FINA Committee Report
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CHAPTER 4: POSITIONING COMMUNITIES As noted in Chapter 2, our people must be properly “positioned,” with the right skills, supports, incentives, health and education, in order to contribute to the economic recovery under way as well as to the prosperity and sustainability of the nation in the future. As employees, they contribute to the success of businesses; as residents, they contribute to the vitality of communities. In Chapter 3, “positioning” our businesses for the current economic recovery as well as for future prosperity and competitiveness was highlighted, and the importance of the right regulatory and tax environment as well as financing, research, innovation, trade agreements and other supports was identified. To realize their potential, both people and businesses require the communities in which they live and work to be “positioned” for economic recovery, prosperity and sustainability. For example, people need high-quality and affordable housing, and may benefit from charitable organizations as a recipient, a donor or a volunteer. For their part, businesses need adequate and well-maintained infrastructure, in part for the purpose of transporting their goods to domestic and international markets. As well, people may find it more enjoyable to reside in, and businesses may find it relatively easier to attract and retain employees in, communities that are—and that are perceived to be—desirable. Consequently, as the economic recovery continues, and as decisions are made today in preparation for tomorrow, attention should be paid to the actions needed to “position” our communities. From that perspective, adequate and affordable housing, preservation of heritage buildings, a safe and clean environment, reliable and adequate infrastructure, the particular needs of rural and remote communities, the contributions made by charities and volunteers, and the value added to a community by the artistic and cultural sectors merit consideration. I. HOUSING AND HERITAGE PROPERTIES Housing is important for the emotional, social and physical health of its occupants, and thereby for the health of the nation, regardless of whether the housing is rented or owned, new or heritage. Moreover, some buildings in particular—those that have heritage significance—are part of the country’s history, and particular efforts and incentives may be required to safeguard their existence and ongoing maintenance for the benefit of Canadians and foreign visitors. Witnesses provided the Committee with their thoughts about a number of issues related to housing and heritage properties. For example, they spoke about the Canada Mortgage and Housing Corporation and its programs, strategies and initiatives as well as about the particular needs of low-income households. Considerations in respect of heritage properties were also highlighted. A number of the Committee’s witnesses indicated that Canada is the only industrialized country without a national housing strategy. In their view, millions of Canadians are precariously housed, which may be particularly problematic for low-income Canadians. They urged consideration of a long-term national housing strategy that incorporates all three levels of government and that ensures safe, healthy, dignified and affordable housing for all Canadians. Witnesses felt that there should be more funding for, as well as a greater supply of, affordable housing, and shared their belief that the government should initiate policies to reduce significantly or end chronic homelessness. They encouraged more direct financial support for certain organizations in the affordable housing and homelessness sector, particularly those that are not-for-profit and community-based. However, the private sector was also encouraged to develop affordable housing, with witnesses supporting new affordable housing models such as land trusts, co-operatives, housing corporations, life-leases and housing trusts, among other initiatives. It was also argued that violence against women is the leading cause of homelessness among women and children in Canada, and witnesses said that a national housing strategy should not rely on social housing alone; emergency shelters as well as second-stage and permanent housing are important elements in a comprehensive and coordinated national strategy. The Committee was informed about the link among poverty, poor mental health, substance addiction, and inadequate housing and homelessness, with inadequate housing and socioeconomic problems sometimes resulting in a situation where problems in one area cause problems in another; income support for low-income individuals was offered as a solution. Furthermore, witnesses advocated investments in social housing that could lower the costs of other social program spending, particularly on healthcare. Financial support directed to rental households, which have disproportionately low income when compared with those who own their homes and may be “priced out of” homeownership, was urged. It was also recommended that the Home Buyers’ Plan be extended temporarily to all homebuyers who have investments in their registered retirement savings plan, that the Plan be indexed to inflation and that the Home Renovation Tax Credit be extended by one year. Moreover, it was requested that the maximum threshold for the Goods and Services Tax/Harmonized Sales Tax (GST/HST) New Housing Rebate be indexed to inflation. The Committee was told that low-income individuals and families need more affordable loans since they cannot access mortgage financing, and that some low-income individuals who own their home—including retirees—may not be able to afford their property taxes, which has implications for their ability to remain in their home. In the view of a number of witnesses, financial security can be assured more easily with homeownership. Witnesses made recommendations related to the Canada Mortgage and Housing Corporation (CMHC), particularly its role and its capacity. For example, the CMHC was urged to invest its surpluses in social housing, and to increase its Direct Lending Program in order to assist in the development of social housing projects. Some witnesses urged renewal of federal and CMHC housing agreements so that low-income households can continue to be accommodated. A number of witnesses were concerned that the CMHC’s Emergency Repair Program takes too long to provide services, and asked that wait times for home repairs be reduced. As well, witnesses supported the Affordable Housing Program (AHP), the Residential Rehabilitation Assistance Program and the AHP’s Homelessness Partnership Strategy, and recommended that these measures be made permanent. Witnesses indicated that any national social housing policy should recognize the particular needs of those with a disability and ensure that they are adequately housed. The Committee was told that funding of the Residential Rehabilitation Assistance Program should be increased, that continued investments in federal and provincial housing agreements are needed, and that a certain proportion of federal investments in social housing should be directed to units that are designed in a manner that makes them accessible to persons with a disability. Witnesses highlighted the lack of affordable rental housing for urban Aboriginal Canadians, and urged the government to fund affordable rental housing in addition to previously announced federal on-reserve housing commitments. They also recommended that steps be taken to help recent immigrants acquire adequate housing, particularly those without funds for a down payment or a credit history. Noting that the government lacks adequate data on housing and homelessness, witnesses told the Committee that better data are needed if the government is to have accountability in spending and is to be able to set targets and timelines with respect to social housing. A number of witnesses made recommendations to the Committee with respect to rental property taxation. For example, they suggested that rent should be zero-rated for the purpose of the GST/HST, which would mean that property owners would not have to pay the GST on rent revenue; should zero-rating not be possible, it was recommended that owners of rental buildings pay GST on a “cost plus” basis, effectively lowering the GST paid by them. Witnesses supported efforts to increase the stock of rental properties. Moreover, witnesses shared their view that rental property owners should be allowed to roll over or defer the recaptured capital cost allowance and capital gains tax on property sales if they invest the proceeds in another rental property. They also requested that small business deductions apply to rental property owners. Housing for seniors was mentioned in terms of nursing homes, which are classified with hotels as non-qualified property with respect to real estate investment trusts (REITs) in the Income Tax Act. It was recommended that the rules regulating REITs be changed. Finally, it was suggested that rental properties in communities with low vacancy rates should receive favourable tax treatment in order to increase the supply of rental units. C. Heritage and Cultural Buildings Witnesses were concerned about the condition of Canada’s heritage and cultural sites, and made recommendations designed to preserve them. Suggestions included: more funding for Canada’s cultural sites; creation of a national conservation endowment fund; establishment of a multi-year capital program for investments in cultural and recreational facilities nationwide; and creation of tax incentives for the renovation, conservation and rehabilitation of heritage properties, perhaps limited to those on the Canadian Register of Historic Places. A request was made for increased funding to support activities and materials that would assist in the interpretation of Canada’s national historic sites. As well, witnesses requested funds for science centres and related organizations, with some mentioning particular projects and others speaking more generally about the nation’s science centres. The Committee, in Chapter 3, noted the importance of health and education in positioning people and ensuring their prosperity as well as the prosperity of the businesses for which they work, the communities in which they live and—ultimately—the country. We believe that the same principle is important in respect of housing: people must be adequately housed in order to prosper. For this reason, the Committee recommends that: The federal government investigate the feasibility of repayable loans, through the Canada Mortgage and Housing Corporation’s Direct Lending Program, for affordable housing repair and new affordable housing development. In 2009, leaders of the G8 countries agreed to limit global warming