EVIDENCE

[Recorded by Electronic Apparatus]

Wednesday, December 6, 1995

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[English]

The Chair: Order, please. The finance committee is continuing its hearings into the coming budget.

We have with us tonight a group of distinguished Canadians who are involved in education: from the Association of Canadian Community Colleages, Terry Anne Boyles; from the Association of Universities and Colleges of Canada, Sally Brown; from the Canadian Academy of Engineering, Angus Bruneau; from the Canadian Association of University Teachers, Donald Savage; from the Canadian Federation of Students, Guy Caron; from the National Graduate Council, Derrick Deans; from the Canadian Research Management Association, Henri Rothschild; from the Canadian Teachers' Federation, Harvey Weiner; from the CBHR Coalition for Biomedical and Health Research, Clément Gauthier and Dennis Fitzpatrick; from the Corporate Higher Education Forum, John Dinsmore; from the Learning Disabilities Association of Canada, James Horan; from the Social Science Federation of Canada and the Canadian Federation for the Humanities, Chad Gaffield; and from the Canadian School Boards Association, Marie Pierce. We thank you for being with us.

Perhaps we could start off with you, Terry Anne Boyles, with the first of the three-minute presentations.

Ms Terry Anne Boyles (Vice-President, National Services, Association of Canadian Community Colleges): Thank you, Mr. Chair.

The association represents the 175 colleges, institutes of technologies, and CEGEPs in all regions of the country. Our remarks are presented within the context that these institutions are key publicly mandated instruments of social and economic development in the country and that the development of any economy and the society it supports depends on the skills of its citizens. The colleges and institutes prepare new workers for and upgrade the skills of existing workers through partnerships with industry, business, labour, and communities in which they are based.

This fall our association brought together a small group of college presidents to look at the visioning, the way-out future for the colleges. One component of that was what is the federal role vis-à-vis our institutions.

In the background package that I provided, there are some points of particular note that relate to this particular round table tonight, and I refer you to those. I also included in the package our presentation before this committee last May. Again, there are several points relative to the social and economic context.

I will speak quickly to some of the points and the questions that were posed to each of us this evening.

First, with respect to universality, we believe there is a need for a major review of universality and the principles behind that in the country. We don't have specific recommendations other than it needs to be based on the principles of inclusivity and particularly with respect to access for all Canadians to learning opportunities in the country.

We wish to make a particular point because of what is in the press and other discussions that training does not equal jobs but that retraining helps individuals keep the jobs they are currently in and upgrade their skills for the future.

We believe there is a critical need for a massive expansion of student financial assistance in the form of scholarships, grants, and loans. We believe there is a need to encourage working Canadians to invest more in their own skill development and skill updating. We believe tax incentives should be instituted to further encourage individual commitment to self-funded lifelong learning.

We believe there should be national standards and international standards for graduates of colleges, institutes, and private trainers; that standards are essential to ensure an individual receives the skills required by employers; that the corporate, government, and individual investments are assured that they are getting quality training that is portable within the country and internationally; and that these standards must tie directly to the occupational standards developed through the leadership of business and labour.

Standards are key to internal mobility and to international mobility, and the federal government should play a significant role in helping to ensure the development and maintenance of such standards.

We believe that sector councils, which are proposed to employees and employers as well as representatives from our education sector, have demonstrated themselves to be very valuable contributors to enhancing the human resources development of the existing labour force and for new entrants to the labour force. They are proving to be very effective in the evolution of occupational standards. We believe federal support to these councils should be expanded and there should be additional financing in the area as we all accept major downsizing.

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With respect to research, we support the need for basic research in the country. I'm sure our colleagues will speak to that. We would like to note, however, that the existing parameters for most of the research grants preclude access by the staff in our colleges and institutes. We believe this is a serious inefficiency in our existing funding mechanism. Many of our institutions place a high priority on research. They partner with local business and industry, particularly at the applied research and product development end of the spectrum. This resource could be accessed much more thoroughly by opening the simple eligibility criteria of some of the research grants to the colleges, institutes, and CEGEPs of the country.

The Chair: Thanks very much, Ms Boyles. Could we come back to you later? Would you mind?

Ms Boyles: Actually, I'm very appreciative and we have completed our input.

The Chair: Thank you very much, Ms Boyles.

Sally Brown, please.

Ms Sally Brownm (Vice-President, External Relations, and Acting President, Association of Uiversities and Colleges of Canada): Thank you, Mr. Chairman. I'd also like to thank you for accepting our request to have a special roundtable on higher education and research. We're not all here from higher education and research, and we're pleased to be here with our other educational partners. We do appreciate the opportunity to have a pre-budget round table on these issues.

I also want to say at the outset that I think you'll find that while we often disagree, there's very much agreement in the research and higher education communities on the fundamental issues we face. I think you'll find that this evening, although we hope to have a good debate too.

[Translation]

We received a rather disturbing letter according to which the committee is inferring that higher education and research come solely under social policy.

In fact, even if these two areas have important social ramifications, they are at the same time essential factors in Canada's ability to innovate, to be competitive in a knowledge-based world economy, to attain economic expansion and to create jobs.

In essence, higher education and research are investments in the economic future of Canada. They are, or should be, at the heart of our economic policy, according to the Red Book of the Liberal Party, with a view to increasing employment and ensuring economic growth. We must make a financial effort in support of our human resources and of our children.

[English]

Mr. Chairman, federal transfer cuts threaten the university research infrastructure, which supports all of our basic and applied research as well as providing the foundation for collaborative research with the private sector and for knowledge and technology transfer. To undermine university research infrastructure is to undermine much of Canada's receptor capacity, not to mention jeopardizing the federal government's own investments in sponsored research.

Federal transfer cuts also raise serious questions about access to quality higher education across the country and highlight the importance of adequate student assistance through public programs. A country's ability to flourish in today's economy depends on the quality of its human resources. No country can afford to deny advanced training and lifelong learning opportunities to whole segments of its population.

To those who would cut further in Canada's research and high education investments, we would ask: do they actually believe that Canada is overinvesting in these areas? Have any of our most successful competitors achieved their success by cutting back on their investments in research and higher education and by allowing their intellectural infrastructure to deteriorate? It will be a bitter irony if Canadians emerge from their long struggle with public debt only to find that the world has passed them by because we've allowed our intellectual infrastructure to crumble.

We were very pleased to hear Mr. Martin say earlier today, in a response to a question fromMr. Manning, that investment in basic research and development is public money well spent.

Mr. Chairman, the red book promised that this government would pursue a two-track fiscal policy, combining deficit reduction with strategic investments to generate economic growth and jobs, both in the short and long terms. To date, the government has delivered primarily on the first of these tracks. The time has come to begin to address the second track. Thank you very much.

