FINA Committee Meeting

STANDING COMMITTEE ON FINANCE

COMITÉ PERMANENT DES FINANCES

EVIDENCE

[Recorded by Electronic Apparatus]

Monday, November 15, 1999

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[English]

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

This morning we have the pleasure to have with us representatives from Canadian Pensioners Concerned; Independent Living Resource Centre; the Nova Scotia Advisory Council on the Status of Women; the Metro Non-Profit Housing Association; the City of Miramichi; and the Canadian Nature Federation.

Mr. Mills, you're the first presenter. You have approximately five to seven minutes. Please stay within that timeframe, because that will allow us to engage in a question and answer session. You may begin. Welcome.

Mr. Leon Mills (Chairperson, Independent Living Resource Centre): Good morning, Mr. Chairman and members of the committee. We're pleased to be here.

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We represent the Independent Living Resource Centre of St. John's, Newfoundland, which provides services designed by and for persons who have disabilities. The ILRC is managed under the direction of a membership-elected board of directors, which is consumer controlled, cross-disability, and not for profit.

As a member of the Canadian Association of Independent Living centres, we join 23 other centres across the country in promoting independent living, choices, and opportunities for persons who have disabilities. We strive for the full inclusion of all citizens within our communities, for the removal of barriers, and for the end of discrimination that currently prevents people who have disabilities from being fully engaged in this country.

We firmly believe that we, as individuals, must have full opportunity to take control of and responsibility for decisions that affect our lives. We are entitled to clear and accurate information, to the expertise of our friends and neighbours, and to the support systems that enable our full contribution to our communities and country. Independent Living provides a foundation for a cost-efficient, community-supported, proven model of service delivery that reduces dependencies on expensive medical and rehabilitative systems.

On the matter of social transfers, we believe the decrease in provincial transfers implemented through the Canada health and social transfer continues to place a strain on our province. Within this province, reduced revenue has resulted in cuts to some social programs and freezes being placed on other services, resulting in continued isolation, poverty, and exclusion for many individuals.

As has been so often described, the deficit-cutting exercises of the past two years have taken place at the expense of collective caring. This weakens the country and challenges the very values that Canadians take pride in. We emphasize that there is still time to reinvest in the citizens of our country and reaffirm our commitment to equity, equality, and fairness.

I'll turn it over to Mary Ennis, one of our members.

Ms. Mary Ennis (Member, Independent Living Resource Centre): I'm a member of the ILRC, and I'm also executive director of the Coalition of Persons with Disabilities—Newfoundland and Labrador, which is the provincial affiliate of the Council of Canadians with Disabilities.

We challenge you and the Government of Canada to invest in the positive capacity of persons with disabilities to be a major part of the social economy. We urge the continuation of strategic initiatives that network the talents and skills of people across the country. Given the necessary supports, individuals and communities are well situated to contribute to social policy, research, and a sharing of best practices.

We acknowledge and commend the federal support of citizenship issues through the continued support of the Canadian Association of Independent Living Centres and the Council of Canadians with Disabilities. As organizations of persons with disabilities, these groups and their provincial affiliates provide a strong foundation for the increased participation of persons with disabilities in all aspects of community life, and this participation clearly enhances the economic and social life of our country.

Mr. Leon Mills: Under government commitments, and as poignantly described by the Standing Committee on Human Resources Development and the Status of Persons with Disabilities in its report to Parliament, Reflecting Interdependence: Disability, Parliament, Government and the Community, government action is long overdue. The commitment of the federal government to citizenship issues for people with disabilities must be acted upon. Its reports, briefs, investigations, and inquiries are all in, and the message is clear: barriers must be identified and removed, supports for everyday living must be accessible, and individually based education and employment barriers must be addressed.

Ms. Mary Ennis: Disability issues have been clearly identified as horizontal. They impact on and cross all departments and levels. Ongoing policy reviews to identify and remove barriers are essential to a forward movement for inclusion. It is recommended that a coordination mechanism at the senior level be established.

We also challenge the Government of Canada, through the Department of Finance, to mandate an allocation within departmental budgets for barrier identification and removal processes.

Mr. Leon Mills: For supports to facilitate participation, we emphasize that there needs to be a system of covering disability-related costs that is pan-Canadian in scope, addresses needs, reduces gatekeepers, and encompasses the principles of independent living.

Ms. Mary Ennis: Canadians with disabilities have often had to define themselves as unemployable in order to get supports. Current labour market agreements with the provinces only support those who are EI eligible to access training dollars. The Opportunities Fund was created to address this exclusion, but runs out in March 2000.

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Employment equity legislation has failed Canadians with disabilities. A comprehensive labour market strategy for people with disabilities is a cost-cutting measure. A labour market strategy that will result in jobs, with access to labour market agreement resources and expansion of the Opportunities Fund, is highly recommended.

Mr. Leon Mills: In closing, we challenge you to focus on the positive capacity of all Canadians as being integral to the economic and social goals of our country. We challenge you to focus on our skills and abilities to contribute to economic growth in Canadian society. We challenge you to meet the commitments made and endorsed by your government by providing adequate resources to do so. We challenge you to reaffirm your leadership role of supporting networks of persons who have disabilities through dynamic and strategic initiatives across the country.

Thank you.

The Chair: Thank you very much, Mr. Mills and Ms. Ennis.

We'll now hear from the Canadian Pensioners Concerned, with Ms. Patricia McLellan.

Ms. Patricia McLellan (Past President, Canadian Pensioners Concerned Inc.): Actually, it is Joan Lay who is going to speak.

The Chair: Joan Lay, welcome.

Ms. Joan Lay (President, Canadian Pensioners Concerned Inc.): Thank you very much.

My presentation really is in answer to the questions you sent us. I sent you the answers. I will go over some of those answers because I think they relate directly to the problems of seniors, especially in tax relief and reform.

It's obvious from all reports that middle-class Canadians expect some relief, and this is certainly the case when it applies to pensioners. The pensions that were contributed to in the sixties, seventies, and eighties can no longer keep up with the hidden inflation and the taxes, both hidden and blatant.

The income tax on pension income has become a malignant tumour eating away at the moneys that should go for housing, for food, and for the quality of life that was supposed to be a guaranteed expectancy for those who put moneys into any type of savings plan. This is not the case, and it is becoming steadily worse as the financial climate changes.

Obviously we would say that a study of the tax system is in order, taking into consideration the older people for the taxes they paid for the 50 years when they were not older people.

Now, the initiatives proposed by the federal government towards higher education and health care have not been brought back to the levels of the eighties. We are concerned for the younger people coming up. We feel the government is no longer keeping up with existing technologies. The so-called strengthening of social structure is simply putting back the planks that were taken away previously. We are not making any headway with increased costs relating to education and health care.

Salaries have steadily increased, and no doubt should. Technical abilities have increased the costs in both areas. Money must be found to cover these costs. There is little relief for most students when they go into the job market, and they're under a load of debt, which seems grossly unfair. When we look at the booming economy and the number of businesses making a great deal of money for themselves and their shareholders, we feel that something more should be done for the students and for the younger people who are trying to make their way in life.

Priorities for new or renewed social investment: I believe it requires people across Canada to sit down and discover exactly which priorities are necessary for new or renewed social investment. This should include the youth, the middle-aged, and the older people, not just the bureaucrats and the academics but a wider range of people who would be prepared to acknowledge other peoples' agendas and to correlate them into meaningful opportunities.

Now, under productivity, a number of these things seemingly do not refer to the seniors of today, but they do, because the seniors of today can be very productive. One of the problems is that they're not allowed to be. I think it's about time the government looked into this area and made use of all this knowledge and possible productivity, to make these people feel they are still Canadians and still part of the Canadian process.

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Lastly, on what government can do to enhance productivity, we have to look at the land itself. How long can it survive the cutting of timber, the increasing loss of farmland, and the continuing rape of the water system? We're very concerned about this because we grew up through a period that more or less introduced this. Unfortunately, it is continuing at an increased pace.

We have to look at whether we can survive with a lack of oxygen, food, and water, or is it time to take a look right now and make sure our children, our grandchildren, and our great-grandchildren have a country they can live in?

Thank you very much.

The Chair: Thank you.

We'll now hear from the Nova Scotia Advisory Council on the Status of Women, Ms. Patricia Doyle-Bedwell and Stella Lord. Welcome.

Ms. Patricia Doyle-Bedwell (President, Nova Scotia Advisory Council on the Status of Women): Thank you very much. Thank you for allowing us to present our brief to you today.

This is, I believe, the fourth or fifth time we have presented before this committee to advocate for budget decisions that would make a difference in the lives of women, especially women who are struggling to catch up or maintain their living standards, who are constantly juggling employment and family responsibilities, or who are marginalized because of their backgrounds or status—for example, their family situation, having a disability, or being a member of a particular racial or cultural group.

Our written brief responds in detail to the specific questions the committee has asked us to address. In what follows, I would like to summarize the main points we raise in the brief and highlight some of our major concerns.

On the process of budget-making, we urge the committee and the Department of Finance to put as much emphasis on social policy to develop a social infrastructure, including social justice and gender-equity goals, as it does on ensuring purely economic goals. Those who advocate for women, the poor, and other marginalized groups often feel excluded from the budget-making process when it really matters: at the beginning.

We would like the standing committee and the Department of Finance to not only consult with economists, but to consult with experts on social policy and social services, on issues affecting women and marginalized groups, at an early stage, when they are developing budget alternatives.

We note that the Standing Committee on Human Resources Development and the Status of Persons with Disabilities examines labour market and some social policy issues. We would like to see the concerns raised by this parliamentary committee better integrated into the budget-making process, including the background material for these consultations.

On tax relief and reform, we believe that rebuilding the social infrastructure should be emphasized as much as, if not more than, tax cuts. Any tax reform should integrate the principles of progressivity, equity, and ability to pay. Tax cuts, if implemented, should primarily benefit Canadians whose incomes are below the median. We therefore recommend gradually returning to full indexation of the current income tax system. In the first instance, we think you should focus on indexation of the low and middle tax brackets.

The GST/HST is a regressive tax that does not take ability to pay into account. It includes taxation on many of the necessities of life. It places too large a burden on low- and middle-income families. It can also stifle the development of small business.

We recommend the federal and provincial governments consider reducing or eliminating the tax on necessary and non-luxury items, such as heating oil, children's clothing, convenience foods, and essential hygiene and sanitary products.

On social infrastructure, it is truly ironic that the federal government is now asking us to choose how the government should spend surplus money when the Province of Nova Scotia is faced with the probability of cutting programs because of a large deficit.

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In our view, the Nova Scotia deficit has been created, in part, by cuts in federal social program transfers since 1996. The federal government must restore, in 1999 dollars, all the money it has cut from transfers to the provinces under the Canada health and social transfer since 1996. The federal government must also ensure that all provincial and territorial governments can live up to their commitments in the social union agreement to “meet the needs of Canadians” wherever they happen to reside in Canada.

We are therefore concerned about a recent federal government announcement that the finance department proposes to move to a per capita approach to transfers under the CHST. In our view, this proposal is regressive and will unfairly penalize the poorer provinces and provinces in Atlantic Canada, such as Nova Scotia, that have smaller populations and where a large percentage of the populations live in rural communities.

Whether the population is large or small, a social infrastructure to deliver the same range of social services and programs is required in each province or territory. The government must recognize that poor provinces have smaller tax bases, and smaller provinces cannot take advantage of the economies of scale like provinces with larger populations, such as Ontario, Quebec or British Columbia.

In this context, we are particularly concerned that while there has been limited new federal funding or programs in the areas of health and post-secondary education since the demise of the CAP and the introduction of the CHST, there has been little attention paid to additional support for social services.

We are therefore very concerned about what appears to be declining moral and financial support for social services at the federal level. Social services cover such things as subsidized child care, programs to assist abused women, special home care programs for low-income seniors, child protection, and mental health services. These are all areas of increasing need and complexity, and they deserve special attention in rebuilding the social infrastructure. It is too easy to turn our backs and blame individuals or families for problems or lack of resources. Communities and governments must protect children and youth and assist vulnerable persons, whatever their ages or sources of their problems.

The federal government must also respect its fiduciary responsibility for first nations people and keep its commitment to implement the recommendations of the Report of the Royal Commission on Aboriginal Peoples, especially in the areas of ensuring equitable access to post-secondary education and maintaining the health and health care of first nations people, whether they reside on or off the reserve. The federal government must also ensure that first nations are fiscally accountable to their people, and when self-government is introduced, as is being done in Nova Scotia, that both women and men are treated equitably.

We support the national child benefit and its goal of assisting low-income families. However, we are disturbed that the program was developed in a way that encourages provinces to deduct the benefit from social assistance. The rationale is to encourage recipients, especially single mothers, to look for employment. We find this policy reprehensible, in the context of increasing concern about child poverty and the well-being of children. We're also concerned about the well-being of parents, especially mothers.

We are therefore concerned about the absence of specific funding for subsidized child care, educational and skills-upgrading programs, and other transitional supports that could assist and support single parents to make a transition to the labour market in a way that does not increase the level of stress on them and their families.

So-called employability programs must have enough funding and support to be conducted in a way that might actually ensure single mothers will be better off in the new economy, both financially and in terms of their own health and well-being, in the short and long terms.

Globalization of production and liberalization of markets and trade are having different impacts on specific economic sectors, regional economies, and women and men. As some reap the benefits and others the losses, Canada must renew its commitment to be a caring society, reducing poverty, narrowing income and regional disparities, ensuring equity among different cultural groups in society, and advancing women's equality.

The fisheries is one section in Nova Scotia where there have been negative impacts on women and their families due to the depletion of fish stocks brought about, in part, by globalizing trends, technological change, and government policies on fishing. Government responses to assist individuals in coastal communities affected by these changes have also been inadequate, or in some cases have made things worse. Similar observations could be made about communities' experience in the decline of other traditional industries, such as coal mining and steelmaking.

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Although their voices are not often heard in public forums on these issues, it is often women who bear the brunt of family and community stress. We are hearing of an increased incidence of family violence and more health problems as women juggle family finances and struggle to keep their families and communities together. Governments must provide more funding for community economic development programs in rural and coastal communities affected by declining industries. They must also ensure that women's needs are addressed and that they are included in the design, development, and delivery of these programs.

As we move toward a more knowledge-based economy based on information and other technologies, we must also ensure that gender equity prevails and that men and women from all cultural and ethnic backgrounds have equal opportunities in these areas. Women's participation in computer science at the university level lags far behind their advances in other fields. Financial incentives for young women to enter computer science programs at the university level might help to improve the participation of women in computer science programs.

Productivity. We are glad that improving the standard of living of Canadians is now on the agenda, because recent data suggest that in recent years income has remained static or has fallen for middle- and low-income Canadian families. GDP and the traditional concept of growth, however, are inadequate measures of productivity because they do not take into account invisible non-economic costs, the value of unpaid work, the quality of life, or the distribution of wealth.

