EVIDENCE

[Recorded by Electronic Apparatus]

Wednesday, November 29, 1995

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[English]

The Chair: Could we come to order?

The next groups to appear before the finance committee - and I'll probably get this wrong, but I know you'll correct me - are: from Harvest Foods Limited, Stuart Garvin; from the Saskatoon Council of Women, Ruth Robinson and Lori Isinger; from SASKFILM, Mark Prasuhn; from the University of Saskatchewan, Marv Painter; from Woloshyn Mattison Barristers and Solicitors, Donald Woloshyn; from Working for Women, Linda Smee; from the YWCA, Jo-Anne Coleman and Marta Juorio; from the Saskatchewan Federation of Labour, Barbara Byers and Don Anderson; from the Saskatchewan Health Coalition, Ed Holgate; and as an individual, Roy Chernoff.

Have I missed anybody? Have I really massacred the pronunciation of your names or done a disservice to you?

Could we start off, then, please, with opening statements of a maximum of three minutes?

Would you like to start, Ms Byers?

Ms Barbara Byers (President, Saskatchewan Federation of Labour): Thank you.

The Federation of Labour in this province represents 70,000 workers in both the public and the private sectors, located in about 500 locals throughout the province. I think it's fair to say, though, that the federation sees our mandate as much broader than that in representing all workers, especially those who are unorganized and who don't have anyone to speak on their behalf.

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We are obviously very concerned about the question of jobs and the fact that there really hasn't been any movement on job creation in this country. More than that, the jobs that have been created have tended to be low-wage, low-benefit or no benefit, part-time and very intermittent.

With that, as we look at the whole question of social programming, we need to ensure that the jobs that are created as we look at the changes there are quality jobs that will be in our communities for a long time and will contribute to our communities.

We're also very concerned about the issue of taxation. Our members pay taxes, and there are many people who are unemployed who would like to be able to pay taxes if they had a job. It's gone past the point now of saying that with banks and corporate profits soaring the way they have, something needs to be done.

There is a wider and wider gap between the rich and the poor. It's time the federal government took a serious look at some of the proposals that have been made by people such as Neil Brooks out of Osgoode Hall Law School and others to stop attacking social programs and go after the dollars where they are, and that is in the banks and the corporations.

Quite frankly, it appears across this country that politicians are held for ransom by large corporations and the banks. They do the bidding of the corporations on the basis that there will be some sort of capital strike.

We are very concerned in this province about the question of block funding, the CHST, what that means to people in this province and also what it means to people in this country. I would ask you, if you haven't seen a copy of it already, to get a copy of Bob White's letter from the Canadian Labour Congress. He wrote to Jean Chrétien after the referendum in Quebec and suggested very strongly that it's time the Prime Minister and premiers rose to the occasion and found a solution with Quebec that works for Quebec and for the rest of Canada but does not fall into the trap of ``me too'' that is being proposed by the Reform Party and provincial premiers.

It won't do any good to save this country if what we have at the end is twelve little boxes across the country that represent something that is not a national standard.

Earlier people urged you to look at the alternative budget. We ask you to go back and review that again and consider the one that will be coming out in the next short while as well.

Finally, we are really concerned that what seems to be driving this country is to drive standards down in order to get people here. We should be driving standards up in order to attract people to this country and keep them here.

It's not often you'll hear someone from the labour movement quote Dalton Camp, but he was in The Globe and Mail a few days ago talking about values and the fact that we need to return to values of people versus profit.

I know I'm getting the time signal, but I want to just add that if politicians want trust, they're going to have to show they can be trusted. Right now the feeling amongst workers and other people in the population is that politicians can't be trusted with our social programs, with a fair tax system and so on. It's time for you to show some leadership.

Thank you.

The Chair: Thanks, Ms Byers and Mr. Anderson.

Mr. Woloshyn, please.

Mr. Donald Woloshyn (Individual Presentation): Thank you very much, Mr. Chairman.

I don't represent anybody but myself today. I was invited to attend by my local member of Parliament because I've been corresponding with her on a number of issues of public interest.

I'm not an expert. I'm a lawyer and a farmer. My partners and I employ about forty people. I have a payroll to meet tomorrow. I've always been self-employed, and when I make decisions, I'm making them in respect of the expenditure of my own money, unlike, for example, the salaried presidents of some corporations.

My observation is that over the last fifteen years or so, we've been conducting a kind of grand experiment in Canada. You will remember that about fifteen years ago we were told inflation was a great bogeyman and the country would fall to its knees if we didn't conquer inflation somehow. So we embarked on a policy of high interest rates, high unemployment, and I may say, high human misery, in an effort to wrestle inflation to the ground. We were told for at least 15 years now that if we did that, all would be well. We'd be competitive, we'd be able to compete in international markets, we'd have more and more jobs, and we would have prosperity in Canada.

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I need hardly to say that the experiment has not worked. We are at a lower ebb today than we have ever been. My children are the first generation of Canadians who are worse off than their parents, and there is no relief in sight. Nobody thinks things are going to get better. Nobody is predicting unemployment of less than 10% in the foreseeable future.

So I'm here to suggest to you that we're not going to solve Canada's financial problems by tinkering around the edges, by firing 100 civil servants here or there, by reducing grants to museums from $17 million to $11 million. When you have a $500 billion debt and a $30 billion deficit, you don't make it up in that way. It's as if I was going in the hole at home $25,000 a year and I decided to use skim milk instead of 1% - it wouldn't make any difference.

I remember that in the 1950s, 1960s and 1970s things were different. They were good. We were all employed. We had low interest rates. Those of you on the committee who espouse traditional values will remember that mothers stayed home and looked after the children, if that's desirable. A family could live on one salary. What were we doing then that we're not doing now?

It seems to me that the secret or the answer is that we had full employment then. What we need is a climate in Canada where there is full employment, where everybody is making a decent dollar and paying taxes on it - income taxes and sales taxes. We're not going to solve our deficit problems by tinkering with expenditures. What we need is more revenue. What we need is for everybody in this room to make an extra $5,000 next year and pay a little more income tax and pay a little more sales tax. We have to grow ourselves out of the deficit.

I want to say, too, that I entirely disapprove of government at every level thinking that firing people and being lean and mean is any kind of a solution. We all know about the multiplier effect. We know that when a well-paid civil servant loses his or her job, one or two other people in the economy are also displaced. The three of them would be paying perhaps enough taxes to almost pay the salary of a civil servant in the first place. Now we have the three of them on unemployment insurance or welfare, and instead of having their productivity the government has their expense. So I question whether it can be shown that dismissing civil servants is effective at all.

Nor is it productive to shift the burden. As I was driving down here this morning, I heard on the news that the Harris government in Ontario is proposing to slash $4 billion from their budget and the municipalities will be the big losers. Who wins from that if the service is transferred from the provincial to the municipal government?

I imagine we'll get into these things in more detail, and I'll yield for now. Thank you,Mr. Chairman.

The Chair: Thank you, Mr. Woloshyn.

Mr. Prasuhn.

Mr. Mark Prasuhn (General Manager, SASKFILM): I am the general manager of SASKFILM, which is the film funding agency for Saskatchewan.

You may know that over the past decade the film and television industry in Canada has diversified outside of the three major centres of Toronto, Montreal, and Vancouver. We now have five healthy regions besides those. Emerging are Alberta, Manitoba, Nova Scotia, most recently Saskatchewan, and now other parts of Ontario, in particular Ottawa.

So I'm here today to speak a little bit about that healthy growing, and taking off from the last speaker here, we're growing our way out of this. That isn't the whole answer, but I think that's certainly a portion of the answer.

We believe cultural industries generally are efficient mechanisms for job creation. They have a great deal of export potential. Canada is now the second largest exporter of film and television products in the world, after the United States. We have an industry here in the country overall that is exceeding $1 billion a year and employing tens of thousands of people. So we think that's significant. The role of the federal government within that area, in both regulatory terms and in terms of the institutions of the federal government, is quite critical.

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We understand in our industry that the fiscal house has to be put in order, that cuts have been made - and particularly at the CBC, have been made over a period of many years - and they will continue to be necessary. But we do urge equity, fairness and thoughtfulness - most specifically, thoughtfulness and strategy - in making those kinds of reductions.

There are really four areas that are of relevance, and I'll just name them and then move on to the next speaker.

First, in the area of tax measures, the federal government this year began the transition from the previous tax shelter for film and television production, which was similar to the investment credits for other industries, and is moving now to, in effect, a kind of employment-driven tax credit for corporations within the film industry. This is a good thing.

