EVIDENCE

[Recorded by Electronic Apparatus]

Tuesday, November 5, 1996

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[English]

The Chairman: Order. The House of Commons is very pleased to be with you again in the beautiful city of Fredericton.

This afternoon we have with us for our pre-budget consultations in this round table, from the Saint John Board of Trade, Thomas Creamer and Patrick Darrah; from the Chaleur Coalition for the Preservation of Our Social Programs, John Gagnon; from l'Association acadienne des artiste professionnel(le)s du N.-B., Jeanne Farrah; and from the Future Homeless of Restigouche, Stéphanie Wright and Suzy Beaton.

Thank you very much for being with us. I was going to suggest we could all start off with about a three-minute presentation outlining the issues and the problems and then we could go to discussion. You'll have all the time you want to make your full case before us before we sum up.

Would you like to start, Stéphanie Wright or Suzy Beaton?

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Ms Suzy Beaton (Future Homeless of Restigouche): Good afternoon. I'm here as a member of the Future Homeless of Restigouche and also as a voice for countless others who are in trouble.

What got us here doesn't matter. No one consciously plans tragedy. I didn't plan on having a husband who so psychologically abused me that I became non-functioning. My children didn't plan on growing up with a father who was only part-time and would not take responsibility. As I said, that doesn't matter now. Whether we're alcoholics, whether we're drug addicts, whether we were emotionally disordered, doesn't matter. What matters right here, right now, in this room, is that countless people are living in hell on earth. I know that because I'm one of them.

I read somewhere once that the saint who had helped heal thousands upon thousands of casualties of war, when asked how she did it, replied ``one by one by one''. If we don't start somewhere, if we don't start seeing with open eyes and taking some kind of a stand, where is it going to end? We have a lot to look at. A lot of problems, a lot of issues, are not being addressed. A lot of hardships are never being looked at. They are just pushed underneath the table. It's time to look at them. It's time to see what we can do and it's time to do something about it.

The Chairman: Thank you very much. I appreciate that.

Jeanne Farrah.

[Translation]

Ms Jeanne Farrah (Director General, Association acadienne des artistes professionnel(le)s du Nouveau-Brunswick): Good afternoon. The Association acadienne des artistes professionnel(le)s du Nouveau-Brunswick would like to thank the Standing Committee on Finance of the House of Commons of Canada for having given us this opportunity to make a presentation during these pre-budget consultations.

We will attempt to explain the importance of investing in arts and culture in the next federal budget. In the current context, we will be discussing questions of a financial nature, where priorities must me reestablished with regard to arts and culture.

But before I broach the problems of arts and culture, allow me to briefly touch on the question that seems to be the starting point for any pre-budgetary discussion. Manage for whom? That's the question we asked ourselves, because a budget that is used to manage the country should reflect the needs of all citizens. Right now, that is not the case. The last budget clearly showed that the federal government released itself of its role as national manager and is shedding its responsibilities for social and cultural programs. The unilateral strategy deployed by the government to get rid of the public debt is not without consequences. It contributes directly to the impoverishment of the population and to the disintegration of the cultural identity of the country.

In the next budget, managing for the entire population should not be just an option, but a duty, so that the government can see to the economic, social and cultural welfare of the population. This is why the government should make a priority of job creation, for example in the arts and cultural sector. According to Statistics Canada, a ceiling is being reached in the traditional sectors in terms of job creation, whereas culture has registered an increase of 122% since 1984. Creating a job in the arts sector costs $29,000 compared to $200,000 in the other sectors. The arts generate over $11 billion in direct revenue. The spin-offs of this sector have been estimated at $46 billion in 1993 by the Department of Canadian Heritage. Arts and culture are the ninth largest industry in this country.

In conclusion, we would like to quote the Minister of Industry, John Manley, who stated on April 25th that the arts and culture sector trained 170,000 creators and producers and contributed$16 billion to the national economy. So try to imagine the economic and even social spin-offs that would result from a firmer commitment by your government to support cultural initiatives. Initiatives such as the injection of 1% of the budget in infrastructure programs for the arts are innovative and important solution for developments of the arts. At the dawn of the new millennium, we must take the time to reflect on what we want to accomplish, as a people and as a country, in the coming years.

In closing, we would like to underscore the fact that in the short term, it may certainly seem important to solve the debt problem. However, we feel that the long-term effects of this approach may imperil the social fabric of our country and Canadian identity. Is that the Canada we want? Thank you.

The Chairman: Thank you very much.

[English]

John Gagnon.

Mr. John Gagnon (Co-Chair, Chaleur Coalition for the Preservation of our Social Programs): Thank you.

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Before I start, I was here this morning and heard my colleague - if you call them that - from the Fredericton Chamber of Commerce, Bill McMackin. He referred to the fact that he was here last year and heard this rhetoric about corporations not paying their taxes, and he asked us to for once provide a document. I would therefore like to table this document. It's a document from Stats Canada and contains information from the Department of Finance and information from Revenue Canada. It has been compiled by labour, but the information is from those sources. So just to address that, to show that we're not talking in terms of rhetoric, these are the facts.

If we're going to discuss the legitimacy of these facts, I have no problem debating them. I have no problem if the Chamber of Commerce comes here and says this is correct, this is what's happening. But this is why it's happening and it's disgusting. I have no problem with that. But to come here and to say that we just reiterate rhetoric year after year is not a fact. These facts are backed up by your government stats, so I would like to table this document at this time.

I would also like to table a set of ears that we also had at our press conference - maybe you could hold them up, Suzy - and hopefully the finance minister will use them to start listening to the working people, the people who pay the taxes. I've heard a lot of talk about how business is the engine of this economy. I'd like to stress that if the business is the engine, then the working people - the working poor, the middle class - are the fuel for that engine. And with that, I would like to start my presentation.

Our coalition does not accept the premise that there's no real choice in reducing the deficit. We feel there are viable alternatives to slashing our social programs. On the contrary, we perceive the existing problem as one that's not only a lack of expenditures being cut, but a lack of revenue. What we're trying to say is that there are two sides to the equation. One side has the government saying that we have to cut the expenditures in order to balance the budget, but we're saying that on the other side of the equation there's a revenue problem - and we will refer to the document that I just tabled in the future.

Our view is that there has to be a more equitable distribution of wealth and income in Canada. This can be accomplished by a fair tax system. It's fundamentally unfair to cut social programs while 93,000 corporations pay little or no taxes on $27 billion worth of profit, and while numerous corporations owe a combined $37 billion in deferred taxes. These are Stats Canada figures, and I'll give you examples of a few of the companies I've referred to in this document.

In 1992 the Royal Bank made $63 million in profits but paid no taxes. The irony of this is that the same teller working for the Royal Bank in B.C. paid $5,732.00 in taxes while making $25,000.

In 1990 - and I think you're familiar with this gentleman I'm going to refer to - one of the Honourable Paul Martin's companies, the CSL Group, made a pre-tax profit of $19,700,000, paid no taxes, and at the same time received $400,000 in credit. And he is now our finance minister, although he was not at that time.

In 1989, 7,000 individuals making more than $50,000 paid no income taxes at all.

So as we say, I think there's more than one way to kickstart or build our economy. The Liberal agenda seems to be following the business agenda, but we have a few suggestions.

Over the last ten years - and I'm going to refer to all of the stats - food banks have gone from being a temporary organization to a permanent fixture. Some 700,000 people go to 450 food bank outlets every month; if not on a daily basis, at least 350 million people use food banks three or four times a year.

It's known that 77% of Canadians surveyed said large corporations should not lay off when making higher profits, and 54% of these respondents says corporations that lay off should be required to pay a penalty through higher taxes or some other means. So the population is saying virtually the same thing.

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In this 59-page document, here, we have taxes that start from 2%, 0% - and most of them fall under 0% - and go to a high of probably 12% or 13%. But the majority are under 5%.