If the government is to focus on increasing productivity, it must ensure a narrowing of the income gap between rich and poor and that the overall quality of life for both women and men in Canada is enhanced. Increasing productivity must also include ways to reduce stress and the time crunch, especially for employed parents. Special attention must be paid to enable working parents to balance employment with their family responsibilities. Measures must not, however, jeopardize the financial stability of families or women's equality gains in the labour market.

We believe the government must find equitable ways to help both mothers and fathers combine their parenting roles with their jobs and their careers. Improved funding for quality child care could certainly help to improve the situation. But employers must also do their part. One idea we had would be to provide tax incentives to employers that offer progressive policies on family leave, flexible working hours, and the provision of on-site child care.

In conclusion, we urge the federal government to demonstrate in the 2000-2001 budget a renewed commitment to programs that might help to make women's equality a reality rather than just a dream.

Thank you very much.

The Chair: Thank you very much, Ms. Doyle-Bedwell, and also Ms. Lord.

We'll now hear from the Metro Non-Profit Housing Association, Carol Charlebois.

Ms. Carol Charlebois (Executive Director, Metro Non-Profit Housing Association): Thanks for inviting me to speak this morning. My name is Carol Charlebois, and I'm the executive director of the Metro Non-Profit Housing Association.

The Metro Non-Profit Housing Association has been in operation for about 10 years. We have two primary areas of activity: we supply supported housing to 44 single individuals who have been homeless or who are in danger of becoming homeless, and we also operate a housing support centre affectionately called “the coffee shop” by its participants. It's in the heart of some of the very worst rooming house accommodation in Halifax, and people drop in for a constructive social environment. They also receive assistance in improving their circumstances, in looking for other accommodation, in accessing health resources, and in dealing with mental health and addiction issues.

I'm going to be speaking from our experience as front-line workers. We haven't had time to do a lot of research. I'm speaking from our experience.

We do have memberships in a number of organizations, though. We are a member of the Creighton-Gerrish Development Association and four member organizations that are pursuing a development project in the heart of a depressed area in Halifax. I'm going to speak about that later. We're members of the Affordable Housing Association of Nova Scotia; the Urban Core Support Network, a national group; and the Halifax Homeless Network. Last spring we co-hosted CMHC's regional round table on homelessness.

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Our philosophy has been that homelessness is not caused by addictions or mental illness. The solution to homelessness is homes. Rather than saying that addictions and illness are the causes of homelessness, we feel that people are not able to deal with these issues, to make constructive use of treatment programs, to improve their education, or to do job searches when they're based in a shelter, a substandard room, or perhaps on their friend's sofa. A roof over one's head is the first step.

Our own tenants are witnesses to that. In 1997 we collected statistics on our current and former tenants. There were 64 in total. We found that when people applied to us for their housing, 67% of them were in receipt of social assistance. Of our tenants in 1997, only 25% remained on social assistance, and of people who had moved out, 28% were still in receipt of social assistance.

I'd like to read from a letter from a former tenant who talks about what that kind of housing did for him. He begins:

I am an alcoholic and addict. I reached bottom and got sober in the spring of 1989. I was living in a rooming house. There were frequent battering and fist fights in the halls. One resident was arrested for attacking a group of kids with a knife and chain. Another was arrested for trafficking in narcotics. The kitchen was too dirty to prepare food in. I was unable to afford anything better. In the spring of 1991 I suffered a mental [breakdown] and was hospitalized. I was unemployable and homeless.

Through the social work department in the hospital, he was referred to Metro Non-Profit Housing. He goes on to talk about what the housing meant to him.

For the first time in a long time I had my own bathroom, kitchen, and living room. Privacy and security are so precious when you rediscover them. I did not have to worry about my safety. I was not constantly exposed to drugs, alcohol and violence. I now had an anchor point to which I could centre my life. I had a place where I could heal from my illness.

He went on to describe the various programs he was able to take advantage of. He took advantage of treatment programs, educational programs, and employment support programs. He left our housing about a year ago, and he now runs his own computer programming business. He's concerned about our work. He has offered this letter, and he signed it with his name.

Through our work we come into contact with many individuals who suffer severe housing problems. Homelessness is a Nova Scotia issue. It's not just a Toronto problem. Homelessness takes many forms across the country, and there would be different specific solutions across the country.

In Metro Halifax the problems include extremely substandard buildings. We did a study of rooming house conditions a few years ago and found instances, for example, where people had no locks on their own doors and there were no locks on the main door to the building, so that essentially the general public, including drug dealers and drug users, were going through the building all the time.

The other issue in Halifax is the quickly decreasing vacancy rate. There was an article in the Daily News the other day that quoted a recent CMHC report. They called Halifax housing a hot spot. They said that this project is paying off for the housing industry, and within Halifax activity will be concentrated around high-end apartments and condominiums. What that means is that there's going to be pressure put on the existing accommodation for moderate rents. Costs are going up. It's making project such as ours in the Creighton-Gerrish Development Association more expensive as well.

I see two areas where the federal government must act if the problem of homelessness is to be addressed. We need federal spending on housing and spending at a significant level. Numerous proposals have been made to the government from the Federation of Canadian Municipalities, the Big City Mayors' Caucus, the Canadian Housing & Renewal Association, and the Toronto Disaster Relief Committee, as well as many housing groups that support the one percent solution.

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The common message in all these proposals is that significant spending is required. Something approaching $2 billion is necessary.

A federal contribution of $50 million in rental RRAP funding is almost meaningless in the face of the great need.

Federal government intervention is necessary in Nova Scotia because this province doesn't have the resources to act appropriately. Non-governmental attempts to deal with the problems are not effectual. I mentioned earlier our work with the Creighton-Gerrish Development Association. We're very proud of that project. We're going to have a new 18-unit building soon for single individuals. The project also includes 52 units in condominiums and starter homes for people of moderate income. So that's about 70 units.

That project began nearly 10 years ago, and it's been a severe strain on the resources of all the member organizations. It's depended on a unique situation where we've had a lot of volunteer labour from a professor of architecture at the local university. That kind of volunteer effort can't be marshalled, and 70 units over 10 years is no way to solve the problem of homelessness.

Another area where action must be taken is to repair the social infrastructure. In Nova Scotia a single person on assistance considered to be employable receives $349—and most people are considered to be employable unless they have a really serious illness; illiteracy or other problems with job readiness are not considered when people are judged to be employable. Of that $349, $225 is for rent and $144 for everything else. In the 10 years I've been working in this field I've seen that rate decline. It used to be $560 and now it's $349.

Those are the years in which the federal government decreased its spending and policy role in the social policy field. That decline has resulted in untold misery. Some of the people at our coffee shops and housing support centres call themselves the disposable people.

There is support for the federal government to take action in these fields. When we did our research on rooming house conditions we consulted with people in the neighbourhood, and their primary reaction was to say they wanted better housing for the people in those rooming houses. There was no hostility toward them. When I speak to people not involved in the field, they're surprised and appalled when they find the single assistance rate is $349.

Public opinion surveys have shown that homelessness is a priority issue for most people in the population. So I ask that you reintroduce a strong and significant spending role for the federal government in these two areas.

Thank you.

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

We'll now hear from the City of Miramichi, the Mayor, Mr. Rupert Bernard. Welcome.

Mr. Rupert Bernard (Mayor of Miramichi): Thank you, Mr. Chairman. Thanks for the opportunity of being able to present to you and your committee this morning.

The city of Miramichi is located on the world famous salmon-fishing Miramichi River in northeastern New Brunswick. We have a population of approximately 20,000 and are New Brunswick's fourth largest and newest city. Incorporated on January 1, 1995, we are a recent amalgamation of 11 local governments—two fair-sized towns, three villages, and six local service districts.

The two former towns, Chatham and Newcastle, are over 100 years old. The villages are over 30 years old. The local service district areas where the growth is taking place is largely unserviced. This amalgamation of local governments has presented a major infrastructure challenge to our city. The Miramichi region and its largest municipality, the city of Miramichi, has never had things easy. A resource-based economy, including forestry, mining, and fishing, and a large military installation, CFB Chatham, along with withering federal policy shifts, virtually ensured that our economy would be in a continuous state of flux.

The national airports policy and the closure of CFB Chatham, with the loss of those 1,000 jobs, has been successfully addressed. Our airport is still open, and the jobs lost as a result of the closure of CFB Chatham have been replaced. We are stronger for it. The port divestiture program currently underway is the most recent challenge you have handed our community with which we must deal.

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Heath Steele Mines closed last week, throwing 300 very well paid employees out of work. The ore is gone. There isn't very much we can do about that, only try to help those people adjust and find new work.

However, I'm not here this morning to whine or complain about the above. I merely wish to note it briefly. Miramichiers are a hearty lot, driven to persevere largely due to our Irish, Scottish, and Acadian backgrounds and their vision. We have met and are meeting many of those challenges with mixed success.

There is a driving vision that keeps the people of Miramichi region moving forward. First, we have a deep conviction that we live in one of the best spots in Canada, perhaps the world, and we want to share with others the natural beauty, our friendly lifestyle, and our special sense of history.

Secondly, we are all united by the Miramichi River and want to keep our special local neighbourhood heritages that are the key to our family lifestyle and community involvement.

Thirdly, we have a cyclical forest-based economy, and we want to revitalize the economy further with tourism, small manufacturing, agriculture, and service- and knowledge-based industries so that our young people will be able to remain here.

The City of Miramichi is entering the new millennium with a feeling of confidence, knowing that we live in the best country in the world. We would like to add value to Canada, and we have embarked on several initiatives designed to achieve that.

Those initiatives are a new municipal plan. It's the first municipal plan for the City of Miramichi and is intended to foster and focus on development. A riverfront development strategy, overseen by a 30-member advisory committee, has recently been completed. It is a comprehensive review of our city's 55 kilometres of Miramichi riverfront and has identified many development opportunities largely related to our heritage and our diverse cultures. A unique concept establishing the city as an eco-museum, or a museum without walls, has been adopted.

In a recreation service strategy, the City of Miramichi recognizes that recreation and leisure opportunities are a distinct and valuable component of the fabric of community life. This initiative will develop a comprehensive and integrated community strategy that will ensure a fair, efficient, and equitable system that continuously responds to the widest possible range of leisure needs.

We very strongly endorse the Federation of Canadian Municipalities' proposal for a quality-of-life infrastructure program and its investment targets—and that proposal is attached. Within the Federation of Canadian Municipalities quality-of-life infrastructure program proposal, the priorities of the City of Miramichi are waste water collection and treatment, repair and upgrade of municipal roads, affordable assisted-living accommodations, downtown revitalization, heritage preservation, recreation facilities, and the protection of ecologically sensitive lands and nature. We are very grateful for the previous Canada-New Brunswick infrastructure program and strongly encourage you to support a new infrastructure program, which we know would be very beneficial to the city of Miramichi and to Canada.

The example I'd like to conclude with is that under the previous infrastructure agreement we were able to complete a northside waste water collection and treatment project that was valued at approximately $15 million. With infrastructure support, it had the effect of doubling the user rates of all the users in the city of Miramichi. We now must contend with an equally serious problem, the southside collection and treatment system, which is valued at $15 million as well. Without infrastructure support, we can't even begin to think about replacing that old infrastructure on the south side. I'd like to remind you and the committee that those systems in Miramichi and many other municipalities were constructed 20 to 30 years ago with massive amounts of federal assistance. We can no more afford to replace those systems today on our own than we could have built them initially 20 to 30 years ago.

Thank you very much.

The Chair: Thank you very much, Your Worship.

We'll now hear from the Canadian Nature Federation, Mr. Kevin McNamee, director, wildlands campaign.

Mr. Kevin McNamee (Director, Wildlands Campaign, Canadian Nature Federation): Good morning, Mr. Chairman, ladies and gentlemen. My name is Kevin McNamee. I'm the wildlands campaign director for the Canadian Nature Federation in Ottawa.

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The CNF is a national environmental non-government organization. One of our priorities is advocating the expansion and protection of Canada's national parks system for the benefit of Canadians, both present and future.

Our submission is summarized in the handout, which I believe has been passed to you. I will refer to it. I've left a more detailed submission with the clerk.

The CNF is urging the federal government to fund a recent throne speech commitment that states:

The Government will continue to extend Canada's national parks system.

For over two decades the federal government has been committed to extending and completing the national parks system. However, at this point, Canada still needs 14 more national parks to meet this commitment.

I would ask you to turn to the coloured map on page 3 of our submission. It's entitled “Completing Canada's National Park System”. This is the national parks system referred to in the throne speech. It divides Canada into 39 natural regions. Some you will recognize as the Rocky Mountains, the grasslands areas, and areas in Labrador. The federal goal is to represent each natural region with a national park. To date, 25 natural regions have one or more national park. The regions coloured brown are the regions not yet represented, and there are 14 of them. You will see that the yellow and red areas are the prospective or candidate national parks.

Moving on to the next slide, this shows that there has been a long-term commitment to completing the system, one shared by a range of political leaders from different parties, names such as Jean Chrétien, Lucien Bouchard, Jean Charest, and Paul Martin. Indeed, the last two Liberal red books maintained this commitment to complete the system by 2000.

Moving to the slide entitled “Conservation and Funding Issues”, there are two issues we'd like to bring to the committee's attention. First, Canada is quickly losing options to protect nationally significant natural areas. Some candidate national parks have been lost to development. Others are at risk of being logged and mined.

The second is the funding issue. There is no long-term source of funds to ensure progress on new national parks. Today when we create a new national park we typically raid the budgets of existing parks to put the money into the new parks, or separate submissions have to go to cabinet on an ongoing basis. In part, this takes away money from the existing communities that already have national parks. The problem is that Canada is negotiating new national parks with other governments, aboriginal people, and local communities with no predictable stable source of funds.

Moving on to the slide entitled “Opportunities for New Parks”, there are two that I'd like to bring to the committee's attention. When it passed legislation creating the new Parks Canada Agency in 1998 during the last Parliament, Parliament created a new parks and historic sites account. This is a non-lapsing account that will receive parliamentary appropriations and donations from Canadians. In other words, now if we put money into the fund, it stays there. The situation before the agency was established—for example, last year—was that if Parks Canada got some money for new parks, it had to spend it in two months. That was an unacceptable situation. Now we can put the money into the fund, dedicate it to new parks, and it stays there.

The second opportunity is that prospects are good for at least nine new national parks and possibly four new national marine conservation areas in the next five years.

We are asking this committee to recommend that the federal government allocate $275 million over five years for new national parks, new national marine conservation areas, and to complete the land acquisition programs for grasslands and Bruce Peninsula national parks. Of this total, we suggest that $175 million be placed into the new parks and historic sites account. This money will provide stable funding to plan, negotiate, acquire, and develop new parks. This money will be invested in local communities.

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The next slide shows you the assumptions for the $275 million. I won't go through them, but basically to develop this figure we used cost estimates that we took from Parks Canada's national business plan.

I've mentioned that of the 14 candidate sites we believe prospects for nine are good. Prospects for the balance, which are mainly in Quebec, are minimal at best at the moment.

