FINA Committee Meeting

STANDING COMMITTEE ON FINANCE

COMITÉ PERMANENT DES FINANCES

EVIDENCE

[Recorded by Electronic Apparatus]

Tuesday, October 21, 1997

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[English]

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

Pursuant to Standing Order 83.1, the finance committee is holding pre-budget consultations across the country to seek input from Canadians. As you know, this era has been described as a new economic era full of challenges and choices as we deal with the issue of a balanced budget and an eventual surplus. One of the challenges we face as a committee, of course, is to identify the priorities, and usually they've been tied to the values and expectations Canadians have.

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So without further ado, I'm going to begin with the presentation from Results Canada and Chris Cann, Professor of Commerce at Mount Allison University.

Welcome.

Dr. Roger Wehrell (Results Canada): Thank you. Actually, there are two of us. My name is Roger Wehrell. I'm a Professor of Commerce at Mount Allison and Chris Cann, my colleague, is international and development educator from Nova Scotia. We represent Results Canada, as you say.

We'll be talking about micro-credit. I'm wondering if I can beg the chair's indulgence for about two additional minutes beyond the five that have been allocated to us in order to do this.

The Chairman: Yes. Go ahead.

Dr. Roger Wehrell: I'll try to go efficiently here.

Results Canada is an advocacy group for micro-enterprise development in both the industrialized nations and the third world. Its stress is micro-credit as a major tool for micro-enterprise development, and micro-enterprise development in turn is seen as a tool for dealing with poverty, with community and economic social development, and even with the relief of hunger in many of the third world countries.

So what is micro-enterprise? By micro-enterprise, we mean businesses and enterprises with revenue-generating activities that are very small. Some of them are insignificant or not very noticeable. They're on the margins of the economy.

An example of one is a pilot project we're doing in northern New Brunswick. I'll speak briefly about Diane. She's about 29 years old, she's a homemaker, she has a high school education and she's been married to a worker in the pulp and paper industry for about six years now. They've started a family.

He of course is out of work with the downsizing and restructuring in the pulp and paper industry up north. For the last couple of years, she has been trying to supplement the family income, which is not very high, by doing some pet-sitting. Her interest is pets. She made a few hundred bucks a year at it.

When she came to our program, she had aspirations of trying to develop a little bit more of a business, formalizing the business, being recognized as a business, and perhaps offering a fuller line of pet services and generating a few thousand dollars instead of a few hundred dollars a year. That's the kind of thing I'm talking about when I talk about a micro-business.

What's micro-credit? Micro-credit is business lending, business credit, in very small amounts—$500, $1,000, maybe up to $5,000. It's directed to enterprising individuals who just don't have enterprises that can be taken seriously by the conventional lending community. Either they're too small or the credit history of some of these individuals, if they're unemployed or haven't developed much in the way of net worth, doesn't make them good prospects from the conventional lender's point of view. Some of them are unemployed. In some cases we're even talking about people on social assistance.

Micro-credit is a tool to let them get started in some sort of business or enterprise that will help improve their personal financial situation. It's also a tool to encourage people who wouldn't otherwise do so to think about some sort of enterprising activity as a way of helping themselves out. So it serves two purposes.

Where do you find micro-credit activity in Canada? As I say, it's in experimental stages. You'll find it in many small communities in Canada and some of the large cities. In the Atlantic region, there have been very noticeable projects run by the Calmeadow Foundation in Lockeport, Shelburne, and several other areas around Nova Scotia. Women's World Banking is running a project in Sydney. The New Brunswick government and ACOA are financing a pilot project of ours in Campbellton in northern New Brunswick. And the Newfoundland-Labrador Federation of Co-operatives has a couple of projects going in Newfoundland.

You also find some of these programs in the United States. The American government provides quite a bit of direct and indirect support for micro-credit programs, much more so than the Canadian government does in Canada.

The next question is why should the government consider making this a priority in terms of social spending? To answer that, I'm going to turn this over to my colleague, Chris Cann, very briefly, who will answer the whys.

Mr. Chris Cann (Results Canada): Thank you very much. I'm Chris Cann. I too am a partner with Results, whose background is essentially an international grassroots advocacy network seeking to end hunger and absolute poverty.

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We acknowledge that the Canadian economic ship of state is perhaps the best managed ship in the uncertain and often turbulent times of this emerging global economy, where the economies of many states are being severely battered and experiencing the current blizzard of changes. Our ship sails firmly and boldly into the storm.

We Canadians, through communications such as this, are prepared to man the ropes for the challenges ahead.

As most of us will note, the ship is heading into uncharted waters. The world of economics appears to be making a definitive and revolutionary shift through the means of powerful new information technologies towards the new economic realities of the global village.

Small boutique elite teams of cybernauts are transforming the workplace and the marketplace and generating unprecedented productivity gains. Dramatic quantities of wealth are being generated. For the first time in decades, our government is asking us what to do with the expected federal budget surpluses. Amazing, is it not?

Yet, as we sit here in comfort and good company, bedazzled by the splendours in wealth of this emerging phenomenon, a darker force looms in the shadow—a growing uncertainty and anxiety that arises from broken promises and commitments, visible and painful increases in poverty, still 33,000 children per day dying from preventable causes.

Many hard-working people are asking themselves the question, will I, too, soon fall off the margins of this new economy into fear and privation, when my children may or may not have their needs met?

Long before globalization became a new explanation, the global village referred to interdependency of people, culture, and destiny. The world's poorest and Canada's poor are the ones working most effectively against poverty, which is their own, since Canada's embrace of globalization theory and zero inflation targets.

Our social investment has, of late, been a process of confiscation from the have-nots. Reforms instituted since nations have been overly concerned about deficits require that people in their billions now need very targeted programs with measurable results to include them in any attempt to move humanity forward on any level.

Given access to resources, people, including the poorest, will indeed creatively improve the quality of their lives and that of the community.

There is a miracle in the making that demonstrates the real spirit of globalization. At the Washington micro-credit summit in February 1997, citizens in a rich variety of configurations committed themselves to providing the critical resource—access to credit—as well as necessary micro-enterprise support for 100 million of the world's poorest families by the year 2000.

Canada had strong positive presence in this summit, and indeed colleagues of the members of this room attended that summit and have formed themselves into a committee of parliamentarians in Canada to promote micro-credit and the goals of the summit.

What we need to do in this country is to acknowledge that, through investment, we will reach 5% of the families in question. Of the 100 million families, it would be 5 million families that we would undertake to support. Furthermore, in Canada, given that we have addressed the question that we are just beginning now to address, and positively the question of the 1.5 million children who are now living in poverty, 5% of that 5 million families, or 250,000 families in Canada, also would be served by micro-credit in the near future.

Results Canada, along with affiliate groups in Germany, Australia, Japan, Mexico, the U.S. and the U.K., is a long-time supporter of micro-credit and assisted in funding the stellar Grameen Bank of Bangladesh, which has originated this movement toward micro-credit.

We've taken five minutes and some, and we request that Canada take on 5% of the micro-credit summit goal of reaching 100 million families and, further, specify that 5% of these families will be Canadian.

We both invite any questions and further comment beyond this. Thank you very much.

The Chairman: Thank you very much. After all of the presentations will have been made, we will have a question and answer session. I'm sure some of the questions will be directed to you.

