very large, and now of course there is the Gates Foundation and a few others. We really have not seen that kind of development of private foundations in Canada. I must say it is a fairly unique U.S. phenomenon, and I think part of it is the structure, really, of the U.S. governmental system.

We of course have a more caring kind of government. We have far broader social programs and so on, which is great. I think we're all supportive of it. To fill the gaps in the U.S.A. over the last 80, 90, maybe 100 years, a lot of private foundations.... Of course, wealth generation is significantly greater in the U.S.A. across the board than it is in Canada, again for tax reasons. Generally, you'll find that this is the case.

That being said, however, private foundations in Canada have perhaps taken a bad rap in that this is seen as an avenue for really rich philanthropists to sock away money for their own benefit, which is not true. I have some data, which Max Bell might have given you as well—and we're on the board of that foundation—that shows that across the board, private foundations have done just as much as community foundations or any other foundations in dealing with poverty, small charities, and education. So generally speaking, I believe the private foundations in Canada have done a remarkable job, given their size.

I hope I didn't belabour the point too much.

Ms. Gail Asper: Just in terms of the difference between Canada and the States, the other thing about the States is that there is no capital gains tax payable when you donate shares, as opposed to the Canadian situation where I think half the relevant tax is paid. For Bill Gates, when he donates to the Bill Gates Foundation, there's no capital gains tax payable.

It may also be that there's just been a longer period of growth. They've been operating and functioning perhaps a bit longer, so these businesses have grown and there are more shares to donate. That seems to me a sort of timing factor. I think it probably is our tax system a little bit too. There hasn't seemed to have been as much of a need for the private foundations, because a lot of our problems are supposed to be taken care of by the government through our taxation system. That's not really the case, and we can do a lot more with private foundations.

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Mrs. Sue Barnes: I think we have to thank private foundations for doing the work they have been doing in our communities. I'll undertake, along with Mr. Cullen, to try to figure out what's going on inside our bureaucracy to see why this has been a roadblock, and after that discussion I'll make my input into this final report also.

I want to go to a more general comment and get some input from all of you, briefly. This past week on the road, apart from one witness, the Vancouver Board of Trade, which called for capital tax elimination for both financial institutions and corporations, we really haven't heard anyone talk about tax cuts. Nobody has been coming to the table looking for tax cuts.

Our dilemma is—I don't have the finance minister's job, but this committee has to write a report—that we want to make sure Canada keeps its fiscal credibility, whether de facto or psychologically, and I think there is a difference.

I want to know whether or not you feel a small deficit that would still keep us within a downward debt-to-GDP ratio would be something you wouldn't be totally averse to, or whether you feel that come hell or high water, to quote somebody else's words, we should never go back into a deficit, even if it's just a short-term business cycle. What I've heard most of you call for today is increased spending.

I have news for all of you. If we answered yes to everybody's request for increased spending, we would be in a major deficit—just from what we've heard in one week. And I didn't do the other side of the country, as Mr. Bevilacqua did last week.

So these are very real concerns. They're not theoretical. And you can add on to that, obviously, some demands for military and security spending, of which you've seen some of the rollout already. I don't expect anybody to have the answers, just as we don't, but try your best.

Thank you.

Mr. Al Cerilli: Did you want me to go first?

We dealt with that very question at our last meeting, by the way, and in the main, all of the executive council in Manitoba, which represents a variety of retired union workers and professionals, decided that maintaining services rather than having tax cuts is a must. All levels of government have to start looking at that, otherwise we may be in a really serious boat situation where we're all drowning ten years from now, if we don't maintain our infrastructure for roads, sewers, water treatment, health care, and so on.

In our presentation we specify those very basic things—education for the kids, disease control, etc.

Our CURC presentation also mentioned that there is a pool of money out there in the billions of dollars in pension surpluses, and it belongs to the retirees so they can spend those surpluses. It should not go to companies to increase their bottom line. I think that has to be revisited and reviewed, because two or three years ago, through an Order in Council, a Revenue Canada directive changed that rule, and the retirees were left fighting in the wind. I think we're picking up the fight. You might as well realize that our approach in our presentation was that there is a stimulus to spend, and if we have to go in debt to protect all these areas, I think we have to. Small deficit? So what. We've been there before.

Mr. Wayne Motheral: Thank you. My comment is that in any of our presentations we never ask anybody to spend any money. We ask people to invest money. That's how we've always approached our situation. As far as highways are concerned, that's an investment. That's not spending money. The payback there is immediate, and I think there's no better time than when the country is in a situation where we may not have the huge deficit. That's the time you have to invest money. That's our position on that. It's the same with agriculture, with highways, whatever.

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Mrs. Sue Barnes: Okay. The one point I would make to you is you did call for dedicated taxes, highway taxes, and that is something that can't then be used as general revenue to do all the other things we're talking about. So there is a contradiction there.

Mr. Wayne Motheral: I just want to remind you that the intent of the dedicated tax at the first was for highways—

Mrs. Sue Barnes: Yes, I realize that.

Mr. Wayne Motheral: It got shifted over to general revenues.

Mrs. Sue Barnes: You're not the first person to raise that this week.

Mr. Al Cerilli: I agree with the comment there, because at the very beginning it was dedicated for construction.

Mrs. Sue Barnes: Yes, I realize that. Go ahead, Ms. Asper.

Ms. Gail Asper: My vote is always for a balanced budget, and absolutely, I know my father would be here demanding tax cuts, so there is his two cents' worth. My view is, cut everybody else, but give us what we want. So as long as we all get....

My naive view is still that it's a matter of efficiency and focusing on what the priorities for the government should be, which, we know, are health care and education.

I still see a lot of things and I'm still not sure why governments put money into them—for example, trade missions and all those sorts of things, where millions seem to go for.... Some people get into a debate about how that's going to turn into more jobs in the end.

I think we need to focus on the essential parts of the government, doing those things as efficiently as possible, and having the discipline to say, this is what you have to spend but this is what we expect, and we're going to make sure you produce it and there's actual accountability.

I think the key problem in government is accountability, that people aren't accountable enough for how they spend their money. I'm not sure what the system is, but it doesn't seem to be working as efficiently as it perhaps could. But the balance is good.

Mrs. Sue Barnes: Mr. Lock.

Mr. Randy Lock: We operate in an environment where we try really hard to balance the budget in the face of very major demands, so we're similar to the situation you find yourselves in.

I think it's important to recognize a number of provinces have balanced budget legislation, and if the provinces are going to meet their legislated requirements to balance their budgets, as providers we find ourselves in difficult situations. That's the reality we've been facing for quite some time now. So we would urge the federal government to spend to assist us in investing in the future, which we see health care very much as being part of.