to 2 degrees Celsius above the average temperature that existed prior to the Industrial Revolution. The United Nations Intergovernmental Panel on Climate Change estimated that, by 2005, the average global temperature had increased by about 0.76 degrees Celsius relative to the pre-Industrial Revolution level. Since the Kyoto Protocol was adopted in 1997, Canada’s greenhouse gas emissions have continued to increase and, in 2009, the Auditor General of Canada estimated that, by 2012, the country is expected to be 31.3% above its greenhouse gas emission target established under the Kyoto Protocol. Witnesses spoke to the Committee about a variety of environmental issues, but often focused their comments on global warming and greenhouse gas emissions, as well as on fiscal and regulatory measures that might help to achieve the country’s climate change goals. These measures were identified as including energy efficiency, alternative energy, energy technology and protection of the natural environment. A. Energy Efficiency and Emissions Although there was a general consensus among the Committee’s witnesses that global warming is caused by carbon dioxide and other greenhouse gases (GHG) emitted by human activity and industrialization, that position was not held unanimously. Among those who agreed that global warming is an issue, there was some concern that a cap-and-trade or carbon pricing mechanism would have negative economic effects and could reduce the effectiveness of the federal fiscal stimulus measures. That being said, a number of witnesses supported efforts to reduce GHG emissions, and made recommendations about how to accomplish this goal. Their recommendations included a range of legislative, regulatory and fiscal tools. Some witnesses supported carbon pricing, while others argued for a cap-and-trade mechanism. Regardless of the methods chosen, there was a general consensus that any proposal is likely to have costs, benefits and behavioural consequences. The Committee was told that the government should negotiate honestly with other countries regarding reductions in GHG emissions and that Canada should “do its part.” It was also suggested that the government should: align Canadian GHG emissions regulations with the US; introduce a transparent and predictable cap-and-trade permitting process; impose tariffs on non-signatory countries to a global emissions reduction agreement; set rules and regulations that make the emissions-reduction regime accountable and transparent; and favour public-private partnerships, conservation technology and energy efficiency as the best methods to reduce GHG emissions. In the view of witnesses, in order to accomplish the nation’s GHG emissions goals, better data collection and research will be needed. It was noted that Canada’s meteorological monitoring efforts north of the 56th parallel do not meet minimum guidelines set by the World Meteorological Organization. A number of the Committee’s witnesses supported initiatives to increase alternative or renewable energy production, and provided a number of methods by which this increase might occur. For example, they advocated extension and expansion of the ecoENERGY for Renewable Power Program or, alternatively, replacement of the ecoENERGY for Renewable Power Program with a capital grant program, a refundable tax credit or a “feed-in-tariff” mechanism similar to that used in Europe and in Ontario. Witnesses also requested that solar cells used in commercial buildings be zero-rated for the purpose of the GST, that green energy bonds be created, and that the accelerated capital cost allowance for wind, solar, wave and tidal energy capital be extended to energy-efficient building equipment. The Committee was told that Canadian authorities have not fully explored and assessed Canada’s geothermal resources for energy development, and witnesses noted the lack of a comprehensive national geothermal data system, resource assessment and classification system. Recommendations made by witnesses included: funding for an assessment and fiscal mechanisms for geothermal energy production, such as through an extension to the ecoENERGY for Renewable Power program; the creation of a production grant equal to the net present value of the current payment schedule; or the implementation of a feed-in-tariff mechanism for geothermal energy. An extension of the capital rebate for solar heating systems to geothermal energy through the ecoENERGY for Renewable Heat program was suggested. Witnesses made a variety of suggestions about oil as well as about carbon capture and storage. For example, reduced subsidies for oil extraction and for the oil sands were encouraged, and the government was urged to support carbon capture and sequestration through a variety of measures: an accelerated capital cost allowance and other tax incentives; the management of carbon sinks; efficient resource extraction; and a “tail pipe to tail pipe” analysis of the environmental impact of Canadian oil extraction compared to global oil extraction. As well, it was requested that vegetable oil-based biodiesel investments be eligible for the ecoENERGY program. Lastly, regional development agencies were seen as an appropriate tool to encourage the adoption of green technology in Canada’s industrial capacity. Since witnesses felt that Canada could reduce GHG emissions by applying the best available commercial technology in buildings and automobiles, they advocated fiscal measures to promote the utilization of leading technologies with respect to transportation, buildings and infrastructure. Witnesses provided the Committee with a number of ideas in relation to energy technology and transportation, including: a natural gas for transportation policy; fiscal measures that would encourage automobile, heavy truck and vehicle operators to switch to fuels with lower GHG emissions, such as natural gas; support for GHG-reducing technology development for the transportation sector in the early stages; strengthened vehicle emission standards; support for the enviroTruck initiative; and financial measures for farmers to retrofit and replace diesel engines in order to reduce GHG emissions. The Committee was also told about variations of a “cash for clunkers” program. One suggestion involved the creation of a tax credit for individuals who retire a vehicle that is at least ten years old and who purchase a new light-duty vehicle, while another proposal would zero-rate the purchase of a new vehicle for the purpose of the GST, provided the purchaser transfers a car “in good working order” to a low-income individual, who in turn retires his/her “clunker.” Regarding energy technology and buildings, the Committee was informed that fiscal measures, such as tax credits, reductions in the GST rate or funding for public buildings, could be used to encourage the construction of environmentally friendly buildings. Witnesses also advocated extension of the Home Renovation Tax Credit for an additional year, provided that the focus would be energy-efficiency initiatives, and supported energy-efficiency renovations for low-income homeowners and landlords. Tax credits for green buildings, as well as tax credits, grants or loans with favourable terms for the purchase of green capital and equipment, were encouraged. Moreover, witnesses argued for the introduction of best practices and technologies in the National Building Code, and LEED certification was suggested as an appropriate mechanism for assessing the environmental impact of particular buildings; tax incentives for LEED-certified buildings were supported. The establishment of an energy-efficient or “net zero” energy subdivision was suggested as one way by which to improve the environment and reduce emissions, and support for the implementation of such subdivisions was encouraged. With respect to environmental assessments, the Committee was informed that greater collaboration among relevant provincial and federal authorities should occur in order to reduce the cost of assessments and expedite the process. As noted in Chapter 3, it was argued that, ideally, only one approval process for environmental assessments should occur. In terms of energy technology and infrastructure, witnesses spoke about the need for a lifecycle GHG emissions analysis in planning public infrastructure investments along with an analysis of initial construction costs, long-term maintenance costs, environmental impacts and societal benefits. Witnesses also recommended the creation of a technology fund for the construction of natural gas pipelines to communities in order to facilitate the switch away from higher-emissions fuels. As well, there was support among the Committee’s witnesses for environmental solutions at the municipal and community levels. They proposed such measures as federal transfers to communities for the development and implementation of integrated energy projects, perhaps through an extension of the Clean Energy Fund. In order to generate revenue from gas shippers so that other stakeholders share a portion of the costs associated with pipeline abandonment, the creation of a proscribed trust, managed in a tax-effective manner by natural gas pipeline companies, was encouraged. In an effort to minimize disruptions to local ecosystems, a number of witnesses supported the expansion of Canada’s national parks system and limitations on the ecological “footprint” in these parks. Support for oceans was also brought to the Committee’s attention, with a recommendation for the establishment of large ocean management areas within Canada’s marine ecosystems, functionally equivalent to an ocean national park. As well, witnesses argued for more funding to fulfill the mandate of the Species at Risk Act, and indicated that more funds will have to be made available to protect our nation’s wetlands and forests. Additionally, witnesses were concerned about the ecology in the St. Lawrence River and the Great Lakes, and advocated funds for the rehabilitation of sensitive areas in these waters. Finally, they requested funding to improve the environmental condition and impact of landfills by reducing landfill leakage, improving storm water management, supporting landfill cover systems, and introducing landfill gas capture and energy projects. The Committee believes that the physical environment is a key contributor to our current and our future health, prosperity and sustainability. Like many Canadians—indeed, like many citizens of the world—we feel that a portfolio of energy sources will be needed for a secure energy future. While traditional energy sources are likely to continue to be part of the energy mix, we are of the view that attention must be paid to renewable energy sources, including those that use such products as forest waste, if we are to be positioned for the future. We also feel that electric cars should be encouraged because of their environmental benefits. Consequently, the Committee recommends that: The federal government examine the possibility of expanding current traditional and alternative energy programs to include production from forest waste. Moreover, consistent with the jurisdiction of the provinces and territories, the government should implement initiatives designed to encourage the use of electric cars. Initiatives that could be considered include:
According to Statistics Canada, in 2007, Canada had infrastructure assets of about $286 billion in the following categories: highways and roads (59%), bridges and overpasses (8%), sanitary and storm sewers (21%), and water supply systems (11%). In that year, the average age of Canada’s infrastructure was 16.3 years, down from a peak of 17.5 years seven years earlier. On average, Canada’s wastewater treatment facilities were the closest to the end of their natural lifecycle. Witnesses expressed their views and provided their suggestions about Canada’s infrastructure as well as about the mandate and sources of revenue of municipal governments. Issues discussed by witnesses included Canada’s approach to infrastructure policy, funding mechanisms and research. A number of witnesses informed the Committee that Canada’s national infrastructure deficit is $123 billion, and that municipal infrastructure is underfunded. In their view, since municipal revenues account for only 8% of total government revenues, the issue cannot be solved without cooperation among all levels of government and new sources of revenue for municipalities. Witnesses were concerned that federal and provincial governments are down-loading their responsibilities to municipal governments without providing them with the funding needed to deliver an expanded mandate, and urged the development of a long-run, national infrastructure strategy to address the infrastructure deficit. Witnesses also noted that municipal governments need an expanded Gas Tax Fund or sources of revenue other than the Fund, such as a portion of the revenue from the GST. In an effort to address concerns that the Gas Tax Fund fails to grow with the economy, witnesses requested that the Fund be indexed to inflation. While increased sources of revenue are one means by which the fiscal situation of municipalities might be improved, another suggestion was also presented: cost reductions. To that end, witnesses suggested that the federal government waive applicable taxes on local infrastructure projects and/or provide interest-free loans for municipal infrastructure. In light of concerns about the cost of regulatory changes imposed on municipalities, witnesses suggested that a regulatory authority that is imposing changes should be required to finance the cost of those changes on public-sector stakeholders, particularly municipalities. They also requested spending on specific municipal programs and infrastructure, such as public transit as well as fire and police departments. Regarding fire departments and Canada’s emergency preparedness plans, witnesses supported more funding for the Joint Emergency Preparedness Program and identified the need for funds to be provided to volunteer fire departments, which are facing recruitment and retention challenges. Moreover, it was recommended that the government create a national office of fire statistics, which would promote a greater understanding of fire-related safety issues. Assistance for police departments was encouraged through long-term support for the Police Officers Recruitment Fund and through policies intended to increase the number of police officers “on the streets.” A number of witnesses advocated a national public transit strategy. In order to finance public transit, they supported the allocation of a portion of the Gas Tax Fund for public transit, the creation of a permanent public transit funding program and changes to the Building Canada Fund that would make public transit an eligible investment. Witnesses asked that the government renew its spending on public transit, and informed the Committee that accessible transportation is essential for Canadians with a disability. As well, witnesses requested long-term funding for municipalities to modernize their wastewater facilities, and urged the development of programs to direct infrastructure spending and to support the servicing of industrial- and commercial-use land, which should provide opportunities for long-term employment and development. To meet the infrastructure needs of urban Aboriginal peoples, witnesses recommended that infrastructure funds be provided to Aboriginal Friendship Centres without the requirement that funds be matched by the recipient. B. Infrastructure Policy and Financing Mechanisms Some of the Committee’s witnesses were concerned about the government’s approach to national infrastructure development and recommended a number of policy changes. For example, they said that program-based funding is preferable to project-based funding for particular infrastructure initiatives, and that a direct transfer of funds to the provinces, territories and municipalities is generally preferable to federal programs that require provincial and municipal spending. To provide municipalities with an additional source of funding, witnesses suggested that a federal municipal infrastructure bond program should be created. A number of witnesses discussed public-private partnerships, and PPP Canada was mentioned. Some criticized public-private partnerships because of cost-overruns, a loss of control and more costly borrowing rates than those on public debt. Others said that because such partnerships may involve alternative funding mechanisms, more projects can be implemented than would otherwise be the case. The issue of waste and product disposal, and the rules and regulations associated with disposal, were also discussed by witnesses. They urged the government to provide guidelines to help harmonize complex and uncoordinated provincial and territorial laws, as well as municipal by-laws, in respect of waste disposal in an effort to facilitate and streamline the functioning of businesses. C. Infrastructure Consultations and Research According to some of the Committee’s witnesses, research and preparation must occur before a national, long-term infrastructure strategy is developed. They highlighted the National Round Table on Sustainable Infrastructure as the appropriate forum and requested that the government fund a number of its costs. Furthermore, the government was also urged to invest in an infrastructure simulation platform to analyze and model potential projects and to facilitate their planning and design; the Roundtable was identified as the appropriate entity to manage the platform. Witnesses were concerned about how climate change may affect Canada’s infrastructure in the future, and requested that the government support more detailed national climate change research and gather information regionally in order that infrastructure design can be tailored to changing climatic conditions in particular regions. To accomplish these goals, it was recommended that the government provide funding and support for the Public Infrastructure Engineering Vulnerability Committee. The government was urged to have expected intensity-duration-frequency (IDF) curves with respect to future rainfall so that engineers can tailor Canada’s infrastructure to expected conditions over the lifecycle of particular types of infrastructure. In supporting the federal infrastructure-related stimulus measures to date, a number of the Committee’s witnesses requested an extension or expansion of the current measures, perhaps for one year. Those who believed that the current stimulus measures should be extended were supportive of a comprehensive, long-term infrastructure stimulus spending plan with a focus on: roads, sewers and basic municipal infrastructure; health and educational facilities; mass transit; passenger rail; affordable housing; energy conservation through building retrofits; and renewable energy. In the view of some witnesses, infrastructure-spending priorities should be health and safety; for others, the focus should be public transportation, clean water and sanitation. Some witnesses commented on the manner in which the current infrastructure stimulus measures are being administered. They argued for such changes as a longer timeline for applications, the ability to “bundle” requests for funding, improved communications between the government and applicants, reduced program complexity, relaxed deadlines for project completion and strengthened monitoring. Witnesses asked that any future funding programs have clear and consistent rules nationwide, and believed that the details and processes of a funding program should be available online within 60 days following the program’s announcement. As well, they argued for a more efficient and effective project approval process, a priority for new projects over upgrades in the context of stimulus spending, and a more transparent application process. Infrastructure upgrades also received support. Furthermore, witnesses told the Committee that the focus of the infrastructure-related stimulus spending on “shovel-ready” projects is too restrictive. In their view, long-term strategic planning is required for further infrastructure projects, and “pencil-ready” projects—such as those involving architectural design, which is considered to be an essential part of the development of any infrastructure project—should be considered as well. A number of witnesses advocated a “Buy Canadian” clause in order that the government’s spending occurs domestically, and supported the employment of local trades people in infrastructure construction and maintenance whenever possible. E. Projects, Sectors and Initiatives Witnesses spoke to the Committee about a variety of infrastructure projects that they believed should receive federal support, a number of which were related to transportation. The projects included: dredging of the primary and secondary channels of the Fraser River; long-term strategic national highway infrastructure with appropriate funding; expansion of an airstrip at Baker Lake in order to accommodate jet aircraft, such as the 737, as well as improvements to the dock and barge off-loading facilities; completion of the extension of Circle Drive and South Bridge in Saskatoon; creation of a Fort McMurray bypass route with an associated bridge; creation of an east-west highway from Saskatchewan through Wood Buffalo to Peace Country; twinning of Highway 63; maintenance of the Crown-owned dry-dock in St. Catherine; creation of a deep water port in the Rankin Inlet; creation and implementation of a new rural road and infrastructure program; construction of