The next group will be from Canadian Pensioners Concerned Inc.: Myrna Slater, past national president, and Joan F. Lay, president.

Welcome.

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Ms. Joan F. Lay (President, Canadian Pensioners Concerned, Nova Scotia): Thank you. There is one correction. It is Canadian Pensioners Concerned, Nova Scotia. We have had a name change provincially.

The process of deficit reduction has been too swift for older Canadians to incorporate their retirement plans and for those on fixed incomes. It has meant a downgrading in their standard of living at all levels. The impact on employment, education, and health has been obvious to all. Downgrading of the costs from the federal level to the provinces and municipalities has resulted in increased costs to seniors as a group.

We ask if the method has been appropriate. We feel that it wasn't appropriate, and we also call attention to the fact that the HST is a process between the federal and the provincial government in Nova Scotia. It has affected seniors adversely, increasing the cost of fuel, clothing, electricity, telephones, food, and gasoline.

In the light of the negative reaction to the HST by those affected in the maritimes and by the fact that it is not being accepted in other provinces at this time, it should be abolished.

You ask how the government should set its priorities with respect to debt reduction. The government must necessarily continue to reduce the debt, at a slower but steady rate, and without hurting those who can no longer tolerate further burdens in the form of reduction of fixed incomes.

You notice that I am speaking basically for seniors. It's because I feel that there are people here who can speak for the rest of our Nova Scotia population.

Since the federal government accepted the recommendations from the National Forum on Health, and in regard to the implication of pilot projects on national home care and pharmacare, when will we see the evidence that these will be carried out?

Regarding spending increases, it is obvious to everyone that federal moneys must be restored to health and education programs, and we would ask that you give more consideration to those that most particularly affect seniors.

Finally, on tax relief, as we have indicated previously, there has to be tax relief for many Canadians, in particular seniors, as their disposable income is now less than it was in 1990, and all things, including taxes, have gone up considerably. There must be some relief from this problem.

Those are my speaking notes. I don't like to veer off very much because of the interpreters, and I think I probably could go on a little longer. I do draw your attention to the fact that I have included a history of the dismantling of seniors' benefits from 1986 to 1994, which is attached to the one-page summary.

Thank you very much for your time and consideration.

The Chairman: Thank you very much, Ms. Lay. I'd also like to thank all the members of your organization for their input.

We will now move to the Nova Scotia Advisory Council on the Status of Women. Stella Lord, welcome.

Ms. Stella Lord (Researcher, Nova Scotia Advisory Council on the Status of Women): Thank you. Actually I'm here speaking on behalf of Patricia Doyle-Bedwell, who unfortunately couldn't get out of her doctor's office in time to be here.

I'd like to thank the committee for the opportunity to speak today. I'm reading this in the first person as though I were Patricia Doyle-Bedwell, who is the chair of the advisory council.

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When I was here last year I warned that women in Nova Scotia were beginning to experience the negative impacts of government restructuring, deficit reductions, and the downloading of social program costs to the province. I'm here to report that since last year at this time things have gotten worse.

We're now experiencing the full effects of two years of federal cuts to the financing of social programs under the CHST, on top of cuts that happened before the CHST came into effect. Cuts to programs, organizations and services for people who need them—both federally and provincially funded—are still happening in Nova Scotia. The burden of these cuts falls mainly on the backs of women, as individuals, workers, mothers, community members, and volunteers.

I am relieved, however, that there seems to be some light at the end of this deficit-cutting tunnel, and we can now look forward to the federal government investing more resources into social programs in the near future. We desperately need this investment in this province, for we are beginning to see a crisis emerge in the availability of services and programs.

The situation is having a heavy impact on women, especially on women who are already poor and vulnerable. It is taking its toll in increased poverty, more stress, and lost opportunities. Let me give you some examples.

Fisheries and other government policies are focusing on getting smaller fishers out of the fishing business. This means fishing families are finding it harder to survive financially. Many women and and men in these families are also finding it more difficult to qualify for EI or to find real meaningful alternatives to fishing. This situation puts great stress on women in fishing families and on people who live and work in coastal communities.

Because of federal cuts to social programs, women who are on social assistance, including single mothers, are facing more restrictive social assistance regimes. We hear complaints daily of women having their eligibility for assistance questioned or refused or being threatened with having their cheques cut even before an appeal is heard.

Women who need support or help to get out of poverty find that services such as literacy, educational upgrading, employment counselling or training programs are harder to get or are simply not there. For example, cuts to HRDC training programs and employment outreach programs mean that women who don't qualify for employment insurance or social assistance have fewer training or transition-to-work programs to help them. Many have nowhere to turn.

Young women who are students attending universities, including single mothers trying to find a way out of poverty, are facing increased tuition and less financial support and leave with much higher debt loads. This makes university education, as the president of St. Mary's University said the other day, increasingly an option only for people from rich and middle-income families.

Social agencies, like transition houses and women's centres or other community agencies that serve women and their children, are experiencing more demands on their time and services but have fewer resources to meet the growing need.

Cuts in education, health care, and social services are affecting women as employees as well. For example, nurses, teachers, and social workers have faced lay-offs or increased workloads in hospitals, health centres, schools, and community organizations. More caregiving and support work must be taken up by women and families or by volunteers, again, most of whom are women.

We hope that the federal government's renewed commitment to social programs will mean that you will work co-operatively with provincial governments to ensure they have the fiscal capacity to provide the needed services and programs that really serve the needs of women and their families in local communities.

We note that a new priority of the government will be to address the needs of low-income families with children and that you are planning to develop programs that focus on “investing” in children. While we need governments and communities to recognize their responsibilities for children and that it's not just a private matter, we must also acknowledge that it is the parents who are the “primary investors” in children. We can't invest in children without also supporting and investing in their parents, especially mothers. Single mothers in particular need support to carry out their parental role.

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We are particularly pleased that you intend to develop youth centres and expand the aboriginal head start program on reserves so that aboriginal children have the opportunity to get a good start in life. But, again, the needs of children cannot be divorced from the needs of their parents, their families, and their communities. If the government is serious about building a future for aboriginal children, and in fact all children in this country, it must take the recommendations of the Royal Commission on Aboriginal Peoples seriously and begin to act upon them.

While we support the idea of centres of excellence for child development, these centres should focus on ways to support and further the economic and social well-being of mothers, including single mothers. We hope that the centre will also help to refocus recent research—much played up by the media and decontextualized, I would think—about the problems “children” experience growing up in single-parent households, towards a research agenda that is more supportive and less prone to negative stereotyping of single parents, most of whom are women.

We liked your intention to provide more financial and other support to working families through the national child benefit, but we have some reservations about its potential impact on those single mothers who will still have to rely on social assistance.

For example, while the program is supposed to divert social assistance money to support working parents through the national investment framework, it's not clear how women will in the end be helped who can't get more than a minimum wage job, access a literary program or an upgrading program, find job training, be eligible for employment benefits or get subsidized child care. We are concerned that these women will not only reap few benefits from the program but that because of a lack of standards for social assistance delivery in this country they may be worse off than before. Nor is it clear that the national child benefit will make up for all the cuts to federal programs over the last three or four years, including transfers to the province for social programs. These cuts have gone a long way to destroying what was already a fragile infrastructure of services and programs for women wanting to make a transition to the labour market.