I picked an article out of the Telegraph-Journal the other day. It just astonished me to read this, but the country's business bosses are pushing Minister of Finance Paul Martin to wipe out the deficit as fast as possible and to balance the books. They're urging him not to concur with what Reform is saying or the Conservatives are saying: to offer a tax break to the middle class. I'm not saying I am agreeing with the tax break or with what Reform and the Conservatives are saying, because they're offering tax cuts on the backs of social programs. We're saying that if it's possible, there's no problem, but it has to be done by other means.

But the Business Council on National Issues is representing chief executives, and it is saying ``Mr. Government, don't give the middle class any tax breaks. We have to balance the budget first.'' I think they - some of the CEOs in this country - have some audacity to make that statement while their corporations are paying little or no taxes, and when at the same time they're saying to not give a tax break to the working people. I mean, some of these statements....

We have other statements from the Catholic.... I know some people will say that we're talking rhetoric, that this is not the way to run an economy, that we have a spend-spend-spend type of attitude. But the Catholic Church had a conference, and the conference was called ``A Struggle Against Poverty - A Sign for Hope''. It was held in Halifax on October 17, 1996. At this conference of the Catholic bishops from across Canada, they called for alternate policies aimed at fair tax reforms and at corporate tax loopholes, at creating dignified jobs, at lowering interest rates, and at preventing the gutting of the social programs. Isn't that what we're saying here now? I think this is a credible organization; they do their research and things like that.

So we're saying the same thing as many individuals, and the list goes on. From the G-7 conference, Jacques Chirac, President of France, is urging the richest governments to find ways to save jobs without destroying the safety net. Again, a human development report issued by the UN - this is the UN! - says Canadians are worse off than they were in 1990, and economic growth still leaves the poorest poor again.

So we're not the only people saying this. It's been said by credible people in this country. It's being said by credible people outside of this country. We have one of the lowest corporate tax rates in the world. All we're saying is that there should be an equitable system here.

What we suggest is a series of measures - and I'm going to wrap up very shortly, but please just be a little patient. You've probably heard these stats before, but I think it's important that they come out again. These are Stats Canada figures from 1991: 50% of the debt.... We always talk debt whenever we say we have to cut the social programs, we have to cut UI, even though they obviously have nothing to do with the debt. It's all funding, but we have to cut education grants, transfer grants, health care. We always hear that it's because we have to bring the debt down.

Stats Canada said in 1991 that 50% of the debt was due to tax breaks and subsidies for upper-income earners and corporations; 44% of the debt was due to high interest rates - and I put it to you, who controls the interest rates; 4% of the debt was due to general program spending; 2% of the debt could be attributed to social programs.

If we look at what happened while the Conservatives were in power from 1984 to 1993, the debt at that time was $206 billion, and by 1993 it was $504 billion. In 1994, when the Chrétien government took over and started slashing social programs by going in the same policy direction as their predecessors, the debt stood at $582.9 billion. So all we're saying is that twelve years of trying to reduce the debt by cutting social programs - which make up approximately 2% - has proven a tremendous failure according to our figures, which again are Stats Canada figures. The debt has almost tripled in the twelve years since 1984, from $206 billion to $582 billion in 1995.

.1320

We therefore put it forward that this is not the way to reduce the debt because it's not the main reason for the debt. When we talk deficits and debt, they are different. I understand social programs are probably a bigger portion of the deficit, but there are humane ways of reducing these debts.

Thank you.

The Chairman: Thank you very much, Mr. Gagnon. I'm sure our next witnesses will agree with you completely.

Mr. Darrah or Mr. Creamer.

Mr. Thomas Creamer (President, Saint John Board of Trade): Thank you, Mr. Chairman.

My name is Tom Creamer, and I'm president of the Saint John Board of Trade. I'm representing over 900 members in the greater Saint John area, and I'm also a small business owner.

I'd just like to make a few comments. One of the main concerns among our members is that nobody is listening. We just went through a tax harmonization deal that has been signed, and New Brunswick is one of the provinces that has taken the lead on this. The Board of Trade has pushed for a harmonized tax, which is now called the HST. But something that we pushed against was all-inclusive pricing, and the federal government did not listen.

If the rest of the provinces would come on, we would be all for it. What it is going to do now, though, is cost our members in the retail sector a lot of money. It will cost some of our larger members millions, which is going to mean jobs. Somebody has to pay for it, and the cost of this will be passed on to the consumer. I'm hoping that maybe the finance minister will change his mind on this. We're for all-inclusive pricing provided the rest of the provinces are on-board.

We're also saying stay the course. You must eliminate the deficit by further reduction in expenditures and through streamlining delivery of government services. There can be no new taxes of any kind. Our members can't afford it, and consumers can't afford it.

There is a lot of stimulation from reduced interest rates and a stable dollar. We finally have made-in-Canada interest rates. We're gaining control of our finances and this must continue. Just as an example, I guess we'll find out this week, but it looks like Bob Dole is going to lose the presidential election. He's proposing a reduction in taxes. People know they can't afford for this to be done at this time.

Debt reduction, and not just deficit reduction, is the key. A major portion of deficit reduction is due to lower interest rates. We must continue to reduce spending and not transfer the burden on to the provinces. The federal government has to take the lead and cut waste.

If a stimulus is required, which we don't think we can afford, we're asking you to expand the small business deduction to $400,000; it has been at $200,000 since approximately 1977. This would allow small business to build capital and create new jobs. This limit, as I mentioned before, has not been changed since approximately 1977. And the other option would be to reduce payroll taxes, reducing the burden on both the working family and small business.

Thank you.

The Chairman: Thanks very much, Mr. Creamer. I'm thrilled that we have such a diverse panel with us today.

Mr. Darrah.

Mr. Patrick Darrah (Executive Director, Saint John Construction Association): If I may, I'm actually here representing the Saint John Construction Association.

The Chairman: I apologize, Mr. Darrah.

Mr. Darrah: That's quite all right.

The Chairman: We look forward to hearing from you.

Mr. Darrah: I just want to say a couple of things.

I'm representing an association that was established in 1883. If I look around this province and around this country, we are the builders of the nation. I would like to say that we want to leave you with a clear message on this day: In the process of building the nation, we all got hurried up a little in the sixties and the seventies, and we're paying the price today on the sides of my colleagues both to the right and to the left.

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But I want to compliment the Bank of Canada for getting its monetary policy in place whereby the interest rates are at what I call a competitive level so that we can get on with the new capitalization of Canada.

I think we have to stay the course, Mr. Chairman, because we aren't quite there. And if we look at the industrial revolution, we see the changes in society. If we look at the computer revolution that we have today, these are the pains we may have to suffer to get through this particular revolution.

I think as we start to reach the other end - and I think it'll be short rather than long - if we do not stay the course, we will be back into the inflationary cycle and the tremendous beating that all Canadians have taken as a result of that particular policy.

I have a couple of comments. The other issue that is before us today - and I'm sure you will review it - is the revamping of the CPP. I will leave you with this thought. Before you pass on any burden of what I call employment taxes, take a serious look at transferring the overpayment in the EI to cover the increase you may require in the Canada Pension Plan. This will leave the payroll burden on the same plane that it is today. Even though we may think it is too high, we also want to leave you with this: before you start adding on to one, you should transfer the overpayment to this particular policy. And I believe when you look at the numbers that have been presented to you by other organizations in Canada, you will find that this would likely be the most economical way of doing it.

The biggest problem the federal government has is the transfer payments - or what we call people payments - to all of the provinces. We suggest that the streamlining of all of these things must be taken into consideration. And I want to point out that it's not easy as we all crawl out of the mess we all created some time ago.

We will leave with you the request that you look at the whole matter of government expenditures and the efficiency of government, and at my pet peeve, the monstrous rules and regulations that you pass on to society as a whole. We could likely reduce our debt. We could reduce the whole system of operating all of the agencies in this country if we could get rid of this tremendous amount of - I could say bureaucracy - duplication among the federal, provincial and municipal governments.