roads to remote regions that may have mineral resources; replacement or upgrading of the Fraser River Training Infrastructure; replacement of the New Westminster Rail Bridge; electrification of Highway 37 in northern British Columbia; work on the Phase 2 expansion of the Fairview Container Terminal; and efforts in respect of the proposed Ridley Island road, rail and utility corridor. Requests were also made to increase British Columbia’s railroads and Vancouver’s port capacity, introduce high-speed rail in Canada’s major population centres, replace the Coast Guard’s icebreaker fleet and invest in Canada’s Coast Guard more generally. As well, witnesses made comments about airports, airport rents and air travel. Some requested abolition of airport rents, arguing that Canada is one of a limited number of countries that charge such rents. Also, the Committee was informed that, with a number of shovel-ready small airport projects that have not received funding, the government should develop a permanent program to fund small National Airport System (NAS) and non-NAS airports. Furthermore, it was noted that airlines are regulated federally while travel agencies are provincially and territorially regulated. The Committee was told that Ontario, Quebec and British Columbia have established funds to reimburse travellers if their travel agency ceases to operate and cannot guarantee services, but that—since airlines are federally regulated—travellers are not eligible for compensation from the federal, or the provincial or territorial, governments if an airline cannot provide its services. It was recommended that a federal travel compensation fund be created that could work in concert with existing provincial funds. Moreover, it was thought that Emirates Airline should be permitted to make more than three flights each week to Canada, which is the current limit under the Canada-United Arab Emirates Agreement on Air Transport. Finally, witnesses spoke to the Committee about transportation safety, and highlighted the need to increase Transport Canada funding in this regard. There was some concern among witnesses that the US Department of Transportation will require commercial transport vehicles to have on-board recorders and vehicle stability systems, and they advocated changes to Canada’s commercial transport vehicle safety regulations to bring about consistency with US regulations. Furthermore, fiscal measures were requested to assist commercial transport vehicle operators in their adoption of the new systems. The Committee realizes that much of the current federal stimulus spending has been allocated to the nation’s infrastructure. That being said, once all such spending has occurred, there will continue to be an infrastructure deficit, and municipalities may lack the resources needed to meet infrastructure needs. We believe that eradication of this deficit may be unrealistic, but that governmental efforts should be directed toward the development of a plan in this regard. In our view, action is needed if our infrastructure is going to help residents, businesses and communities be positioned and achieve their goals for a prosperous future. From this perspective, the Committee recommends that: The federal government work with provincial, territorial and municipal governments in order to develop a strategic approach to resolving the nation’s long-term infrastructure needs. Moreover, the government should augment the existing program for the sharing of a portion of the federal gasoline excise tax revenues with municipalities. All regions contribute to the nation’s gross domestic product and all regions—urban, rural and remote—have a role to play in safeguarding the nation’s economic recovery and its future prosperity. According to Statistics Canada, while Canada’s rural population has been fairly stable since 1981, relatively stronger population growth in larger urban centres has resulted in the rural population representing a smaller share of the nation’s total population. Moreover, Canada’s rural population is aging relatively more quickly than the urban population in terms of the share of senior citizens. Northern regions also face challenges. The cost of living is often relatively higher and, while globalization has created economic opportunities for sectors such as the primary resources that are relatively abundant in Canada’s north, Statistics Canada has indicated that the economy of some regions relying on these sectors is vulnerable to population and employment declines. Finally, many communities in the country’s rural and remote regions are resource-dependent, which presents challenges for them when particular resources are under strain. As the nation continues its economic recovery and attention turns to sustained prosperity, consideration should be given to the rural and remote regions of the country as well as the particular challenges and needs faced by them and the resource-dependent communities within them. Witnesses presented the Committee with a wide range of ideas designed to ensure that Canada’s rural and remote residents and communities can participate fully in the nation’s prosperity and growth, and enjoy a standard of living and access to services that mirror urban centres. Some suggestions were specific to rural areas, while others focused on northern regions. Often, given the dependence of some rural and remote communities on resources, comments were made about the needs of the agricultural, forestry, fisheries, and oil and gas industries. Witnesses presented the Committee with a variety of suggestions for improving the prospects in Canada’s rural regions. Among these was a proposal to increase federal consideration of rural issues through the creation of a federal rural affairs department with a minister who would champion rural issues in Cabinet and who would work with other federal departments in a coordinated approach so that all government programs and directions would be analyzed through a rural lens. In the view of witnesses, the proposed department should also lead the development of a long-term vision for rural Canada that would promote economic development while appreciating the unique challenges that exist. Adequate resources for, as well as greater influence on government priorities by, the federal Rural Secretariat were also encouraged. B. Cellular and Broadband Networks A number of witnesses commented on cellular coverage and broadband access in rural regions, and urged a levelling of the urban-rural playing field. One proposal involved the creation of a one-time tax credit for households that would reduce the costs of digital connectivity equipment—personal computers as well as broadband internet connection equipment—and/or its installation, regardless of service provider or technology. It was argued that such a credit would “drive” competition and innovation as well as provide significant benefits to the rural labour force. Witnesses also spoke about a national rural broadband adoption strategy that would, in part, have health, education, government-service-delivery and economic development benefits As well, a federal campaign to encourage demand for, and adoption of, rural broadband was requested. The Committee was also told that the government should consider a “public good” model in awarding spectrum licences in rural Canada. According to this proposal, the government should auction rural and urban licences separately. In arguing that a limited number of subscribers and current policies that promote facilities-based competition in rural areas have led to wasteful duplication of infrastructure investment and restricted affordability, it was recommended that the government examine actions by foreign governments in assisting the construction of a single, strong network in rural and northern areas for cellular and broadband. Such an approach would, according to witnesses, stimulate competition regarding services rather than facilities, since a single advanced optical and wireless broadband network can accommodate a number of competing services. Finally, witnesses said that public-private partnerships may be particularly useful for rural and remote areas. Witnesses spoke to the Committee about the need to improve the quality of life of both urban Aboriginal peoples as well as those who live in rural and remote areas. They suggested that the government should consult Aboriginal organizations and then establish national targets, as well as renew and increase support for the Department of Canadian Heritage’s Urban Multipurpose Aboriginal Youth Centre initiative. Other suggestions included support for Service Canada’s Youth Employment Strategy programs, the urban-based Aboriginal Friendship Centre programs, the Chiefs Atlantic Economic Development Strategy and the Aboriginal Visual Culture Program in Ontario. As well, witnesses indicated that the treaty negotiation process needed improvement and urged the government to recommit to it. In their view, the mandate of federal negotiators should be expanded to include tax and own-source revenue, recognition of Aboriginal languages, a change to self-governance and fish resources. Other witnesses suggested that the government should limit rights to those detailed in the treaties. Witnesses were concerned about the level of direct transfers to First Nations, and proposed removal of the funding cap on core services, as well as the introduction of guaranteed funding escalators linked to revenues collected by all levels of government on a regional basis. They also supported a non-discretionary and secure system for fiscal transfers to ensure adequate, accountable and sustainable funding to First Nations governments. Moreover, they recommended adoption of a First Nations property act for those who want to opt out of the Indian Act reserve land system, and replacement of the Indian Act with direct treaty-based funding agreements negotiated between First Nations governments and the federal government. These measures could help to address Aboriginal poverty, which was noted by a number of witnesses. They suggested that the government support provincial, territorial, municipal and Aboriginal governments in their efforts to solve poverty and help to create a pan-Canadian strategy. The Committee was told about the problems and crises in a number of the nation’s agricultural sectors. Regarding the hog and pork sector, witnesses described the current situation as a “perfect storm” of factors that are affecting the sector as well as packing plants, feed companies, equipment dealers and veterinarians, among others. In suggesting that the current support programs have not met the needs of the sector, witnesses advocated the creation of an ad hoc rescue program and support for the sector’s strategic transition plan. They also encouraged the development and