The Chair: Thank you, Sally Brown.

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Mr. Angus Bruneau (President, Canadian Academy of Engineers): I have been associated with science policy in one form or another for about 25 years in this country, and during this period the federal government has taken many steps to encourage the development of research, and in particular to stimulate industrial research.

We have had very little effect, as it is little changed from what it was in 1972. If you examine the way we do these things in this country you will conclude we have a structural problem, and we must address that if we are to realize the benefits from our investments in research, both our past and future investments.

The structural problem in the way we do things in Canada is that to a substantial extent we have isolated our faculties of engineering from the economy. We require faculty members to pretend they are scientists, and we measure their progress using scientific measures, not engineering measures. We consider it to be an enterprise that is carried out by individuals, which engineering is not. Until we address these problems we will find that our faculties of engineering, and consequently the perceptions of those who graduate and go into industry.... We will find the faculties isolated and those going industry saying if that's research, we don't need it in our company.

Furthermore, in contrast to other developed countries, our competitors, we discover that faculties of engineering are deliberately locked into an education-cultural domain. This is in stark contrast to what you find in many competing economies, where faculties of engineering or technical universities - they are often organized as separate institutions - are funded by the department of economic affairs. They are considered to be active elements in the economy.

Mr. Chairman, much can be said about this, but I will only go that far. Perhaps we can engage in discussion, as time permits. If we fail to address it, the very profession whose task it is to convert what we know - the science - into useful things in the economy, will never fulfil that role to the extent that it can, should and can be seen to do in other economies.

The Chair: Thank you, Mr. Bruneau. I'm sure there'll be lots of time to come back to look into this box you just opened.

Mr. Donald Savage (Chairman, Canadian Association of University Teachers):Mr. Chairman, I would like to direct your attention to the transfers. We have given you a written statement that deals with other matters as well, but in my opening statement I want to limit myself to this.

The current EPF arrangements, as you know, come to an end this year. This year, $2.2 billion in cash is being transferred in respect of post-secondary education. The creation of the new CHST leads CAUT to have grave concerns about where post-secondary education fits, if at all, in the government's view as we move into this new era of funding.

We have a two-tier suggestion in terms of what might be done to make that role clearer. One possibility would be to reform the CHST itself, not only its title, which excludes one of the three areas, but more particularly in the creation of three sub-envelopes for the three areas it's supposed to deal with, and in a continuing cash component that would ensure a federal government role in these three areas.

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However, we take it that this is not terribly appealing to the government at the moment. Our fallback position if we are not listened to in terms of reforms to the CHST, is that the $2.2 billion should be redirected into programs in which the federal government is already assisting the post-secondary education sector, in particular, to pay the indirect costs of research, which is generated by the three federal funding councils.

As you know, at the moment the government pays only the direct costs through the councils. It's always argued that its contribution to the indirect costs came through the EPF transfers. If we abolish the post-secondary component of this, as certain cabinet ministers seem to be suggesting to media people on the Hill, then it seems logical that you have to address the question of indirect costs up front, not indirectly.

We would define research relatively broadly, in terms of transferring some of those funds to research, to include not just the indirect costs, which would benefit the largest and richest universities in the country, but also to a group of other research programs, which I could go into later on. We also think that some of the money should be directed to increase and improve the student aid arrangements in the country.

If the federal government decides the CHST will be focused almost exclusively on health, we think the money that is being generated at the moment in terms of post-secondary education, should be directed in these two general areas - research and student aid. The federal government already does these things. It doesn't require any constitutional change to keep doing these things, and it could do them better, more directly, more up front and more visibly if it funded them adequately.

The Chair: Thank you.

[Translation]

Mr. Guy Caron, you have the floor.

Mr. Guy Caron (National President, Canadian Federation of Students): Thank you,Mr. Chairman. I would also like to thank the members of the committee for giving us the opportunity this evening to discuss post-secondary education and research within the context of your pre-budget consultation meetings.

The Canadian Federation of Students is an organization made up of 64 student associations representing some 400,000 college and university students from all provinces.

Canadian post-secondary education is today at a crossroads. In the federal political arena, more and more people are questioning the appropriateness of maintaining federal government financial support for post-secondary education.

In our view, the federal contribution remains critical for the maintenance of a system that is accessible to all. Should you retain only one element of our presentation, it should be this one. Successive cuts by both levels of government are bringing about the transformation of our system, from one that was accessible to all to one that favours privileged students over less privileged ones, without considering merit or potential.

It was in order to put an end to a similar situation that the federal government began to finance universities after the Second World War. Indeed, when the veterans started coming home, the government thought it wise to facilitate their transition to civilian life and to the general workforce by financing their entry into university.

Thousands of veterans were thus able to make a positive contribution to the unprecedented economic expansion that followed. The federal government could very well have pulled out of this area in the 1950s, once veterans had finished their studies. It however preferred to follow the recommendations of the Massey Commission on National Development in the Arts, Letters and Sciences in 1951 to renew its commitment to improving post-secondary education accessibility.

In 1976, these objectives continued to be recognized by the federal government, that had become a signatory of the International Covenant on Economic, Social and Cultural Rights. The 1990s witnessed the abandonment of these principles with the massive introduction of cuts that resulted in an underfinancing of universities and colleges and prevented an increasing number of Canadians from participating in the building of our society.

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The provinces, with the exception of Quebec, that froze university tuition fees and continues to offer free college education, have been pulling back more and more from an area that is rightly theirs.

In Ontario, the measures announced on November 29th will reduce university and college funding by $400 million while increasing tuition fees by 20 per cent, driving them up to more than $2,800 a year.

This decision will result mainly in a further drop of the enrolment rate in Ontario universities, which has already decreased substantially, by as much as 15 per cent in the case of Carleton University.

We need our two levels of government in order to preserve quality and accessible post-secondary education. When Federation members voice their opposition to the cuts I have just alluded to, they are told that Canada and the provinces must prepare themselves for the global economy of the twenty-first century.

In truth, we are going backwards rather than forwards. It is impossible for Canada to prepare itself properly for the twenty-first century if it reduces access to universities for those who would flourish there and could later contribute to progress, but who will be prevented from doing so by insufficient financial support.

It must be immediately recognized that post-secondary education is an essential and major investment for Canada and not an expense. We are not reducing the country's expenditures by reducing university and college financing. In fact, by reducing our investment we automatically reduce the benefits we could draw from it.

It is a very simple calculation that, if done incorrectly, compromises the entire equation. Thank you.

The Chairman: Thank you, Mr. Caron.

[English]

Derrick Deans, please.

Mr. Derrick Deans (National Graduate Council): Thank you, Mr. Chairperson.

The National Graduate Council represents over 42,000 graduate students across Canada. As a result, the budgetary concerns pertaining to research and development in Canada are of great interest to our membership.

