FINA Committee Report
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CHAPTER 2: POSITIONING PEOPLE As noted in the Introduction, if the nation is to continue its economic recovery and ensure a prosperous and sustainable future, our people must be “positioned” to contribute to, as well as to take part in, that future. To that end, governments must ensure that children, youth and students—who are our future—people of working age—who are our present—and seniors—who are both our past and our present—have the tools that they need in order to be a part of Canadian society, whether in their home, in the labour market or in their communities. Those tools include high-quality health and education systems as well as other measures that provide the right supports and incentives. In 2008, there were more than 7.8 million individuals aged 19 years or younger in Canada, representing more than 23% of our population. For these individuals and their families, important considerations include federal benefits for children, early childhood development and parental leave. Although witnesses provided their thoughts about a number of topics related to children, much of the discussion centred on child benefits and child care. They spoke to the Committee about the government’s tax credit and benefit programs for children and families, including the Canada Child Tax Benefit (CCTB), the National Child Benefit Supplement (NCBS) and the Universal Child Care Benefit (UCCB), parental leave through the Employment Insurance program, First Nations children and the rights of children. The Committee’s witnesses provided a range of views about child care: what exists and what is needed. Some argued for a “re-imagining” of the federal role with respect to child care. According to a number of witnesses, the market has failed to supply accessible and affordable child care: wait lists are long, fees are high and wages in the sector are low. Additionally, witnesses noted that tax credit and benefit programs related to children do not oblige the recipient to purchase or provide child care, that a small proportion of the funds dedicated to child care have conditions attached and that the value of the monthly UCCB is less than the cost of child care. In proposing changes related to child care, witnesses made a variety of suggestions: a national, universal child care strategy that would increase the number of child care spaces, with funds for both operating and capital costs; greater federal transfers to the provinces and territories that are conditional on the provinces and territories spending these funds on the provision of child care; and implementation of a Quebec-style child care model across the country. Some witnesses noted the importance of providing funds directly to public and not-for-profit child care centres under any child care strategy, while others recommended that the government introduce a refundable tax credit, perhaps called the universal child benefit, that would pay an average full-time wage to the family for each child under the age of 18, for up to two or three children. Witnesses also urged the government to increase the maximum amount of the national child benefit, which includes the CCTB and the NCBS, for low-income families. In their view, the increased cost could be financed by elimination of the UCCB and non‑refundable child tax credits, which provide a relatively greater benefit to higher-income families. As well, it was recommended that the amount of the CCTB be increased gradually over time. A number of witnesses commented that the amount of the UCCB is too low and noted the benefit’s non-means-tested nature. It was also suggested that the UCCB should be increased in amount, made non-taxable, be indexed to inflation and be integrated with the CCTB. Multi-year maternity benefits and payment of a birth bonus were urged as well. The issue of maternity and paternity leave was addressed by a number of the Committee’s witnesses. They argued that the current parental leave provisions in the Employment Insurance program provide an insufficient number of weeks of benefits and have a replacement rate that is too low; they advocated a program with a longer period of leave and a higher replacement rate. The Committee was also told that benefits should be enhanced for modest-income families, and that individuals who are self-employed should be allowed to participate in the Employment Insurance program and—with an appropriate delay—be eligible for parental leave. The Committee was also reminded that since parental leave is administered under the program, parents are eligible for parental leave only if they meet the program’s eligibility criteria. It was recommended that parental leave be administered separately from employment insurance, much like the Quebec Parental Insurance Program, in order to provide parental leave to a greater proportion of working parents. C. Aboriginal Education and Other Issues related to Children Witnesses made comments about First Nations children, urging that spending on them occur at the same rate as for non-First Nations children and suggesting that the government provide funding to purchase a laptop for every Aboriginal child between the ages of six and twelve. As well, they highlighted the importance of the Aboriginal Head Start (AHS) program for both urban and northern communities in order to provide early childhood development programs for First Nations, Inuit and Métis children and their families with a view to promoting Aboriginal culture, general health and education. They shared their view that the government should renew, and increase its support for, the AHS program. It was also argued that the government should promote its programs for Aboriginal education and students. Lastly, the government was urged to remove the funding cap on First Nations core services, recognize that education is a treaty right, and cover educational costs related to language training, education facilities, technology, skills development and recreation. Additionally, witnesses requested more funding for educational facilities, language training and skills development. It was also suggested that more funding should be made available for community-based crime prevention programs for children and youth, for after-school programs, and for measures that assist youth who face barriers to employment, such as the Skills Link program. The Committee was told that the maximum net family income level below which families are eligible to receive the Family Supplement Benefit should be increased, and that the level should be indexed to inflation. An increase in the amount of the Child Disability Tax Benefit was also urged. Finally, witnesses encouraged Canada to fulfill its obligations under the United Nations Convention on the Rights of the Child, which would ensure that children would be involved in the decision-making process with respect to relevant policy issues and to budgeting for education, health, child welfare and youth justice. The Committee believes the often-repeated phrase that “children are our future.” Certainly, this reality is recognized by governments and by a variety of individuals, including parents and other family members, teachers and health care professionals, among many others. At the federal level, recognition of the importance of children and youth is provided through a number of tax and program spending measures that benefit them either directly or indirectly. Nevertheless, we feel that additional federal actions could—and should—be taken to support our children and youth, and thereby position them, their communities and the nation for a prosperous and sustainable future. For these reasons, the Committee recommends that: The federal government, recognizing the jurisdiction of the provinces and territories as well as the need to compensate those provinces and territories that decide not to participate in a country-wide measure, implement a national child care plan providing high-quality, affordable and inclusive child care services. This goal should be achieved through federal transfer payments to participating provinces and territories, and the plan should include measurable targets and timelines. Moreover, the government should increase and streamline existing funding for federal “at risk youth” programs, with a view to creating a centralized initiative that would better engage such youth in their communities. The government should also increase funding for Aboriginal friendship centres for the benefit of Aboriginal youth in cities. Post-secondary education helps young people acquire the academic, social and other skills that will help them enjoy a high quality of life and make a meaningful contribution to their community and society, and that will help Canada ensure a prosperous and sustainable future. In 2005-2006, the latest year for which comparable data are available, more than one million students were enrolled in universities in Canada, and almost 614,000 students were attending community and trade colleges. Witnesses told the Committee about several issues affecting students, including tuition costs and student debt. They spoke about the government’s tax measures, grants and loans for students, and made particular mention of the needs of graduate and Aboriginal students, among other issues. A. Student Funding and Support Measures In the view of some of the Committee’s witnesses, the benefits of the government’s post-secondary education tax measures for students—including scholarship or bursary exemptions, tuition credits, monthly allowances for full-time enrolment and registered education savings plans—accrue disproportionately