The transition has taken longer than I believe people within the government expected. Within our industry now we're looking at a situation where the new program comes on-line in a month and there are still loose ends. So there have been representations made to government that we would echo, that a longer period of grandfathering the previous regime be considered, in order to allow for the transition to occur smoothly and the bugs to be worked out.

Secondly, on the mandate review committee, which is reporting momentarily on the role of the CBC, Telefilm Canada, and the National Film Board, we have watched this process from the regions with considerable interest, particularly because of what happened to the CBC a few years ago when it received its first major reductions and immediately turned around and laid the burden of that upon the regions. We're concerned that this not occur again.

We do believe there are efficiencies that can be made, a possible amalgamation of operations. We in Saskatchewan have suggested that to the committee when we had opportunity for input. We think that's a good thing. We also believe the CBC could realize more efficiencies by working in greater partnership with independent producers like the ones that SASKFILM supports here in Saskatchewan.

The third area is looking at the future initiatives to build and grow the infrastructure in Canada, the most obvious one being the information highway. Again, we watched these deliberations with great interest and hope they will be done in such a way that there is a clear regional...you know, care is given to that strategy and how that is implemented.

On the federal infrastructure moneys, the program has also been of benefit in some other areas, such as Winnipeg and Halifax, where they've built film industry infrastructure with some of that money. I think that's important and shows the kind of positive benefit the federal government can make with its interventions.

Finally, in the area of the labour force for the film industry, we find that the administrators of the job training programs that have been instituted over the last several years are listening closely to our industry, and that's important. We have a freelance, mobile kind of industry, but also a very well-paid and professionalized group of people. So we're eager to work in partnership with those kinds of programs and hope that as these matters that are being sorted out right now come to pass, those programs are not derailed. Thank you.

The Chair: Thanks, Mr. Prasuhn.

Mr. Painter.

Mr. Marvin Painter (Assistant Professor, University of Saskatchewan): Thank you,Mr. Chairman.

I've addressed three questions: the first, what should our deficit reduction targets be and how can they best be achieved?

I believe the federal government should achieve a balanced budget by the year 2000. During this budget balancing period, the next five years, I believe there should be no tax increases. However, at the same time, I don't believe we can afford to have tax rate decreases.

Also, if over the next five years inflation averages 2% to 3%, which is roughly where we are now, and the GDP grows at a real rate of 2% to 3%, which is again roughly where we are now, we can expect real growth in tax revenues by year 5, or by the year 2000, of about $15 billion per year, which is half of the current deficit of $30 billion. So therefore half of that deficit can be eliminated, I believe, with real growth in tax revenues, without tax rate increases. However, that means the other $15 billion, the other half of the current $30 billion-per-year deficit, has to be eliminated through real cuts in program spending, which I believe should be done.

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I also believe the federal government should be including a minimum five-year fiscal projection with their budgets to show both Canadians and the international community exactly what the fiscal plan is.

The second question is how may budget measures be used to create an environment for jobs and growth? The main requirement for Canada to achieve sustained real growth in the economy is for governments to provide the investment community with a believable assurance of economic and fiscal stability, including inflation, taxation and regulatory stability. Expected future stability is the most important requirement for new investment, and without private investment, this country's economy cannot grow and jobs will not be created here.

The federal government must reduce the fear of hitting the financial wall. With our total government debt-to-GDP ratio in excess of 100%, there's a real fear of financial collapse. Therefore the federal government should produce a five-year balanced budget plan and reach that fiscal target come hell or high water.

The third question is what areas of federal activity should be considered for further cuts, commercialization, privatization or devolution to other levels of government? First of all, on social programs, I believe old age security, the Canadian pension plan, unemployment insurance, the child tax benefit and the transfers to provinces for welfare, which are now called the CAP transfers, should all be combined into one Canada social program, which would be a negative income tax program.

I'm not prepared to talk about details, because of course there would be a lot of details. However, I am proposing that they all be combined into one Canada social program instead of having this mishmash of all kinds of programs that overlap and get in the way of each other and so on.

This negative income tax program will only provide social funding to those in need, and it can retain a built-in incentive, depending on how the negative income tax rates are set, for people to actually find employment. This type of program would have to be phased in over a period of years, but I would like to see the planning begin now so that possibly in five years it could be fully implemented.

Second, the Canada social program can include employment matching and training as well as job placements for those who are employable. The Canada social program should be federally funded but managed at the local level, and it should be financed with federal taxes and partially through reductions in the provincial transfer payments.

The federal government should cut the duplication of federal and provincial departments by decentralizing in some cases and centralizing in others. For example, Agriculture, Fisheries and Oceans, Energy, Mines and Resources, and Economic Development should all be decentralized to the provincial level and something like Environment should be centralized at the federal level rather than having departments at both levels.

After the budget is balanced, the federal government should plan for a combination of tax relief and debt repayment.

The Chair: And also a huge nationwide celebration.

Mr. Painter: Exactly.

Some hon. members: Oh, oh!

The Chair: Mr. Garvin.

Mr. Stuart Garvin (Individual Presentation): Thank you, Mr. Chairman.

Ladies and gentlemen, I'm a management consultant based in Saskatoon. I don't represent any group. I'm here as an individual offering you my personal comments. I've tried to keep my points brief and address each one of your questions.

The first one is on what our deficit reduction targets should be and how they should be met. The present deficit reduction targets should be reduced in an aggressive manner, trying to get, if possible, below 2.5% to somewhere around 3.5% or 4%. I think that we simply can't afford to mortgage the future any further by being easy on the deficit reduction target.

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The second question is, how can budget measures be used to create an environment for jobs and for growth? I'd like to focus on this question. In reality, governments really have very few tools to work with to create growth and economic development. I'd like to focus my comments to you today on regional economic development programs as one of the tools available that you've used in the past and you're probably considering for the future.

Because of the lack of reliable information, no one is in a position to judge today whether these programs work or do not work. There are many opinions held in favour of or against these types of programs, but very few conclusive facts.

The auditor general last week tabled for you his report. It correctly identified that these programs do a poor job of evaluating what companies do with the money and the real impact of spending through these programs.

As a committee like yours deals with the questions facing you today, you are very likely having to ask yourself a question about the future of regional development programs right across the country, from Atlantic Canada to western Canada.

These programs, in my view, have important economic, psychological and political value. In my view, they should not be eliminated without having proof that they do not work in the manner of creating new jobs and new opportunities. The fact that there is an absence of information that tells us whether they work or not is, in my view, unfortunate. But that shouldn't be the reason why they are eliminated today.

While these programs have experienced restructuring recently, going from grants to repayable types of loans, I recommend that they not be abandoned. Instead, they should go through dramatic changes. Also, these programs should go ahead only if they can demonstrate actual success in achieving job creation and growth. They must become performance-based and far more accountable to Parliament and to taxpayers. Because you have such few real options available to you for increasing growth and job creation, I believe it's better to sharpen the tool to make it more effective than to throw the tool away.

Regarding the last question, I believe that your target of reducing the civil service by 45,000 over a period of time is a very valid target. I'd encourage you to continue with that approach.

That concludes my comments.

The Chair: Thank you, Mr. Garvin.

Mr. Chernoff, please.

Mr. Roy Chernoff (Individual Presentation): Thank you, Mr. Chairman. I'm a family physician. I have practised family medicine in Saskatoon for fourteen years. I am deeply concerned about the erosion in the funding of our health care system.

At a recent Prime Minister's dinner held here in Saskatoon, the Right Honourable Mr. Chrétien frankly stated that the cabinet of his government was facing difficult choices with regard to the funding of government programs. Mr. Chrétien stressed that health care will continue to be universal, portable and accessible.

He told a short story of how a friend of his had a heart attack while vacationing in Florida. He recovered and was presented with this bill for $10,000 from the hospital. He then had another heart attack.

Local physicians will agree with the statement that reductions in federal transfers to the provinces, even though they're not excessive, are damaging and destructive. These reductions are striking at the heart of the system Mr. Chrétien wants to preserve so dearly. I suggest to you that these reductions are automatically triggering the start of a two-tiered health care system.

Most Canadians believe in equal access to all health care services. However, it has already been shown that if Canadians can afford a quicker, reasonably priced alternative, they will surely use that service to avoid waiting in a line-up.

I urge the finance committee to heed the advice offered by the Canadian Medical Association and negotiate long-term funding for health care to ease the hysteria and paranoia that's rampant in the health care industry. This hysteria is slowly spreading its cancerous legs throughout the public sector as well.