Graduate students are either training to become researchers or are already closely involved with R and D on campuses across the country, and thus are very familiar with the issues of lifelong learning.

As students we also share the same concerns just expressed by Guy Caron. We are aware that the government is attempting to prioritize its expenditures with a view to reducing the national deficit and stimulating economic growth. While we recognize that the government is under considerable pressure from financial markets, we are very concerned with both the short- and long-term effects of a laissez-faire approach to socio-economic development.

In addition to important concerns of reduced accessibility, a decrease in the breadth and depth of Canada's post-secondary education system, as well as the lack of priority given to job creation, graduate students are concerned about the effects of this process on Canada's already weak commitment to R and D. As researchers and students, our membership is concerned with Canada's past and present expenditures on R and D.

Our gross expenditures on research and development as a percentage of our gross domestic product have been in the lowest range of the OECD countries. It is important to note that these figures include both private and pubic spending on R and D.

While spending by private interests on R and D in Canada has been widely recognized as low and inadequate for an industrialized country, there has been widespread recognition of the work done by the federal funding councils.

This has important implications. Given the need to work and cooperate in the new global economy, it is essential that adequate and predictable funding be received for our R and D in order to further new technical and social innovations.

An important item of concern that has been expressed by many of our members, and is closely involved with the differentiation between public and private funding of R and D, is the growing trend toward partnerships between industrial organizations and university campuses.

Graduate students are very concerned that through these partnerships the curiosity-driven nature of much campus research will be transformed into purely commercial interests. This is particularly worrisome given some current arguments that reductions in federal financing could be made up through an expansion of these partnerships.

The National Graduate Council suggests that before we move too far in the direction of these arrangements for private-sector funding of public universities, safeguards should be developed and/or retained that ensure that the control of research and development on our campuses remains independent of commercial interests. We believe the existing funding councils are better placed to accomplish this through the practice of peer evaluation of the broadest spectrum of research concerns.

We suggest that private funding of private interests can be done independently of public universities. If a desire to use the range of facilities available at our post-secondary institutions remains, this should be done through some form of gatekeeper to ensure the continued independence of R and D in the broadest terms.

Thank you.

The Chair: Thank you, Derrick Deans.

Henri Rothschild.

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Mr. Henri Rothschild (President, Canadian Research Management Association): Thank you, Mr. Chairman.

I represent the Canadian Research Management Association, a national professional society of senior executives responsible for the management of research, development and technological innovation in all sectors of the Canadian economy. It was established in 1962 and has over 200 members. They are collectively responsible for roughly two-thirds of the R and D performed in Canada.

The orientation of the CRMA has traditionally been towards industrial research. Thus, over 42% of our members are company executives, typically the vice-president responsible for R and D. Another 16% are leaders of independently incorporated, non-profit R and D organizations; 20% are from provincial and federal government entities; and 12% come from universities. The remaining 10% are emeritus and honorary members.

Mr. Chairman, we had the pleasure and privilege of participating in the government's S and T review, and all this with the view of helping the government departments make more effective use of the resources they do invest in R and D internally.

We're very pleased to participate here in presenting our views to your committee. I'm going to be brief in the interest of time.

The CRMA supports the view that we must at a minimum maintain the capacity of our colleges and that of our university research capability. For our members, this is vital for two obvious reasons. First, university-based research provides the foundation upon which industrial innovation can proceed. Second, it also provides the trained researchers and research managers of tomorrow. We need this critical part of our national infrastructure.

Since we know that you probably agree with this general message, and most of your members do as well, the key question is, to what degree? What is the affordability issue that governs this question and all other questions you deal with? Here I'd like to reinforce the question and the point made earlier by Sally Brown. Are we overinvesting or underinvesting in this field? How do you even begin to answer that question? You have to look in a comparative way: how are our competitors doing in this area?

In every aspect of this we are underinvesting. The numbers are fairly obvious. They've been obvious for the 20 to 25 years that Angus Bruneau has looked at science policy, and we know that to be clear. We can't continue to slide back even further.

Are we getting value for our investment? This is another issue that must concern this committee. How do we measure the value we're getting out of university research? We have to measure it in terms of imprecise indices of efficiency of the research message.

The system problem we have of translating this into commercial realization is not a problem of university research. It's a problem of linking it with receptor capacity in the industry. What we need is better links, not fewer resources. This is not the time to erode our university research base.

Finally, Mr. Chairman, I want to emphasize one thing that is pretty obvious, but it needs re-emphasis at this crucial time. It takes only one stroke of the pen to wipe out a research activity and a research capability in this country. It takes a generation to build it up.

Before any decisions are made, we plead with you to think very carefully about what you are taking away from Canadian capability. The growth-with-jobs agenda is not going to be achieved by dealing with these issues in a way that doesn't take into account the time factors involved.

Thank you very much.

The Chair: Thank you, Mr. Rothschild.

Harvey Weiner.

[Translation]

Mr. Harvey Weiner (Assistant Secretary General, Canadian Teachers' Federation): Thank you, Mr. Chairman. The Canadian Teachers' Federation represents more than 240,000 women and men teaching in elementary and secondary schools in every province and territory of the country.

We are very pleased to have the opportunity to participate in this round table on the budget. The Liberal Party Red Book had promised an approach geared to balancing measures related to revenues and expenses in order to give new momentum to the economy and get the deficit under control. The CTF accepts the strategy put forward by governments, aimed at bringing the deficit down to 3 % of the GDP between now and the 1996-97 fiscal year.

We have thus far however seen few indications that the government has examined potential sources of income that could help mitigate the cuts aimed at the programs and services that the less privileged in our society are in need of.

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[English]

We are here today because federal budgets impact profoundly on the lives of the children we teach, and their families. We believe the federal government must review and revise tax policies, as well as look at the area of social program cuts.

Tax policies can be looked at with a view to making them more fair and more progressive than they are at present.

A recent in-depth study by Dr. Irwin Gillespie of Carleton University, ``Tax Incidence in Canada,'' was published in the June 1994 Canadian Tax Journal. It demonstrates conclusively that all Canadians - rich, poor, middle class - pay between 30% and 35% of their gross income in one form of taxation or another. We would suggest that this graphically demonstrates considerable inequities in the current tax system.

When we have a system in which the average effective tax rate for the richest 1% of families with broad incomes in excess of $300,000 is 35%, compared with 30% being paid by the poorest with incomes of $10,000 or less, there is something wrong with our tax system that should be examined.

We believe that social program cuts, in the absence of clearly articulated government goals and policies in these areas - and they are absent here - weaken Canadian society and the potential for economy prosperity.

We need measures that help ensure the health, education, dignity, and personal security of all Canadians. If these aren't available, we limit the capacity of every Canadian to participate fully in our society, the net effect being to make the rich richer and the poor poorer.