As the government now seeks ideas on how to build up rather than break down our social programs and services, I would like to remind the government that women are still 51% of the population. Although some have now achieved some measure of economic independence and stability, and you may see a few more female faces in Parliament and even in middle and senior management of your government bureaucracy, this is not the reality for the majority of women in Canada, especially Atlantic Canada.

Whether you are white, black, aboriginal, a new Canadian or a woman with disabilities, if you are a women you have a much greater risk of being poor, of being assaulted, of having poor health, and you are much less likely to be in a position of power or authority. No, we haven't yet resolved the problem of women's inequality in our society.

Programs that focus on children alone are not enough. Women—as mothers, as family and community members, as workers, as volunteers in groups and, yes, as activists in women's organizations—also need support. Women have a lot to offer, and we can bring all our particular attributes and skills to build toward a better future for us all, but to do so we need the continued support of our government so that we can really move towards equality in all of our different roles and spheres.

Thank you again for inviting us here and for listening to us today.

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

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The next presentation will be from the Nova Scotia Disabled Persons Commission, Nita Irvine, president. Welcome.

Ms. Nita Irvine (President, Nova Scotia Disabled Persons Commission): Good afternoon. It is a pleasure for me, on behalf of the Nova Scotia Disabled Persons Commission, to participate in this 1997 budget consultation.

The input of representatives of the disability community should be heard and responded to with a sense of urgency and with high priority. The commission was also very pleased to have participated in the consultations of the federal task force on disability issues in 1996. I am sure committee members will recall that the mandate of the federal task force was to explore the many and diverse issues around which action could be taken to improve the lives of persons with disabilities.

In its October report the task force put forward 52 recommendations for legislative reform and for changes to the federal approach to disability issues, labour market integration, disability income programs, and the tax treatment of disability-related costs. The Nova Scotia Disabled Persons Commission as well as the disability community was very pleased with the leadership and vision of this report.

Last year when I appeared before the Standing Committee on Finance on behalf of the Disabled Persons Commission, I came with a great sense of optimism as we supported those recommendations of the task force. However, while the 1997 federal budget did respond in some areas to the recommendations of this task force, there is a great deal left to do.

The report made it clear that persons with disabilities want a government that demonstrates vision and leadership and expresses common principles and values on disability issues. While we fully supported all the disability-related measures put forward in the 1997 federal budget, they must be considered a very modest beginning.

The Nova Scotia Disabled Persons Commission urges continued implementation of federal task force recommendations, particularly in the following areas. First is a disability expense credit to replace the current disability tax credit and the medical expense tax credit. Second is the removal of the taxable status of special opportunities grants for students with disabilities under the Canada Student Loans program. Third is to commit to carry out a regular review of the medical expense credit to ensure that the goods and services that qualify as deductions are keeping pace with scientific and technological changes. Fourth is a refundable work income supplement for those individuals who are eligible for the disability tax credit, or an employment expense credit for disability-related equipment and services.

So you see there are certainly many additional areas even beyond these four that we would ask you to consider as we look to the upcoming budget in 1998, especially in relation to the task force report.

I would like to move on and address three other issues briefly this afternoon in the time I have left. One is employability assistance for people with disabilities, formerly known as the VRDP program, and I will have a few words about it in a moment. The other two are the infrastructure to facilitate the full inclusion of people with disabilities and the harmonization of income support programs.

For Nova Scotians with disabilities the importance of federal participation and leadership in all of these areas is critical. The federal spending power must be used to ensure that an appropriate level of program equity exists across the country. Certainty and equity are the two basic things required in federal involvement and leadership from a Nova Scotia prospective.

Let's look at the Nova Scotia Disabled Persons Commission's position on the newly named VRDP program. It's called Employability Assistance for People with Disabilities. We are pleased with the proposals for the multilateral framework that have been brought forward, but we are concerned that if a multilateral framework is not put into legislation it will not guarantee the two key principles we must have of equity and certainty.

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We must also have funding. We can't have a program that serves the needs of the disabled on an equal and continuing basis across this country unless we have the federal spending power in this program. It is essential for a province such as Nova Scotia, where many of the complementary programs that are available in the more fiscally strong provinces are not available.

As I reminded this board last year—and there are many different people on the committee now—we in Nova Scotia have the highest per capita rate of disability in this country. We have been doing research on reasons for that, and I'd be happy to deal with that at question time.

I'll move quickly on to the other two areas I wish to touch on.

On infrastructure to facilitate the full inclusion of people with disabilities, when I speak of infrastructure, I mean accessible transportation, accessible services and facilities, support services plans, and well thought out and well-funded deinstitutionalized education initiatives. In order to do this, the key word is “inclusive”. The program has to be national, there has to be federal leadership and resources, there have to be national standards, but the provinces all have to participate, as does the disabled or the disability community. There must be participation at all three levels.

The proper level of federal funding, once again, can make the difference between action and inertia. It can make the difference between short-term and long-term programs. If the disability community is to be treated with equity and with certainty, then that is the key. There must be federal leadership and resources.

The third area I want to touch on is the harmonization of income support programs. The Disabled Persons Commission supports the general goals and direction of proposals to harmonize or integrate income support programs for persons with disabilities. The key issue here is meaningful consultation and participation in the design, implementation, and evaluation of proposed harmonization action.

At a recent four-day consultation precipitated by the Nova Scotia Disabled Persons Commission, we consulted on the harmonization of programs such as community services, the Canada Pension Plan, social assistance, and the workers' compensation program. I was really appalled at the cynicism within the group of 30 people representing various disability groups that participated. Current programs are seen to be very complex, very fragmented, and very bureaucratic. The cynicism was that unless we have better training for service providers, clearer and more consistent language on eligibility criteria entitlement, and rules governing employment and earned income, then we're not going to be any further ahead with harmonization of programs. Those are key to its success, and we must overcome that cynicism because we have a large segment of our population in Nova Scotia who must participate in an equal and fair way with the able-bodied people of this community.

Before I close, I'd like to say that a program we really support and see as a necessary part of making life better for the disability community is a national pharmacare program. Many people who have disabilities are on assistance programs. These assistance programs are niggardly, at best, in the way they handle things like pharmaceuticals and necessary prescriptions and health care. Unless we get some help from, again, federal resources, we cannot go ahead on an equal footing.

Thank you very much.

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

I'm going to ask the witnesses if they could stay within their five-minute allotted time. If you go over, we won't have any time for questions and answers.

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The next speaker is from the Nova Scotia League for Equal Opportunities. Mr. Lorne Ryan is the league's executive director.

Good afternoon and welcome.

Mr. Lorne Ryan (Executive Director, Nova Scotia League for Equal Opportunities): I'd like to thank you for giving me the chance to speak to you this afternoon, and I'd like to express our appreciation for being able to do this for the fourth year in a row.

However, before I begin my remarks, I would like to comment on the fact that we received the topics for discussion on Thursday afternoon, October 16. This is a very limited time in which to develop a thorough analysis of the questions you posed.

Let me begin with the question on deficit reduction. Has it been too fast? The answer is an unequivocal yes. It has been way too fast. Cuts were made only on the basis of how many dollars they would save. No consideration was given to the long-term consequences, to what would happen if these cuts occurred.