In a recent correspondence with the Saskatchewan Medical Association, I was told that58 physicians left Saskatchewan in the first nine months of 1995. While this is not an alarmingly high number, as we have 1,500 doctors here, the executive of our association points out that many of these people who are leaving are long-time Saskatchewan physicians. They are fixtures in their communities and have established, successful practices. I suggest to you that they are leaving because of this hysteria and paranoia, and the abhorrent increased tax burden placed on middle- and higher-income Canadians.

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The people of Canada have good reason to be proud of their health care system. We must try to preserve it. Medical economists say that we simply can't afford to put physicians on salary. Making doctors official public servants ruins incentive and may harm the quality of care. Health care providers must continue to have a strong voice.

I want to discuss briefly, for a few minutes, the ways the finance committee could stimulate the economy and help future generations.

I believe that RRSP limits should be increased, not decreased. People should be encouraged to contribute at a younger age so we could be less reliant on dwindling federal government pension reserves.

In medicine, manpower planning is becoming difficult. Physicians are not retiring at the age of 65 because they can't afford to retire. Doctors and other professionals spend many arduous years in training, yet may only be in the workforce for 30 years.

RRSP limits are presently low and should be indexed upwards, not downwards. The Canadian people want fairness in allowing them to plan for a decent retirement.

With all respect to committee members, the pensions of MPs should be decreased to a realistic level that would be comparable to the business sector. The public chastises government as a whole, but we do respect the volume of work our local MPs perform individually. Therefore, we think you should have a decent pension.

Mr. Chrétien has stated that his government will try to replace the GST with a fairer tax. The business community will undoubtedly applaud this because of the bureaucratic nightmare the GST has caused.

Physicians, as you know, have paid millions in GST since 1991. We have not been allowed input tax credits, while other professionals whose revenues are not controlled by the government are capable of recouping their GST. The Canadian Medical Association has repeatedly repeated its case for GST fairness, only to be frustrated. A new tax must be fair and ensure that all professionals pay no more than other professionals.

Welfare reform is a very sensitive issue. I see many welfare recipients as patients. A minimum wage job should pay more than people receive on welfare, after deductions. Welfare payments could be funnelled into the service industries to provide recipients with the dignity of having a job and the stimulus to excel.

Keynote dissertations for the 1990s by economists, accountants and other experts repeatedly discuss the dreaded government spending and deficits. It goes without saying that the government must continue to downsize and be responsible. The Canadian people believe that we must not leave our children with a massive debt load.

Thank you for allowing me to talk.

The Chair: Thanks, Dr. Chernoff.

Ms Coleman or Ms Juorio.

Ms Jo-Anne Coleman Pidskalyn (Director of Housing, YWCA of Saskatoon): Both of us are sharing on behalf of the YWCA. I'm Jo-Anne Coleman Pidskalyn, the director of housing for the Saskatoon YWCA.

We are concerned that the Canada health and social transfer payment changes will result in a reduced federal role in shaping social programs. The substantial cuts are unnecessary since social spending accounts for a small proportion of the national debt. Also, by giving away the responsibility for policy development and delivery to the provinces, the stage is set for eroding current national social policies, such as health care and social support payments, which is a basic right and an important essence of being Canadian.

We believe that these programs should be reviewed with the intention of better delivery of services, but financial support must be retained. Canadian society cannot ignore that citizens are profoundly affected by poverty, family violence, mental health, and addiction issues. These are national issues.

Based on my experience with affordable housing, opportunities exist for both jobs and human growth. Through innovative ways of delivering housing options, the construction industry, suppliers, banks, and support infrastructure are all positively affected.

The people who reside in affordable housing, either as renters or homeowners, have security and financial stability. As a property manager, I have seen many tenants move from social assistance to training programs because they can now afford to do so.

Job training programs and post-secondary education programs need to continue to be supported and developed according to our economy's needs. This is essential in order for Canadians to be participating fully in our economy as employee, employer, and consumer.

Finally, we believe that the Canadian government needs to resolve the aboriginal issues in order to best address service delivery and funding to both the aboriginal and non-aboriginal populations. Until this is done, we will continue to experience people falling through the cracks by not being able to access services.

As a non-profit organization, in the micro sense, the YWCA is struggling with the same financial issues as those of the federal government. We have to be proactive in our leadership and program delivery, but work with limited human and financial resources.

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Despite these constraints, we remain committed to our principles of a better community. We challenge the federal government not to give up its basic principles because the economists are driving the agenda. We believe a balance can be achieved.

Thank you.

Marta.

Ms Marta Juorio (Director of Child Care, YWCA of Saskatoon): I represent child care. I am the director of the child care centre at the YWCA.

We feel child care goes hand in hand with affordable housing as the key elements to help families to become self-sufficient. If these basic support systems are missing, families become dependent on the system.

We're asking the federal government to go ahead with their promise to create 150,000...as stated in the red book. We suggest that the government amalgamate all the money already spent in day care into a designated fund earmarked specifically for childcare. This would prevent further deterioration of the childcare situation, which is already happening in some provinces.

We believe childcare creates jobs in itself because it's labour-intensive. For every childcare space we need five to six workers. Indirectly it also supports other industries. By employing people in the field and by allowing parents to work, childcare helps to bring more taxes to the government.

We recommend that deficit reduction targets would be best achieved by implementing fair taxation practices. We need to look into loopholes and tax exemptions for the wealthy and for corporations.

Job creation and training must be a high priority. Wealth must be distributed among more people. Measures should be taken to help the working poor and the disadvantaged to become independent and help them in their efforts to earn a decent living wage. We also believe the government should make a serious effort in eliminating waste and duplication of services, reducing bureaucracy and providing incentives for business to become more family oriented.

Failure to address these issues will result in a huge loss in the quality of life to all Canadians, and the cost will be much larger than the present deficit.

Thank you.

The Chair: Thank you, Ms Juorio.

Ruth Robinson.

Ms Ruth Robinson (President, Saskatoon Council of Women): Thank you.

I'm president of the Saskatoon Council of Women. With me is Lori Isinger, who is the convener of our economics committee.

On behalf of the council, thank you very much for this opportunity to hear some of our concerns and present some ideas.

Just so you're clear about the group I'm speaking for, the Saskatoon Council of Women is a federation of twenty local organizations and some individuals who are working together to improve the quality of life for women, families and society. The council includes a wide cross-section of women, and through the cooperation and support of the various groups involved, it educates and advocates on issues of common concern. The local council is affiliated with the Saskatchewan Council of Women and with the National Council of Women of Canada.

First of all, talking a little bit about the deficit and debt, there certainly is a problem for Canada caused by the huge national debt and the required interest payments, which eat up such a large percentage of revenue. We agree on the need to reduce the annual deficit and we support balanced budgets. Fiscal responsibility is a given.

A few suggestions for reducing spending are: economies at all levels of government; an overall reduction throughout the bureaucracy; a reduction in military spending, in the Department of National Defence in particular; and an overall reduction in government spending, but not putting social safety net programs at risk. Poor people are not causing the deficit.

With respect to taxes - and some of this might be more appropriately directed to Revenue Canada - we support a more progressive and a fairer tax system.

With respect to income taxes, we feel the income level at which one pays tax should be raised, and secondly, the tax rate should be lowered at the lower end of the scale. We favour closing loopholes, which are used mostly by the rich to avoid paying what most of us would consider their fair share of tax. We are concerned about the money that is invested in offshore enterprises from which Canada receives no tax revenue.

The Council of Women is traditionally opposed to the use of family income for taxation purposes. We recommend that the government study the effects of collecting income taxes from each person as an individual rather than as part of a family unit.

In order to enhance donations to charities, which are picking up responsibilities no longer carried out by governments, we recommend that donors receive a greater benefit for these donations on their tax returns.

The two sales taxes, the GST and the PST, should be collected by one or other level of government. Doing this would decrease administrative costs and reduce some of the paper burden on retailers.

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With respect to devolution to the provinces, we believe it has to be very carefully considered and can only go so far. The costs both in dollars and in human terms have to be examined.

In addition, how far do we go in reducing federal powers? The Council of Women supports a strong federal government in order to unify the country, to provide national standards, to reduce inequalities and to speak internationally when negotiating trade deals on agricultural policy or when influencing other countries to protect their citizens from human rights abuses.