I'd like to leave you with a couple of comments. First, I think all governments are too large. We have too many representations for our population. We should streamline those in the process. Second, I do want you to tell the Minister of Finance that to be successful in the future we must not deviate from the plan that has been set forward.

Thank you.

The Chairman: Thank you, Mr. Darrah.

[Translation]

Would you like to begin the question period, Mr. Laurin?

Mr. Laurin (Joliette): Unfortunately, I did not hear the testimony of the representatives of the Association acadienne des artistes professionnel(le)s du Nouveau-Brunswick. I don't know if they discussed the demands concerning copyright for artists. Has it been discussed? If you haven't touched on that, I would like you to express your views on it.

The government currently has a bill under consideration. Do you think the government is doing enough for artists and copyright?

Ms Farrah: There's certainly a need to reform this legislation, which is quite old. In fact, we support the recommendations of the Canadian Conference on the Arts in this regard. There are many amendments needed, because artists are not receiving their fair share.

Mr. Laurin: Mr. Chairman, I would also like to address the business representatives.

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This is the second day of public hearings, and especially since this morning, I've heard almost no one complained about government schemes regarding job recovery and deficit reduction. Right now, the government is using the unemployment insurance fund to reduce its deficit. There is a$5 billion surplus in the unemployment insurance fund, since unemployment insurance has become employment insurance. Therefore, there is a surplus of $5 billion in this fund that the government is using to reduce its deficit. Since this morning, I have heard no representatives of private business or chambers of commerce complaining about the situation.

Instead of using the employment insurance surplus to create jobs or reduce payroll taxes for employers, the government is using it to reduce its deficit. Do you agree with that policy? Since no one has mentioned it, am I to take your silence on the matter as agreement?

[English]

The Chairman: I think that's you, Mr. Darrah.

Mr. Darrah: In regard to that, I responded that I thought they should use the UIC overpayment to augment it. It was the fact that they were going to change the contributions to the CPP, to the employer tax.

I think the suggestion that Mr. Creamer has made in regard to the tax on the business deduction.... If you took the business deduction from $200,000 to $400,000, you would create the opportunity for employment in the small business sector in Canada. We believe that the government could take initiatives to make that sector of the economy far more vibrant. We think employment would increase. We look at the steady growth, and I can only speak for our own industry.Mr. Creamer can speak for the broader business community, but I can take the construction industry per se. As we crawl out of this, we think we will create employment.

And if I look at the interest rates, they're going to be the key to growth in the construction industry. We have been the kicker of the economy in every recovery for years, and if we go back in history, you will find that when the interest rates get to the right place, the construction industry and the economy as a whole will in fact create employment.

Now that the interest rates are where they are, we think that in 1997 we will get that employment growth, because that was more important than - I'll say it - throwing money at it. That was short-term. We believe that with the fiscal policy we have now, we can create the employment in 1997. That's what our industry across Canada sees. That's where we think it's going to come from.

[Translation]

Mr. Laurin: Mr. Darrah, I thought that Mr. Creamer was going to add something. I will have another question for you right after, Mr. Darrah.

[English]

Mr. Creamer: Mr. Laurin, I agree with Pat Darrah. As for the $5 billion you talk about, the overpayment in the UI fund, before the government comes out and increases the CPP contribution, I think they should move that $5 billion over so the burden isn't put on the consumer or on business. That burden would mean an increase in taxes. We don't want that.

We feel that if you expanded the small business deduction from $200,000 to $400,000, yes, the government loses taxes there, but they don't in the long run. By creating jobs, they get a payback almost immediately. We're pushing for that to be increased and that will stimulate the economy.

The other thing is obviously the interest rates. It's great that they're so low. If we could just keep them there, we'll be all set.

[Translation]

Mr. Laurin: I would like to put a question to Mr. Darrah.

What is meant by rationalizing transfer expenditures to the provinces? Does that mean that we will continue to cut in transfer payments to the provinces?

[English]

Mr. Darrah: I think what's going on, Mr. Laurin, is that the federal government - and I'll be as blunt as I can - has sent wheelbarrows of money down the road, and I think the management of those wheelbarrows of money is now much more important. So when I look at the way you transfer money, I think there has to be more major accountability to it so that in fact the federal government gets its dollar value for a dollar spent.

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I think there are programs in the whole thing.... And we've talked about subsidies to businesses. We think they should be stopped. We've said that before. We said it here last year, and we said it the year before. We think you should stop those subsidies. You transfer money to provinces; they transfer it out. We're saying let's manage those funds better. I think there are better ways of doing it. But at the same time, we know that constitutionally every time we try to do something.... And I'm a centralist, so I'm the opposite to most. But I think we'd better manage our money or have them manage it so that in fact we have a better accountability. If there are programs, and I've suggested some, I think the federal government should stop just passing money down the road.

[Translation]

Mr. Laurin: Mr. Darrah, you mentioned the wheelbarrows of money that the federal government has sent to the provinces. The federal government has just sent the last wheelbarrow of almost $1 million to the Atlantic provinces for the harmonization of the GST. You talked about rationalization of transfer expenditures. Do you feel that this procedure is a good way of rationalizing?

[English]

Mr. Darrah: I've already answered the question. I said no, I think you should manage the money better. As far as I'm concerned, I think the federal government should lay out some criteria and see that they're all well managed. I'm not sure they have been.

[Translation]

Mr. Laurin: The federal government reduced unemployment insurance premiums by $0.05. In fact, after having increased them, it has reduced them by $0.05. Do you think that's sufficient to create new jobs? These premiums are collected directly from salaries of employees and employer's premiums. The federal government does not contribute one cent to the employment insurance fund.

Do you think that this is a rational way of creating jobs? Don't you think that the government is unfairly taking away money that belongs to employers and employees currently on unemployment?

What do you think is the right way to solve the unemployment problem that is currently ravaging the Maritimes? It's also true in Quebec, but the situation is even worse in the Maritimes. One witness this morning told us that the actual unemployment rate was 20% in the Maritime provinces. Do you approve of this way of doing things?

[English]

Mr. Darrah: Let me say this to you: The economy is not going to grow out of UI payments. As much as they are a necessity and I happen to agree with them - there are things that have to be done and I agree with those things - the greatest growth we're going to get out of the Canadian economy is having the right fiscal policy, the right interest rates, the right way that people can afford to do those things. If you look at the payment to buy a house today relative to the interest rates of ten years ago, you can certainly see the amount of money that creates employment.

Yes, we're going through a transition, and that transition hasn't quite got there. But we're going to be better off with the lower interest rates than with higher unemployment payments. My suggestion is using the money to pay the CPP rather than to pay the debt, because we have to fix the CPP and we don't want to get taxed twice. If you don't move the UI, then what you'll do is end up adding 15¢ or 20¢ or 50¢ to the payment for both employees and employers on the CPP.

But we really believe growth in jobs is going to come out of the reason we have an interest rate in a right place, we have a monetary policy in a right place. We can kid ourselves about everything else, but the unemployment, the EI - I keep calling it the UI - is not going to do it for us. Five cents here or five cents there isn't going to do it when in fact the whole matter of the interest rates is far more important to us.

If I can look at the harmonization of the tax, if we had the darn thing shown and didn't hide it, we'd be better off, because in fact it works its way through. The problem is we don't have enough patience to allow things to work their way through. We all watched it go the other way with great glee, and for us at my age who are going to retire, 18% on a GIC was a hell of a lot better than I'm making today. But the truth of the matter is that my grandchildren wouldn't have one to go in or one to throw out the window.

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I'm saying we're better off with the fiscal policy we have. We have some chance of success, in my opinion. I know it hurts. It hurts me as well as everybody else. But we can't keep throwing UI money or anything else at it; that's not going to work in the long haul.

