[Recorded by Electronic Apparatus]
Tuesday, November 21, 1995
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[English]
The Chair: Can we come to order. The finance committee is continuing its pre-budget investigations.
With us this afternoon we have a distinguished number of Canadians representing various groups who have concerns, largely in the field of social policy: from the Assembly of First Nations and National Indian Brotherhood, Glen Rajack, chief financial officer, and Conrad Saulis; from the Caledon Institute of Social Policy, Sherri Torjman; from the Canadian Centre for Policy Alternatives, Bruce Campbell; from the Canadian Council on Social Development, Christopher Clark; from the Coalition of Seniors for Social Equity, Claude Edwards and André Lécuyer; from the National Association of Friendship Centres, Marc Miracle and Mathieu Courchene; from the National Association of Women and the Law, Martha Jackman; from the National Council of Women of Canada, Mary Nickson; from One Voice - The Seniors' Network, Andrew Aitken and Robert Armstrong; from the National Action Committee on the Status of Women, Sunera Thobani and Barbara Cameron; and from the Social Planning Council of Ottawa-Carleton, James Zamprelli.
We welcome you. Because of the large number of interveners, I would appreciate it if we could keep our opening remarks fairly brief so that everyone would have a chance, after which we will turn to questions from members.
Would it be Mr. Saulis who is going to start? Mr. Saulis.
Mr. Conrad Saulis (Assembly of First Nations/National Indian Brotherhood): Thank you very much for the opportunity to be here. In my native language, [Witness continues in native language].
The issue of finance is very important to the first nations of this land. Our aboriginal and treaty rights are of course the most important aspects that pertain to our lives. The federal government has primary responsibility in ensuring its fiduciary responsibilities and our aboriginal rights are protected and our social health and educational well-being are maintained and assured.
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The Chair: Thank you, Mr. Saulis.
Ms Torjman.
Ms Sherri Torjman (Vice-President, Caledon Institute of Social Policy): Thank you very much, Mr. Chairman, for the opportunity to be here today to share some of our views for your coming report on the budget.
I want to make three opening points. First, we have long recognized in our work the need to fight the deficit and the need to fight the debt, but we believe poor Canadians and low-income Canadians have already paid their share of deficit reduction - at least they have borne a disproportionate share - already through a number of means: through partial indexation of child benefits, through a lowered income tax threshold, through massive cuts to the UI program, and especially through the CHST. We're worried not only about welfare recipients, as you know, but about people with disabilities and how they will be affected through those cuts. So we do think poor Canadians have paid their fair share already.
The second point is that we want to reinforce how important employment creation is. I think this came out clearly in the numbers we saw last week. Statistics Canada released a report on poverty in the country and showed that in 1994 the poverty rates went down slightly. This was the result of improved employment. It shows clearly how employment and poverty are linked. We would encourage you to use those figures and to pursue the goal of employment creation, which we know has been important to you in the past. We have some proposals for that.
The final point is that we hope in the political pressures we face now Ottawa will not retreat from its spending power. The spending power has been very important. There are pressures to decentralize the country. We recognize that. Yet we feel the federal government is in the only position to ensure adequate benefits, equitable benefits, portable benefits, throughout the country. We would urge you not to retreat from your spending power at this point.
I would like to table with the committee a report we put out on November 10 entitled Lest We Forget: Why Canada Needs Strong Social Programs. It talks about the importance of the federal government and the federal spending power in national unity.
The Chair: Thank you, Ms Torjman.
Mr. Campbell, please.
Mr. Bruce Campbell (Executive Director, Canadian Centre for Policy Alternatives): Thank you, Mr. Chairman.
I'm here in my capacity as executive director of the Canadian Centre for Policy Alternatives, but also as one of the coordinators of the ``CCPA choices - alternative federal budget'' project, which is now in its second year. Its goal is to demonstrate that budgets are political documents, they reflect political choices, and it's possible to produce a budget within a credible fiscal framework that reflects a different vision of society, with a different role for government - one that truly reflects the priorities of strengthening social programs, reducing inequality, and reducing unemployment.
I have a couple of opening points. First, I agree with the Prime Minister when he said in October 1993:
- The Liberal Party is, indeed, quite persuaded that the monetary policies of the Conservative
government have been absolutely disastrous for the Canadian economy. We are convinced that
the ``war on inflation'' is at the very root of our economic problems.
You can continue to cut and slash, but as long as you don't take deliberate measures to reduce real interest rates down to or below the rate of economic growth, something that has not occurred for the last fifteen years, you won't be able to stabilize your debt-to-GDP ratio and you won't be able to reduce your unofficial unemployment rate much below 10%.
That's the first point. The second point deals with the question of fairness. The government's last budget touted its fairness. I would question that, and I would hope this time around there would be some real fairness.
For example, it cut $25 billion in direct program spending, much of which disproportionately benefits the most vulnerable, while it cut tax-based federal spending, of which there is roughly $90 billion, and much of which disproportionately benefits those with money by less than $1 billion. I ask if that's fair.
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In two budgets the government will have made annual cuts to UI of about $4 billion. Less than half the people who are now unemployed find themselves able to collect UI. That's down from 85% four years ago and it's getting worse. Now our UI system is among the least generous in the OECD.
Meanwhile, banks that earned more than $4 billion in profits last year were hit with just a $50 million temporary tax, which was less than 1% of their profits. I ask if that's fair.
I could give more examples, but I think I'll leave it at that for now.
The Chair: Thank you, Mr. Campbell.
Mr. Clark, please.
Mr. Christopher Clark (Policy Analyst, Canadian Council on Social Development): I'm here on behalf of the Canadian Council on Social Development. I'll keep my opening statements rather brief and to the point. Suffice it to say I'll outline several of the positions and the way the CCSD looks at the budgetary process.
One element is that of a balanced approach. We felt that last year's budget lacked some balance. I think what we're hoping for this year is a little more balance in how we achieve our deficit reduction goals. We don't at all question the need to balance the budget. It's more of a question of the priorities and how that's done.
The second element is that of the need to take seriously social investment and the need to invest in people, providing them with the supports and tools to be healthy, contributing members of society. We look particularly at families and children in this respect.
On the issue of employment, our concern is that the moment we start talking about employment, the discussion switches to employability. We have some problems with the connection that to increase someone's employability necessarily means they'll suddenly become employed. We have to look at the changing nature of work in the economy, the increase in non-standard employment, and in essence the ability of the labour market to provide people with the security they need. It's important to look at how to get people trained and increase their employability, but we also have to look at jobs themselves and the nature of the work that's out there.
I'll close this off with one final point, and that is the cumulative impact. We think it's important to look at the separate changes by themselves, but also to look at the cumulative impact of the whole host of changes that comes out of the budget and other government policies.
What we're seeing right now is cuts at all levels of government. Just as the federal government is cutting back in its areas of responsibility, the provincial governments are cutting back. We're now seeing the municipal level cutting back. There's a trickle-down effect from the decisions that are made by this body. We think it's important to look at the full impact there, to look at the impact of restrictive economic policies. When the government pulls out of the economy, does that hole naturally get filled, and what is the impact of that scaling back?
One last point I'll add is the CHST, and I'm sure we'll talk about this later. I think most of the people in the social policy community feel that social programs have taken their hit. They certainly took a big one with the CHST. We're looking at things like freezing the cash transfer. We're quite interested in looking at the nature of the formula that comes out of the upcoming negotiations and the degree to which we can establish a national framework, whether it's through standards, principles and objectives, and so forth.
I'll close with that.
The Chair: Thank you, Mr. Clark.
Mr. Edwards, please.
Mr. Claude A. Edwards (Co-Chair, pro tempore, Coalition of Seniors for Social Equity): Thank you very much, Mr. Chairman. We welcome this opportunity to be here with you.
I'm here as chairman of the Coalition of Seniors for Social Equity, and Mr. André Lécuyer is with me also. He is our spokesman in the French language on issues relating to our concerns.
At the outset I want to express my concerns with the manner in which this meeting has been structured. I noticed that the people who have given opening statements so far have not responded in any way that I can see to the questions that were asked in the letter we received from the clerk, which posed four particular questions we were expected to respond to.
What bothers us very much is the matter of trying to deal with four particular questions, which are very important questions but very lengthy. It requires a considerable amount of study and effort on the part of any organization to respond objectively and with concern to the nature of the questions.
Here you're posing questions to us when our resources are limited, but you and the government have all the resources, legions of tax lawyers, investigators, economists, researchers and so on. You're posing questions to us that we think are your responsibility - at least you have a proposition to put before people who want to consult on the issues.
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Not only that, we don't have the opportunity to acquire the necessary background material to which we might respond if it's not readily available to us. We can't help but feel that the consultation as laid out for this meeting today is somewhat farcical. It proposes a method in which to deal with these important issues, but within a very short timeframe. You have until approximately 5 p.m., which is a little more than an hour and three-quarters, yet a number of people around this table are expected to respond to these questions.
In the letter that we received from the committee clerk we were given four working days to come to this meeting and have answers to the four questions. Obviously that's insufficient time, because many of these questions could have been subjects for doctoral theses. Expecting us to respond with our limited opportunity is just too much.
We have our own concerns. We wanted to bring matters before the committee that are of concern to us. We're quite happy to deal with matters that are of concern to you, but it's difficult for us to do it within that timeframe.
The Chair: I don't know what is preventing you from bringing those matters before us. If you didn't want to deal with the suggested topics you certainly could have brought your other concerns before us, Mr. Edwards, and you still have that opportunity.
Mr. Edwards: We have a brief that we wish to leave with the committee.
The Chair: We would welcome your views if you ever want to give them to us.
Martha Jackman, please.
Ms Martha Jackman (National Association of Women and the Law): In the few minutes allotted to our opening remarks, I wish to convey the deep concern of the National Association of Women and the Law, or l'Association nationale de la femme et du droit, about the recent direction in federal social spending policy.
As you know, the 1995 budget repeals the Canada Assistance Plan and adopts the Canada health and social transfer in its place. When NAWL appeared before your committee in late November last year, we were given no indication that such a major change was being contemplated. In our presentation to your committee, we underlined the crucial role CAP has played in ensuring a national infrastructure of programs and services to address the poverty in which too many women and children live.