to students from families with higher incomes. Consequently, witnesses shared their view that the fiscal cost of educational tax credits could be better used by allocating the tax savings from the elimination of these credits to the Canada Student Grants Program (CSGP) or the Canada Student Loans Program (CSLP); alternatively, it was suggested that these tax credits could be made refundable. Also, it was argued that support for students should be means-tested and targeted to underrepresented groups in order to increase access to post-secondary education. Witnesses requested additional funds for the CSGP in order to forgive debt owed to the government, to increase the number of grants available and/or to increase the maximum size of the grant to an amount that equals the national average undergraduate tuition cost. Moreover, it was argued that the income threshold for the CSLP and the CSLP’s in-study work exemption level should be increased so that students can work while receiving a loan for their studies. Witnesses told the Committee that student debt is problematic. A variety of proposals designed to alleviate student debt were expressed, including postponed repayments on the principal of the student loan and/or partial or complete relief from student loan interest payments, an extension of the interest-free period, an increase in income thresholds for student loan interest relief, greater student debt relief in the CSLP, and elimination of post-secondary tax credits with a reallocation of the tax savings to address student debt. Recognizing the higher cost and duration of certain graduate programs, such as medicine, witnesses advocated an increase in the weekly lifetime limit for student loans, in the absence of which students might seek financing from the private sector, which may be relatively more costly for a variety of reasons. A number of witnesses noted that Canada Graduate Scholarship funding has lagged graduate school enrolment, and argued that this issue should be addressed. They supported making Canada Graduate Scholarships permanent and increasing the funding. Finally, a rebalancing of the number of graduate scholarships for students in the humanities and social sciences was urged. According to witnesses, post-secondary education for Aboriginal Canadians needs more support in order to reduce socioeconomic disparities between non-Aboriginal and Aboriginal Canadians. In arguing that funding for Indian and Northern Affairs Canada’s Post-Secondary Student Support Program (PSSSP) should reflect the increasing demand from eligible students and the increased cost of post-secondary education, witnesses advocated removal of the cap on funding increases to the PSSSP as well as increased funding of the program. Witnesses also requested that Métis and non-Status First Nations be eligible for this program. A number of witnesses requested additional financial support for Aboriginal students, post-secondary programs and services that support Aboriginal students, as well as a pilot project that would fund partnerships between post-secondary institutions and Aboriginal communities to help raise public school graduation rates. A variety of other student-related proposals were presented to the Committee, including: continuation of the Canada Summer Jobs program; creation of a national work study program to help post-secondary students find work and obtain career-related experience; funding to promote Canada’s post-secondary institutions to foreign students; creation of a tax credit for the purchase of learning materials; and a renewed mandate for, and funding of, the Canadian Council of Learning and the Canada Millennium Scholarship Foundation. In order to position them and the country for future prosperity, the Committee feels that students—whether children, youth, teenagers or adult learners—need to be supported in their studies and in their transition to employment. While federal support currently exists in the form of transfers to the provinces and territories, as well as a variety of tax and program spending measures, we believe that additional assistance would be desirable, particularly for graduates to locate in areas of the country that may have difficulties in recruiting and retaining employees. Thus, the Committee recommends that: The federal government create a refundable tax credit for new graduates. The proposed tax credit should be available to those who move to designated regions and engage in employment in their field of study. III. WORKERS IN AND OUT OF THE LABOUR MARKET Like the businesses for which they work, employees are critical to the nation’s prosperity, and their efforts will be instrumental in helping the Canadian economy continue its recovery. In order to be fully productive and efficient workers, employees need to be trained and compensated adequately. They also need to have some assurance that they will be able to support themselves and their family in the event that they lose their job. As well, work incentives are affected by the design of a nation’s tax system. Moreover, the labour market contributions of Canada’s immigrants are enhanced by settlement and integration programs, as well as by recognition of their foreign credentials, while the contributions of those with a disability or a chronic disease occur best where required supports are given and accommodations are made. Finally, those who are not in the labour market make contributions to the nation through community, charitable and other involvements. Witnesses spoke to the Committee about a number of issues affecting employees at this time, including employment insurance, job training, job creation, the personal taxation system, accommodations for those with a disability or chronic disease, and recognition of foreign credentials, among others. They also discussed supports for those who are not involved in paid employment. A number of the Committee’s witnesses spoke about the Employment Insurance (EI) program. Some proposals were general in nature, such as the need for reform and simplification of the program, while others were quite specific. In highlighting what they considered to be some of the inadequacies of the current program, and with a view to enhancing the program for those who are unemployed and to making it available to more individuals, witnesses recommended changes to several of the design features of the EI program. In respect of EI eligibility and benefit amounts, witnesses recommended that the federal government: reduce the entrance requirement, with some proposing a uniform number of hours of work regardless of area of residence and others suggesting a somewhat higher number than that proposed wherever the unemployment rate is 10% or less; ensure that benefits are available in all regions for a longer period of time; calculate weekly benefits on the basis of fewer of the best weeks of insurable earnings prior to a layoff; implement a higher replacement rate; eliminate variable benefit rates for part-time employees; give extended benefits on an emergency basis or provide an additional year of special extension benefits if the national unemployment rate exceeds 6.5%, depending on the witness; remove, or refrain from removing, the two-week waiting period, depending on the witness; eliminate the timeline associated with the claimant’s report; end the benefit repayment requirement; expand the definition and categories of just cause for voluntarily leaving a job; extend benefits provided under Part 1 of the program while a worker is involved in approved training; move the social-program aspects of EI from the regular structure to general program spending; enhance the program without increasing the employer’s contribution rate; and ensure that benefit entitlements are not reduced or delayed as a result of severance payments. Suggestions related to the financial aspects of the EI program were also made, with witnesses urging the government to: amend the EI rate-setting formula so that EI account deficits are funded over a business cycle of up to ten years; phase in an employer-based experience rating system; reduce the employer premium rate to equal that paid by employees; implement a system to refund employer over-contributions; operate the program as a true insurance program; review the program to ensure that it is self-financing over the longer term; develop a new financing scheme that draws down over-contributions by employers and employees; undertake a review to determine how new benefits would be financed; and invest a portion of the EI surplus in better training and labour adjustment programs. Other EI-related proposals were also identified. For example, the Committee was told that EI recipients should be able to access academic upgrading, as well as literacy and basic skills training, at publicly funded colleges without a reduction in their EI benefits. Comments were also made about EI and self-employment. In the specific context of direct selling, it was suggested that individuals making a transition from EI to self-employment should not be unduly penalized and should be eligible for some support, perhaps under the self-employment program, although a more general proposal that Human Resources and Skills Development Canada-funded programs not provide a disincentive from engaging in direct selling was urged. The government was also encouraged to create an EI Board of Referees for the Northwest Territories and Nunavut. Finally, expanded support for, and funding of, work-sharing arrangements under EI was advocated, as were links between work-sharing and training programs. While some witnesses focused on training in the context of the EI