If that leads to deficit financing at the federal level, I'm not sure that's what we're suggesting at all. I think our belief is that there are priorities that need to be sorted out, and appropriate decisions need to be made. We can probably do that without going into a deficit position at the federal level.

Mrs. Sue Barnes: Thank you.

The Chair: Thank you.

Mr. Beresford.

Mrs. Sue Barnes: Oh, sorry.

Mr. Kevin Beresford: I'd like to give some follow-up comments to what Randy is saying, and to my previous comments to Mr. Cullen.

I think there is a requirement for some targeted funding, specifically in the area of health promotion, information technology, and training and education. Those are some of the areas in which I think we'll maybe see some short-term pain for long-term gain, but I firmly believe there has to be some targeted funding in those particular areas.

The Chair: Thank you very much. I just want to first of all express my gratitude for your presentations, and also give you a sense of the challenges we're facing and give you an update on what we heard across the country.

The emerging theme, I think, is national security. There's no question about it. It transcends business groups, social groups, and private and non-governmental organizations. Everybody agrees the government needs to give priority to re-establishing a sense of security for Canadians.

Then there's the issue of going back into a deficit or not, and I think the committee understands the importance of being fiscally responsible and prudent as it relates to the impact it has on consumer and business confidence. That's also been an issue that's come out loud and clear.

But we're in the world of looking at the next report in this manner. There's no question we have to relate to the minister the point that national security is the issue, in the short term, but in the long term we still have to be dedicated to a pro-growth strategy. If we want to talk about enhancing health care, above and beyond reinventing the system, and if it's going to require more money, you have to have a pro-growth strategy to generate revenue. It's the same way with charities. If you want people to donate, you have to have growth in the economy, and if you want to have a productive economy, you have to make some investment.

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The reason why I continue using the word “productive” is because this committee historically has dedicated itself to the issue of productivity as a way of enhancing the standard of living for Canadians. So the various measures that, by the way, you have talked about are also consistent with this philosophy that we need to make strategic investments, always with the view to enhance economic growth and to liberate citizens to make as many economic decisions as possible on their own. To do this you have to have a fair and equitable tax system that not only generates revenue for the government but rewards risk takers, rewards those individuals who take the effort to produce goods and services. This type of style of governing would in fact enhance saving and enhance productivity.

This is the view that we have been advocating in the past five years anyway, because we feel there's still much work to be done. While nobody is talking about tax cuts in this round—or very few people are—there's no question about the fact that you'd better have a globally competitive tax system if you want to compete with your competitors internationally as a country, which means not only lowering certain taxes but having a smart taxation system that gives the right signals to the marketplace and to those who want to invest in Canada. The discussion on productivity really comes down to the ability to attract investment in our country. If we are not able to do that, then we're going to face challenges in the future, which means we can't deal with the health care system, which means we can't deal with a lot of the social issues.

So the bottom line is we're going to have to look at ways to grow the economic pie so that we can each get perhaps a bigger slice, or a slice if there isn't one now. We are convinced this is the route to go. Generation of wealth is only a means to an end, and the end is to provide Canadians with a quality of life and a standard of living that I think they have to work for but deserve.

I wanted to give you a sense of where we're at.

I want to thank you very much for your input.

We're going to suspend for approximately five minutes.

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The Chair: I'd like to call the meeting to order and welcome everyone for panel number two here in Winnipeg on the prebudget consultation hearings.

We have the following witnesses. From the Canadian Parks and Wilderness Society—Manitoba, we have Beth McKechnie, executive director, Manitoba chapter; from the Manitoba Organization of Faculty Associations, the president, James M. Clark; and from the Association des résidences pour retraités du Québec, Eddy Savoie, of Les Résidences Soleil-Groupe Savoie, and Robert Chagnon, directeur général.

You have five to seven minutes to make your presentation. Thereafter we'll engage in a question and answer session. We'll follow the order of the agenda here and start with the Canadian Parks and Wilderness Society—Manitoba, Beth McKechnie. Welcome.

Ms. Beth McKechnie (Executive Director, Manitoba Chapter, Canadian Parks and Wilderness Society—Manitoba): Thank you, Mr. Chairman and members of the committee, for inviting the Canadian Parks and Wilderness Society to present our views on federal budget priorities.

As background, CPWS was founded in 1963 as Canada's grassroots voice for wilderness. We have over 35 years' experience on national parks issues and we have helped to protect over 400,000 square kilometres of wilderness in Canada. CPWS has 11 grassroots chapters working across the country in support of parks and protected areas. In Manitoba CPWS has played an active role since the chapter's founding in 1991 in negotiations to establish a new national park in the Manitoba lowlands region, on the management board of Wapusk National Park, and with issues concerning the ecological integrity of Riding Mountain National Park.

I'm the executive director of the Manitoba chapter and I'm here today to highlight the need for reinvestment in Canada's national parks system, for the establishment of new national parks, and to restore and maintain the ecological integrity of our existing parks.

CPWS is a member of the Green Budget Coalition, a broad coalition working towards integrating sustainability into the federal budget through reinvestment in three critical areas. One of the three priority proposals for the Green Budget Coalition, and the number one priority in the nature conservations theme area, is to ensure Canada has national parks for future generations to experience. This priority requires a reinvestment of $493 million over the next five years—specifically, $165 million for the negotiation, creation, and operation of eight new national parks and four new national marine conservation areas, and $328 million to implement the recommendations of the EI panel and to reverse the decline in park ecosystems through science and partnership.

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In 1993, the Liberal government committed to completing the national parks system. This commitment was reiterated in 1997 and 2000. In the same period, the federal government cut Parks Canada's budget by over $100 million or 25%. To pay for its last four new parks, Parks Canada had to take money from budgets of existing parks. This strategy further undermines the already degraded state of existing parks.

Canadians have overwhelmingly voiced support for national parks and the creation of new national parks. In an Environics poll conducted in October 2000 for the Canadian Nature Federation, 8 in 10 Canadians said that it is important for the federal government complete the national parks system; however, no progress will be made until new funds are received. Parks Canada is currently negotiating for new parks without any stable source of funding to implement new park establishment agreements. Lack of funding could jeopardize many years of sensitive negotiations with local communities for new parks.

In Manitoba, the process to establish a new national park representing the Manitoba lowlands region was initiated in 1992. Negotiations have been, and continue to be, a lengthy and extremely sensitive process, but without consistent progress, support from local communities and first nations has eroded. Once negotiations are complete, it is imperative that the funding be in place to establish the new park.