We reminded you that women are disproportionately harmed by federal social spending cuts. There is no sign whatsoever that such gender-based concerns were taken into account in the decision to repeal CAP or to adopt the CHST. Rather, the CHST has every potential to worsen the circumstances of low-income women in Canada and to increase the relative inequality of women as a group.
As your committee is aware, the CHST abandoned CAP's shared cost approach, which guarantees that federal welfare dollars are actually spent on the welfare programs and services upon which so many women rely, programs including support counselling and shelter services for survivors of sexual violence and domestic abuse, legal aid, financial and other supports for women with disabilities, subsidized child care for the working poor and social assistance itself.
In addition, the CHST abandons national conditions that have existed for almost 30 years under CAP, conditions that ensure women and men in all parts of the country have an equal right to assistance when in need, a right that is not contingent upon discriminatory judgments of individual deservedness.
In our view, this change in federal spending policy is fundamentally at odds with Parliament's and the federal government's constitutional obligations under sections 7, 15 and 28 of the Canadian Charter of Rights and Freedoms. It is incompatible with Parliament's and the federal government's constitutional commitments under section 36 of the Constitution Act, 1982, and it violates Canada's international undertakings under the International Covenant on Economic, Social and Cultural Rights, the Convention on the Elimination of All Forms of Discrimination against Women and other international human rights agreements ratified by Canada.
In NAWL's view it is imperative that the CHST be amended to include the conditions necessary to ensure that federally funded welfare programs promote rather than undermine women's social and economic equality. We will table with the committee this afternoon our specific recommendations with regard to the required reform of the CHST. We hope to have a further opportunity to discuss these recommendations with you, as we believe the finance committee and finance department are now playing a pre-eminent role in the social spending process.
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The Chair: Thank you, Ms Jackman.
Mary Nickson is next.
Ms Mary Nickson (Constitution Convenor, National Council of Women of Canada): I represent the National Council of Women of Canada, which is a large umbrella group of organizations across Canada. I'll give a quick overview of the things we normally respond to in the budget, and then I'll answer your questions.
On inflation, we support the government's anti-inflation focus.
On the deficit, we see the federal debt as a major problem, and we urge the government to move as quickly as possible to a balanced budget. However, we do recognize that economic and social changes must always be made at the expense of someone, and that changes must be sufficiently gradual to avoid undue hardship.
On taxation, we're against increasing tax rates, but we believe the tax base might be somewhat broadened.
On non-profit agencies, whose grants are being cut so much, we recommend that tax credits be given and that they be maintained. These groups are important to the nation and need tax concessions; however, we recommend a review of the regulations under which Revenue Canada grants charitable status, and we recommend a much greater use of non-profit agency contracts.
On the OAS, NCWC has traditionally opposed the use of family income for taxation purposes, but if the government adopts the program of the 1995 budget to base OAS clawback on family income, then our council strongly urges the government to ensure that the lower-income spouse be not affected by a clawback until the higher-income spouse has paid back the total benefit.
On the public service reductions, we're in sympathy with the government's cutting, but it would appear that the payments have been overly expensive and we recommend that cuts to the public service be much more shared with shorter hours of work and employment sharing programs.
On the question of where federal priorities should lie, for the budget as a whole the priority must be with economic functioning. For social programs, the priority must be the control of matters that overlap provincial boundaries, setting standards of health, education, welfare, child care and ensuring sufficient funds to implement them.
What programs are of low priority? All social programs should be reviewed, and those not providing high social and economic value should be at least temporarily cut. The reviews should be done by outside agencies such as the auditor general, possibly with volunteer help from outside groups such as our council.
We have no developed policy-setting priorities, but we suggest starting with the numerous training programs that have not provided long-term jobs for the recipients, the high use of consultants and the mandates of some federally funded organizations.
What's best left to the provinces? In normal times the council would like to see the federal government in partnership with the provinces for most social agencies. However, at a time when there must be fairly widespread cutting of expenditures, we believe the emphasis must be on finding and servicing families or people with severe unmet needs, and this requires decentralization. In many cases municipalities would be best able to decide what's essential, although they'll still have to meet provincial standards.
We believe national standards are absolutely essential to families more readily moving across the country, to upholding the traditional Canadian social system, and to providing for universal fairness. Standards must be set in consultation with provincial representatives and interested groups, and the federal government must have the ability to enforce the standards.
Is the government spending an appropriate amount on social assistance? We would require a lot more information to tackle this question, but we are concerned about the distribution of funds within the allocation. There must be greater emphasis on prevention of social dependency, providing job-oriented education and training, making child care available and encouraging employment sharing.
I think that's most of the questions. Our council's policy on most of them is limited because we have to go back to our membership and get agreement on everything first. These are things that we have to think about before we come.
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The Chair: Thank you very much, Ms Nickson.
Mr. Armstrong.
Mr. Robert Armstrong (One Voice - The Seniors' Network): Thank you, Mr. Chairman. We at One Voice represent a broad constituency of seniors from all across the country and in every province, and we're concerned about their broad health and welfare, questions of medication and of consultation with physicians. It's a very broadly based organization.
We are pleased to be here today. We think it's an important process. It's a mature and open consultation, and it's impressive in its own way.
I didn't stay on this morning simply out of curiosity. I've been a long-time student of Parliament and its procedures, and I've been very close to this process, though never having held elected office. I regard this as an important channel. It's important as you approach the Department of Finance, which is certainly the most powerful administrator in Ottawa. Of all the government departments nationwide, it is pre-eminent.
With respect to the questions, what is the federal priority?
[Translation]
I believe that Canada must be defined in all its beauty and poetry,
[English]
- as this emblem says, from sea to sea - to give it form, to give it shape and purpose, and to begin that work very, very soon. We can't say that more strongly and with more emotion.
Seniors are very attached to the country. We understand what Team Canada is about. That was spoken of this morning. We have been there, and many of us helped bring this country to where it is. I know you share our views on that.
With respect to the broader questions on social programs, in our mind these are essentially philosophical issues. We think the government is not an end unto itself. Mrs. Stewart was on this question this morning. The government is for the people; the people are not for the government.
You pushed us into redefinition of what democratic government is, and over the weekend we had to go to our J.A. Corry and other books on democracy in Canada. We find there that the notion of it is to develop the personality of each of us in our own country in our own way, and we do that. That's why we give the resources to people who are invalids and people who are ill. We're not making any apology for social programs, and there's no magic equation to say it's 60% or it's 40%.
With respect to change, we know what that is all about. We've been there. We're not afraid of change. We're in the fourth quarter of our days and we don't fear that either. At our age, frankly, you don't fear that much, but you can be concerned.
In a broad sense, in policy and programs there is a season. To all things there is a season and a time. Our time, particularly on the pension issue...seniors cannot make up changes that affect security of income - I think that's really quite obvious - nor will those who follow closely behind us. So to approach that, you have to do it in a very gradual way. That's really what we're saying. We're not saying don't ever touch it. We're not saying that it's sacrosanct. We're saying you have to do it slowly, gradually, and openly.
We don't think the budget is the appropriate vehicle for such changes. The reason is this: if you touch the pension question in the budget procedure, it's necessarily piecemeal, ad hoc in nature.
Secondly, there is a review under way of the pension system, and the inference is that no change will be made until that review has been completed. Sadly, that is not what has happened. Significant changes were made in the last budget to the pension system.
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The third related item is that the ways and means procedure, which is what the budget path is about, doesn't allow you to get the scrutiny that those issues should have. Public bills have their own path, as you well know. I'm perhaps the only non-member in the room who actually reads the Standing Orders. It's a very arcane procedure sanctioned by history and, of course, the Standing Orders. But things get into that big package, if you will, and they get out of sight.
We think you don't want to do it that way. We think some officials sometimes are very impatient and they say, well, we'll just put it in and it will get by. But I don't think you want to do that, particularly in this instance. That's the traditional way these matters are dealt with. Tax changes are made that way. But we would like you to bring this out and let it be in the reform package and not in the budget package.
That's really all I have to say at this time.
The Chair: It makes a lot of sense, Mr. Armstrong.
Ms Thobani, please.
Ms Sunera Thobani (President, National Action Committee on the Status of Women): I'd like to begin by thanking you for giving us the opportunity to appear before this committee.
I'd also like to remind you of the positions that NAC has taken in the past. We have always drawn your attention to the gender make-up of this finance committee, and again we have to raise the question that two members out of fifteen are women on this committee.
The Chair: What do you want us to do about that?
Ms Thobani: We would like you to increase the number of women MPs who actually sit on the finance committee. We have raised this periodically -
The Chair: How many should we be?
Ms Thobani: Given that women are 52% of the population of this country, 50% would be very nice, actually.
The Chair: I wish we could get that many in Parliament.
Ms Thobani: I think we have to work harder at that, but I think there certainly could be many more on this committee than there are at present. NAC has always made this point, and I'd be remiss if I didn't remind you of this again today.
We have also in the past called for a gender analysis of the budget to address the unequal impact of the budget on women's lives. We have also called for a job creation strategy. We have asked that the fiscal crisis confronting the state today, the debt and the deficit, be addressed in terms of the loss of revenues to the government and creating a fairer taxation system.
We have also drawn your attention to the need to address high interest rates and have called for the Liberal government to deliver on its promise to create a national child care program.
But today our message is very simple. We feel that the country is facing an urgent situation, that last year's federal budget by finance minister Paul Martin today poses the gravest threat to the future of this country and to the unity of Canada.
The Liberal government has tried to push through decentralization and, in fact, is pushing through decentralization by using the federal budget. This is completely undemocratic. The Canada health and social transfer will actually result in decentralization and will mean the end of the country as we know it as every province decides for itself which social programs it will fund and which it will not, which entitlements and obligations it will actually meet for the citizens in the provinces and which it will not. We feel this is a far graver threat to the unity of the country.
NAC wants to stress to you today that we need an open and democratic process if the government is going to fundamentally alter federal-provincial relations and that the federal budget is not the mechanism by which this should be done.
We're calling on this committee to call for stopping the implementation of the Canada health and social transfer, which is due to come into effect in April 1996. We would like to see this committee and the Liberal government state a clear commitment to a strong role for the federal government in social programs.
Thank you.
The Chair: Thank you, Ms Thobani.