program, others spoke about the issue more generally, urging more federal funding for labour adjustment training opportunities; if funding is transferred to the provinces and territories, these governments should be directed to allocate funds to improved training access and affordability, and should be held accountable to ensure these outcomes. Also advocated was the creation of a refundable employers’ training tax credit, based on business investments in maintaining and upgrading workforce skills and abilities, to be applied against EI premiums payable or deducted from corporate income tax. A somewhat similar proposal for the creation of an employee education and training credit was presented to the Committee, as was the idea of a learning account into which a portion of EI contributions could be placed for use by employers in declining sectors. Training challenges faced by Atlantic Canadians and skills training for underemployed workers, as well as the requirement for needs assessments and trainers’ salaries, were also noted. Witnesses also supported a broader definition of tax-deductible education and training expenses, and the creation of a deduction or refundable tax credit for personally acquired qualified education and training. They also commented on “meaningful” training offered in home communities, with jobs available where this training can be used. Furthermore, an integrated, multidimensional approach to providing training programs that focus on community development was encouraged. As well, it was requested that the government subsidize 50% of the costs incurred by businesses in training, consulting and certification. The training that occurs within the EI program was also highlighted. Some witnesses urged reconsideration of EI funding and regulations in order to maximize incentives and opportunities for laid-off workers to upgrade their skills through training, while others advocated an increase in the funds available for training so that regular EI benefits are available for all forms of workplace training. In identifying the link between literacy and employability, the Committee was informed that, during review of the EI system, literacy and numeracy programs should be incorporated since, at present, literacy and basic skills upgrading are being classified differently across the country, with impacts on EI benefits. A national literacy strategy with program supports, practitioner skill development and increased awareness, as well as workplace literacy training expertise and funding, were also noted by witnesses. Regarding workplace literacy, they spoke about the creation of a tax credit and an online portal that would help employers to procure an initial needs assessment as well as to identify a trainer and funding sources. Moreover, it was argued that Canadians should be permitted to use the EI fund to pay for their post-secondary education, with these expenses reimbursed through a payroll or income deduction. Specific training for “green jobs” was also brought to the Committee’s attention. Particular mention was made of opportunities in the “green sector” for training programs designed to enhance the traditional skills of architects, planners, developers and engineers in order to include emerging environmental practices. A number of the Committee’s witnesses spoke about job creation, which for some is of great concern as jobs continue to be lost. The federal government was urged to begin a major, multi-year public investment program to create jobs, perhaps in partnership with the provinces and territories as well as municipalities, depending on the witness. Specific mention was made of public infrastructure and services, energy and environmental technology, conservation and renewable energy projects, industrial restructuring, “green” industries and cultural industries. In this context, it was proposed that federal support be linked to “Made in Canada” procurement policies. “Green jobs,” perhaps targeted at youth and adults requiring retraining, were also highlighted, and the government was encouraged to invest in such areas as renewable energy and energy efficiency, public transit, environmental remediation, and energy retro-fitting of homes and buildings. According to some, federal support could be matched by funding from other levels of government, not-for-profit organizations or other eligible partners, with funding conditional on the jobs having “decent pay and working conditions.” As part of an effort that would result in Canadians attaining employment and good wages, witnesses requested that the government invest in job creation measures that ensure the effective use of the knowledge and skills of a diverse workforce. Investments to diversify the Canadian economy and to focus on the development and encouragement of new and higher-value products and services as well as their commercialization were supported. Job creation was also identified in the context of a proposal to renew and expand the Community Adjustment Fund, which witnesses argued creates jobs at the community level. It was proposed that this fund receive more money, and that it contain a component that could work with the renewed Co-operative Development Initiative and be dedicated to community enterprises—including co-operatives and social enterprises—that are starting up or expanding. The co-operative sector was also discussed in the context of the proposal for a co-operative investment strategy to ensure the capitalization and financing of new and emerging co-operatives and co-operative sectors. The proposed strategy would consist of a co-operative investment plan providing a tax credit, which is noted in Chapter 3, and a co-operative development fund providing repayable loans. A Canadian co-operative investment plan was also encouraged, one benefit of which could be investment in rural communities, perhaps for rural development, which can lead to job creation. Finally, the Committee was informed that Canada’s youth have been disproportionately affected by the global financial and economic crisis, and that the long-term impact of youth unemployment will be significant if action is not taken. Within this context, the government was urged to support existing programs, increase the number of communities in which particular programs operate and build an online learning community connecting programs with public-policy researchers. D. Those Not in Paid Employment There are a variety of reasons why people might not be involved in the labour market: choice, age, a lack of skills, skills that are not in demand generally or in a particular geographical location, disability, and barriers related to language or a lack of foreign credentials or Canadian experience, among others. To address the income needs of people who are not involved in the labour market, or who are involved in the labour market but earn a low income, witnesses made a range of proposals. The Committee was informed about the need to protect the purchasing power of the poorest consumers and to adopt income stabilization measures that target the most vulnerable Canadians, particularly those living alone, seniors and children in low-income households. One proposal was for an income-tested basic income benefit for persons who cannot reasonably be expected to earn an adequate income from employment, while another involved ensuring that all new or modified policies are assessed with respect to their impact on those whose incomes fall below the after-tax Low Income Cutoffs (LICOs) published by Statistics Canada. The goal would be to improve the well-being of these individuals and to minimize the income gap between them and both the median income of all Canadians and of the top 20% income group. Still another suggestion involved adequate and accessible income support for the non-employed, with a focus on those groups with relatively higher poverty rates. A somewhat related proposal was the introduction of a universal guaranteed livable income, which would ensure that everyone, regardless of labour force status, would be able to access the basic necessities of life without stigma and with respect for dignity as well as enabled participation and community inclusion. Particular mention was made of income security for working-age adults and for older workers, since they do not benefit from the Old Age Security payments and Canada Child Tax Benefits that are similar in intent to the proposed guaranteed livable income. Finally, witnesses urged the creation and adoption of a federal strategy to eliminate poverty, with the following elements: a long-term vision as well as measurable targets and timelines; an action plan and budget that coordinate initiatives within and across governments and their partners; accountability structures for ensuring results, measuring outcomes, and consulting with as well as reporting to Canadians; and a set of agreed poverty indicators that could be used to plan, monitor change and assess progress. The Committee was told that such a strategy should address many different aspects of poverty, including: income security; food security; housing and homelessness; children and early childhood development; education and training; labour standards; Employment Insurance; health and disability supports; and the particular needs of such specific populations as Aboriginal Canadians, immigrants and women living in rural communities, the last of whom need adequate support in meeting basic needs as well as in developing skills and capacities. The creation of a designated transfer to the provinces and territories in support of the development and implementation of poverty-reduction strategies was also