EVIDENCE

[Recorded by Electronic Apparatus]

Thursday, May 11, 1995

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[English]

The Chair: Can we come to order, please.

We're on Bill C-76.

Before us today we have the Social Planning Council of Ottawa-Carleton: Mr. Jim Zamprelli, executive director; and Helen Berry, social policy consultant.

Mr. Jim Zamprelli (Executive Director, Social Planning Council of Ottawa-Carleton): We're here from the Social Planning Council of Ottawa-Carleton, which is a citizen-based, bilingual planning and advocacy organization created in 1928. So we've been working in our community with our members for over 65 years.

As a council, we provide independent, informed critical perspectives on our social support systems at all levels of government, whether that be local, provincial or federal. We are a vehicle for citizen interaction with government, with the public sector, at its various tiers.

We are a means by which our members, which are over 100 organizations and over 250 individuals, and our community within which we work can identify and act on social and economic issues important to our community's future well being.

As an example, we helped to mobilize the community to react to the federal intentions on social security reform. We actually appeared before the Standing Committee on Human Resources Development. We have done a lot of research on child and family poverty in our community and have educated the public to the realities and hopefully to some solutions. We have highlighted the inadequacies of our social assistance programs in really and adequately meeting the costs of living of families, children and individuals who must rely on assistance to survive.

I think we've given you copies of our market basket document in which one could ask the question, does social assistance really meet the living needs of individuals who rely on it?

Most importantly, we serve as a catalyst for change and advance the interests of many segments of our community, especially the marginalized segments.

We do this by advocating specific policy positions to government, and actually that's the reason why we're here before you today.

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The Social Planning Council of Ottawa-Carleton is requesting that this committee recommend the following amendments to Bill C-76. With regard to the part V amendments, i.e., the Canada health and social transfer, we strongly recommend that the proposed paragraph 13(1)(a) include the following language: that as a condition of continued Canada health and social transfer funding the provinces must use no less than 43% of those funds for social assistance and social services.

My colleague, Helen Berry, will get into more detail on this 43% figure.

Also under the same paragraph 13(1)(c) - and as well this would affect proposed subsection 13(3) of the bill - we strongly recommend that the proposed section include the following: that as a condition of continued Canada health and social transfer funding the provinces comply with national standards and principles for social assistance and social services as outlined below.

We've outlined and chosen very specific language around a number of these standards. First is adequacy. Social assistance benefit levels must take into account what is required to meet recipients' basic needs using a market basket approach.

As I have just said, the pamphlet I gave you gives you an example of what we mean by a market basket approach, i.e., looking at the realities of the cost of living and assessing whether social assistance does or does not meet those. If they don't they should be increased.

Consistency: Service, delivery and entitlement of social assistance and social services must be consistent within provinces and across Canada. So we're talking about national consistency, national standards, no matter where, from coast to coast.

Universal eligibility for those in need: Social services and/or financial assistance must be provided to any person in need. I refer back to the current legislation, which we would endorse, which defines a person in need as anyone who by reason of inability to obtain employment, loss of the principal family provider, illness, disability or age is unable to provide for himself or herself and family. That was adapted, as I say, from existing language.

There should be choice, opportunity and assurance that all applicants and recipients of social assistance and social services are treated with courtesy and dignity. The system must also provide meaningful economic and educational opportunities for people receiving assistance to access voluntarily - and we put the emphasis on ``voluntarily'' - when and if they are able.

The system must be equitable. There must be equity. The social assistance system must treat all people in a fair, equitable and consistent manner. People can expect to receive fair and equal treatment free from discrimination in accordance with the Charter of Rights and Freedoms and the Canadian Human Rights Code.

Accountability: The system must ensure that individuals have a meaningful role in decision-making - especially the individuals, meaning consumers of service - that directly affects them and have access to a broad range of choices, opportunities and supports to participate fully in the community. As well, we insist that provinces must provide an open and accessible appeals system for applicants and recipients of social assistance.

I will now ask Helen Berry to provide you a more in-depth analysis of these two strong recommendations. So I'll turn it over to Helen at this point.

Ms Helen Berry (Social Policy Consultant, Social Planning council of Ottawa-Carleton): With regard to the first proposed amendment that the provinces use no less than 43% of the CHST funding for social assistance or social services, that figure of 43% came from the 1993-94 levels of federal funding to CAP and EPF for the health care and post-secondary education. It's the percentage that CAP took.

That's where that figure came from: the Auditor General's report of 1994.

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We feel it's necessary to legislate a certain percentage of funds for social services and social assistance mostly because of the climate and the way things are going right now.

There's been a lot of discussion at various levels. The Prime Minister himself has said there's a feeling that health care and post-secondary education are priority areas, whereas the emphasis seems to be less on social assistance and social services.

This is why we feel there's a necessity to legislate a certain percentage. We feel it makes good economic sense to support social services and social assistance.

Here are a couple of examples. One is the correlation between poverty and poor health, which is in recent studies, including the report by the Canadian Institute of Child Health called The Health of Canada's Children.

I'd like to read a quote from that. It's a little bit long, but I will read it because I think it's important to set the stage for what I mean about poverty and poor health:

In Canada today, a country considered internationally to be wealthy in many ways, more than 1.2 million children live in poverty. What does this mean for these children? It means not having enough food to eat. It means living in houses that are in ill repair. It means not having warm clothes in the winter. It means not having access to the kinds of play and recreation facilities that children need to grow and develop. It means being less likely to finish high school and even less likely to go to college or university, which means being less likely to find a job, which is what we're all hoping our kids, our grandchildren and ourselves do.

Being born poor also means that children are more likely to face ill health: physical health and emotional health. It means facing a greater risk of death, hospitalization or disability. It means being more likely to have difficulties in school or to have some kind of mental health problems. Although poverty does not guarantee that a child will have health problems, it is strongly correlated with the increased risk of illness.

As I said, this comes out of the Canadian Institute of Child Health.

As we see, health care and social service costs received equal portions of federal funding in 1993-94, which is about $7.2 billion. This, again, comes out of the Auditor General's report.

However, we have an aging population. Baby boomers are getting older. With the increased high cost of medical technology, which we also see, I think it's fairly safe to assume that health care costs are likely to grow at a faster rate than social assistance costs. As Canada's economy recovers and the unemployment rate lowers, social assistance needs will significantly decrease. This was demonstrated after the 1982-83 recession; social assistance rates slowly decreased.

Looking at the correlation between poverty and poor health, one method we see of possibly reducing escalating health care costs is to ensure that there's financial support to maintain the infrastructure of preventative social services and social assistance programs.

As an example, it seems to make better economic sense to assist a single mother with properly feeding and housing her children at a high rate for social assistance, depending on housing, of $1,500 a month than to pay almost $1,500 a day to hospitalize one of her children. That just seems to make economic sense.

With a 43% minimum of social assistance, as social assistance needs decrease, which is what we hope with jobs being created and things like that, the province will be able to channel the funds they will gain from social assistance rates going down into more preventative social services. This will, again, keep things like health costs down as we're looking at the prevention of ill health.

The Canada Assistance Plan not only funded social assistance, it funded a lot of social services, including things like counselling services, homes for people with special needs, people with disabilities and some child care. We feel there's a whole infrastructure that has been built by the Canada Assistance Plan over the last 30 years. Without implementing a minimum standard of funding to the provinces, we're afraid that infrastructure will fall.

It wouldn't be very cost-effective to either try to rebuild that or suffer some of the consequences of not having in place what we call preventative social services.

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While there isn't a complete correlation and I haven't seen any studies that really prove it, there's talk about poverty in relation to crime and certainly poverty in relation to high drop-out rates in school and things like that.

So there are many studies out there that show these correlations. Again, this is why we look at these services as being preventative in nature. These are short-term costs for long-term gain.

The Social Planning Council recognizes that the present form of the Canada Assistance Plan and EPF funding is rather complicated. I was reading in the Auditor General's report, I think, that there's some feeling that the federal government didn't exactly always know where CAP was going, especially with the cap on CAP in 1990. Three provinces felt they only had to describe a certain amount of their funding.

We believe that supporting a minimum amount of 43% toward social services and social programs will give the federal government some leeway in monitoring more clearly what the provinces are spending. It will also give the provinces flexibilities to create the kind of social services and social assistance system they need given the national standards we talked about, which we feel are very necessary.

Speaking of that, with regard to the second proposed amendment, which is the inclusion of those national standards, we do recognize that in proposed subsection 13(3) of clause 48 in the bill there is a provision that Human Resources Development will consult with provinces to develop what they call ``shared principles and objectives''.

However, we are concerned that the bill will not be amended after the fact and that those standards will not make their way into the legislation. Whether that's valid or not, I don't know, but we are concerned about that. This is why we feel that some very clear standards to the provinces should, in the first place, be put in.

It's been pointed out by other groups, apparently in pre-budget consultations and most recently by the National Anti-Poverty Organization and the National Action Committee on the Status of Women to the UN committee, that failure to place national standards for social assistance and social services into legislation has a potential of creating clear inequities in social assistance and social services between provinces. This means that the people who rely on these services are big losers in this.

While we would agree that the Canada Assistance Plan did not necessarily satisfy either federal or provincial goals for funding for social assistance or social services, it was one area of legislation that supported some fundamental social and economic rights for Canadians that aren't covered under the Canadian Charter of Rights and Freedoms, the Human Rights Code or the Constitution at this point.

These rights include, among other things, the right to income when in need, which is one of our standards, and the right to an appeals system for adverse welfare decisions. I think we would all agree that a basic right to appeal is very important, whether it's social assistance or not.

With the CAP repealed and no legislated replacement of standards at this point, low-income Canadians will potentially lose some very fundamental, basic rights. I think Canadians across the board, not just low-income people, will lose some basic rights.

Some groups have argued that this would discriminate directly against the poor, thereby contravening the Canadian Charter of Rights and Freedoms and the Human Rights Code.

One such group is Lawyers for Just Reform. They're lawyers - I'm not - and they talked about this possibly being discriminatory under those bases.

In conclusion, the Social Planning Council of Ottawa-Carleton recognizes the critical impact of repealing the Canada Assistance Plan and the far-reaching implications of the $7 billion funding cuts. We haven't talked a great deal about that, but we do recognize, as I think this committee must, that $7 billion out of that budget will change things dramatically.

Although we feel that national standards are an important part of it, they alone will not create an equitable and an adequate system of social programs and social assistance for Canadians.

We, and certainly the community of which we are a part, feel that it's very important to have national standards across the board so that all Canadians can have access to social assistance and social programs when they are in need.

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The Chair: Thank you very much.

[Translation]

We will start with you, Mr. Deshaies.

[English]

Mr. Deshaies (Abitibi): Do you speak French?

[Translation]

Ms Berry: Yes.

Mr. Zamprelli: I was going to mention that we would certainly be pleased to answer in French.

[English]

Mr. Deshaies: You can speak English, but...

[Translation]

Mr. Zamprelli: But no, as you wish.

Mr. Deshaies: Alright. I will...We'll wait for Ms Berry.

Mr. Zamprelli: I just wanted to mention that if you haven't received the brief, we have a French version of it that we didn't have earlier. So, if you'd like a French version of it...

The Chair: Mr. Deshaies.

Mr. Deshaies: Hello again, Ms Berry and Mr. Zamprelli. I think you made a good presentation on behalf of those expecting the government to implement some social measures, and especially Ms Berry, who stressed the need for national standards.

I am not fully convinced of that need, since it may not be possible to meet those standards given certain constraints. For instance, budgets will shrink every year because of our national debt. How can you meet those standards if you don't have the money to do so?

Also, you say that 43% of our monies should go to social assistance. That is also a type of standard, because I think it is well founded: you want people to be guaranteed a certain income, because you say that if they are not as poor, they may not be as sick and this will have a positive, rather than a negative effect.

But there again, if the total budget shrinks, that 43% will also shrink; so, you will end up with less money, you will still get 43%, but it would be a lesser amount. So, your goals will still have not been met.

Also, how can you reconcile the bigger provinces, such as Ontario, and Prince Edward Island, whose social, health or education needs may be different? If they have to follow the exact same rules, where 43% is for social assistance and the rest for health and education, I think you can expect serious problems.

Mr. Zamprelli, since we will be faced with cutbacks over the next few years, how can we give provinces or regions some flexibility and at the same time have national standards?

Mr. Zamprelli: Perhaps I should start by saying that 43% is just a suggestion. The point is, there must be some guarantee that funds will be earmarked for social programs. Our concern with Bill C-76 is that the entire issue of social services is quite vague and nebulous.

So, our point is that needs equals standards, and standards does not necessarily mean expenditures.

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I have no idea how much it would cost to implement these standards we presented this morning, but it is really a question of fairness, knowing that every program is accessible, etc. I really don't know whether it will cost more.

But to get back to the 43%, that is really just a starting point. It is basically a question of guaranteeing a definite amount for the transfers.

Mr. Deshaies: Don't you think it would make more sense to have a policy statement, confirming that social assistance is a priority in Canada?