implementation of a campaign to increase consumption of Canadian pork, with proper product identification in stores. Finally, witnesses requested that a firm, independent of the government and the pork sector, be funded to conduct a study of the competitiveness of the nation’s pork industry compared with that of other countries. The cattle and beef sector was also highlighted by witnesses, who—in respect of particular provinces—advocated a cost-shared program of direct assistance for the sector, leading to long-term sustainability. A per-head payment contingent on, or aimed specifically at, long-term sustainability ideas, such as water well development or specified-risk-material disposal, was noted. Mention was also made of the enhanced ruminant feed ban regulations that exist in Canada. Witnesses urged support that would offset the cost of these regulations, which make Canadian producers relatively less competitive. In their view, this assistance should continue as long as Canadian and American regulations in this regard are different. Federal support for slaughterhouses, which face increased costs in managing specified risk materials, was also encouraged. Comments were also made about grains. For example, the Committee was told about a proposed centre of excellence for grain crops, which would bring together leading university and government scientists, as well as coordinate academic, government and industry science, in order to position Canada as the international centre of excellence in cereal grains and the supplier of the highest-quality grain products in the world. Federal support for the proposed centre was advocated. With increasing demand for food that is grown using environmentally responsible practices, witnesses urged the government to reward farmers for producing food in a sustainable manner, specifically through reduced production insurance premiums for those who currently use “green” agricultural practices that tend to reduce production risks. Similarly, consumers are demanding safe food and, in this regard, witnesses advocated federal support for improved food safety technologies. Finally, recognizing that control of microbial activity is crucial for the hog and pork sector as well as for public health, witnesses encouraged federal support for stakeholders and producers. They indicated that stakeholders should be commissioned to compile a regional disease profile where there is a higher incidence of health issues, and suggested that producers should implement measures to reduce microbial activity within their region. Initiatives related to agricultural land were also proposed by witnesses. The Committee was told that an agricultural gifts program, modelled on the Ecological Gifts Program, would provide incentives to donate productive farmland or agricultural easements/covenants/servitudes. Moreover, it was suggested that the Home Buyers’ Plan should be amended to permit young farmers to withdraw funds from their registered retirement savings plan for a one-time, tax-free purchase of a farm, land and/or capital. A number of the Committee’s witnesses spoke about the role played by federal research, development and innovation in the agricultural and agri-food industries. In arguing that Canada is uniquely positioned to be a “global leader” in agri-food innovation but—at present—appears to be a “reluctant follower” because of the current regulatory system, witnesses suggested regulatory changes that would allow new products and traits to move smoothly and predictably into commercialization. In particular, witnesses said that reforms to variety registration, resourcing and refining for plants with novel traits, novel foods and novel food regulations are critical, and advocated a modernized regulatory system that—while in no way compromising Canadians’ access to safe and healthy food—is more responsive, predictable and efficient. Support for federal departments to ensure the needed modernizations to the regulatory system was encouraged. Enhanced federal support for basic public research in agriculture—in some cases specific to the production conditions in particular provinces or to certain agricultural products—was advocated, as was a broadly based tax incentive—such as a tax credit—for farmers who purchase certified seed, since there is no incentive to invest in the development of new varieties if farmers do not regularly buy certified seed. The need for a succession plan to replace retiring federal public service scientists was also highlighted. As noted in Chapter 3, the Committee was also told about a proposed non-refundable vintners investment tax credit. The proposed credit would provide Canadian wineries with an incentive to invest in their operations, which would create jobs and support economic development. The proposed credit could be carried backward and forward in time, be based on a proportion of eligible infrastructure and capital asset expenses, and be applied against federal income tax payable for the taxation year during which the investment is made. Other suggestions related to agriculture were also made: an amendment to the Income Tax Act to ensure that all large farming organizations are treated fairly and that all Hutterite colonies are able to sustain their way of life; linking advance payment program rates to farm input costs and adjusting them with reference to Statistics Canada’s Farm Inputs Price Indices; an end to meat products inspection fees associated with federally registered meat processing facilities; and elimination—or, if not, a significant increase in the cap—of the restricting farm loss regulation. Witnesses also supported: agricultural programs that are responsive and sufficiently funded; opening up the Agricultural Flexibility Fund to business risk management programs, with additional block rather than ad hoc funding as well as sufficient flexibility to respond quickly to emerging regional priorities as well as to fund projects from agricultural producers and associations; single-desk buying and selling of Maritime-grown feed grains for Maritime-grown hogs and cattle; diplomatic efforts to ensure that Canadian agricultural products are not excluded from markets as a consequence of country-of-origin labelling requirements in the United States; a better-funded Agricultural Flexibility Fund that is truly flexible and permits the use of funds for provincial income security programs; and improvements to the AgriRecovery program, including coverage of short-, medium- and long-term losses. Witnesses told the Committee about the current difficulties in the forestry sector, and made suggestions related to the sector. For example, the creation of a financial incentive for woodlot owners to complete silviculture treatments and conduct sustainable harvests was suggested through proposed amendments to the eligibility and earnings criteria for federal income supplements, allowances and benefits, with conditions that would have to be met. An extension to the deadline for the Pulp and Paper Green Transformation Program was encouraged by witnesses, who argued that the current deadline risks the program’s effectiveness as companies give preference to smaller projects that can be completed by the deadline rather than the large-scale projects that may have the greatest energy, environmental and competitiveness benefits. Finally, in arguing that a two-year funding cycle creates uncertainty, the Committee was told that certain programs should be funded on a five-year basis in order to ensure that decisions are made with a long-term vision. The programs identified were the Canada Wood Program, the North American Wood First Initiative, the Value-to-Wood Program, the LEAF Initiative and the FPInnovations Transformative Technologies Program. Most comments received by the Committee in relation to fisheries focused on British Columbia wild salmon, which is declining in supply and—in the view of some—may be in danger of extinction. Witnesses advocated additional funding for the Pacific Region within the Department of Fisheries and Oceans (DFO) in order to expand and revitalize the Salmonid Enhancement Program (SEP) and to develop a “salmon master plan.” In their view, additional funds should be controlled by the regional office and should be earmarked for the stated initiatives. Furthermore, they believed that a stakeholder advisory committee should work with and advise the regional office on the best projects to undertake; the committee should also review all proposed projects and make recommendations on their viability in achieving the goals of an expanded SEP. A more general request for increased funding for the DFO, in part to ensure the continued survival and sustainability of British Columbia’s wild salmon population, was expressed. Particular mention was also made of salmon fishery enforcement, habitat protection, stock assessment and stock enhancement. Federal support to retire gillnet licences, which would reduce pressure on salmon stocks and ease tensions between native and non-native fishers, was also encouraged. Witnesses suggested that support should be sufficient to cover the value of the licence, lost revenue, and devaluation of boats and gear. G. Oil, Gas and Mineral Resources Witnesses spoke to the Committee about northern oil and gas issues. For example, a public review of the resource revenue regime related to oil and gas development in the Northwest Territories was urged. In the view of witnesses, the proposed review should provide an avenue for input from youth as well as three independent review bodies: a citizen’s assembly, an expert resource revenue reform committee and an avenue for public input. Four principles for reforming the resource revenue regime were provided: citizens first, meaningful public input, timeliness and transparency, and neutrality. Other elements of the proposal included broadly based input with stakeholders, public education materials, consideration of a non-renewable permanent fund into which a portion of revenues from oil and gas developments could be placed, and contemplation of the full range of issues, including devolution, employment, environmental and social issues, and infrastructure needs. In the context of rural and remote communities, witnesses highlighted public services, transportation access and systems, economic development, tourism and living costs, among other issues. For example, they noted that certain public services may be provided differently in rural and remote regions. For example, firefighting services are often provided by volunteers, and witnesses urged federal funding for the development of a plan to ensure that Canadians who reside in rural and remote communities have access to basic fire protection services. They also advocated increased funding for the Royal Canadian Mounted Police to provide policing