On the accountability of government and government programs, it seems to many of the public that many of the recommendations contained in the auditor general's report, royal commissions and other costly documents that are produced are never acted on. The public pays for the report and wants it to be seriously considered and appropriate actions taken. There needs to be open accountability for all government programs and government-funded programs run by non-governmental organizations, followed by action if warranted.

The Chair: May I ask you to wrap up now.

Ms Smee, please. Thank you for being with us today.

Ms Linda Smee (Working for Women): Thank you for the opportunity to speak in today's discussion.

In terms of deficit reduction, not feeling qualified to talk about details, I want to say that citizens would support deficit reduction if the responsibility was shared by everyone. The sense I get is that basically individuals in the public sector are paying through higher taxes, fewer social services, de-indexing and costs to public sector basics such as health and education, while many banks, corporations and industries are getting tax breaks and subsidies.

Often the example of a family budget is used to support cutbacks. If you use that example, if a family is over their heads in debt and at a crisis point, if everybody gets together, cuts up the credit cards, reduces spending and eats their meals at home, then that family is probably going to survive. But if some members of the family have to cut back and other members manage to keep the credit cards and get the extra spending money, that family is not going to last. It's going to split up. That's my theory of what's going to happen with us.

In terms of jobs and growth, it's been addressed by a couple of other people that having fuller employment certainly gives us consumers and taxpayers, which balances off the growth side of budgets. To have a fully employed economy we need a viable workforce and jobs for them to work in.

In terms of a viable workforce, we need training and education that's accessible, transferable and relevant at all levels of society. That means from entry and re-entry kinds of training and employment programs up to the post-secondary level.

I'd like to speak particularly about community-based training and bridging programs since that's the area I work in and am familiar with.

Research shows that community-based training programs work, and the federal government has done a lot of research in this. The program that I work in, Working for Women, assists women in getting jobs, in making informed decisions about training and in dealing with life situations so that they can move on. And they do move on to become consumers and taxpayers contributing to the growth side of the equation.

Another point about Working for Women is that it's a targeted federally funded program. Statistics show that women are still making less money than men, are less educated and have more responsibilities at home, so it still makes sense for this target group and other target groups to get funding to them.

Once people move beyond basic employment and training programs, they need access to jobs, training and childcare, which has been addressed by other people here.

On the employment side, say somebody gets the training. Is there a job for them? Right now that's pretty questionable. The argument and documentation for a reduced work week or for a four-fifths work week are very persuasive. Automation and technology have made it so that to hire the same number of people to produce the same number of goods you're just going to...you need people to buy those goods and to do that you have to have people with jobs. That's one very positive option.

Another option is that small businesses collectively are a very large employer, and moving further on encouraging banks to lend to small business would help a great deal in terms of employment.

The Chair: Thank you very much, Ms Smee.

Mr. Holgate.

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Mr. Ed Holgate (President, Saskatchewan Health Coalition): Thank you, Mr. Chair and committee members.

I'd like to initially thank Georgette Sheridan, MP, for assistance in helping to arrange this appearance. We had spoken to her about our concerns about the massive cuts to social programs and she suggested we should address this committee.

I'm the voluntary president of the coalition that is made up of organizations and individuals who have been working towards an improved health care system since 1982. We are affiliated with the Canadian Health Coalition.

We recently endorsed 30 candidates in the Saskatchewan District Health Board elections and 16 of those candidates were elected. Our organization recently petitioned the Saskatoon City Council to call on the Canadian government to stop offloading the federal deficit onto provincial and municipal governments, and city council took the action we had proposed.

In addressing the questions the committee is addressing, we need not to repeat the mistakes of the past. The proponents of the benefits of unbridled capitalism and the evils of big government, that is, those advocating market control as a solution to almost any of our current problems, have been in the ascendancy for for almost two decades. Can they point to any successes? First inflation was the problem, then the fat in incorporations was cut, then the fat in government was the problem. Now international trade has to be increased to attempt to solve our woes.

I suggest that none of these steps has solved the problem yet, despite the immense costs of implementing these potential solutions. The nations in western Europe since the Second World War have established high standards in trade, environmental, social and human rights. Standards have been raised to a reasonable level rather than lowered to the lowest common denominator.

The market will not solve all our problems. The marketplace is only capable of calculating those costs connected with the production of the items. They exclude costs that interfere with profit. Leadership of society requires the calculation of those inclusive costs.

The social safety net was designed to compensate for a few of those inclusive costs to prevent a recurrence of the extraordinary impact of the Great Depression in the 1930s, for instance. Right now this social safety net is being removed.

This old ideology of complete free enterprise that didn't work in the past has led to two world wars and the Great Depression in this century. I'd suggest that the social safety net was part of the solution to those problems in the past. It worked; those programs worked. Cutting these social programs will create new problems, not solve current problems.

This position has been echoed and made by other members around this table. We hope this position will be considered by the committee, and we'll be watching for a further report of the committee with anticipation.

The Chair: Thank you, Mr. Holgate.

[Translation]

We will now begin the questioning. Mr. Crête, you have the floor.

Mr. Crête (Kamouraska - Rivière-du-Loup): My question is addressed primarily toMr. Painter. I was most interested in the model he proposed, which involves merging into a single fund old age security, unemployment insurance, tax credits and provincial social assistance.

Would Mr. Painter agree with the idea of allowing a province to opt out of such a program, as Quebec did back in the 1960s, when it withdrew from the Canada Pension Plan and created its own Quebec Pension Plan?

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You have suggested that this be a federal program, but that it be administered locally. Surely that would lead to the same old arguments. Each of the regions will say that it has to be able to meet its own specific needs. Do you not think an opting-out provision would be a realistic solution under such circumstances?

[English]

Mr. Painter: I'm sorry I can't answer you in French.

My only concern with decentralizing this type of program is that we know that not all provinces have the same level of wealth or ability to collect taxes. My concern would be that a province like Newfoundland may then end up with a very poor set of social programs compared with, say, another province like British Columbia, which has a lot of extra wealth and could have a very good set of social programs. I'm not sure I would like to see Canada divided in that way.

However, if you ask whether it could technically be done, I'm sure it can. I'm sure there's no reason why it could not.

[Translation]

Mr. Crête: But there may be wide variations from one region of the country to the next. Some may have large numbers of senior citizens, while others have a high youth population. As a result, it could be very difficult to apply the same system everywhere, given these regional differences.

Let's take Newfoundland, for example. The government there has to develop an economy that will allow it to keep people at home; it has to make political choices that will encourage people to stay in their home province rather than moving West. Don't you think an opting-out provision would be one way of avoiding implementing a program that does not in fact yield the desired results all across the country, because it exists in one form and one form only?

[English]

Mr. Painter: It almost sounds like you're asking that maybe what the federal government should do is just set up a block-funding transfer to each province and let them choose their own set of social programs. In fact, you could take these federal social programs we have now and say you could do just like the federal government is doing with the Canada health and social transfer, set up a block funding and give the provinces more autonomy, if you want, to decide what programs they want, and they decide how to spend the money.

[Translation]

Mr. Crête: In Canada, we have developed an equalization system that has clearly yielded positive results. But this system may well have reached its limit. Central Canada has undergone considerable economic development, while the outlying regions, which are the resource-rich regions, have become dependent to a certain extent on transfer payments made possible by the equalization system.

In future, we may well have to develop a system that will allow us to better distribute wealth creation, rather than just wealth.

However, I still think you have made an interesting suggestion.

[English]

Mr. Painter: Thank you.

[Translation]

The Chairman: Thank you, Mr. Crête. Mr. Walker, you have the floor.

[English]

Mr. Walker (Winnipeg North Centre): Thank you, Mr. Chairman. I'd like to pursue the same witness and the same questioning because it is a very interesting proposition.

First of all, Mr. Painter, you're at the university. Is this an area you're pursuing professionally or just one that you're very interested in?

Mr. Painter: Well, I believe, a mix of both.

Mr. Walker: A mix of both, okay.

Mr. Painter: I do teach a course in the college of commerce. It's called Tax.

Mr. Walker: Right.

Mr. Painter: But it does involve a little more than just tax. It's almost like a government policy course.

Mr. Walker: The reason I ask is, because we changed the program only last year, we're all very curious as to what research is being taken on, and so forth. People are just beginning their research projects in this area, and it's very much of interest to the committee.

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You quite properly pointed out that in some respects we are backing into either a negative income tax approach or a guaranteed annual income approach, variations of the same theme, that certain segments of society are being picked up on a regular basis but a whole package hasn't come together.