Let met give you some examples: the poverty level. Someone earning, say, $12,000 and living in Abitibi is better off than someone earning $12,000 in Montreal or Toronto. The person in Abitibi can have a small house in the country, have few housing and heating expenses, because he lives close to some woods and can cut his own wood; in that case, the policy should not deal with figures, but rather quality of life.

The person living in Abitibi has a better quality of life than the one living in substandard housing in Montreal or Toronto. Would it not be preferable to have qualitative rather than quantitative standards?

Mr. Zamprelli: That is what we did with the standards we put forward, the principles. That is indeed what we are advocating by presenting these standards for you, which are quite broad, but which, for us, are nearly set, so that any beneficiary in any province or municipality must meet those standards and have their own system; as you know, under the current system, rates vary tremendously from one province to another, to reflect local condition.

However, even with the different benefits, we think that regardless of where you live, beneficiaries should get enough assistance to live adequately. In some cases, even within a given town, when the cost of living had supposedly been taken into account... At the end of the day, the benefits were certainly not enough to live decently. All we ask is that the Act clearly define those standards and principles that would be tailored to a given community, but we still feel there must be a clear policy.

[English]

Ms Berry: Can I just add to that statement? What we're advocating around the adequacy is the market basket approach to setting social assistance rates. This would take into account community situations, or what we call community standards. As they do right now, social assistance rates take into account housing costs, family size and things like that. The market basket would also take into account school supplies, clothing and things like that.

At present in Ontario a telephone is considered a luxury; it's not a basic cost that's covered by social assistance. We start to feel certainly in urban areas and in rural areas in 1995 that a telephone is not a luxury; it's a necessity. This is particularly so if you have children.

So these were standards that were set in a variety of provinces under the Canada Assistance Plan. We are looking at taking the differences into account in the provinces.

I think there is a good point. There is $7 billion being cut from this budget. This is the reason we didn't set an amount; we set a percentage. We're not pleased with $7 billion being cut. The system is falling anyway, and people are falling further and further into poverty.

However, rather than talking about that, we felt that a percentage would mean that at least it would show the support for preventative social services and social assistance and that we do recognize they have impacts on every area of Canadians' lives.

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Social assistance doesn't just affect the person who's on it. A lack of social assistance doesn't just affect the person who doesn't receive it. It affects all of us when we walk down the street. As time gets worse, we all recognize homelessness and things like that and the move toward that.

So we have to realize that this will affect us, those of us who aren't on social assistance and those of us who are. I think it's a matter of a whole-service system that supports.... It's the moral side, I suppose, of what we as Canadians want to see in our social services.

I'll just address the issue about the national standards. We handed out a position paper that the Social Planning Council recently adopted. I think there's a copy available in French also.

We did have to reconcile with the fact - there's been a lot of discussion around this - that with the federal government giving less funding to the provinces, it has less leeway in enforcing national standards. In the position paper we talk about basically revisiting the idea of a social charter. It means different things to different people. We feel that it again comes back to what we, as a society, want to have in Canada for Canadians, for ourselves and for our children in the future.

[Translation]

Mr. Dehaies: Excuse me. The time ran out around 10:15. I would like to finalize this. Other members wish to ask questions. If I let you go on...

What you say is interesting, but I should tell you that yesterday, we met with people involved in the health area. They wanted an even larger share. Right now, it is difficult to determine the percentages, while the goal is to try and provide Canadians with the best possible quality of life. I will now let someone else take over. Thank you, Mr. Chairman.

[English]

Mr. Speaker (Lethbridge): I have two questions, which are basic to what we are talking about. First, I spent a number of years of my life working with social planning councils. I've always respected the tenacity with which they pursue social needs, so I respect that.

This is the first question I wanted to ask. For many years I was the minister of public welfare and health. We changed it to health and social development to try to put it into a different context. Over those years, in sitting around the table of ministers, the Province of Quebec and the Province of Alberta always had the same point of view in presentations to other ministers and also to the federal minister at that respective time. It was that we felt the province should have more jurisdiction over our social service programs and our own pursuits and more ability to set our own priorities.

When I listened to your presentation, the inference was there such that you don't trust the provinces. My first question is why not?

Ms Berry: I think it's certainly not just one province or another; I think it is the general climate out there that we're concerned about and a move away from supports, particularly welfare. Social services seemed to fare okay, but there was a move away from the idea that people need social assistance. I think that's a general climate that has taken place.

There are very real reasons for that. There's a recession. A bulk of people in, say, the middle class are feeling a personal income tax crunch and things like that.

That's what we're trying to be proactive on. It's the feeling that if there are standards set across the country.... We also feel that it's only fair for a Canadian in Vancouver to have the same kind of service in as a Canadian in St. John's.

It's the same base.

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[English]

I think there's still a lot of flexibility. Even in the national standards we talk about, I think there's still a lot of flexibility for provinces.

This has been shown. There were standards involved in the Canada Assistance Plan. I realize they were ones that were set 30 years, which may not be relevant today. I think there's also movement to change that, but I think the provinces still had a great deal of flexibility around social assistance.

Mr. Zamprelli: I was just going to say that it's not a question of not trusting provinces. We are a federal system. We believe, as a nation, in certain principles. We're saying that with the changes, the abandonment of CAP and the institution of CHST, we should not forget some elements or principles that were in the original CAP, which should be reinstated or even enhanced in terms of this new arrangement.

When CAP was instituted I assumed that certainly everyone was on the same wavelength, as it was a national federal-provincial program, and that some standards, which would be applicable across the board, would be appropriate and non-threatening. These would not be accusative such that anyone would sabotage the program.

That's not our point. Our point is that if it is a national program and if it is to serve Canadians first and Albertans, Québécois, etc., the program should subscribe to standards that should not necessarily inflict extreme constraints on provinces too, as monsieur was saying, to localize and provincialize, if you will, the program. Nevertheless, there has to be an agreement that the Canadian people will be served in a certain manner.

Mr. Speaker: The other question is with regard to the fiscal circumstances. You have reflected on that already in recognizing the reality of the circumstances we face.

As I look back over the years, I can recall when Alberta had two social workers. One of them happened to work for me in the latter part of his career.

He pointed out some of the things that happened. During my time as minister, we had 1,000 social workers. That has increased up to 2,000 or 2,500 at the current time in Alberta. The budget went from a few hundred thousand dollars to $1.2 billion or $1.3 billion, which is what it is at the present time.

The numbers continue to increase with the social needs out there and the demand. My question is in terms of continuing to spend more. We seem to be creating more dependency rather than independency. In this legislation, as for the Canada Assistance Plan, if we preserve certain levels of support, are we enhancing the system or are we creating a circumstance in which we can't...? We're not resolving the problem.

Ms Berry: I think we would all agree that the social assistance system needs to be reformed. I don't think anybody would argue that. With the social security review, I think it came across that changes need to be made. As you said, there's an increasing need out there. There has to be a reason for that.

Again, look at realistic ways of changing the system. We have programs called ``opportunity planning'' and things like that in Ottawa-Carleton. It really is what it says: opportunity planning. It's not coercion, workfare or forced.... What happens when people are given an opportunity to do real things to educate....

A lot of this, again, comes when you look at the high rate of single parents - single mothers - on social assistance. There's a need for other services like child care and social housing, which is unfortunately lacking in the budget.

Those kinds of infrastructure costs are necessary to assist people to get off the system if they are on it, or to keep them from going on the system if they aren't on it.

Again, it's a matter of having a long-term vision around some of these things. I'm not an economist, but I couldn't say that it wouldn't cost money to put money into the system at the front end to lower caseloads.

For example, rather than having workers sign a piece of paper or handing out a cheque, they're actually spending time in knowing what's going on in the community. They're able to assist and show people where some of those services are.

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Right now in Ottawa-Carleton we have caseloads of one worker to 105 cases at the municipal level and one worker to 450 cases at the provincial level. They can't do anything more than fill out forms and sign off cheques. It's a huge system that's not working.

But as I said, I can't say it wouldn't cost money to start.

Mr. Zamprelli: I just want to add something regarding dependencies. As Helen has said, we in the social advocacy field, if you will, certainly want to see the social assistance and social security reform move forward. However, as you're aware, it's basically been shelled.

What we're concerned about is that through the budgetary or legislative back door, we are in effect continuing with ``social assistance reform''. That's what's really disturbing us.

If we had continued through the process as had been originally designed, questions like ``Does social assistance cause dependencies?'' and ``How can we deal with such an issue if it does exist?'' could have been handled through an adequate social assistance reform process, not through inclusion of this in the budgetary measure without adequate preparation and debate.

Mrs. Brushett (Cumberland - Colchester): I thank the witnesses for coming before us this morning.

I would particularly pick up on the point Helen has mentioned regarding child poverty. I'd like to have it on the record that this government is extremely concerned with child poverty in this country. Those of us who have been involved at the municipal and provincial levels of services in our communities know it doesn't seem to be the amount of money we throw at this problem.

One of the things that has come up repeatedly in discussions I've been involved in is the fact that we isolate the single mothers in these old apartment houses where there's no support - no maternal support or grandparent support or whatever. As a result the young mother loses her education and her dignity, the child isn't nutritiously fed, the child goes to school unhappy and hungry, etc. As you say, disease and illness come and no education in this cycle perpetuates itself.

Money doesn't seem to be the answer. Whether we leave that number of 43%, or maybe 75%, we don't solve the problem. Don't you think that if we give the provinces and the municipalities that flexibility, they will tackle it from the community, family level and integrate that family somehow to give that child a better chance?

Ms Berry: I think also you should be aware that the 43% would include support services; it's not just social assistance.

The services you're talking about - the child care, the decent housing and even those community support networks - need basic resourcing. In the long run those kinds of programs are cost-effective, because people are really getting out of the cycle you're talking about.

Mrs. Brushett: But don't you believe that if, for example, I have a child who becomes a young mother at fifteen, I should have some responsibility to play a role there somehow as the extended family, rather than isolating that young girl at fifteen with a baby, when she's only a baby herself?

Ms Berry: Ideally, yes. Having worked with young single parents to a great extent, you can see a very clear division between the young women who make it and the young women who don't. I'm sure that is dependent on support, whether it comes from a family member, a partner or somebody else. I truly believe there are both sides of that.

Unfortunately we can't go back and create families that will support or that can do it well, and I think this is where we have to make sure there's a social infrastructure. We can try to bring that back, if it did ever exist, with support for whole families, because it must be overwhelming if, as you said, your daughter comes home at fifteen with a baby. That would be overwhelming for the family too.

Again, under the Canada Assistance Plan there was counselling involved and things like that, which I think are necessary preventive services. You're talking about a year's worth of counselling rather than ten years' worth of social assistance, say. These preventative types of measures I think are very important.

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Mrs. Brushett: But don't you think it comes back to the community rather than, per se, a national government legislating some relevant standard that could ever be imposed to ensure that we alleviate child poverty in this country?

Ms Berry: We're making some very general points about standards.

I've mentioned that the provinces and the municipalities would still have flexibility. We're talking about just some basic minimums so that the communities that aren't prepared to come together or aren't in a position right now to come together around the poor, especially large urban cities like Ottawa or Toronto.... Isolation is a major problem for that group.

It would be ideal, but I'm not sure that without some very basic minimums across the board.... Maybe in twenty years' time those systems could be in place. There really is a move to community-based health and social services and things like that, and I think that is a good move, but I don't think that structure is set right now. I think it needs certainly a few more years of resourcing and some standards before it's going to be available, unfortunately.

The Chair: Your presentation to us today I think again illustrated why it is so important that we as a finance committee have people like you, who work with the most disadvantaged, impoverished people in our society and who really have a claim and should have a claim on our resources and our assistance. This is why I thank you - and all of us thank you - for again reminding us of the duty we have to these people.

Thank you very much.

Ms Berry: Thank you.

Mr. Zamprelli: Thank you for hearing us.

The Chair: Our next witnesses are from the Communications, Energy and Paperworkers Union of Canada. We have Don Holder, president; Serge Lord, assistant to the president; and Keith Newman, director of research.

Do we have anybody from the Confédération des syndicats nationaux?

Let's take a petite pause.

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[English]

The Chair: Thank you very much for being with us.

Do you have a brief presentation? We can then turn to questions.

Mr. Keith Newman (Director of Research, Communications, Energy and Paperworkers Union of Canada): That's correct, yes.

The Chair: Thank you.

Mr. Newman: My colleague and I will read our brief - it's a short brief - and then we can proceed to questions.

Bill C-76 signals the beginning of the withdrawal of the federal government from health care, social assistance and education. Given the pivotal role the government plays in these fields, particularly in health care and social assistance, it is highly unlikely these programs can long survive in anything near their present form if the changes embodied in Bill C-76 remain in effect very many years.

The consequences of abandoning our principal social programs can easily can easily be seen by observing our southern neighbour. There a vast underclass cut off from health care and government assistance has been left to drift into a life of despair, violence and third world living conditions. Those somewhat better off live in constant fear of losing their jobs and all the health and other benefits that go with them.

Alternatives do exist. The slashing of our national social programs is being driven by the single-minded view of the economic ayatollahs at the Department of Finance that Canada's debt problems can only be solved through social program cut-backs.

Yet it has been pointed out by Statistics Canada that our debt is due to a combination of slow economic growth, excessively high interest rates and tax reductions, but most definitely not social programs. Indeed the Minister of Finance himself has said social programs are not the culprit.