encouraged. E. Taxation of Employees and Families A number of general and specific comments about personal taxation were made by witnesses. For example, the implementation of a flat tax was advocated, which—according to witnesses—would simplify the tax system, make the nation more competitive in attracting residents, and reduce the time and other costs associated with preparing and reviewing tax returns. Other suggestions included: reducing the lowest income tax rate; allowing income splitting for all Canadian families through separate or joint tax filing in order to end the preferential treatment of certain family configurations; basing the tax system on the family unit; applying full personal tax credits to every Canadian, including dependent children; removing tax obligations from those living below the “poverty line;” indexing the Working Income Tax Benefit; and taxing unearned income in the same manner as earned income. Furthermore, the situation faced by a mobile labour force, which may involve work for more than one employer during a tax year, was highlighted, with a request that the tax system recognize the travel expenses for employment to include the cost of travel, meals and lodging minus any money paid by the employer for these purposes. Substantial personal tax relief for volunteer firefighting personnel was also encouraged. More general comments about taxation were also received by the Committee. For example, a number of witnesses highlighted the need to ensure that the tax system is both fair and seen to be fair, and argued that simplification—for example, by treating share options, capital gains, dividends, interest, salaries, hourly wages, commissions and bonuses in the same manner—would lead to fairness. The government was also urged to pursue a simple, transparent and fair system with low, internationally competitive tax rates as an important measure in supporting economic recovery and growth; specific mention was made of lowering brackets, increasing thresholds, and keeping tax bases both broad and neutral. Witnesses also favoured prudent, modest and broadly based tax relief rather than targeted tax measures, and advocated the appointment of a panel of experts to undertake a review of both domestic and international aspects of the tax system and their impacts on businesses and individual taxpayers, as mentioned in Chapter 3; in the view of witnesses, the proposed panel should consult widely in the context of a public forum. A more progressive tax system was also urged. F. Those with a Disability or Chronic Disease The Committee was told that those with a disability or chronic disease may need particular supports to participate in the labour market. According to a number of witnesses, some individuals are unable to participate in the labour market at all, while others can participate on a full-time, part-time or periodic basis, depending on the nature and extent of the disability or disease as well as on the supports provided. They indicated that current policies and legislative measures are disincentives for those with a disability who can participate in the labour force intermittently or on a part-time basis, as health permits. Witnesses said that there is a need to review, on a regular basis, all new and existing government programs to ensure that they assist in the removal of barriers to what was characterized as “the elusive goal of full participation and equality” and to ensure that no new barriers are erected. While barriers may not always take a physical form, witnesses identified a need to ensure that all infrastructure projects are accessible to those with a disability. Employment opportunities were one component of a national economic strategy for Canadians with a disability or chronic disease that was proposed by witnesses, some of whom advocated that the Prime Minister convene leaders from the provinces and territories, the business community, representatives of labour and representatives of community organizations representing the disabled to develop a strategy and others of whom supported the establishment of an advisory committee, reporting to the Ministers of Finance and of Human Resources and Skills Development, to explore options to address poverty, income reform and the federal role in income support for these Canadians. The notion of a working group to study, and to make recommendations to address, the poverty among disabled Canadians was also expressed. In the view of witnesses, components of a strategy to assist those with a disability or a chronic disease should include efforts to enhance employment, reduce poverty and ensure improved access to the nation’s infrastructure, with appropriate national standards. As a possible component of a strategy, the Committee was told that, within five years, a new income support program for long-term disabled Canadians should be developed and implemented, perhaps modeled on elements of the Old Age Security program and the Canada Pension Plan disability benefit. According to witnesses, the proposed program could provide a level of income similar to that provided by Old Age Security and Guaranteed Income Supplement benefits. Comments were also made about registered disability savings plans which, while helpful for people with disabilities and their families, were characterized as being problematic for those with intellectual disabilities; it was recommended that the assumption of legal capacity be foundational and that an individual be permitted to use support in financial decision making without that use affecting legal capacity. Witnesses also supported the establishment of an income-tested basic income benefit for those who cannot reasonably be expected to earn an adequate income from employment, which would include those who have a severe and prolonged disability or chronic illness, have limited training, are of advanced age and/or have inconsistent labour market attachment. The recommended design and amount of the proposed benefit mirrored the suggested income support program noted above, and it was argued that the proposed benefit should be made available to those who earn income through episodic, short-term and/or partial labour market attachment. A higher-valued benefit for Northern and remote residents was urged as a means of recognizing their relatively higher living costs. Furthermore, a national dialogue was advocated for such topics as the financial implications of including people with episodic disabilities in disability benefit programs, the development of a measure that would provide partial income support to those with episodic disabilities as a complement to earned income, and consideration of changing disability income support programs, including EI sickness benefits, to a unit system that would allow people to work part-time and/or intermittently while receiving partial benefits. A more general request for flexibility in respect of EI sickness benefits, to allow those who work part-time to receive partial benefits, was urged. According to witnesses, the financial situation of those with a disability would also be improved if the federal disability tax credit became refundable. Moreover, it was argued that definitions in respect of this credit should be harmonized with those for the Canada Pension Plan disability benefit, with eligibility for the latter automatically meaning eligibility for the former. Finally, it was recommended that the Opportunities Fund for Persons with Disabilities and the Multilateral Framework for Labour Market Agreements for Persons with Disabilities be extended, that the federal government increase the labour market participation of persons with a disability in the federal public service and that a new Canada Pension Plan disability benefit be created to encourage labour force attachment. Witnesses also highlighted the need to include targeted representation of, and allocations for, persons with a disability within Labour Market Agreements, which could occur as part of an initiative to train people for new industries. Three specific measures were proposed to assist employers in ensuring that workplaces are accessible: an accessibility bond, an accessibility tax credit and an accessibility tax deduction. The Committee was told that these proposed measures could be used to offset the cost of purchasing adaptive equipment, removing architectural or transportation barriers in facilities or vehicles, adapting information systems and/or producing accessible formats of printed materials, for example. G. Foreign Credentials, Integration and Settlement of Immigrants A number of the Committee’s witnesses highlighted the important role that immigrants now have, and will continue to have, in our workplaces and in our society as demographic change continues. They indicated that immigrants face challenges, including language barriers, an inability to obtain recognition for their foreign credentials and a lack of Canadian experience, and advocated assistance in addressing those challenges, which can affect physical, mental and emotional health and well-being. To that end, the government was encouraged to abandon the Right of Permanent Residence Fee for new immigrants, fund integration and settlement services as well as cross-cultural supports, collaborate with the provinces and territories in order to accelerate recognition of foreign credentials, and support businesses—particularly small and medium-sized enterprises—in recruiting, assessing, hiring, integrating and retaining skilled immigrants. Finally, it was recommended that child and youth services be included as part of federal agreements with the provinces and territories concerning