[Translation]

Mr. Laurin: Mr. Darrah, I think there is a consensus on the fact that we must reduce the deficit. But on the assumption that we are on the right track, do you feel that right now, unemployed youths or students are receiving the help necessary to obtain the training they need to occupy vacant jobs or the jobs that will be created by entrepreneurs during the economic recovery?

Isn't it true that in the Maritime provinces, you have a large number of jobs available that are left vacant because young people lack proper training? I'm thinking here of occupational training. That's a problem we have in Quebec and I imagine that you have the same kind of problem in the Maritimes.

I'm disappointed that no one is talking about this. We will end up thinking that the problem does not exist, or that if it does, there is an attempt to ignore it because of other problems such as the debt, the deficit and interest rates.

[English]

Mr. Darrah: I was at the community college this morning. We're putting a particular training program together that in fact is going to be a partnership between business and students and the community college.

So I think the combinations are that, yes, there is training. I think there are enough dollars in - maybe a few extra dollars sliding around - so we had better target our training.

I can take our own industry. We have to reorganize our training very shortly, as you will have to in Quebec, to fit the whole new economy. We think the money is likely there, but we're not managing it as well as we could.

I can only take from the conversation we had this morning. We looked at the computer training side. We have some shortages in the province of New Brunswick, significantly. We have them clear across the country. One of the things is we didn't manage the plan well ten years ago or we wouldn't be where we are.

So I'm back to my same story. I think there are things you talked about, Mr. Laurin, that have to be addressed, but I want to leave with you that I think there are enough resources if we manage them better and we in business participate with them, because today we're doing more contract training with public institutions than we ever did before. I think that's an initiative that's working. I think the employers of Canada are certainly far more keyed into the new technology, if I could put it that way. They are participating with their own money as well as government money in the training aspects. So I think these things are coming.

There are areas that in fact we may have to put some money into, but I don't want to leave this committee or anyone with the fact that we just have to throw money at it. I think there are very specific things, and you may find them.

I didn't come here this morning to pick the training side, but I can tell you that we in this province are working very closely with the business community, the working community, and the trade unions. We're looking at revamping some things. We're putting money in from both sides and with government money, and I think we're making some progress. We're working at those things.

The Chairman: Merci beaucoup.

Mr. Grubel.

Mr. Grubel (Capilano - Howe Sound): Thank you, Mr. Chair.

I would like to ask Mr. Gagnon the favour of perhaps letting me have his copy of the list, or if he does not have an extra one, if he could mail it....

May I keep it? Thank you. I'll pick it up in a second.

Suzy Beaton, your story is very shocking and I feel sorry for you, what has happened to you in your life, you and many other young people like you.

I want to ask you a question: Where does the federal government come in here? I'm asking this deliberately. Have you received help from your family or have you approached your church - I thought these would be kind of first-line defence - or other local agencies? Many of us give to the United Way in expectation that they would help you. I give at church.

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Then we have municipal services where I look at the expenditures of our tax money. Some is going to social welfare. Then the provincial government itself has social welfare programs.

I find it very distressing that your problem has not been addressed by these levels which society has put into place to help people like you and many others who are in such unfortunate situations. What can Ottawa do that these people cannot do?

Ms Beaton: They can recognize that we're people. They can recognize that we're looking for solutions. It's not up to you only to find the solutions; we know that. We're willing to do our part. We want to work. It's not that we want the handouts. We don't want the handouts. We want people to see that just because we're on unemployment or we're on welfare or we're not doing anything at all doesn't mean we don't want to. It means as time goes by, and the more these people are living in these situations, the less capable they are of taking themselves out of it.

The more you fall under this.... It's like a cloud. It's as if you're not even a person any more. You become so oppressed that there is no importance...that you don't have anything to say, and what you do have to say doesn't matter; it's not important.

Mr. Grubel: Of course - and many people realize it - this is known as the ``welfare trap''. It's one of the worst tragedies that can befall people. But those of us who have thought about it have always had the feeling that the best way to approach it is to go to the people who can give you the emotional support. It isn't just the money.

What happened? How come the family, the church, the municipality, all the social workers our taxes pay for and our charity contributions paid for, haven't been able to help you?

Ms Beaton: As I said a while go, when we get to the situation where we are on social assistance and we are on unemployment and we are looking for jobs and we can't find the jobs, we get to where we don't even want to go for help from these people any more. We believe we're no good any more. We believe there is no real help.

I can give you an example. I was out working full-time. I was supporting my children. We were doing really well. I was taking a course. I was going for journalism. I was doing really well for myself. What happened was my youngest sons started smoking cigarettes. They were with babysitters more than they were with me. So little by little by little I started watching my kids leave. I started watching them rebelling. So I had to choose and say, okay, what do you want? Do you want to support your family? Do you want to give them the good life, all the good things they need, or do you want them to be happy children? I had to decide.

So where am I now? I and many others are back on income assistance.

Mr. Grubel: Yes, but I don't understand how the federal government, even if it reduces the unemployment rate, creates conditions such that there is a lower unemployment rate, would help you with your problem. What did you have in mind?

Ms Beaton: Make more jobs available.

Mr. Grubel: But you have described that you had a job.

Ms Beaton: Yes.

Mr. Grubel: Then you had some problems.

Ms Beaton: Yes.

Mr. Grubel: Now, you say you gave up the job. There was a job for you.

Ms Beaton: Yes, I was working.

Mr. Grubel: How do we get out of that dilemma?

Ms Beaton: The jobs a lot of single parents, a lot of single mothers particularly, are able to get are, for example, waitress jobs and night-time jobs. They are evening jobs. Give us work where we can do our 8 a.m. to 5 p.m. or 9 a.m. to 5 p.m. day, so when our children get home from school we're there for them.

Mr. Grubel: I thought that's the kind of job you had. You said you worked for a department store.

Ms Beaton: No, with the job I had, I would leave for work at 4 p.m. My children got home at 3:30. So from 3:30 until they went to bed.... We saw each other for maybe half an hour a day, maybe. You can't do a lot of good for your child in a half-hour day.

Mr. Grubel: Is your children's father still alive?

Ms Beaton: He's still alive, yes.

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Mr. Grubel: Is he giving you any help?

Ms Beaton: No, he doesn't help. What he does is make it harder. He's one of those people who believes that if you're a single mother on welfare it's because you can't do better and there's nothing there for you. You're labelled.

Mr. Grubel: Was there a court judgment against him to support his children?

Ms Beaton: No, there was not. I did not want the courts brought into it because, as I said before, the abuse was so severe that I figured if he had that bit of hold on us, we wouldn't get out of it.

Mr. Grubel: I hope you understand that I'm trying to understand what the situation is. I would like to take back with me to Ottawa what precisely Ottawa can do. The way I understand it, you wish us to create your condition so better full-time jobs starting at 9 a.m. will be available for people like you.

I'm somewhat surprised that the legal system of your province would allow a man to walk away, having procreated these children - under our legal system he has retained responsibility - and he would not have had the responsibility to help you. But I'm sure this is all part of your personal tragedy and my sympathies are very much with you.

If you'll allow me now, I would like to just ask Mr. Darrah a question. Don't you believe, Mr. Darrah, that there is a certain merit in keeping the unemployment insurance system as a separate unit? Some of us are proposing that it should be set up completely separate from the federal government as a self-financing insurance system, so we will not in the future be burdened again with certain types of social programs like maternity leave. We might want to support women who have children, but that is not really related to unemployment. We heard witnesses making the argument that those obligations should be paid for from general taxes and should not be burdening the unemployment insurance premium.

In order to get that kind of a rationalization, I would think it would be more useful to keep the UI system and force it to accumulate reserve funds during good times, which would then be used up during bad times. If ultimately it ran out, it could borrow from the federal government to carry over the emergency.

You have suggested that these funds should be mixed up with other programs, such as CPP. That would prevent the unemployment insurance program from being there in order to protect Canadians against this horrible experience of being unemployed.