At our federation we believe that the deficit need not prevent us from establishing social policy goals that meet the needs of all Canadians. The goals can be set for the short, medium and long term. They can include clear benchmarks and a plan to achieve them that includes the dimensions of equity, accessibility, accountability and affordability.

We ask, if the Minister of Finance can set specific targets to meet on deficit reduction, why can he not do the same to ensure that adequate resources are targeted for equitable health, education and social services for all Canadians? The CHST in its present form is not an answer.

I would conclude by reiterating that Canada must do more to meet the needs of children, in particular. As more and more Canadian families slip below the poverty line, children suffer most.

In the Axworthy reform proposals, which seemed to have disappeared, there was a very strong commitment to attend to the needs of children. These needs seem to have been forgotten, and we, as teachers, are dealing with the consequences on a daily basis in our classrooms.

There are many questions that need to be addressed. We would be pleased to develop these particular issues more fully in the discussion to follow.

Thank you.

The Chair: Thank you, Mr. Weiner.

[Translation]

Mr. Clement Gauthier (Director General, Coalition for Biomedical and Health Research): Let me first thank you for giving the Coalition for Biomedical and Health Research the opportunity to appear before you a second time within two weeks.

Before handing the microphone over to the representative of the Board of Directors, I would simply like to mention to committee members that the brief we are tabling with you today is complementary to the one concerning Canada's health care system that we submitted to you on November 23rd.

Our spokesperson for today is Dr. Dennis Fitzpatrick, who is Vice-President of the Coalition.

The Chairman: Thank you, Mr. Gauthier. Dr. Fitzpatrick.

[English]

Mr. Dennis Fitzpatrick (Vice-Chairperson, Coalition for Biomedical and Health Research): Clearly we represent the diversity in Canada. We have Quebec and the western side sitting side by side to focus on this issue.

Thank you for the opportunity to come here.

I'm going to limit my comments to avoid repetition. I think many of the points spoken before go to the heart of our view of what should be done in the future. We have to look at issues involving education and competitiveness.

The thing all of us working in the public sector deal with is public perception. The public perception today is that we're coming out of recession. Companies have re-engineered, and there are no jobs.

The reality is that the economy has been creating jobs for almost three years now. Where are the jobs? The jobs do not touch those people who have no education. The jobs that are being created increasingly call for a solid education and credentials.

If you look at it, the share of jobs held by people with post-secondary education has increased from 41% to 48%, a remarkable change in four years. The most amazing fact is that it has been completely ignored by the politicians, and almost completely missed by the public.

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We know universities are facing crisis times. Funding pressure is going to be horrific over the next three years. We've already heard about the transfer payments. The transfer payments are going down. Provinces are going to have to decide where the budget is being cut. Health or education, which is going to go?

We know that part of the money coming from the federal government supports research infrastructures. We'd like to see a clearly articulated statement - and cash too - to show that the federal government is in for research and development in the long haul.

We know it's important. Astra, one of the ten largest pharmaceutical companies in the world, cites access to excellent research facilities and qualified scientists graduating from universities as a critical factor for directing research and development to Canada.

Our first recommendation basically is very simple: that the two levels of governments involved here have to sit down and identify the infrastructure necessary to conduct research in a Canadian university environment.

This leads into the issue of job creation. Investment in the creation of new knowledge through basic scientific research appears to be second only to deficit reduction on the list of actions prescribed by the OECD to promote growth in employment.

Public perception until now has been that the government is run by the finance department, and the finance department's obvious goals are the fiscal goals.

I'm very pleased to see this balanced approach articulated today by Mr. Martin talking about getting spending under firm control. The other necessity is to maximize the nation's potential and its productivity, its capacity to grow, to create jobs.

We think the research infrastructure at universities is important for that. Canadian expertise is recognized in software development, pharmaceutical research, clinical trials, the human genome project, communications and geosciences. It didn't happen by accident. It happened because of a policy that was put in place to encourage the best basic research over decades.

This expertise has been investigator-driven. University-based research and the three granting councils - MRC, NSERC, and SSHRC - are the strong foundation for future economic growth and maintenance of our health care system.

So our second recommendation is that this committee reiterate its previous recommendations that the granting councils be given favourable treatment in future budgets.

The Chair: Are you about finished, Mr. Fitzpatrick? I hate to cut you off.

Mr. Fitzpatrick: I'll make one more statement here, which relates to jobs, and then the rest we can dredge up later, or we'll introduce later.

The Chair: We will. We will frame it and gild it later.

Mr. Fitzpatrick: The last issue I wanted to come back and focus on is one of our emerging areas, the biotechnology industry. I sat on an industry-driven resource committee looking at the human requirements for this industry. They concluded that we either maintain the basic science capacity within universities or we change the immigration rules, because we're going to have to bring people in for high-paying jobs from elsewhere.

Thank you.

The Chair: Thank you, Mr. Fitzpatrick.

John Dinsmore, please.

Mr. John Dinsmore (President, Corporate Higher Education Forum): Thank you,Mr. Chairman. The Corporate Higher Education Forum is a network that enables corporate CEOs and university presidents across the country to increase mutual understanding and discuss significant issues.

We welcome this opportunity to speak to the Standing Committee on Finance about the next federal budget and the profound dilemmas you need to resolve in the necessary work of debt and deficit reduction.

The forum believes that whatever action you take, it must impact favourably on wealth and job creation. Indeed, earlier today the Minister of Finance confirmed this priority in his remarks before this committee.

These days our economy is shaped by developments in technology and global markets. New knowledge and innovation are essential ingredients for survival and success. So-called knowledge workers are driving economic growth. Knowledge workers create new businesses, leverage job creation, and expand to export markets.

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Universities are key partners in this knowledge-based economy. They discover, interpret and transmit knowledge through research and development, networking with other experts worldwide, and by teaching and publication.

For 50 years government policy has fostered growth in higher education activity in Canada and, as a result, in a highly educated workforce. Changes in the way higher education is provided are taking place, and will accelerate. Unilateral cuts in public funding for education, however, send wrong signals about national priorities, and will undermine this valuable resource when it is most needed, unless effective programs are implemented.

These programs should first ensure that all qualified students can afford and access higher education, regardless of financial circumstances.

Second, they should stimulate savings during the lifetime of each student to help pay for education costs, something we have neglected in this country for at least 30 years.

Third, they should increase productivity in higher learning by equipping students to better plan and manage their learning.

Fourth, subject to appropriate safeguards, they should maintain the integrity of academic institutions, and maintain, and preferably increase, the university-industry collaboration and research that was referred to by one of our colleagues earlier.

Because these measures generate wealth and employment, the resources required to implement them should be derived, if necessary, from other programs.