One example is education. We the public have been told repeatedly that the way to get a well-paid job in the future is to get more education and to engage in lifelong learning. But with the federal funding cuts to education, university and post-secondary tuition fees have risen. Many students are looking at a debt load of $60,000 for their university tuition. Many are saying that this is too much for students to undertake even if they do get well-paid jobs.

What no one seems to consider is that if students are repaying a $60,000 loan during the first few years they are working, they do not have money for other things. These would include retirement savings and purchases of items such as new cars, televisions, refrigerators, homes, etc. If young people are unable to buy these items, less production is required and more jobs are lost. Therefore the unemployment rate rises and more people are on social assistance. It's possible, therefore, to argue that higher tuition fees lead to higher unemployment.

If young people are unwilling to assume the debt load of university education, this means they can only get low-paying jobs. Then Canada has a relatively uneducated workforce, which will not entice high-tech, high-paying companies to the country. Nor, in the low-paid jobs, will they be able to afford as many new items or items as highly priced as they would have with a university education. This will result in lower sales of the highly priced items, which will mean less production and fewer jobs.

Cuts were made to a wide variety of programs, including the Canada assistance program, which had many ways of assisting provinces to pay for the debt incurred. These were called “50-cent dollar” programs: the federal government paid half and the province paid half. This included many things, such as assisted devices for the disabled, child care, educational programs, health care, and many more. This has all ended and the provinces have had to come up with 100% of the funds required. The result has been that many programs that were useful have been ended.

I'm going to skip to appropriate methods. Part two of this question asks if the methods have been appropriate. The answer is again very clear and definite: no. The methods were very inappropriate. Thousands of people were laid off. This meant they were no longer paying taxes to the government, but instead were being supported by employment insurance. This reduction in the federal workforce would have been better handled by attrition over a longer period of time, thus giving the people and the economy a chance to adjust more slowly and evenly to the loss of a large number of jobs.

The cutbacks in the federal civil service have led to cutbacks in services for many people who depend on those services.

In handling a debt it's necessary to direct funds towards it. Where this money comes from is the question, and the basis on which this decision has to be made is another. The basis on which the decisions for deficit reduction were made seems to have been to cut everything we could regardless of the consequences.

Before being made, any reduction should be examined on the basis of what both the short-term and long-term consequences will be to those who are in receipt of the program. Will it make things better or worse?

I'm trying to stay within my guidelines so I'll skip to page 5 and go to debt reduction.

The debt has not fallen because of spending cuts to social programs. After all, they only count for 6% of the federal budget.

The deficit has largely fallen due to a change of interest rates. The Bank of Canada controls interest rates in this country. While it cannot control foreign investment rates, it can control the percentage of the national debt it holds.

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The Bank of Canada should buy up a larger portion of Canada's foreign debt as part of the deficit reduction plan. This would mean that any portion paid off the debt that the bank owns would be Canada paying itself.

We have no information on how much money the HST/GST is raising. The money from these funds should be dedicated solely to paying off the deficit. This would put hundreds of millions of dollars per year into paying off the deficit without increasing taxes or changing any tax rates.

Under spending increases, it will be necessary to increase spending to those portions of the budget that deal with social assistance, health care, and education. One of the reasons for doing this is because Canada committed itself, under an agreement made to the United Nations in 1992, to follow the standard rules on the equalization of opportunities for people with disabilities. The reference for that is given at the end of my speaking notes. You can check that out.

Tax relief is usually viewed as cutting taxes. What is needed is not so much tax relief as change in the tax laws so there are no unreasonable tax loopholes in the laws. Let me give you two examples.

One example is the RRSP legislation. You can take $13,500 a year out of your income to put into an RRSP. I would think, ladies and gentlemen, that anyone who can afford to take $13,500 a year out of his or her income to put away for the future can afford to pay higher taxes.

Secondly, I will go to a comment made by the federal Auditor General, who in 1995 said the focus must be on large corporations, particularly those who, with extensive domestic and foreign operations, have significant opportunities to enter into tax avoidance schemes.

In 1992, the last year on which I have figures to quote, 66,000 corporations escaped taxation. They had a combined profit of $14.7 billion and they escaped paying even 1¢ in income tax.

In conclusion, with reference to your last question, we don't need tax cuts, we need tax reform so those 66,000 corporations pay their share. Thank you.

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

We now move to the representatives from the Nova Scotia Federation of Labour, Mr. Rick Clarke, president.

Mr. Rick Clarke (President, Nova Scotia Federation of Labour): Thank you, Mr. Chair. I would like to again thank you for the opportunity to appear, but I would echo the concerns voiced by the previous presenter. We received our confirmation yesterday morning. The fax arrived Saturday afternoon, but we weren't in the office.

The Chairman: I'm sure you know what to do with the fiscal dividends.

Mr. Rick Clarke: I do apologize to the interpreters for our point form, because I wasn't able to provide something for them to follow.

I would also like to state that I know there will be full involvement by the Canadian Labour Congress on this committee, and we support the position put forward by the Canadian Labour Congress, along with many presenters that are here this afternoon and this morning, because we're working very closely on these issues as they impact on people.

As I've done on previous opportunities, I would urge this committee to very shortly consider the alternative federal budget that has been put out. There are some very good suggestions in it and it has been passed.

In the last couple of years there has been economic crunching to see whether or not these proposals would actually work, and it has been proved that they would work better to help get our deficit-debt under control, rather than the direction in which the government has gone.

I would support the view on the questions about whether the process has been too fast or too slow. As indicated, we think the cut-and-slash approach the government has taken is totally inappropriate and unnecessary, particularly when we consider that the major factor in the reduction of the current deficit has been the low interest rates. Had the Bank of Canada or the government of the day ensured us that the interest rates would have been lower three years ago, then maybe we wouldn't be fighting with the concerns we have with the education and health care cuts and high unemployment that we're seeing across this region.

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As others have said, the concern we have with the approach the government has made is very clearly the human cost, the human factor. An impact has been made. It was just a matter of looking at the bottom line and forgetting about what the impact would be on people.

It kind of brings me back to when I was watching the minister on CPAC. He talked about the free enterprise system today and why government has to be involved in some of these programs. He said—and this is not a direct quote, but it's the essence of it—free enterprise is profit-motivated and not necessarily concerned about those left behind. I would suggest to you that the spending we've seen through health care and education cuts, and the downsizing of the federal government, reflect exactly those comments: the government has done what the minister says free enterprise does.

Here are the concerns we have. I guess I'm coming to the priorities. I will send copies of some of this material I have. These aren't our studies; they were done by other groups.

Although it has been touted that there has been some job creation across the country, and we obviously are appreciative of any job creation, I'd like to remind you that not only in this region but across the country there's a major trend, and that is that most of the jobs being created are part-time jobs. The clearest example of this was in 1995, when 99,000 jobs were created and virtually all of them were part-time jobs. At the same time, we had a net loss of 22,000 full-time jobs in the country. Those are not our figures; those are from Statistics Canada.

Also, the Atlantic Provinces Economic Council made two report cards on employment in this region and across the country. They said that it's becoming a very scary trend: part-time employment versus full-time employment. There's a substantive increase in involuntary part-time employment. There are people who, because of family and other considerations, do opt for part-time work. In the last few decades there's been a fourfold increase in the number of people who do one full-time job and are being forced into part-time employment.