Mr. Zamprelli, please.
[Translation]
Mr. James Zamprelli (Director General, Social Planning Council of Ottawa-Carleton): The Social Planning Council of Ottawa-Carleton is a private non-profit agency headed by representatives of our local community.
The Council keeps members and the general public informed of issues affecting the social and economic welfare of the community. It supports public policies which, in our view, contribute to the quality of life in our region.
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[English]
We're a little different from the other groups in that we're a local regional group. However, our work continually looks at the ramifications and the perspectives of federal and provincial policy on our local communities. So we're more on the ground specifically in terms of what decisions taken from above - if I may put it that way - can affect the capital region.
I'm speaking as a resident of the province of Ontario, where certainly the question of what is best left to the provinces is one for which the answer right now is staring us in the face. The course the present Government of Ontario is taking to dismantle our provincial social safety net is astounding. Those with any modicum of common sense - as is so often brought up about common sense - on how such important decisions must be made on our social and economic future can only conclude that leaving it to the province is not necessarily in the best interest of the social and economic health of our society.
Destabilization of our social service infrastructure, taking money out of the hands of those who need it the most to survive, and contributing to a growing trend of job loss in our labour market, is what leaving it to the province has meant in Ontario.
The leadership of the federal government, in mutually defining and maintaining with the provinces national standards for social programs, remains paramount in our opinion. As a matter of fact, the council made a presentation to this committee last spring on Bill C-76 in which we affirmed the need to continue with national standards and emphasizing the federal government's role as important and distinct in creating, sustaining and enforcing standards of service, delivery and adequacy of Canada's social programs.
As to the issue of those most in need, which is also addressed in one of your questions, one can only become extremely cynical about this remaining truly a continuing commitment on the part of government.
Again, our experience in Ontario shows just the opposite effect. Those most in need seem to be those most in line for cuts to their income, for hardships by withdrawal of services and supports from housing, day care, and other areas, and certainly those most in need seem to be those most stigmatized by the notion that they're really modern-day pariahs of our society.
Therefore, what is appropriate for social spending, or should social spending be sacrosanct? We would quote from a document prepared by the Social Planning Council of Metropolitan Toronto and others on last year's federal budget, and in response to the question of appropriateness, we would say that preserving the bonds of nationhood means paying for Canada's social programs.
The issue is, either we commit ourselves to paying for them and make a commitment to democratic development as evidenced by people's growing capacity to participate and contribute to society, or we allow a drift to the polarization of society as evidenced in the society to the south, our American neighbours, a society increasingly marked by marginalization, exclusion and desperation.
The Chairman: Thank you, Mr. Zamprelli.
Last, who's going to make the presentation - Mr. Miracle?
Mr. Marc Miracle (Executive Director, National Association of Friendship Centres): First of all, I would like to thank you for having the opportunity to appear before this committee once again. I recall being here last November with members of our executive committee to make a presentation, and despite the spelling of my name, as much as I would like to be able to produce a miracle and get this country out of debt, I'm unable to do that. Also, I apologize for being late.
I represent the National Association of Friendship Centres. We're an urban-based community of organizations, a collective of 112 friendship centres across the country. As you're no doubt aware, we deal with urban aboriginal people and provide a full range of programs and services as identified by the communities.
We have a balanced organization in terms of gender, and we're faced with some fairly substantial issues in terms of demographics.
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In this country, over 70% of the aboriginal population reside in urban communities.
We have an overwhelmingly young population. You should take into account that 57% of our population is under 24 and close to 40% is under the age of 15. Consider the impact this is going to have on our economy.
We have a government that's committed to creating a new economy, but in the creation of that new economy, it has to be based on people.
We have a young population, and we're willing and able to participate in the building of this new economy, but it's difficult when you look at sustaining community development, economic development, and social development in the context that we're faced with. We're faced with continual cuts. We've been underfunded, and it's a struggle.
We realize the struggle that the federal government has, but we would take the position that the responsibilities of aboriginal peoples in this country and the relationship we have are with the federal government. There's a growing concern within our constituencies that things such as the Canada health and social transfer are a diminishment of federal responsibility to aboriginal people. It's definitely going to have an impact.
We struggle with understanding the overall concepts in trying to communicate that to our membership and the people who are in the cities so they realize the implications of this move the government is now taking.
It is a decentralization and a devolution. It's interesting that our association is involved in a number of specific areas, such as our funding base with Canadian Heritage. We're involved now in a program transfer negotiation process that would put control in aboriginal hands over our funding. But it is an offloading of responsibility. There's also a fear from our membership that the federal government is attempting to diminish its responsibilities.
In the same vein, I think what we're asking for and what we expect is to really have more tangible control over our own lives in developing and designing programs and services in a way that's going to meet our needs in the cities and establishing stronger linkages, not only with the federal government where it's appropriate, but with provincial and municipal governments, and with our own people, whether they're on reserve or off reserve or in rural and isolated communities.
A reality we face once again is the fact that the migration is not going down. People are coming into the cities for a whole host of reasons. I think that if the federal government was able to stabilize its commitment to urban aboriginal people and sustain that over a longer period of time instead of this successive level of cuts, our ability to build and create healthy communities and be productive members of this society....
Say you put that responsibility and control in our hands. At least within the friendship centre movement, we've been able to deliver.
The Chair: Thank you, Mr. Miracle.
Could we begin the questions, please, with Mr. Silye?
Mr. Silye (Calgary Centre): Thank you, Mr. Chairman.
Thank you, everybody, for attending and giving this committee your ideas on the direction in which the next budget should go. I'm glad to see that all of you basically have touched on the fact that the debt is a problem. You recognize that the debt puts severe limitations on funds that are available because of the high servicing costs of that debt. It's putting a lot of pressure on what is available with other funds.
So given that we all share this problem and given that all of us here want to help those in need - those most in need sometimes have unmet needs - what I'm looking for are solutions and suggestions as to how that money can get to those people.
I campaigned as a candidate in Calgary Centre. This is my first experience in politics. I saw the people who would come into my campaign office. The disabled would come in and say they're not getting help. There are some 30 programs available from the federal government for that area. Seniors came in and said they only had a small cheque, so how could they live on this small amount?
I know of all the other assistance programs, the income supplements, and what's happening here.
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Take the people who walk the streets, who are just down and out. I can see them in Calgary Centre. They're not getting the help.
When I started to get involved, I realized that 67% of our expenditures are on social programs in this country, out of $126 billion. So if all the government does is cut just on the business side of things and other programs and doesn't address social spending, you'll never get to a balanced budget. Also, some of these social programs don't have fixed amounts. They are open-ended. Therefore, the cost keeps spiralling.
I see inequities in unemployment insurance and in welfare payments and subsidies.
This is what I would like to know. I have a question for four different individuals who made presentations: Ms Torjman, Ms Jackman, Ms Nickson, and Mr. Zamprelli.
I'll go quickly, Mr. Chairman.
Ms Torjman, what should UI be? Should unemployment insurance be an insurance program that is fair and uniform across the country? So for this amount of payments, when you're unemployed, you get this amount in benefits. Then after that, if you don't get a job, you go on welfare. Or should it be just a social program?
Right now, it's both insurance and a social benefit program. But we have a social benefit program as well called CAP, which is soon to be the health and transfer program.
So there are a lot of inequities in UI, the way it is right now. We collect premiums from people in parts of the country where unemployment rates vary. The minimum contribution rates vary. The benefits vary by 5%.
If you're willing to address this area, in your opinion, how should unemployment insurance be adjusted to make for a much simpler, more effective program that will satisfy that particular problem of unemployment?
Ms Torjman: First, I just want to comment very briefly on your observation that social spending is increasing. Yes, in fact, it has increased despite the cuts that have been made.
There are two major reasons. One is the recessionary times. Social spending goes up in a recession, which is really what it's supposed to do. The other reason is demographics.
So we have to look very carefully at the context and not simply say that social spending has to be cut because it's going up. There are some very good reasons for that, and I just want to put that context in place.
With respect to your question on unemployment insurance, we have put out some material in the past on proposals for unemployment insurance. Basically, we feel that unemployment insurance should be a true insurance program. It's trying to fulfil too many kinds of roles right now in terms of income supplementation as well as a pure insurance. It should return or revert to a pure insurance.
But we don't want to see people going on welfare after that point. We don't feel that welfare is appropriate. In fact, in some of the material we've prepared, we've proposed dismantling the welfare system. We would prefer to see some kind of federal income-tested system after a certain period of time into which employable welfare recipients and people who had exhausted their UI benefits could go, if necessary. That would be associated with some form of training and employability enhancement.
We also think that in most or many parts of the country it's not employability only that's the problem, but employment creation. The supply of jobs is a very important component, and that money has to be invested in community economic development.
One of the things we would like to see is a requirement for certain corporations, including banks, to reinvest money in their local communities for the purpose of employment creation.
I know this is a difficult area, but we have a precedent for that in the United States. We don't often look to the U.S. for examples of things we can do in social policy, but this is one area in which we think it's really worth while looking into, especially when three of them will be claiming profits of more than $1 billion and their profits are being generated through the wealth coming into through local communities. That wealth is coming out.
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So essentially, we should have a smaller social insurance program, another component that would help get people off welfare but that would serve long-term unemployed people as well, and then investment in job creation.
Mr. Silye: Thank you.
Ms Jackman, you pointed out in your presentation that you believe in a balanced budget and you believe the government should work toward a balanced budget.
You didn't mention that in yours? Do I have you confused with Mary?
Ms Jackman: Yes.
Mr. Silye: I'll just skip right along to Mary, then.
Ms Nickson, the presentation you made and the responses you gave to the questions as presented by the standing committee I find very useful, and in some cases very provocative. I hope certainly the government members of this committee take a close review of this, because I feel some of your suggestions do solve some of the problems of the pressure of raising funds for social spending, how to rationalize it, who should be running it and who should be doing it.
There are two areas you've touched on that I feel are good and would just like you to elaborate on a little bit more. One is the section in which you talk about the non-profit agencies. You recommend a review of the regulations under which Revenue Canada grants charitable status. As we know, there are anywhere from 67,000 to 77,000 charitable organizations. You feel, and I feel as well, those who are set up as a legitimate organization should be tax exempt.