CEP believes it is only common sense that to solve a problem we must deal with its causes. There lies the alternative policy.

It is true it would not be easy to implement. It involves increasing taxes on corporations and the wealthy and keeping interest rates as low as possible. Without question this would result in a fight with some of the most powerful corporations in our country and their influential and prominent supporters. It would also be unfavourably received by bondholders.

Only a government that strongly identified itself with the interests of the people of our country rather than with the interests of the transnational corporations and foreign and domestic bondholders would do this.

Unfortunately, failing to engage in such a fight condemns our country to adopt U.S.-style social programs and injustice, chaos and violence that flow from them.

Let me turn to the issue of the end of economic stabilization. Bill C-76 also signals a significant withdrawal of the federal government from its role as a stabilizing force in the economy.

Under current arrangements the cost of social assistance is shared 50-50 by the federal and provincial governments. During recessions, when unemployment soars, the number of people needing welfare rises enormously because people exhaust their UI benefits before they are able to find a new job.

Under the new Canada health and social transfer the cost-sharing formula is being abolished and much more of the burden will fall on the provinces. Come the next recession the federal government will not contribute a nickel more to social assistance than when times were relatively good.

The government expects this will recession-proof its finances and appease the much dreaded bond-rating agencies. This approach will have very serious economic consequences.

The federal contribution to social assistance has always had an important economic impact. Income provided through social assistance is spent in local businesses, stabilizing local economies and preventing an even deeper recession and greater job loss.

Under the new CHST it is the provinces that will have to put up the additional money during the recession. But it is money they simply won't have. So while the federal government may be able to recession-proof its expenditures, it will do so at the expense of the provinces.

Leaving the provinces to pick up the tab is clearly inappropriate since they do not have the power the federal government does over monetary policy. Monetary policy in part determines the interest rate and affects the length of the economic downturn and the cost of borrowing.

Even today under shared funding arrangements we are experiencing a very slow climb out of recession despite reasonably good rates of economic growth. Our export industries have done very well due to the economic recovery in the U.S. and the low value of the Canadian dollar, but the domestic market has fared poorly.

Millions of workers still fear for their jobs and employment growth has stalled. Many of our young people face bleak prospects. We hate to think of what will happen in the next recession when federal expenditures have been recession-proofed. Domestic stagnation could last a very long time indeed.

CEP believes that Bill C-76 signals a major turning point for Canada. Changes of this magnitude should be debated from one end of the country to the other. At the very least this committee should hold cross-Canada hearings.

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We further urge the committee to recommend the establishment of a royal commission on social programs in order that the issues surrounding our country's future be fully debated.

Mr. Serge Lord (Assistant to the President, Communications, Energy and Paperworkers Union of Canada): The Canada health and social transfer proposed in Bill C-76 is the centrepiece of the government's plan to roll back social programs and public services. Through the CHST, funding for health, education and social assistance will be merged into a single block fund.

In 1994-95 the federal government provided $29.4 billion in cash transfers and tax points, a figure that will reduce to $25.1 billion in 1997-98. While this decrease is substantial, it obscures the very rapid disappearance of federal cash transfers to the provinces over the period. For the same period, federal cash transfers will decline from $17.3 billion to only $10.3 billion.

Assuming the government freezes the total CHST at $25.1 billion beyond 1997-98, it will only be a matter of 10 to 15 years before the federal cash transfer vanishes altogether. The disappearance of federal cash transfers will starve our social programs of funds, resulting in hefty cut-backs. It will also rob the federal government of any effective means to enforce what remains of national standards.

In terms of CHST and medicare, Canada's public system of health care includes five national standards that must be met if provinces are to receive the federal contribution for health costs. Provincial health plans must be comprehensive; provide universal coverage; be administered publicly; be portable from province to province; and be accessible.

If a provincial plan violates any of these standards, the federal government can withhold money, and has in fact done so to prevent extra billing and user fees. Withholding cash is the only enforcement mechanism the federal government has, but the CHST provides for the phasing out of the federal cash transfer over a number of years.

While the bill does allow the government to withhold all the money it transfers to the provinces, it is far from clear that there will necessarily be any money transferred on their other programs. It would also need considerable political will to withhold money dedicated to some other use to enforce the standards of the Canada Health Act.

In terms of the drive to private health care, as the federal government withdraws funding from health care the provinces will increasingly look for ways to save money. Many provinces will choose to de-list necessary services rather than raise taxes. Private health care will then return in force to Canada.

This would be a tragedy. First, an unfair two-tier system of care will be set up, one for the well-off and one for everyone else. Second, private health care is wasteful and inefficient. It serves largely to line the pockets of both shareholders of insurance companies and doctors, and supports a useless bureaucracy needed to process claims.

Reducing public expenditures on health will only increase private expenditure on health by a great amount. Private health care is unfair and costs more to administer than public health care. It makes no sense at all to turn back the clock to this discredited system. From a worker's perspective, the privatization of health care will mean future wage increases will be diverted into private, inefficient health insurance premiums.

In the U.S., health insurance is the single largest area of contention between workers and employers. Privatizing health insurance in Canada will increasingly sour labour relations here.

CEP believes the federal government should reaffirm its commitment to the five standards outlined in the Canada Health Act. It should commit itself to maintaining adequate public funding of health care by setting a minimum percentage of GDP the federal government will devote to supporting public health care across the country.

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Mr. Newman: The CHST eliminates the Canada Assistance Plan, which provided for 50-50 funding between the federal government and the provinces for income to poor people and for other social services such as child care, home care for the elderly, aid to people with disabilities, family counselling and provision for children at risk.

While CAP is far from adequate, it has prevented much destitution and homelessness. Indeed it is part of the reason our crime rates are so much lower than those in the U.S.

With cost-sharing eliminated, the provinces will have a strong incentive to remove as many people as possible from the welfare rolls. From there many will sink into destitution and despair. Indeed Bill C-76 makes it easier for the provinces to arbitrarily cut people from social assistance by eliminating all but one national standard for provincial programs, that of no residency requirement.

The CHST eliminates the national standard requiring provinces to provide assistance on the basis of need alone. Now provinces will be free to deny assistance to single parents or workers who are unable to find a job in areas where unemployment is very high.

Under the CHST we will soon see the introduction of workfare, meaning the obligation of social assistance recipients to accept any work in order to receive welfare payments.

Workfare is not about helping workers enter the labour force by assisting them to upgrade their skills and find an adequate job. Workfare is about forcing people to accept poorly paid jobs in bad working conditions.

Workfare will put strong downward pressure on wages at the low end of the labour market and tend to displace other workers who are paid somewhat better. But it will not stop there. By creating a large pool of desperate, underpaid workers, workfare will contribute to a more widespread lowering of wages as well.

Workfare fits in nicely with the theory of competitiveness based on a low-wage strategy.

CEP believes social assistance should be available to all those in need in a non-discriminatory way and the national standards to this effect should be enforced by the federal government.

The next section is entitled ``Cut-backs to Public Services and the Legislating Away of Collective Bargaining Rights''.

Bill C-76 puts into effect the massive downsizing of the federal government's operations. It unilaterally amends the workforce adjustment directive, which was negotiated in 1991, in ways that are detrimental to government workers. The workforce adjustment directive, which guarantees a reasonable job offer for surplus workers, compensates public sector workers for the long-standing wage freeze and lack of seniority.

CEP strongly objects to the unilateral elimination of collective bargaining rights of public sector workers. It is unfair to those workers. We also recognize that if the government believes it is acceptable to take away bargaining rights in the public sector, it will have no compunction about doing so in the private sector as well.

I'd just like to add as well that we don't believe the reduction of services that will come about by the laying off of 45,000 federal civil servants will advance the best interests of our country. Jobs will be eliminated at the National Research Council and Agriculture Canada. They will be eliminated in the inspection of food, in the environment and in the Canadian Forest Service.

These are all things that surely don't fit in with the stereotype of the paper-pusher in an office. These are on-the-ground, useful things for Canadians in general and for our country.

Thank you.

The Chair: Thank you, Mr. Newman and Mr. Lord.

[Translation]

Mr. Deshaies will open the question period.

Mr. Deshaies: Good morning, Mr. Newman and Mr. Lord.

In your presentation you showed that the best level possible of health and social services must be maintained in Canada.

As you know, Canada has a heavy debt that must be reduced by the federal government or the provincial governments. Given those circumstances, how can we have our cake and eat it too, which means that we want to have it all without giving away anything? We have a choice to make as a society.

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You spoke of a royal commission of inquiry to define those choices. As union leaders, do you have any proposals or solutions to put forward to that commission?

Mr. Newman: No, not really. We would suggest the commission undertake a comprehensive review of all our social services and assess the impact of their partial elimination, or rather, determine what the impact would be if the federal government withdrew from those services. We think there would be a huge impact, resulting in a situation similar to the current one in the United States. We therefore think that type of approach should be examined in great detail. We think the future is quite bleak.

Mr. Deshaies: Personally, I think each and every one of you is convinced the quality of services must be maintained. However, you have to be realistic, because if you and I want to keep the same services, someone, somewhere - be it the boss or the government - has to pay for it. Some compromises must be made.

You are part of the high income middle class, a rare breed nowadays. Are your workers receptive to the idea of shortening their work week as long as the employer compensates for it and the government creates additional jobs? Is that the type of solution your members are advocating?

Mr. Lord: I think our union has always been in favour of a reduced work week, for two reasons. First, so that workers can enjoy more leisure time, and secondly, to have a fairer distribution of the workload, even though that would be more difficult to achieve than you imagine.

We do not think cutting social programs is an effective solution to our national debt problem, because many studies show that the debt was not caused by the social programs; quite the opposite, social programs can even generate a surplus.

When social programs are cut, crime will increase, our welfare roles will swell and we will still be burdened with the same debt. Perhaps that is when people will realize the current financial crisis is more a revenue crisis than an expenditure crisis.

That is not to say you should increase my personal income tax. It is just that I am under the impression Canada has the lowest corporate taxes of all the G-7 countries. So improvement could be made in that area, to ensure our country does not become a tax haven for large banks, multinationals, speculators, etc., and to make sure that Canadians, who want to maintain their social services, are guaranteed minimum support, because that is always one of the election promises. In fact, just read the Red Book!

The Communications, Energy and Paper Workers Union of Canada recognizes that this country has a huge debt. We also realize the debt can be caused in part by a revenue crisis or excessively high interest rates.

The answers are not necessarily simple and we do not want to get into demagogary, but to answer your question about whether we had any suggestions as to how to legislate reduced work hours, etc., our union would be willing to look at such options.

Mr. Deshaies: Other suggestions as well?

Mr. Newman: Yes, absolutely.

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As director of the research services for our union, I have the opportunity to review the issue of hours of work. As far as the private sector is concerned in Canada, our union has had in the last 20 years the highest number of workers with a reduced schedule in the paper sector, 37 hours a week; in the petroleum chemistry sector, they also work 37 hours a week; in the communications sector, we represent some 12,000 employees who used to work 36 hours a week but who unfortunately went back to working 38 hours a week. We wanted to maintain the 36 hours a week schedule, but the employer refused. Anyway, the agreement on the working schedule was temporary.

Those whom we represent asked for a reduction in the working schedule. Some argue that it is not so much the idea of working less. The fact remains that in our area, there is a heavy request for reducing hours of work, which has been achieved.

We represent some 52,000 employees who work a reduced schedule. We have made some progress at that level. We are not yet where we would like to be, since it is up to the two parties to do some give and take. We are not the only ones to make the decisions.

Mr. Dehaies: Thank you.

The Chair: Thank you, Mr. Deshaies.

[English]

Mr. Speaker: Mr. Chairman, there are a number of philosophic questions that are certainly raised in the paper. I wouldn't want to discuss them all, but I think in terms of this legislation there is one broad, overriding principle that is being discussed and that we have to deal with as a committee, and that's with regard to jurisdiction in terms of programs.

Your recommendation to us is to strengthen the hand of the federal government in terms of standards and criteria by which programs are delivered to the people of Canada, whether it's health care, the Canada Assistance Plan, or in terms of employment within the public service.

Could you comment on that further as to why you feel you have a greater trust in this national body, which is more than one step removed from you in a sense, than, say, a provincial body? For example, here in Ontario there's an election going on, and you certainly have a more direct, front doorstep approach to influencing them in meeting some immediate needs, or the needs that are covered in this piece of legislation.

Mr. Lord: It is an interesting question. Again, the answer has to be part of the philosophical debate.

I think a country must have a single purpose. We must pull together. Our social programs are part of the fabric of the country. It's important for us that they be unified, that they be the same across the country. We have membership in every province, we have offices in every province, and it's been accepted that the government is the guardian of the national identity and our social programs are part of that identity.

It's interesting that Canadians will tend to define themselves by what they're not. We're not Americans. One of the reasons for that is we have these social programs. We have this common bond that holds us together.

Again, it's a philosophical answer. In more practical terms, we're told studies of social programs demonstrate the fact that they run at a surplus. The point I want to make is that we get rid of one and we inherit crime problems, social problems, and what not, and the debt has not gone away. That's also our problem.