immigrants and refugees, and that the government support language instruction, including language centres, self-paced modules and computer training. Witnesses also provided a number of other suggestions: attention to such compensation issues as minimum wages, pay equity and a national public safety officer compensation fund; higher tax credits for low-income workers; protection for the basic employment rights of cleaning workers who are employed in federally owned or leased buildings, or by those who contract with property management and services; reforms to employment standards in order to improve the “quality of precarious employment;” greater social inclusion and income support for families that are “being left behind” by the job market; fair taxation of wealthy Canadians; appropriate training and accreditation for federal public service employees responsible for the procurement of goods and secures and the management of the federal government’s supply chain; and increases to provincial and territorial income assistance payments as well as the development of mechanisms for reporting and public accountability in order to ensure transparency and adherence. The Committee is aware that not everyone engages in paid employment, and that a variety of considerations exist when individuals are deciding whether to enter the labour market and, if so, the nature and extent of that participation. For those in the labour market, a recession can lead to job loss that jeopardizes the ability of workers to support themselves and their families. We realize that this reality is a foundation of the Employment Insurance program: the need to support oneself and one’s family when unemployment occurs. Certainly, a great many workers faced—and continue to face—job loss resulting from the global financial and economic crisis. Extraordinary times often call for extraordinary measures, and we feel that the insurance system on which many rely, and which must be recognized as an effective countercyclical stimulus measure, should continue to support them. Consequently, and with a view to positioning those who are in and those who are out of the labour market for a prosperous and sustainable future, the Committee recommends that: The federal government, in respect of the Employment Insurance program, amend the Employment Insurance Act in order to:
Moreover, the government should identify the skilled labour needs of Canada’s small and medium-sized businesses and ensure that Employment Insurance training measures facilitate the acquisition of those skills. Finally, the government should fund job training initiatives that provide individuals with the skills needed to participate in the green economy. The Committee also feels that there are some workers and potential workers—whether they work in the home, in their community or in the paid labour force—who require additional federal assistance in order to support their activities. For example, we think that persons with a disability or chronic disease, as well as newcomers to Canada, may have particular needs. In our view, the federal government should take actions to facilitate their full participation in all aspects of Canadian society, and to position them for the prosperous future we all seek. Therefore, the Committee recommends that: The federal government amend the Income Tax Act in order to ensure that the disability tax credit is a refundable credit, and examine options to improve labour market supports for those who are disabled or have a chronic disease. Moreover, the government should work with the provincial and territorial governments in the development of a plan to ensure that appropriate, properly funded and equitable immigrant settlement and integration services are available throughout Canada. As well, a plan should be developed to recognize and reconcile the educational and professional qualifications obtained by immigrants in foreign countries. Finally, the government should continue to reduce the landing fee applicable to all new immigrants to Canada. In Canada, in 2008, there were an estimated 4.56 million individuals aged 65 and older. Of these, 4.47 million were receiving benefits from the Old Age Security program, which includes three initiatives: the Old Age Security (OAS) benefit, the Guaranteed Income Supplement (GIS) benefit and the Allowance. Moreover, 3.52 million individuals received Canada Pension Plan (CPP) retirement benefits in that year, 2.93 million of whom were aged 65 years or over. These individuals make a variety of valuable contributions to Canadian society, including as workers and volunteers. While witnesses provided their thoughts about a number of issues that are important to seniors, most senior-related comments focused on pensions. They spoke about all aspects of retirement savings in Canada: occupational pension plans and the rules that govern them, the OAS program, CPP retirement benefits and private retirement savings. The Committee was told that many seniors have retirement savings and pensions that are inadequate, and that the maximum value of public pensions fails to replace the 50% to 70% of pre-retirement income needed to maintain living standards. In their view, the private pension system is in “crisis,” and a variety of changes were recommended. Consultation about the future of the nation’s pension system was advocated by some witnesses, who urged the government to convene a national pension summit, with participants that include—depending on the witness—federal and provincial ministers of finance, federal and provincial government officials with responsibility for pensions, actuaries, employers, employees, unions and retirees. According to them, the proposed summit should address such topics as a concrete plan for pension reform in this country, reduced coverage by defined benefit pension plans, and harmonized legislative and regulatory reforms by the federal, as well as provincial and territorial, governments. Witnesses also supported another mechanism for consultation—a pension advisory group with a sunset clause—to assist the government with its current Pension Benefits Standards Act, 1985 (PBSA) initiative. Like the participants in the proposed national pension summit, it was recommended that actuaries, businesses and retirees, among others, be represented on the proposed group. B. The Old Age Security Program The Committee also heard about suggested changes to each of the three components of the OAS program: OAS benefits, GIS benefits and the Allowance. Regarding OAS benefits, the Committee was told that immigrants should, after three years of residence in Canada as a Canadian citizen or landed immigrant, be eligible to receive benefits. Particular recommendations about the GIS included an immediate increase in the monthly amount, perhaps financed through a reduction in the registered retirement savings plan contribution limit, which was described as “high.” Other suggestions involved removing the GIS reduction rate for casual earnings, and allowing a higher amount of income before GIS benefits begin to be reduced. Some witnesses expressed the view that the combined amount of the OAS and GIS benefits should be increased to a level sufficient to ensure a guaranteed income that is at least as high as the LICO for urban centres, although an increase at least equal to the after-tax LICO for those without any other source of income was also mentioned, as was increased benefits commensurate with the pre-tax LICO. Indexation of the OAS and GIS to wages as well as to prices was advocated as well. Witnesses also argued that the dividend gross-up in respect of the net-income calculation for income-tested OAS and GIS benefits should be amended, so that the calculation is based on actual dividends received rather than on the grossed-up amount of 125% for ineligible dividends or 145% for eligible dividends. Regarding the Allowance, it was suggested that the benefit should be made available based on income, regardless of marital status. Witnesses also advocated changes to the Canada Pension Plan, with some describing the Plan’s retirement benefits as inadequate and advocating an increase in the Plan’s replacement rate, perhaps phased in over a number of years. To finance proposed increases in benefits, some argued for an increase in the upper limit of contributory earnings, while others suggested an increase in the contribution rate for employers and employees. To protect low-income earners from the effects of higher contribution rates, two options were proposed: increasing the tax credit for CPP contributions or linking the value of the tax credit to income. Finally, witnesses believed that immigrants could receive higher retirement income if their CPP contributory period were to start when they enter Canada rather than at age 18. It was also suggested that, for them, changes to ensure that survivors of recent immigrants are not penalized should also occur. Although witnesses did not focus on employer-sponsored defined contribution plans, issues related to defined benefit plans were mentioned, with some highlighting the relatively higher levels of predictability and security as well as lower level of risk for members in such plans. Also noted was the role that these plans play in helping employers attract and retain employees, thereby stabilizing their workforce. Witnesses also commented that these plans generate large pools of investment funds, with relatively higher returns and lower fees, and recommended such changes as an employer-sponsored pension security trust, a target solvency margin for each plan reflecting the level of risk of the plan’s asset mix, and an increase in the