To conclude with the last slide on “Benefits of New Parks to Canada”, we believe the new parks will increase the economic contribution of the current system, which we've detailed. It will provide present and future generations an opportunity to visit, learn about, and support Canada's natural and cultural heritage. It will afford permanent protection of boreal, arctic, and grassland ecosystems. It will ensure that we will stop raiding the budgets of existing national parks. It will assist aboriginal people in protecting lands that sustain their traditional way of life. It will provide gateway communities with economic and ecological benefits. And finally, it will create greater certainty for industry in that they will finally know which areas are closed to development.

In conclusion, the Canadian Nature Federation asks this committee to recommend Parliament invest in the preservation of some of our nation's best, and indeed some of the planet's best, but still unprotected natural areas.

Thank you very much, Mr. Chairman.

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

I'm going to suspend for two minutes to get some technical issues resolved, and then we'll go to a question and answer session.

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The Chair: I think, Your Worship, you're going to be the only one with questions. Everybody is gone.

Now we're in the question and answer session. This is how it's going to work. Basically, I'm going to recognize members of Parliament on both sides here, and they will ask a question. They're usually directed to a member of the panel. If they don't, that means it's open to anybody who would like to answer the question. We will begin with Mr. Lunn. It's going to be a five-minute round, everybody.

Mr. Gary Lunn (Saanich—Gulf Islands, Ref.): Thank you, Mr. Chairman.

I first want to thank all the witnesses for coming. It was very interesting, and there's no question I heard, I think probably from the majority of you, that you want greater consultation. The feeling I'm getting is that you would like the transfer cuts that we've seen over the past years restored back to their previous levels so that money can be put into the number of programs you've spoken about.

I want to respond to Kevin from the Canadian Nature Federation. The minister responsible for Canada Parks was in my riding a few weeks ago and told me that her goal was, and she stated this publicly, to create more parks than Jean Chrétien did when he was the minister responsible. So there's some encouraging news for you.

But I'm going to throw out something completely different. It's something we're hearing a lot about, and a few of you touched on it briefly. I'm trying to get a sense... It seems to be growing out in British Columbia, where I'm from, and I want to see if it's resonating out here as well. When I go out to universities, and even in communities, the young people believe we're choking their aspirations. They don't see the opportunities out there for them to fulfil their dreams here in Canada and are looking elsewhere, not just to the United States, but overseas and in many places. That seems to be growing.

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My concern is that these are the best, the brightest, the economic engines of 15 years from now, the future CEOs and entrepreneurs, the people who are going to drive our Canadian economy, the people who are going to create the jobs and the wealth that are so critical in this country. We won't see that impact for 15 or 20 years. I didn't hear a lot of people talking about the lost opportunities for our young people. Is that a big issue out here in Atlantic Canada?

I just throw that out generally, Mr. Chairman.

The Chair: Mr. Mills and Ms. Ennis, you guys have the mike.

Mr. Leon Mills: It's an interesting point. I'm glad you raised it, actually, because it touches on disability issues as well. Young people with disabilities are in the same boat as those without disabilities, but even more so. While those who don't have disabilities can go places and have better opportunities, those with disabilities can't. They're really sort of stuck in place and need more supports.

But the point you raised is certainly a valid one. I know Newfoundlanders have always travelled for better economic and employment opportunities. We're no strangers to that. I'm sure a lot of eastern Canadians are the same way. But even more so in recent years, with the economy the way it's been since the cod moratorium in Newfoundland, it has caused a massive upheaval in our cultural identity and the way we've done things for hundreds of years. And it's true, we are losing our best and brightest. There's no doubt about it, despite a lot of other things you hear to the contrary that there's not really a brain drain and all that kind of thing.

I'll give you an example. I was reading an article about a young entrepreneur from St. John's—one of these information technology computer people—who graduated a couple of years ago, had no opportunity here, and went to the United States. He's now the CEO of a $50-million company, five years later. Examples abound of these kinds of things. In Newfoundland, you can hardly speak to anybody who doesn't have a relative who hasn't just gone to some other part of the country or to the United States, but is just as likely to be in Korea, Japan, or wherever.

So it certainly is a big issue. Like you said, it's not being felt right now, but it will be because these are the people who will be a big part of the economic growth engine 15 to 20 years down the road. Rural Newfoundland is just dying and is becoming full of retirement communities because all the young people, and especially those of child-bearing age, are leaving.

Mr. Gary Lunn: Thank you.

The Chair: Are there any further comments?

Ms. Lord, followed by Mr. McNamee.

Mr. Kevin McNamee: Sorry, I'm not from Atlantic Canada, so I think Ms. Lord should actually go first.

Ms. Stella Lord (Planning and Development Officer, Nova Scotia Advisory Council on the Status of Women): At our organization we do have contact with women who are working in rural communities and living in rural communities in Nova Scotia. I would say the situation is very similar to the one in Newfoundland, especially in and around Cape Breton, and especially in the areas that have been hit particularly hard by the downturn in the fishing industry. There are young people leaving those communities. They don't want to stay.

From women's perspective, many of them have been working in small fishing operations. Because of the closure of the fisheries or the downturn, they are now having to look for paid employment elsewhere. Sometimes the best they can get without training is $7.50 an hour in rural communities. So there's a lot of stress on women in these families that are trying to make ends meet. In many situations, they are now the breadwinners. We know of families in which the man is at home because he can't work in the fisheries. There's no training for him, and all the money has run out. There's an increase in alcoholism and in family violence. Those are the stories we're hearing from many of the communities in Nova Scotia.

Thank you.

The Chair: Mr. McNamee.

Mr. Kevin McNamee: Just a sort of broader perspective on that too is that we hear from a lot of young people and students who are looking for opportunities to work in protected areas, in national parks and in environmental conservation. When Parks Canada's budget was cut by 25% over the last few years, some of the victims were people and youths who find employment on a part-time basis in these parks. The recent Sirmilik National Park agreement, up in Nunavut, created a scholarship fund precisely to help train young people in the region to be employable, because one of the complaints is that people who tend to get jobs in national parks sometimes are from central Canada, because they're not finding the youth in other places.

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One of the things we think our recommendations would cover is scholarship funds to help train local people so that they can work in some of these areas.

The Chair: Mr. Bernard.

Mr. Rupert Bernard: Thank you, Mr. Chairman.

I believe communities in Atlantic Canada are tremendously resourceful. The reduction of a federal presence in Atlantic Canada has been significant over many years for those communities, and the resources and spirit of entire communities have largely been just trying to get on balance from one federal reduction or another for many years. I'll use the case of the closure of CFB Chatham. For 14 years, the entire community was consumed fighting that decision. We finally accepted that decision and moved on, and in three and a half short years we recovered from that loss. If there was some sort of predictability, some stability that could occur relative to a federal presence in terms of dollars, I have every confidence that communities in Atlantic Canada would be able to create very good futures for themselves.

The Chair: Thank you.

Mr. Mills, and then we'll go to Mr. Szabo.

Mr. Leon Mills: One of the conundrums I look at when I see employment for young people with disabilities or without is the same thing. Employers say they want experience, but it's the same old story. You cannot get experience until you get work. So what does a young person do? In Newfoundland, especially in the IT industry, we're leading the country now in a lot of areas, but a lot of young people still have to go away to get work, even though there are jobs not being filled, because employers want experienced people.

I think the employers are sort of getting ahead of themselves or missing the boat a little bit. They need to go back and look at some of the programs we had in the past, like the apprenticeship programs they used to have for trades. A lot of young people went that way before. In trades, you got in on the ground floor with an employer, you got trained, and you got to know the employer's system. If you take that principle and apply it to the IT industry or some other industries over a couple of years, employers will get the people they want. They'll build in a loyalty factor while they're also creating work for young people. Maybe HRDC could look at one of these as a possible means of addressing part of the problem.

The other thing is that under current programs that are cost-shared between Newfoundland and the federal government, a lot of the programs are good but are not long enough. Again, they're only short-term things. I look at the issue in the sense that you have to do it over two or three years. An apprenticeship program could work in conjunction with some of these programs so that you get more sustainability and more positive outcomes over time, and probably create more long-term employment. At the moment, though, they're just too short, and there's not enough money being brought to bear to really have an impact.

Thank you.

The Chair: Thank you.

Ms. Doyle-Bedwell.

Ms. Patricia Doyle-Bedwell: In the other job that I have as director of the transition year program at Henson College at Dalhousie University, one of the things I've noticed in the last couple of years, in relation to your question, is that a lot of our students are waiting to get out of here—and our program is focused on African Canadians and first nations students, by the way. We lost four students out of a class of 22 last year. They went to Toronto to get work.

When I was employed at the Dalhousie Law School, a lot of the students I went to school with ended up leaving the province. In my own situation, I would love to be living in Cape Breton, where my family is living; however, there are no jobs in Cape Breton. I'm not going to be going to Cape Breton any time soon. So I think I see a trend here.

The other issue that's going to be coming up and may create more problems, of course, is winter. We're not sure what the impact will be. I'm sure it will be a negative impact. The Nova Scotia government has now cut the winter employment program for this winter for a lot of the rural communities. So you may see even more people picking up and leaving.

I think that's been one of the bigger problems we've had. Even with the young people I work with on a daily basis, we see them thinking about going somewhere else.

The Chair: Thank you.

Mr. Szabo.

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

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I want to thank all of you, the presenters, for keeping your promise to your constituents about representing the interests of your region and for talking a lot about nationally important issues. I think it is really a credit to you to take the time to link up the concerns of all of Canada with the Maritimes and Newfoundland.

I want to ask Patricia Doyle-Bedwell about an issue that came up last year quite often—that is, the clawback of the national child benefit under the Canada child tax benefit program.

A lot of material out there demonstrates that Canadians who are transitioning off social assistance into the labour force are in fact economically worse off than under social assistance. They lose their drug and dental coverage, etc., and there is in fact this step down.

First of all, we understand the provinces are the ones who choose. It's quite likely, I think, by virtue of the fact that the provinces that have chosen not to claw back but rather to extend it are the ones whose likelihood of having employment options available is very small...and therefore to help their people the best. If I was a provincial premier, I'd probably do it as well.

If we were to, say, eliminate the current clawback under there, I want to ask you whether or not you feel there's any need to try to address the loss of economic position that someone incurs when they transition out of social assistance into the paid labour force.

Ms. Patricia Doyle-Bedwell: Stella is ready to go.

Ms. Stella Lord: I think the two provinces where they don't claw back have also had in the past the lowest social assistance rates in Canada. That's another consideration here.

I think it would be good if there was some formula. It costs money to go to work. You need money for transportation. You need money for clothes. You need money for your coffee in the morning, and your lunch. Obviously you can take your lunch, but likely you buy something as well.

We know of single mothers who, for instance, live in Spryfield when the nearest subsidized child care is in the south end of Halifax, and they're working in Dartmouth. This is nonsense.

I know of one woman who has to leave her house at 6 a.m. to get to work at 8.30 a.m. because of the lack of subsidized child care. There are only certain spots in centres in Halifax that have subsidized child care. It's not necessarily the child care that's down the road.

So it's these types of things. We need more infrastructure to allow women to get employed and we need better training and job opportunities. There is a drug plan for people on social assistance, and there is a short transition period in Nova Scotia. I think it's something like three months. That needs to be extended. Some of the other benefits that social assistance recipients get need to be extended to at least a year.

On top of that, I think we must improve the employment infrastructure, the training opportunities, and the opportunities to look for advanced education. It's our understanding now that anybody with the equivalent of grade 12, any single mother, is going to be considered employable. You're not going to get a good job with grade 12. I mean, it's okay, but you're not going to be able to support a family.

So we have to look at both sides of that equation.

Mr. Paul Szabo: So as I understand it, there is a variety of other supports such that if you put them in place, you could deal with the economic reduction.

Ms. Patricia Doyle-Bedwell: Perhaps I could add something to that.

As I said, I work with the transition-year program, and I deal with a lot of single mothers who are going back to school. Part of the problem we run into with our students who are trying to make that transition to school—I echo what Stella says—is that some have to leave their home at 6.30 a.m. to get to an 8.30 a.m. class. They have to take their kids from Spryfield to their subsidized day care downtown and then get back on a bus to come back to school. It's a long, involved process.

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Subsidized day care is really a misnomer in some ways. My students, for instance, are still paying a surcharge of $5 or $6 a day, and they're still paying $130 a month for day care. As well, if their kids get sick, they have to pay more money if they don't have any family support.

So I think the national child benefit would go a long way towards helping with those transitional costs, whether it's going back to school or to work.

You're right, there are transitional costs. When single moms go back to work, they end up with a loss of benefits but they still need that extra support. Getting ready to make that transition, I think we need that child benefit there for them.

Mr. Paul Szabo: One last question. You referred to the extension of parental leave under EI, as referred to in the throne speech and by the Prime Minister.

To play devil's advocate, self-employed people probably would say they don't support this because they wouldn't qualify. Small business people might suggest it's not possible, because of the small employee base, to be able to lose somebody for that period of time. What would you say to those people who are concerned about not being able to participate in such a program?

Ms. Patricia Doyle-Bedwell: One of the concerns we expressed when the extended EI parental leave was announced was that one of the things we have noticed since the cuts to EI—and I call them the cuts to EI, but the qualification conditions haven't changed—is that less women are qualifying for EI. So one of the problems we noted is that even though there's an extended parental leave, which we applaud...

I know it's called “parental” leave, but we know women will be the ones most taking it, although there's certainly the option to share that leave with the other parent.

With regard to small business and self-employed people, I think it would be good to have self-employed people qualify for that. I know self-employed people don't qualify for EI right now.

I think part of the other thing is that when you're training people for employment, and if it's a small business, one of the things I see it doing is creating employment. I can't see the costs outweighing the benefits in that sense. I certainly do see that extended parental leave is a good idea, but one of the things we noted is that, for instance, people have not qualified for EI because they lacked eight hours of work.

I also know, in the current economic climate, employers tend not to be supportive of family-related leave and things like that. I think one of the things that has to happen is that the government has to come down quite clearly and support women and men who need to take that parental leave, whether it's a tax break or something like it, to offset some of those concerns.

With regard to training people for a new job, coming in for six months, certainly we now see people taking six months' maternity leave and having to be replaced. A lot of the jobs I've seen lately are maternity leave replacements. So I don't think cost outweighs the benefit of having the ability to be a mom and to stay home with their child for that year.

A voice: I think we have to look at the longer—

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

Mr. Earle.

Mr. Gordon Earle (Halifax West, NDP): Thank you, Mr. Chairman.

First of all, I'd like to thank all the presenters. I think you've touched on many very important points, issues I know my colleagues and I in the House have really been pushing over the past period of time.

You've touched on a number of very important issues, including the commitment to persons with disabilities, the potential for the Opportunities Fund to be closing down in March 2000—as a matter of fact, I had a client in my office the other day expressing concern about that very problem—and the issues around parks, pensions, and so on.

All these issues seem to be very important, and they indeed seem to have an underlying theme, which is basically calling upon the federal government to put more funding into the system here in our area so that we can confront those issues.

At first blush, it might appear to some people that we have a number of organizations all competing for funds, but I don't quite see it that way. It seems to me that rather than competition, it's more of a focused attempt or focused mechanism that's being put in place.