There is no doubt that Parks Canada's funding crisis has resulted in delays in park establishment. This means that candidate areas for protection continue to be vulnerable to degradation and subject to development pressures. Delays in park establishment due to funding shortages will, in the long run, increase the cost of new parks, both in terms of potential compensation payments to developers and in ecological restoration cost. In some cases, opportunities for protection may be lost and completion of the system jeopardized.

A healthy and complete national parks system is vital to protecting our natural heritage. Parks also provide substantial contributions in terms of direct employment, revenue from park passes and other fees, economic diversification for local or gateway communities, and new job growth in nature-related services and ecotourism, the fastest growing segment of the tourism sector. Reinvestment of $165 million over five years will assist the federal government in achieving its goal to complete the national parks and marine conservation areas system.

The government-appointed expert panel on the ecological integrity of national parks identified a critical need for reinvestment in national parks to address the substantial stresses originating from both inside and outside the parks. To quote the EI panel's report published in 2000, “Unless action is taken now, deterioration across the whole system will continue.” The state of the parks reports prepared by Parks Canada further support the EI panel's conclusions that the existing parks system is threatened by human activities. Only 1 of our 39 national parks is considered to be in pristine condition.

Riding Mountain National Park in Manitoba, one of the focus parks in the ecological integrity panel process, was identified as one of the ten most threatened national parks in Canada. On a scale of one through five, Riding Mountain scored a four, or major, in terms of level of impairment. In the Environics poll mentioned earlier, Manitobans responded the strongest, at 82%, that our parks are under stress from human activities and need protection. Within the park the wolf population is struggling, due in part to its population being isolated from other wolves to the north. A high number of alien plant species are displacing native species, and inadequate sewage treatment facilities are negatively affecting aquatic systems—to identify just a few examples of the park's decline in ecological integrity.

Riding Mountain is known somewhat infamously for the satellite image that clearly shows from space the park's distinct outline, with agriculture, logging, and development occurring right up to the boundary. Also on the periphery of the park, bait stands are set up by commercial hunting outfitters to lure bears from the park and alfalfa bails are set out to similarly entice elk. The latter can result in the transfer of disease, namely bovine tuberculosis, from wild elk to domestic livestock.

These issues point to the urgent need for increased funding to enable Parks Canada to work with private landowners, provincial and municipal governments, local communities, first nations, ENGOs, and other stakeholders to protect the parks ecosystems and species from the impacts along its boundaries.

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Budgeting $328 million over the next five years, as detailed in the ecological integrity panel's report, will allow the federal government to live up to its commitments, to implement the recommendations of the EI panel, and to reverse the decline in parks' ecosystems through science and partnerships.

Thank you again for the opportunity to present our recommendations. I strongly urge you to make Canada's natural heritage, through the national parks system, a priority in the upcoming budget.

The Chair: Thank you very much, Ms. McKechnie.

We will now hear from the Manitoba Organization of Faculty Associations, President James M. Clark. Welcome.

Mr. James M. Clark (President, Manitoba Organization of Faculty Associations): Thank you very much.

MOFO represents approximately 1,500 teachers and researchers at Manitoba's four secular universities. Our members teach 30,000 or more students at undergraduate and graduate levels and conduct much of the basic research in the province of Manitoba and a considerable portion of the applied research and development.

The concerns we would like to bring to the attention of the standing committee fall into three broad areas: regional disparities, national interests, and global issues.

I understand that one of the objectives of the committee is to consider providing Canadians with equal opportunity to succeed. We are somewhat troubled that there seem to be growing disparities across the country with respect to university education and research.

One sign of these disparities is salary and equities. I present statistics for Manitoba versus the rest of Canada for three ranks—assistant, associate, and full professors—and for corresponding age ranges that constitute the largest number of people at that rank in Canada. You can see, if we just look at the assistant level—the level competing for new faculty members—that Manitoba is now 14%, 15% below the rest of Canada with respect to the average salary we can offer for correspondingly trained and aged people. This amounts to about $8,000. I don't think it is compensated for by niceties about the cost of living being somewhat lower in Manitoba than it is in other parts of the country.

My own department, which is not one of the esoteric competitive ones—it is just psychology—has lost people in the last two years to other provinces because they simply outbid us with respect to salaries. One of these people was someone from Manitoba who did want to come back to the province. But it was just not within his means to say no to much more lucrative offers elsewhere.

The second source of inequity is in research funding. We think the province can do quite well with respect to competition in the standard sorts of granting competitions—these are more individual research directed, operating and equipment grants, and the like. But in recent years there has been a tendency of the government to move toward more targeted kinds of funding that often require partnerships. These are difficult to find in have-not provinces like Manitoba.

For example, this morning I got onto the CFI website—the Canadian Foundation for Innovation—and downloaded all of the grants that have been given so far, almost $1 billion worth. Manitoba has received 1.88% of all of that. Our population is going down, of course, but it is somewhere around 3.7%, 3.5%. We would have had to almost double what we were getting in order to receive an equitable share of that program. Perhaps you have heard there are similar concerns about the Canada research chairs, and other sorts of programs, that have been put in place. These are just going to exacerbate regional disparities.

If you are committed—and we believe you are—to providing every Canadian with equal opportunity, we recommend, first, an increase in core funding for universities. I won't get into the nitty-gritty of the CHST transfers and what happens to the money. All I can tell you is that the end result is not equity with respect to higher education. If that's the intention of the government, then they need to find some means in order to better ensure that's what happens.

I also strongly urge increased funding for the standard, traditional granting agencies, NSERC, CIHR, and SSHRC—the Social Sciences and Humanities Research Council—rather than targeted programs.

Our second category is national interests. I won't say much about this. The Canadian Association of University Teachers has presented you with an extensive document about the concerns regarding funding of universities. I will just address one issue, and that's the increased cost to students, tuition having almost doubled, and the increased debt loads. I think there are some unforeseen consequences of this that this committee should be very concerned about.

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One of those consequences is that I think we're producing another generation of taxpayers who'll be even more averse to paying taxes down the road because they weren't supported when they needed it. If you make people pay their own way now, then they're going to want to make other people pay their own way. I think you're just creating problems a decade or so down the road as these people get out into the workforce.

Personally, I'm dismayed at my own generation. We benefited from a very generous sort of taxation system—I could never have afforded to go to school if it weren't such the case. And now I see people from my generation clamouring for more of that money back rather than investing in the next generation. So I'm somewhat dismayed by that particular tendency in people our age—and happily I'm older than I look. I think people of my generation should be giving more concern there.