Mr. Darrah: I'm just saying in the transfer that if we're paying so many cents per hour worked for EI, to take those cents and put them into CPP. I didn't say marry one with the other.

I think the other thing is that all the industry in Canada has always held the position that it should go back to being what it was originally set up to be - an insurance program. That's where we are as a policy matter, and we've been there for years.

I want to make it very clear that I'm not suggesting to put the two together. I'm just saying if we're overpaying by so many cents per hour for the employees and the employers, don't leave that where it is and then up the CPP. Take the overpayment from the EI and put it in the CPP. That's all I'm saying.

We really believe we're in an insurance program and it should be an insurance program. That's always been our policy.

Mr. Grubel: I'm glad you clarified that. I would therefore suggest that maybe we should put it this way. UI premiums should be reduced so the fund does not grow any more, and CPP contributions should be raised to meet whatever objectives are there. Don't make them the same thing.

Mr. Darrah: Yes. I'm just saying the numbers should stay the same, but for God's sake don't marry the two together. We'd be chasing ourselves around the bend here sooner than later.

Mr. Grubel: I'm glad you clarified that.

I thank you, Mr. Chairman.

The Chairman: Thank you, Mr. Grubel.

Ms Brushett, please.

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Mrs. Brushett (Cumberland - Colchester): Thank you, Mr. Chair.

I have two or three small questions. I will direct the first one to Mr. Creamer. It's about the HST.

You've made the point that until all the provinces have come into harmonization it will have a negative impact, or certainly it will be a disliked force. Other manufacturers have come before this committee indicating that those provinces which have harmonized are in fact going to be a drawing card for businesses that might like to come there, as opposed to provinces that have not harmonized. Do you think there's some advantage there and in fact it will accelerate the process a little, because it will be much more attractive to them?

Mr. Creamer: We've been for harmonization all along. We're just delighted the deal has been signed, because although the consumer in a business pays on more things, in the long run it's a wash. We're in money and we'll be able to stimulate the economy and we hope create some jobs. We've been told by the McKenna government that people in low-income situations will be rebated, so I'll leave that one alone.

The problem here is that in the provinces that have harmonized now the federal government wants all-inclusive pricing. So if you go into a retailer and it says $50, it's $50. When you go to the cash register, it backs it out and breaks out the tax.

In the tourism industry, for instance if somebody comes in from Ontario and looks at.... We all know roughly what things cost. Some of us are sharper than others, but you go in and you.... You look at it initially and think, my gosh, I can get that more cheaply at home. You don't realize this is maybe with all taxes included. It's what you see first that sends you away.

The other thing is that we have no problem with the all-inclusive pricing as long as the rest of the provinces are on. That makes it a level playing field. The big expense to business here is the initial retooling. Our retailers have to retool their computers and everything, and if in four or five years the federal government doesn't get the rest of the provinces on -

Mrs. Brushett: But in checking that, Mr. Creamer, with all due respect, I've been told by retailers that the retooling will probably not be more than $150 to $200.

Mr. Creamer: That may be a one-person operation.

Mrs. Brushett: No, not necessarily.

Mr. Creamer: Sears and some of these large national firms are talking about $8 million to $9 million. Shoppers Drug Mart and places like that, which buy their cards out of the U.S.... The U.S. card companies are not going to put a price on the card just for New Brunswick or Nova Scotia. It's those types of things.

Mrs. Brushett: This is true to a degree. There are positives and negatives, I agree. However, the point I was trying to make is that certain businesses have indicated to us it would be an incentive to relocate to a province where they have harmonized their tax.

Mr. Creamer: Absolutely.

Mrs. Brushett: So we're looking forward to seeing these positive benefits.

Mr. Creamer: Exactly. That is positive. But that's not what I'm debating. Right now it's the all-inclusive pricing, it's not the 15%.

Mrs. Brushett: All-inclusive pricing saves businesses the cost of dealing with two taxes as opposed to one.

Mr. Creamer: Maybe we're talking about two different things here. The all-inclusive pricing.... I'm talking about the price tag when you get to the....

We're on the same thing here?

Mrs. Brushett: Oh, yes, precisely.

Mr. Creamer: Okay. It's lower by 3.77%.

Mrs. Brushett: Yes.

Mr. Creamer: I agree with that. It's the cost of retooling to bring these companies up to the line. For a small company it's not expensive, but for the bigger firms it's a nightmare, a national -

Mrs. Brushett: I agree. Manufacturers have indicated that when they have to put ten different prices on for ten different provinces it is a problem. But I'm suggesting it may be offset by companies relocating to those provinces that have harmonized, because they have one price and it will be cost-effective in that area.

I want to have another question for Suzy Beaton here, Mr. Chairman, on the problems of ``the future homeless'', as she has put it.

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It isn't our mandate as the federal government to develop programs for the social service sector. We give the transfers of the funds to the provinces to develop those programs and to ensure the programs benefit the people in need. But as a federal member, I agree with you. There have been more and more people coming to my office just asking the federal government to please look at how they transfer funds. The benefits Canadians tend to harvest are not harvested from those payments.

So I ask you what the solution is. It doesn't seem to be more money, because as you've indicated, if you are away from your children they suffer. They perhaps don't get the nutrition they might need or the balance of a proper sitter or day care from responsible people.

What is the appropriate resolution to this? We have many single parents. Is the solution to maybe locate a certain number in one complex? Maybe the solution is to have a child day care centre built in there, so the young mother can either go for retraining or education or to a job, knowing her children are centrally cared for with a sound housekeeper and nutritious meals while she is off upgrading and making her life better.

Ms Beaton: All of this is very important, but there are things that must come before. As I said a while ago, what happens when we fall into this rut is we come to the point where we don't believe we can make our life better. This does not apply to me so much because I have worked for a long time at it. But the single parents, the people on unemployment insurance, the people who are living through these hardships need to first know they're people, they're real.

Mrs. Brushett: How do we do this, then?

Ms Beaton: Stop turning us into numbers. People are numbers; they're not people any more. It needs to be known that if we're poor, we're still good. If we have a problem with alcohol, we're still good. It doesn't matter what we've become. What we've become is only because of what has been. It doesn't mean it is the way it always has to be.

We need to become well again. The people need to heal, and the people are not going to heal if we're continually oppressed. The oppression has to stop first. Then all of these day cares and all of this can come in. If they are not well, they're not even going to see they can get the job or get further ahead in their life, because it's just not even there right now. All the people in this situation see ahead of them is black clouds.

Mrs. Brushett: I agree with you. I spend a lot of time in my constituency listening to young people who do not have jobs or who are becoming alcohol dependent and depressed, or whatever. I try to encourage them to look at their future in a broader sense. If I know a program that might be beneficial, I direct them to it. I just analyse and look for solutions.

But we need to have recommendations as to where we can begin either developing the program or the model that could get us results, that would be effective, that would, as you say, provide self-esteem and lead you out of this trap.

Ms Beaton: There is a lot of study. Behind healing there is a lot of study and a lot of work. There is a lot of looking at the garbage. You have to look at it before you can clean it.

It would be different if only people in my situation just had the places open. For example, I have an idea right now I want to start working on. I want to open a business that is a healing centre. These people can come and start their healing so they can move further with their life. They need places and people. We have some social workers.

Mrs. Brushett: Are you suggesting community health centres?

Ms Beaton: Yes.

Mrs. Brushett: Is this what you're suggesting for your mental and physical help?

Ms Beaton: Yes. Then they will know there are people who will understand and there are people who can help. But you have to have been there before you can understand it.

Mrs. Brushett: Yes.

Thank you, Mr. Chairman.

The Chairman: Thank you Mrs. Brushett.

Mrs. Chamberlain.

Mrs. Chamberlain (Guelph - Wellington): First of all, I'd like to commend the three women on the panel. We don't seem to get many women at the finance committee hearings, so I'm very pleased to have this representation. We didn't have any this morning at all, and I was quite concerned. I know this area also obviously has many very bright and articulate women. So I thank you for your presence here.