With a lot of these issues, when you touch upon one it reflects upon the other. If you're dealing with housing, for example, it would tend to facilitate the situation for employment and so forth. These things really have a crossover effect.

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It seems to me the federal government needs to have a very focused approach in order to deal with all these issues. I'm just wondering if you, as presenters representing specific organizations, see it that way, or are there certain issues you would give priority to as opposed to others? It seems to me all the issues that have been stressed here have a connection, and it's important to tackle them that way, rather than looking at them piecemeal. I would appreciate some comments in that regard.

The Chair: Thank you, Mr. Earle.

Mr. McNamee.

Mr. Kevin McNamee: I guess too often the idea of setting lands aside and creating new national parks is seen very much as a tourism or an outdoor recreation issue—setting areas aside for the elite of society. To pick up on your theme, the one point I'd like to stress is we're asking for an investment in sustainable ecological, economic, and social development. This clearly won't cure the ills of any community, but I would ask the committee to look at it as investing in communities, aboriginal people, and young people. I won't go into detail, but there are enough studies and material to support that. I would ask you to look at it as not just creating wilderness preserves that are set-asides; these are very much investments that do and can benefit communities.

Communities in the north have been asking for these things. It's not Parks Canada that's advancing them. It's important to them to protect the caribou that sustain their native culture. It's the food they eat in the more remote communities. The Innu nation, as part of their land claim, have been asking for a national park in southern Labrador that focuses on protecting the traditional grounds they've been using to hunt for hundreds of thousands of years. It also provides an opportunity to possibly involve some use in running that park, managing that park, and things like that. So I ask you to please look at it as a broader investment in a number of these themes.

The Chair: For final comments on this particular issue, we'll hear from Ms. Doyle-Bedwell, and then Mr. Mills.

Ms. Patricia Doyle-Bedwell: Mr. Earle, in regard to your question on the connection between all of this, the deficit-cutting mentality within the federal government has caused transfers to the provinces to be cut back, and the people who are the most vulnerable have been hurt. Now we're in a situation in Nova Scotia where we have a huge deficit and there will be even more cutbacks to programs.

You'll notice in recent years there have been cutbacks to charities, people with disabilities, the winter works program that is focused on people who are in seasonal work in the rural communities, health care and things like that, and aboriginal people. In our communities in Nova Scotia, we have a 90% unemployment rate. If we're going to take transportation away from people with disabilities, we may save money on the one hand, but we'll pay it out on the other.

We have to get back to a Canada that cares about its citizens. It's a vision, and an investment in our future, in our communities, and in our people. It's something that has to take priority.

I know the deficit is important, and to the regular person on the street it's an unimaginable number, but we have to get back to a Canada that cares about its citizens. Women and other marginalized groups feel the effects as soon as the cuts are made. The Bank of Nova Scotia didn't take a serious cut when they had their call training centre put in Nova Scotia, for instance. They got quite a chunk of change out of that.

Banks are not needy and vulnerable, but the needy and vulnerable people in our society are the ones who are getting hurt. I think we have to go back to the perspective that we are investing in our people, investing in Canada. That's the connection I see.

The Chair: Thank you.

Final comment, Mr. Mills.

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Mr. Leon Mills: I'll let Mary comment.

The Chair: Ms. Ennis.

Ms. Mary Ennis: Thank you, Mr. Chairman.

Thanks, Leon.

When it comes to people with disabilities, I think probably the most important things to us are disability-related supports. I hear people talking all the time about the special needs that population has. I don't see anything special about spending $4,000 or $5,000 every three years on new hearing aids, and I'm sure you don't find anything special about spending $10,000 on a wheelchair. We need those supports. There's nothing special about them. There's nothing extra. We just need those supports to enable us to live up to our fullest ability and to participate in the social and economic development of the country.

It's part of our rights as citizens. We don't want special programs. We don't like to be bothering the government all the time, saying develop this program, extend our Opportunities Fund. We want to be included in all the initiatives that are going on anyway. Our ultimate goal is to be fully included.

The Chair: Thank you, Mr. Earle.

Mr. Brison.

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

Thank you all for your interventions today.

I'd like to start with Mayor Bernard. My question is about the federal infrastructure program. These programs have been introduced on an ad hoc basis. There's been some concern about the provision of funding in occasional spurts, seemingly geared towards four-year electoral cycles as opposed to the real needs of communities. Would Canada be better served by an ongoing and constant infrastructure funding formula as opposed to a sporadic program that appears periodically, like the Loch Ness monster, prior to elections?

Mr. Rupert Bernard: Thank you, Mr. Chairman—or Santa Claus.

I believe that a sustainable infrastructure program, with perhaps less money initially but over much longer periods of time, would enable municipalities to better plan their infrastructure needs.

The ad hoc nature of the program has municipalities scrambling to put plans together. To do that appropriately, much time is required. Therefore, some of the projects that get done are probably not the priority projects. Instead, there is a plan ready to go to take advantage of an infrastructure program. I could very easily support a longer-term, sustainable infrastructure program.

Mr. Scott Brison: Do you believe we would probably see a better quality of investment or project from that kind of approach?

Mr. Rupert Bernard: It's my experience that you would. To use Miramichi as a case in point, we have approximately $40 million worth of public works types of capital priorities. With the limited amount of capital we have, we always seem to have $40 million worth of capital priorities. We get two or three done one year, but two or three more appear. We have some internal wrangling, if you will, on council for which priority gets done this year, because folks see that narrow window of time in which to have their pet projects achieved. So that could be removed from the equation as well.

Mr. Scott Brison: My next question, Mr. Mayor, is relative to the provision of federal government services. When the previous government was in power, at the time the Summerside base was closed there was a decision to put the new GST centre in Summerside. That worked quite successfully as an anchor.

What would be your opinion of the potential for the federal government to redistribute the provision of services, particularly on the information-processing side? With the death of distance as a determinant in the cost of telecommunications, these jobs could be anywhere. They need not be in Ottawa.

I would appreciate your views on some of that.

The Chair: That was your last question, Mr. Brison.

Mr. Rupert Bernard: I'm a fan, of course, of federal government decentralization. If you might recall, when the closure of CFB Chatham was imminent, what was scheduled to take place in the town was the directorate of pay services for the Canadian Armed Forces. A new government changed that plan but did keep the base open in 1984.

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However, the success of their redevelopment of CFB Chatham today is in part due to the location of the Canadian Firearms Centre in the city of Miramichi. Those are good initiatives.

The Chair: Ms. Lord.

Ms. Stella Lord: In regard to the question about infrastructure, I'd also like you to think about rural communities, about communities around Atlantic Canada that are having some real problems in this regard. While you're broadening your thinking, I'd also like you to think about other kinds of infrastructures. I'm thinking of child care.

Related to the earlier question about employment insurance, I think it's a good idea to extend employment insurance, but I think the statistic I read was that something like only 52% of employed mothers would qualify, and those who qualify and actually take the year are likely to be from middle- or upper-income families.

We have to think about the situation of people who cannot afford to take the EI alternative for maternity leave. In that regard, I think we have to really get serious about a national child care program, which is part of the national children's agenda. To me, though, it has gone to the bottom of the list, and it needs to be at the top of the list.

Thank you.

The Chair: Thank you, Mr. Brison.

Thank you, Ms. Lord.

Mr. Mills, a final comment.

Mr. Leon Mills: Thank you, Mr. Chairman.

Just to close, I'd like to bring a focus to a lot of these comments. You can look at federal programs, at cost-shared programs for employment, at decentralization of government to help out areas, and at revamping EI and all those kinds of things, but the basic common thread, I think, to a lot of that is investment in people. That has often been forgotten in the last number of years. With the surpluses and the improving economy, I think it's time for the government to return to an investment in the social fabric of this country.

To take a page from your report, on page 25 you talk about investment in education and human capital. I'd like to extend that thought to investment in people and the whole issue of human capital, because if you invest in people and allow people the opportunity to overcome the barriers they face, a lot of the other related issues will fall by the wayside. That's been proven time and time again. I fail to see why that's not recognized more and why money isn't put forth to help people at the individual level, as opposed to putting in make-work projects or glorified programs and those kinds of things. By helping people overcome their own individual barriers, you help society overcome the barriers that exist for all people.

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

Thank you very much, Mr. Brison.

On behalf of the committee, I would like to express to you our sincerest gratitude for the input you have given during the pre-budget consultation hearings here in Halifax.

As you probably know, as we travel across the country we hear from various groups and individuals, and members of Parliament are holding town-hall meetings in their ridings.

You probably understand the demands being made on the federal government vis-à-vis resources. We have, of course, limited resources. We do have a surplus, but we live in a new era in which we have to make new choices. They also have to be smart choices about the road map to improving the quality of life for the people of Canada. This is basically what drives the agenda of this committee: to make those choices that are in fact going to improve the standard of living of Canadians. You, of course, have added a great deal of value to the debate, and for that we thank you very much.

I'm going to suspend for approximately five to seven minutes. We'll be right back.

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The Chair: I want to call the meeting to order and again welcome everyone here this morning.

We have representatives from the following organizations: the Canadian Association for University Continuing Education; the P.E.I. Action Canada Network; the MacKillop Centre for Social Justice; the Nova Scotia School Boards Association; the Canadian Federation of Students—Nova Scotia Component; the Atlantic Popular Education Network; the Association of Nova Scotia University Teachers; and the Newfoundland and Labrador School Boards Association.

As some of you know, having appeared in front of the committee already, you have approximately five to seven minutes to make your presentation. Thereafter we will engage in a question and answer session.

We will begin with Mr. Jim Sharpe, chairperson, external relations committee for the Canadian Association for University Continuing Education. Welcome.

Mr. Jim Sharpe (Chairperson, External Relations Committee, Canadian Association for University Continuing Education): Thanks a lot. I'm really pleased to make this presentation.

In terms of the five questions outlined in your call for submissions, I'd like to focus on three of them, those being: rebuilding the social infrastructure, increasing productivity, and investment in innovation.

My group is a national group that represents all the continuing education divisions of English-speaking universities in Canada. We have over 50 members. We've been in existence for over 50 years, so we have quite a track record in terms of the expansion of universities and the general adult education movement in the country.

What I'd like to focus on is the role of universities—in particular university continuing education—in the growth of the new economy, the need for tax incentives to encourage this, which are outlined in terms of previous budgets and the framework for this budget, and the importance of this in terms of increasing productivity, investing in innovation, and the growth of a world-class distance education industry in this country.

Starting with the social infrastructure, since the 1995 cutbacks in transfer payments there have been great cutbacks at the universities in this country. Actually, predating that by two years, since 1991 there has been a great decline in the number of part-time students studying at Canadian universities.

There are two reasons for the decline. One is the lack of funding available to the universities through the provinces in federal transfers, and related to that is the dramatic increase in tuition fees, which have doubled in the last 10 years.

The numbers of the decline are quite dramatic. In 1991-92, there were 313,000 part-time university students. In 1998-99, last year, there were 239,000, a decline of over 28%. The preliminary data for this year, 1999, shows a continued decline of undergraduates. The Statistics Canada report of last November attributed this decline to the decrease in government funding, which has resulted in less availability of courses and in higher tuition.

Part-time studies are important for a number of reasons. As a part-time student, you are able to combine work and family responsibilities with your studies. This spreads the cost of education over a longer period of time, making it more affordable. For both the worker and the workplace, there's less disruption for lifelong learning, rather than having to leave the job to go back to full-time study. If we build a culture of lifelong learning and continuing higher education, there is a constant upgrading of skills and knowledge.

One of the major supports for university education is the student loans program. There has been great debate and discussion over the future of the student loan program, and I'm sure there will be more discussion at this table about it.

I want to bring your attention to one part of the student loans program that has missed most of the discussion: student loans for part-time students. Although the program has been in place for 15 years, it has been used hardly at all because there are no benefits for that program. A part-time student taking out a loan has to pay interest on that loan immediately. Because of that, there are very few taking up those loans.

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So there's a need to give equal recognition to part-time studies, to put it on the same basis as full-time study, and similarly, in order to make the same basis of support for it, to ensure the interest will be paid while the student is studying.

As well, there is greater need to use the employment insurance fund. Some progress has been made in investments in that fund, but it should be used for general support of education and skills upgrading, increasingly at the higher end of education as well.

The third need for support is improvement to the registered educational savings plan, RESP. Right now there's very little advantage for them for lifelong learning. Our recommendation is that they be given similar treatment to the RRSP program. In other words, they should be deductible when the contributions are made.

These programs are important for the growth of the new economy. All the reports agree that the new economy is based on knowledge and skills, and key to those knowledge and skills are the Canadian universities. The best support for this new economy is broad-based support for research, innovation, and lifelong learning. For this we call for a substantial reinvestment of the government surplus in higher education.

How can that investment take place? First, as I mentioned, there's the need to put the RESP on the same basis as RRSPs. Right now it's possible to withdraw from your RRSPs to invest in your lifelong education, but this reduces that long-term value of the plan because while the money is withdrawn it is not accumulating investment for the purpose of retirement.

There was great innovation in the program for youth under 18 in terms of the grants for RESPs but none for lifelong learning. I think there's a great need to put these programs on a similar basis to encourage individuals to invest in lifelong learning. The variety of tax supports for extended education are very difficult to communicate to students or potential students. What I think we need to do is move towards a voucher system so everyone understands that every person's lifelong learning will be supported.

This is critical for increasing productivity. There's great growth in information and communication technology, which is affecting the universities. At my university, and all universities, more courses and programs are using the worldwide web for instruction and support for on-campus students. Funding for this innovation is very difficult with the cutbacks in transfer payments and provincial funding for institutions. This provision for on-line learning—learning on demand—will be a key element in the new knowledge economy.

So universities must make major investments in curriculum and the information technology for this infrastructure. One thing we're seeing right now is increased competition from the American private universities and even international universities coming into Canada to offer programs. Canada currently is a world leader in both distance education, through our programs, and also in the application of communications technology to that distance education. But this leadership needs substantial funding for research in terms of the communication technology and development of programs to deliver that.

I would like to end with this focus on developing a world-class distance education system within the country. Right now, Canadian universities are leaders in developing and applying the new information technology, but there's a great cash crunch at universities and a lack of investment funds to support and encourage these applications. I'd like to call upon the committee to recommend that this be a key area for investment. Industry Canada has had some small programs, the note-makers and applications programs, but they are very small amounts, and there's a need for much greater investment in this area.

This provision of access to education is a key element for the new knowledge economy, and now is the time to invest in lifelong learning. Thank you very much.

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

Ms. Boyd, you are representing two groups?

Ms. Mary Boyd (Director, MacKillop Centre for Social Justice; Chair, P.E.I. Action Canada Network): Yes, but I'm only going to make one presentation and it is on behalf of both.

The Chair: That can be arranged. We have Ms. Boyd here, who is going to be speaking on behalf of the P.E.I. Action Canada Network and the MacKillop Centre for Social Justice. Welcome.

Ms. Mary Boyd: Thank you, Mr. Chairperson. I hope this is not a trend, coming only to Halifax and avoiding a visit to the other provinces. I certainly hope that in the future you will return to P.E.I. and other provinces to hear from more groups.