maximum allowable surplus in a pension plan. Moreover, the need to increase defined benefit contribution limits alongside increases in defined contribution and registered retirement savings plan contribution limits was identified. Finally, the Committee was informed that the requirement for an employment relationship between plan members and the plan sponsor should be removed, which would perhaps be particularly beneficial for small employers and would permit self-employed and other “unconnected” individuals to participate in broadly based multi-employer plans. E. Tax-Assisted Private Savings The Committee’s witnesses made comments about a number of private savings vehicles, including registered retirement savings plans (RRSPs), which were characterized as “failures” that have not provided security or certainty for many Canadians. Witnesses also spoke about registered retirement income funds (RRIFs) and their rules, which were described as outdated because of their failure to recognize that Canadians are living longer, with a consequential need for retirement savings to last for more years, and to realize that today’s environment has relatively low interest rates. Depending on the witness, either a reduction in, or elimination of, the mandatory minimum withdrawal requirement that currently exists for RRIFs was advocated. Regarding RRSP contributions, the Committee was told that the income base on which contributions are calculated should be broadened to include such amounts as investment income in addition to earned income. Moreover, witnesses said that the amount that can be transferred from defined benefit pension plans to RRSPs should be increased in order to recognize the inflation that has occurred since the limit was first established, with regular updates to the limit in the future. Some witnesses focused their comments on the situation that exists in the event of employer insolvency, which may be a particular problem for those in single-employer plans; a main concern was protection for plan members and their entitlements should the plan sponsor fail and the plan be underfunded. In the view of witnesses, the following changes would enhance protection for plan members in these situations: a prohibition on contribution holidays in order to ensure, to a greater extent, pension fund solvency; enforcement of deficiency funding obligations contained in pension standards legislation; amendments to bankruptcy and insolvency legislation to ensure that pension deficits are given priority in these situations; and creation of a government-sponsored, plan-sponsor-funded insurance mechanism to guarantee a monthly maximum per plan member, with initial establishment of the measure at the federal level to be followed by negotiations among the federal, provincial and territorial governments for a national system. G. Simplification, Harmonization and Actuarial Deficits Witnesses also noted pension-related legislative and regulatory measures, and urged the federal government to streamline administrative and compliance activities required by the Income Tax Act and the PBSA, with possible outsourcing of these functions to regulated specialists. According to some witnesses, in order to reduce unnecessary complexity which lowers competitiveness, the provinces should be encouraged to change their requirements in order to ensure coordination and consistency on a national basis. Finally, the Committee was told that the rules in respect of solvency deficits have not kept pace with changes in global markets, are not sufficiently flexible to deal effectively with extreme volatility in financial markets and are too burdensome for plan sponsors. In the opinion of some witnesses, the maximum period over which a pension fund actuarial deficit must be financed should be increased, without any conditions. A change to the discount rate applied to the solvency funding was also proposed. Witnesses also made such suggestions as: a shift in emphasis for retirement saving from private pensions to public pensions; allowing the dividend tax credit to be claimed when eligible dividends are paid to registered retirement savings plans and income funds; establishment of a voluntary, supplementary national retirement savings plan; creation of a universal pension plan, modelled on the Canada Pension Plan, for those who do not participate in an occupational pension plan; a reduction in the age contained in the definition of “eligible pension income” in the Income Tax Act; the creation of a defined tax-assisted lifetime pension allowance, supplemented by retroactive Tax-Free Savings Account contributions, combined with elimination of the minimum annual withdrawal limits from RRIFs; a requirement that, each fiscal year, pension funds publicly disclose any environmental, social or governance factors considered during investing, with a copy of the report provided free of charge on request; re-introduction of a limited net capital loss to be applied against all sources of income; equivalent treatment of Goods and Services Tax/Harmonized Sales Tax among all retirement savings vehicles; and an obligation for the government to look first to private-sector solutions to public policy concerns. In the Committee’s view, after a long life and a history of contributing to their family, employers and communities, Canada’s seniors should be able to live in dignity in their retirement. In the aftermath of the global financial and economic crisis, we are aware that some seniors are experiencing—or may soon experience—financial difficulties associated with reduced investment returns as well as pension plan losses associated with lower returns and employer insolvency. Believing that the federal government should take actions to ensure that seniors have adequate retirement income and incentives to save in order that they are positioned to continue their contributions to their families, their communities and the nation, the Committee recommends that: The federal government provide increased funding for Guaranteed Income Supplement benefits. Moreover, the government, with provincial and territorial governments, should continue its comprehensive review of the Canadian retirement income system. The focus of the review should include incentives for saving and the extent to which these incentives ensure that the financial and other needs of current and future pensioners, as well as of labour force participants and those who engage in unpaid work, are being—and will continue to be—met. A healthy population is essential to ensuring an effective economic recovery. Moreover, healthcare is an important source of GDP growth for Canada, since it is one of the few service-producing sectors that experienced increased GDP growth in 2008 when compared to 2007. That being said, rising individual healthcare costs prevent some individuals from attaining full health. For example, Canadians spend a greater proportion of their own money on prescription drugs than on any other category of health expenditure. An aging population is also playing, and will continue to play, a major role in the overall level and availability of healthcare services. Finally, it is likely that adequate and effective delivery of healthcare will require greater coordinated action by all levels of government. Comments and suggestions made by witnesses about health touched on various programs that they believe the government should implement or modify to improve the quality and efficiency of healthcare services, thereby decreasing healthcare costs and improving health outcomes. They ranged from funding for more advanced diagnostic equipment and improved treatment facilities to incentives to improve the integrated electronic health records system. Witnesses also highlighted various public health programs that could be improved or created to prevent disease and maintain the health of Canadians. A. Prevention and Treatment of Disease and Injury Witnesses voiced concern about the threat of infectious diseases that could affect the well-being, prosperity and security of Canadians, and recommended improved surveillance of infectious diseases and greater dissemination of collected information to prevent pandemics. Increased funding for emergency preparedness budgets was also mentioned by witnesses and, since the socioeconomic background of the patient and his or her community influences the delivery of public healthcare services, increased funding for the Public Health Agency of Canada and the creation of a national public health infrastructure fund to assist public health units were recommended. Regarding medical technology, witnesses highlighted the slow regulatory approval process for new medical devices, and suggested that additional human resources for the Medical Devices Bureau of Health Canada could alleviate the situation. They also argued for increased funding for drug and natural health products approval in order to expedite the approval process, and suggested an extension to the deadline for the approval of natural health products To decrease out-of-pocket expenses for diabetics and to manage patients in the healthcare system effectively, witnesses proposed that a specific tax strategy be created. A number of the Committee’s witnesses mentioned increased physical activity by Canadians as a solution to the nation’s growing obesity rate. They urged the government to allocate funds for physical activity throughout Canada. Particular mention was made of funding for ParticipACTION, renewal of all current federally funded programs, direct funding for all physical activity programs, and the allocation of a portion of health funding to physical activity and amateur