What recommendations do you have in terms of what constitutes a charitable organization? Who is qualified? Who should be qualified to raise money? Aren't they competing? We have two seniors groups here today, and there could be more across the country. Where would you recommend that the government look for changes in this area?
Ms Nickson: We were asking that they all be reviewed to find out which ones are beneficial, which ones are fulfilling an actual need that's widespread across the country. We're worried about them. Our group also belongs to a non-profit agency group, and we're feeling....
All these groups, of course, are getting less money, and we're really wanting the ones that do fulfil a mandate to get a good tax concession, which is the real problem. But there are just so many of them. Some of them are not doing what they were set up to do. They may be fulfilling something that's useful, but in these times, when there are a lot of cutbacks, we think you could be much more rigorous in deciding which ones are useful to the economy, which ones are doing a job the federal government would like to do but can't because there aren't enough funds.
Mr. Silye: In the area where you answered the question of what areas are best left to the provinces, you indicated that you'd like to see both levels of government involved, but that at a time when we have to look at spending cuts or spending restraint, an emphasis should be on finding and servicing families or people with severe unmet needs. This requires decentralization; in many cases, municipalities.
I've been seeing that a lot in Calgary. I see the people in the areas and I know where the money should go and who needs help. I am closest to that. I see that when I'm there. A group of people there 24 hours a day, receiving x amount of funds that are available through it, no matter who collects it: I think that is a very good suggestion - along with the standards, however. You qualify that with the national standards being set by the federal government so that's it's accessible, portable and people can move around.
The criteria you set, though, for what social programs, how they should be prioritized, is on the basis of social or high economic value. Could you elaborate on that?
Ms Nickson: That really was the question we gave to our people, and that's what they recommended.
We are a little concerned, you see, about income tax figures, that they're not good right across the country. A lot of adjustments could be made to get at the real needs.
So when we're talking about this, some of the things that were set up.... There was one committee, and I think it was set up to.... We were very hopeful it would look after training, bring together the unions and management and government and education, and we'd get the training needs set. Instead, they've turned out a lot of reports, nice economic reports, which might be useful but they're not, in terms of what we thought was going to be done, of prime concern.
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So a lot of those are looked at. We can't judge on all these organizations, but looking at what they are doing now, we really feel they have to be reviewed.
Mr. Silye: My final question, Mr. Chairman, is to Mr. Zamprelli.
The Harris government, as we all know, has cut their welfare payments to recipients by 22%, to levels that still represent, according to the finance minister there, Ernie Eves, an amount 10% higher than in the rest of Canada. Single parents with one child appear to be extremely upset, claiming that if their benefits go from $1,200 per month down to $900 per month, they can't live on that in Toronto or the Toronto area.
By giving more money to those who genuinely qualify for social benefits and then, say, especially with welfare, where you are capable of working if there's work, creating that dependency to stay because they're in an area where it's hard to get a job or it's more expensive, does that not create a dependency to stay in that area versus leaving that area and coming down to the valley here, where $950 in Ontario might go a little further? There might be a job around here versus none in the Toronto area.
So my question is, by adopting the philosophy of giving more in areas where there's high unemployment and giving more where costs are higher, are we not creating a dependency to keep people there, which in the long run hurts them by reducing the pressure to allow them to be more mobile and go into other areas?
Mr. Zamprelli: On the issue of the 22% reduction and the claim that we're still 10% higher than the national average, I think that's playing with numbers. In all instances, welfare incomes traditionally have been below the poverty line, or the LICOs, the low-income cut-offs. What we're seeing in Ontario, as has been said elsewhere, is a race to the bottom in the sense of bringing down the quality of our support to people who need it in Ontario, based on a national average that in its own right was never adequate anyway.
On the issue of adequacy, we've always supported giving people an adequate income. We at the Social Planning Council and other groups have done studies on what is adequate to survive. We've done market basket studies, for instance, looking at what it takes to pay for housing, to pay for food, to pay for normal amenities of life here in the region. When you measure that against what people are getting under the old system, before the 22%, most of them fell very much short of what was absolutely necessary.
On the question of mobility, I think what you're saying is that instead of continuing to pay people incomes in high-cost regions, if you reduce the income, it's going to give them an incentive to move elsewhere. But I think the issue here is that people on low incomes and people on social assistance in terms of their own means are not extremely mobile in terms of paying for moving, uprooting themselves, going elsewhere. Notwithstanding that, we are seeing trends in, for instance, B.C., where they are claiming that they are getting the casualties, if I may put it that way, from Alberta and even from Ontario.
So on your theory of creating incentives for people to move to the valley, for instance, I just don't see that working. The issue is to give to people where they are - and most people cannot move; they do not have a level of mobility - an adequate income, one that meets the real cost of living in that area, whether it's the province, the region of Ottawa-Carleton, Toronto, or whatever the case.
I think the Government of Ontario has taken a decision to just cut across the board without any consideration of the real issues of affordability.
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The Chair: Thank you, Mr. Zamprelli.
Mr. Crête, s'il vous plaît.
[Translation]
Mr. Crête (Kamouraska - Rivière-du-Loup): I would like to thank the interveners for their presentations. I have the impression of seeing, if not the same people, at least the same organizations that we heard from last year during the social program hearings of the Human Resources Development Committee.
I think it would be interesting for the Finance Committee and the Human Resources Development Committee to hold joint meetings so that their respective members can be sensitized to the need for unity of action.
My question is directed to all of the interveners, although it concerns more particularly the comments made by the representatives of the Caledon Institute of Social Policy, the Canadian Council on Social Development and the National Action Committee on the Status of Women.
These three organizations raised the question of accountability and responsibility. There was also mention of the federal government's spending power, of the impact of cutbacks and of the need to avoid decentralization, given the negative examples seen in certain provinces.
I would like to hear your comments on the problems we are having with the existing system in terms of evaluating government efficiency. Indeed, Canadians have long been given the impression that the federal government has an almost limitless ability to come up with money, whereas the provinces do not enjoy the same spending power.
The present-day reality is quite another matter. Money is a rare commodity and because of past experiences, you seem to think that the provinces would not be able to display the same generosity as the federal government if they were made fully responsible for certain areas. I'm interested in what you have to say about that subject.
How can there be fair accountability in a system where the government that collects the money is not the government that spends it for the benefit of the public? When the federal government slashes budgets, the provincial governments are the ones that feel the pinch. The best example of this is the ongoing health care reform in Quebec. We find ourselves in a position where the Quebec government could face criticism from Quebeckers because of cuts to transfer payments. The public does not see the link between government efficiency and how that government is evaluated. I would be interested in getting the participants' reaction to this statement.
Mr. André Lécuyer (Co-Chair, pro tempore, Coalition of Seniors for Social Equity): Could we know the political affiliation of the committee members?
Mr. Crête: I'm a member of the Bloc Québécois, the Official Opposition.
Mr. Lécuyer: I apologize for my ignorance.
Mr. Silye: I'm from the Reform Party.
Mr. Lécuyer: Yes, I understand. The Chairman is always a Liberal.
The Chair: Would someone care to respond? Who will begin? Ms Torjman, perhaps?
[English]
Ms Torjman: I think you have to look at the issue of decentralization within the context of fiscal capacity. I don't necessarily mean in actual dollars, because I know all governments now have deficits and debts. What I mean is the ability to raise revenue and distribute it throughout the country. That's been the importance of the federal spending power: that ability to generate revenue and to spend it and to ensure Canadians throughout the country have access to benefits that are equitable, adequate, and portable. Only the federal government has had the capacity to do that. In the area of income security in particular, we see a very strong federal role.
About social services, by contrast, and health care, we know those are in provincial jurisdiction and provinces in some cases can do a very good job of delivering those services.
We worry about a number of things, one of which is the fiscal capacity to provide an adequate level of services. We think in some provinces there clearly is not this fiscal capacity. That's where, again, there is a federal role: to compensate for fiscal imbalances throughout the country.
Did you want to comment before I finish? Sorry.
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[Translation]
Mr. Crête: I don't understand why you say the provinces would not have the necessary fiscal capacity. Of course, if spending power is left in the hands of the federal government which continues to collect money through taxes, it's the federal government that will have this fiscal capacity, not the provinces.
Shouldn't the government that is responsible for collecting taxes be responsible as well for those areas for which it collects taxes?
[English]
Ms Torjman: One of the possibilities is to allow more revenue-generating capacity on the part of the provinces. But we still think there would be fiscal imbalances, based on the current revenue of provinces. There is a problem in that area right now, which is why we have equalization payments.
Our second concern has to do with ensuring relative equity in the delivery of services and their availability throughout the country. That doesn't necessarily mean they have to be identical in every province, but there should be at least some reasonable capacity to provide services. Again, equalization was not intended to do that. It was really much more for infrastructure. That's why we feel there is a federal role to be played in offsetting or compensating for those fiscal imbalances.
So in income security we see a very strong federal role.
In health and social services we see a role by the federal government in the area of conditions. We're very concerned about maintaining federal money in the CHST arrangement. We were very pleased to see that this committee recommended that federal cash be maintained in the formula. We were delighted to see that in your last report and we would hope you would reinforce that. We feel that's absolutely essential to maintaining any federal conditions.
[Translation]
The Chair: Mr. Crête.
Mr. Crête: Yes, unless there are any further comments.
Mr. Zamprelli: I would like to respond to the question on responsibility. We agree that social responsibility should be shared by the two levels of government. To a certain extent, we can talk about decentralization. As Ms Torjman said, the federal government has a very important role to play, particularly if we wish to maintain a minimum level of service across the country and guarantee to Canadians a similar level of service from coast to coast.
As for the generosity of the provinces, let me take Ontario as an example. Personally, I don't think - and many people likely share my opinion - that the provincial government is very generous. Rather, I see it as a government prepared to penalize those who are already victims.
Therefore, I have a hard time believing that a provincial government would preserve a vision of Canada. Maybe other provinces are more progressive and willing to respond to the needs of the community without penalizing some of its members. However, I believe the federal government must continue to play a leading role.
Mr. Crête: Are the results that we are seeing today not due to the fact that in the past, equalization was used primarily to bring about economic development rather than to ensure its transfer?
Today, we see for ourselves the rather devastating results of equalization programs. Since the federal government no longer has the means to administer this prescription to the other provinces, it must devise another development model.