I think another issue is we're all concerned about the economy and stimulating the economy. We have tens of thousands of young graduates who would be out there buying homes, buying cars, buying other commodities, and what are they doing? They're paying off debts—debts that this government put on them because of increasing tuition. What it does is exacerbate problems with the economy. Personally, it doesn't matter to me whether the debt is the government's or individual Canadians'. It's the same situation. We don't have money to put into the economy. If those people were relieved of that particular burden, I suspect we wouldn't be going so far down into the hole as we are now—because they're simply not spending.

Our third recommendation is for a marked increase in needs-based grants for post-secondary students so that all eligible citizens benefit and not just those with financial means, which is what tax-based kinds of benefits generally mean.

The third concern I'd like to raise is a global one—and I hesitated to do this because I don't want to just take advantage of the circumstances of September 11. In August I wrote, “We're concerned about the inadequate funding for SSHRC—Social Sciences and Humanities Research Council of Canada—because understanding our physical and human worlds is our best hope to address many contemporary ills.” One of those I mentioned there was ethnic conflict.

I know we're going to have concerns about security and the cost for that, but I think we need to take the longer-term perspective, and the only people who are going to do it if it's done is the government. Business isn't going to invest in this and other places. It's got to come from the government. We need to understand more about what are the root causes of—and what are the ways in which you alleviate—this kind of animosity that exists out there in the world. Investing in this kind of understanding is extremely helpful for our social well-being and even for our economy, as we're now seeing when these things are not addressed.

I strongly encourage an extraordinary increase in funding for the Social Sciences and Humanities Research Council. Two-thirds of students and the majority of faculty are involved in those departments, yet they get a pittance of the research funding throughout the country.

Thank you very much. Other colleagues would have been with me but they're out on the strike line down at the University of Manitoba.

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

We'll now hear from Eddy Savoie. Mr. Chagnon? Welcome.

[Translation]

Mr. Robert Chagnon (Director General, Association des résidences pour retraités du Québec): Mr. Chairman, Madam, members of the committee, it's a pleasure to be here at this meeting this morning to tell you about the situation.

Unfortunately, our brief, the document after the buff page, was not translated, but during the explanation we'll be giving later on, if you go to the folder, you'll find the little document in English on the tax credits.

The presentation we'll be making will be facilitated if, after page 6, you look at the appendix entitled “Orientations”. That's the table you have here, right after page 6.

In Quebec, over 100,000 people live in retirement homes. The Association des résidences pour retraités that we represent in Quebec deals more specifically with semi-independent clients that are found in the centre whereas the clients who are not independent are served by care centres that are usually called nursing homes, for really dependent clients.

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The association thus represents the managers and owners of homes, whether private or non-profit corporations. Mr. Eddy Savoie, who is the chairman of the Groupe Savoie and the Résidences Soleil and who is now setting up a tenth home, offers services to over 3,000 clients. So I can count on his co-operation to really explain the daily life of these people and the owners who manage these homes.

Mr. Savoie.

Mr. Eddy Savoie (Les Résidences Soleil, Groupe Savoie, Association des résidences pour retraités du Québec): Thank you, Mr. Chagnon.

It's a great pleasure to come before your committee. As Mr. Chagnon told you, as the owner of homes, I've had to meet over 15,000 people with whom I've talked about their personal budgets. You often meet people, men, women, but you can see that those people have low incomes. If you look at the women, 70% of them have income that is less than $12,000 a year.

I think that in the document that's being presented there's a request for 25% for home support services. That's very important, because when we request that 25% for home support services, it's for help with taking baths or for cooking when people can't do their own cooking themselves anymore. Of course, as long as people can live in their own homes, they don't have that problem, but as soon as they have to have their meals prepared by others, then they can't meet their needs anymore. I think this document speaks for itself.

However, what I would still like to say is that those people, aged 70 and more, are people who helped build Canada and governments absolutely must take care of them. We know very well that the women spent most of their time at home because in those days, they had big families and they couldn't participate in the labour market. Today, 75% of all people living in homes are elderly women. So with the income they have today, we'll often see that instead of paying for a bath or two every week, they'll pay for one bath every two weeks. I can tell you that that is almost not acceptable in the year 2000.

The association's situation in Quebec is still rather good because the Quebec government does provide 23% of the home care costs to help those people. But it's not really enough.

We do have a good example with veterans. Those people who defended the principles that we enjoy today—and that's a good thing—also live in homes with their spouses. There's a lot lacking there too because as soon as the husband dies, the wife winds up with a problem because she doesn't have enough money to meet her needs anymore. Most elderly people have to deal with that problem at age 80. Before age 80, they can meet their own needs.

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When you look at elderly peoples in homes, there are between 10 to 15% who can't eat their fill. We can see that: rather than paying for three meals a day, they pay for two because their income of $12,000 or less a year isn't enough.

I think that if the government could grant 25% that would also lead to a major decrease in underground work because we know that in many homes there are people who are getting employment insurance and working at the same time. With an employer's number to get the 25%, people wouldn't have any choice: they'd have to register those people.

Anytime we have to meet with people and discuss their budgets, we look at the budget, they tell us that when they live in an apartment, of course it costs $400. But they have to pay for their food and they do their own cooking. But the minute they can't cook for themselves, they can't stay in their apartment anymore. They have to live in a home and then, if they need $330 a month for food, the food itself is perhaps maybe 35% but they have $230 or $220 left of which 25% is subsidized.

Now that also creates jobs because the people who prepare the food are doing a job. That's why if the subsidy were to be granted by the government—I think the document has rather specific figures on what it could cost—there would be an enormous gain for the federal government within that program.

As for the Association des résidences pour retraités du Québec, we would also be ready, at your convenience, to meet the committee and discuss this more at length in order to share our experience in that area. I think that we don't have the right to let our elderly people suffer anymore. A lot of them are suffering.

We often talk about the children, but I think that if the children are there today it's thanks to those people who worked so much. I have a rather interesting example. We're told that the families were big. On my wife's side, there were 16 children, so I don't think that the mother ever could have worked at an outside job. The father worked as a lumberjack. Imagine what that person's income is today. She doesn't have enough to keep body and soul together and that's not the only example of the kind.

Thank you for listening.

[English]

The Chair: Thank you.

We'll now proceed to the question and answer session. It's a six-minute round for everybody.

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

Thank you all for being here.

I'm going to go around in the same order that you presented, if I may. First of all, I'd like to tell Ms. McKechnie that a couple of years ago my wife and I were in this area with some relatives—we won't go into the details—and we spent some time in a marshland park just north of Winnipeg. I'm sure you are aware of it. Is that a federal park?

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Ms. Beth McKechnie: Was it Oak Hammock Marsh or Delta Marsh?