Mr. Speaker: So, as an organization, what you're saying to us is that the British North America Act was wrong - sections 96, 97, 98, somewhere in there. Where they outline the jurisdictions of the federal and provincial governments they were wrong in their assumptions and we should think that whole first plan of Canada by our Fathers of Confederation.

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Mr. Lord: I think it's a bit late to have that debate. I think your colleagues should have had that debate in 1971 when they put medicare in place. I'm sure they had that debate at the time. I think it's the wrong debate. It's 25 years too late to debate whether or not it should be federal or provincial legislation. That debate has been resolved; the government has acted. The government gave us the program that set us apart from our American neighbours. It's part of the fabric of the country.

To say today that it should be a provincial jurisdiction is, to me, a cynical argument. I'm not saying it's your argument, but I think it's a cynical argument. It's something very unfair because we had that debate and it was resolved. The issue was never raised again for 25 years and suddenly it appears to be convenient to transfer these problems to the provinces and what not, so we resurrect that argument. I think it's unfair.

Mr. Newman: Of course, it's an excellent question, but I think besides the philosophical aspect to it there is the practical aspect. If you just look at what happened, we have medicare largely because the federal government intervened with its powers and whatever to set up medicare. It set the national standards and has, over the last 25 years or so, acted as we just mentioned briefly, to maintain those standards by withholding money from some provinces when they violated the standards.

So whatever the debate may be in theory, in practice we see we have it largely because the federal government pushed it; the federal government was the guardian of it. I guess I could say if it's not broke, why fix it? It works well and has served us well. It's one of our most popular programs in the country. It seems to me it would be a serious mistake to start pulling back on it and devolve more of it to the provinces.

The Chair: How many members do you have in your union? How many workers do you represent?

Mr. Lord: We have 150,000.

The Chair: That's big. How do you rank in terms of size of union in the country?

Mr. Lord: We are the most important union in pulp and paper, communications, the media, energy, petroleum, gas and what not. The auto workers would be the biggest private sector union with 200,000. We and the steelworkers would be the second-biggest private sector union. CUPE would have about 400,000, and the Public Service Alliance, before the government did what it did, was the second-biggest union in Canada. So we would be among the five or six biggest unions.

The Chair: I agree with you that if there is no cash going from the federal government to the provinces there is no clout in terms of maintaining national standards. I should maybe point out that the budget was only a two- to three-year projection. There is a diminution in the transfers, there's no doubt about it. It does not mean they will eventually run out. There was only a three-year program put in place. So I think your warning caution to us on that point is important.

Mr. Walker (Winnipeg North Centre): Just to reinforce that point, maybe one of the recommendations the committee can consider is whether or not cash proportion is maintained. The recommendation might come directly from this committee.

The impression being left with people, mostly because of what was begun by the last government, is that we have the same intention to take the cash out of the system. The intent of the bill was only to deal with the next two questions. I personally don't want the spirit of the bill to be misinterpreted, and that's the direction we're going in. We've been silent on it for fiscal reasons and I think that silence is being misinterpreted.

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Maybe this committee would want to bring it very strongly to the attention of the government. We've heard this before and it's not being ignored.

The Chair: That view, which I support, is strongly reinforced by the two witnesses before us today. For that and the rest of your presentation, as well as the work you are doing in these critical industries in Canada and the important role all of you members play in our economic future, on behalf of all the members here I thank you for your presentation to us.

Just before we go to our next witness we have a little bit of internal housekeeping.

Mr. Fewchuk (Selkirk - Red River): I have before me a motion that has been agreed upon by the opposition parties. The motion reads as follows: I move that the libellous comments on pages 10 and 11 of the May 9 presentation of the Newfoundland and Labrador Federation of Labour be stricken from our records.

The Chair: If I could just make a little comment on that, we offer witnesses a very unique opportunity to speak with privilege. Anything they say in this committee is privileged and cannot be used against them. I don't want witnesses to ever take advantage of that privilege and make libellous or slanderous comments against any person. So I strongly support your motion.

Motion agreed to

The Chair: Thank you very much.

I have another little housekeeping itme. Last night we sat from 3:30 through to 8:15 and our clerk very kindly ordered us some sandwiches. I forgot to get a motion for it. Could we have a motion unanimously agreeing that any time we have to sit through similar circumstances, the clerk will have the authority to use his or her discretion to buy us very cheap food?

Mr. Pillitteri (Niagara Falls): I would also add that the clerk buy enough food.

Mr. Fewchuk: Not only that, Mr. Chairman, next time we should all stop and eat together. If we have a client here and everybody else is eating it doesn't look very nice.

The Chair: Okay, we'll add that all members will use excellent table manners when eating that food.

Motion agreed to

The Chair: Thank you very much.

Our next witnesses are from the Confédération des syndicats nationaux, Mr. Pierre Paquette, president, and Jean Charest.

[Translation]

It is a pleasure for us to welcome you. Thank you very much for your contribution.

Mr. Pierre Paquette (Secretary General, Confédération des syndicats nationaux): First, may I correct what you have just said. I am the Secretary General of the Confédération des syndicats nationaux rather than its President.

The Chair: We had promoted you.

Mr. Paquette: Maybe in due time.

Jean Charest is the union research advisor. He is an economist and has helped us to prepare the brief that I will be reading to you.

May I remind you that the Confédération des syndicats nationaux has 250,000 members in Quebec, half in the private sector and half in the public sector.

Last October, the CSN submitted a brief to the Standing Committee on Finance in which we proposed a multi-faceted strategy for reducing the deficit. We insisted on the need to give priority to job creation, to a more flexible monetary policy, to reintroducing progressiveness in the tax regime, in order to generate the necessary added revenues that allow us to maintain social programs and economic support programs while reducing the deficit.

We must note that the federal budget of the 27th of February does not meet anyone of our suggestions. Thus, the budget is a complete reversal from the position held by the Liberal Party during the last campaign. Whereas the Red Book did it abundantly, the government ceases to talk about creating jobs, about tax fairness and about protecting our social programs.

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Instead, massive layoffs are announced, regressive taxes are imposed, the unemployment insurance system is attacked and the health and welfare burden is shifted onto the backs of the provinces. Meanwhile, Ottawa is centralizing it's powers; Bill C-76 is ample proof of that.

We have come to the unfortunate conclusion that Mr. Martin's Budget was simply an exercise in expenditure reduction fully dependent upon fluctuating interest rates.

To reach his expenditure reduction goals, the Minister of Finance focused on three specific measures which will have immediate and long-term repercussions, especially during the next recession.

First, the elimination of 45,000 jobs in the Public Service. This exercise is modeled on other companies who have reorganized and downsized their human resources to improve their financial situation. The announced cutbacks in the federal government will eliminate one out of every seven jobs - 14% of all jobs in the Public Service - and the measure will save the government between 3 and 4 billion dollars in salaries.

However, it's hard to say just how much the government will save, since it will have to turn to the private sector to do the work formerly done by its employees. As well, the government estimates that the attrition of positions will cost approximately $1 billion in 1995.

We can't help but notice that the greatest defenders of federalism in Quebec, who regularly brandish the threat of massive job losses if Quebec separates, did not seem troubled by the measure when it was announced in the federal budget. What is heresy in a sovereignist scenario is simply realism when the federal government wants to clean up its finances.

The second major cut announced in the federal budget deals with the unemployment insurance system. Let's not forget that last year's budget had already dealt a harsh blow - in fact, the hardest - to the UI system since it's creation, by reducing the UI fund by approximately 10%. This was partly achieved by reducing the benefits ceiling to 55% from 57% and by increasing the number of weeks a person had to work to be eligible for UI. These measures had long-term effects, and they will result in savings of $2.4 billion this fiscal year.

The 1995 Budget announced additional cuts to the unemployment insurance system, totaling $700 million by July 1996, and the Minister of Finance said that increasing employment, as well as Mr. Axworthy's reforms, should result in a further total reduction of at least 10% in the UI fund.

However, as expected, we won't know what Mr. Axworthy's proposed reform will be until later this year, but the Minister of Finance has already set his budgetary targets. Seen from that angle, the 1995 Budget is a smoke screen, since the public won't know what repercussions the measures announced by the Finance Minister will have.

Furthermore, according to projections made by the Minister of Finance, the unemployment insurance program will have a surplus of $5 billion in 1996. The government does not intend to increase the UI fund, and it has not hidden its intention to use surplus money from the fund to pay for manpower training programs.

So it's clear that the federal government does not intend to respond to Quebec's demands - nor for that matter to the demands of all of Quebec's socio-economic partners - regarding the devolution of manpower training programs to Quebec.

Lastly, the third important measure, after cuts to the unemployment insurance system and to the federal Public Service, are the budgetary cutbacks to transfer payments to the provinces.

In 1995-1996, under the Canada Assistance Plan and established program financing, the provinces received a total of $29.7 billion, and $8.9 billion in equalization transfers.

The changes announced in the 1995 Budget affect the Canada Assistance Plan and establisheed program financing. These two programs will be melded into a single envelope called the Canada Social Transfer, which will have $7 billion less than the previous programs for 1996-1997.

The minister also announced that the federal government will expect the provinces to respect certain standards. Standards contained in the Canada Health Act will be maintained as well as those pertaining to social assistance. As well, new standards will be contained in Mr. Axworthy's future reforms.

Since we still don't know what conditions will be attached to the new Canada Social Transfer, it's difficult for the provinces to know how deep the cuts will be. This is another Martin strategy to avoid an immediate uproar, especially on the eve of the Quebec referendum. The government knows what the cuts will be and how the provinces will be affected, but it won't tell until later.

However, we estimate that the average yearly shortfall for Quebec will be one billion dollars. In fact, Mr. Campeau, the Minister of Finance of Quebec, who tabled his budget last Tuesday, said that the shortfall would be 650 million dollars for next year, and one billion and 880 million dollars for the following year.

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The unemployment insurance program will shrink, and the federal government will gradually withdraw its support for social assistance. This means that the provincial burden will increase evermore. Indeed, it has already increased. This shows that Ottawa is increasingly withdrawing its support for people who are not in the labour force. This means that the federal government will save a lot of money, especially during the next recession. Indeed, the provinces and people who are not in the labour force will be the ones to feel the impact of creeping unemployment.

It was also announced that the federal pension system will be reformed. We will find out more later in 1995, when Mr. Axworthy unveils his reforms. Changes to the federal pension system will be implemented in 1997. The Minister of Finance has already said that a guiding principle will be to maintain the protection of poor elderly Canadians. The Minister has said that the cost of the public pension system will increase dramatically, so we can infer that his reforms will be made at the cost of reduced retirement benefits. After it withdraws its support from the UI system and cuts the UI fund, post-secondary education, health and welfare and social services, the government will complete the circle and even cut back government pensions.

What does the future hold? The last federal budget clearly indicates that the vision the federal Liberals have of the future is more than ever based on a politically centralized federation and the withdrawal of federal financial support for the provinces and individuals.

However, the federal government will still be able to set national standards, maintain duplication and continue its incursions into provincial jurisdictions, such as manpower training. It will soon make changes to provincial and individual transfer programs, including government pensions for the elderly.

As well, the government is quickly withdrawing its financial support for programs which will need more funding than ever in the coming years: health and social services, post-secondary education, social assistance and government pensions for the elderly. At the same time, the government will maintain its current tax base which will increase its revenues, whereas the public will have access to fewer and fewer services.

We don't want to paint a pessimistic scenario, but all the measures announced by the federal government will not solve the unemployment crisis, nor will they reduce Canada's debt. Indeed, the government does not know what impact the budget will have on employment. And yet, the cuts to the public service as well as the forthcoming budgetary cutbacks will undoubtedly have a major repercussion on the country's unemployment rate. If they are carried through, the Martin budget's global measures will slow economic growth and might plunge the Canadian economy into a recession much sooner than would otherwise happen.

Let's not forget that the Minister of Finance projected a deficit of 24 billion dollars in 1996-1997. At that point, we will still be a long way from a zero deficit and the debt will continue to grow. We would be on the brink of a recession, especially if interest rates climb and given the negative repercussions of the federal budgetary policy. Therefore, the projected 24 billion dollar deficit would probably be at its lowest before growing again because of the recession. In short, the federal public debt will have increased to approximately 625 billion dollars in 1997-1998 - which represents an increase of over 100 billion dollars during the four year reign of the Liberals.

In conclusion, we realize that the financial situation of the federal government is serious. In October, the CSN proposed a global approach based on greater social solidarity and an economic strategy based on employment. In our opinion, it's the only way the public can hope to take control of the country's economic and social development. Unfortunately, the federal government has not chosen this approach.

I'd like to end by saying that before Bill C-76 is passed, there should be, at the very least, intense consultations with the provinces, in particular Quebec, to clearly assess the short term affects of the measures announced by the federal government.

Thank you.

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The Chair: Thank you very much. Let's move on to questions.

Mr. Nunez (Bourassa): For how long, Mr. Chairman?

The Chair: We still have half an hour. You can use your allotted time.

Mr. Nunez: Thank you, Mr. Chairman.

The Chair: Welcome to our committee.