I have a couple of sets of questions for you. One is, you mixed together CPP and old age security, and I wonder if there are any consequences to that. With one being a contributory-based program, not income related, and the other being more and more income related, do you see that as being a complication or not?

Mr. Painter: I think the complication would come with the Canada pension plan in that because it is a pension plan, it's not a strictly government-funded program.

However, I think if you offered the people of Canada a phase-out for the Canada pension plan - for example, let's say people who are now 60 or older would continue to get exactly what the plan has promised, people from 55 to 60 would have to take three-quarters, 50 to 55 would be down to half, 45 to 50 to a quarter, and anybody under 45, nothing - that gives those people enough time to plan for their own retirement because I believe they are going to have to anyway. I don't think you're going to get the contribution rates on the CPP up to where they have to be in order to make it pay out what it's going to have to pay out.

Mr. Walker: You probably would need a set of reforms that are both on the contribution and on the benefit side in order to get it into shape, and that's what the discussions are with the provinces right now. I tend to agree with your premise that way.

The second set of questions deal with the CAP. If I was listening carefully, the impression I was getting was that the CAP, as we originally designed it, has now been changed. It was transferring to the provinces on an accountability basis, and they then developed a combination of programming and transfers to individuals. It was a combination of things.

Are you suggesting now that a CAP-like notation or notions within that general transfer be assigned to individuals and perhaps use the tax system to do it?

Mr. Painter: No. I was thinking that if the federal government were to set up this Canada social program, which as you've described it is like a guaranteed annual income but negative income tax process, would there then be a need for the provinces to have a welfare program because the federal government would be covering that now? Why would there be a need?

I'm saying if there's no need at the provincial level to have a welfare program, then you don't have to make the transfer to the provinces. It would be like part of their contribution to this federal program.

Mr. Walker: I think other witnesses will probably jump in in a few minutes with regard to some programming needs that are seen to be working in low-income communities.

We do have another issue, which is making sure that even on a negative income tax system we have a more complete capturing of low-income people who are not captured now by the income tax system. We have - and I guess it's a bad expression - the welfare poor. But our difficulty in designing a program is that the federal Income Tax Act is not a sophisticated instrument in dealing with low-income groups who are not contributing.

Sometimes people make sure they're registered to pick up, for example, the GST tax credit, to get the cheque, but we're worried about the fact that you're dealing with the very, very poorest of poor. Are you going to capture them through the income tax system? Do you think that's a problem, or do you think that's something we can see through new technology and so forth?

Mr. Painter: I think some more research might have to be done from my side to be able to answer as to how big a problem that would be. Certainly there are potential difficulties there, and certain regulations might have to be put in place to solve those problems.

Mr. Walker: Mr. Chairman, would you open it up to other witnesses?

The Chair: I think Mr. Holgate wanted to respond.

Mr. Holgate: My concern with your proposal and comments, sir, is the level of the guaranteed annual income or of the Canada social program, however it's done. This has been discussed for a decade or two. My concern would be that lowering the existing programs that are a bit higher than social welfare levels down to social welfare levels is just lowering and impoverishing a larger and larger group of society rather than raising some standards so that people have a minimum, liveable income. I think that's the problem.

We can easily miss the forest for the trees by talking about, well, do we run it through the tax system or existing systems? My question is, what sort of system do we want?

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Mr. Painter: Actually this is the way I envision the program: I agree, I don't think you want everybody lowered down to the $5,000 welfare level. I don't think you have to.

Where does the money come from to actually raise the level? It comes, for example, from those people who are over 65 now and have other income of, let's say, $45,000, other than OAS.

In this program they would not receive what they are now receiving. That OAS is over $20 billion a year. If you cut out those people above with this new program, you'd probably cut out probably well over half of that money alone.

Now, a similar thing would apply to the unemployment insurance program. A lot of companies right now are using this program as a part of their wage package: we'll hire you for ten months, and then you'd go on unemployment insurance for two months.

Is that what it was meant to do?

There's another $20 billion in total. I expect you'd get quite a bit of that as well. That money then would go to raise these levels you're talking about.

The Chair: That's a very important discussion.

Mr. Walker, thank you very much.

Could we pass on to Ms Sheridan, please.

Mrs. Sheridan (Saskatoon - Humboldt): Thank you, Mr. Chair.

First, I'd like to say that Professor Painter is being a little modest when he says he teaches tax.

It's a pity the finance committee won't be here on Friday, because part of his course is to have his class present what I would call a mock budget. That's going to happen this Friday. I hope to be there to hear what they have to say. I'm sure I'll be able to bring all these tips back to Ottawa with me.

It's funny how when you participate in these round tables each round table has a different personality. For anyone who was here for the first round table you see a bit of a difference with this one compared with the one we just had at 9 a.m.

If I had to, I would describe the personality of this table at the moment as almost a split personality. I could find a group that is in favour of quite an aggressive approach to deficit and debt reduction with perhaps not as much focus on the implications of taking that approach. Then there is another side of the table that is perhaps more interested in a slow, transitional approach with a bit more focus on the consequences rather than on marching forward.

Again I would like to focus on childcare. I would like to hear from some of those people who are very concerned with government expenditure.

Before I hear from you, I'd like to focus your attention on what I think I heard from some of the groups. Childcare in the past is seen to be something of a frill or something at which governments toss money and for which they get nothing back. Yet it seems to me that an argument can be made from the first group we heard this morning and from this one now: putting some government priority on establishing a childcare policy will provide an employment opportunity, perhaps for a group in society that's not exclusively female but has tended to be left out of some other initiatives.

If those people become employed, they contribute to the tax base. We also have the happy spin-off of producing a generation of children who've been well looked after and who will then grow up to become taxpayers themselves.

I'm wondering, Mr. Garvin, if would you like to start the discussion. I'm addressing you because I know you have children.

I'm also addressing you because you mentioned regional economic development. I see a link here to the rural regions where part of regional economic development might include childcare strategies.

It seems to me that if you want to push a program these days, you have to show that it pays its own way. Would you have any comments on that?

Mr. Garvin: Well, I'm not skilled enough to comment on the childcare area; nevertheless, I think we should be asked to do so.

It's a very important area because our society has changed a lot since the 1950s and 1960s. We need to be sure the children who are growing up today have the capacity to become taxpayers and the adults we'd like them to be. So I personally would like to see lots of support for childcare.

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It's an interesting idea if one can use recent economic development programs to somehow do that. How we look at regional economic development programs is totally outdated today. Those programs have to go through some dramatic change, as I mentioned. Maybe one idea is that it has some impact on some of the very key social issues like childcare.

I wish I could give you a better quality answer, but I'm very concerned that we have fewer and fewer opportunities to deal with childcare and the social issues that our country faces if we postpone making some of the tough decisions on spending and getting the deficit under control.

So I'm of a split personality as well on that whole area, but I'm practical enough to realize that as a country we can't ignore the problem. We have to deal with the pressing physical problems so that we're in a position to deal with childcare and other issues.

The Chair: Mr. Woloshyn.

Mr. Woloshyn: This is a good opportunity to express the view that too often we tend to think of expenditures in the social area as just being expenditures. I'd like to view them as investments that pay off well for government.

Childcare is a good example. If as a result of a denial of proper funding for childcare we find that parents are unable to work, then we have the downward multiple spiral of more people being unemployed, fewer people being productive and paying taxes, and more people being on welfare and unemployment insurance.

I could say the same thing about cuts to education. If the result is that fewer people go to post-secondary education, then we have fewer people who are in the high taxpaying brackets in the future. We have a smaller number of well-trained people in the knowledge-based economy we're moving into.

So I think a lot of these things that have traditionally been considered as expenditures should be considered as investments. I feel sure that the finance committee can find in the resources of the federal government either studies or people to make studies that could justify making a lot of these expenditures from a straight dollars-and-cents, good-investment point of view.

The Chair: Thanks.

Ms Juorio: I entirely agree. I think it has to be looked at as an investment rather than as a heavyweight on the economy.

When you consider this, every day I see the pressures families have today and the pressures children go through. Children don't start to hear when they are five years old. If you look into the needs of these families when they are younger, the best opportunity for them is to continue their schooling, become taxpayers and hold good jobs.

Childcare is a reality of today. To me it is a privilege to be able to stay at home. We have to look at the families who don't have a choice. Today more families need two incomes to survive.

When you look at the cost of childcare, it takes an extraordinary chunk of a pay cheque to pay for quality childcare. Many parents are pushed to make decisions that maybe are not suitable for the children, but it's an economic decision. We have to help these children and parents all along the way.