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My question is to Jeanne Farrah. I wanted to ask you, since you're involved with the arts, about your position on tobacco advertising in association with the arts. As you know, the federal government is studying this. They're looking at coming out very shortly with some policies on it. I really would like to know how you feel about this particular issue.

[Translation]

Ms Farrah: There is no doubt that there are two sides to this debate, the first concerning health and the second concerning the survival of artists and many companies that depend on subsidies or funding from tobacco companies.

I don't want to get into a debate about the morality of this issue. However, I feel it is important that the federal government examine the question more closely in order to give arts organizations in the arts community reasonable deadlines, when they depend solely on these subsidies or sponsorships, so that they can have time to find new partners or even develop a new strategy with the tobacco companies.

However, we don't even know if the tobacco companies will continue to support artistic and cultural activities. There is no doubt that large corporations that invest in cultural activities want to project a certain image, and that's what the debate is all about right now. It is therefore important for the arts community to have reasonable time to find new partners.

There was some mention that the federal government may create new programs, but I don't know whether that's realistic. It's also been said that the tobacco companies' investment in the art sector alone, is $26 million, which represent direct revenues. I therefore think it is important to give them sufficient time, because that's the key to the whole problem.

[English]

Mrs. Chamberlain: When you say $26 million, out of what budget does this come? What is this? What percentage is this?

[Translation]

Ms Farrah: Twenty-six million dollars is the amount that tobacco companies contribute each to artistic and cultural activities in this country. This could be theatre, dance or other activities.

[English]

Mrs. Chamberlain: In your opinion then, if this advertising that had been allowed was taken away, how severely would this hurt you? What you're really talking about is a transition period. There have been a number of suggestions in Ottawa. I think one of them currently being talked about is a dedicated tax from the sale of tobacco. But if this $26 million were just removed, how seriously would this hurt the arts if you don't have a transition period? How serious is this to you, in your own opinion?

Ms Farrah: It's very serious. We're talking about companies that won't be able to do their annual shows. We're talking about companies that are going to close down.

[Translation]

In addition to the current programs, which gives fewer and fewer grants to arts and culture, the fact of also cutting off the funding from tobacco sponsorships will create serious problems for the survival of many companies. This will also have a direct impact on artists.

[English]

Mrs. Chamberlain: Has the arts community come out with any proposals on this? I'm just not aware of this. We have been talking about this for some time, so it is not a surprise we're moving perhaps in this direction.

[Translation]

Ms Farrah: The Canadian Conference on the Arts has developed a strategy about that. It has made presentations and briefs have been tabled. There is also an alliance of artists' companies that has presented a brief.

[English]

Mrs. Chamberlain: Thank you very much. I appreciate your information.

The Chairman: Thank you, Mrs. Chamberlain. Monsieur Laurin.

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[Translation]

Mr. Laurin: Mr. Chairman, I had a question for Ms Beaton, but I'm sorry to see that she has had to leave the room momentarily.

The Chairman: Perhaps Ms Wright could answer.

Mr. Laurin: All right.

First of all, I would like to congratulate her because you need a lot of courage to come before a committee and admit your distress, your misery, particularly social misery. I wanted to tell her how much I was sensitive to the problems that she has raised, particularly because I am a career educator, as I spent 30 years of my life in education and have known many young people who were from families with a lack of cohesion or direction, families that have experienced a lot of economic hardship.

I would therefore like to ask her why she thinks the federal government holds the solution to these problems.

Through its spending power, the federal government is currently interfering in areas of provincial jurisdiction. It is cutting transfer payments to the provinces. It is cutting off funds that should be used to relieve the misery of these people. But the government is not lowering its standards. When you come here today to present your situation to representatives of the federal government, is it because you think that your province does not have the powers and the resources necessary to solve these problems alone or because you sincerely believe that the federal government is in the best position to meet the objections that you've raised?

In your opinion, which is in a better position to help solve the problems you have raised? Your provincial government or the federal government?

In Quebec, we think an easier way to solve the problems of poverty is to have those closest to the problem handle it. By that I mean our provincial governments. Also, there was no mention today of the cuts in transfer payments, funds that the provinces require to solve those types of problems.

It's as though you were telling me it is up to the federal government to solve the problem. Am I mistaken or is it really what you hope?

[English]

Ms Stéphanie Wright (Future Homeless of Restigouche): I feel there should be money somewhere to help people in my situation. There should be job opportunities. I feel we should get more than $6.25, because when you're only allowed to make $200 on welfare and then you are cut, you are back in the same rut. You people give us a project for 20 weeks. We fall back on unemployment insurance. When we can't get another job, we're back on the welfare system. So we are no further ahead. I think -

[Translation]

Mr. Laurin: Did you know that with the employment insurance reform, as of January 1st, things will be much worse because fewer and fewer unemployed will be eligible for the program? In fact, even if you count your days of unemployment insurance from the very first day you were without a job, there will be 50% fewer unemployed who will have access to the program.

They will be eligible on paper, but half the people will not manage to accumulate enough days of unemployment to collect unemployment insurance. That is what the employment insurance reform is all about!

Did you not raise the issue because you are unaware of the negative impact of this reform or is it because you accept it thinking you cannot do any better?

Mr. Florient Levesque (Futurs sans-abri de Restigouche): We are fully aware of the impact of those reforms and of the cuts in unemployment insurance and the social transfer. We have observed them. We see the impact on the street, in the Restigouche area, where we come from, which is one of the poorer regions of Canada that can be viewed as Canada's Third World. Many people do not know that there is a Third World in Canada. Since the beginning of the year, there have been seven suicides in our community. We have one of the highest suicide rates in Canada.

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Those are some of the direct consequences of cuts to federal transfers to the provinces. Moreover, in our province, we have a Premier who is most insensitive to human suffering. So our premier, Frank McKenna, will not provide any solution to poverty in our communities. That's a fact. I heard Mr. Grubel say earlier that he was surprised to hear about fathers not taking care of their children and I felt like pulling my hair out. God knows I have a lot! How can it be that people who represent the entire population are unaware of the fact that a lot of guys, in this community, do not take care of their children or their spouse?

It is absurd that people in power do not comprehend those things. Those things will happen, they happen in the United States, where social programs were slashed, which resulted in a lot of homeless people and tremendous poverty. Those people must find the means to survive. What is there left? They will have to steal food to feed their children, because they want to raise them properly. They will have to be fed, and the parents will end up in prison.

So you are going to make huge investments to control society. Canada is creating a monster. And when that monster wakes up, it could be disastrous. If you read Victor Hugo, you can see that the story of Jean Valjean is being replayed right now.

As a society, are we going to collectively say enough is enough? Are we going to do it collectively?

That is what I wonder. I listen to colleagues from industry and business, and I don't object to those people making money. Someone has to. But what upsets me is that society has extremely wealthy people on the one hand, and people starving on the other. I cannot accept that. In our province, in New Brunswick, we have two of the seven richest families in Canada, the Irvings and the McCains.

But there are solutions to the problems. I can assure you, Mr. Laurin, that if we had the proper tools, there would be no talk of separation in Quebec right now. Political options are not the answers to our social problems. But the current social crisis might bring grist to the mill of sovereignists or independentists in Quebec. Politicians must recognize this. Canada is about to collapse and those that are left behind will have to cope and make do.

Mr. Laurin: I don't see why you view this as a threat. I for one view this as an opportunity. It's the reality and people must see both option A and option B.

The Chairman: I think the question was put to Ms Wright.

[English]

Do you have anything else you'd like to add to that?

Ms Wright: There are a few issues I'd like to talk about. First, I believe that if the jobs are created and people who are on social assistance get more than $6.25 an hour, it would also give them some sort of initiative to get off the system. A lot of people feel that they don't want to really get off the system because it's not benefiting them. They're not getting ahead financially. If you make a little over $200, your assistance is cut. And fathers that pay child support...I do believe that single mothers should be able to get their child support.