Mr. Nunez: I wanted to be here because I admire what the CNTU does. You said you would promote Mr. Paquette...but that will probably happen later. I would like to congratulate the CNTU, Mr. Paquette and Mr. Charest for their presentation and the brief they submitted today.

The brief states that the federal budget does not contain any job creation measures. When the first Liberal budget was tabled, it contained at least the infrastructure plan. But there's nothing in the second budget.

Also, the budget announced a 700 million dollar cut to the unemployment insurance system for 1996. Mr. Paquette, can you tell us how these new cuts to unemployment insurance will affect Quebec, and in what sectors? At the moment, let's not forget that Quebec is paying more into the system than it claims in benefits. This is very important. Can you tell us how the cuts will affect Quebec?

Mr. Paquette: Yes. I think we're already feeling their impact, as I said earlier that we had felt the repercussions of the cuts contained in last year's budget. There are over 800,000 welfare recipients in Quebec today, and their ranks swell by approximately 8,000 cases a month in the last few months. In our opinion, that's because it's now harder to claim unemployment insurance, and since there is a shorter waiting period, people are going on welfare faster than before. The hardest hit are young people who, as you know, often work in unstable jobs, as well as women, specifically those who go on maternity leave, which is funded through the unemployment insurance program, and people who live in isolated regions. There are all kind of problems, specifically in the fishing and forestry industries, because seasons are much shorter than they used to be. This means that there are less people eligible for UI and who therefore have to go on welfare.

The rules governing social assistance are very strict. I don't think it's in society's interest to put people on welfare. If a person is on unemployment insurance, it's as if he will find a job in a few weeks, whereas if a person is on welfare, it's as if he will have a much tougher time finding a job.

I sat on two economic renewal committees in the Montreal area - one in the East end and one in the South-West sector of the city - and managers openly told us - I believe they were speaking the truth - that when they received a résumé from someone who had been on welfare, they immediately threw it out. People who are on UI, it seems, are in a transitional period; they are between two jobs. Perhaps they had the misfortune of working for a company which closed or they might have been temporarily laid off.

There are very serious economic, psychological and social repercussions. In our opinion, this program has been hardest hit over the last few years, and cutbacks to the program have had the most marked effect in Quebec's society.

Mr. Nunez: It seems that the federal government has studied changes to the way the unemployment insurance system is managed, including equal representation between management, labour and government, as is the case in Europe.

The unions, the employees and the employers administer the unemployment insurance fund. Do you have an opinion? It also seems that the federal government is going to try to use the UI funds to train welfare recipients.

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We have asked questions and there are no clear answers. In Quebec, we have discussed repatriating the UI fund in the past, and I think that we're also discussing it now. What is the CNTU's opinion in that respect?

Mr. Paquette: We have always supported the idea of an unemployment insurance system with accountability to social partners; sort of like what we have in Quebec for the health and safety regime.

One of the problems in the Canadian system is that the CNTU is not recognized as a pan-Canadian union organization. We are rarely present among the organizations that the federal government consults. The Canadian Labour Congress is present, and that is legitimate. In that sense, we would agree with the parity system, especially since employees and employers finance the unemployment insurance fund. However, we would like to ensure that our representative organizations in Canada are represented fairly.

On the second aspect, it bothers us to see the minister announcing the creation of a surplus. The principle does not bother us, we agree with it. Moreover, we said the same thing in the brief that we presented to the Finance Committee. We were in favour of a fund to stabilize contributions between period of recession and expansion.

In that sense, creating a five bilion dollar fund to stabilize contributions seems quite appropriate, but how this fund will be used worries us, especially since in our opinion, the calcultations that have been done are quite basic. The surplus, with the current contribution rate, will quickly exceed five billion dollars. So several billion dollars will be available to the federal government for the Human Resources Investment Fund.

They announced that this fund would be used to provide federal assistance for daycare centres, problems linked to children and professional training. These are all areas under provincial jurisdiction where the federal government will have the means to intervene, as it already does in a discretionary way.

Another one of our concerns is that Minister Martin is very fond of pilot projects. There is one in South-West Montreal and another in New Brunswick. The federal government, and especially the Liberal government's idea of decentralizing the use of these funds is to create a strategic alliance between the federal government and the community, thus bypassing Quebec. That really worries us.

Finally, the CNTU has been in favour of repatriating unemployment insurance for a long time, but we don't want to just repatriate the administration of the fund. As long as contributions are dealt with by the House of Commons, it will always be legitimate for the federal government to intervene to set standards.

Therefore, we want full jurisdiction over the fund and responsibility for administrating it so that we can provide complementary labour force and income support measures to truly help the unemployed re-enter the workforce.

Mr. Nunez: You have focused on cuts to social programs. What is happening in this area is terrible. The federal governement's commitments will penalize the neediest members of society.

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There were no cuts to the pension plan in the last budget, but some Committees are already reviewing the matter and it seems that this will be coming up later, after the referendum. In Quebec, the federal government is taking senior citizens into account - until the coming referendum.

There has even been talk of setting the age of retirement at 67, which is incredible because in Europe, they are doing exactly the opposite. The age of retirement has to be brought down. Here, we are thinking of bringing it up. What are your thoughts on the matter?

[English]

Mr. Pillitteri: Mr. Chair, are we conversing this way or that way?

[Translation]

Mr. Nunez: I put my question to the witness. I see that my friends felt the need to comment.

Mr. Jean Charest (Economist and Advisor, Research Service, Confederation of National Trade Unions): As indicated on page 7 of our brief, this is an issue which concerns us, but we are not really in a position to discuss it more in depth. What we do know at this time are the intentions expressed in the last budget speech concerning an up-coming review of Canada's public pensions system.

That is why we do say in our document that we are concerned. Senior citizens, obviously, always get worried when old age pensions come up for discussion, and that's legitimate. People pay into the system for a number of years, pay income tax for years, and as they near retirement or have retired, they are legitimately concerned that the quality of the protection they enjoy within the present system might be called into question.

Everyone knows that there is serious financial and demographic pressure on the Canada Pension Plan. That fact has been known for a long time. Unfortunately, I would say, in the 60s, Canada chose to encourage individual retirement planning, particularly through the introduction of RRSP's. The unfortunate thing is that people with lower incomes can do very little in the way of individual retirement planning and have little access to RRSP's. They depend more on the public system. Consequently, the present situation is that some people, especially the most disadvantaged, are directly dependent on the quality of the public pension plan.

We know that there is serious pressure on those public plans, notably demographic pressures because our population is aging. It is clear that because of that, adjustments will have to be made over the next few years. Those adjustments may mean a decline in the quality of protection or an increase in contributions to the public pension plan to shore up its cash inflow.

We would prefer the latter, of course. Pushing the pensionable age back is one simple solution; that age could be set at 67, 68 or 70. We feel that would not be an equitable solution to the public pension problem. That is why, in the brief we submitted to the Standing Committee on Finance last October, we said that a reform of the public pension system could not be carried out without a tax reform, a reform involving RRSP's, to be more specific.

You need to take a comprehensive approach to look at those areas. We would be concerned if you were to undertake a reform which would only deal with the public pension plan. We would fear a federal reform in the following months which would substantially lower the quality of protection afforded by public systems.

Yes, we are worried. Unfortunately, we can't say much more than that for the moment since we have only heard announcements so far, but we are well aware of the pressures weighing on the system.

We know that the minister's expressed intent can certainly become reality. We think there will indeed be a review of the public pension plan. This review is a cause of concern.

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In conclusion, we wouldn't want the public pension plan to be subject to the same treatment as the unemployment insurance plan over the years. We don't think it would be an equitable or comforting solution for senior citizens in Quebec and the rest of Canada.

Mr. Nunez: Concerning the tax system, a question dealt with in your presentation, the changes should be extensive if it is to become more equitable. It's a very significant matter in Canada. There is almost nothing in the budget except a rather pathetic 100 million dollar tax on banks. The Royal Bank alone showed profits of over a billion dollars. There's nothing on tax havens or family trusts.

I was in Europe a few months ago. Over there, they have a 10% tax on businesses while here, we don't even have a minimum tax. What do you think of the tax system?

The Chair: That's the Bloc's platform.

Mr. Nunez: Which is more equitable than the government's.

Mr. Paquette: I think that the population as a whole, not just the unions, consider the tax burden is inequitably divided between individuals and between individuals and businesses. As far as we are concerned, we've been asking for an in-depth review of the tax system for quite a long time.

We got the Wilson reform in the eighties which lightened the tax burden of Canada's richest. Then, we got the GST, which is a regressive tax. Finally, you wind up in a situation where the middle class is overtaxed. That's the cause of all the grumbling here.

So we believe, and this applies to all Canadian provinces as well as the federal government, that it is extremely important to do an in-depth review of our tax system to make it more equitable and more progressive. People who have the means to pay must contribute their fair share to funding the community services we decide we want.

Now, there is no such provisions in the budget. As you mentioned, the temporary tax on banks made everybody laugh; the same year the banks were asked to make a special 100 million dollar effort, 700 million dollars were taken out of the pockets of the unemployed. It just goes to show that the present government's ideology is the same as that of the former government.

Mr. Nunez: I will defer to my colleagues.

The Chair: Finally. Thank you very much, Mr. Nunez.

[English]

Mr. Speaker: In your second paragraph you reference the red book of the Liberal Party. I gather from what you're saying that there's a major crack in the government in terms of its credibility and integrity. But it made these major promises during the election and now we're finding this battlefield of broken promises, and you're very concerned about that.

Maybe you could comment on that further. It's within the context of this legislation, so it's not a partisan question.

[Translation]

An hon. member: Oh, absolutely not.

The Chair: Nobody plays politics here.

An hon. member: I think the taxpayers pay you to play politics.

An hon. member: I'm neither surprised nor shocked.

Mr. Charest: The answer is of a political nature, but only in terms of the credibility of the political process for the population. I think that's what your question was more precisely about. It's very clear that within the context of the last election campaign, a majority of Canadian men and women supported the Liberal Party, particularly because of the Red Book which was quite an important tool during that campaign. What we deplore in our brief is that the Red Book has been set aside, in many respects.

What's dangerous - that's what you point out, I think, and that's also our opinion - is that the credibility of the whole political process is in question.

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A lot of people now are quite cynical vis-à-vis the political process and political parties. People say: ``How can the parties make so many promises and do something else entirely once they're elected?''

It's a concern, because there's a risk that the population will just be turned off by political reality. The Liberal party's credibility, in this case, is being questioned but, from a broader perspective, it's the credibility of the political process and the whole political environment that's being questioned. That is unfortunate for Canada's citizens as a whole.

Mr. Paquette: I'd just like to add a very concrete example of something we've often discussed with Mr. Ouellet who is the minister responsible for Quebec. It's industrial reconversion.

According to the present budget military expenditures will be decreasing by 1.5 billion dollars over the next two years. We're quite happy with this provision. However, the Red Book promised that the cancellation of the helicopter contracts - which we supported, even going against Quebec's public opinion - would be accompanied by the creation of a conversion fund to help industries which concentrated mainly on military production to turn to civilian production.

There was only one program that could be used for that purpose, the DIPP in English, PPIND in French. It was used in the past. In the present budget, not only are the funds not increased, but they're even reduced and brought back down to the level of commitment the government made years ago. What we have in the fund today is about 90 million dollars. For Quebec alone, we would need 300 million dollars.

In conclusion, I would like to point out that the representations we made to Mr. Ouellet and Mr. Manley on this subject were made jointly with the industry and Montreal's Urban Community. As you probably know, we really feel the impact of this because a lot of the military industries, particularly aeronautics and in gun powder production, were located in Montreal's metropolitan area.

That's the kind of change of heart the present government is showing. During the strike, Mr. Martin was the owner of Voyageur and I was the President of the Conseil central de Montréal. So, we met many times. I know him well. I'm personnally very disappointed to see how much his tune has changed because I honestly thought he was a man of his word.

[English]

Mr. Speaker: The broken promises are actually providing more provincial autonomy. The red book was more a federalist document; the federal government maintains more power. But some of the changes that have been made have moved jurisdiction authority and spending authority to the provincial level. They've really broken a promise, that's true, but the question is whether this is a more realistic position to take at this time.

As I listened to your brief, if I heard correctly, I found that at points in it you were saying to give more jurisdictional authority at the provincial level - Quebec or Alberta - but at the same time you were questioning whether the federal government should have really broken its promises, or moved from this federal position it enunciated in a firmer manner in the red book.

Could you comment on that in terms of how you see this jurisdictional shift? It's mixed in with the broken promises, actually.

[Translation]

Mr. Paquette: We can't say we consider that the decentralization announced in the budget is not for real. The financial problems are being decentralized, but they're keeping control over program configuration since national standards remain, on the one hand, but also because they are there, on the other. So, in that way, this is not real decentralization.

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What would actually happen would be more of a decentralization of jurisdiction with corresponding tax points and each side getting organized as they wished.

We're not like some of our colleagues in English Canada, at the union and community levels, who are afraid that transfering responsibilities to the provinces would affect social or health programs. We don't need our federal big brother to make sure that in Quebec, the population will apply the political pressure required to maintain adequate programs in the areas of either health or income support.