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The Chair: Would someone like to respond?
[English]
Mr. Armstrong.
Mr. Armstrong: I think the model has served us very well, and maybe it's time to look at it and find new machinery. I think it was the envy of many countries that we had a system of equalization. The suggestion not to have it will mean to withdraw from the periphery of the country and have everything located in the centre. I think it was effective, but it should be looked at, as everything should be looked at. I think it was a rather innovative idea.
The Chair: Thank you.
Mr. Saulis.
Mr. Saulis: I'd like to offer some comments as well.
With regard to the present system and to the new system that we're hypothetically talking about or that is emerging, one of the major concerns first nations people continue to have is our lack of involvement in discussions on an equal footing with the federal and provincial governments. Historically and traditionally, of course, treaties were signed with first nations, government to government. Somehow along the way in the history and development of this country, first nations people have been marginalized and cast aside. Our issues are considered not as important and our opinions and our views are considered as being tertiary and marginal as well.
One of the goals that first nations governments have is to re-establish that government-to-government relation, which we have never seen dissipate from our perspective. The social health and education realities of our people in our communities are the worst in this country and have been compared to those of Third World countries. Obviously the present system is not working to the benefit of our people. Any proposed changes, whether they be to CHST or other transfer arrangements, must and should include first nations in a government-to-government discussion and not as just an interested party.
The Chair: Thank you, Mr. Saulis.
[Translation]
Thank you very much.
The final respondent will be Ms Thobani.
[English]
Ms Thobani: Thank you.
I'd like to respond to several comments you made, the first one being about the responsibility and accountability of governments. We feel very strongly that the Liberal government has no mandate to be radically transforming federal-provincial relations through the federal budget. When the question of accountability comes up, it's very clear to us that this has to be done through a process that includes Canadians in the whole debate.
We also feel very strongly that the Liberal government ran on a platform of job creation and protecting social programs. Again, when we come to the question of responsibility and accountability, there are many Canadians who do want to be involved in the whole discussion about any changes, especially in how to make our political systems more accountable to us.
In terms of less money being available, I think everybody agrees there is a problem with the debt and the deficit. The question is what is the most equitable way to be dealing with this question of less money. For us, cutting back social spending is not the answer. That is dealing with it on the backs of the poorest, the most vulnerable, and the most powerless people in our society. So that's something we reject.
In terms of the relationship with the provinces - and you mentioned Quebec - our position has been very clear. Quebec has a different relationship with the federal government, and aboriginal peoples also should have a different relationship in terms of the delivery of social services, but in the rest of the country we want to see federal standards be attached to funding. These standards should be implemented and upheld by the federal government.
For those of us who live in Ontario, what is happening right now is traumatic enough, but if the Canada health and social transfer comes into effect, Harris would have carte blanche. Think about what that will mean, not only for Ontarians; that will also be the face of the rest of Canada if the Canada health and social transfer comes through. So we are very, very concerned, which is why we have decided to focus on the Canada health and social transfer and to call for a democratic process, which is desperately needed in the country right now.
The Chair: Thanks, Ms Thobani.
[Translation]
Thank you, Mr. Crête. We will now hear from Mr. Campbell.
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[English]
Mr. Campbell (St. Paul's): Mr. Chairman, I'll resist the temptation to inquire as to why the rest of the country needs national standards, but not Quebec.
Ms Thobani: Federal standards is what I said.
Mr. Campbell (St. Paul's): Yes, I understood you.
Ms Thobani: I didn't say national, I said federal.
Mr. Campbell (St. Paul's): Then I repeat - why does the rest of the country needs federal standards, but not Quebec?
The discussion this afternoon, Mr. Chairman, has been fairly constructive. As a member of the committee, I want to thank our interveners this afternoon. It's wonderful to see all of you together.
We had a panel of business representatives this morning, and I want to close the circle on something I began this morning. I said that since we were not in actual dialogue - people with the views you have expressed and the views we heard from the business community this morning - maybe we can engage in a bit of virtual dialogue. If those business people were here this afternoon, they would say that many of you have spoken quite eloquently about how we go about this exercise.
Everyone accepts that we have a problem, but the issue is how we solve it. You've asked us this time around to err on the side of staying away from further cuts and adding more to the burden that in your view has already been placed on certain sectors of our society, and you eloquently expressed the impact. So you've asked us to balance fairness, but if the representatives who were here this morning were here this afternoon, they would ask if you meant higher corporate taxes, because they can't bear that.
If you do that at this time, you will snuff out whatever jobs we can create. You have to look at Canadian corporate taxes being competitive with American corporate taxes, and you have to look at total taxes - payroll taxes, land taxes and the range of taxes that the corporate sector bears, and on that comparison we are not out of whack with our major trading partner and with other nations. So they would ask how you can ask them to absorb higher taxes. That can't be an answer unless you want to snuff out even more jobs and put an even greater burden on the social safety nets.
[Translation]
The Chair: Mr. Lécuyer.
Mr. Lécuyer: I'm very happy that you raised this question, but I'm astounded to hear that this committee met with a panel of business representatives and is now asking us to try and explain where social program cuts should be made.
Wouldn't it be better - and that's precisely where I'm going with this - for persons interested in the financial side of the question and for those concerned with maintaining social programs to work together to explore the various options available? I'm having trouble with this, because in the past four years, I have been asked twice by the former government and twice by this one to come and have my body examined, if you will. You're like surgeons standing around an operating table in the emergency room and your sole mission is to amputate all of my limbs.
I believe that you are fair-minded individuals who want to explore ways of finding additional sources of revenue, apart from making cuts. Governments are never willing to discuss this subject. They always want to talk about cutting, slashing, destroying, eliminating and tearing down, without ever asking us to examine the situation in an effort to find out whether other revenue sources exist.
You know full well that there are other sources of revenue out there, but it takes political fortitude to tap into them!
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For example, one source is the entire range of business subsidies. Do they generate the necessary profits? Have they truly helped to lower unemployment? Are they merely handouts to businesses? For example, would the government have the courage to contemplate adding one per cent to banking or stock-market transactions to generate several billion dollars? Has any thought been given to a minimum income tax? What about tax shelters that amount to approximately $23 billion in lost tax revenues?
I believe I have made my position clear. I merely wanted to know whether you were concerned about such matters. Obviously, you do discuss these issues, but with business people, never with us. You seem to think that we cannot help you to see the light at the end of the tunnel!
[English]
The Chair: Mr. Campbell.
Mr. Campbell (St. Paul's): I don't know if the chairman wishes to respond. There are others who wanted to speak to this issue.
I didn't want to leave you with the impression that we engage in one debate with you and another debate with another group. I'm playing devil's advocate here, giving you their perspective, as this morning I gave what I anticipated to be your perspective on their comments that business couldn't absorb any more taxes and we should meet tougher deficit targets. I didn't want you to misunderstand that.
Mr. Chairman, there were others who had their hand up and who wanted to speak. I would just ask this gentleman if he thought those changes could be made without any impact on employment in this country.
The suggestions raised about additional taxes, and the other suggestions made - would they have an impact on employment, in your view?
[Translation]
Mr. Lécuyer: What changes are you referring to?
[English]
Mr. Campbell (St. Paul's): The 1% tax you recommended; and you had a few other suggestions.
[Translation]
Mr. Lécuyer: In fact, there are many other possible sources of revenue. However, each time we raise this issue, the Finance Minister gives his standard response: if we do anything that affects these individuals, who are already favoured by the system, they will move to the Caribbean or to Switzerland.
If that's how these people think, they are not good citizens. Perhaps they should start working on their patriotism! They cannot always think about getting gifts without ever accepting any responsibility.
Mr. Campbell (St. Paul's): Would this have an impact on employment?
Mr. Lécuyer: It certainly would.
[English]
Mr. Campbell (St. Paul's): There were some others, then, who wanted to speak.
Mr. Clark: I'd like to respond specifically to the question of whether or not these taxes would have an impact on jobs. In many cases I'm sure they would. But something we also have to recognize is that many of the most profitable companies aren't creating jobs. In fact, they're the companies laying the most people off. At a time when six of the largest banks are looking at $5 billion in profit, I think it was, every one of those banks is laying off thousands of employees: the Bank of Montreal, CIBC....
Mind you, this is as a result of a lot of things: changes in technology, changes in the structure of organizations. But I think the frequent implication that to give money to businesses will lead to jobs and then at the same time to impose taxes will automatically lead to a loss of jobs is not always correct.
Again, we also have to look at the impact on jobs from some of these other changes. How do cuts to transfers to individuals affect economic activity and stimulus in the economy? If you give a person on welfare a dollar, pretty much a dollar goes right back into the local economy. We've seen that landlords in Ontario are upset now because they're not going to have people who can pay their rent. Local grocery stores, local places that sell clothing....
I don't want to get into this debate, because this is something I think we have from Mr. Harris.
Mr. Silye: They can lower the rent. Subsidized housing doesn't need $700 a month in Toronto. Lower it to $550.
Mr. Clark: As I said, I think I'll leave this for our provincial debates.
To get back to the federal issues, I'd like to expand the dialogue a bit. First of all, these questions are quite pointed, and I think they really narrow the discussion.
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If we're going to talk about dealing with the budget, one of my colleagues mentioned that the budget is all about choices, and I think that's what we have to remember - that there are always choices. This whole notion right now that there really aren't any choices, that the only way to deal with the deficit is to cut public spending or cut social spending in particular, is false.
In terms of a recommendation, I'll lead you to what the auditor general had mentioned. The auditor general for a number of years has called for a closer scrutiny of tax dollars lost through tax expenditures. Basically what he asked for when he appeared before the committee on public accounts earlier in the year was that a closer assessment be made as to what these tax expenditures are supposed to accomplish, how much they are expected to cost, and what they have actually achieved. If we're going to put the kind of pressure that we have on social spending, I think it's only fair that we put equal pressure on other areas of government tax spending, as it's called.
One thing that often comes up when we talk about tax expenditures is that people say, well, there are all sorts of behavioural impacts, and it's difficult to measure what they cost. I caution you that there are behavioural effects when you start cutting spending; there are multiplier effects. There are effects whether you're cutting tax spending or whether you're cutting spending in general, so to write tax expenditures off as an area that doesn't deserve attention just because there are behavioural effects I think is unfair.