in rural communities, and highlighted that it is not safe to have one-member stations. The Committee was told that tourism is essential to maintaining people, and a commercial presence, in rural and remote communities. Since small communities may not be able to afford matching funds, witnesses requested tourism development funding that does not require the community to contribute financially. Because of the relatively higher costs associated with living and working in Canada’s North, some witnesses urged an increase in the value of the Northern Residents Tax Deduction, which had the same value for almost 20 years until a recent 10% increase. As well, a change from zone B to zone A was advocated as a means of increasing the value of the deduction for particular Northern residents. The Committee believes that, increasingly, Canada’s rural and remote regions are experiencing challenges that must be addressed if these regions and their residents are going to contribute fully to a prosperous future. In our view, the federal role in positioning our rural and remote regions can be varied, encompassing the technological and other resources needed to ensure that rural and remote residents, businesses and communities enjoy a level of service equal to their urban counterparts, as well as the specific measures needed by sectors that are often found in rural and remote regions. Therefore, the Committee recommends that: The federal government continue to ensure increased broadband availability in rural and remote regions of Canada. Moreover, the government should examine measures that could be taken in order to encourage young Canadians to enter the agricultural sector, enhance the Growing Forward Framework, and increase income support for agricultural producers. As well, the government should implement a co-operative investment plan that would include the creation of a tax credit for members or employees of agricultural and employee-owned co-operative businesses that invest in their co-operatives. The government should also establish a $70-million repayable co-operative loan fund. Furthermore, the government should introduce an economic diversification program, similar to the measure eliminated in 2006, in order to support regional economies that have been adversely affected by the forestry crisis. As well, in order to assist companies in modernizing and in surviving the current crisis, the government should implement a loan guarantee program for the forestry sector modelled on the efforts of Investissement Québec. Additionally, the government should introduce a support plan for the fishing industry that would include assistance to the lobster and shrimp industry, assistance for repairs to small-craft harbours and a long-term plan for the fisheries sector. Finally, consistent with the jurisdiction of the provinces and territories, the government should increase the funding available to fire departments through the Joint Emergency Preparedness Program and should ensure that 50% of the funding is used by volunteer fire departments for the purposes of training and the purchase of equipment. The Committee recognizes that a great many—although certainly not all—of the nation’s Aboriginal peoples reside in rural and remote communities. In addition to the difficulties that exist in some regions, Aboriginal peoples and communities often face additional challenges. We believe that the federal government should address these challenges in order to ensure that our Aboriginal peoples can contribute to our prosperous future. From this perspective, the Committee recommends that: The federal government ensure that programs for Aboriginal Canadians are designed and delivered in a manner that addresses their health, education, housing, infrastructure, early childhood development and care, and other needs. These programs should respect their rights and governance concerns, be delivered consistent with the Canadian Constitution, be sufficiently flexible to meet their diverse needs, and permit funding allocations that reflect the relatively small population base as well as the size and geographically large and remote nature of their communities. Moreover, the government should revise applicable programs and procedures within Health Canada’s Non-Insured Health Benefits Program for First Nations and Inuit to allow independent dental hygienists to receive payment for the services provided to beneficiaries of these health benefits. Finally, the government should reaffirm its commitment to the British Columbia treaty process, to timely implementation of the West Coast Fisheries Review, and to updated mandates for Canadian negotiators on specific issues hindering treaty completion. V. CHARITIES, VOLUNTEERISM AND FOREIGN AID Charities and volunteers make an invaluable contribution to our country, providing assistance to those in need as an alternative or supplement to government services. According to a recent report by Statistics Canada, in the 12-month period covered by a 2007 survey, 84% of the Canadian population aged 15 and over—about 23 million people—made a monetary donation to a charitable or other not-for-profit organization. Canadians donated $10 billion in 2007, with religious organizations being the largest beneficiaries, followed by health organizations and social services organizations. Moreover, about 12.5 million Canadians—46% of the population aged 15 and over—volunteered during that same 12-month period, with almost 2.1 billion volunteer hours in 2007, often in order to organize or supervise events, raise funds, sit on committees or boards, and teach, educate or mentor. Finally, in 2008, Canada contributed US$4.73 billion in Official Development Assistance. The Committee’s witnesses commented on a variety of issues related to charities, volunteerism and foreign aid, including the important role that charities play and measures that are needed for them to continue their work, initiatives that could lead to more charitable giving and to more volunteerism, and to the role that Canada plays in providing foreign aid to needy nations. A. The Role of Charities and Not-for-Profit Organizations In speaking about the role that charities and not-for-profit organizations play in society and about their potential as engines of economic growth, particularly during times such as these, a number of the Committee’s witnesses advocated federal policies and programs that provide not-for-profit organizations, social enterprises and co-operatives with a greater role in economic development. Suggestions involved the development of mechanisms to include social enterprises and social economy organizations in all industrial development strategies, and recognition that communities may be best positioned to identify needs at the local level. Witnesses also argued for the adoption of a federal procurement strategy that would give an advantage to community-based businesses, including a legislative initiative to facilitate purchasing from social enterprises and a communications strategy to increase awareness of the benefits of such procurement. A number of witnesses spoke about donations of publicly listed securities to charities, in respect of which comments were made about a possible enhanced charitable tax credit that would include a 42% rate on the adjusted cost base of the security and the existing 29% rate on the capital gain. In the view of some witnesses, charitable giving would be enhanced if the current tax treatment for donations of publicly listed securities were to be extended to donations of real estate and land as well as to donations of private company shares. Regarding real estate donations, the Committee was told that real estate could include vacation, industrial, commercial and residential investment properties; principal residences, which are already tax-exempt, would not be covered. Two measures for charities to receive donated land were presented: the qualified donnee would receive all or part of the cash proceeds from the sale of the property and the donor would be exempt from capital gains tax on that portion of the real estate sale which he or she donated to the charity, or the donor could make an in-kind real estate donation that would enable the qualified donnee to retain the property for use within its mission. In an effort to attract new donors and to increase the level of donations by existing donors, a number of the Committee’s witnesses supported the creation of a “stretch tax credit.” The proposed credit would have a higher rate than that currently legislated, would be applied to incremental donations from year to year, and would have $200 and $10,000 of giving as relevant thresholds; charitable giving in 2008 would be used as a baseline. Witnesses believed that the government should proactively publicize the proposed credit in collaboration with charities, and undertake a five-year review to ensure that the proposed measure’s stated goals were being met. A more general request for an increase in the tax credit in respect of charitable donations was also made, as was a specific request for an increase for donations of cash over the current $200 threshold. Finally, the Committee was told that the effectiveness of tax incentives for individual charitable giving would be enhanced if complemented by other initiatives to increase access to investment capital. C. Access to Financing and Funding Witnesses indicated that access to capital is a particular problem for charities, social enterprises and similar organizations, since they are unable to access investment capital through traditional stock offerings and need fiscal or other measures—such as capital development funds with federal seed money—to access “patient,” or long-term, capital and financing. Also advocated was federal/provincial/territorial/municipal/donor cooperation in establishing community investment capital funds for patient capital, as well as the creation of a registered retirement savings plan-eligible tax credit for Canadians who wish to invest in community economic development investment funds operated by local not-for-profit organizations. The Committee was informed that while debt capital is available from commercial financial institutions, smaller organizations with multiple and unpredictable revenue sources cannot access it easily, which results in a need for unsecured debt in smaller amounts for operating and growth. It was suggested that the government should develop a regulatory framework that would encourage the growth of investment vehicles for social investors and should review the regulatory framework for charities. The provision of grants to support charities was also identified as a means of support. Charitable foundations were also mentioned by witnesses, who urged the government to review the current regulatory framework with a view