[Translation]

The Chairman: Thank you, Mr. Laurin.

Could I ask you a question, Ms Farrah?

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It is being suggested to increase the credit or deduction for charitable contributions. Would this greatly help your sector? At every level, every government has cut subsidies to the arts and this has caused extensive hardship to Canadian artists. Could you address this by providing an incentive for personal or corporate charitable contributions?

Ms Farrah: Admittedly it would do no harm, but the federal government must still make a commitment towards creators, culture, production and distribution. The arts cannot be funded only by the private sector. We have made efforts. For instance, in our association we try very hard to develop partnerships with the private sector. We do a lot to find solutions to improve matters, but the federal government cannot abdicate its responsibilities for the arts and culture.

As for your specific question, it can certainly make a difference.

The Chairman: Thank you very much.

Are there any other questions?

Mr. St. Denis.

[English]

Mr. St. Denis (Algoma): Thank you, Mr. Chairman.

Thank you all for being here. I'm sorry I had to be late. I was in St. Andrews for most of the day with the Prime Minister's task force on aquaculture. New Brunswick is home to -

The Chairman: What he means is he went fishing.

Voices: Oh, oh!

Mr. St. Denis: Not in this outfit.

New Brunswick is home to quite a bit of research and an emerging aquaculture sector. We have a long way to go yet, but I think there certainly is some job potential.

I just rented a car and drove down to St. Andrews and came back. On the way back, I heard an ad on the radio by an automobile dealership advertising a sale of cars with the PST, the provincial sales tax, and GST included in the price. In other words, they were essentially promoting the sale of cars as if the new system were in place. There seemed to be a certain amount of pride. At least that's how the ad came across to me. It came across like this was a good thing.

I find it hard to believe that businesses in general would consider advertising like that if they thought it was a bad thing. So I do hear some positive feedback from Mr. Creamer, I think.

Notwithstanding the fact that there will be some adjustment difficulties, I am wondering whether in fact the tax included in the price at retail is not the best way to go. Once the dust settles in the Atlantic provinces that have agreed to harmonize, I wonder whether everyone will be better off for the harmonization at the end of the day.

Any additional comments you have would be appreciated.

Then I have a second question, Mr. Chairman.

Mr. Creamer: First of all, again, we are for it. It will be a good thing. There's no question about it.

I'd like to table this document, if I could, Mr. Chairman. This document is called ``Tax-inclusive pricing in the retail sector for the Atlantic Provinces: why it is impractical, costly and insupportable''. This was prepared by Coopers and Lybrand for Canadian Tire, Consumer's Distributing, Eaton's, Hudson Bay, Sears, Shoppers, and Woolworth's. Again, tax-inclusive.... Have you seen it?

The Chairman: No, but I want the whole committee to see it.

Mr. Creamer: Again, it will be a good thing. There's no question. It's just that it'll be even better once the other provinces come on board.

Mr. St. Denis: [Inaudible - Editor]...tax-included pricing suggests to me that it isn't universally accepted that this is the way to go.

Mr. Creamer: For a car dealership, I remember my father taking us in, and whenever they would give him the price he would.... They will know it's plus, plus, plus. That bothers a lot of people. So in certain things it's great.

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Mr. St. Denis: They were saying the price they quote you is the price you're going to pay.

Mr. Creamer: Yes, and that's good. It's just that it's a nightmare for these people.

I'll hand this over to the chairman and he can get you a copy.

Mr. St. Denis: I have a second question, back on the very important area of social services and the difficulties faced by too many families, especially single-parent families and their children in Canada. There's no question that even though we are one of the best countries in the world in which to live, if we are leaving people behind in any respect, on the basis of income or of illiteracy, then that is a tragedy. We can't consider ourselves a modern nation if everybody is being left behind.

I wonder if there's any opinion around the table...and I would encourage the business community to jump in on this as well, because it's everybody's concern. We hear so much about the fiscal or financial deficit. We need to hear more about the social deficit, because we all pay for it in one way or another. I wonder if it isn't time for the federal government to be showing some leadership in the area of standards.

When Ms Wright talks about how in this province - and I'm sure the same philosophy applies elsewhere, in different form - as soon as you go out and make a few dollars they come off your benefits, and if your support payments come in, well, that affects something else.... We certainly have effective national standards in health. We don't have standards in post-secondary education, though I think we should. Except for residence requirements, we don't have any standards in the area of social services. I'm wondering if, in contradiction to what Mr. Laurin is saying, the people of Canada would want some federal leadership in the area of standards, more than just residence - whether there's more the federal government can do, without it costing great sums of money, to rationalize the system so some of the complications Ms Wright and Ms Beaton and others face wouldn't be there simply because of differences and different approaches in different parts of the country.

I'll leave that open, Mr. Chairman, if there's any comment on that.

The Chairman: Mr. Creamer.

Mr. Creamer: Suzy, I was thinking about your situation. I wear the hat of the board of trade president here today, but I own Eastern Collection Services, a collection agency in the province, and we collect money. Every day -

The Chairman: We don't like people like that.

Mr. Creamer: Well, I sleep very well every night.

Every day we run into people in your situation, so I don't have blinders on. I'm not in your shoes, so I don't really know what you're up against, but I deal with it every day.

I'm wondering about a couple of things. First, you read in The Globe or in the U.S. about.... I hate to use the word ``deadbeats'' - I won't let my employees use that word - but the papers have written about ``deadbeat dads'' and that type of thing. The federal government could assist a lot of these mothers by trying to facilitate dialogue between the provinces - I believe some provinces have already gone this route - to help them out where their husbands are working, they're not paying their support, and they should be paying their support and supporting their families. That should be right across Canada.

That for one thing would help them out. They shouldn't try to tie them up in red tape. They have no money, so how do they pay a lawyer to.... Every time you turn around, ``well, I have to go back to court''. They get tied up in the system. They don't have the money to go about it and get it done, so they give up. That's what happens.

You haven't gone after your husband, from what I hear. Maybe you don't want to. That's a decision you have to make yourself. But I think the federal government could facilitate something there.

Also, you said you had a job. You had to leave at 4 p.m. and your children would be left alone with a babysitter. I can understand that - I have children too - and how you feel about that.

.1430

More and more families, women and men, can operate out of their homes. You have a new idea for a small business. In the province of New Brunswick there is a spot for a lot of people in the technology industry; we're crying for them, basically people who have skills in computers, that type of thing.

You're young. Is there some way you can re-educate yourself? Obviously you have to go to the province where there is a need - I'm not sure what's available - but there's something where somebody can send you in the right direction, get you the help you need as far as education goes. Maybe you can sell something to a company that will allow you to set up a PC in your home and be with your children and operate from there.

Ms Beaton: I know in which direction I'm going. I know what type of work I want to do. The work that I will be doing in the future, if everything works out, will allow me to work the hours when my children are in school. There will also be some evening work, but the type of work I will be doing will enable me to involve my children in it, because it's also very important for them to see that there are healthy people, that there are people who are not messed up, I guess would be the best way to say it. The type of business I am hoping to be able to open in the future is...what I'm hoping to call it is the healing centre.

Unfortunately, there is no study that can be done in universities. It's a study I've been doing on my own for eight years, but there is no degree, no diploma. There is only the peace of mind I have acquired.

Mr. Creamer: Okay. So you can charge for this. I mean, do you know how you can get paid?

Ms Beaton: The centre I hope to open is a mixture of three in one. One is the material to do the study. I will be selling the material to do the study.

Mr. Creamer: Good.

Ms Beaton: The other form of healing that I'm planning to do I'm not going to charge for because not everybody can pay for it. It shouldn't be limited to people who can pay to be well, and the people who can't should not.

Mr. Creamer: Good luck in your venture.