I have to say, both as a parent and as an activist, that although I have a lot of concerns today about high unemployment and what the prospects are for the unemployed—I'll speak for Nova Scotia—I can't sit here without talking about my fear for the future of our young people and youth.

You heard presenters here already this afternoon and this morning talking about the personal debt that's coming out. It kind of irks me a bit when I hear economists and others saying that the government has to take tough measures for our young people and that we can't leave them with the debt and the deficit. I have copies of news clippings here of record bankruptcies concerning young people who are coming out of university. The average personal debt of students is $25,000 when they come out of university.

I have to ask what kind of a legacy we leave for our young people when they are encumbered with a $25,000 to $50,000 personal debt, yet the best hope of employment is part-time employment. What kind of contribution are they going to be able to make to our economy?

As a parent who has one in high school and another in second-year university, I think they would be pleased to be able to have affordable, accessible education, with the opportunity for meaningful, full-time employment so they could pay their share of the national debt, rather than being encumbered with a $30,000 or $50,000 personal debt and never being able to buy a home or perhaps a motor vehicle or anything else. Obviously, they'll not be able to make any major contribution to our society.

I'll wind up. I think the priorities of government have to be with this surplus. It's very clear that we have to invest in people. That's been the missing aspect. I think we have to look at creating meaningful jobs. We have to look at rebuilding our social programs and public services, which have been devastated because of the tax reform.

I want to take a minute to talk about tax reform. I think tax reform in itself sounds fine to the average person, but we don't need changes in income tax; I think what we need is a fair tax system.

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I won't echo the points that Lorne has raised about the large corporations, but I think if everybody paid their fair share there would be more money to go around.

What we really have to take a look at is a reformed system that addresses some of the very unfair taxes in society. There is the GST. In Nova Scotia, what our province prefers we call the HS tax rather than the BS tax—we favour the BS tax. Any consumer tax is a very unfair tax. It's hitting the people who have less money to spend and is taking money out of people's pockets.

Right now we're approaching our heating season. We have people who are in low- or middle-income earning brackets who are going to have substantive increases in their electric and oil bills because of the 15% tax that is now being applied. If we really want to do something to get money back into the system we ought to be looking at a fairer tax system.

I'm going to touch very quickly on some statistics that talk about taxes. It's often misrepresented that if we give tax breaks it's going to be great for job creation. Our belief is that the money is better left in the government to use that money directly for providing job creation, because for every billion dollars in spending cuts we see, it costs 10,000 to 20,000 more jobs than what we actually see the tax breaks would create.

We have several large corporations that are looking at a reduction of payroll taxes. If we had a billion dollars worth of payroll cuts, it's estimated that would create 9,000 jobs across the country. If we took the same billion dollars and gave it back in personal income tax cuts, it's estimated again that that would create 12,000 jobs. If government used that same billion dollars and spent it on public services and social programs, by the way, as outlined in the alternative federal budget, then we would see an estimated 56,000 jobs created across the country.

So if we really want to look at proper spending, then we ought to be spending on direct people issues and certainly not on tax breaks for large corporations, because that's generally where we've seen it.

The final point is that we think the Bank of Canada, rather than have a fixation with inflation, ought to focus on low interest rates, job creation, and getting people back to work. Keep the rates sound, because it's very clear that deals with the deficit. The bottom line is that people have jobs and that there be reasonable employment opportunities and good-paying jobs whereby they are paying into the system, which will do a lot more in creating other jobs. That's our concern with the trend to part-time employment, because in this region we're evolving into a part-time economy.

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

We'll now move to the representatives from the Community Action Program for Children Projects in Nova Scotia, Joanna LaTulippe-Rochon and Pauline Raven. Is that correct?

Ms. Joanna LaTulippe-Rochon (Coalition Member, Nova Scotia Association of Family Resource Projects): Yes, it is. Thank you very much.

The Chairman: You're welcome.

Ms. Joanna LaTulippe-Rochon: I'd like to open by recognizing both Pauline Raven and Joyce Beaudry, colleagues who are here with me today. Certainly in the spirit of sharing, Pauline will step forward and participate during the question and answer portion of today's proceedings.

We come to the Standing Committee on Finance today on behalf of Canada's most vulnerable children. We are here to ask our federal government to make a full social investment in their future. We are a coalition of family resource projects in Nova Scotia that is funded under the community action program for children, better known as CAPC.

CAPC is a national health promotion program funded by Health Canada and managed in partnership with the provincial and territorial governments. CAPC funds support 12 projects in Nova Scotia, 40 projects in the Atlantic provinces, and approximately 450 projects when all provinces and territories are considered. Across Canada, CAPC operates thousands of community-based education and support programs for children, parents, and caregivers. In communities across Nova Scotia, CAPC is most noted for providing families with parenting education and support and children with opportunities for early learning experiences that meet their physical, intellectual, social, and emotional needs.

We come here to highlight the needs of families we serve and to tell you that the minimum dollars available to the community action program for children in Nova Scotia are barely enough to melt the tip of an enormous iceberg. After four years of programming, CAPC projects now have an increased sense of the size and temperament of that iceberg.

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When compared to other provinces, in 1988 Nova Scotia had the third lowest poverty rate at 14.2% for children aged 17 years or younger. By 1994, the standing of our children had worsened, with Nova Scotia listed as having the fourth highest poverty rate, 20.2%. In 1995, this figure climbed another percentage point to 21.4%.

The ability of our parents to provide even the bare necessities for their children has become increasingly difficult over the last two decades. For example, in 1976 a single parent with one child needed to work 41 hours per week at a minimum wage to bring the family up to the poverty line. In 1993, that same parent needed to work 73 hours per week to reach that same low standard of living. Many of the families use CAPC services with their lives against a backdrop of violence, sexual abuse, poverty, poor self-esteem, low educational status and/or generalized lack of control over their situation. This undermines their ability to live productive and healthy lives and to parent as positively as they would like.

For such parents, days, weeks, months, and even years can be filled with quiet desperation and hopelessness, which all too often transcends to the children. Racism further exasperates these experiences and further underscores the need for appropriate services and support. Despite all the complex and difficult issues so many of our young families are facing today, we're witnessing a great political attraction to deficit reduction. This deficit reduction is largely being undertaken at the expense of worthy social programs aimed at eliminating poverty and/or alleviating its devastating effects. For example, last year this federal government had to be heavily lobbied before a planned 51.9% cutback to CAPC was abandoned. Yesterday, the Truro edition of the Daily News noted severe cutbacks to the provincially funded adult education programs aimed at helping persistently unemployed or underemployed women.

Therefore, with respect to the process of deficit reduction, we can't emphasize strongly enough that the progress to date has been too fast and has employed inappropriate methods. If we do not address the needs of families living in poverty, its horrific effects will continue to exact an enormous toll. Until poverty is eliminated, it will continue to cause great emotional costs to those involved and even larger financial costs to society.

It is notable that this government recently set its health priorities through a national forum, which called for increased spending. Please be assured that the National Forum on Health's emphasis on preventative approaches aimed at ensuring optimal outcomes for children and preventing harm is solidly endorsed by our coalition. Much research firmly supports the forum's findings that deprivation during early childhood has a significant impact on the child's physical and mental health, which can only be partially offset by interventions later in life. Therefore, we believe dollars spent on CAPC are better understood as an investment than an expenditure.