Concerns related to changes in federal support for higher education are too far-reaching to be addressed in a few minutes on the eve of a federal budget process. We encourage the Standing Committee on Finance to open ongoing discussion of these issues with the Forum and other concerned non-governmental organizations.

Thank you very much, Mr. Chairman.

The Chair: Thank you, Mr. Dinsmore. I'm sure we'll want to come back to you later for details.

Mr. Horan.

[Translation]

Mr. James Horan (Vice-President and President elect, Learning Disabilities Association of Canada): Mr. Chairman, members of the committee, thank you very much for your invitation.

[English]

For over ten years I have been a volunteer at the Learning Disabilities Association of Canada. I and thousands of others across this country have served in that capacity. Our mission is to advance education, employment, social development, legal rights, and general welfare of people with learning disabilities.

Do you know that an estimated three million Canadians have learning disabilities? Children and adults with learning disabilities are defined as those who have average or above-average intelligence, yet they have difficulty in reading, writing and spelling; in mathematics; in concentrating; in dealing with special and social skills.

The Learning Disabilities Association of Canada acknowledges that these individuals do not have a continuum of support and service. Direct consequences resulting in low self-esteem, academic failure, and difficulty achieving success place them at a distinct social and economic disadvantage.

The Learning Disabilities Association of Canada recognizes that this government has very difficult decisions to make. We also recognize that the Government of Canada must ensure that all Canadians have access to learning opportunities. No child, no youth, no adult should be denied the education and training needed to be self-sufficient and independent in this country.

The government must provide leadership by establishing priorities, setting minimum standards in literacy and numeracy, advocating the need for programs to provide early intervention, developing new opportunities for high-risk young people, exploring ways of sharing services, and offering incentives to those who are creative enough to actually cut costs, and at the same time improve the quality of service.

The government of Canada, through the National Literacy Secretariat, made a wise investment in our association. The fund is bringing literacy within reach. With its partners across Canada, the Learning Disabilities Association developed a screening procedure and teaching strategies for literacy programs. The materials were designed to help adults with learning disabilities meet with success by upgrading their literacy skills. Your investment, the investment you made as a government, continues to pay dividends.

Do you know that literacy workers across the country continue to actually use the manual? Our national office fills orders almost on a daily basis from literacy centres and adult education centres. Through this very initiative adults with learning disabilities, who were once excluded from the world of print, are now experiencing the joy of actually reading a newspaper. They can actually share a book with a young person, they can actually fill out a job application, and they can conduct their daily affairs in this country without a lot of fear and a lot of shame.

.1955

There's no greater gift a country can give than to allow all its members equal opportunity to learn, to have a sense of accomplishment and a sense of self-worth.

Yes, the investments that have been made are a priority for the future, because the Learning Disabilities Association and other agencies are not done. Do you realize we still have 16% who have difficulty reading? We must ensure that from an early age the education needs of all Canadians are going to be met if we're going to experience any kind of economic growth or success in the global village of the 21st century.

I'm not going to go into it, but just recently, through Health Canada, you've put together support for families and children at risk of having learning disabilities. We're putting together a wonderful program that will be given across the country, two really viable programs that we have developed in partnership with the government.

Because of the volunteer base and the committed staff, the value of your dollar goes well beyond its limits. We look towards the federal government, because you help us help keep health care down.

It helps keep people out of prison. Did you know that up to 75% of young offenders have experienced difficulty learning? That helps keep unemployment down. It helps keep families together in this country. They set the stage for productivity in the 21st century.

But let's say you can't do it; let's say you don't have the funds necessary. I would like to mention two tangible examples of what could be done. First, level the playing field. How do you do that? You allow charitable organizations and federal political parties to play on the same field. Second, simply increase incentives for businesses to invest in the grassroots organizations like ourselves.

Let us continue to work together towards a really healthy and prosperous country.

Thank you.

The Chair: Thanks, James Horan.

Chad Gaffield, please.

Mr. Chad Gaffield (Vice-President, Science Policy and Research, Social Science Federation of Canada and the Canadian Federation for the Humanities): Thank you very much. I'm a professor of history and vice-dean of graduate studies at the University of Ottawa. I'm here today representing 23,000 researchers in universities across the country.

Last year we came before the finance committee. One of the arguments we made concerned the necessity of not cutting funding for the funding councils, including the Social Sciences and Humanities Research Council of Canada.

The finance committee recommended no cuts, but what happened? There were cuts. If one thinks about that, it seems clear that there is an underestimation of the value of research, including research in the humanities and social sciences. Why is that?

It seems to me that one of the problems is that sometimes we think our problems are economic, or they're technical. I'd like to suggest instead that, yes, there are economic and technical problems, but in fact the real challenges we face are social and cultural.

If one picks up a newspaper in the morning, one reads about social and cultural problems, often primarily violence in urban centres, child abuse, questions of personal and ethnic identity, social environmental impacts of new technologies, and so on. The list goes on. It seems to me that these sorts of questions are exactly the types of social and cultural questions to which humanities and social sciences are directly addressed. I might add that they're addressed in innovative ways that often are not well understood.

Universities can trace their roots to the Middle Ages, and they're one of the few institutions that can. That is for a good reason: universities have continued to innovate, change, and keep in step with and in fact ahead of the social and economic needs.

One of the key issues we'd like to leave with you today is the necessity of putting forward an argument. When we look at our society and we calculate it in terms of how much money is here and how much money is there, and so on, at heart often what we're looking at are social and cultural issues, for which support for agencies like the Social Sciences and Humanities Research Council seems to be essential.

The other message included in the document we've left for your use concerns the really essential leadership role the federal government must play in the research infrastructure and in supporting the humanities and social sciences.

A lot of these questions and examples of difficulties I've suggested to you are not provincially based. They're not regionally based necessarily. They're questions of national concern. If we're ever going to have a healthy, wealthy, and wise country, as the title of the National Advisory Board on Science and Technology report suggests, it seems to me the federal government has to play a leadership role in that sense.

.2000

I'd like to conclude by summarizing a number of specific aspects your committee can recommend very strongly for this pre-budget exercise.

First of all, we desperately need a science and technology policy. The humanities and social sciences were intimately involved in the review process. We're still waiting for something to happen on that. It seems to me the time has come. We need to include in that strong support for social and cultural goals for Canada.

Secondly, we need to articulate even more strongly the necessity of funding for the Social Science and Humanities Research Council of Canada. It seems to me that this small budget item of less than $100 million has been able to do remarkable work, but obviously there are limits to how much we can do with the small amounts that are being allocated at this time.

Thirdly, it seems to me that the government must take seriously the recommendations of the National Advisory Board on Science and Technology. For example, there is the specific suggestion that a certain percentage of health care and social program funding go for research. It seems to me to make eminent sense that if we can put aside 1% perhaps of budgets like that, we can actually get a better understanding.