The Chair: Do you have another area you'd like to touch on, Mr. Sheridan?

Mrs. Sheridan: Yes.

The Chair: I'll come back to you later on.

Mr. Discepola, briefly.

Mr. Discepola (Vaudreuil): I have two questions for Dr. Chernoff, since he brought them to my attention.

You can look at the delivery of health care services across Canada and at the examples of where we could improve that health care in the delivery service. I'm wondering if during the revision of health care and in an attempt to try to offer better services at reduced cost, obviously, we shouldn't be looking at the core services we provide and see if they are essential services in providing universal health care.

I look at several cases, for example, of whether vasectomies - in my case I don't have one - or those kinds of services should be covered. You hear that all kinds of exaggerated services are covered under medicare - some of them surgically or otherwise.

Can you give examples of redefining the basic fundamental services we should provide to all Canadians, as opposed to just opening it up? That's been one of the problems. It has put an awful lot of pressure on our health care, in the sense that we've opened it up too much now. It has not become that one principal element it was back in the 1960s and 1970s.

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Mr. Chernoff: You know, it's a very good question, and your Liberal government underMr. Chrétien said that everyone will get the same health care. That's a philosophy that goes back to Tommy Douglas, etc., in the past, as you know.

Recently in Alberta they were asked by Mr. Klein to tell him what are essential and non-essential services. And you say, what about a vasectomy? Well, there might be some native fellow in Saskatoon here who has seven or eight kids and wants a vasectomy but can't afford to pay it.

So there is the real thorny issue that all the activist groups are going to be up in arms again. My view as a physician is that if he couldn't pay, I would probably still do it for him. I would take whatever he could give me - chickens, or whatever they used to do in the past.

Mr. Discepola: But are there no examples you can give where you think we could reduce the costs of health care?

Mr. Chernoff: I think privatization is a big thing right now, with the Gimble eye clinic, etc. Perhaps you should look at people who can afford their cataract removal; they shouldn't be covered by the government. So if you can afford to go from here to Calgary to get your cataract removed, then Mr. Romanow probably shouldn't be sending a cheque to Dr. Gimble.

That's one good example, and that could be looked at. I don't think you would get too much argument about that. But again your government has come out against that philosophy, saying these private clinics should not be allowed to exist.

Perhaps the other thing is user fees too for people who.... You know, we didn't even get into that. I know you've talked.... That's been batted about, especially in Saskatchewan.

For example, we've already said that reversal of sterilization is now uninsured. So right away you have to pay $3,000 or $4,000. I think that's a good start.

In Saskatchewan we've de-insured removal of non-malignant lumps and bumps, so those things are.... Even warts on children now are de-insured. I do skin laser surgery on kids' warts and I have to charge them. A lot of people can't afford it, so we're exerting a lot of effort for not much money.

The Chair: Mr. Holgate wanted to add something to that. I know you have a lot to say about it, Mr. Holgate.

Mr. Holgate: I do. I won't, though. But I will say that as far as the system of medicare is concerned, the more times that an individual approaches the system and finds out that a vasectomy or eyeglasses or this little service or that little service isn't covered, the more public confidence in that system is reduced and the less we have a public system.

So I say that, look, this cutting at the corners and edges of the medicare system isn't the way to go, even though I admit there are some problems with things like cosmetic surgery and vasectomy.

But the more times an individual approaches the system, find that they're rejected, the less and less there is public confidence in the system, and the less chance that system has of continuing.

And I'd suggest that the system basically is continuing. It needs helping, but it's working well.

The Chair: Do we have any more salubrious examples than vasectomies to worry about?

Mr. Discepola, you just have one more point?

Mr. Discepola: Yes.

On the question of RRSPs, Dr. Chernoff, you mentioned that we should be encouraging people to save more, and I agree with that concept. But I do have a problem when you say that the ceiling should be limited, increased for example, because I believe that as the government we have a responsibility to provide an adequate level of support for Canadians.

So I question and wonder whether you feel that maybe we shouldn't put a ceiling on the amount of money that could be capped into RRSPs, for example. Should that ceiling be $500,000, $1 million, $2 million or $3 million? I don't know.

But why should we allow people to save? I realize the benefits. Being self-employed myself, it's probably the only mechanism we, small business people and other Canadians, have to save.

I hope to reach 65, but I concur that probably there won't be a pension for me at that age. So we have to encourage Canadians to save more, but I'm wondering at what level we should be encouraging.

Mr. Chernoff: It's hard to answer, because you'll get different people saying, this is how much you need to have a good retirement. It depends on your quality of life.

I know you also may argue that physicians who can't retire at age 65 have probably lived too high off the hog, and I can't dispute that. But certainly right now there are young physicians who are leaving. We have licensing and manpower requirements. There are old physicians who are staying, who should be retiring. This is what our executive wanted me to convey to you.

I talked to Dr. Brian Scharfstein, our executive director for the Saskatchewan Medical Association, who is always in Ottawa talking to government. He said this is a big problem for manpower planning.

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So whether the ceiling should be a million or half a million, perhaps we have to have a round table around the country, but I think it should be raised and our children should be encouraged to start saving for their retirement and not relying on government.

Mr. Discepola: But there is no ceiling right now.

Mr. Chernoff: There is no ceiling right now but there is a ceiling on the amount you can contribute, as you know, and many economists feel that ceiling is quite low, especially considering the shortened length of professional careers.

The Chair: Thanks, Dr. Chernoff. Thanks, Mr. Discepola.

[Translation]

Mr. Crête.

Mr. Crête: I would like to put a question to Mr. Prasuhn. I would like you to again explain what has happened as a result of the changes occurring within the CBC, namely the impact of CBC cuts on private producers in places like Saskatchewan, so that we can determine whether there is any kind of domino effect and what can be done to counter it.

[English]

Mr. Prasuhn: We're waiting for the mandate review committee that will shape to some degree how the cuts to the CBC unfold in the future. The CBC has regional facilities in Regina and Saskatoon and also affiliates in smaller centres in Saskatchewan. The facility in Regina in particular is fairly large, and a number of years after it was built it was staffed at a fairly high level, thereby employing a few hundred Saskatchewan residents, I believe, at one time. That's no longer the case because of the cuts made.

My view is a little different because I don't reside within a broadcast institution organization such as SASKFILM. We're set up to support the small businesses, the independent producers, so to some degree there is at times an opposition to the larger institutions such as CBC, in particular around the area of where the production should be occurring. It is our view that the CBC could devolve more of this, thereby raising the efficiency of the resources at its disposal.

Presently the CBC puts about $100 million of its total budget into what are called broadcast licences that are amounts given to independent production companies across Canada to manufacture programs for their use on the network. This number, in our view, could be increased and be more than offset by a reduction in their in-house staff that manufactures much of the programming outside of news and sports, which is clearly more efficient to do inside.

We see, obviously, that an institution as large as the CBC in dollar terms is not going to be unaffected by the kinds of things that are occurring, but what we're proposing is that the effect upon the regions can be mitigated by the greater use of independent production companies, the small businesses in the various centres such as Regina and Saskatoon.

[Translation]

Mr. Crête: Based on my own understanding of how the cuts are being made, the Corporation is trying very hard to protect itself. Indeed, rather than taking a hard look at the actual structure of the CBC, the decision has been made to decrease the number of private contracts, which has the effect of wiping out jobs in the regions. Just what can we do to change that?

[English]

Mr. Prasuhn: It would probably be unfair to go that far. Over the past decade of reduction certainly the effect outside the institution has been greater than the effect inside, but in more recent years, as the cuts have become larger, there are large reductions occurring within the organization itself.

I'm heartened by the announcement from Perrin Beatty recently that there were going to be major reductions at the headquarters, which, frankly, has not had a wide array of functions within the organization and certainly in the cuts that were made in 1991 where regional centres were reduced or even eliminated in the Maritimes, in the west, in Quebec and so on.

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At that time there was certainly a feeling of great unfairness about how it was being handled. I wouldn't say that's the case so much today. I guess what I'm advocating is more of a strategic use of the necessity of reduction to actually look at how the business is being done and try to do it differently. Knowing that you'll have fewer resources in the future than you do presently, how do you achieve the same ends and deliver the mandate that the CBC has to Canadians and so on?

The Chair: Mr. St. Denis.

Mr. St. Denis (Algoma): I want to say first that it's so great to be in Saskatoon again.