sport. To promote the creation of recreational infrastructure, witnesses proposed that the government renew funding for Recreational Infrastructure Canada and Own the Podium beyond 2011. Moreover, witnesses recommended three specific changes to the Income Tax Act to increase physical activity: changing the children’s fitness tax credit to a refundable credit, creating a 150% tax credit for private-sector corporations that sponsor amateur sport organizations, and including amateur sport as a charitable purpose for registered charities. Since the use of vaccines to immunize the population against various diseases has been instrumental in improving public health, witnesses urged continued support for the Public Health Agency of Canada’s National Immunization Strategy, and suggested a variety of improvements: continued financial support for the strategy; equal access for all Canadians to vaccines recommended by the National Advisory Committee on Immunization; funding for the strategy that is separate from Canada Health Transfer payments; harmonization of immunization schedules across Canada; and creation of a national vaccine registry. To ensure essential services during pandemics, witnesses suggested that emergency personnel should be given priority for vaccinations. As well, witnesses called for the creation of a national immunization trust fund to facilitate the approval and adoption of new vaccines, and indicated that greater financial support is needed for the National Advisory Committee on Immunization to ensure the existence of a stable committee that can review and recommend vaccines in a timely manner. To prevent food-borne illnesses, the creation of a program to ensure the removal of E. coli from the Canadian food chain through the funding of innovative vaccines was encouraged. Witnesses indicated that health research is important for the discovery of new and more effective treatments as well as for disease prevention and cures. To increase the amount of basic and applied health research conducted in Canada, they suggested increased funding, in varying amounts and percentages, for the Canadian Institutes of Health Research. To allocate research grants efficiently and to set research priorities, witnesses argued for the development of a Canadian health research strategy, developed through a national task force with representatives from the academic, private and voluntary sectors. Moreover, they highlighted that research funding could be used to attract foreign researchers to Canada and to increase the number of targeted research partnerships between universities and hospitals. In their view, increased funding could also be used to study methods to increase the quality of care and to maximize the efficiency of the healthcare sector. On these two points, witnesses also recommended an investment in research on nursing practices. E. Electronic Health Information Witnesses stated that standardized and accessible electronic health records could save the healthcare system billions of dollars each year, and stressed the importance of the Canada Health Infoway program for developing and implementing standardized electronic medical records that can be used by healthcare professionals throughout the healthcare system. They were concerned that funding for the program has not yet been made available, and recommended an immediate release of funds and renewal of the program for 2010. Witnesses also wanted to ensure that projects involving information technology infrastructure in home and community care would be eligible for current and future funding. The temporary accelerated capital cost allowance (ACCA) for hardware purchases of health information technologies was highlighted, and witnesses proposed an extension of the ACCA for a period of time, removal of the 50% half-year rule on related software, and inclusion of electronic tools involved in transferring patient records from physicians’ offices to laboratories and hospitals. F. Personal and Public Healthcare Costs Good oral health for all Canadians was highlighted as an important goal, and witnesses indicated that the existing oral healthcare delivery system could be improved through a parliamentary consultation. Witnesses also mentioned the lack of affordable Aboriginal oral healthcare services, and suggested that changes to the policies and procedures within Health Canada’s First Nations and Inuit Health Branch’s (FNIHB)—Non-Insured Health Benefits (NIHB) program occur in order to enable dental hygienists in private business to provide services to NIHB clients on a fee-for-service basis. A number of the Committee’s witnesses indicated that an individual’s drug costs may not be covered by his or her employer-sponsored insurance plan, and advocated a national catastrophic drug plan for all individuals or a national pharmaceutical strategy to increase access to drugs and to lower out-of-pocket expenses. Witnesses identified increased operating costs for institutions as a major issue, and advocated a 100% Goods and Services Tax rebate on eligible purchases made by publicly funded, not-for-profit institutions in the healthcare sector. As well, witnesses noted that certain employer-created health trusts for retired employees are taxed at the highest personal income tax rate on reserves in excess of annual expenses. To promote the creation of more health trusts and as a possible solution to growing public healthcare costs, a lowering of the tax rate and equal tax treatment for all employer-created health trusts were suggested. The potential for private healthcare to reduce use of the publicly administered system was highlighted by witnesses, and it was suggested that the Canada Health Act be amended to allow private delivery of healthcare services while maintaining the amount of time that practitioners spend treating patients in the public healthcare system. Moreover, to decrease the wait times to see a primary care physician, and to assign a value to hospital visits, it was proposed that an admission fee to enter a hospital be charged for individuals who are not economically disadvantaged. With witnesses defining “health infrastructure” to include buildings, equipment and personnel, concern was voiced about the exclusion of healthcare facilities from federal infrastructure funding. They argued for inclusion of health facility construction across all areas of the health services sector in federal infrastructure funding, and supported the creation of a national health delivery infrastructure fund to alleviate the infrastructure gap. Witnesses were concerned about outdated and inadequate diagnostic and other medical equipment, and also suggested the creation of a medical technology fund to help the provinces and territories in obtaining medical technology. Regarding healthcare professionals, some witnesses identified the lack of physicians, nurses, medical laboratory technologists, personal support workers and others as troubling, and suggested a variety of solutions: a national health human resources infrastructure fund to improve coordination of healthcare professionals and to accelerate training capacity; a federal strategy to recruit foreign-trained professionals and to repatriate Canadian professionals; incentives for graduates to remain in Canada, especially in rural areas; a study to determine whether the role of nurses could be expanded when a physician is unavailable; and investment in a health observatory to facilitate pan-Canadian health human resources planning. To increase the supply of physicians, witnesses recommended that the federal government fund new residency positions. In indicating that palliative care will become increasingly important as the population ages and in agreeing that caregivers are an important component of palliative care, witnesses suggested a number of changes to social programs and tax policies to help family caregivers financially when they temporarily leave the workforce. For example, they suggested an expansion of the caregiver tax credit in the Income Tax Act to include spouses as well as an increase in the value of the benefit and a change to make it refundable. It was also suggested that the compassionate care benefit under the Employment Insurance program be expanded by increasing the replacement rate, that the list of eligible recipients over the course of a year be expanded to recognize the chronic nature of care, and that a dedicated program be created. In the view of some of the Committee’s witnesses, a working individual may provide more palliative care to a family member if changes are made to the CPP. Proposals included the introduction of a caregiving dropout provision analogous to that which currently exists in respect of child-rearing; this provision could be used by those providing unpaid care for older or disabled family members. It was also suggested that these caregivers should be able to continue their contributions to the Canada Pension Plan while they are out of the workforce in order to provide informal care. Witnesses also made suggestions regarding the creation of a palliative care fund to be used to obtain public views on palliative care and end-of-life issues, and increased funding to the federal granting councils for studies designed to obtain accurate information on palliative and end-of-life care. Witnesses also recommended the creation of a national caregiver strategy to coordinate federal, as well as provincial and territorial, efforts. Witnesses mentioned certain diseases and illnesses that, in their view, should receive greater federal support. They identified preventable vision loss and other eye conditions as an area where a