Finally, I think there are specific initiatives, such as the date of liberation initiative, that make eminent sense and would help researchers throughout Canada. They need to be implemented very quickly and perhaps we'll get a chance to discuss them as the evening unfolds. Thank you very much.

The Chair: Yes, you will. Thank you, Mr. Gaffield.

Lastly, Marie Pierce please.

Ms Marie Pierce (Executive Director, Canadian School Boards Association): Thank you. The Canadian School Boards Association, representing over 500 school boards across the country, wants to thank the committee for the opportunity to participate in this round table.

Although elementary secondary education is a provincial responsibility, decisions made at the federal level have a direct impact on the delivery and quality of education at the local level. In particular, decisions related to the transfer payments under the Canada health and social transfer will affect programs delivered by school boards for children, youth, and adults.

Reductions in transfer payments will force provinces to make adjustments that compensate for lost revenue. Options include introducing user fees, redefining the qualification criteria for social and health benefits, raising university tuition fees, eliminating the existing programs, and raising taxes.

Moneys could also be diverted from the elementary and secondary education sector to reduce the impact of cuts in other areas. This could result in major changes to existing education programs at the elementary and secondary level. School boards are also gravely concerned that cuts in social assistance will increase child poverty beyond current levels and may raise levels of substance abuse, youth crime, and other factors that have a negative impact on the ability of children to learn.

We've been finding over the past number of years that school boards have had to expand their programs to deal with issues that traditionally have not fallen within their mandate - programs like breakfast programs, counselling programs, programs for children when they have to deal with the results of poverty.

We urge the federal government to immediately negotiate with the provinces the shared principles and objectives that would regulate the transfer of funds under the Canada health and social transfers. These principles must ensure that basic needs are met, and they must stress adequacy, consistency, equality, accessibility, and portability.

There's no question that there is a link between adequate social benefits and economic prosperity. We recognize the need to deal with fiscal realities. School boards are always making decisions about trying to deal with less money in more innovative ways. However, when we deal with those realities and when the federal government deals with those realities, we urge you to take a balanced approach between social and economic objectives.

Thank you.

The Chair: Thank you, Ms Pierce.

[Translation]

We will now begin our question period. Mr. Brien, go ahead please.

Mr. Brien (Témiscamingue): I heard a lot of people talk about education, post-secondary education in particular, and all of them defended their point of view. As you well know, our mandate is to make recommendations.

.2005

I fully understand what you mean when you say that your sector is important and that it is an investment rather than an expense. That having been said, what can we do?

This year, our deficit is at $32 billion, and we must gradually reduce it in the hopes of one day eliminating it completely. If we don't touch any of the money that is normally devoted to post-secondary education, where will we find the funds that we need? You must make suggestions as to alternative solutions. We can't tell the Finance Minister to not touch anything and to simply let things happen.

You must surely have suggestions to make to us, even though you represent very specific interests in very specific sectors.

My next question is for the Canadian Federation of Students. When our committee held its hearings in the West, an idea was often brought up in the course of these meetings: that of the establishment of national education standards. I would like to know your position in this area and I would also like to know if Quebec college and university students associations support the idea of national standards in education.

Mr. Savage: When we talk about national standards, we must be careful because very often this concept points to a single standardized system for the whole of Canada.

The Canadian Federation is in favour of a national standard, but not in that context. It is in favour of a system of national standards that would ensure transferability of credits, interprovincial mobility and access to quality post-secondary education - much in the way that the Health Act provides each and every resident, whatever his or her native province, access to quality health care services - as well as a financial assistance system for students who cannot afford to go to university.

That is our vision of what a national standards system should be. What we have right now in Canada are provincial systems that are relatively similar, with the exception of that of Quebec, which is quite different from all the others.

What we would like is for each and every student to be able to study within a system that is compatible from one province to another. Compatible does not mean identical. Canada should put in place a set of rules enabling each and every student to have access to university.

Mr. Brien: The problem that comes up as soon as we talk national standards is that of Quebec, because of its Cegeps, etc.

How can we set up national standards dealing with your concerns when there is one post-secondary education system that is very different from all the others, with its Cegeps?

Do you think it is feasible? Do you think the student associations of Quebec - because you stated that you represent the students of ten provinces - are in agreement with your position considering national standards?

Mr. Caron: We have had some discussions on the matter with Quebec associations, namely the FEUQ, the FEEQ and the MDE, but we haven't yet come to any agreement on a common position. We are still at the preliminary discussion stage. As far as the Canadian Federation of Students is concerned, it adopted this position on national standards some time ago already, but it had not yet done any real promotion of it beforehand.

The Cegeps system is quite unique. I myself studied at a Cegep in Rimouski and I therefore know first-hand that Cegeps are very different from other colleges elsewhere in Canada. That however doesn't mean that there is an impediment to credit transferability between Cegeps and colleges and universities in the rest of Canada.

Half the credits that I accumulated at the Cegep enabled me to chop a year off my program at Ottawa University. I therefore believe that credit transferability and student mobility are possible without compromising the uniqueness of the Quebec Cegep system.

As for colleges, if there must be standardization, we would like the rest of Canada to follow Quebec's example of granting guaranteed access to students wishing to pursue college level studies.

Mr. Brien: Someone wanted to say something earlier.

The Chairman: Mr. Rothschild.

Mr. Rothschild: I would like to say a word about the issue of alternative solutions that you mentioned earlier. With your permission, I would like to throw the ball back into your court and tell you a few things about research.

The deficit you talked about is due to two factors: expenditures and revenues.

.2010

Emphasis must be placed on both elements. Do you have an alternative solution other than economic growth based upon an innovative industrial sector, itself based upon solid research work? Are there any countries in the world that have registered economic growth while at the same time cutting back on fundamental research? I don't know of any at all.

Mr. Brien: It is easy to compare the ideal situation with the present one, but there is a transition phase between the two. We must first put out a considerable financial effort: $32 billion. That's a lot of money! It represents 20 % of the budget, including expenditures and interest payments.

It isn't true that success will come easy and it isn't true either that we won't touch key sectors, essential sectors. Everyone will have to contribute. Every single sector will have to contribute. But my thoughts on this go further still. Does more money necessarily mean better quality?

We spend a lot of money on education and health here in Canada. Must we inject more money into the system for it to be more efficient? Is it possible to make improvements to the system without putting more money into it? Isn't it normal to establish an order of priority, even in the area of research?

Mr. Rothschild: Absolutely. If you work in the pharmaceutical industry, for example, you know full well that you must be efficient. But if you reduce your research expenditures in accordance with your sales and go below a critical level - less than 5 % for example - you're no longer in the game.