That's what we would consider a really decentralized federalism. Responsibilities would be decentralized by decentralizing resources. That's not at all what is happening.

I'm very concerned. Jean Charest was pointing out to me that section 39 or 37 amending clause 13 of the Act means that the whole enveloppe of the Canadian social transfer will be subject to the Minister's interpretation, as to what constitutes an adequate provincial program according to the federal government's standards.

Does that mean that if we don't agree on certain standards concerning post-secondary funding, the whole enveloppe will be frozen, including social security and other provisions of the transfer program? These are questions that have not been answered.

[English]

Mr. Speaker: So really what you've said to me is that the broken promise hasn't gone far enough.

I have been a representative of Alberta for years - and I've said this to my Bloc Québécois colleagues - and we have felt the same way there. We have exactly the same feeling that if you're going to give us responsibility then transfer the funds or the tax points. We can live with that. And we'll relate to our people in terms of priorities. So I think we have a common cause in our presentation.

I make that as an exchange of information rather than as a request for a response.

[Translation]

The Chair: Is your union in favour of sovereignty?

Mr. Paquette: Yes, since our 1990 convention.

The Chair: I never would have believed it!

Mr. Paquette: But I have to tell you that all Quebec unions are in favour of sovereignty. We're not an exception.

The Chair: In the name of all the members here, I would like to thank you for your presentation today.

Mr. Paquette: Thank you for invinting us, Mr. Chairman.

The Chair: Our next witnesses have not yet arrived, so we'll take a five minute break.

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[English]

The Acting Chair (Mrs. Stewart): Order.

We'll continue our discussions on Bill C-76, and welcome the National Council of Welfare, Mr. Bruce Hardy, the vice-chairperson, and Steve Kerstetter, the acting director.

Please present your opening comments, and then we'll have questions for you.

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Mr. Bruce Hardy (Vice-Chairperson, National Council of Welfare): I work in social services in British Columbia and have for about the last 25 years, working with children and families in crisis.

With me today is Steve Kerstetter, who for the last three years has been the acting director of the National Council of Welfare.

The National Council of Welfare, as you know, is a citizens' advisory group to the Minister of Human Resources Development, whose mandate is to advise the minister on matters of concern to low-income Canadians. All of its work flows directly from that very specific mandate.

Members of the council are appointed by cabinet and come from a variety of walks of life. One thing that we have in common is our close ties to social policy initiatives in the communities, whether through our paid work or through volunteer activities, and sometimes both. We see firsthand the way social policy developed in Ottawa translates to the street level and we see the real impact of federal policies on real people everywhere across this land.

Over the years the council has given praise where it believes praise is due and has offered criticism where it believes criticism is due. Some members of this committee may recall our criticism of the previous federal government for its decision in 1990 to impose a cap on the CAP.

All the concerns we raised at that time are relevant to our concerns about the proposed Canada Health and Social Transfer and related measures in the 1995 budget.

Because of time constraints, we would like to limit our prepared remarks today to four main points:

First, we believe it is totally inappropriate for the federal government to combine funding for programs now covered by the Canada Assistance Plan with block funding for medicare and post-secondary education. Welfare is a counter-cyclical program and has virtually nothing in common with medicare and post-secondary education.

Second, and in line with the first point, the spending limits to be imposed by the legislation appear to take no account of the real needs of real people in this country.

Third, the Canada Assistance Plan should remain in place pending amendments to the legislation as it now stands or new legislation to replace CAP. The council believes that legislation of some kind is required for minimum national standards.

Finally, we want to make a case, again, for cuts to expenditures as an alternative to cuts in federal spending on welfare and social services.

Welfare is a good example of a counter-cyclical social program. When the economy is strong, the number of people who are forced to rely on welfare tends to be relatively low. When the economy goes into recession, the number of people on welfare shoots up.

Medicare and post-secondary education are entirely different, because their demands are reasonably stable from one year to the next. Their stability made them logical candidates for block funding under the EPF-PSE funding in 1977.

The basic trigger in the formula for determining EPF-PSE entitlements is economic growth as measured by increases in the gross national product. Under the original formula, federal support for medicare and post-secondary education increased more or less in line with increases in the production of goods and services.

Once the proposed Canada Health and Social Transfer became a permanent funding arrangement, they would presumably have a single formula for determining entitlements to federal funds and the formula would likely be tied to economic growth. It is difficult to imagine a worse mismatch than using economic growth to determine how much money would be or could be spent on welfare and social services.

To get an idea of the long-term financial impact of the budget proposals, the National Council of Welfare compared actual federal spending under CAP with the federal spending that would have taken place if CAP had been funded in the same way as medicare and post-secondary education beginning in 1977. The results are shown in a table on page 2 of the report we've given you.

The first column of that table shows the actual escalation of federal support for medicare and post-secondary education in percentage terms from the 1978-79 fiscal year through to 1995-96. The second column is the actual federal spending on CAP under cost sharing. The third column estimates where the federal share of CAP would have been if Ottawa had adopted block funding using the same formula as EPF. The last column shows the loss of federal funds for CAP that would have occurred if the EPF formula had been used instead of cost sharing. The total loss to provinces and territories, and in relation to the total loss to the people in the country, would have been $19.4 billion over those years.

If the federal support for welfare and social services continues to be cut artificially, provinces and territories will be left with two choices: they can make up the shortfall in federal funds with their own money, or they can pass on the federal cuts in the form of reduced services or reduced benefits to the people who need help. There is no doubt in our mind that cuts would be the order of the day in most parts of this country.

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When all is said and done, the burden would fall on the men, women and, in my mind, particularly the children who depend on welfare or social services. The ultimate cost of Canada Health and Social Transfer would be paid by the poor.

Even with cost sharing under the Canada Assistance Plan, the provincial track record on welfare and social services has hardly been unblemished. Some provinces, notably New Brunswick, have welfare rates that are abysmally low. Prince Edward Island, Quebec, Ontario, Manitoba and Alberta have reduced some of their basic welfare rates in recent months. Alberta has also cut thousands of people from its welfare rolls.

Pressure on the provinces and territories to cut basic welfare rates would increase under the proposed Canada Health and Social Transfer. There could also be cuts in the different forms of assistance given at the discretion of welfare officials. People with disabilities could find it harder to get the special help they need for daily living. Parents could find it harder to get subsidized dental care for their children or prescription drugs. Allowances for back-to-school costs, recreation, transportation, and anything else that might be construed as non-essential could be threatened.

Repeal of the Canada Assistance Plan could destroy a long-standing arrangement for welfare and social services that has served Canadians well over the years despite its shortcomings. We urge the federal government to keep CAP alive.

Even if Ottawa is intent on proceeding with the proposed Canada Health and Social Transfer in the 1996-97 fiscal year, it makes little sense to repeal CAP simply to accommodate an interim financial arrangement. Continuation of the Canada Assistance Plan would ensure, among other things, that welfare and social services are readily available everywhere in Canada and that all persons have the right to appeal decisions by municipal and territorial officials. Under the Canada Health and Social Transfer, the only protection that would survive is protection against residence requirements imposed by a province or a territory. There would no longer be an appeal mechanism. There would no longer be basic rights.

Many of the improvements in welfare and social services that have been proposed by the National Council of Welfare over the years would involve additional spending in the short term to achieve additional savings in the long term. We believe that the federal, provincial and territorial governments could find this extra money by winding up or restricting tax expenditures or tax loopholes.

Our 1994 report, A Blueprint for Social Service Reform, offered a short list of tax expenditures that benefit primarily upper-income Canadians and that cost federal and provincial governments billions of dollars a year in lost revenues. Eliminating these loopholes would make our tax system fairer and would free up valuable funds to be used for the benefit of disadvantaged Canadians.

The 1995 budget mentioned the need to make the tax system fairer and promised a fresh look at tax expenditures. ``If we must constantly scrutinize government spending, as we must, then let it be clear that we shall also constantly scrutinize the fairness and effectiveness in the tax system'' is what the budget said.

We believe that getting rid of more tax expenditures is a vital part of efforts by governments to reduce deficits. Many government programs and transfer payments have already been cut to the bone. It would be profoundly unfair to make additional cuts in social programs that are designed primarily for tax income for low-income Canadians and at the same time to ignore top loopholes that lavish billions of dollars on high-income Canadians.

That's our formal text.

As an additional comment, I work in east-end Vancouver. I work with families in crisis, and I work particularly with pregnant and parenting teens. We offer programs funded by the provincial government, and of course, because of provincial funding, half of those dollars are coming from the federal government to get these people out of a social service loop so they won't end up in a pattern of life-long dependency on social services.

Most of the women in the program I work with are between the ages of 15 and 19. All of their kids that we work with are currently under 18 months of age. The two things I've found that demonstrate who they are as people in this country are, one, they all have dreams about doing better for themselves and particularly for their kids and, two, none of them want to be on social assistance.

When I sat down and talked to them about the budget and its impact, nobody was angrier than they were about people who abuse the system, because they know that reflects badly on the whole system.

Without the help of the province and the federal government, I can't imagine how they will make the transition from their dependent state now to an independence.

As someone who works in the community, I fear that they are the most vulnerable and in all likelihood might be the first to get victimized by cuts in provincial transfer payments or federal transfer payments to the provinces. My biggest fear in this whole exercise is the loss of the independence of CAP funding where potential social service spending becomes a political football and where the hand of the federal government is removed from setting national standards.

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Although we may end up still keeping the residency requirements, the fact is that as the provinces shift their financial burdens, people will move around the country to places where there is money and avoid places where there is not.

The Acting Chair (Mrs. Stewart): That's the end of your presentation. Thank you.

We will begin our questioning with Mr. Brien.

[Translation]

Mr. Brien (Témiscamingue): Good afternoon and welcome to the Finance Committee.

I would like to congratulate you for describing the human consequences of this bill, but also for suggesting alternatives. You have made suggestions as to where the government could get money, about where it could get more money than it will get by cutting transfers to the provinces. Obviously, not everyone will agree with you, but at least you have made some suggestions.

We often hear talk about applying the Alberta model to other provinces. Could you perhaps elaborate on and confirm what I have been told in this regard? I've been told that fiscal choices made by the province of Alberta have resulted in a number of people on social assistance moving to British Columbia. You spoke earlier about residency requirements.

In the testimony we have heard, the Alberta Government is often held up as a model in the area of sound management of government expenditures. Yet its fiscal policies have resulted in people moving to other provinces. Alberta was the first province to act, but it seems that a number of Albertans have moved to British Columbia. I wonder if you could confirm these numbers. Is it true that some 30,000 people have moved?

[English]

Mr. Hardy: I can't give you the exact number, but it's very clear, working in B.C., that the number of people on welfare has been going up dramatically and that the number of people moving to B.C. from other parts of the country has also gone up dramatically. It would be safe to assume that a number of those people are on some form of social assistance.

About a year, or maybe a year and a half, ago, Alberta cut the rate of payment to both single welfare recipients and families on welfare, plus a number of people were cut off welfare entirely. You can certainly control spending by doing that, but the people don't disappear. They surface somewhere in the country, and they may not surface right away. My concern has always been the longer-term impact of keeping people in poverty, what happens to their children. Do they ever not become dependent? We in B.C. have seen the impact of that.

In the case-load of the organization I work at we never saw people from outside the province in our programs. Now there's a scattering of them from Alberta, Saskatchewan and Manitoba who have moved to the coast, find themselves in need and come into our programs specifically for help.

[Translation]

Mr. Brien: Those who disagree with your suggestions would say: ``Yes, but those are the people that are investing and are responsible for keeping the economy going. They would be losing some of the revenue they get from dividends.'' The argument put forward by those who are of that opinion is that this money you want to go and get would be spent more productively if it were put into the economy than if it were given to welfare and unemployment insurance recipients, those very people who will be affected by the series of cuts being made to social programs.

Have you looked at the impact of the money that those people put into the economy? How is that money less productive than money spent by higher income Canadians?

[English]

Mr. Steve Kerstetter (Acting Director, National Council of Welfare): We've never looked into that topic specifically. It's certainly an interesting one, but beyond that, I'm afraid we can't comment. Sorry about that.

Mr. Hardy: I would like to comment, though, that if indeed welfare is cut and those dollars are used in a way to help people get off welfare, such as training programs, educational upgrading, those sorts of things, then I would think there's at least some room to discuss and debate that. But if the money is simply going back into the general coffers, the people aren't going to go away.

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I've often used gardening analogies to discuss our social service system. It's like planting a crop; it doesn't come up right away. Friends have jokingly said to me that if they were wise they would move to Alberta now and open up organizations, because in two or three years, when masses of people will need social assistance programs and help, when the kids start appearing in the juvenile justice system, when there's more apprehension of children from families because the families can't afford their children, there will be money to be made on social services. It's a cynical viewpoint, but these people don't go away. There are immediate savings on dollars, but long-term deficits are being created that will truly haunt that province in years to come.

Mr. Peterson: Mr. Hardy, I was very touched by your comments after your formal presentation about the profile of the people you are helping, about their hopes and how they resent abuses of the system. You have demonstrated clearly that things can be done through positive intervention, that these people need the help and they're not ripping us off. We have to get that message out. I encourage you to use every opportunity you have to do so, and we shall as well.