As Dr. Paul Steinhauer of the Toronto Hospital for Sick Children underscores, we have an important choice to make that can be delayed no longer. He states that as a society we can either provide the support hard-pressed families need to prepare their children for success in school and in life or we can avoid doing so, in which case we will pay later and with much less to show for it as we try to pick up the pieces of their developmental failure.

As the Minister of Finance continues to plan our government's debt reduction strategy, he has a moral obligation to balance this goal against our responsibility to care for our children. When this government sets its priorities for spending increases, children must be first on its list. This government must heed its own recommendations reached after considerable consultation with the Canadian population through the National Forum on Health. It must substantially increase its financial commitment to primary prevention initiatives, such as the Community Action Program for Children and the related Canada Prenatal Nutrition Program.

The National Forum on Health recommends the creation of a national foundation to strengthen community action. The forum's findings can only be moved forward by a strong commitment from the Minister of Finance. For example, without increased dollars to address increasing poverty, how can health care be more responsive to a changing environment and to the needs of Canadians? How can it improve health status or ensure that health gains made in this century are not compromised? How can it address the urgent needs of children and families, especially aboriginal children, through targeted programs and income support? How can it strike a better balance between short-term economic imperatives and the long-term health and well-being of Canadians?

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We believe CAPC projects are what the national health forum refers to as success stories in Canada that show how individuals and communities can overcome adversity and improve health through a variety of non-medical interventions.

CAPC was described by the Hon. Paul Martin in his February 1997 budget speech as an essential component of the increasingly important social economy. As such he knows that CAPC is worthy of increased financial support. Now, as preliminary results of national and regional evaluations emerge, we are increasingly able to provide strong evidence that this federal program is a true example of best practice in preventative programming.

In closing, we need to bring your attention to one more recommendation. We want to ensure that public policy decisions are based on what is truly best for families. We can no longer afford band-aid solutions, which in the long run are ineffective and therefore a waste of our limited resources.

The child and family service system has been firmly criticized over many years. Professionals and families alike have consistently expressed concern about the conflicting mandates within these agencies. They argue that when an agency has the legal responsibility for apprehending children, it cannot effectively administer preventative programs, because these two activities have strongly competing priorities. For vulnerable women who have a need for support in the parenting role, child protection agencies are viewed not as places to get help but as places to avoid.

We believe the federal government must set the highest possible standard for the provision of effective prevention and intervention programs. For families these must be timely, flexible, stable, and non-judgmental.

By building programs on these premises, CAPC projects in Nova Scotia have become highly capable of addressing the many issues facing parents and children today. Participants come to CAPC in great numbers to find affordable and accessible help as they struggle with the issues related to poverty, children's development, racial discrimination, and the many forms of abuse they may experience. The wise saying, mother the mother and she will mother the child, is routinely accepted throughout the CAPC community in Nova Scotia.

At CAPC we have found that rigid rules and programming are a real barrier to those seeking help, support, and guidance. Instead, CAPC projects offer friendly, family-centred approaches that build on strength and address with respect whatever needs are identified and presented.

We believe the savings expected to the provincial treasury, which are to be realized as a result of changes to the child tax benefit next July, need to be closely monitored. We fear that if these are assigned to child protection agencies they will not be used as effectively as possible.

At CAPC we realize that the full dividend of social spending is only realized when each dollar is stretched to its absolute limit. We question what the human, social, and long-term fiscal costs will be if our limited resources are not spent where the greatest potential for success is evident. If prevention dollars are to be spent under the jurisdiction of our province, we believe the federal government must insist on increased accountability that will encourage a high level of effectiveness.

The community action program for children was the specific response of the Government of Canada to the incredible needs of Canadian children identified during the September 1990 world summit for children. At that time, Canada promised 70 other countries that it would eliminate child poverty and eradicate its effects.

Later, in May 1992, when defining key roles for government, parents, and even children wherever possible, the community action program for children was conceived. Today the population it aims to help remains the same: vulnerable children who experience increased levels of risk to their health and well-being. Five years later the current Minister of Finance gave increased prominence and well-deserved acclaim to CAPC and the related Canada Prenatal Nutrition Program by stabilizing funding. In doing so he clearly acknowledged the wisdom of providing community groups with the financial resources necessary to sustain programs that improve the health and social development of young children and families dealing with difficult life circumstance.

We are asking this government to ensure that community-based organizations like CAPC and CPNP remain the target for additional program funds as they surface. Thank you.

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

We will move to the representative from the Nova Scotia Council for the Family. Sue Wolstenholme, member of the executive, good afternoon and welcome.

Ms. Sue Wolstenholme (Member of the Executive, Nova Scotia Council for the Family): Thank you.

The Nova Scotia Council for the Family is a province-wide, non-profit organization that represents child-serving and family-serving agencies around the province. It also is the provincial affiliate for the Child Welfare League of Canada.

I don't have any prepared paper to pass in, but I have some notes here that I will speak from, and I'll watch my watch.

As the previous speaker mentioned, in November 1989 the House of Commons voted unanimously to work to eliminate child poverty by the year 2000. At the same time, it signed the United Nations Convention on the Rights of the Child. Eight years later, child poverty levels in Canada have grown by 46%—an additional 428,000 poor children. A serious national strategy to reduce child poverty must address problems such as low wages, insecure employment, high jobless rates, inadequate social assistance, disintegrating social services, and inadequate child care and housing.

Canada has the second-highest child poverty rate when compared against seventeen other industrialized nations around the world, behind only the United States. Aboriginal children are at a higher risk of living in poverty than non-aboriginal children. I could go on to quote many more facts, but I will leave it at that.

Campaign 2000, a coalition of national partners working to eliminate child poverty, has clearly demonstrated that poverty rates move up and down with the changes in the employment rate. As a result, children are extremely vulnerable to the impacts of high unemployment. Addressing child poverty requires that Canadian families have access to stable employment, adequate training, appropriate training or post-secondary educational opportunities, and adequate income and social support.

For the government, we would recommend that strategies be developed to generate sustained employment, to ensure adequate child tax benefits, and to provide a responsive community support system that includes child care.

I could talk about many different elements of the impact of the current fiscal situation on children and families, but I have chosen to restrict it to three areas. The second one will be the area of child welfare, which is one of the areas in which many of the agencies of the Council for the Family is highly involved.

Children come into the care of child welfare as a result of neglect and abuse. Investing early in family support programs can keep more children safely at home, at a much lower human and financial cost to society. I think the programs that the previous speaker was referring to are some of the investments that could be made in order to help children stay safely at home. We know there are hundreds of thousands of families in Canada served by child welfare services on any day of the year. It costs $24,000 a year to support a child in care in Canada. The alternatives, of which there are many, are much less costly than that.

In 1996, the federal government replaced the Canada assistance plan with block funding. The move was accompanied by huge reductions in federal support for medicare, post-secondary education, welfare and social services. The promise of the new national child benefit to alleviate some of the financial stress on parents is not enough. These families need access to parenting education, to adequate prenatal care, post-natal home visiting, and early child development and child care options. We would recommend that the government ensure that adequate social supports are available to high-risk families and children.