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If there is any point we want to leave with the committee on finance today it is that social programs deserve the major portion of the budget surplus. Last year we stated that $5 billion is required each year for five years in order to put health care back on its feet after the debt and deficit scare of the last few years, which caused the federal government's share of health funding to plummet to 10% of the cost.

Although some money was put back into health with last year's budget, it is not nearly enough. The 1990-2000 budget brought funding levels to approximately 12%, but they are slipping back again. In reality, the federal government needs to increase its share to 25% of funding. In that way it will be able to enter into a partnership with the provinces and will have the right to demand that national standards for health care be respected.

The CHST dealt a severe blow to welfare programs as well as to higher education. The provinces have had to cut back severely on funding to social assistance. This has happened in almost every province, and the result is increased poverty in the form of homelessness, insecurity, despair, fear, and hunger, which is evident in the increased use of food banks and the growing gap between rich and poor. The growing gap in turn weakens communities, creates tensions, and leads to conflicts.

Furthermore, people's rights are being denied through the introduction of workfare and the withdrawal of the permanent right to assistance when unemployed. In P.E.I., the Minister of Health and Social Services refers to welfare as a temporary measure and boasts that the caseload has been reduced by 20%. It seems that cutting back is infectious and once it starts it just continues on and on. This is a habit that must be broken.

The cuts to unemployment insurance have also created hardships. In P.E.I., which has a large number of seasonal workers—26% of the workforce in 12 sectors of the economy—the cutbacks have had an unbelievable impact. Figures are out on the extent of cuts during the first year, and in Cardigan riding beneficiaries were cut by 24% and $21.5 million. In total, $62 million was cut out of P.E.I., a small province with a small population.

The cuts were made during a time of surplus, which makes this harder to understand. Overall in Canada, besides these cuts that I speak of, federal spending on programs has been cut by 16.6% of GDP to 12% under Mr. Martin. Program spending will have fallen by 4.6% of GDP over the period of 1993-94 to 2001.

Federal taxes have increased by 1.4% of GDP, so social programs were hurt the most. They can be restored. We know the money is there to do it. We simply can't justify sitting on a huge UI surplus while workers suffer. Many now can't even qualify for UI and they're often the ones who need it most.

Cuts to social programs and other programs have cost the incomes of Canadians in the lower and second lowest quintiles to fall by 8% over the past few years. This is a huge reduction in their standard of living, while the incomes of the top 100 CEOs and the top 10% of income earners increased dramatically.

As far as taxes are concerned, although there are several myths being planted by big business interests in an attempt to cut taxes, the income category that deserves or needs a tax break is the lowest 40% quintile, which experienced a 43% increase in taxes. The bottom 20% of earners paid more income tax, although their incomes dropped. In fact, taxes as a percent of total money rose from 2.6% to 3.1%.

Tax relief should come in the form of more tax brackets, which would redistribute income and close the gap between rich and poor.

So social programs must come first in budget considerations and then tax relief targeted to low- and middle-income earners.

We also ask for an increase in overseas development assistance and the cancellation of the debts of the 50 poorest countries. Canada gives now less than 0.3% to overseas development, and we need to start back on the road to Lester Pearson's goal of 1% of our GNP.

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The increase in child poverty is a prime illustration of the drop in the standard of living of the lowest 40% quintile, and the national child benefit must go to all people in poverty, including those on social assistance. It is quite unbelievable that they have been denied this benefit.

In addition, we need other programs to help wipe out poverty. The country needs more well-paid jobs in order to wipe out poverty.

I think you had a presentation from the Canadian Ecumenical Jubilee Initiative, who talked about the jubilee and closing the gap between rich and poor and righting the wrongs of the past. We strongly endorse this.

We also ask that we do something about the myths that are flying around—the attacks by Canada's business elite and their influential academic and media allies on social programs. Canadians are not overtaxed; we are just below the average of the entire OECD. Corporate taxes are extremely competitive with other countries. In fact, Canada has one of the lowest rates of all the industrialized countries at 27%. There is no brain drain in this country. In fact we are beneficiaries of immigration. Canada is one of the least expensive countries in the world to do business in.

All of this points to putting the surplus back into social programs. That's where the debt and deficit was paid, and the suffering has been enormous. It doesn't mean tax cuts to the wealthy. It means the people who need it should get some consideration. As I said before, cuts are continuing in many places and they have to be stopped.

Finally, Oliver Wendell Holmes has stated that taxes are the price of civilization. I don't think Canadians mind paying taxes; Canadians want taxes to be put into social programs. We have been chastised again by the United Nations for the way we have treated the poor in this country. They have specifically outlined that no one shall be required to perform forced or compulsory labour, and yet workfare is a fact of life in this country. They have said everyone has the right to liberty and security of person. If you look at the lowest 40% quintile in this country, many people do not have the right to liberty and security of person. This is such a deep concern in a country with the wealth that we have.

Thank you very much.

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

Now we'll hear from the Nova Scotia School Boards Association, the president, Ms Margaret Forbes. Welcome.

Ms. Margaret A. Forbes (President, Nova Scotia School Boards Association): Thank you. I'm not going to read all of the paper. We thought we had 10 minutes. I'm assuming there will be copies for all these people. We brought 25 copies.

The Chair: That can be arranged.

Ms. Margaret Forbes: Okay. Thank you. As I've stated in the paper, the Nova Scotia School Boards Association represents seven school boards of Nova Scotia, and that would include over 400 schools and all of the students of Nova Scotia.

Our association has taken a very active role in the past year to try to determine the level of child poverty and how it's affecting education in our province. We do have a report that we had done. It's not statistically correct, but it's very coincidental that it is almost bang on with Statistics Canada figures, and it does show the level of impoverished students in Nova Scotia is between 24% and 25%.

We do have a copy of that, though we did not bring it today. I've mentioned to both Mr. Brison and Mr. Earle that I would like the MPs to have it as well. We should have brought it for this committee, so we'll make sure you do get it. If we have enough copies available, it will be brought over today.

As referenced in the report, the association's parent body, the Canadian School Boards Association, launched a federal lobby with the release of a report in March 1997 called Students in Poverty: Towards Awareness, Action and Wider Knowledge. At the same time, our association was receiving information from educators in the school system concerning the increasing number of children from families living in poverty and the detrimental effects of poverty on children's ability to learn and to succeed in school.

Those factors led our association to make child poverty a priority. We will make sure you get a copy of that report.

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As an organization that exists for the benefit of Nova Scotia's students, the Nova Scotia School Board Association has always felt strongly that the future of our province and our country depends on the young people of today. We all need to make a concerted effort to stem the tide of poverty so these children have the opportunities they deserve and the country has a chance for future success.

The results of the Nova Scotia child poverty survey have been beneficial to our association in assisting with other child poverty initiatives, including the national children's agenda.

On behalf of our association I have represented our seven member boards at discussions on this topic over the past several months, nationally, regionally, as an Atlantic region, and of course provincially and locally.

As a member of the Canadian School Boards Association, our association is concerned about federal issues that impact on education and therefore supports the implementation of the national children's agenda, which I'm sure you're familiar with.

We urge the federal government to assign the highest priority to issues affecting children and youth, and to make the elimination of child poverty a major focus of this year 2000 federal budget.

We recommend that money be allocated to implement the national children's agenda. Early childhood intervention is crucial to reducing expenditures in future years. According to Dr. Fraser Mustard, physician and noted social science researcher, the early years of childhood development are vitally important, not only for things like vision but for things like IQ, mathematics, emotional behaviour, and health.

Fraser Mustard also notes that communities in the United States and Europe and organizations such as UNICEF and World Bank are developing preschool programs, recognizing that healthy populations are key to society's well-being.

June Alteen, my counterpart from Newfoundland who will speak in a few minutes, perhaps will also speak to the fact that the Canadian School Boards Association has undertaken a very extensive study which was initially funded by Health Canada. I believe it was in 1997 that it started. The first phase was funded by Health Canada; we assumed that all phases were going to be funded until it was completed. We were ready to start the second phase and we never received a cent of funding for that.

Now, if you know the way school boards associations operate, you realize we are on an absolute shoestring. For instance, in the provincial association the only way we can exist is if we have a small tax from each of the school boards, which contributes to the cause. The same thing applies when we belong to the Canadian School Board Association.

There have been times when associations have had difficulty in the past even paying their telephone bills. So I can't emphasize how disappointing it was not to receive any funding at all for that second phase of the study. We are now waiting with bated breath to find out if we are going to receive funding for the third phase, in which case, if we do, we will be right off the mark the first of January.

The second phase, I might add, was carried out on an absolute shoestring because the Canadian School Boards Association really doesn't have very much money. It wasn't carried out to the extent we would like to have had it done. But we did, through the generosity of people who of course have given their time for no money, carry it on to some extent.

The second phase is very badly needed because not only does it help to raise the awareness in the individual communities, but it also will ultimately keep the focus on the problem, on the child and the student, and ensure that school boards are taking steps whenever possible to do the best they can to help our students.

The profile will also help with assessments, it will assist with advocacy, and it will set a benchmark. It will also assist boards in making financial priorities and program priorities. Of course, it will also help to mobilize communities and hopefully encourage them to do the very best they can with what they have.

The Nova Scotia School Boards Association strongly agrees that the next federal budget must announce a five-year plan of investment in children, establish a federal-provincial agency with the sole mandate of ensuring that the goals of the national children's agenda be achieved, make substantial investments—an additional $2 billion each year—and increase investment in the national child benefit system immediately. We believe it must also develop a national system of early childhood education and care; coordinate increased funds for the development of integrated service delivery models to meet the needs of children at risk; provide funding for a quality national child care strategy that will ensure that all children requiring care outside the home have access to affordable licensed care by qualified individuals in a safe, stimulating, and nurturing environment; and of course also take action on affordable housing and the creation of good jobs.

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I do want to say a word about the federal-provincial-municipal infrastructure program, which we were able to take advantage of for one year two years ago. I believe it hasn't existed this present year. In addition to child poverty issues, the Nova Scotia School Boards Association recognizes that there is a multitude of needs that could be addressed with funds from a federal-provincial-municipal infrastructure program. In some provinces, school boards were provided with the opportunity to participate in the 1994 three-level government infrastructure program.

This project not only created thousands of new jobs but also greatly benefited the educational community. New roofs and heating systems were installed and structural repairs were made to hundreds of aging school buildings across the country. Based on data provided in the 1996 report, Taking Stock: A Review of the Canada Infrastructure Works Program, which is referenced here, of the total dollars spent on the infrastructure program, $413,970,000 went to improving school facilities.

Schools are still in desperate need of repair. I think June will concur with that. For example, many schools are in serious need of environmental improvements, upgraded technology, and accessibility modification for special needs students. There is a need for energy management retrofits that generate savings in excess of the installation costs within three to four years. And there are other maintenance requirements, such as roof work, boiler replacements, brick work, and window replacements, that cannot be postponed.

Because of this significant need, our association is seeking the assurance of the federal government that school boards will be included in any federal-provincial-municipal agreements that are negotiated to implement a new infrastructure program.

Our association also identifies a critical need for universal access to the Internet and other computer-related technologies. You can refer to the report for further detail on that.

Increasingly, graduates of both the public school system and post-secondary institutions realize that employers see bilingualism as either a requirement or an asset. In Nova Scotia school boards continue to be concerned with the level of funding provided by the federal government to support minority language teaching and second language teaching. School boards receive these funds through the official languages and education program from the Nova Scotia Minister of Education.

On March 2 of this year, the Minister of Canadian Heritage, the Honourable Sheila Copps, announced an increase of $70 million per year over the next four years in federal official languages support programs. This investment does represent a 31% annual increase and will bring the budget for the programs much higher than it has been. But we are concerned that, for instance, in the last five to 10 years, most of this increased funding from the federal government has been targeted for new projects, so it's extremely difficult to sustain the projects that have already been started.

Through the 1980s, when there was more money available to start these French programs, unfortunately our Nova Scotia boards probably weren't off the mark as quickly as they should have been in instigating the programs. There is much more demand now in the 1990s than there was in the 1980s, but now the money isn't there to the extent it was in the 1980s. So of course who picks up the tab? The school boards. And the school boards certainly have been affected by the diminished federal transfer payments. They have been diminished by a pretty difficult time here in our own province.

In order to ensure that those French programs can begin and in fact be sustained, boards are actually doing that under very difficult circumstances. We're trying to keep it going, but what I want to emphasize is that the sustainability of doing that with the present level of funding is pretty difficult.

I thank you for the opportunity.

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

We'll go to the Newfoundland and Labrador School Boards Association president now. Ms. June Alteen, welcome.

Ms. June Alteen (President, Newfoundland and Labrador School Boards Association): Thank you for the opportunity to present today. I'm very pleased to be here on behalf of the Newfoundland and Labrador School Boards Association. We represent 11 school boards and 150 volunteer school trustees who participate in monitoring approximately 400 schools throughout our province.

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We're pleased to present our concerns to this pre-budget consultation of the Standing Committee on Finance. As an association that represents the K to 12 educational system in Newfoundland and Labrador, our responsibility extends to all our students, not only for their educational well-being but of course for their physical well-being and for providing a nurturing, spiritual environment. We share that responsibility with other levels of government, communities, etc., to ensure that all our children are able to enjoy an educational and psychological environment that allows them to flourish, both as individuals and as members of society.

I'm going to focus on poverty—child poverty specifically—in Newfoundland and Labrador. Although educational reform, the economy, unemployment, and indeed out-migration occupy much of our attention in this province, child hunger has become a critical challenge. This presentation consequently will focus on child poverty and the impact it has on the education system in our province.

I have some notes to share with you. I believe that throughout the presentations you have heard, and perhaps today, other speakers have referred and will refer to the seriousness of child poverty. As you know, 10 years ago the Canadian House of Commons passed a resolution unanimously to eliminate poverty among Canadian children by the year 2000. Although we're on the threshold of that anniversary date, we have not achieved this objective.

Unfortunately, as well, Canada doesn't have a level playing field for children, specifically when it refers to poverty and the status of living for children. In 1996 the richest 20% of Canadians received 44.5% of the total income in Canada and the poorest received 4.6%.

It's estimated that 21% of Canadian children live in poverty. In 1996 in Newfoundland we estimated 26%, and we know that by the year 2000, more than a third of our children in Newfoundland and Labrador will live in poverty. Countless studies confirm—and I know you have access to this information—that income and economic success are directly linked to educational achievement and affect the quality of life these young children experience as children and subsequently as adults.

Between 15% and 30% of all children have significant problems learning to read, and most of these come from low-income families. Youth from low-income families in Newfoundland and Labrador have lower literacy levels than their counterparts in Quebec and the prairie provinces and throughout the rest of Canada. We know that in Newfoundland and Labrador, school-aged children from low-income families are among the nation's worst readers.

Incidentally, or coincidentally, boys are worse readers than girls, and if they haven't learned to read by the age of nine, they are extremely unlikely to learn to read. Consequently, we graduate children who aren't successful readers, and we know the impact that has on their post-secondary education, if they proceed to post-secondary, and indeed the rest of their lifetime experiences.