Mr. Ken Epp: It was one of those. I don't remember the name. Are you talking about that type of park area or are you limiting yourself to the federal parks?

Ms. Beth McKechnie: Our organization is involved in all parks, provincial and national. We're just addressing national today because of federal funding.

Mr. Ken Epp: In your brief you indicated on several occasions that the park is at risk because of human involvement. How do you propose to solve that? By eliminating humans from the area or by more closely controlling what it is they do there?

Ms. Beth McKechnie: That's exactly it. There are two aspects to it. As I was saying, what we have with Riding Mountain, which is one of the ten most threatened national parks in Canada, is an issue of trying to deal with use without abuse, so that you can accommodate Canadians enjoying their national parks but not essentially trashing them so that they can't be enjoyed in the future or in a way that conflicts with wildlife and natural habitats.

The biggest problem for Riding Mountain National Park is the fact that it has essentially become an island. Development, whether it's logging, agriculture, commercial hunting outfitters, or town development, has encroached right up to the boundary of the park. So it has essentially become an island, and parks that become islands become islands of extinction. The only animals that are going to be able to survive in a national park the size of Riding Mountain are very small animals. The wolf population is already suffering.

Mr. Ken Epp: I was curious to notice in your report that you were not exactly pleased with the practice of hunters putting out bait just outside the boundary in order to entice the animals to come out so that they can shoot them. Do those that survive go back into the park? Where do they go from there?

Ms. Beth McKechnie: I don't know if you're familiar with bear bait. It's a barrel of rotting food that is placed to entice bears to come out and become accustomed or habituated to feeding at that barrel. It's done during safe periods, such as non-hunting season. The bear becomes habituated to that easy food source. Then the day hunting season opens, you have a dead bear. Our problem with it is that it affects the ecological integrity of the national park. Over 50% of the clients who use this service are Americans, so there's the economic benefit, but I think it's at a great cost to Canadians and Canadian wildlife.

Mr. Ken Epp: Thank you.

I'd like to turn now to the faculty associations. The message you're giving is quite consistent with what we've heard in other representations made to our committee.

One of the things you mentioned was the concern you have about the huge debt load. It's a concern I share very highly, because I worked in post-secondary education for many years before I became a member of Parliament. You talked about our generation versus their generation. When I speak at colleges and high schools, I sometimes say we need to give an apology to the graduates of today because we give them a legacy of debt when they graduate. But when I went to school—I graduated in 1961, so it's a long time ago—I actually graduated debt free. I didn't borrow any money when I was going to school. I was independent. I had run away from home, but I was able to earn enough money to pay for all of my needs. Students find it increasingly difficult to do that.

My question to you is: with regard to getting money into the hands of students, would you have any openness at all to some sort of voucher system that would give post-secondary students a federal voucher they could use to offset their costs of tuition and perhaps even a little bit for books?

Mr. James Clark: I think I'd have to know a little bit more about the details. The universities in Canada are complicated because the infrastructure serves not only the teaching function but also the research function. So the core funding is a preferred approach to me because it addresses both of those pillars.

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Another concern is that unfortunately students have to some extent I think bought into the idea that you can get a short-term kind of education that's going to benefit you just as much, if not more, as a commitment to a longer-term education.

Again, I'd have to know the details, but my preference would be for the government to appreciate the benefits of a certain kind of university education and make it generally more accessible to students, so that tuitions weren't so high.

There's some irony to the whole thing, because a considerable portion of the increased tuitions is going into increased scholarships, since, to keep the faculty, universities are now competing with one another with taxpayers' money. They need the students in order to get the tuition, because now that's such an increased proportion of the cost of the university. I don't see a voucher system addressing those kinds of concerns.

Mr. Ken Epp: In my view, it would do something to make opportunities more equal across the country, in the sense that if students were to get a federal voucher, it wouldn't depend on where they live. That would solve the problem of the federal government encroaching on the provincial jurisdiction for managing education under the Constitution.

That leads me to my next question. Manitoba, according to your report, is suffering in terms of being able to retain qualified staff at the university level and pay them an adequate salary. I just wonder what you expect the federal government to do to force your provincial government to do its job.

Mr. James Clark: Again, I don't know the niceties, but the CHST transfer is supposed to include post-secondary education as a component.

Mr. Ken Epp: Yes.

Mr. James Clark: If the federal government is giving money that it thinks is adequate for university funding, then it seems to me it's up to the federal government to determine why, from the outcome data, it seems in fact these funds are not adequate for what they're intended to do. I think CAUT addresses more explicitly the idea that maybe you need to dedicate certain funds for post-secondary education and have certain standards in education comparable to what we have in health care.

Mr. Ken Epp: In other words, you would favour doing away with the CHST as a lump-sum transfer and actually getting the federal government into “so much for health, so much for education, so much for social welfare”, and so on?

Mr. James Clark: Well, when the CHST was being proposed, we tried to get it changed into “CHEST”, to put education at least explicitly into the title of it and get a little more recognition. That didn't happen, and I'm not exactly sure what control, if any, the federal government exerts on what those moneys go to.

It seems to me, in the case of health care, I read a lot in the newspapers about the federal government saying “If Alberta does X, then there'll be consequences.” I don't know that I've seen that same kind of concern in other domains.

Mr. Ken Epp: Thank you very much. I have many questions and great interest in your subject.

Addressing now the association for retirement homes in Quebec—we're going to have to depend upon the good services of our interpreters, whom I love dearly, because I would not be able to communicate well in this environment without them—I want to ask you about the supplement.

You're proposing that there be an income support of some $2,700 per person. How would you consider it should be administered? Should it be done through the provinces, which I think is the constitutional requirement, and if so, how would you make sure the provinces spend the money for that purpose?

Would you want to see the money go directly to the retirement homes, or should it go to the individuals and have them write the retirement home a cheque? I'm just a little worried about the administration of this request.

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[Translation]

Mr. Eddy Savoie: That is certainly an excellent question. I think it should not go to the homes. It should go to the people themselves so that they can choose where they want to live and they can choose either to stay in their own homes or apartments if they so wish. If it's given to the institutions, then, naturally, the people won't have any choice and they'll still be controlled. When the money is given out as it is under the Quebec program, the person keeps the power to choose.

From that point on, there's a maximum amount. The person might need only $50 or $25 a month. The person who's a little less independent might need $75. At that point, that person needs more aid. During the time that person doesn't need any aid, then there is no need. That's why we're saying that people can go all the way to age 80 before needing that aid. That isn't the case for everyone. It's for the people who really need it and the money should be given to them.

[English]

Mr. Ken Epp: Thank you.