We're worried about the loss of national standards and recognize that there has to be a cash component. You're aware of the fact that Mr. Martin mandated Mr. Axworthy to go out and try to get agreement on what the national standards should be for the first time - there are very few right now, as you know - and try to expand those in consultation with the provinces. Do you approve of that approach?

Mr. Hardy: Yes, I do.

Mr. Peterson: Do you think you'll be successful?

Mr. Hardy: Yes, I do. I would guess there may end up having to be, initially, a certain degree of posturing, as is often the case in these kinds of debates and dialogues. But in the end I truly believe....

I've talked to my provincial minister of social services and asked her what she feels about the concept of standards. She believes in standards. I'm not talking about massive control. We're talking about things such as the right to appeal a decision. One of the national standards is residency, and there doesn't seem to be a lot of fuss about that. There is the right of every person in this country to some form of social assistance.

It's hard for me to imagine someone debating strongly that we don't need standards. If the federal government is prepared to hear about the ideas for standards in the provinces, I think there's lots of room.

Mr. Peterson: I think your help, and adding your very forceful and eloquent voice to that, will be of great assistance in the days and months to come. I thank you very much for an excellent presentation.

Mr. Hardy: Thank you.

The Acting Chair (Mrs. Stewart): Thank you both for being here. You have certainly presented us with an important perspective, particularly on one aspect of our social safety net, CAP. We appreciate your taking the time to share that with us, and thank you for your contribution.

I call now our witnesses from the Fédération étudiante universitaire du Québec and the Fédération étudiante collégiale du Québec. Welcome Mr. Rebello, Ms Therrien and Mr. Howe.

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[Translation]

Please begin your presentation.

Mr. François Rebello (President, Quebec Federation of University Students): Good afternoon everyone. We apologize for being late. We had a few problems printing our brief before we left to Montreal.

We are going to begin by introducing ourselves. My name is François Rebello and I am president of the Quebec Federation of University Students. I am accompanied by François-Guy Richard, Vice-President of the Quebec Federation of College Students, and Patrick Howe, coordinator of External Affairs at the Federation of Student Associations of the University of Montreal.

Mr. Patrick Howe (Coordinator of External Affairs, Federation of Student Associations of the University of Montreal): In bringing down the 1995 budget, Minister Martin officially announced that the federal government could withdraw from the areas of health, post-secondary education and social welfare, while cutting a large part of its funding in these areas. The new Canada Health and Social Transfer will replace the Canada Assistance Plan and the estalished programs financing.

The federal budget also announced a 10% cut in transfers to the provinces in 1996 and 1997. Two and a half billion dollars will be cut in 1996-97 and 4.5 billion dollars in 1997-98. For Quebec, that represents a shortfall of roughly 650 million dollars in 1996-97.

We can summarize the Chrétien government's proposal in the following way. First of all, the matter of social programs will be left to the provinces. Then, there would be a 10% cut in transfers to the provinces for health, post-secondary education and social assistance programs. Finally, there will be future cuts in the enveloppes for these programs.

In clear cut terms, the federal government is devolving to the provinces responsibility for health, post-secondary education and social assistance programs while making significant cuts in the transfer payments intended to finance these programs.

In addition, national health standards will be maintained and the federal government will continue to oppose provinces establishing minimum residency standards for people receiving social assistance.

In short, to receive the full transfer they are entitled to, the provinces will have to respect standards set out by the federal government while facing reductions in federal funds devoted to these programs.

Thank you.

Mr. François-Guy Richard (Vice-President, Quebec Federation of College Students): I would like to begin by saying that we consider the cuts in the transfer announced in Mr. Martin's budget as federal interference in areas under provincial jurisdiction. Here is why.

This change to the funding system will force the provinces to make decisions and to review the choices that they have made in an area under their jurisdiction such as education, which interests us particularly.

Faced with this shortfall due to reductions in transfer payments announced by Minister Martin, the Quebec government will have four choices. The first will be to reduce budgets for colleges and universities. This would undoubtedly affect the quality of teaching offered in post-secondary institutions, colleges and universities in many ways. Registration costs could also go up.

The second option would be to introduce tuition fees at the cegep level, which is unique to Quebec. In doing so, the Quebec government would go against what Quebeckers want, that is a free and accessible college education. The Parizeau government reaffirmed this choice by recently abolishing the user fee that had been implemented by the previous government. So it would have to abolish free college study, something that is very important for Quebeckers.

The third option would be to increase tuition fees in universities, thus making them considerably less accessible. That would run counter to the educational objectives Quebec has set. These objectives are very important for socio-economic development.

The government's fourth option would be to increase spending to maintain the current level of funding for post-secondary institutions, but that would increase its deficit.

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It is interesting to point out that Québec has always spent the credit it receives from the federal government for post-secondary education on education, contrary to other provinces whose practices have been criticized.

These cuts to transfer payments represent two ways the federal government is transfering its deficit. The first is a transfer to the provincial deficit. By cutting transfers to the provinces, the Chrétien government is not resolving its debt problem; it is shifting it to the provinces However, in a document that the Liberals used during their election campaign, they said that for nine years, the Conservatives claimed they were making budget cuts, but in fact, they simply increased the financial burden born by the provinces and municipalities. In the end, the taxpayer always picks up the tab. The Liberal's recognized that during the election campaign. However, they seem to want to make the same choices as their predecessors.

These cuts represent not only an offloading on the provinces, but also, given the difficult choices that the provinces will be forced to make, since it is difficult to envisage them increasing their deficit, as lenders to governments no longer allow it, these cuts could also represent an offloading of the federal deficit on individuals. In terms of education, it could also mean a transfer to young peeople.

However, Minister Martin, in appearing before the Standing Committee on Finance, recognized that budget deficits represents money borrowed to cover what is already being consumed. They do not correspond to investments that would stimulate our economic potential. In fact, they weaken it. We are not creating new opportunities for our future generations. We are usurping their right.

If this deficit, which is apparently the result of past spending and something Mr. Martin says he does not want to leave to young people, were to result in cuts to education, and consequently increases in tuition fees, it would simply be offloaded onto young people. It is the deficit that, to a certain extent, has not been created by them, but by past spending.

I would like to remind you of some statements made by another government Minister, the Minister of Labour. When she was Minister of Education in Quebec and President of the Council of Ministers of Education, Canada, she stated that Ottawa did not have a role to play in defining national objectives, nor any jurisdiction in this area reserved for the provinces. She said that it should never be involved in the content of decisions made to resolve problems nor in the content of programs. She also said that if Ottawa wants to invest in education, it must leave defining the programs up to the provinces and provide money without tying the grants to attaining specific objectives.

However, with the conditions it seemed to be called for under Bill C-76, national standards will be imposed. I would like to point out that despite the wording of the text, the intention seems to be to create conditional transfer through the imposition of national standards. We must bear in mind that these conditions are found in a document that sets out the conditions for the Canadian Health and Social Transfer. In our opinion, if national standards are included in this document, they clearly become conditions for the Canadian Health and Social Transfer. In our opinion, this of course is unacceptable.

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Mr. Rebello: We are not just complaining. We have a solution to bring forward, the solution that Quebec has always presented: the federal government should withdraw from areas of provincial jurisdiction, and should transfer taxation powers to the provinces to compensate for a transfer of responsibilities. We are just suggesting that the federal government act in a public spirited way. It is very surprising that the government dared cut transfer payments and ask the provinces to provide services with much lower revenues.

This position is not a Quebec separatist position. It is also the position of the Liberal Party of Quebec. When the federal government refuses Quebec's request, it's thumbing its nose at Quebec federalism, and that's serious.

I'm going to read you the resolution adopted on February 2, 1995, at the Quebec National Assembly. It reads as follows: ``That the National Assembly of Quebec expresses its solidarity with all those in the field of education by speaking out against the cuts that the federal government is considering to post-secondary education and that the national assembly demand tax points from the federal government corresponding to the actual transfer paymets made to Quebec for post-secondary education.'' This resolution was passed unanimously, which is quite rare given the current political situation in Quebec. It's quite rare for the Liberals to vote with the government. This resolution was tabled by Mario Dumont.

There was a broad consensus in Quebec on this matter, and the federal government refused the request. What is surprising is that this proposal confirms the fact that the Liberal Party of Quebec sees the problem in the same way as the Quebec director of Finance, Jean Campeau. In the budget which was recently tabled, Jean Campeau emphasized the fact that cuts to federal transfer payments force Quebec to make choices in its area of jurisdiction. This is interference. The resolution expresses the same position, and the Liberals of Quebec voted for it. If the rest of Canada does not understand that, its thumbing its nose at those Quebec separatists and Quebec federalists. To some extent, today the students of Quebec are speaking on behalf of the Liberals of Quebec.

The last thing that we would like to stress is that we are very concerned about integrity. We wonder how federal politicians were educated and we wonder what kind of environment they operate in. I hope that our representatives from the Bloc québécois won't take on those ways of doing politics.

Mr. Chrétien out and out lied by doing what he did recently, namely cutting transfer payments to the provinces. In the Red Book, the Liberals said very clearly that they never would do that. They said it was unacceptable. They complained about Conservatives, who had done that for nine years. They said, ``We'll never do that, because we are good people, well educated, civilized people.'' Mr. Chrétien recently proved the contrary to us.

That shouldn't come as a surprise. It's somewhat like what happened in 1982, when Mr. Chrétien and Mr. Trudeau sold us out, breaking the promises that they had made us when they encouraged us to vote no during the 1980 referendum.

We student are in the habits of weighing our words. We are not the kind of people who call out just anything from the roof tops. Today we are obliged to say that by deciding to cut transfer payments to the provinces, Jean Chrétien has proven that he lied during the campaign when he told us that he would never do that. I think that this must be said so the politicians understand that the people don't accept this situation.

This concludes our presentation. If you have any question, we are quite willing to answer them.

Mr. Dubé (Lévis): Since I'm from Quebec, I understand your previous remarks. But even so, you surprised me today, by clearly showing that you've had it up to here. The Human Resource Development Committee carried out consultations. But despite these consultations, here is what you find in Bill-76, and then there is the cutbacks in the budget.

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You didn't read out the entire brief, and I'd like to ask you some questions about what you haven't said yet, for example, the specific impact of budget cuts to post-secondary education on universities in the regions and on the others. We also know that some subjects that are taught are more vulnerable to cuts than others. Could you tell me about the specific impact of these cuts and what socio-economic changes they will bring about in Quebec?

Mr. Rebello: In fact, if the federal government cuts transfer payments and forces the government of Quebec to make choices that it would not like to make, such as increasing tuition fees considerably, access to higher education will be seriously compromised. As you pointed out, things would be worse for the universities located in the regions as well as those on the outskirts of the cities.

If we examine the situation more closely, we can see that tuition fees in Quebec have increased considerably in the past few years. In 1990, tuition fees were unfrozen, for those of you who didn't know that. At that time, the government said that tuition fees could be unfrozen, doubled or even tripled, and that these increases would not have any impact on accessibility, because, according to the government and contrary to all economic theories, when prices go up in the field of education, that has no impact on demand. This went against all economic theories, but everyone endorsed this idea. Once again, it would appear the economic theories were correct, because the number of students at Quebec universities has indeed gone down since 1990.

Despite the demographic reasons, one can certainly say there are economic reasons for that; in other words, higher tuition fees caused the number of students at Quebec universities to go down, and we just can't let that happen in Quebec. Quebec is still the province with the lowest level of university education in Canada. If we compare McGill University to the University of Rimouski, for instance, we see that McGill University did not suffer greatly from the increases in tuition fees, because of its reputation and its location. It's obvious that McGill University could increase it's tuition fees even more, because the demand is high. So the number of students there won't necessarily decrease.

However, universities such as the University of Rimouski, the University of Chicoutimi and the University of Abitibi-Témiscamingue cannot increase their tuition fees. They are much more sensitive. When tuition fees vary, the number of students at regional universities varies far more than the number of students at urban universities.

In the middle-term and in the long-term, the repercussions could be severe. If we decrease the number of students, even just by a few thousand per year, there could be quite serious repercussions for Quebec's government finances in the middle term and in the long term. We know that it costs about $50,000 to train someone after cegep until he (she) has completed his (her) studies at the university, but over the course of his life, he will pay $500,000 more in tax because of his training and his skills. Consequently, if the number of university graduates decreases by several thousands, this will certainly have a major impact on government revenues. This is very much and economist's viewpoint, but there is also a social viewpoint to consider.

An education society is a more democratic society that reflects upon the issues more. We currently have many problems in Canada because the population is not educated enough. Just imagine what these problems are like in Quebec, where the level of education is even lower. When you look at the society in isolation, the level of education is even lower. There are many social problems that stem from the low level of education. The federal government's cuts could have serious social and economic consequences for Quebec society.

Mr. Dubé: You're quite right to mention that fact. A group of university students carried out a study that demonstrated that over the course of his life, a university student paid $400,000 more in income tax over his lifetime. So that point should support your arguments.

We've talked about cutbacks, but we musn't forget about standards. As you said, it's true that there's a well established consensus in Quebec; everyone, including organizations outside of Parliament, rejects the idea of national standards set outside of Quebec.