It's obvious from our research as well that early intervention is the key in reversing these undesirable and critical trends. In Newfoundland and Labrador we have a large native aboriginal population, and the statistics for these individuals are compounded more significantly.

Almost all educational outcomes, such as initial reading achievement, referrals to special education, discipline, behaviour problems, years of education completed, grades achieved, and so on, are strongly correlated to family income. Research by the Canadian Teachers' Federation summarizes a number of negative effects of child poverty, including the fact that food deprivation influences concentration and development. We know that. We know the significance—and I listened to some of your presenters in the earlier session—of inadequate child care arrangements, and the impact that has then on children attending school. We know child poverty significantly impacts on children's behaviour in school; children may be termed with difficult behaviour. It also impacts on motivation to learn, illiteracy, achievement, and interrupted school attendance.

The recent Speech from the Throne indicated a commitment on the part of the federal government to address child poverty. The Canadian School Boards Association, as referenced by my colleague, has placed top priority on this issue.

This is the document Margaret referred to, Poverty Interventions Profile. I'm going to show it to you, because it actually is a working document that's available for all school boards throughout the country. It's a document that allows school boards and educators to look specifically at various problems or challenges within their system, and, with some very concrete, specific recommendations, tackle some of the issues we face in terms of poverty in our schools across this country.

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If I still have time, I want to respond also to some of the themes you had identified as issues you were interested in hearing about. We certainly support this consultative approach to budget-making. Looking at the budget, obviously we would like to have the opportunity for greater impact. The fact that I'm the only person representing Newfoundland and Labrador is a function of limited resources and the distance between here and the rock.

We would like to see intermediate as well as long-term budgetary strategies set. With regard to tax relief and reform, I can echo Margaret's position with the Canadian School Boards Association. Certainly we do need to see opportunities for individuals, particularly on the lower end of the scale, to have a significant impact from tax relief.

In my other life, I'm a small business person, as are most of us here; we wear many hats. I recognize the growing lobby for tax relief. In the business community, certainly people will tell you how important it is to have taxes lowered. As a Canadian, I believe when we live in a country as wealthy and wonderful as ours, if we're going to lower income taxes, we need to ensure they do affect the people who most need it and not necessarily those who are already in the more fortunate positions.

With regard to social infrastructure, I certainly would support and endorse preschool programs. Children in our schools are hungry. We need to find a way to feed them, through breakfast programs and lunch programs, and I realize many programs are out there. They do work when they're there, but not all schools have access to them. Not all children in our schools are able to come to school filled or find meals at school. We need to find a way to feed our hungry children across this country.

We need to develop the collective conscience to ensure that the social framework, the fabric that we pride ourselves on as Canadians, continues to flourish. We are the only G-7 country that doesn't have a ministry or portfolio for education, and while I know the realities of provincial and federal jurisdictions are a constraint, it's amazing that we still do not recognize the importance of education in our social fabric. We need to recognize how important education is, and I believe we do need to establish that particular ministry.

The Canadian School Boards Association, and indeed the Newfoundland and Labrador School Boards Association, recommend the establishment of a federal-provincial agency with the sole mandate of ensuring the goals of a national children's agenda be met. We need to increase the national child benefit and the coordination of increased funds for the development of integrated service delivery models to meet the needs of children at risk. We know every dollar spent for young people translates into numerous dollars saved in terms of intervention and expenses at a later stage of their lives, and we also need funding for a quality national child care strategy.

With regard to the economy—and we're certainly appreciative about the impact of STEM~Net and computers in schools. Distance education was referenced. I come from a very rural part of our country. We know the challenges rural Canada faces. Distance education is a reality in our province, and we need to enhance that and provide equitable educational opportunities for our children in rural Newfoundland and Labrador, in rural Canada, as well as in our urban centres.

Finally, with regard to productivity and small businesses, we respect many of the programs that government integrates and provides. However, the role of government is to create the environment for job creation and to allow small business to move forward. Often, as you know, many of the programs are blocks, and then small businesses are encouraged to put people in the blocks. But it doesn't work like that, and you find yourself chasing programs that are very specific in their nature.

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In summary, I'd just like to say that in Newfoundland and Labrador, and indeed throughout the country, we believe education is a right that all our children should be able to achieve. We know that in this country we have the resources that will allow our children to graduate and to go on and become the lifelong learners we want them to be.

Thank you.

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

We'll now hear from the Nova Scotia component of the Canadian Federation of Students, and Ms. Penny McCall Howard. Welcome.

Ms. Penny McCall Howard (Nova Scotia National Executive Representative, Canadian Federation of Students—Nova Scotia Component): Thank you very much. I'd like to thank the committee for its attention today, especially those members of the committee who are giving their full attention to the presenters who have taken the time to travel from many provinces to come here.

I represent students at many of the post-secondary institutions in Nova Scotia. We currently don't represent students at the community colleges in Nova Scotia, but we do have community college students who are members in other provinces, so I'd also like to talk a little bit about the experience of community college students.

We do have a very short brief. Hopefully it was distributed to the members of the committee today.

First, I'd just like to outline one of the things in the economic and fiscal update that was sent to us. The statement was made that “The reduction in program spending has accounted for most of the fiscal turnaround, as a percentage of GDP, since 1993-94.” I think it's important to look at what the impacts of this reduction in program spending have been. I'd like to reflect the experience of students here in Nova Scotia, and then move on to what some of our recommendations are for the best way to move on.

First of all, we all know—and it's reflected in this document—that the investment in post-secondary education and research as a proportion of the economy is now at its lowest level in 30 years. In general, program spending is at its lowest level since World War II. In Nova Scotia, our colleges and universities have experienced the largest cutbacks to post-secondary education anywhere in North America. Post-secondary education in Nova Scotia has been cut by 27.6% since 1992-93. This figure should be compared with an average reinvestment of 24% in post-secondary education across the American states, where every state except the State of Hawaii has increased its education funding since 1992-93. If we want to talk about a brain drain and why a few students might be going to the United States, I think the priority that the government there seems to be placing on education might be a better thing to talk about than a taxation level.

Students have also been experiencing concrete declines in the basic quality of the education that we receive at our colleges and universities, specifically in terms of the nitty-gritty, concrete things: the ranges of courses that are offered, the size of classes that we study in, and the accessibility of faculty members. One way of measuring this is the ratio of students to faculty, and this has been steadily increasing. In 1990-91, there was an average of 16.5 full-time equivalent students for every full-time faculty member, while that had increased to 19.5 students for every faculty member in 1997-98. I'm a student here in Halifax, and I know that every year we have more students and every year it seems like we have fewer faculty who are expected to do more and more.

Not only has there been a decline in quality, there's been a decline in access. Tuition fees in Nova Scotia have increased 117% since 1991. They've more than doubled. Nova Scotia students now pay the highest fees in Canada for a university education, and it's my understanding that these are higher than most of the fees for state universities in the United States. This has led to a crisis in access. Students entering their first year this year, while relying on student assistance—approximately 50% of students—may graduate with average debts of $36,000. Those are projected figures from the Maritime Provinces Higher Education Commission. Of students in the Maritimes whose household income is less than $30,000, 52% have second thoughts about whether or not to finish their education when they consider the amount of debt they may have to accumulate. This is very highly correlated to the household income levels, because only 28% of students with household incomes of more than $50,000 were shown to have similar thoughts.

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Another important thing for this committee to note is that only 16% of Nova Scotia students who are using student assistance—which is about 50% of the total number of students—will have access to a millennium scholarship as well. So although it certainly is welcome, that program is only having a limited impact.

The Nova Scotia Community College is chronically underfunded and was seriously affected by cutbacks to the training funds through the employment insurance funds and the cessation of the block seat purchases. Per capita spending on community colleges is less than half of what the Canadian average is. It's $56 in Nova Scotia, compared to an average of $142 across Canada. Consequently, there's a huge lack of space and lack of resources.

Last year, 17,000 students applied to the Nova Scotia Community College, but only 7,000 were accepted. That's all the students they had room for. Those who were not accepted are students who want to get training, who want to upgrade their skills—many of these lifelong learners we keep hearing about from the federal government—and who want to get in the door, but there's simply no space or funding for them.

The other large difficulty we're facing here in Nova Scotia is that our government currently has a very large deficit. It has announced its intention to implement even greater funding cutbacks in order to meet its shortfall. Here in Nova Scotia we have already gone through years of cutbacks, and we're terrified that they're going to happen yet again. It's very upsetting that this is happening at the same time we're seeing our federal government with a surplus of up to $12 billion, and possibly more, although we don't know because the figures obviously haven't come in yet. To offset this, we desperately need a reinvestment in our base transfer payments if we're to avert the crisis here. We need these education systems to build a strong foundation for our economy and opportunities for young Nova Scotians.

There was a study recently done in British Columbia that showed that for every dollar invested in post-secondary education, four dollars were returned to the economy. HRDC estimates that in 2000—that's in a couple of months—45% of new jobs will require an average of 16 years of education, which means three years of post-secondary education. In a recent Ekos poll, 55% of Canadians ranked social reinvestment as their number one priority for the federal budget, whereas only 19% listed tax cuts.

We can see the actual, concrete amount of money in some of the figures that were worked out in this brown book, The Economic and Fiscal Update. When we see the very small number of dollars that are to come through for tax cuts for people—one figure was $178 per $20,000 in income—studies have shown that the amount is more than being offset by the increased user fees people are paying for health and education as fees increase and programs are no longer covered by the public system.

Now, 70% of our funding for post-secondary education does ultimately come from the federal transfer payments. In August, the provincial premiers collectively called for an increase in transfers for post-secondary education. This money is now desperately needed to help overcome the regional disparities among and between provinces, in order to maintain our national education system, and to prevent the collapse of our post-secondary education system here in Nova Scotia. I think an arrangement like that for the 1999-2000 budget for health care, in which both the federal and provincial governments made a commitment to reinvest, should certainly be struck. In the long term, the government should establish separate, dedicated funds for post-secondary education and an act of Parliament that governs post-secondary education, with minimum standards along a similar vein as the Canada Health Act.

So our first recommendation is funding. The federal government should restore transfer payments to Canadian universities and colleges by $3.7 billion. That's a small proportion of what was cut, which was $7 billion. This infusion will allow Canadian post-secondary institutions to meet the social and economic need for post-secondary education, and Canadian universities will be able to rebuild their infrastructure and gradually reduce the fees they charge.

With recommendations for student assistance, we feel the federal government must invest $1.2 million in a national system of grants. The risk-sharing agreements currently being negotiated with the national chartered banks should not be renegotiated when the current agreement expires in July 2000. The government should guarantee these loans. In addition, the federal government should abandon credit checks on student loans and reverse the discriminatory changes to the Bankruptcy and Insolvency Act.

We also certainly support the folks who have taken all their time out of the day—those at the back of the room here—to push for a national child care strategy. Certainly, when we look at the points made earlier about part-time students' difficulty in accessing the education system in a concrete way, if you have to stay home and look after your kids because due to your student loans you can't afford to pay for day care, then you can't go to school. When we talk about lifelong learning, having children is a fact of life for many people, and if we want to encourage that, we need to be very concrete in the ways we address it.

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Thank you very much.

The Chair: Thank you very much.

We'll now hear from the Atlantic Popular Education Network, Mr. Juan Telez.

Mr. Juan Telez (Member, Atlantic Popular Education Network): Thank you very much for this opportunity. I will speak on behalf of the Atlantic Popular Education Network, but as well I will speak on behalf of the Canadian Community Economic Development Network and the Atlantic CED Institute.

The topic of my presentation is around issues related to community economic development and community capacity-building.

Community economic development is emerging as a major strategy in a context where the global marketplace is reducing the power of the nation state and wherein all the workers try to stay abreast of achieving the skills requirements. Young people strain to finance their education, which is increasingly critical to their economic well-being, and people on social assistance have fewer and fewer exits from the trap of economic dependency.

In this context, CED organizations are making a significant economic and social contribution to communities' revitalization in these tough conditions. To give you an idea, I would like to share a couple of examples of how CED best practices are contributing to the local development. For instance, in 1987 the six original development associations in Newfoundland established the Great Northern Peninsula Development Corporation to strengthen the region's economic base. In 1998 through this organization, Northchip Limited was created, and that facilitated the creation of 30 direct jobs and enhanced 100 jobs. Today this organization has financial transactions of $3 million and is well on its way to becoming a self-sustaining organization.

Another example we have here in Halifax is the Halifax Resource Development Association, which was formed in 1978 to reduce welfare or social assistance costs through the direct creation of real jobs. HRDA Enterprises has created and managed a range of businesses that employed over 160 people in 1998. Out of these 160 people, 62% had been dependent upon social assistance at the time of hiring them. HRDA assets by now are close to $3 million. An independent cost-benefit analysis concluded that this enterprise yields close to $1.83 per dollar invested from public funding. This same study estimated that in that period of two years the saving to the municipal welfare budget was close to $3 million, while provincial and federal levels of government saved another $3 million.

Another textbook experiment in this field is Development Isle Madame. In February 1995 Isle Madame experienced a very drastic decline due to the dramatic crisis in the ground fisheries. At that time Development Isle Madame was formed and undertook a number of projects. In the first year they created six permanent positions and 12 short-term jobs. In the second year a bilingual call centre was established, generating another eight permanent jobs. By the end of this year this development association will have created 460 sustainable jobs in the sectors of aquaculture, tourism, small-scale manufacturing, and information communication technology.

In all of these experiments the HRDC has been very useful and instrumental.

I will cite several successful cases in this field, such as the Enterprise Centre of Hants County in Nova Scotia, as well as the La Ronge First Nation in Saskatchewan and the Revelstoke story in British Columbia.

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But I would like to mention very briefly the success of RESO in the southwest of Montreal, which has a mandate for economic and social renewal in the area of southwest Montreal. This organization was established in 1998, and in 1999 it established a very large coalition, which included 1,500 individual members and 300 organizations working in this neighbourhood. RESO has established a neighbourhood venture capital fund of $5 million by now, and their strategy for development is quite comprehensive and inclusive.

Based on these best practices experiments in building local economies and communities, we feel there is a need to increase CED and collaborative public and private investment opportunities. For instance, it is well known that CED is achieving economic and social impacts in communities that have been marginalized by economic restructuring and persistent decline. We also know that it successfully contributes to creating community wealth and generating meaningful livelihoods. We know also that it's a positive return on the taxpayers' investment, and it creates partnerships in which governments assist communities to develop the capacity to respond to their own challenges and opportunities. We know that it creates a realistic framework for local people to hope that their individual and collective circumstances can be improved and that their participation can be meaningful.

In that framework we would like to recommend that the government look at three ways of investing and allocating resources to strengthen the field of community and economic development and community capacity-building: the first one would be to increase and secure funding for community capacity-building initiatives or strategies; the second is to strengthen and support community-building capital; and the third is building people's confidence.

Very briefly, the role of HRDC in Nova Scotia has been extremely useful in the successful cases of CED where communities have taken their destiny into their own hands. HRDC has to provide the funding and support to encourage this process of community-building capacity. We would like to see more of this and an increase in the budget from what we're experiencing at the federal level.