We have just a little lag with the interpreters, so thanks for your patience.

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

We'll move on to Mr. Nystrom.

[Translation]

Mr. Lorne Nystrom: I'd like to start with our friends from Quebec.

You mentioned that the aging rate of Quebec's population comes second, just after Japan's, and that this is going to double during the next 30 years. Is the aging rate of the population in the rest of Canada about the same as in the province of Quebec or is Quebec very different from the others?

I come from Saskatchewan where the population is already older than the national average. The majority of the population lives in the cities of Regina and Saskatoon, in rural communities where there are a lot of farmers and so on. Is there a huge difference between Quebec and the rest of Canada? Do you have the figures region by region?

Mr. Eddy Savoie: No, but I still think that it's something that's happening all across Canada. I think we're all conscious that the baby boomers won't need those subsidies. Most of them have contributed to pension funds and have RRSPs. They are well off. That doesn't cause much of a problem. Maybe Mr. Chagnon could elaborate on that.

The Chair: Mr. Chagnon.

Mr. Robert Chagnon: There's a specific phenomenon in Quebec because of the age pyramid. In Quebec and a few other provinces, there were big families followed by smaller families.

The total rate isn't higher in Quebec than elsewhere, but what is specific, is the speed at which it is changing. Over time, the rates will be similar from one province to another, or practically, but it's the speed of change that is peculiar.

As you say, in Saskatchewan, right now, there is a higher rate. In Quebec, the population was younger because of that age group, but that will pass quickly. That's the big structural change. Of course, in the rest of Canada, there will be an increase in the percentage during the coming years, but this increase will happen more gradually than in Quebec, where the change is more rapid.

The reason we're asking for an intervention like that, is because we thought we felt the Government of Canada wanted to support those initiatives that would allow each Canadian to make his or her own choices. Yes, the Government of Canada and the provinces have responsibilities in the area of nursing homes, but we're also talking about support services that are more or less part of the health system. For example, helping a person take a bath, fixing a person's meal, or other such things.

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Three years ago, we went to the Government of Quebec and it offered us a tax credit. The advantage we saw to that, and this is mentioned on page 5, is that this allows the government to have a direct link with the citizen. In a system like that one, the citizen knows how much money the government is putting in his or her bank account every month to be able to buy services. So that is a direct link. It doesn't go through another government go-between.

Mr. Lorne Nystrom: Thank you.

[English]

I have a question for you, Mr. Clark. Welcome.

I wanted to ask you about tuition fees. Do you think our goal in this country should be to totally abolish tuition fees over the next—how many years—five or six years? What other countries have done this, and what have some of the consequences been?

As far as I know, they've been pretty positive in terms of making education more accessible and training young people. The biggest resource we have in the world is of course people. Is that a direction in which we should go? If we go that way, what should the role of the federal government be? Should it be cost-shared 50-50, or is there a particular formula you want to recommend we start looking at?

Mr. James Clark: I think that's probably idealistic. There was actually a debate at the University of Winnipeg, where I am, yesterday just on that issue. I think ideally we'd be in a situation where we could invest to that degree.

If I think back to when I was an undergraduate and the tuitions paid then, it almost seems now as if it had been free, relative to what you have to pay today.

I think what the government should focus on first, though, is making it available and accessible. What that means is making the base funding for universities adequate so they're not so dependent on tuition. I think lack of that is driving a lot of the tuition increases. I think the second factor would be, as one of the points we made, that more needs-based funding must get out there.

At the debate yesterday, two students stood up whose parents were both working. I don't know what we think people are like in typical families in Canada, but not all families can easily find $3,000 or $4,000 or $5,000 a year—even if their kids are staying at home—in order to fund a university education.

I think that's the group that's really hurting right now. They're going to turn away from universities or have already done so, or they're going to turn towards things that might seem to be of more immediate benefit but in the long run will probably not be as good for them or for the country.

I wouldn't put a time limit on getting down to zero, and I wouldn't even try for it right away, because that's probably going to get a lot of people just blocking the whole idea to begin with. I do think we need to find ways to make university education more accessible to all Canadians.

Medical school applications from families making under $60,000 have dropped off dramatically with the increases in the cost of professional education. We're essentially getting to the point where the professional schools are going to be for the kids of professional parents. Those are the only ones who are going to be able to afford to go to those schools.

Mr. Lorne Nystrom: Right: professional parents, wealthy people....

Mr. James Clark: That's exactly right, yes.

Mr. Lorne Nystrom: How do your tuition fees in Manitoba compare to the rest of the country? Are you roughly average, or—

Mr. James Clark: We were about average, but we're now towards the low end, because the NDP government has frozen the tuition for the last two years. There was actually, I think, a 10% reduction that has been maintained.

This is probably producing some situations such as the strike going on right now. The government said they compensated for that tuition loss to the universities, but the universities said “No, you didn't fully.” So they find themselves in tight situations.

The University of Winnipeg—and I suspect Patrick Dean, if he had been able to be here, would have emphasized this point. There's been virtually a deficit situation in the last two years. They had to dip into our pension surplus, which faculty weren't thrilled about, in order to get by the last couple of years.

I think it's a very difficult situation. The root cause is inadequate core funding for what are not just teaching institutions but research institutions as well.

Mr. Lorne Nystrom: Turning very quickly to national parks, how many more national parks do we need, and what's the timetable you wanted to recommend on that?

Ms. Beth McKechnie: To complete the entire system, it's 14 new parks. What we're proposing is funding for eight new national parks. We're looking at achieving this goal by 2005. The process is very long with these negotiations because so many people need to be consulted and so many things considered, and it involves all levels of government.

Mr. Lorne Nystrom: Are there any in Manitoba?

Ms. Beth McKechnie: Do you mean new parks? Yes, there's the Manitoba Lowlands region. I was saying it's been in negotiation since 1992—nine years. It has suffered from lack of funding in terms of Parks Canada. It's been stalled several times, and erosion of negotiations has taken place.

The Chair: Thank you, Mr. Nystrom.

Mrs. Barnes.

Mrs. Sue Barnes: Thank you very much.

I want to talk about tuition for a little while.

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Both my husband and I were in a business and law faculty. I look at that now, and in my own university, I don't think I could have afforded or I would have been daunted by the prospect of taking on that increased tuition, and it concerns me.

We're just starting to see the justification. I understand the arguments to justify increasing that, because the revenues come back later in life, but I really do think it's going to change the demographic, as you've stated, of those people going in, and not only amongst income groups, where you start out, but also a disparity between urban and rural. Have there been or is anybody you know undertaking these studies as we see these shifting changes?