I would imagine that you are in regular contact with other student associations throughout Canada. One can see that outside Quebec, people have more mixed feelings.

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People in one part of English Canada feel a need for national education standards that are uniform from one province to another. If federalism were truly flexible, it could allow Quebec to exercise its jurisdiction, which in fact is set out in the Constitution.

What do you think about this kind of measure?

Mr. Rebello: Are you suggesting that there should be national standards?

Mr. Dubé: What I'm saying is that some student associations and some stakeholders in education and other areas such as health would like to see national standards in Canada.

We have a distinct society in Quebec, and we wouldn't want to keep the rest of Canada from setting its own standards. What do you think about that?

Mr. Rebello: That's their problem. Even in the English-speaking part of Canada, it is difficult to set national education standards from one end of the country to the other. There are very different societies.

Another thing to consider is the time and energy that's wasted by trying to regroup things that are too different. We will try to agree on things and each of us will make an effort.

I've attended meetings of the Council of Ministers of Education, Canada, and I can tell you that they're a big waste of money. When you ask people from the East to agree with people from the West about national standards, you're wasting your time.

If you manage to define education standards, they will just be inane guidelines such as ``we must educate our youth''. You'll never be able to go any further than that with national education standards. You'll always want to do so. Many people dream of doing it. All the energy they'll spend on it will just be a waste of time and money.

Perhaps were not as used to operating at such meetings, but I can tell you that when 300 to 400 people from all parts of Canada come to Montreal for five or six days, at the taxpayer's expense, to talk and talk and try to set Canada-wide standards, it's a big waste of money.

Those people should be back in their schools, back in their regions, trying to teach and train their people as best possible, and in each case the teaching should reflect what the realities are there. Obviously, the realities of Prince Edward Island are different from the realities of Vancouver. By definition, teachers will always try to provide the best possible teaching. National standards are not going to improve teaching in one area or another.

We can't make decisions for other people. We can't pass legislation that will force people to emphasize education in their province. It doesn't make any sense. If people don't want to pay for education, sooner or later there will be pressure, and these standards will be done away with. If people have decided that education wasn't important, national standards aren't going to make education important. They'll just be done away with.

So national, Canada-wide standards will still be their problem, if ever they set any. If I were to make a recommendation, I would say that national standards are a waste of time. There are good reasons why education is a provincial area of jurisdiction. It's because the issues depend on the specific characteristics of each province.

It's a little bit like in Europe. The only educational standards in the European Economic Community are standards that relate to the transfer of degrees and the recognition of credits from one society to another. That's all they have. It was very difficult to come to those standards. They have such standards, but we don't have them here in Canada. Here you can't even transfer a degree from one city to another. In Europe, they can do that from one end of the continent to the other, in two different languages.

The Canadian Federation in no way guarantees mobility of education. If Quebec were a sovereign nation, it would be easier to go off and study in Ottawa than it is now, even though now we're part of Canada.

Mr. Dubé: With the Canada Health and Social Transfer, three groups of people - the unemployed, the social assistance departments and students - will be competing for funding from their provincial government.

How do you feel about being in such a situation, that is to say, in competition with the unemployed and the social assistance department?

Mr. Rebello: We don't feel that we're competing with them. We think that's just a detail. It's comical that in Ottawa, education is managed alongside unemployment programs. That's not the way it works in Quebec. We see that completely differently.

Furthermore, when the minister, Mr. Axworthy, announced his plans for reform, when he told us that he was going to talk about education while reforming social programs, we were quite confused. We didn't understand.

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We don't think that education is a social program. Education is education. It's important enough to be something in itself. Social programs are something different. They are specific economic measures that are taken to ensure that those who are least fortunate can get out of poverty and return to the labour market. That's what social programs are. Education is an end in itself. It's sole purpose is not to make it easier to get a job. It's purpose is to educate people, develop their knowledge, make people happier, and make the community happier. That's what education is.

The federal government's vision, which is that education is on the same footing as unemployment insurance and welfare, is somewhat comical. We in Quebec are not making a big deal out of all this; we would prefer that the federal government do that rather than create a new Department of Education in Ottawa.

[English]

Mrs. Brushett: You made a point earlier regarding McGill having less of a financial burden than Chicoutimi and Rimouski in terms of funding and tuition fees. Could that not be because McGill is a national university and Chicoutimi and Rimouski are not of that calibre?

Therefore, this will probably be faced throughout the country and really has very little to do with the transfers of funding. A lot of foreign students are coming to McGill. Therefore, they pick up a lot of these tuition costs at a higher rate, and so on. It's a common problem throughout the country.

[Translation]

Mr. Rebello: Obviously, the fact the McGill University has an international reputation means that the cuts to public funding from the federal government or other sources affect it less. That's normal. There are more students who want to register at McGill University than who want to attend a university in one of the regions.

However, that doesn't mean that the students in the regions aren't as good students. First of all, they live in the regions. Secondly, not all universities are at the same level. Some of the more recent universities need some time to rise to the same calibre. That's normal.

Am I answering your question?

[English]

Mrs. Brushett: Yes, you are. It is a problem for each province, not only Quebec. But it is a point that we have to cover so that our young people in rural areas will have opportunities.

I'm from Nova Scotia, so I understand those things.

A point that has come up to me from other students is the benefit of a university education in dollars. Some people believe that the high costs of tuition are great but the expected benefit to the student afterwards may be only $5,000 with a university degree, that you might expect so much more in addition to your salary.

I'm wondering if you've evaluated that. Can you afford to take that big debt to get maybe a marginal benefit in today's economy?

[Translation]

Mr. Rebello: You can look at that question from the individual's point of view, and you can also look at it from the community's point of view. In other words, if the level of education increases in a community, a community will get more revenues. That's for sure. However, if you look at it from an individual's point of view, only 90% will benefit from a degree, since the unemployment rate among university graduates is above 10%. So there's a risk. You can have a university degree and not necessarily get a job. You may go $15,000 into debt for a B.A. and not have a job; actually, you have a one in ten chances of not getting a job.

So at present - we saw this in Quebec when the increases in tuition fees led to fewer students attending university - this is enough of a risk to dissuade some students from continuing university education.

And coincidentally, it's not the richest, the best off students who are dissuaded. They know that even if they have to borrow money or if their parents pay for their university education and they don't get a job afterwards, it's not that all important. They will be able to go into some other field and earn another degree in something else. They have that manoeuvering room because their family is rich, because they have assets and going into debt does not mean starvation for them. Those students will remain at university, despite higher tuition fees, but people who are less fortunate won't.

Consequently, the argument that if you go to university you'll have a better chance of earning a good living comes from economists who don't bear in mind the opportunity cost for people who are less fortunate. They are bad economists. You have to take a global perspective. You have to think in terms of the community.

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We have to make sure that the poorest members of society have the most opportunity at the lowest cost. If someone from a poor background finds it is less risky to go on to post-graduate studies, he will probably do so. In the end, this will benefit society as a whole. But if we tell an 18 year old: ``You have two choices: either you go to university, which doesn't mean you'll get a job, and you graduate with a debt of $15,000, or you start working right away for 8 to 10 dollars an hour and you won't be saddled by debts''. If that person is pressured not to go to school - and pressure is a major factor - chances are he will choose the 8 to 10 dollar and hour job immediately rather than go on to post-graduate studies.

We know that in the long term that choice is not good for society. In the short term, it may be an appealing option for a young person because he'll be able to buy a car and meet his consumer needs. But it's not good for society. Society must encourage him to stay in school despite pressure to the contrary, including buying things and other pressures. This person has to stay in school because society as a whole will benefit in the future.

The last point I'd like to make is the issue of values. I'm not interested in leaving my children money; I want to leave them with knowledge. Money is relative. Money comes and goes, but a person never forgets what he or she has learned.

Some federal expenditures are considered capital assets. They're not considered expenditures. When a country buys a building and pays for it over several years, it's considered a capital asset. But education is still perceived as being, on paper, an expenditure. However, we know that a person who buys knowledge never loses it. It's always valuable.

As well, we shouldn't insist too much on the kind of knowledge that is acquired. People often say ``so and so is studying history but it's useless. He won't be able to get a job. He shouldn't be taught history''. That's a bad outlook because you can never know too much. No one has ever told me they shouldn't have learned something because it's useless. It's important to learn as much as possible, on as many subjects as possible and, if possible, to acquire knowledge which will help a person find a job. However, that shouldn't be an obsession. A person shouldn't be stingy with knowledge. No family father keeps information from his children. There is no reason why government shouldn't do the same with students.

[English]

Mrs. Brushett: Thank you very much. I appreciate your comments, because it contributes to our whole global society: the better-educated, our youth and the opportunities. I appreciate having you here before us today. Thank you.

[Translation]

Mr. Brien: I just want to say that the Bloc will not be taken in by the system. We'll get out of it first.

I agree with what was said regarding the amount of time we waste trying to harmonize everything. I often see this happening and even I occasionally - even regularly - waste my time. Sometimes it's a necessary evil, but we should avoid it as possible.

I would also like to congratulate you. Until recently, I was a member of a student association, since I was still a student. At the time, students were not represented as well as they are today. I know that you work hard to improve the situation of students.

M. Rebello: But I'm sure that you get to meetings on time!

Mr. Brien: I don't have any lessons to teach about punctuality!

In your brief, you made an interesting analysis on student debts and the repercussions of an increase in tuition fees in Quebec. I'd like to hear more about this.

You painted several scenarios and you compared the current debt load of a cegep student with the debt load of an undergraduate student, taking who account as well the possibility of an increase in tuition fees. I'd like you to explain the repercussions that this would have.

Mr. Rebello: Turn to page 20 of the brief. There is a table which partly explains the potential repercussions of a 62% hike in tuition fees on the debtload of a student.

Where did we get the 62% increase in tuition fees? We studied scenarios and analyzed the effects of a 10% cutback in budget transfers to universities and cegeps, should the Quebec government decide it didn't want to increase its deficit to compensate for the withdrawal of federal funding, and if it decided to transfer the debt load entirely onto the backs of university students. University tuition fees would have to increase by about 62%.

If that was the case, an undergraduate students would graduate with a debt load of approximately $18,000, up from approximately $13,000. Such would be the impact if the education budget were cut by 10%.

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That would only apply to the first year, 1996-1997, at which point the effects of the cutbacks in transfer payments won't be felt yet. But in the future, the effects of the cutbacks will increase the debt of undergraduate students.

Aside from the numbers, it seems that people have this fundamental idea that Canada can reduce its deficit by increasing the debt load of students. It's ludicrous to believe this will solve anything. That's completely outrageous. It solves nothing.

We've been saddled with an $80,000 debt. This is only part of our collective debt; it's the share borne by an individual. Aside from the $80,000, students will also incur personal debts, and then they're supposed to enter a job market where there are no openings and where the previous generation got all the good jobs, for instance in the public service, which just isn't hiring anymore. A graduate in international relations can't even envisage the possibility of working for the federal government, even if he has a 97% average. That's the way it is today.

Students have debts but the doors to the job market are closed. It doesn't make sense. As if that wasn't enough, people are telling us - as Mr. Axworthy and Mr. Chrétien did last fall - «Listen, you have to do your share.» Let's set the record straight. Let's see who have done their share. Let's see who decided to spend more money than they had; it wasn't me.

There are incompetent people. Even the man who was Minister of Finance in the 1970's was incompetent. He was President of Treasury Board and took stupid decisions. He decided to buy 12 frigates - you've seen them, haven't you? - at the cost of 9 billion dollars. This was in the 1970's. Nine billion dollars! Imagine how much we could have done for education if we hadn't bought the frigates.

Mr. Chrétien, you're the one who took that decision. But I'm not going to pay for them for the rest of my life, because I'll make the right decisions.

Let's be clear. First, you'll sell your frigates. Second, you'll make the people who made profits on the construction of those frigates pay taxes, because some people benefitted from those contracts. Perhaps they should pay a special tax.

Take another Minister of Finance, for instance, Mr. Martin. Even he did not immediately abolish family thrusts; that will only happen in five years. However, poor people are going to pay the price much sooner. It doesn't make sense. It's not ethical.

I honestly believe that federal politicians are being bought off; they're too close to business and they can't make the right decisions.

We have serious doubts regarding the ability of Mr. Chrétien and Power Corp. to make the right decisions. Our leaders are puppets of the financial industry; they have no backbone. They don't come anywhere near the man René Lévesque was.

I have one final thing to say. As a politician, a man like Jean Chrétien is an embarassment to Quebec. He never was a member of Quebec's cabinet. We can't imagine why the rest of Canada likes him. Given the financial decisions which are being made today, it just doesn't make sense.

[English]

The Acting Chair (Mrs. Stewart): Thank you very much. We certainly appreciate you being here. You've had great latitude in your comments today. That's a wonderful part of this democracy.

Certainly some of the things you said are controversial, at the least. I suppose there would be a number of challenging points that we could have, philosophically.

You made some interesting points, gentlemen. We're glad you were able to make it here, albeit a bit en retard. Merci beaucoup.

Mr. Rebello: Thank you.

The Acting Chair (Mrs. Stewart): This meeting stands adjourned.