In the software sector, if your research expenditures fall below 12 %, you might as well pack it in. The same goes for the economic system. I understand full well the critical problems we are facing, but in a way, are you not going to create even more serious problems if you deprive yourself of the means to take care of the two factors of the deficit, namely expenditures and revenues?

Mr. Brien: I agree that it is important to examine both sides. Economic growth resulting from progress with certain tax expenditures, etc., can indeed bring about revenue increases. But the expenditures problem is nevertheless a sizeable one.

I am a member of the Opposition. I don't want to be constantly defending the government, but I nevertheless expect of groups that appear before the committee that they tell us in which areas we might be able to make some savings.

We, the members of the committee, must arrive at recommendations that are as precise as possible. That is the message I wanted to give you. You say that we must look at the revenue side and generate growth. But how? You established very clearly that education and research are important sectors. Does that however bring us any closer to resolving the problem at hand?

The Chairman: Who would like to answer the question?

Mr. Gauthier.

Mr. Gauthier: In the area of health-related research, we have concrete examples illustrating the validity of investment in evaluative research on applied therapies. Researchers from the Robarts Institute in London, Ontario, in collaboration with colleagues elsewhere in the world, were able to demonstrate that the surgical procedure called carotid artery bypass was not useful and that this practice should cease. The discontinuation of this surgical procedure has enable Canada to make savings of some $20 million, but it was nevertheless necessary to carry out a study in order to demonstrate that the procedure was not useful.

There are many other evaluative research projects that could and should be undertaken. Contrary to industry, the Canadian health system doesn't invest any portion of its total costs in research on its own future. This is explained in our brief.

The Advisory Council's recommendation is that 1 per cent of the total health care costs paid by the federal government be devoted to this type of research work. In the United Kingdom, they invest 1.5 % in this type of research and there are economic spin-offs from this work. In the area of biomedical and health research, we believe that if the Advisory Council's recommendation were followed, this would generate, after five years, $7 billion in savings per year within the Canadian health care system, savings that all the provinces as well as the private systems and the federal government would benefit from. We believe in this objective.

.2015

If we could find nine other similar projects, I would think we'd be on the right track towards reducing not only the deficit, but also the national debt.

Mr. Brien: I have another question. How much of an initial investment would be required?

Mr. Gauthier: The initial investment required would depend on the size of the project. In this instance, 1 per cent amounts to approximately $160 million. The Advisory Council talked of $100 to $200 million. It is 1 per cent of federal expenditures in the area of health care, considering that the system costs $72 billion per year. That includes the costs borne by the provinces as well as by private plans.

I would like to add something to my answer and explain to you why the research sector simply must be spared. The deficit isn't the only problem. The Minister of Finance himself recognized that fact. We must tackle head-on the structural unemployment problem, that now stands at between 7 and 10 % here in Canada. We must tackle this problem at the same time we tackle that of the deficit.

Furthermore, Canada's competitiveness has fallen back, dropping our country from the fourth to the fourteenth rank among OECD countries over the last six years. Enough is enough. We are literally sinking.

The document entitled OECD Employment Study: Facts, Analysis, and Strategies, published in 1994, summarizing 45 years of study on the evolution of employment in OECD countries, recommends, immediately after macro-economic measures such as deficit reductions, investment in basic scientific research. The OECD makes other recommendations aimed at helping countries get back on their feet, but these recommendations come second. It also says that chronic structural unemployment appeared well after countries began to accumulate the enormous debts they now have on their books. It is a problem, and the way to get at the root of the problem is to facilitate a more innovative and more competitive economy. According to the OECD study, here again this must be accomplished through science and technology, education and training.

The Chairman: Mr. Brien, there are several people who would like to answer your question. Is that alright?

Mr. Brien: No problem whatsoever. That is what I want.

The Chairman: Sally Brown, go ahead please.

[English]

Ms Brown: I would like to respond, because I think many of us are saying the same type of thing. It's not inconsistent with what Minister Martin is saying, it's just that we're not seeing the actions that support what he's saying.

The red book, the purple book and the orange book all have the underlying premise that we can't cut our way out of this problem. We have to have economic growth. We don't just have a deficit problem, we have a jobs problem.

All of the research that even the Department of Finance believes is that the chain is jobs flow from growth, growth flows from productivity, and productivity flows from working smarter. How do people work smarter? We work smarter if we do more research and if we invest in our human capital. We know that's true. What many of us are saying here is that, well, this seems to be accepted - in Industry Canada, in Finance - by all the analysts, but when you look at the choices the federal government is making in certain areas, it belies that truth.

So what we're saying is, if that's so true - that's where the growth is going to come from, and that is where, rather than cutting programs, we're going to get out of the situation we're in - then we need to be more consistent. You have only to look at small programs like the infrastructure program to ask why we didn't invest in those things that help us innovate as an economy instead of investing the way we used to, when we had money, in roads and skating rinks.

The time has come to say if we have x dollars right now, and that's all we have, then let's be consistent with what we're saying is going to bring us out of the crisis. I think that's a lot of what we're saying here.

The Chair: Mr. Gaffield, please.

Mr. Gaffield: In posing the question of where to cut, obviously we're all going to try to avoid that like crazy. Our role here is to mount strong arguments for our own sectors. It would be very bad for us to put our finger anywhere else -

The Chair: With all due respect, that's absolute nonsense. You're abdicating your responsibility as educated leaders in our country. You're the people who are attempting to lead our young people, and you're saying you're not prepared to engage in the debate to decide what our priorities should be? You're just here to fight for your own things?

.2020

Mr. Gaffield: May I finish, please?

The Chair: May I please finish what I'm saying?

Mr. Gaffield: Okay.

The Chair: I think it's a very legitimate question to ask our educational leaders whether we have a deficit problem and how we should deal with it. It would be wonderful if you would be prepared.... One individual - only one - said here tonight we could increase the personal income taxes payable by the rich. That was Mr. Weiner.

Now, if you're saying it's not your responsibility to help us make these decisions, then I would put it to you that you're abdicating your responsibility to really engage in one of the most important and difficult debates we have. You're saying it's not your problem and that we should fix it for you.

Mr. Gaffield: May I finish? Because that's exactly what I was going to do. I was going to juxtapose what Sally Brown said against what we read today in The Ottawa Citizen: ``Royal reports record earnings of $1.26 billion''. ``Profit is largest in Canadian banking history''. ``Canada's Big Six domestic banks are set to notch another record year, with collective profits in the $5-billion range for 1995. That's up from $4.3 billion last year.''

I could go on. I'm not a specialist and I haven't done research on banking, but it seems to me something is wrong in priorities in the way in which we're cutting up this cake if at the end of the day we can juxtapose articles in the newspaper about violence, child abuse, and all the many social and cultural problems we have with reports of record earnings of $5 billion among a small number of institutions in Canada.