In my province, Ontario, they have now passed provincial statues that allow U.S.-style schools to come into our province, and if you want to talk about inequity, we in Ontario have the lowest per capita funding of post-secondary education anywhere in this country, which I think is shameful.

Mr. James Clark: I think it's difficult to do the regional comparisons for a lot of reasons. It's true that the per capita would be lower, but then you benefit as well from the concentration—

Mrs. Sue Barnes: And the increased research.

Mr. James Clark: —and the larger institutions.

I don't know about the urban-rural statistics. I suspect somebody has done that, and we would probably find that proximity to universities is a pretty good predictor of whether or not you go and how far along you go.

I know people have a lot of hope for things like distance education or more remote kinds of campuses. They're talking here about a University of Northern Manitoba, for example. I myself am not convinced about the effectiveness of those particular approaches and that they correspond to what you get from actually being on a proper campus, because it's not just the classroom but the interactions that go on outside the classroom as well that matter so much.

Charging what the market will bear for business schools and law schools, and so on, again, I think does discriminate against a large segment of society and puts additional pressure to steer other funds in those directions.

I notice Ms. Asper was here in the previous session. I really have a lot of respect for her family and what they've done for higher education. But where has it gone? It has gone to the Asper School of Business.

My own university, the University of Western Ontario, in London, is soliciting funds right now, and they'll solicit ten times as much for the business school as for the arts and sciences, which have about two thirds or three quarters of the students.

So what you're essentially doing is steering more and more money towards a small segment of the institution. The university does that—why?—because they're running it like quasi-entrepreneurs and they think that's the way to make money. Unfortunately, I think that's the way a lot of administrators now see themselves.

Mrs. Sue Barnes: It's also my home university, so I know exactly what you're talking about.

Let's go to Parks Canada for a little while.

When park fees were increased a few years back, did attendance at parks go up or down? I'm trying to find out here if there would be further resistance to small user increases, as well as the funding from the government on the acquisition of parks, because there's not only the acquiring of the new national parks but the ongoing maintenance of that. I know you have statistics that show 1:9 ratios on operating maintenance to usage, but I wonder if you think we've hit the ceiling there on park usage, for family cars going into our national parks?

Ms. Beth McKechnie: I haven't actually seen any studies that have been completed on that exact question, in terms of sensitivity to increased fees, whether that would turn people away from parks.

My concern is that user fees represent such a small percentage of the funds that are available. I am also concerned about accessibility. This becomes an issue of who can access parks. To me, that's a fundamental part of why parks exist; they're there for Canadians. They represent Canada, and they define us as Canadians. I really would hesitate to see that we get caught in that trap of such a small revenue generator that would possibly keep some people from being able to—

Mrs. Sue Barnes: That will be the debate we have with health care, as with education and everything else.

Ms. Beth McKechnie: Yes, of course.

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Mrs. Sue Barnes: There are some things that we as a society have said that everybody pays for, whether everybody uses it or not, because that's the society we want to have.

Ms. Beth McKechnie: I'm not sure of the exact report, but I do remember reading that people want to know that the wildlife is saved and that the natural regions are protected, even if they never visit them themselves. Nahanni in the Yukon is an example. You may never actually go there, but you like to know that it's being protected.

Mrs. Sue Barnes: Thank you very much.

[Translation]

Thank you for your presentation. I'll use my second official language, but my grammar is not perfect.

Are there other provinces with the same program?

Mr. Robert Chagnon: To our knowledge, a lot of service programs were developed in the other provinces, but not necessarily using this tax credit or direct allowance idea like the veterans' plan that we used as our inspiration. Usually, it takes the shape of services given by public, community or even volunteer organizations. These are support programs for people at home. The direct allowance was implemented for the veterans. Also, workers' compensation is sent out as that kind of allowance by the CSST. But to our knowledge, this kind of tax credit payable for home care services does not exist anywhere else in Canada.

[English]

Mrs. Sue Barnes: I want to make the distinction you made in your presentation. You said that babyboomers have the access to...and this will not be so much their problem. Are you servicing people pre-1967 employment, that being the year we put in the Canada Pension Plan? Is that a large portion?

Mr. Robert Chagnon: No.

[Translation]

Mr. Roy Cullen: It's working.

[English]

Mr. Robert Chagnon: I'm not really good in English.

[Translation]

Most of the residents are now between 80 and 85 years of age. That gives you an idea of their situation. You know if they had income or not.

[English]

Mrs. Sue Barnes: So from that, does it follow that you see this as a service that would have, over time, a decreased necessity?

[Translation]

Mr. Robert Chagnon: Yes.

[English]

Mrs. Sue Barnes: So this is merely a sunsetting—

Mr. Robert Chagnon: A program for those people now....

Mrs. Sue Barnes: We know from our own statistics in Stats Canada that the poorest of the poor are the senior women who are widows basically of men who did not have transferable pension benefits. Is that your major catchment demographic?

[Translation]

Mr. Eddy Savoie: That's right and this problem is very serious. We know that women are living longer and longer. In our homes, 75% of residents are women. I can tell you very frankly that those women have serious problems. Of course, there's $25 or $30 missing every month to make ends meet. As they grow older, they might be missing $50 or $75. That's where the problem is. The men managed to work and often saved a few pennies, but there are women who never had the opportunity to work and buy a savings certificate of $500 or $5,000. That's where the big problem is. It's the women.

[English]

The Chair: Thank you very much, Mrs. Barnes.

Mr. Cullen.

Mr. Roy Cullen: Thank you to the presenters.

[Translation]

I'll have a question for each witness, if I have enough time.

[English]

Mr. Clark, I noticed in your brief you don't mention the question of the indirect costs of research. Other organizations have come before us in our travels talking about the fact that, notwithstanding that the Government of Canada has put in the research chair, the CFI, increased the grants to granting councils, the federal government should also step up to the plate for about 41% of grants to contribute to indirect costs of research. What's your position on that?

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Mr. James Clark: My suspicion is who you're hearing from are the larger universities that are benefiting from these programs.

Canada has a different tradition than the U.S. The Canadian tradition is that the universities get funded and then they are both a platform for research and for teaching, so things like NSERC and SSHRC have not generally had to concern themselves. And it's only now that we're getting into this more targeted kind of program that these are coming. But that's going to produce a double class, at least, of university.

Yes, if you look at the United States, you'll find their top institutions are the top in the world. But you'll also find greater variation in the quality of universities in the United States than you will find in Canada. Part of the reason we have uniformly good-quality universities is because they've been uniformly funded, historically. And that is what's being put at risk right now.