Thirdly, to speak about child care, investing in accessible, affordable quality child care for our children is fiscally and socially responsible. It is an investment in children in the early years and it is an investment in the development of healthy communities for the future. The research clearly states that the first six years of life lay the foundation for children's development.

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One of the things we know is that Canada ranks behind at least 16 other industrial democracies in the percentage of its children aged three to five in publicly funded child care. In the majority of these other countries, this publicly funded child care is available to all children regardless of their parents' status in the workforce, whether they are in it or out of it. It is made available as a child development program because the research clearly states that the experiences children have in their first six years are crucial to their later development.

Canadian families are struggling and have been struggling for many, many years to achieve an acceptable standard of living, without the support of the child care services that they virtually need and deserve.

Accessibility to quality child care services varies tremendously in Canada. To date, provincial and federal and territorial governments have not shown the political will to build a national framework to guide service delivery. Child care services in Canada are extremely fragmented. They vary greatly from province to province. In addition to that, they're in a state of decline in many provinces due to the changing federal-provincial financial arrangements. We recommend that the government ensure that a national framework for quality child care is developed for all families in Canada.

I'd like to quickly sum up by saying that Mr. Martin has recently been quoted as saying that education is the key to our new economy. May I remind you that education begins at birth and that we need to ensure that all young children experience the quality of care in their early years that they deserve, especially when their parents are unavailable to them. All children deserve a good quality of life today.

Insofar as we speak of child care as supporting parents in the workforce and all these other necessary needs for child care, we always have to remember that, first and foremost, child care is a program for children that provides them with the opportunity to have a good quality of life.

When their parents aren't available to them, far too many children spend their time in poor quality child care arrangements of one kind or another, which are usually the only thing that is available or that is affordable. I think we would have to say that many of those children do not experience a good quality of life.

There have been many task forces, parliamentary committees, and royal commissions over the last quarter of a century and more that have recommended to all the various federal governments they have reported to that Canadian children need accessible, affordable child care. So far, they don't have it. The children and the parents have been listening to the promises, and we strongly recommend that it is far past time that the government act on these many promises.

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

Now we will move to the question and answer session, starting with Mr. Riis.

Mr. Nelson Riis (Kamloops): Thank you very much, Mr. Chairman. I think we will all agree that these have been some of the most thoughtful presentations we have heard, and they have been very well presented. We will all have a chance to study them in more detail.

I particularly appreciate the comments made by you, Rick and Lorne.

I think the proposal for micro-credit will be a welcome idea for many people starting home-based businesses or self-employed initiatives.

However, since I know we have such limited time, my question, Nita, is to you. You promised you would respond to a question. In terms of the rate of disability growth and development in this part of Canada, you're going to help us understand why this is so.

Ms. Nita Irvine: I was asked this question after my presentation last year, so I've given it quite a lot of thought and we've discussed it. Statistics are not that easy to come by in relation to this.

As we know from presentations that have been made around the table this afternoon, poverty is a real concern and has been over the years in Atlantic Canada. Poverty, of course, affects health, and health, of course, affects disability. It brings on or reinforces disabilities and does not bring help to people with disabilities. As they age, of course, that is something they suffer from and adds to our statistics, we feel.

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Another thing is that I think we're notorious for exporting our able-bodied people from Atlantic Canada to the rest of Canada. We've always said that we export our brains, but we export that element of our population very often, while many of our people who are now aging, and so on, and have been long-time residents who live in rural areas and who have not had access to literacy and education at higher levels, stay here—and we're glad they do—but we don't get the influx. Also—and we have seen this in some statistics we've looked at—Metro Halifax HRM has probably some of the best medical facilities in Canada now, so we attract a lot of people who come here for the purpose of getting treatment for disabilities.

Of course, the latest real census report we have that is a detailed study on that is one that was part of the 1986 census. In 1991 there was a study done by Statistics Canada. In 1996 there was nothing except a few questions on the long form.

Those are the things we see. We do have quite a variance. Ours is 21.3%. I haven't seen the most recent statistics, but after the 1991 census the statistics for Canada were just 15.6%, I think, on average.

Mr. Lorne Ryan: You may not be aware of this, but there was a paper released by the Department of Health this month entitled Disability Profiles for Nova Scotia and Canada: Why the Discrepancy? It was in response to two questions I asked the Department of Health: Why has Nova Scotia had the highest disability rate in Canada over the last ten years? Is any of this preventable?

One of the things we have to remember is that not all disabilities are inevitable. Many of them are acquired. After a lengthy study, the conclusion of the report was that we're not noticeably higher in industrial accidents, car accidents, and alcohol-related accidents. We seem to be highest in one particular category; that is, mobility. Further than that, they have no conclusions. So your guess is as good as theirs.

Ms. Nita Irvine: It's something that has been in my purview for the last while, and I have been looking at and reading whatever I can get my hands on.

The Chairman: Thank you, Mr. Ryan and Ms. Irvine.

We'll move to Mr. Brison.

Mr. Scott Brison (Kings—Hants, PC): I have a quick question. We heard last week and this week that access to capital is a severe problem and that the Canadian banking system is not responsive to the needs of small business.

I enjoyed and appreciated the comments relative to micro-lending. Could you expand a little bit on some of the benefits of micro-lending to women, to minorities, and to the disabled? These groups seem to be particularly disadvantaged by the current Canadian banking system, and it strikes me that there seems to be an opportunity with micro-lending to address their needs, and in fact the needs of people in rural communities and all Atlantic Canadians.

Dr. Roger Wehrell: You actually have a complex question there in terms of the way it benefits particular groups. It has been shown to benefit many of these groups, and probably for different reasons for each of the different groups.

In the case of women, we know, in terms of statistics of forming new businesses, that women are forming businesses at a much greater rate than men are. Typically the businesses tend to be less capitalized than the businesses men are starting. With less net worth they are therefore not prime candidates in terms of the conventional lenders, for whom net worth is a major criterion. Of course, many of the women started businesses that tend to be home based, and also in the service industries, which again poses, by conventional lending standards, difficulties for the conventional lender in terms of managing what they take to be the risk and so forth.

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Some of the micro-credit programs are specifically targeted to women, like Women's World Banking. Some are not specifically targeted to women, but when you look at the uptake, at who the clients are, anywhere between 65% and 75% of the clients tend to be women. Very clearly, micro-credit benefits women as a group in terms of business formation.

Some of the other groups mentioned have issues that are a little bit different in terms of ethnic groups and so on who, because they belong to one group or another, are apparently disadvantaged by the banking system. Usually it has to do with belonging to groups whose economic status is, on the whole, lower than the average status of persons starting businesses. Again, that would account for it.

Rural areas are a very interesting factor in that many micro-credit programs require borrowers to form peer groups in order to access loans or to belong to a network where the responsibility for repayment is shared by the network or by the circle of borrowers. As it's been shown, these kinds of micro-credit programs work better in many rural areas, simply because in rural areas people have tighter bonds of family, of trends and so forth, a lot of the time, and tend to form these groups and these networks more easily than people in many metropolitan and urban areas do.

In Atlantic Canada, almost all the experiments other than Sydney, if you count Sydney as an urban area, and one in Halifax—and there are now a considerable number of these micro-loan funds—are in rural areas. The major successes have been in rural areas.