My first question is for the Saskatoon Council of Women. You mentioned in your remarks that you opposed the combining of family income for the basis of taxation. Are you making that with reference to talk about combining family income for the purpose of clawback in the OAS or is it generally for all taxpayers? If so, do you also intend that deductions for spouses and children would come out of that equation?

Ms Robinson: Yes, we do intend it, specifically with reference to the OAS but also in general. Then some sort of a system would have to be devised for how deductions for children, childcare, or whatever would be done. We feel the impact on women is drastic and that women in particular would be better off if they were separated completely and considered as individuals not part of a family unit when it comes to taxation and related matters, particularly the OAS.

Ms Lori Isinger (Economic Chair, Saskatoon Council of Women): That's one of the reasons why we have so many people, especially senior citizens, who will live together outside the bonds of marriage simply because they are then taxed as individuals rather than as a combined unit. If this is what we want out of society, then that's the way we should tax. If we want something else out of society, we should look at the repercussions of everything we institute, because a lot of government programs have very bad social implications.

Mr. St. Denis: My second question is to the Federation of Labour. We had testimony, most notably yesterday in Winnipeg, about shortening the work week for the purpose of obviously opening up job positions. One of the mandates of this committee in terms of a study area is the whole job situation. Do you have a view on this? Combined with that, do you see the labour force being more willing to be flexible in the workplace in terms of job assignments?

I know in my riding there was a big debate at one company a couple of years ago where tradespeople repairing a given machine...for example, you had to have an electrician, a plumber and another tradesperson to do one job. They negotiated a means where one person could do all three, but it was for the benefit not only of the employer but also the employees. I wonder if you could comment on the notion of reducing the work week without costing the employers more money, because they're most likely in a delicate situation profit-wise, and on the notion of flexibility.

Ms Byers: It's interesting that we just started to take up more of the work around the question of the shortened work time. I'm using work ``time'' as opposed to ``week'' because not everyone works a standard week.

You have an excellent document that was prepared for the federal government, I believe, and released last December. It was the Donner commission that in fact recommended shortening the work week, the distribution of work time, and putting restrictions on the number of hours of overtime people could be paid for. If I recall correctly, the report's recommendation was that you couldn't be paid for more than 100 hours in a year. In fact, what that would do would be to encourage employers to hire more people, because if somebody has to take time off, they're going to have to replace them eventually. You can cope for so long, but eventually you have to replace people.

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Our federation had a convention in October. We had a resolution to get actively involved in this issue. I think there will be some very heated discussion with our membership because a lot of people have had to use overtime and picking up a second job as a hedge against inflation, and the taxation they see they're carrying, their corporation isn't carrying. So we're working on that, and we hope to be part of some national work that's done along that way in the labour market partners area.

In terms of flexibility, I just came back last weekend from a national apprenticeship conference, and consistently what people raised there - and there is a great deal of debate about this as well - was the question of flexibility and cross-crafting, essentially. I wouldn't say there's unanimity on this issue, but what people want to ensure if you're going to do that is that first off we have national standards, that the Red Seal program in the apprenticeship area is expanded, and that apprenticeship and the number of jobs in apprenticeship trades are expanded, and expanded into a lot of what we would see as non-traditional work. If you look at who are apprentices and who are journeypersons and what gender they are, predominantly they're men...as opposed to the women-dominated jobs.

I want to say one word about flexibility. Workers are prepared to enter into issues around flexibility and partnerships, but consistently what we get back is that every time people have gone in on those issues.... We get invited to be in the partnership to talk about what needs to be done and why it needs to be done, but on how it's done, the door is shut on people.

What they find is that they went into partnerships and they tried to create a workplace that would have more room for more people, not at a terrifically increased cost for their employer, and what they find out at the end of the day is that they did all of the work and they made the room, the employer took the advantage and there are in fact fewer people working there...and in fact, it might be them.

So Partnerships were actually starting a conference this evening with the Canadian Labour Market and Productivity Centre on partnerships and workplace change. It starts here in this hotel.

Partnerships can go so far if there is a true partnership, but if at the end of the day more people find out that their friends and neighbours, or in fact members of their families or themselves are out of work, they won't go into another partnership very often.

The Chair: Thanks, Mr. St. Denis.

Mr. Walker, you had a point you wanted to make.

Mr. Walker: Yes.

Mr. Anderson, you were here last year too, I believe, weren't you? Thank you for coming out again.

On the question of national standards, I want to ask you, not from the point of view of consumers in terms of health care and social policies but in terms of the workforce that you represent, what do you hear from people in the workforce in health care and social policy about national standards versus flexibility of what they're doing?

I know how we all feel as consumers, but my question is more directed to the other side, if you will.

Ms Byers: One of the things that people consistently tell us is that they want national programs. They do not want twelve jurisdictions with twelve sets of programs so that you don't know what kind of health care you're going to get in Saskatchewan as compared to Ontario or B.C.

So the question is of national programs that will have some demands of national standards. They've always had flexibility in them in terms of how they've been applied inside provinces. But people quite clearly want that. That's why I made the reference earlier to the question of Quebec, that it is time that the government rose to the challenge and dealt with the issue, dealt with the question of Quebec and allowed the flexibility that's needed with Quebec, but not on the basis of ``me too'', with twelve different premiers of provinces and territories standing up and saying ``me too''.

If we're going to have a national program, we can have it with the rest of Canada and we can find accommodation with Quebec.

The Chair: Thank you. That's very interesting.

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The last question will be to Mr. Fewchuk. Then anybody who would like to add something, please feel free. What I then would suggest is a thirty-second wrap-up from every participant.

Mr Fewchuk.

Mr. Fewchuk (Selkirk - Red River): Mr. Chairman, my question was answered already.

The Chair: Thank you, Mr. Fewchuk.

I know, Mr. Woloshyn, I cut you off in mid-sentence in your opening remarks. There might be some things you would like to add to finish up on that.

Mr. Woloshyn: I'll be satisfied with my thirty-second wrap-up, Mr. Chairman. Thank you.

The Chair: Okay. Is there anybody else who wanted to say something before the wrap-up? Good, then maybe we can start with Mr. Holgate.

Mr. Holgate: Thank you, Mr. Chairman.

When we're talking about any of the old or new programs, whether it's free trade or some form of guaranteed annual income, I would suggest that we have to average up. We have to look at the best of those programs and try to match those rather than averaging down to the bare minimum, whether that be environmental standards or income security levels.

It's important that we learn from the past. In the 1950s and 1960s we were developing a social safety net in Canada and in the western world. When unregulated competition was allowed to continue, we had the Great Depression and the world wars. I think it's important to look back on the time when we developed the social safety net and say, that worked; let's make it better, but let's keep at it.

The Chair: Thanks, Mr. Holgate. Linda Smee.

Ms Smee: In terms of the recent announcement from Human Resources about unemployment insurance and the HRIF, the Human Resources Investment Fund, I am concerned that between the federal and provincial governments those two programs are not going to offer anything available to people not on UI.

Who's going to purchase those training seats? If it's only available to people on UI, I wonder what's happening to the rest of the people who also need training.

If the Human Resources Investment Fund money is available to institutions and businesses to run training programs, community-based organizations that offer services to the target groups from a grassroots level are going to get left out, and I'm concerned about that.

The Chair: Thank you, Ms Smee. Ms Isinger.

Ms Isinger: We have some concerns about the repercussions of government programs and policies. Children often are used as commodities by a large segment of our population because they see another child as a means of augmenting monthly income. The child does not benefit in that case.

Game-playing by politicians has destroyed public respect, and we would ask that game-playing be seriously considered as something that could be done away with.

On accountability of agencies that receive government funding, we were involved in a program that received money from the Secretary of State. At the time we received it, a list of people receiving such funds was given and a statement was made by a good many people that the accountability is always lacking in these cases. If you're going to give money, make sure it's used wisely.

We also seem to be very anxious to establish programs that penalize initiative. If you have no initiative, you're not going to have anybody to tax.

The Chair: Thanks very much. Ms Juorio.

Ms Juorio: I want to emphasize that in spite of the growing demand for childcare, spaces haven't been growing with the demand, so childcare is very much in need today. It is a patchwork of arrangements. There are no standards. Childcare needs national standards as much as health care does.

We are concerned that with the Canada health and social transfer being proposed by the federal government, childcare is going to be lost in the shuffle and even the actual funding they have will be lost. I think to appreciate the impact that the child-rearing years have on a woman's life you just have to look at how many women are in poverty when they are old.