Another area we've looked at at the Canadian Council on Social Development is the introduction of an inheritance tax. The emphasis right now is placed on taxing seniors or taking away benefits at later stages in their life. Everyone brings up the whole intergenerational argument. What we're looking at is a way to - I don't know how to say this politely - not nail them while they're there, essentially waiting until people have passed on. Estates are being passed on to families and so forth. If you really want to get money out of people, do it in a way that's least painful. We're one of only several countries in the entire industrialized world that doesn't have an inheritance tax. In fact, we had one years ago. We see this as a major way - some of the estimates are that it would raise about $3.3 billion annually.
The issue of RRSPs is a highly explosive one, and we always use caution when discussing it. What we try to do is make clear right off the bat that we're not looking at taxing RRSPs; what we're looking at is reducing the ceiling. The current increases in the ceiling - there are very few people who can actually contribute to those levels; you'd have to be making something like $75,000 or $80,000 a year. I don't know how many people sitting around the table can contribute $15,500 or $14,500 a year to their RRSP, and I certainly don't consider that the average Canadian could. So I think we have to look at that.
I have a list here, but I think I'll let other people speak. I'm kind of getting out of control here. Thanks for your time.
Mr. Campbell (St. Paul's): Mr. Chairman, there are a couple of others who have their hands up; I don't know what I've opened up here. I don't know whether you want to recognize them or if I should just conclude and move on.
The Chair: I'd like to go through to the other members and have their questions and then we'll give everybody a chance.
Mr. Campbell (St. Paul's): Everybody is getting a chance to wrap up, in any event, if you want to respond to what I mentioned.
In concluding, Mr. Chairman, Mr. Clark is quite right, budget-making is all about choices. But so is it about impact, as you quite eloquently explained to the witnesses here this afternoon. Changes that we have made on the spending side have an impact; so would changes made on the revenue or tax side.
The comment with respect to the profits leads me to ask what I often ask when we get into this debate; that is, whose money is it anyway? When we talk about the banks we're talking about widely held corporations, the largest shareholders of which are the pension funds, so we're talking about individual workers. The question is, have you asked them whether they're prepared to see their investment lessen in value by scooping more tax from the profitable corporations?
As for inheritance taxes, we always get into that discussion as well. We're hearing it again for the third time, Mr. Chairman, as we begin our third budget exercise. People have to bear in mind that there is a capital gains tax on death. Bear in mind also that most studies have shown that in order to generate the real revenue from inheritance tax that would have a real impact on our situation, the definition of who is rich or what inheritance you would have to tax is surprisingly low for this to have any meaning. Again, there will be impacts on the very same seniors that we were talking a moment ago about protecting. I just throw that out for what it's worth, Mr. Chair.
The Chair: Does anyone want to take one quick stab at it? Mr. Armstrong.
.1700
Mr. Armstrong: I think you raised very important points, because people on even very moderate incomes may want to do something with that. I don't want to be unduly personal, but I have no children and a plan to do something with modest funds, and I hope I will be able to do that. We live in a pluralist society and we all have people we want to give to and do things for. We would be very restricted. The government would have some money but one wouldn't be able to fulfill one's own goal of doing something useful for young people, which is what I have in mind.
I agree that we're not talking about millions, but it would be important for the people who might receive it, and then the opportunity would be gone and the bonding with the community would be gone. So I think you are raising important points.
The Chair: Ms Thobani, I now present to you the result of your representations to us last year. The number of women on the Liberal side of this committee has doubled, which is a 100% increase. We are now at 22.2%, far below your 52%, but if you keep up your efforts maybe we'll be over 50% within a couple of years.
[Translation]
Go ahead, Mrs. Brushett.
[English]
Mrs. Brushett (Cumberland - Colchester): Mr. Chairman, just to take the challenge one step further, Ms Thobani has indicated what we don't make up in numbers, but I can assure her that the women on this committee make up for it in quality.
Ms Thobani: I don't doubt that.
Mrs. Brushett: I want to explore your notion that we as a committee and as the Government of Canada have no mandate to present a responsible budget, or make a few changes in the way we do business. We make those changes with great responsibility, and we listen to the taxpayers. I believe we're elected to do this and therefore have a grave responsibility. I hear from the women in my constituency seven days a week, so there's no lack of communication. We are accessible and we are there. I challenge your view that we have no mandate and that what we are doing in responsible financial management is not within our authority.
Ms Thobani: Nobody would have a problem with that if you were focused on coming up with a responsible budget, if that is what was actually happening in the country. The Canada health and social transfer was announced last year. None of us had been consulted on that, and the devolution of powers to the provinces was one of the proposals in the Charlottetown accord that was resoundingly defeated by people across the country. That was a democratic process.
What we then saw was the Liberal government using the federal budget to push through this decentralization. That is what we're calling undemocratic and irresponsible, and that is the mandate that we're questioning whether this present government has.
Mrs. Brushett: With all due respect, I was elected through a very thorough democratic process, and the women of my constituency, as you indicated on previous occasions.... I don't know if it has been said today, but you've said that you represent the women of Canada. The women in my riding don't know your name. You certainly don't represent them 100%. Maybe there are a few, but they bring those concerns to me, their elected official.
When we talk about the Canada health and social transfer, I believe something like 90% of the Canadian public has requested that we stop duplicating and overlapping on programs, particularly on social programs. In the province of Nova Scotia, we share social spending with the municipalities, the province and the federal cost proponent. In sharing this, there are a lot of things we've been doing for up to 20 years that aren't working. Those same people who ask us to be responsible and bring in a responsible budget...such things as: should the state be responsible for the children of single parents when others have spent their time, money and tax dollars raising and educating their own children? Should we unload this on the state to the level that we have? The municipalities and provinces are telling us to give them the responsibility and perhaps they will have better results in serving our children and providing them with a brighter future.
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Ms Thobani: There is much that I want to respond to, but I know that NAC has been effective in putting its position forward. When the discussion degenerates into who does NAC represent anyway, that's when I know we have been effective.
NAC has never claimed that it represents the women of Canada. We do represent our membership, however, and it's on the basis of the policy positions our membership adopts that NAC makes this presentation to your standing committee. I want to make that very clear. I have never made the claim that NAC represents the women of Canada. NAC certainly does not represent you, for example, but we do represent our membership, and it is not acceptable that you would use such an underhanded attack on NAC's membership and NAC's constituency in this manner.
In terms of duplication of services, we all recognize that as an issue that needs addressing. But what your government is doing is destroying CAP. It's destroying the protections and entitlements that are contained inside CAP. Do Canadians know this? Have they given you a mandate for this? If they did, why have you pushed it through the federal budget? These are the questions I would put to you.
I think the issue you raised about single mothers on welfare is really...it is an example of politicians who feed the mean-spiritedness in our country today - I am able to raise my own children, so why should a single mother who is on welfare receive assistance from the state? This is a very mean-spirited mood that is calculated and is being manipulated by politicians, and I think your comments can be read within that context.
Mrs. Brushett: I think the interest of this committee and of all Canadians is the interest of our children. We have put a lot of money forward to try to serve our children, to feed them and get them educated, because they are our future and we're looking for results. This is where the great concern is.
I want to turn to our youth, because one of my motivations for being elected to Parliament was how to serve our youth. As we move into the 21st century, we have a great divide between the seniors population and youths. Many of our youth believe that seniors have wealth. They have had good lives for the most part, but they can't get jobs, have no future and have no hope.
The suicide rate among our youth, not only aboriginal but non-aboriginal youth, is very high. My heart aches when a young person calls me on a Saturday night, drinking or on drugs, wanting to know what I can do about a UI problem. I tell him that I can handle him on Monday morning, but that's the least of his problems. Let's look at your future. Where's that going to take you and what's out there?
Many of the seniors in my constituency, seniors who live on $12,000 or $15,000 a year in seniors housing, tell me they are living better than they ever have before. They have good food, good shelter and friends, but they are concerned about their grandchildren. That's their greatest concern.
What are we going to do about our youth? We don't have jobs for them. We are looking at job creation, but how do we do that and deal with this deficit so that we have something for our young people tomorrow?
The Chair: Ms Torjman, you suggested that you had some specific job creation ideas. Did you want to bring them forward in response to this?
Ms Torjman: The ideas were primarily with respect to community economic development and investing in local communities. I know that is only a tip-of-the-iceberg solution, but I think it's very important in an economy where we're losing a lot of jobs from the private sector.
We do not see the public sector as providing jobs, let alone creating jobs. We would like to see public sector investment in job creation, but we'd also like to see an investment in local economic development, through loan associations and loan funds. Actually, there's a lot of activity taking place in respect of some very creative forms of investing in communities, and I think we have to harness those efforts. I think we have to look at the creative ways in which we can bring capital into local communities and involve youth in businesses and in work. As I said, it's not the only solution, but I think it's a very important solution in many parts of the country, even simply as a stepping-stone from school to work or in helping people move off some forms of income assistance.
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To my mind we have to build on many of the creative types of initiatives that are under way at the moment with respect to providing capital to people for various forms of employment. One of our concerns, though, is that many of the jobs created through those initiatives are the so-called bad jobs, which don't have associated benefits or security or which provide low wages. This is where we feel the redistributive role of government is absolutely crucial. We have to continue to provide adequate child benefits, for example. This is an absolutely essential role, more so than ever because of the widening inequalities we're seeing between high-income and low-income people in Canada.
There are all kinds of possibilities for investing in economic development, but that doesn't mean the state is divested of a role in redistributing income through a progressive tax system and through appropriate benefits, such as an adequate child tax benefit.
The Chair: Thank you.
[Translation]
We have 18 minutes remaining before the bell rings. Each participant will have two minutes. There are still two members who would like to ask questions. With your permission, I would like to give the floor to Mr. Fewchuk.
[English]
Mr. Fewchuk (Selkirk - Red River): Thank you.
Good afternoon. My question is very simple. Do any of your organizations also go to the municipalities for assistance? Are your groups involved in asking local municipalities for support and assistance, as well as the provincial government?
The Chair: Mr. Zamprelli.