I have one more thing, Mr. Peterson. I'm wondering if your committee could go with that suggestion I've made, to try to facilitate something as far as making it easier for mothers to get their child support from their ex-husbands who are working. I'm not a genius in the economic field, but I can only see that if these people are working and they can pay this lady, or other people like that -

The Chairman: We've seen some examples of that. Ontario has just introduced very tough deadbeat legislation.

Mr. Creamer: Right.

The Chairman: They're going to go so far as to take away drivers' licences and things like that if parents don't honour their financial responsibilities toward their children.

Mr. Creamer: But don't make it tougher for these people to get through the system I guess is what I'm saying.

The Chairman: I want to come back to that. I think it's a very good point.

Mr. Gagnon: Since I'm not on the receiving end of the questions, I must ask a question, I guess.

I want to ask about what was just said by Suzy and Stéphanie. It was a long discussion and I think it took most of the time. It seemed to be quite inclusive, almost like an inquest at times. In the end, there were some productive things that came out of that.

I would like to remind the committee that poverty is a big factor and I think it was referred to momentarily a little earlier. There's a big poverty factor here, child poverty, but there are not only poor children; there are also poor families. I think that's the thing we're missing. If the family is poor, the children are going to be poor. We're always saying how do we solve the problem of child poverty here. I think she's talking a little bit on that.

.1435

It's interesting to note that a report by UNICEF ranked Canada the second-highest number in poor children among the 18 industrial countries in the world. We're second highest. We were ranked 24th out of 34 industrialized countries in the world for the rate of suicides among young females, 22nd for suicide among young males. I thought it was appropriate to bring that up after it was mentioned there were seven suicides in this area. I think the responsibility lies with the federal government.

We talked earlier about investing in infrastructure, roads, sewer systems and schools, arenas, whatever people felt should be proper infrastructures in their communities. But what we forget to invest in is the social infrastructure. We see that governments are now cutting the transfer payments and you were saying it's the responsibility of the provincial governments, that provincial governments are cutting social assistance, health care cuts and everything else. But the cuts in the transfer payments contribute to this. I think it's the responsibility of the federal government to supply proper transfer payments to preserve these fundamental principles, which has made Canada over the last few years one of the better countries in the world to live in, despite our many problems.

We're eroding that base, and I think it's very, very dangerous. These cuts to health care, which can be attributed to cuts in transfer payments, come down to the same philosophy. As you cut health care, as you cut these services, when you cause massive lay-offs in the public sector, these cuts affect recipients like Suzy and Stéphanie and other people, and children. These types of cuts have to stop. And where are they coming from? They're coming from the federal government.

As Patrick beside me was saying, he wants value for his dollar. I think you get value for your dollar if you invest in infrastructure. I think that's where we have to stop. Stop cutting and gutting the social programs, the infrastructure, the services that have been cut from federal buildings, from health care workers. All this has a direct impact.

We talked about education a while ago. I think it's very important that we have education that is knowledge-based. We're always talking about the knowledge-based economy. There's the perception out there that if you train people, the jobs will come. It is something like that movie Field of Dreams, where the father built a baseball field and the baseball players came. That's not reality; that's fictional. If we are going to supply education and skills.... If there are 100 carpenters unemployed and we're training 100 more carpenters, it's not sufficient. I think just to train people shouldn't be sufficient; there has to be a value in the education.

After that, opportunity has to be in place also. For people who want to get educated, we must see that child care is provided, a promise that this government.... I guess it's not one of the 78% you kept. But one of the promises, and I guess the other 22% you were supposed to keep, was supposed to have some type of increased child care so people can take proper education and get proper training to find jobs. But these are promises that I guess your government has made, these are directions your government has taken, and the end result is that provincial governments, good or bad, are living with and again taking the wrong decisions.

I just wanted to comment on that. Thank you.

The Chairman: This has been one of the most interesting round tables I've participated in over the last three years on the pre-budget consultations. It's because we've had such -

Mr. Darrah: I want to make one comment.

The Chairman: Sure.

Mr. Darrah: Mr. Gagnon, I slid down the same hill on cardboard with Sutherland, in the south end of Saint John, so I just wanted to say we all some time or another might have been on the same piece of cardboard.

I do think, Suzy, that one of the things is that we've allowed the system to get too large, so we're not close enough to the people. I only leave that observation because as little boys we slid on the same box. We went to the corner store and got the cardboard. And you know where he is today.

Thank you, Mr. Chairman.

.1440

The Chairman: This is one of the most fascinating round tables I've ever participated in, simply because we have seen very articulate and compelling arguments from both sides. The objective, I think, was all the same: creating a prosperous economy with opportunity for everyone.

We have heard from the board of trade and a very distinguished businessperson, Mr. Darrah, who has indicated that we have to hold the course, that we have no choice really because it boils down to the fact that one-third of our expenditures - the tax revenue we take in - is going out just to pay the interest on the debt. Everybody here knows what it's like to owe money. The highest thing you spend money on is the interest. You can't be spending on other things.

Then we have the other side - Mr. Gagnon, representing other people - saying to the effect that we have an alternative, that we don't have to cut programs or transfers to the provinces, that we could increase taxes, and this is Mr. Gagnon's point, that there's lots of room to increase taxes.

On the other hand, we have heard from business that if they're going to go about their job of creating jobs, they will want to see perhaps increased incentives for small businesses in terms of reduced taxes.

We have heard from the artistic community in Canada.

[Translation]

Ms Farrah discussed the role of artists in our society. You must understand that a small investment in the arts and artists is very important in terms of employment, but also for our Canadian culture.

[English]

It costs so little to create an extra job in the arts. On the infrastructure program that somebody has been calling for here, the last one cost us $60,000 to $90,000 a year for every new job created. It was not a job-creator; it was a program for getting some necessary roads and sewers and other things in place.

What hit me very much was what Stephanie Wright said - and we've seen this in other other areas. Why the hell should she go out and earn at the minimum wage? As soon as she hits $200, they claw back her welfare. We heard this in Ottawa for two years running, not only from welfare but on unemployment insurance. If a person is going to become self-employed, shouldn't there be a weaning process so that at the moment they hit a certain level they just don't lose their UI benefits? This was a suggestion to encourage people to become self-employed by selling products like Amway and joining the Direct Sellers Association. I think this is another example of how we have to change that system. There should be some real incentive for you to get on to that job, and you should be supported by the system much longer when you are going into the job area.

Suzy Beaton has hit us in a way that I don't feel quite capable of coping with, either as a human being or as a politician, because I know you've seen a lot of hardship, hardship I've never seen in my life. I feel that I'm pretty lucky when I look at the opportunities I've had and the things you've had to face.

But I think maybe you hit it, Patrick, when you said maybe we're all too far apart from one another in so many ways. A program coming out of Ottawa isn't going to do a lot of good probably for somebody like you. There must be organizations in this community that could work with you, people who are skilled and knowledgeable and provide some of that support to a certain point.

From Thomas Creamer's questions, I think he was suggesting that he might be able to sit down with you or find somebody in his organization who might help you develop a business plan for the type of business you want to develop to see if it's doable or not; or if it's not doable one way, maybe it's doable in another.

.1445

I have the feeling that there are two people here who have had a pretty rough go of it, who are mothers of kids who are going to be Canadians in the days ahead. They have a lot of guts. They would love to get off this treadmill and would give their right arms to be gainfully employed and contributing taxpaying members of society.

I guess if I were an employer I would think that enthusiasm and that desire would probably be more important than any little bit of formal education or lack of baggage such as kids right now. I don't know whether there are ways that.... We will certainly make recommendations about deadbeat fathers performing their bit. I think that's important.

Maybe there are ways businesses can profit from this incredible enthusiasm I see before me. I think we all have to go back to the drawing boards, but my guess is that you'll come up with the solutions here in Fredericton before we will be able to deal with the problems in Fredericton from Ottawa.

On behalf of all members, I'd like to thank you very much.

The meeting is adjourned.

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