to developing options that would enable foundations to use their assets in the service of donors, charitable organizations and communities. In their view, consideration should be given to the manner in which income tax and regulatory frameworks can be made more accessible and flexible for foundations without compromising the trust relationship between donors and community foundations. Witnesses also highlighted the need to extend the Business Development Bank of Canada’s loan guarantee program to co-operatives and not-for-profit organizations, as well as to review existing programs for small and medium-sized businesses to ensure that they are accessible to co-operatives and not-for-profit social enterprises. A number of the Committee’s witnesses urged full and expedited implementation of the recommendations made by the Blue Ribbon Panel on Grants and Contributions, particularly those related to multi-year funding, full-cost recovery, and reduced administrative burden when applying for, and accounting for, grants and contributions. Moreover, the government was encouraged to enhance support for grants and contributions programs that are best-positioned to help Canadians during the economic recovery. Witnesses highlighted the need for government departments to develop coordinated approaches in order to ensure access to sustained government funding and to initiate proactive measures that would significantly increase capital investment in the not-for-profit sector. As well, they proposed the expansion of investments in place-based poverty reduction initiatives operated by not-for-profit organizations. Finally, the government was urged to create an economic recovery fund to provide short-term support for public and private not-for-profit agencies and organizations, to be cost-shared with the other levels of government. According to this proposal, funding for a recession relief fund would prevent spending cuts to agencies serving vulnerable people, and increase assistance for settlement programs and the Homelessness Partnership Initiative. In arguing that the disbursement rule for charities is confusing, requires an “inordinate” amount of time to understand and implement, is unduly complex, makes arbitrary and excessive capital disbursement demands that ignore the realities of the investment market, and imposes a costly administrative burden on charities, particularly those that are small or rural, some witnesses urged elimination of the rule. In their view, following elimination, consultations with charities would then occur with a view to developing a new regulatory approach that would strike a better balance between public accountability for tax expenditures and flexibility for donors and charities to advance their charitable work effectively. Witnesses also supported a review of the regime in order to simplify it and make it more flexible. Moreover, the Committee was told that the rule should be eliminated for charitable organizations but retained for foundations. The problematic nature of the disbursement rule was mentioned by witnesses, both generally and in the context of the ability of land trusts to build land stewardship accounts. Particular comments were made to the Committee about: the need for government assistance to facilitate the development of a strong, national network/partnership of disability organizations that can set collective national goals; difficulties associated with a requirement for the not-for-profit or voluntary sector to provide matching funds in order to access federal funds; the need to amend the Income Tax Act in order to clarify the situation of donations to Charitable Remainder Trusts; the barrier faced by US residents when donating ecologically sensitive lands or conservation agreements; the benefits of extending the carry-forward provision for ecological gifts in Canada to ten years; and the need for bridge financing, as well as employment and training programs funded through departments, to recognize the contributions of not-for-profit and charitable entities as well as their employees. Witnesses provided the Committee with a range of ideas to increase volunteerism. Suggestions included providing post-secondary education tuition relief in return for volunteerism, increasing opportunities in the education system to demonstrate the value of volunteering and encouraging innovative leadership for new forms of volunteering. Furthermore, it was suggested that individual tax credits should be created for coaches and officials in order to offset a portion of the costs incurred for their training and certification. Also, the need for knowledge transfer and capacity building to recruit and retain volunteers was acknowledged, with a suggestion that the government invest in a Canadian volunteer support system for training, knowledge sharing, innovation and basic volunteer management resources for those at the grassroots level. Finally, a national goal of increasing the rate of volunteerism by a specified percentage over time was supported. Witnesses brought a number of foreign aid-related issues to the attention of the Committee. Some identified the requirement for federal spending in order that Canada can meet the goal of 0.7% of gross national income allocated to Official Development Assistance by 2015; an interim goal of 0.5% by 2010 was suggested. To reduce global poverty, witnesses recommended that Canada take the lead in promoting the creation of a tax on international financial transactions. Mention was made of the Official Development Assistance Accountability Act and its requirement that development assistance be transparent, rights-based and poverty-focused. As well, witnesses noted the need for debt cancellation and “more just” trade rules, and urged Canadian leadership in the Organization for Economic Co-operation and Development (OECD) Development Assistance Committee in promoting a greater role for civil society in delivering development assistance. Other witnesses urged the government to use its role as president of the G8 in 2010 in order to take concerted and coordinated actions in respect of reproductive, maternal, newborn and child health. Specific mention was made of the need for increased funding for, and an expanded scope of, the Initiative to Save a Million Lives. Witnesses also proposed that increased and sustained government funding occur for the Global Fund to Fight AIDS, Tuberculosis and Malaria. Finally, elimination of maternal mortality and morbidity worldwide was also identified as a goal, as was the creation of a Canadian international centre of excellence for women’s leadership in order to develop the skills needed for women to assume leadership positions in poverty-eradication initiatives in developing countries. The Committee believes that the country’s not-for-profit organizations and volunteers are valuable, both for individuals who need assistance and for people who are seeking to support their communities. We know that the need for charitable assistance is particularly high during times of crisis, and believe that the federal government has a role to play in encouraging charitable giving and in supporting charitable organizations. In our view, this support is needed in order to position charities and volunteers for the future role that they can play in society and the contribution that they can make. Thus, the Committee recommends that: The federal government examine incentives that would have the effect of increasing the level of charitable giving by businesses and individuals. In particular, the government should consider:
Additionally, the Committee is cognizant that, from the perspective of many in other parts of the world, Canada is considered to be a wealthy nation. For moral reasons, if no others, we believe that we have an obligation to help those in other parts of the world who are in need. Recognizing the suggestions made by such organizations as Results Canada, the Committee recommends that: The federal government make a commitment to providing increased and sustained funding for the Global Fund to Fight AIDS, Tuberculosis and Malaria. The government should also provide significant assistance to developing countries, with a view to achieving the Millennium Development Goal of 0.7% of gross national income devoted to Official Development Assistance. Vibrant artistic and cultural sectors contribute to communities, improving the quality of life of residents and making it easier for businesses to recruit and retain employees. In addition to the domestic contribution that is made, artists are also ambassadors, and play a role in promoting Canadian arts and culture abroad, which can have tourism benefits. Witnesses provided the Committee with their views about a range of artistic and cultural issues, and spoke about both existing and proposed program spending and tax-related measures. Their observations addressed a range of artistic and cultural forms as well as tourism and international marketing efforts. Like the existing tax credit for film and television production, witnesses advocated a tax credit for live performance, including theatre, dance and opera. Moreover, in the same way that film and television production tax credits operate in conjunction with such other support mechanisms as the Canadian Television Fund, it was suggested that the proposed live performance tax credit should be compatible with such other funding sources as the Canada Council for the Arts. Film and television tax credits were also mentioned in their own right. For example, the creation of a tax credit for films shot in Canada, applicable to full production costs, was supported. As well, changes were advocated for the Canadian Film or Video Production Tax Credit and the Production Services Tax Credit, including an increase in their value, broadened eligibility criteria, and the elimination of certain provisions and requirements. In urging tax fairness for artists, the Committee’s witnesses advocated a variety of changes, including reintroduction of income averaging over a period of time and a limited or full tax exemption for professional artists in respect of revenues earned on copyright and residual payments. Moreover, while a complete tax exemption in respect of grants and awards received by artists was urged by some witnesses, in the event that a complete exemption is not given, others advocated a limit similar to that which exists for royalty income. The Ministers of Finance, Industry and Canadian Heritage were urged to commission, and fund, an in-depth study of the benefits and costs of tax reform for artists. Furthermore, the Committee was told that the basic personal exemption should be increased to at least $30,000, that Employment Insurance and Canada Pension Plan benefits should be extended to self-employed artists, that incentives similar to