Mr. Zamprelli: The Social Planning Council has historically had assistance from the regional municipality, because the municipality sees citizen-based planning and advocacy having a direct impact on the work it does and the decisions it makes, in terms of setting priorities for the funding that it provides for social services, health services, etc. So yes, we do get funding from the regional municipality.
Ms Thobani: Some of our members probably do, but not NAC national.
Mr. Fewchuk: Thank you.
The Chair: Thanks, Mr. Fewchuk.
I'm going to propose that we keep going as long as we can, even after the bells have started to ring. That will give us more time to conclude.
Perhaps we could start with a summary from you, Mr. Zamprelli.
Mr. Zamprelli: We were told that we could use the time to quickly respond to Mr. Campbell's discussion on taxes. I just wanted to bring up that I find it rather ironic that the corporate community is complaining about its tax burden. Figures from the Department of Finance, the Government of Canada, show that in terms of corporate contributions to public revenues, Canada is one of the lowest, if not the lowest, of all G-7 countries, so I don't know what the issue is here.
As well, when we look at trends from 1980 to 1992, the only sector that benefited from a drop in taxes was the corporate sector, whereas the tax burden of low-income Canadians, such as a $20,000 household with two children, went up over 200%. So why are we talking about the corporate sector?
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My closing comment is that when you are looking at the 1996-97 budget, I would hope that the concerns expressed by most of us around the impacts.... I think the issue is whether government adequately looks at the impacts of its fiscal, or nowadays social, decisions. Are you, as decision-makers and as government representatives of us, doing enough really to assess what the impacts of your recommendations and decisions are?
Certainly here in Ontario the government hasn't shown any interest in doing any kind of impact analysis on rapidly changing the social infrastructure and on the kinds of decisions that have been made to dismantle it.
I would make the case that there should have been some legislated obligation to do social impact studies on fiscal decisions.
The Chairman: Thank you, Mr. Zamprelli.
Ms Thobani, please.
Ms Thobani: Yes. I'd like to take this opportunity to pick up on a few points.
I think after the Quebec referendum, if members of this committee are still questioning why Quebec should be treated differently from the rest of Canada, I think we're in deeper trouble than I thought when I entered the room. That's one.
Well, I'm referring to that as well, because that is one of the things.... During the referendum campaign, the federalists had nothing to say in response to the argument of Quebec sovereignists that independence was the only way to protect social programs. So I think if you're still questioning the need to do that, we're in deeper trouble than I thought. That's my point.
The second point I wanted to pick up on was the one that Mr. Campbell made about high corporate taxes. Let alone higher corporate taxes - if they actually paid what they need to pay, given our current taxation system, we'd all be a lot better off.
The Action Canada Network estimated that 63,000 profit-making corporations did not pay any taxes. That was submitted to you in one of our previous presentations.
We also listed for you how $20 billion is lost in revenues to the federal government. It was presented to you in the last submission we made to this committee. I would be happy to dig it out and send it to you again.
The third point I want to pick up on is the one made by Ms Brushett, and that is about caring for children.
I think it is very, very important to care for children. What we're talking about is the future of our society, which is our children. That is why we call upon you once again to come through on your promise to create a national child care program, because it is the children who do matter and they should be central in your considerations and in your deliberations.
I also think it's very important for members of this committee to counter the perception that somehow the interests of youth and seniors are opposed to each other, that somehow they will be fighting against each other. That really needs to be countered. What the youth of today need is no cuts to education. They need access to education. They need jobs. That is what this committee should be addressing rather than trying to play off the interests of youth against those of seniors.
I think the fundamental question before us today is what is your vision for this country? What do you think is the responsibility of the federal government? What are the rights and entitlements that you think the citizens of this country should continue to enjoy? That is the fundamental question you will be addressing when you are looking at the federal budget. We urge you to make these questions your central consideration: What is your vision for Canada today? In whose interests do you think you are making these decisions? Are they serving the majority of the people of this country? Those should be the guiding principles in your deliberations.
Thank you.
The Chair: I don't think we have any problems all agreeing to that.
Ms Thobani: Good. Please reflect it in the federal budget.
The Chairman: Mr. Armstrong.
Mr. Armstrong: Very briefly, I think I agree with the last part of what you've heard. I think it's a great challenge. I tried to say that at the beginning myself. You have to define the country. You have to lead it better. This is a very critical period, this great outpouring of love for the country, and I think everyone recognizes that.
I'm a Montrealer and I worked for many years. Well, it's true. As a young person I worked in Charlevoix for many years, and I'm as attached to the bas du fleuve as much as anyone and to the back country of Charlevoix. It's important. It's important to define the country, and the budget is a very important statement. It's perhaps the most important statement.
We don't want to pose as seniors - some of us are very young seniors - against the youth. Not at all. We are very concerned about poverty and youth unemployment and the lack of hope that people have. We don't approach you in any selfish way at all, but we do ask you to go slow. Slow it down. Think about it. You can make changes, but they should be gradual.
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We would like to see the paper on pension reform, and we should have a forum such as this. I agree with you. The joint committee should meet when that paper is ready. But I urge you not to move on pensions in the budget. It's not the vehicle.
Thank you very much, Mr. Chairman, for your patience.
The Chair: Thank you, Mr. Armstrong.
Ms Nickson.
Ms Nickson: It seems to me we're talking about most everything but the budget, and that the budget can't possibly do everything. Our council is still very concerned with the debt. Although we want national standards, we are not sure how far the government can go on other things, because it has to cut.
We want the government and the economy to be more productive with better skill development and a more cooperative society. Making spending more effective is very important.
We'd like to see all programs reviewed. Cut out ones that don't meet their purpose or if the purpose has been less important. We think programs must reflect the nature of the future economy, guard against polarization of income groups, and promote a quality of life that can be enhanced by making better use of the technological revolution that is taking place.
We're very much in favour of job sharing. Jobs have been cut. We've moved from losing jobs in agriculture to losing them in manufacturing. Now they're going from technological change. We're losing them in the service industry. So we really think the government should be trying to focus on employment sharing.
The other one is the training of the young people and making sure they get a cooperative training and that they're not left out.
But I think a lot of that has to be provincial, again, just with standards and cooperation.
The Chair: Thank you, Ms Nickson.
Ms Jackman.
Ms Jackman: Increasingly those of us who wish to discuss social welfare policy have had to become economists. In last year's brief, the National Association of Women and the Law, along with many of the groups represented at this table today, made numerous recommendations to your committee in terms of measures to increase access to federal revenues in a manner that would not be unduly disruptive of our economy or of national employment.
Instead, in last year's budget we saw a modest reduction of the upper level of RRSP contributions, and then an indexation of this tax-spending measure for the future. NAWL continues to maintain that disproportionate social spending cuts of the type represented by the CHST are unconstitutional in their disparate impact on women and the poor.
In the recently released federal plan for gender equality to which Sunera Thobani referred, the federal government confirmed its continuing resolve to progress toward gender equality, including implementing gender-based analyses throughout federal departments and agencies, including, I assume, the Department of Finance.
In NAWL's view, your committee and your Parliament's willingness to examine the CHST and other issues of federal social spending from a gender-sensitive perspective will be a true measure of your commitment to women's equality.
Thank you.
The Chair: Thank you, Ms Jackman.
Mr. Miracle.
Mr. Miracle: Thank you. Certainly from the National Association of Friendship Centres' perspective, I think there has to be a fundamental recognition of the federal responsibility to aboriginal peoples. There has to be a proper consultation with our communities, organizations, and with the people who are most going to be directly affected by the significant changes that are being contemplated by the federal government.
One of the things that one of the members mentioned was evaluation. Again, from our perspective, there really needs to be a much more coordinated effort between federal government departments in terms of how they deal with all of these proposed changes. In fairness, there needs to be an accurate and open evaluation on both sides of the equation in terms of business and social programs and their effect and how that's measured, and its effectiveness in how it's been applied.
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There are definitely choices. There are choices at least in dealing with our constituency in the urban areas that when we're faced with cuts and continual cuts - we're scheduled for another round of cuts in the next federal budget - it's going to amplify a bad and desperate situation. It's going to lead to more confrontation. It's going to contribute to that despair and hopelessness that the member spoke about.
If you look at it on the other side in terms of trying to create some stability in recognizing that there is an investment that's been made certainly within the friendship centre movement through some of our programming at the federal level, a recognition that when we have a specific role and an opportunity to chart our own future, we're able to demonstrate clearly that we're able to save the federal government and the provincial governments and the municipal governments money, that dealing with us in friendship centres is a good way of doing business and that we provide what the federal government has been seeking in the social security reform throughout our history.
For the last 40 years in urban areas we have done more with less. We've looked after our people when there hasn't been money. There's been a commitment from just a tremendous team of volunteers, both aboriginal and non-aboriginal. In creating that opportunity, that hope, it will be a better future, but if you don't have that fundamental respect and recognition going into any exercise - and not just with aboriginal people but with Canadians in need or who have an opportunity to contribute to what we are as a country - that's where we have to start. You have to maintain those principles and go from that point.
The Chairman: Thank you, Mr. Miracle.
Mr. Edwards.
Mr. Edwards: Thank you, Mr. Chairman. I have been singularly quiet in this whole discussion so far. I want to say that I appreciate the fact that the discussion has been much more far-ranging than I had contemplated by the questions posed and the letter we received.
Some of the things I'd like to just touch on are these. I certainly agree with Mr. Zamprelli with regard to the matter of corporation tax and what has happened there with the amount that is being paid by corporations versus the amount being paid by individuals and how that has changed.
I wondered to what degree the committee, in its discussion with business - since I wasn't present at any of this - questioned some of these statements of business people as to the accuracy or validity of the statements they had made. I would hope that your committee would examine those issues very, very carefully, because I think that in many cases people speak from their own position of advantage, perhaps in what they express, and I think that can lead to wrong conclusions perhaps by a committee.
Little has been said at this meeting this afternoon on the collection of revenue. It was amply demonstrated recently by the auditor general's report in Ontario that there is a considerably very high amount of taxes that remain uncollected as a result of evasion of the provincial sales tax, and if there is evasion of taxes with regard to the provincial sales taxes, then you can be sure those same evasions are being made with reference to the goods and services tax.
It's unfortunate that more effort isn't being made to collect those unpaid taxes and deal perhaps much more heavily with people who evade tax. That needs to be done and it's something that should be addressed by your committee.