federal program is required in order to improve awareness. With long wait times being a concern, it was also suggested that all eye condition treatments should be included in the pan-Canadian healthcare wait time initiative. To help diabetes researchers with basic research and commercialization, witnesses recommended that the federal government enter into strategic partnerships to create a clinical trial network. Moreover, they encouraged the government to contribute to the Spinal Cord Injury Network to support spinal cord research and to provide increased funding for the Federal Initiative to Address HIV/AIDS. Witnesses outlined the relationship between the cost of cigarettes and smoking rates, and suggested that high prices for cigarettes through high cigarette taxes can decrease the prevalence of smoking. They urged the government to strengthen its strategy against the sale and distribution of contraband tobacco in Canada. Due to the risk of brain trauma during participation in sports, the creation of a national sports helmet standards certification program and of a national education program on helmet safety was recommended. Moreover, the establishment of a national registry of brain injuries that would facilitate the collection of brain injury statistics and the creation of a national concussion management program were urged. Finally, to improve pediatric medicine research and to commercialize medical technology, the creation of a multidisciplinary research centre for robotic microsurgery was advocated. The Committee believes that Canadians are better positioned to participate in the work force, their communities and their life at home—and thereby to contribute to a prosperous and sustainable future—when they are healthy. As well, while we agree that prevention is better than a cure, we also recognize that, in some cases, measures and supports beyond prevention are needed. While the federal government has a variety of tax and program spending measures designed to assure the health of the nation’s residents that we feel should continue to be supported, we are also of the view that greater actions are required in certain areas, such as with respect to access by Canadians in all regions to healthcare professionals. From this perspective, the Committee recommends that: The federal government, in respect of both health and education, protect transfers to the provinces and territories. Moreover, while recognizing the jurisdiction of the provinces and territories, the government should help to ensure that all elements of preventative programs designed to improve the health outcomes of Canadians are adequately funded. In particular, the government should continue to promote health prevention, physical fitness and amateur sports through renewed and increased support for initiatives such as Own the Podium and ParticipACTION. Finally, consistent with the jurisdiction of the provinces and territories, the government should invest in health human resources, in particular to ensure access to doctors and nurses in Canadian communities and hospitals where they are most needed. Education is a priority for Canada’s federal, provincial and territorial governments and for Canada’s citizens. According to the Organization for Economic Co-operation and Development (OECD), in 2006, Canada placed among the top five OECD countries with respect to post-secondary education expenditures. Additionally, in 2007, Canada was tied with Korea as the top-ranked OECD country with respect to the proportion of the population aged 25 to 34 years with a post-secondary education. Witnesses discussed a variety of issues related to post-secondary education. In general, their comments were focused on affordability, accountability, the nature and amount of funding to the provinces and territories for post-secondary education, infrastructure for post-secondary education institutions, equity among post-secondary institutions and graduate students. A. A Post-Secondary Education Act In noting that the level of federal funds for post-secondary education through the Canada Social Transfer (CST) is currently below the 1992 level after adjusting for population growth and inflation, a number of the Committee’s witnesses recommended that funds allocated to the CST be increased. They also suggested that the CST should be formally divided into two portions, one for social services and the other for post-secondary education. According to them, a post-secondary education act, modelled on the Canada Health Act, should be implemented in order to guarantee federal funding to the provinces and territories, establish a national strategy for post-secondary education and assure a minimum level of post-secondary education service delivery by the provinces and territories. Furthermore, the Committee was told that, under this proposal, increased funding to the CST dedicated to post-secondary education could be used to lower tuition costs for students and improve the infrastructure at post-secondary institutions. It was also argued that CST funds for post-secondary education should be directed exclusively to public not-for-profit educational institutions. B. Infrastructure at Post-Secondary Institutions In supporting the Knowledge Infrastructure Program (KIP), a number of the Committee’s witnesses recommended that the program continue to be funded at its current level until 2014-2015. Some also proposed annual contributions over time, and stated that the government needs to make a substantial and long-run investment in post-secondary infrastructure. C. Distribution of Post-Secondary Institution Funding Witnesses informed the Committee that Canada faces a skilled worker shortage that could be addressed through more funding for colleges. In their view, there is a funding disparity between colleges and universities, and government financial support—especially research funding—is directed disproportionately to universities at the expense of colleges. Additionally, the Committee was told that current post-secondary funding arrangements—such as granting councils, research chairs, scholarships, loans and infrastructure programs—disproportionately help well-endowed post-secondary institutions and regions at the expense of others. An increase in the CST dedicated to post-secondary education or a more equitable distribution of targeted funds to specific regions and institutions were seen as options for addressing these issues. Similarly, witnesses also asked for KIP funds to be shared equitably among colleges and universities. A number of witnesses requested more funding for specific institutions and for artistic programs, programs targeted to Aboriginal Canadians, infrastructure, operations, information and communication technologies, research and development, and faculty. They also informed the Committee that particular disciplines, such as those in the humanities and social sciences, are underfunded in relation to student demand. D. Graduates and Government Programs With a focus on informing post-secondary education graduates and young entrepreneurs about government programs available to small and start-up businesses, the Committee was told that the government should encourage the Canada Small Business Financing Program, the Business Development Bank of Canada, the Small Business Finance Centre and the Canadian Youth Business Foundation to provide seminars to these graduates and young entrepreneurs. In addition, or alternatively, Industry Canada could provide a model curricula for students and entrepreneurial graduates. In respect of information on education, witnesses encouraged the government to construct a comprehensive national dataset on research, productivity, the labour market and post-secondary education to improve accountability and to facilitate comparisons among the provinces and territories, as well as against other countries and jurisdictions. The Committee was told that a learning information platform should be created for the sharing of local and national information with users. Furthermore, it was recommended that the government fund surveys related to post-secondary education. Witnesses also made a variety of other suggestions related to education, and urged the government to: address the education and training challenges faced by Atlantic Canadians; establish a nationally integrated system of post-secondary learning among tiers and across provinces and territories; utilize technology to the greatest extent possible for distance learning; reduce the cost of distance learning for students and institutions by subsidizing the purchase of computers and the price paid for high-speed internet access; and increase the proportion of economic output spent on education, with a certain proportion of that funding directed to adult education and literacy. Earlier, the Committee expressed the view that healthy Canadians are better positioned to contribute to prosperity and sustainability. From a similar perspective, we believe that Canadians who are well- and adequately educated are in a better position to make the contributions needed to assure prosperity and sustainability for themselves and their family, their employers and community, and the nation. We also feel that our education system is stronger, educational outcomes are better, and everyone benefits, if foreign students are welcomed into our education system and Canadian educational institutions have a foreign presence. For this reason, the Committee recommends that: The federal government, in partnership with the provinces and territories, explore the development of a national strategy to promote greater emphasis on Canadian education services exports. |