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I would like to encourage the federal government to show leadership in the area of childcare, and I would like to recommend that childcare be looked at as a program that enables people to train, to look for jobs.

In closing, I would like to quote the United Nations, which says that children call on resources in good times as well as in bad times.

The Chair: Thank you very much.

Dr. Chernoff.

Mr. Chernoff: Thank you. I'd just like to close by saying that physicians and other professionals don't want to leave this country. We employ people and we stimulate the economy.

I'd like to thank the members of the finance committee for having these round tables. I think they're great. I think they make us feel better about our country. I think our country lacks the identity that our American neighbours have. I think this is excellent that you people come across the country, and I thank you. I know you're trying to do a good job, but I'm going to go back and tell my patients this afternoon that we had a great morning and that the government is trying to help.

The Chair: Thanks a lot. I'll give you another five minutes because of that.

Would you like to bid for six minutes, Stewart Garvin?

Mr. Garvin: It's good to end on positive notes like this.

I just want to say that Georgette Sheridan has identified the split challenges that we face as a country, looking after the social aspects and having to deal with the economy and economic growth. They're tough decisions you're being asked to make as a committee. My only comments would be to not lose sight of some of the tools you have at your disposal to create jobs and economic growth, but also make those tools much more effective than they have been in the past.

Thank you very much.

The Chair: Professor Painter.

Mr. Painter: Mr. Chairman, I believe we must balance the budget in five years' time. I think in the process of doing that the government is going to have to prioritize expenses. For example, I believe childcare is more important than paying old age security to someone who's earning $50,000. However, we must stick within the limits of our spending. Therefore, we must prioritize.

I believe that by amalgamating social programs into one, we could end up with a better set of social programs and still balance our budget.

Thank you, Mr. Chairman.

The Chair: Thanks, Professor Painter.

Mark Prasuhn.

Mr. Prasuhn: Thank you for the opportunity to speak with you today. I guess I would just suggest that the committee, as it's making its difficult decisions and working with others to do that, be strategic, be thoughtful, that once these cuts are made and the budget is hopefully balanced in five years, or whatever the time line is, we will still have people who need jobs and industries that need support and the proper environment to work within in Canada.

Thank you.

The Chair: Thank you.

Mr. Woloshyn.

Mr. Woloshyn: Thank you, Mr. Chairman. I also appreciate the opportunity to be here. I wish I had come ahead of the last two or three speakers because I'm not quite as positive and optimistic as they are.

I think we've had some excellent presentations this morning and some very good questions, which elicited yet more information. However, if I had to characterize them, I would characterize them as being useful administrative suggestions, and I hope many of them will be implemented.

There has not, however, been a word on things like interest rates and what role Parliament can or should play in regulating interest rates, which of course is a big influence on business and on government. I'm afraid, Mr. Chairman, that, with the exception perhaps of Professor Painter, I didn't hear very many suggestions that are going to result in the big bucks we're really talking about. We're talking about the magnitude of $40 billion a year to eliminate the annual deficit and make any meaningful payment on the accumulated debt. In order to do that, it's going to involve a radical change in the way we do things in Canada, and I didn't hear very much about radical change this morning.

So, Mr. Chairman, I'm going to make a note in my diary to ask the then chairman to invite me to appear again in about five years, and if in the intervening five years we have just tinkered - this is what I would call it - with the system and haven't addressed things such as interest rates, the business climate and full employment, then I'm afraid our accumulated national deficit will be $700 billion by then. I hope I don't have to appear to say that I told you so.

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The Chair: Thanks, Mr. Woloshyn.

Ms Byers.

Ms Byers: People have talked today about tough decisions. In lots of ways, obviously, after these hearings across the country, it is your choice. In lots of ways it's not only your choice for now, but for the future. That's because you can make a decision that will make the country stronger and better and that will be better for everybody, or you can make decisions that will go the other way.

If you want to leave a legacy like that of the previous prime minister, I guess it will have the citizens of the country in years hence saying that they don't believe any prime minister or any government that says ``I am not a crook''. When I go to stores, people apologize for the GST and still blame Brian, by the way; they're not blaming Jean yet.

The Chair: Good. You can tell them they're right, okay?

Ms Byers: But I think the same thing will happen if you bring in the Canada health and social transfer while taking away people's UI, pensions, social services, education and health care. Then, when their mother or father doesn't get the kind of care they need when they go to a nursing home, they will say it's Jean Chrétien's fault. He'll be the one to blame.

I'll leave you with some questions. This is what is asked of us by our members and people we run into when we work with community organizations.

They still want to know why we don't have a national childcare system. They wonder when they're going to get it. No, they don't want another study on it, because they've been studied to death.

They want to know why there won't be a pension at age 65, because they think they can have that pension if some changes are really made.

They want to know when you're going to do something to create jobs - real jobs - and to look at alternatives, like those looked at by Kurt Schmoke in the city of Baltimore on a living wage campaign.

They want to know when you're going to deal with the maximum wage. If you're going to deal with minimum wages, let's deal with maximums as well.

They want to know when you're going to start to deal with real tax reform that really does something to provide relief to people and provide the dollars to go into the social programs.

My last comment is, yes, you have tough decisions, but the toughest decisions are made by parents every night in this country when they have to make a decision to send their kids to bed hungry. I hope you will think of those kids and those parents every time you think of what you're going to take out of the budget that affects people.

The Chair: Thank you very much, Ms Byers.

It's frightfully presumptuous, having given you each thirty seconds to summarize what message we're supposed to take away, to then try to summarize what your message to us should have been. I won't do that. I will just very briefly say to you, Ms Byers and Mr. Anderson, that this is a very good message: kids and poverty.

Nobody disputed the need to deal with our deficit and debt crisis. The question was how best to do it. We did receive some very specific suggestions. If I have one regret, it's that we didn't get enough specifics on how to, for example, go to Mr. Woloshyn's full employment.

If we could get people off unemployment and welfare and into meaningful jobs, we'd love it. We've had some suggestions here today, but not too many concrete ones.

We have had the suggestion from some that we could limit overtime. We will be having Arthur Donner before our committee in Ottawa shortly in order to present that to us, but that's not going to be enough to get us from here to full employment. That is only sharing the jobs that are there.

The Canadian Federation of Labour did suggest tax reform. They said we should increase the taxes on banks and rich corporations. That's very reminiscent of Willie Sutton, who was asked why he robbed banks. He said it was because that's where the money is.

Ms Byers: So rob a bank.

The Chair: So we'll go out and rob some banks.

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Mr. Prasuhn, you've given us really a good luck story, where your industry is employing new people and adding to them all the time, aided in part by government programs that give you very generous tax credits. You've given us another example where you could probably, in the private sector, do the work at about a third of the cost we heard elsewhere of producing new programs than it would cost to do these in-house in our bigger institutions such as the CBC.

Marv Painter, that's an interesting idea. You call it the Canada social program. We will probably from now on refer to it as the mother of all programs, but we would ask that you keep in touch with us and pursue it.

Stuart Garvin, we should be more accountable. We should be prepared to look with greater scrutiny, publicly, at all of our programs to see if they are producing the results that are expected, particularly our regional development programs. Nothing is sacrosanct any more, except one thing, as far as our party's concerned, and that's the Canada Health Act.

Roy Chernoff, I particularly agreed with your statement that the medical profession, even if we can't add to the pot right now for you because of the tough times, you at least deserve a five-year spending horizon so that you can plan within it and do the things that our medical profession...the people in charge of the delivery of health care.

You, also, Mr. Holgate, need this type of time horizon so you're not ad hocing everything and so that you can look after the human needs that exist within a system.

YWCA gave a very eloquent plea, along with others we had today, for childcare.

The Saskatoon Council of Women, you did give us a lot of specifics, and I appreciate it. You gave us more specifics than anybody as to the particular ways we should go - cutting government operations, cutting defence, certain types of dealing with the charitable tax credit, this sort of thing. This is most helpful to us when we get the specifics from you as to where you suggest we make those difficult choices.

In terms of Linda Smee, again, a very strong plea for better training programs...and Mr. Holgate for not cutting but looking to higher standards in our social programs.

A lot of you suggested there are loopholes out there. Three or four of you mentioned there are loopholes that we can plug to find extra tax revenues. We're looking very assiduously for them. When you find your favourite loophole, let us know because this would be very useful to us.

On behalf of all members, may I thank you for some very interesting, important and very well thought-out presentations to us. All the best.

This meeting is adjourned to the call of the chair.