So my personal belief—and I happen to be at a small university—is that if the foundation or core funding was more adequate, then one of the consequences would be to reduce these demands for targeted sorts of infrastructure to support the research.

Mr. Roy Cullen: Well, what you've said is consistent with my understanding. I always thought universities were there to support teaching and research. But more recently, the provinces seem to have decided, for some types of research, that the federal government should provide that kind of core funding, or bread-and-butter or rum-and-ration type of funding.

I guess I have a concern that it's being used really as a way to top up insufficient funding by the provinces to post-secondary education institutions. But having said that, I understand and recognize it's a problem.

I met a departmental head at McGill who said, “Forget the indirect funding. That goes somewhere over there and we never see it. We need the NSERC, SSHRC, and that funding.” But we had a cogent case made by someone at the administrative level of the colleges and universities who said, “Yes, but don't forget, if we don't support the indirect costs of research, that means there are no library services, parking, etc.”

Mr. James Clark: I know there are different visions of what the universities in Canada should be like, and I guess there ought to be some role for the federal government in deciding what that vision is. But because of the nature of the programs that have been introduced recently and the cutbacks in general sorts of transfers, it's being steered towards a more commercial kind of model.

If they're things that will make money, like a drug product or something else, then companies should be stepping up to the plate to fund that kind of research. But where the government really needs to step in is for things like basic science research or.... Who is going to make money from understanding ethnic conflict better? Is that not important for us as a country and as a society?

Mr. Roy Cullen: Thank you.

I just have one quick follow-up with you.

On the CFI and the research chairs, I know our colleague, Reg Alcock, has certainly spoken out on the question of research chairs and the allocation, believe me. But with the CFI, isn't it an application-driven process? If you were coming here saying your rejection rate was much higher, then I might say, well, maybe your proposals aren't as good or maybe it is inequitable. How does that stack up? I mean, are you not putting in enough applications?

Mr. James Clark: One of the areas in which Manitoba is disadvantaged is regional funds for research as well. And we're making that case to the province. So you need a little bit of stimulus in order for people to apply.

Are we losing out because, not being competitive with salaries, we're not getting the calibre of people who can apply successfully? And it is commercially driven.

One of the things I did this morning as well was have the grants broken down by sector. Only one of the sectors is science and then you get things like health, environment, engineering, and so on there. Only 30% of the actual grants were in the science domain. So that's going to be the largest number of your university kinds of researcher. And of course that's only natural science. So you've got over 50% of your faculty in the social sciences and humanities who wouldn't even qualify for any of these programs, let alone be competitive with the rest of the country. So it's complicated.

Mr. Roy Cullen: Thank you.

Ms. McKechnie, I wanted to get into a bit of a discussion on this question of public good, private good, on parks, but it's a little too theoretical and in the interests of time, I'm going to skip it.

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But on the question of the parks...an agency was set up by our government. It used to be Parks Canada and now it's an agency; in fact, the head, Tom Lee, is a former colleague of mine and I know he's doing a great job. In my naive mind, I thought they would have a little more flexibility with funding as an agency, but I guess not, because you're here and many of your colleagues have been across the country. By creating an agency, are you aware what it has done in terms of additional flexibility that I thought might be there?

Ms. Beth McKechnie: Well, speaking as someone from a chapter as opposed to someone in Ottawa who deals with the Tom Lee level of representatives at Parks Canada, I can't say that I've seen it come down to our level at the provinces in Riding Mountain National Park or Wapusk National Park. I couldn't identify any specific changes that I've seen in our relationship or what's happening on the ground.

Mr. Roy Cullen: But it doesn't seem to have offered any kind of new creative financing vehicle.

Ms. Beth McKechnie: No, not that I've seen. Less funding is less funding.

Mr. Roy Cullen: Less funding is less funding, yes.

[Translation]

Mr. Chagnon and Mr. Savoie, I have a question for you. If the federal government were to implement your recommendation, would that replace the Quebec government refundable tax credit or would it be added to it?

Mr. Eddy Savoie: I think it's important that the 23% be there. We're asking that it be added to it. As I was saying before, Canada's women were never as well represented as they are now. That's why they have that problem today. I think the 25% we're asking for is a necessity. It's a subject that will have to be looked at rather quickly in view of the average age. I think the federal government can't wait years and years before taking care of the 85-year-olds.

Mr. Robert Chagnon: Yes, it should be added to what is already there. You know that the area of domestic services is where you have the biggest underground economy: housecleaning, grass cutting, snow shovelling. In order for it to be significant and for people to be interested in using a system like that to make official payments, the return has to be significant.

At the other meeting of this committee, you asked how those things could be paid for. Mr. Savoie showed you before that a program like that one could address 10% of the population over age 70, those who have the lowest incomes, in other words, $15,000 or less, with a maximum of 30%. Right now, that's the underground economy and you'd be making those expenditures official. In Quebec, this year, the government paid out $11 million. The resident had an official expenditure and the person receiving the money, if that person was getting employment insurance or income security benefits, had to make that income known. We don't have any figures to show you how $100 million would be paid back through a decrease in expenditures in employment insurance and welfare payments, but I think that that's where you'd get the greatest financial gain as a government: making the underground economy an official one while helping our elderly citizens.

Mr. Roy Cullen: If the federal government were to implement that recommendation, there would have to be co-ordination with the provinces, except perhaps Quebec, to get an integrated system.

I have another little question. Do you know how much this is costing the Government of Quebec right now? That would give us an indication of how much it would cost the federal government to implement that recommendation.

Mr. Robert Chagnon: Yes, on page 4, we state that for half a year, the government reached 26,500 people, which is over 10% of the target clientele, those over 70 years of age, and that this cost $11.4 million.

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We prepared forecasts for Canada in the event of a tax credit of $1,000 per person. In Quebec, regardless of the person's income, the tax credit is not taxable, and we think it should be taxable or that at least that there should be a limit for people with higher incomes. It should not go beyond $15,000 or $16,000. So that gives you an idea. It's the equivalent of $1,000 per person and that corresponds exactly to the figures for veterans who get average benefits of $2,000 which are entirely covered by the government. So would this program be complementary or conditional on the province doing it? The advantage is that this would allow the Government of Canada to intervene directly with residents.

Mr. Roy Cullen: Thank you very much.

[English]

The Chair: Thank you.

On behalf of the committee, I want to thank you very much for your presentations. We'll certainly review your presentations as we get ready to write the report to the Minister of Finance, who recently stated he's going to be delivering a budget before the Christmas recess. So we'll be busy in the next couple of weeks trying to put that together. Your contribution, of course, is very welcome. Thank you very much.

The meeting is adjourned to the call of the chair.