Building community capital is a fundamental aspect for the success of community economic development experiences, and we recommend that the federal government contribute toward policies and funding to create community-based capital that's expressing infrastructure investment and equity.

Finally, building people's confidence is the most significant factor in CED or any community development. It's the ability and willingness of people to be involved in planning and creating conditions for their own future. We would like to encourage the federal government to look at providing expanding funding to strengthen this field.

I would also like to mention that I submitted to you a large document that provides information on how the other 10 experiments in Canada have contributed to local economic development, and I also provided you with my presentation. Thank you.

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

We'll now hear from the Association of Nova Scotia University Teachers, Dr. Chris Ferns, president. Welcome.

Dr. Chris Ferns (President, Association of Nova Scotia University Teachers): Thank you. Our organization represents faculty in a number of Nova Scotian universities, including the Nova Scotia College of Art and Design, Mount Saint Vincent University, St. Francis Xavier University, Université Sainte-Anne, and University College of Cape Breton.

We have two main concerns regarding government financial policy in the area of university education we'd like to draw to the committee's attention. First of all, we'd like to draw attention to the extended brief submitted to the committee in September by the Canadian Association of University Teachers, and we would say that we do endorse both the analysis and the recommendations contained in that document.

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What the CAUT document reveals, I think, is both the extent of the crisis in Canadian post-secondary education and also some of the most important reasons why it has arisen.

In response to the financial difficulties of the early 1990s, the federal government made drastic cuts in transfer payments for post-secondary education, for health, and for social assistance. As far as post-secondary education is concerned, we estimate that since 1992 this has amounted to a decrease of roughly 44% in federal transfers allocated to the post-secondary sector.

On a per capita basis, such transfers have declined from $102 in 1992 to $54 in 1998, which represents the lowest level investment in post-secondary education in more than 30 years, a point that I think the Canadian Federation of Students has already made. We are clearly singing from the same statistical song sheet.

But the result of this is that what we're facing now is really a national crisis. First of all, student tuition fees have skyrocketed. They've gone up over the last nine years by 125%, and as a consequence, student debt loads have massively increased. The impact of that takes a number of forms. We share Jim Sharpe's concern about the impact on part-time enrolment, that decline in part-time students at universities. But it does have to be said that the decline is not visible in all areas. In fact, in many areas, student enrolments have either remained stable or even increased.

What has gone down over this period, however, are faculty numbers. So I think it can be said that while the need for post-secondary education is greater than ever before, its quality is increasingly being compromised by a worsening student-faculty ratio.

Just on an anecdotal basis from the institution where I work, Mount Saint Vincent, our current enrolments are at an all-time high, but over the last five years our faculty complement has declined from 165 to 140. The result of this is that not only are class sizes increasing, as Penny Howard has suggested, but we're now facing the problem whereby we have to choose between programs as to which will survive and which will go. We currently have student demand for both chemistry and religious studies. By the end of this year, one of those will be no more. The actual choice of what to study, as well as the circumstances under which you do study, is being increasingly compromised by what's going on.

There's also, I think, a problem with infrastructure. Recent rankings of over 100 university libraries in Canada and the United States reveal that since 1992 all but one of the Canadian university libraries ranked declined relative to their United States counterparts. In addition, it can be seen that federal government expenditures on higher education sector research also remain alarmingly low in comparison to those in nearly all other industrialized countries.

The other problem that is faced is that there are areas within higher education that demand more and more resources. To try to improve accessibility to students, I think it's important to invest in distance education, but this is a very high-technology field, and an increasing amount of university resources have to be dedicated to that without the actual funding to make that possible.

Since the cutbacks of earlier in the decade had as their primary rationale the fiscal constraints operating at that time, it's hard to see how their continuance can be justified in the face of the budget surplus the federal government now enjoys.

Given the crucial importance of post-secondary education as an engine of economic growth, providing as it does the educated workforce essential for prosperity in the knowledge-based economy of the future, we recommend that the government either restore federal transfer payments to the provinces to the levels of the early 1990s or, as CAUT recommends, that it establish a post-secondary education fund to ensure that Canadian universities are financed at a level that will allow them to remain competitive in both teaching and research. I think our preference would be for the latter approach, to ensure that money is earmarked to be spent in the area for which it is dedicated.

Secondly, we'd like to draw the committee's attention to the fact that although the national crisis is bad enough, it can be argued that it's at its worst in Nova Scotia.

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A recent study of post-secondary education funding in both Canada and the United States, published by the Council of Ontario Universities, reveals that while over the period from 1992-93 to 1997-98 expenditure on post-secondary education in the United States actually increased by an average of 24.2%, in Nova Scotia it went down over the same period by over 30%. Out of 10 Canadian provinces and 50 American states, Nova Scotia finishes dead last. While Nova Scotia's student tuition fees are the highest in Canada, faculty salaries remain well below the national average. These statistics in turn reflect the fact that the provincial government expenditure on post-secondary education per student is the lowest in the country.

This is partly the result of provincial government policy, and one can't disguise that. It's partly the result of cutbacks in federal transfers, but it's also the result of inequities in the distribution of federal funding, which is based on a province's population rather than the number of students it actually educates. This clearly does discriminate against provinces such as Nova Scotia, which are net importers of students. We would urge on the committee the desirability of adopting a fair and equitable policy of having federal funding follow the student to the province in which the student chooses to study.

Taken together, we believe these measures would go a long way towards resolving the crisis that exists in Canadian post-secondary education at both the national and provincial levels. We need to ensure that post-secondary education standards are improved rather than on the decline, and we need to ensure that accessibility to that education is maximized. At present, we seem to be retreating from that goal rather than advancing towards it.

Thank you very much.

The Chair: Thank you very much, Dr. Ferns.

Maybe we'll begin with Mr. Gallaway.

Mr. Roger Gallaway (Sarnia—Lambton, Lib.): Thank you, Mr. Chairman.

It was either Mrs. Forbes or Mrs. Alteen who talked about the growing lobby for tax cuts, or for tax relief, I think, which was the term used.

Would you not concede that it's possible that there is no such thing as a lobby, that in fact it's Canadians who are asking for it?

Ms. June Alteen: Certainly, I'll recognize that. I also sit on our chamber's board of directors as a business person. I recognize that the business community is certainly very concerned about tax relief and tax cuts. If you choose to say that Canadians are concerned, they certainly are a percentage who represent a group of our population that is concerned about tax relief.

My recommendation is that if we are going to have tax relief we need to ensure that it really will impact the people who need it the most.

Mr. Roger Gallaway: Then let me ask you about this, because you refer to your chamber membership: perhaps it has nothing to do with any identifiable group but is a broad cross-section of Canadians who are looking for tax relief.

Ms. June Alteen: No, I certainly wouldn't support that. The reason I—

Mr. Roger Gallaway: I'm not asking you if you support it. I'm asking you if it's not possible.

Ms. June Alteen: Well, of course, all things are possible.

Mr. Roger Gallaway: Okay. Does the chamber, then, look at corporate tax cuts or personal tax cuts?

Ms. June Alteen: Our chamber recently participated in a provincial review. At that point, their presentation was based on corporate cuts.

Mr. Roger Gallaway: Would it not, then, be possible that those who are advocating for a national child care program represent a lobby, a lobby group, and are not representative of Canadians?

Ms. June Alteen: I think they also represent a significant segment of our Canadian population and are not as such, by your definition, a lobby group.

Mr. Roger Gallaway: Okay.

Is it possible to quantify who these Canadians are who are looking for tax relief versus a national child strategy? Or child care strategy, I'm not certain which; I've heard various terms. In other words, is it not possible to determine which group is larger? Let me put it to you that way.

Ms. June Alteen: Well, if they're not lobby groups, according to your definition, how can we assess which group is larger?

However, having said that, I think it may not necessarily be which of the larger groups we listen to; it may perhaps be an equitable balance and the message from each of the groups.

Mr. Roger Gallaway: That's what I think is the important answer: an equitable balance.

Having said that, when people pay taxes, do you think they are entitled when there is a surplus... Do you think the government holds this money just simply to be spent, or do you think it can be returned to people in tax cuts—in other words, give them some discretionary income to make the kinds of decisions they want.

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Ms. June Alteen: I acknowledge that there is no pot of money sitting somewhere locked away waiting to be distributed. As a business person I will also tell you this. When we talk about tax cuts and cutting corporate taxes, it doesn't necessarily immediately transfer into additional jobs that are created, because most businesses are already working toward their bottom line, and we hire additional people when we need additional people to fill job roles, not because we've had relief in tax cuts.

Having said that, I also recognize that additional discretionary income contributes significantly to stimulating our economy, and we do need to see that. However, if we are talking about discretionary income to only a small or a specific segment of our population, it will not alleviate the poverty problems we've all addressed here today. That then will contribute and compound the need for additional expenses toward social structures that will assist the poor.

Mr. Roger Gallaway: A couple of years ago there was legislation passed, both in your provincial house in Newfoundland and in Ottawa, with respect to schools in Newfoundland. You represent school boards...

Ms. June Alteen: I'm very familiar with that.

Mr. Roger Gallaway: Has that had the desired effect? That is, has it made the school systems more efficient and therefore is there more money in the system?

Ms. June Alteen: Certainly we have had a reduction in the number of schools in Newfoundland and Labrador since education reform, and there are efficiencies in administration. The savings have not been translated into direct input into education yet, and may not, because of course our governments, whether they are federal or provincial, as do businesses, work toward the bottom line, and the savings were taken out for other needs.

With regard to the quality of education in Newfoundland, we are a large rural province. Education is underfunded, I believe, throughout this country, and we struggle continuously for additional resources to provide an adequate level of education in our province.

Mr. Roger Gallaway: Ms. Forbes, I think you talked about day care facilities that were, amongst other things, licensed and safe. What do you say to the parents who decide they want, as opposed to going the public route, to go the private route? For example, they may have one set of parents who are retired and want to look after their grandchildren. What do you say to them?

Ms. Margaret Forbes: In this province, I'm not sure what happens about grandparents, but certainly if somebody is going to look after children privately in their own home, there are standards that are required. They are supposed to have a licence and there is a maximum number of children they can be caring for at all times. There are standards even for private people to look after children in their own homes. I'm not really sure how that translates into grandparent care, but I would assume parents would have to be diligent in leaving their children in the care of somebody who they feel is competent.

I recall from having had many discussions with the national children's agenda forums throughout this province and other provinces as well that there is a growing recognition and there are also a lot of statistics to show that the children as a whole are going to benefit down the road, and so will our country, if there is a level of competent care being provided.

The national children's agenda discussion had been funded by Health Canada. I'm sure you're familiar with that. I think myself personally that it would have been the hope of Health Canada that every single community in Canada should become empowered. I don't know if that is realistic, but I think the more attention we focus on this and the more assistance we give to communities and make sure it is going to assist communities in doing that very thing, it is going to help us all in the long run.

The Chair: Thank you, Mr. Gallaway.

Mr. Lunn.

Mr. Gary Lunn: Thank you, Mr. Chair. I'll try to keep this short to allow some time for my colleagues.

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I want to thank you for your presentations, and I want to get right to one issue and try to hone in on it a little bit more. I'm encouraged to see the amount of representation here from educational institutions. We've seen both the K to 12 and the post-secondary, and the problems in it.

I also want to put a notion out there. I know Mary specifically said there is no brain drain; I disagree with that. Some other Canadians agree, and I'm sure there are people who support your viewpoints. I want to focus on that for just a minute. Penny talked about changes to the Bankruptcy and Solvency Act with respect to students, and I absolutely agree with you. They're put at a complete disadvantage with respect to that.

I do agree we have problems in our K to 12. I'm from British Columbia. Our education system in British Columbia desperately needs overhaul, and also in our university there are problems. Beyond that there are also problems.

I think we need to encourage our young people. We need to create a system where they'll want to stay in Canada, and they can fulfil their dreams here.

There are a couple of specific suggestions I want to throw out to you right now. I talked about this with the first group of witnesses, but not about the specific suggestions. One is that when students come out with student loans, their salaries, once they go into the workforce, are very low, as they're starting their careers. They have reasonably high debt levels for them; their student loans, as we've seen, are $30,000 and more. To give those students an incentive to stay in Canada to work, what would you think of giving them, if they work in Canada, part of that student loan as a tax credit—let's say 20% a year for five years? So 100% of your student loan could be forgivable as a tax credit. You're only going to get it if you actually go out to work and offset the taxes you pay in your first years. This would give them an incentive, one, to get into the workforce early, and two, to stay in Canada. That's one thought.

I'll just add one more thought to that. We've heard from a number of witnesses that the tax relief has to make sure it's targeted to the people who need it the most. Obviously that's the people in the the middle- to lower-income bracket. I think we also have to be conscious of the fact that—and I would like your thoughts on this—it stays totally with that philosophy and we don't provide tax relief for people in higher incomes. They in effect see that as penalizing them, and that's what's driving...

Statistically there's an argument out there that we don't have a brain drain. I would agree with that. But our very best, our very brightest, our CEOs of tomorrow, the people who are going to create the economic engine of our country 10 or 15 years from now, are all going south in the health care industries, the technologies industries, the engineering industries. That concerns me greatly. It's understandable that they're going, for a whole host of reasons. We've got to keep those people in Canada too.

So why don't I throw that out for Penny and June, if I could get comments with respect to those issues.

Ms. Penny McCall Howard: First, about the brain drain issue and people going to the States, there was a report put out by HRDC and Statistics Canada that 3,450 of the 300,000 students who graduated from a Canadian university in 1995 emigrated to the United States over the next two years. So it's starting with a very small proportion. Of those, 18% returned to Canada two years after that, and half of those who were still in the United States did plan to return here. So while students may move around looking for opportunities, especially in the first few years when they're out of school, overall people want to come back to Canada. They want to live here. They want to work here because they do recognize the benefits to being Canadian.

Regarding the idea of a tax credit as an incentive to stay in Canada, and an incentive to work, I think the statistics are that if you graduate with a $25,000 loan, which is the average for people on student assistance, you have to pay around $400 a month on that loan. That is quite an incentive to work. I don't think students are somehow lacking in incentive to pay off their loans. The problem is the availability of employment that's out there. We're going to see a huge demographic shift in what university graduates will be able to do once they graduate.

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I went to King's College for discussions with the alumni association there about a whole generation of people who have to move back into their parents' homes to be able to make their loan payments. They don't have the opportunity to travel out of the province to look for other opportunities, and they are literally indebted to the bank for the next 10-odd years.

We would argue that the best solution to that is at the front end—preventing that debt from being accumulated in the first place. The study I referred to in British Columbia by Robert Allen demonstrates that the additional earnings and tax payments of university graduates more than pay for the cost of their university educations. So adding tuition fees at the beginning doesn't directly pay for the cost of their education; they already paid for that. It's simply an additional barrier.

I can send you that report. It's quite interesting. He worked through all the tax revenue and statistics there.

We would argue that putting the money through a tax credit strategy would benefit those who were making the most money to begin with, rather than those who were having the greatest difficulty paying off their loans. It wouldn't target the people who really needed the help. What we really need is a base reinvestment and overall lowering of what we see as the initial barrier to access, which is the fees and the loans people have to take out to pay those fees.