Across the country there have been notable successes in aboriginal communities, again in the rural areas, and in a few other areas. The rural secretariat of Agriculture Canada has just started funding a national study of micro-lending in rural Canada, which will hopefully answer some of these questions in a little more detail.

The Chairman: We'll move to the next and final question.

Mr. Szabo.

Mr. Paul Szabo (Mississauga South, Lib.): Thank you all for your thoughtful input. We have a delicate job to do in balancing need and priorities and being responsible.

As you can appreciate as we go across the country and we hear from different regions, there are some differences in the numbers and the emphasis. You can imagine that we've come across people who have basically told us to stop this equalization because it just rewards mediocrity.

We have to grin and bear it, and we come here and we get the other side of it, so it's good. It provides the balance we need. But we do hear some conflicting information.

I know a little bit about income taxes and I know that if a company loses money in one year and makes money the next year, that money could be carried forward as a loss, carried forward so that even though the company made a profit in year two the loss carried forward would eliminate the need to pay the tax, even though on a net basis it was break-even.

I can assure you that 66,000 companies in Canada didn't get away without paying a cent. They may have not paid the cent in that year, but that's because over the recession they had massive losses and they've been carrying forward. Very slowly that's going to correct itself. It depends on how you want to play with the numbers.

With regard to tuition and university, we heard a lot. What you should know about post-secondary education is that the unemployment rate for university graduates, for youths under 25, is only 6.8%. In Canada university graduates have an unemployment rate of 4.5%.

Only one in four students in Canada has a student loan, a debt. That's just one in four. The average loan is $22,000. It's about the cost of a car. If you asked them if they'd be prepared to pay $22,000 for a car that lasts five or six years or $22,000 for the opportunity of a lifetime to learn and to earn 50% higher than the average wage for the rest of their lives, which one would they chose? There is some balancing to do there.

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This is the area I love the most, though. I wrote a book called Strong Families...Make a Strong Country. This idea of families is very important. In April of this year, at the White House, the latest research study on child development came out, and I have to share it with you because I think it's important. It said:

The neurological foundations for rational thinking, problem solving and general reasoning appear to be largely established by age one...

That means the long-term physical, mental, and social health of our children is put in place and going...

Fraser Mustard, of the Canadian Institute for Advanced Research, was always talking about how 80% of the lifetime development of the human brain happens by the age of three. It's actually happening a little sooner than we thought.

So care is very important during the early years, and I'm afraid that child care and day care up to age six is only dealing with remedial situations. After you have a situation, you can then only fine-tune.

The issue for me—I hope maybe you have some comments—is what Statistics Canada came up with last week when they talked about the divorce rate in Canada, the breakdown of the family. Common-law relationships break down 75% of the time within the first five years, 33% of marriages are breaking down, and 85% of lone parents, who represent about 11.3% of all families in Canada, account for 42% of all children living in poverty. Family breakdown is probably the biggest risk to social dependency in Canada, yet it is coming from a very small proportion.

So maybe I will just throw that out to you. As we balance our needs, I think we can't have all our eggs in one basket. I think we need to have university research and development, debt reduction, and a little bit of targeted-tax things, but we also have to look at our risk element. If the family continues to erode and break down, our children are not going to have that nurturing environment that they're going to need to be the leaders of tomorrow.

For me, I'm thankful, because you brought us full circle. It started in Vancouver. We heard a lot in Edmonton, and even in Toronto. The sensitivity to child poverty, childhood outcomes, and the family issues was really there, even in those big cities. So thank you for that.

The Chairman: Thank you, Mr. Szabo. Comments?

Ms. Stella Lord: I would like to make a comment about not getting too simplistic about family breakdowns and how bad that is for families. Too often, when we are privy to what happens when a family breaks down, we see that as a good thing. It's very often the result of very unpleasant circumstances that women are experiencing in their homes.

With regard to the groundwork being laid by the age of one, I agree that the research is astounding, but that's neurological groundwork for future health. There are lots of other things too that need to be added.

I think families do need to be supported in the prenatal period, but that support must be ongoing so that the gains we make through early intervention aren't lost as we go further down the road and further toward the goal. I think families are very capable of doing magnificent things for themselves with support from their communities. They need to have a sense that we will support them in whatever their personal choices are for the family make-up.

The national longitudinal study on children in Canada did highlight that it wasn't single-parenting that was the problem when it came to ongoing deficits within the family, it was the lack of support. For those single parents who were financially better off or who had extended family support, there really was no significant difference between the performance of their children and that found in two-parent families. So I think we need to think these things through in their complexity as we move toward instituting appropriate programming.

Ms. Pauline Raven (Community Action Program for Children Projects in Nova Scotia): I'll add just one sentence on behalf of a single parent who once said to me that her children were labelled as having come from a broken home. She said they actually came from a fixed home.

Ms. Stella Lord: I would like to really reinforce what has just been said. It relates back to the message I was trying to convey from the Nova Scotia Advisory Council on the Status of Women. When we look at those who are single parents and those who are at risk of poverty, it is mainly women. We have to stop talking about the pathology of single-parenting and start talking about how we can help women support families and work better and faster toward women's equality.

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Thank you.

The Chairman: Mr. Ryan, a final comment.

Mr. Lorne Ryan: I'd like to respond to the comments that were made. You indicated that 6.5% of university students are unemployed. You didn't specify what kinds of jobs they got, but we'll leave that. I'd like to point out that only 13.2% of our entire population gets a post-secondary education, and among the disabled community that figure is one-half of that of the normal community or non-disabled community.

You mentioned that $25,000 was the cost for a student. That is probably only for the undergraduate degree. A masters degree or Ph.D. would put you up into the $50,000 to $60,000 range. So if you want to be a doctor or a lawyer, you're looking at a $60,000 debt load, which is the figure I quoted.

I would like to conclude by mentioning two things. We've heard a lot about child poverty, but I've heard nothing about disabled children. You mentioned here about development occurring before the age of one. Let's not forget about nutrition. If you don't have enough food to buy decent groceries you can't feed your child properly, you can't feed the expectant mother properly, and the child has a possibility of developing a life-long disability because the food budget was too low. On social assistance, the food budget is the one area where people have flexibility. Go out and look at the cost of eggs, butter, milk, and fresh vegetables. A pound of bananas is now 59¢. Can anyone remember when it was cheaper? A quart of milk costs over a dollar, plus of course taxes. Yes, let's not forget our taxes.

My conclusion to you, gentlemen and ladies, is if you want to do something about child poverty, you will have to do something about the entire family, because it's not the child who's bringing in the money, it's the parents. They feed their children what they can afford, and that will affect their ability to learn, grow, and develop. Please take that into consideration.

Thank you.

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

Thank you, everyone, for your very thoughtful presentations. I'd like to personally, on behalf of the committee, thank the people of Halifax and Nova Scotia for their input into the pre-budget consultation.

I also want to mention something extremely important. This is not the end of the pre-budget consultation. Members of Parliament have been asked by this committee to hold town hall meetings to seek input from their constituents. I hope you call your member of Parliament to find out when that town hall meeting will be held so you can reinforce the points you have made to this committee. We're truly trying to get a full national consultation process. I think with 301 members holding at least 301 town hall meetings in their ridings, it will perhaps be the most extensive consultation ever held.

Thank you so much.

The meeting is adjourned.