I deplore to a degree that the budget process now has developed into expected changes in the matter of taxation and how income will be distributed and so on. This has a major effect on seniors because seniors are in no position to recoup lost assets or lost income. They're not like other people who may have other means of establishing higher levels of income. Usually once you reach that senior capacity, your income is generally at a level where your expectations are what you're going to receive on the basis of what your earnings were and investment earnings may be.
I think it's unfortunate that.... When we looked at the changes that have happened in the budget, going back to 1986, we listed about seven or eight particular changes where year after year after year there has been a further imposition - restrictions on income, taxation increases and so on - for seniors. We deplore that situation.
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Little has been said at this meeting on another issue that is going to come before Parliament.
I know you want me to speed up. I will, but let me touch on just one or two issues.
First, there is the matter of the clawback of old age security that's now being considered on the basis of universal income. Nobody has mentioned that particular situation. This is going to impact very heavily on many women who were not part of the workforce when the Canada Pension Plan came into existence and who did not continue in the workforce when the Canada Pension Plan was there. So they have contributed nothing to the Canada Pension Plan and they have no benefits from it.
There are marked changes, as you know, in the composition of the workforce now from what it was back in the 1960s. The majority of women are now in the workplace and can expect some benefits from the Canada Pension Plan. These people are going to be heavily impacted in a situation where they've waited for, or have some expectation of, an income that is their own, with their own cheques. They thought old age pensions were sacrosanct and so on.
The Chair: Thank you, Mr. Edwards.
Mr. Clark.
Mr. Clark: I'd like to just leave the committee with a couple of last thoughts - reiterations, actually. One of the main points is that the budget is about choices and priorities. I think it's really important that at the end of the day we don't just fall back and say that the bond raters made us do it, that we had no options, that everything was written in stone, that there was nothing outside of this one envelope of government control that we could have looked at. I think that's important.
Related to that, I'd like us to avoid the zero-sum game that pits youths against seniors. By assuming that we have this one single envelope with which to deal with our problems, it assumes that you must take from one group in order to deal with the situation, and that you have to pit the groups against one another. I think it's important that we look outside this envelope. I've made a suggestion that has been suggested a million times before - tax expenditures. Again, even the auditor general has been referring to this area of spending as open-ended spending. He has pointed to this area for a number of years now.
The Canadian Council on Social Development doesn't advocate all sorts of across-the-board tax increases. It's been mentioned before that we should collect the taxes that are actually due, close the loopholes that are out there, and collect the taxes from those who are not paying their taxes. If everyone was paying his or her fair share we probably wouldn't have to cut so deeply. I'd like to leave the committee with that thought.
I have one last point. It is often said that Canada is the best country in the world in which to live, one the UN points to as a model nation. I think what we have to remember is that this wasn't by chance. It was through generations of building a nation, through years of investing in social infrastructure, investing in people, and building a society that's the envy of the world. When we start tearing things down and breaking down the things we've built up over those years, we have to realize what the trade-offs are. The cuts will not happen without impact. There's a trade-off between investing and the kind of country you'll have.
If what Canadians want is to break down the infrastructure we have, I think they have to realize that they won't have the country they have now. I think we have to understand what we're getting into when we engage in that kind of dialogue.
My absolute final point is that the budget should pick up on this. If we have a vision of Canada that looks at investing in people, the budget, being an instrument of the government, should reflect that vision. There's more to the budget than reducing the deficit. It should articulate a vision of government.
I think I'd like to leave it at that. Thanks for your time today.
The Chair: Thanks, Mr. Clark.
Mr. Campbell.
Mr. Bruce Campbell: I was intrigued by Mr. Campbell's - no relation, by the way, or at least not to my knowledge - recounting of the hearing this morning, conjuring up visions of these bankers pleading poverty, that if you touch some of their expected $5 billion worth of profits they're going to kill more jobs.
Mr. Campbell (St. Paul's): Excuse me, there were no bankers there this morning.
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Mr. Bruce Campbell: There were no bankers. Anyway, that was the image that was conjured up. You took, what, $50 million a year away from the banks last year in the last budget and I guess another in this fiscal year. Surely you can do a little better than that. Surely you can ask - or force, I should say - the banks to contribute to their share, however you define it, to addressing the deficit problem.
We've been tracking a group of 50 BCNI companies, some of the biggest companies in the country, over the last 7 or 8 years. During this period, of course, when corporate tax rates keep dropping.... Corporate tax rates in Canada are very competitive. They're lower than the U.S. and they're well below the OECD average.
In any case, as corporate tax rates are dropping, what do we find these companies doing? We find them shedding jobs like crazy, from a combined total of 750,000 jobs to about 500,000 jobs in that period. So I suppose you could make a statistical correlation that as you lower corporate taxes you destroy jobs, and therefore if you start raising corporate taxes, they might want to create a few more jobs. I'm being a little facetious.
At the same time, the assets of this group we followed increased from about $150 billion to $250 billion, so it's not because they're hurting. If you look at corporate profits overall since the pit of the recession in 1992, you find that they've increased over 100% whereas wages and salaries have increased merely 7%. So I think there's some room there.
The Chair: I'm sorry, I'm going to have to ask you to speed up. We have only about five minutes left before we have to leave here.
Mr. Bruce Campbell: I have a few brief points. There's lots of room to address corporate tax subsidies and other tax subsidies, especially to wealthy Canadians. I think there's lots of room you can find. You've been focusing on direct spending. Put a little bit more emphasis on subsidies and spending through the tax system.
As one final point - or maybe I'll stretch it - you came in on a red book promise, which was to get the deficit under control, 3% of GDP, but on the basis that the crisis was a revenue crisis and not a spending crisis, and that the way you would do that would be through jobs and growth. You've done a complete about-face on that. I think you should re-examine that promise and look at ways in which you can get back to that kind of an approach, and there's no better way to start creating jobs than to address the question of monetary policy, the Bank of Canada's interest rate policy, and -
The Chair: Could I cut you off there, with your permission, Mr. Campbell?
Mr. Bruce Campbell: I'll leave it at that.
The Chair: Yes, Ms Torjman.
Ms Torjman: Very briefly, please continue to protect federal cash in the CHST. Please protect the CPP - we haven't talked about that, but it's a crucial social insurance and we don't want to see it dismantled. Please don't cut any more at the expense of the poor.
We have not recommended increases to corporate taxes because we feel that it's passed on to consumers, but we think there's a lot of room to move with respect to higher-income Canadians and recouping some of the expenditures there.
Please do not retreat from the federal spending power, and it's important not to confuse the federal spending power with duplication of services. Sometimes federal money is given, but it's to offset fiscal capacity, not to duplicate services, because we need strong social programs for a strong Canada.
Thank you for the opportunity.
The Chair: Thank you, Ms Torjman.
Last, Mr. Saulis.
Mr. Saulis: As I said earlier, the present system does not work in meeting the needs of first nations people. First nations and governments must join as equal partners in identifying how the Canadian federation can be changed to meet the needs of first nations people.
Furthermore, Canada has an existing constitutional obligation that is integral to the Canadian constitution to act in the best interest of first nations. Subsection 35(1) of the Constitution Act of 1982 further strengthens this obligation by stating that existing aboriginal and treaty rights of aboriginal peoples in Canada are hereby recognized and affirmed. First nations must have the capacity to administer their own programs and the capacity to design their own programs, specifically designed and tuned to meet their own community needs - the needs of their elders, the needs of their children and youths, and the needs of single parents.
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The Assembly of First Nations will continue to advocate for a firm bilateral relationship with the federal government. First nations will continue to maintain this as our goal despite the fact that presently the federal government policy dictates how first nations should provide services to their people. A number of administrative regulations have been implemented to require first nations' compliance, such as withholding of funds and the supervision of agreements with provincial governments.
While some first nations have accepted transfer of administrative authority, others have refused to participate on the basis that such developments are federal efforts to reduce its fiduciary responsibilities and that it is little more than delegation of administrative authority.
In the area of social assistance administration, first nations have been subject to a myriad of policies, standards and regulations that have often proved either unworkable or absurd. Empowerment for first nations means taking complete charge over our destinies in creating structures that will empower the people and involve their participation in decision-making and problem-solving.
The social and economic well-being of a people is largely determined by their ability to control their own health care, child welfare, housing, education and economic systems. First nations have gradually been stripped of such control and have been forced to become, for the most part, passive recipients of government programs and services. Any action whereby first nations exercise the inherent right to control community systems will be one of the most fundamental means of improving the well-being of our people.
The first nations, in the exercise of the right of self-government, are entitled to develop and implement policy and programs that address our distinct rights, freedoms, needs, traditions, knowledge and values as well as our social, environmental, cultural and spiritual development. We are also entitled to establish and maintain our own institutions and facilities.
Finally, social programs for first nations people are part of our inherent and aboriginal treaty rights. Such rights are not subject to fiscal restraint or to the current policies of political parties at either the federal or provincial levels.
The Chair: Thank you, Mr. Saulis. I think those representing Canada's first people have made a very eloquent plea for more control and more support for self-determination.
You were invited here to help us. It's not by accident that you were invited here. You represent the people who are at the bottom of the rung in many cases. You are the spokespersons for so many groups we don't want to see jeopardized in this very difficult battle we have of facing the deficit. You have all told us that we can't cut your programs. I understand that. Well, you haven't all; Ms Nickson has said this is a very complicated issue. We understand that.
You have presented us with some alternatives for not cutting but raising revenue: tax loopholes; minimum tax; a Tobin tax; an inheritance tax; corporate tax increases; end tax evasion; collect more of the taxes that are there; end business subsidies; higher progressive personal tax; and job creation. You've also said we could decrease interest rates.
Would you be good enough to send us details on each of those? It's not enough to say we should plug tax loopholes. Could you give us the particular loopholes you want to get rid of? Is it the political tax credit? Is is the credit for charities? Is it the credit for pensioners? Is it the credit for RRSPs? These are the things we need specifically.
We understand the principles. If we could find these funds we would gladly do it, because then we wouldn't have to cut you....
At any rate, thank you so much for being with us. We appreciate it. On behalf of all members, I thank you for your very important contribution to the toughest issue we face.
We are adjourned.