the registered education savings plan top-up should be developed to encourage contributions to registered retirement savings plans and that artists should be permitted to deduct payments for an extended health plan from their income tax. Finally, to encourage the purchase of Canadian art, the creation of individual tax credits and the extension of interest-free loans were encouraged. B. Funding of Existing Governmental and Non-governmental Programs and Organizations A number of the Committee’s witnesses expressed their support for increased, indexed and/or permanent funding and status for a number of existing governmental and non-governmental entities and program. In this regard, particular mention was made of the Canada Council for the Arts, the Canadian Television Fund/Canada Media Fund, Telefilm Canada, the Canada Feature Film Fund, the Community Radio Fund of Canada, the Book Publishing Industry Development Program, the Library Book Rate, the National Archives Development Program, the Public Lending Right Commission, the Initiative for Equitable Library Access, the Museum Assistance Program, the Cultural Spaces Program, the Canadian Arts Presentation Fund, the Canada Music Fund, the National Film Board and the Department of Canadian Heritage. Finally, a permanent increase in its base budget and a long-term memorandum of understanding in respect of its appropriation were urged for the Canadian Broadcasting Corporation/Radio-Canada. It was also mentioned that the corporation’s board of directors should be appointed without political patronage, and that the board should be responsible for hiring and firing the corporation’s president. C. Print and Audio-visual Media Witnesses supported the publishing sector in terms of targeted funding to ensure the short-term viability of as many existing titles as possible and to help the sector through a period of transition; digitization support similar to that provided in respect of multicultural newspapers was also requested. In order to recognize the unique circumstances of business publishers, it was suggested that eligibility for the Canadian Periodical Fund should be expanded and that the Fund should be separated into five categories, each with unique criteria: consumer, business to business, community newspapers, scientific and religious. As well, digitization and dissemination of the nation’s documentary heritage were urged through support for the Canadian Council of Archives. Moreover, a more general request was made for a national digital strategy that would include support for new media production. Print media was supported in the context of a national reading strategy, and witnesses advocated a federal role in the second and third reading summits, which are expected to be held in November 2010 and November 2011. The availability of print materials in alternative formats—braille and audio—were supported by a number of witnesses, who noted that Canada is the only G8 country that does not provide annual support for the production of alternative-format library materials. Furthermore, support for a nationwide accessible public library network for those with print disabilities, as well as training and materials for librarians, were encouraged. It was noted that such a network could occur through a private/public partnership involving the Canadian National Institute for the Blind and federal, as well as provincial and territorial, governments. Mention was made that Library and Archives Canada could coordinate various elements of the proposed network. The Committee was also told about the strategic review of the Canada Post Corporation, and witnesses urged implementation of the resulting recommendations. In particular, it was indicated that the corporation should modernize its network, that its rates for letter mail should not be capped at two-thirds of inflation as measured by the Consumer Price Index, that it should review its approach to distance-related pricing for publications mail, and that its universal service obligation should be defined in a contractual relationship with specific terms included regarding the delivery of Canadian content magazines. Moreover, according to the witnesses, the new Canadian Periodical Fund should be implemented over a transition period rather than on April 1, 2010, and responsibility and funding for small press art and literary magazines should be transferred to the Canada Council for the Arts. As well, witnesses advocated assistance for all eligible community radio stations in order to support their continued presence. Particular mention was made of coordination and shared resources among Francophone community radio stations in minority communities as well as of radio stations in Atlantic Canada. Finally, in order to support international co-production, share risks and promote Canada’s brand on the world stage, the Committee was told that a fund dedicated to international feature film and television co-productions should be created, and that key international trade and promotion programs should be reinstated or created. The Committee received a number of proposals designed to promote travel and tourism in Canada. For example, a tourist card for foreigners was proposed. The proposed card, which could be purchased at border crossing points and airports, would permit the purchase of tax-exempt goods and services and would have a built-in lottery. As well, in order to promote travel in Canada by Canadians, the creation of an allowance that would defray the costs of transportation, accommodation, meals, etc. was encouraged; the allowance would be available for one trip annually. E. Cultural Infrastructure, Museums and Libraries Witnesses noted that much of the cultural infrastructure built in connection with the nation’s centennial in 1967 needs to be repaired, and shared their view that Canada’s sesquicentennial in 2017 would be an appropriate occasion to address the issue. In arguing for a coordinated policy and funding effort to maintain accessibility to cultural sites, the creation of a special, multi-year program for the country’s cultural and recreational facilities was urged. Cultural infrastructure was supported in the context of a national museum policy, which the Committee was told requires funding as well as a stable policy commitment. In arguing for funding for such a policy, witnesses noted that support for the Museum Assistance Program has been reduced and that the Exhibition Transportation Services initiative has been cancelled. Some argued for a revitalized Museum Assistance Program with revised and updated objectives, streamlined delivery and access to multi-year support. The creation of a Canadians supporting their museums fund was also proposed, with federal dollar-for-dollar matching of private-sector contributions of cash or securities, to a maximum amount and with a charitable tax receipt. Witnesses made a number of comments about public libraries, some of which were focused on the buildings themselves. For example, the Committee was told that there is a need to increase access for those with disabilities, to become more energy-efficient, and to incorporate the latest information and communication technologies. They argued for regulatory changes to encourage long-term sustainable infrastructure funding for heritage and cultural institutions through the Building Canada Fund; public libraries should be included in the initiative. Finally, in respect of new museums, restoration of historic buildings, and new cultural and performing arts facilities, a requirement to achieve at least a LEED Gold rating was mentioned. The Committee was also told that arts centres contribute to urban revitalization and economic development; a performing arts/cultural centre for a particular city was mentioned. A number of the Committee’s witnesses spoke about the marketing efforts that are needed to support artistic and cultural endeavours, both domestically and internationally, in order to publicize the nation’s distinctive cultural brand. In noting that international activities can be a vital component of a sound business strategy for artistic and cultural organizations, some witnesses supported a market access and development program, while others advocated a market access or development and innovation program. The particular expertise of the audience and market development activities of the Canada Council for the Arts was highlighted by witnesses, who also advocated cooperation by the Council with the Department of Foreign Affairs and International Trade in respect of cultural activities abroad. In an effort to assess the growth and nature of Canada’s creative economy, the Committee was told about the need for a partnership between the Department of Canadian Heritage and Statistics Canada in order to develop new statistical tools. The former department was also urged to collaborate more closely with the Canada Council for the Arts. Witnesses argued that management of arts promotion and distribution support programs should be given to the Canada Council for the Arts. As well, witnesses suggested that a number of initiatives should not be subject to strategic program review. In their view, these initiatives should include Library and Archives Canada and the Canadian Broadcasting Corporation/Radio-Canada. Moreover, in the context of the broadcasting sector, the removal of specific industry fees—notably, Part II fees and broadcast transaction fees—was supported, as noted in Chapter 3. As well, with the mandated shift from analog to digital technology, government support was requested. Finally, it was argued that a long-term vision is needed to prepare for a new generation of talent. In that regard, the creation of a mentorship/internship program for the cultural sector was advocated as a complement to a pan-provincial approach to arts education in primary and secondary school. In the Committee’s view, artistic and cultural undertakings enrich people’s lives and communities, and act as a recruitment and retention tool for employers. The contribution that such endeavours make have benefits both domestically and internationally. In positioning those in our artistic and cultural sectors for a prosperous future, we believe that efforts must be taken to support artists as well as such cultural infrastructure as museums. From this perspective, the Committee recommends that: The federal government make a significant investment in culture, for example by enhancing the Canada Feature Film Fund and the feature-length documentary fund, eliminating the Goods and Services Tax on books, providing a tax exemption for copyright royalties and increasing the budget of the Canada Council for the Arts. Moreover, the government should work with non-national museums with a view to developing a funding strategy for their long-term sustainability. |