The Chair: Ms. Alteen, and then we'll go to Dr. Ferns.

Ms. June Alteen: Thank you. I'll be brief.

In Newfoundland we not only have a brain drain, we have a mainland drain as well.

I certainly like your idea of tax credits. I don't know how much they would actually secure initially, because of course when you first enter the workforce you're not paid as much as you'll hopefully make after subsequent years.

I also like the idea of prorating the amounts students pay back, depending on what their jobs pay, and so on. Possibly that will go some distance in keeping them here in Canada.

On tax relief for all Canadians, I certainly concur with you that we need to reinforce that it has to happen at all levels. It's disproportionately higher for those who make disproportionately more. I want tax breaks as much as any other Canadian, but if we don't find a way to subsidize our lower-income Canadians, we will continue to broaden the gap. You know all the stats on how much more the higher end makes and so on, but we will continue to see greater marginalization and greater disparity.

The Chair: Dr. Ferns.

Dr. Chris Ferns: I think one problem with the nation is tax relief. After you leave university, it's really trying to rectify the damage after it's done. One of the problems is that a large number of students are petrified about getting into that level of debt. One of the symptoms of that is that they are doing more and more part-time work while they're in university.

Certainly over the last 10 years, the number of my students I've seen working longer and longer hours has become quite alarming. Essentially if someone is working 30 hours at a job as well as attending university full-time, they simply don't have the time, energy, or concentration to get the best benefit out of their education. At that level, it compromises the quality of education in this country.

The Chair: Thank you.

Mr. Earle.

Mr. Gordon Earle: Thank you very much.

I'd like to thank all the presenters. They've raised very important points.

One of the concerns, as has been mentioned, is the high debt students encounter after they've completed their education. I was in Barbados a few years back and it was quite interesting to learn that Barbados now has a system of tuition-free education. It's not a very rich country, but it seems to work there.

I just want to ask anyone on the panel what their views are on the concept of Canada introducing tuition-free education for students. We'd be investing in our students in a very meaningful way at the outset, so we don't run into those debt problems.

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Secondly, someone mentioned the Millennium Scholarship Endowment Fund, touching very lightly upon the problem, and I wonder if any of you have any suggestions with respect to that fund and how that might better be used to assist with this problem.

The Chair: Thank you, Mr. Earle.

Who would like to start?

Ms. Penny McCall Howard: Thank you for your comments.

One very interesting example to look at is the example of Ireland, which I think just two years ago completely eliminated the fees it charges for both college and university education and made a significant investment in the network, especially, of colleges in rural Ireland. They have now, as far as I understand—I haven't been there—become leaders in what people refer to as the new economy and information technology and the production of computer equipment, computer software, and that kind of thing, because they made a very large and a very concrete public commitment to reinforcing the accessibility of education and the general level of skills and education of all people in Ireland. I understand there are now people who are leaving Silicon Valley in California to go to Ireland. So I think this is a very good example.

Canada is in the minority in OECD nations for charging tuition fees for our education. The majority of industrialized countries do not charge tuition fees for post-secondary education. I again bring up the example of that report done by Robert Allen in British Columbia that demonstrated that students already pay for the cost of their education through their increased tax payments because of the value-addedness of their salaries after they graduate from post-secondary education. So in fact the tuition fees constitute an extra barrier there.

As for the Millennium Scholarship Endowment Fund, it was very positive to see that the vast majority of money was distributed effectively as grants through the student assistance programs across the provinces. In Nova Scotia, 3,000 scholarships were received. You had to borrow more than $7,000, and after that you were reimbursed on a sliding scale, with people who had borrowed more money getting a greater reimbursement.

The problem with that is there were only 3,000 scholarships. There are approximately 20,000 students on student loan every year, and it will help reduce somewhat the level of debt of those students, but it's not going to be there to help everybody. And the problem continues unabated. It's also running out in 10 years, and it's also administered by this private board, which simply, as far as I understand, is a whole replication of bureaucracy that we don't need. That money, to be most useful, should be going directly to students rather than to the board.

The Chair: Mr. Sharpe.

Mr. Jim Sharpe: I'd like to build upon Penny's comments, both to Gordon and to Mr. Lunn.

In terms of the tax credits, I think we should look at tax credits. We're getting quite a patchwork quilt of tax credits for higher education, for both part-time and full-time students. It's very hard to communicate. When you look at it, it's probably much more efficient to solve the problem where it's caused rather than to put in a patchwork quilt of tax credits and millennium scholarships that, one, are very hard to understand and, two, don't make a lot of difference for the individuals.

Again, I draw attention to part-time students. It was announced that the millennium scholarship program was for part-time students as well as full-time students, which I applaud. When you look at the reality of it, it's administered through a student loan mechanism, which is probably the most efficient way of administering it, but because there is such a poor student loan system for part-time students, i.e. who are now applying for it, there are going to be very few that go through to them.

So I think in terms of solving the tuition fees problems, following the example of Ireland and Barbados and announcing a national goal for reducing tuition fees would be by far the best investment in education we can make.

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

Ms. Boyd, and then we'll go to Mr. Brison.

Ms. Mary Boyd: I agree with what has just been said about having access to higher education, that it should be free, but I wanted to say that if we start cutting taxes then we're going to limit those kinds of possibilities, and that's why in my presentation I said that social program funding comes first before tax cuts, including funding to a more universal access to education.

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I think we have to be really careful, because once we start the tax cut part, we are going to limit the amount of money we're going to have then. It certainly will drain the surplus.

I don't feel a bit sorry for the CEOs in Canada, the top 10, each of which took home $10 million-plus, and the top 100 CEOs in the country, who increased their well-being by over 56%, whereas the majority of people in the country had a reduction in their standard of living because of the poor quality of jobs that have been created and because of the low wages in this country.

The statistics show very effectively that when government puts money into job creation, it can create four times as many jobs as any tax cut can create. We have to keep that in mind. Cutting taxes is not a good way to stimulate the economy and to create jobs, which we need in order to pay for our social programs and keep from digging ourselves into a hole.

Another thing I want to say is it's so clear that it's the poorest 20%, and then the next group, that really have paid the brunt of the taxes. They pay 17% of their income in taxes, whereas the middle class is at 26%, and the highest income earners, 29%. That is not very much taxes when you look at the cut-off points; in proportion, the taxes paid by the lower end are much higher and create much more hardship because of the lower wages. So these are very important things.

Also, corporate taxes in Canada are among the lowest in the OECD—27%, which is corporate income taxes.

So it's a small group of people who are lobbying for cuts to income tax. The polls show, if you ask, the majority of Canadians would prefer to put the money back into the social programs because that's what's hurting right now, and hurting badly.

You said yourself that the purpose of this committee is to see how we can make a fairer Canada and how we can close the inequalities. Tax cuts to the rich and the wealthy and these kinds of incentives do not make a fairer Canada. But students need breaks, of course, and poor people need breaks.

Yes, we would have much more productivity if we had more access to education. In spite of wages being stagnant all over this country for so long, productivity increased 9%. So there's money owed to the workers who are paid low wages. They are the ones who are creating the wealth in this country, and certainly more access to education creates more productivity.

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

Mr. Brison, a final question.

Mr. Scott Brison: Before my question I have a couple of comments.

With regard to the Ireland example—I'm glad somebody raised that—as a country, Ireland has combined innovative social investment, and particularly investment in higher education, with an aggressive and innovative tax policy.

To be successful in the modern economy, I believe any government has to address social investment, particularly in education, and tax policy. To ignore either, I think the government would do so at its own peril. In fact, we have the second highest corporate taxes in the OECD. Last year, we had the third highest, and we are now the second because Germany has reduced its tax burden. We are second now to Japan. This is fact.

My first question, relative to the funding of higher education, has to do with the endowment issue in the U.S. and the private universities, which are more able to fund research and to build those endowments, partially due to the tax situation. In the U.S., individuals can donate publicly traded stock to endowment funds without any capital gains taxes.

In Canada, we still have a capital gains tax on donation of publicly traded stock to charities. It was raised in last week's discussions in Toronto, for instance, on behalf of the University of Western Ontario, that this would make a big difference in terms of changing, comparatively, our tax treatment of contributions to universities and other organizations. I'd appreciate your feedback on that.

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Dr. Chris Ferns: There are a number of things to be said to that. Yes, there is a different tax structure in the United States. There's also a very different history and a very different culture with regard to the ways in which moneys are channelled towards post-secondary education.

Certainly there are advantages in making it easier for private money to be given to universities. The one proviso one has to bear in mind, though, is that one has to be very careful about the strings that are attached to that funding. We have some rather alarming examples of what can happen when research that was formerly funded by the government is funded by private concerns—for example, the case of Dr. Nancy Olivieri at the University of Toronto, who raised concerns about a product the research into which was being funded by Apotex. She lost her job as a result of trying to act in a responsible manner. That is a danger.

One has to recognize that, as I say, there is a whole difference in the history of how education has been funded in the two countries. That can never be a replacement for, although it may be a supplement to, the public funding of higher education.

The Chair: Thank you.

Mr. Telez.

Mr. Juan Telez: Although I recognize and I realize the importance of discussing public funding for higher education or formal education—it is relevant—I would like to draw to your attention the fact that even in the case of Ireland, which is going to be around us for quite a while, to understand fully what worked and what didn't work in that system...

My sense is that we also need to invest significantly in building adult education and informal or non-formal education, which basically is to build the skills at the community level so that people in communities can take their destiny into their own hands. Especially now that downsizing, privatizing, and so on and so forth have been taking place for quite a while, communities have a larger scope of participating in local economies and in democracy. But they can't do it without a comprehensive strategy of building their skills and building their capacities.

So while it's very important to allocate funding for building the skills and knowledge in the true formal systems, I would like to draw to your attention also the importance of building the skills at the community level, which obviously is a community capacity-building process and building also the community capital and the confidence of people.

The Chair: Thank you, Mr. Telez.

Mr. Sharpe, and then we'll go to Mr. Pillitteri for the final question.

Mr. Jim Sharpe: I would like to thank you for bringing up the issue of endowments.

In general, Canadian endowments are growing, probably not as fast as American endowments. We have to realize too that the attention in the States goes to the Ivy League private schools, but over 80% of the students in the United States are studying at state schools. I would like to draw to your attention that the endowment issue is not the big issue there; it's the public funding that is going to be the big issue. So though changes in endowment may help, it doesn't compare to the public funding of higher education in either country, and the example of Ireland leads to public education becoming free for the post-secondary level.

The Chair: Thank you, Mr. Sharpe.

Mr. Scott Brison: And an aggressive corporate tax strategy as well.

Mr. Jim Sharpe: And transfers from the economic union.

The Chair: Thank you, Mr. Brison.

Mr. Pillitteri.

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

I'd like to make one small comment about the benefits to Ireland and the people living there and the ones who go invest there. I think in Ireland it worked in reverse: for the past dozen years they have given such a benefit to the tax system in lowering corporate tax and income tax that now they've been doing so well in the last two years that they eliminated tuition fees, rather than the other way around. I think it's a benefit the other way around.

Let me ask one question to you, Dr. Ferns. You stated that transfer payments have decreased by 44% over the last few years. Sir, did you take into account the transfer of tax points to the provinces? If you consider the transfer of tax points and the cash transfers, there's an increase of almost 2%.

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Dr. Chris Ferns: That is based on the CAUT document that has already been submitted to the committee. Their calculations are based on trying to determine the portion allocated to education, out of the whole block package to education, health services, and community funding. It's rather hard to calculate what each component was, but we also had the other problem that as things stood, there was very little control over how provincial governments might spend that money. I take your point, but there are different ways of calculating.

Mr. Gary Pillitteri: But overall, when you account for the tax points transfers and the cash transfers, it's an increase of almost 2% from the federal government to the provincial government. It is up to the province how to spend its money.

Thank you.

The Chair: Mr. Gallaway.

Mr. Roger Gallaway: I have a brief point of order, Mr. Chair. I should remind people that this is a proceeding of Parliament. Although we operate quite informally, the presence of signs at the back of the room here is not allowed. I would just ask that the rule be enforced, the signs be removed from the room, and we not allow any more in. Otherwise we will be going from city to city and we will look like somebody's bedroom. You are not even allowed to wear T-shirts with messages on them in the parliamentary gallery. As an extension of Parliament, we cannot allow these signs in the room.

The Chair: Thank you, Mr. Gallaway.

Ms. Boyd.

Ms. Mary Boyd: With all due respect, Mr. Chairperson, I think the people who wanted to participate here have not had the opportunity, and this is their way of speaking. If Canada is a democratic country, surely when you step out of the House of Parliament you can allow, in hotels, buildings, and institutions across the country, various expressions of people's communications that really reflect their concerns. This is an exercise in trying to find out what people want to tell you. I hope you will not enforce such laws and will allow more and more of these expressions of the people to come to this committee, and remember that although it's an exercise of Parliament, it is outside of that House.

I just want to say one more thing about the corporate income tax question. Our rates are low in Canada, but our country is famous for the many breaks and loopholes Canadian businesses get. I will read a sentence or two from a study from 1997 about the competitive alternative, comparing the cost of doing business in Canada, the U.S., the U.K., France, Germany, Italy, and Sweden.

It shows that Canada has the lowest effective corporate income tax rate—the rate actually paid after all tax breaks and credits were deducted. Canada's rate, which included federal and provincial taxes, was 27.4%. The U.S. rate was 40%—good for fifth place and nearly 50% higher than Canada's. Sweden was second lowest, and even in Germany and France, where the corporate taxation rates were 60.5% and 54% respectively, they were still not considered uncompetitive.

I just don't understand the necessity to cut corporate income tax rates here, when we have one of the best rates. We are not uncompetitive because of tax rates.

I have heard very little around this table about social conscience and what is really happening to people on social assistance, about what is happening with the stagnating wages that have created poverty and hardship.

Mr. Roger Gallaway: A point of order.

The Chair: That has to deal with the point of order.

Mr. Roger Gallaway: Mr. Chair, I raised the point of order. I appreciate Ms. Boyd's comments, but this is a parliamentary proceeding and she's not entitled to respond to a point of order raised at this table. Her comments are strictly out of order and I would ask that the signs be removed.

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The Chair: Just one second here. On behalf of the committee, I want to thank the panellists for the input you've given. I've taken notice of your point of order and I'll deal with it.

Essentially, as I said earlier in the day, we're travelling across the country to listen to input from Canadians. Just for the record, Ms. Boyd, I also want to tell you that nobody's been turned down to appear in front of our committee throughout the country. Anybody who wanted to appear could have appeared.

We're not here to talk about process or anything. We're here to talk about substance, and the substance is really what you've all expressed so eloquently. You've obviously added value to the debate about the priorities and points of view that Canadians bring forth.

We will reflect upon what you've stated in your presentations and will take it under full consideration as we prepare the report to the Minister of Finance, to be tabled in the House the week of December 10.

On behalf of the committee, thanks very much. We will suspend and come back at 1.15 p.m.