The Chair: Okay. Tax the banks. I understand.

We also have Mr. Savage, and then Mr. Bruneau.

Mr. Savage: I have a couple of things. Like Mr. Rothschild, I would like to push something back onto the committee. It seems to me we have been through one program review of the federal government, through the office of Mr. Massé, and we're about to launch, or are in the middle of, program review two.

In relation to questions of what we should invest in R and D and that type of thing, I would have thought one of the questions we should ask ourselves, and one of the questions the government should ask itself, is what has been the effect, on both R and D and the science capacity of the federal government, of the cuts from program review one?

I have been part of a coalition that's been meeting with various members of the government for the past month. We have been asking that question. No one seems prepared to give us that answer. I don't see how you can go into program review two without having that answer and expect that whatever decisions will be made will make some sense in terms of our science capacity in this country.

So I would strongly urge the finance committee to itself urge, I suppose, Mr. Manley andDr. Gerrard to produce a report that will show what has happened over the past year as a consequence of budget review one. Then we might be able to make some intelligent decisions based on what's already happened.

All we have at the moment is anecdotal stuff. Everybody can come to you and say they've cut this, and this terrible thing has happened, or they've cut that - but there's no global picture of what's happened to the science capacity of the federal government. It seems to me it would be useful to have that as the basis for ongoing discussion in this area.

The Chair: Thank you.

Mr. Savage: I was going to respond on the tax question as well.

It does seem to us at CAUT that when the finance department produced its tax expenditure book last year it was inviting some discussion of tax expenditures. We pointed out at the time, and we'll point it out again, that the total cost of the three federal granting agencies is a little bit less than the total amount of money the finance department estimated it was not taking in because it refused to tax gambling and related matters. That also suggests to you, of course, the small amount of money that's being invested in the three federal research councils.

.2025

There also has been a considerable amount of discussion about how we can ensure that one of those tax expenditures, namely the scientific tax credit, which seems to us to be a good thing, is in fact spent on science and not on other things. A year ago both we and other people raised whether it was legitimate for the banks to have the very considerable access to this tax credit that they were claiming a year ago.

We understand the government has been studying that for the past year. When we've asked questions about what is the result of that study, we've been told the study is still going on.

The Chair: I'll tell you what I'm going to do - with your permission. I'm going to go on to questions from other members. You will all get a chance to say as much as you want.

Mr. Weiner, you're throwing your hands up in disgust. Please -

Mr. Weiner: I am. I recognized a thought about six speakers ago, and actually -

The Chair: Mr. Weiner, you have been recognized.

Mr. Weiner: Thank you.

The Chair: It's just that there's everybody at the table, I have three more people who want to talk, and I haven't given the other members a chance to pose questions. I can guarantee you.... We'll make an exception in your case, Mr. Weiner.

Mr. Weiner: Thank you. I will try to be succinct.

If there is money being wasted, we say stop it. If there are programs that aren't working, we say cut them or change them. But if needs are not being addressed, then we say there should be goals and principles established by the government. There should be targets established based on an affordability basis.

We recognize that not everything can be done at once, but at the moment cuts are being made on a willy-nilly basis. We are looking at the deficit side and cutting. We're not looking at the revenue side.

I did not say tax the rich, because the rich are sitting around this table. When I talk about the rich, I am talking about the middle class and up. If one looks at some of these studies that have been done on a very thorough basis, we can see that families with incomes from $42,000 to $300,000 are basically on a flat rate, a proportional rate, in terms of the kind of taxes they're paying.

What we are saying is we've created a myth in this country that we are so heavily taxed we cannot pay another nickel. I would suggest that if the government showed leadership and demonstrated that waste and programs that are not working are being cut or are being changed, and that certain needs are not being met, people would be prepared to pay for some of the services we're talking about. They would be prepared to pay additional sales tax. They would be prepared to pay additional income tax.

The Chair: We understand that theory. Could you tell us which programs you want us to cut? We know we want to cut useless programs, or ones that aren't delivering. Which are they?

Mr. Weiner: I don't know.

The Chair: Okay, fine. We'll find -

Mr. Weiner: I don't know what those programs are.

The Chair: You were suggesting -

Mr. Weiner: But we're saying you have not been looking at the revenue side at all.

The Chair: That's nonsense.

Mr. Weiner: No, you've not been looking at the revenue side. You've eliminated the prospect of any tax increases -

The Chair: Oh, have we?

Mr. Weiner: - be they sales tax or be they income tax. We haven't seen any indication whatsoever that this government is prepared to.

The Chair: What did we do in our last budget, Mr. Weiner?

Mr. Weiner: Minimal. Insignificant. Insignificant.

The Chair: You're calling for a major tax increase, and we're quite prepared to look at that.

Now, with all due respect, Mr. Weiner, I can guarantee you - it's a political promise to each one of you - that tonight you will get as much time as you want. If you haven't been able to respond to one questioner - we have about seven or eight at the table - remember your questions or comments, and I'll make sure you have an opportunity to put them on the record. But I do want to be fair to all members, if you don't mind.

Monsieur Brien, would you like to carry on, then?

Mr. Solberg (Medicine Hat): Thank you very much, Mr. Chairman. My name, by the way, is Monte Solberg. I'm the member of Parliament for Medicine Hat.

I don't know where to start here. A lot of provocative things have been raised. I think I'll start with Mr. Weiner's comments about leadership.

I've heard comments about why, in each area, your particular ox shouldn't be gored, but I haven't heard much discussion about some of the inefficiencies in the educational system in this country today. I would argue that there are really quite a few.

.2030

I see all kinds of overlap and duplication. Even in my own proince, Alberta, I see eduational facilities providing all kinds of duplicate programs, and I haven't heard this group speak about that tonight. I haven't heard them talk about the amount of money people are paid in institutions, about tenure, for instance. I would argue that it is a very inefficient way of staffing universities in this day and age.

I would also argue that we haven't heard much talk about the need to go after the provincial governments that take the money that comes from the federal government and don't necessarily put it into universities. I also haven't heard any discussion about the need to create competition between the universities for students. One of the best ways to do that, and I would argue it's one that has gotten very short shrift from people in the educational industry, is to take the transfers from the federal government, give them to students in the form of vouchers, and create a real competition so that you people are held accountable.

I have no problem providing funding at the present level for education. I believe it is important. I think it's one of the ways we can help the economy grow. But I am also not convinced that the money necessarily gets used in the wisest possible way today.

I am wondering if people would like to explain why they haven't discussed some of those things I've talked about and also whether they're prepared to talk about some of those issues now and show some leadership when it comes to making cuts in your own areas or finding efficiencies.

The Chair: I see a lot of hands going up. We will start with Mr. Bruneau.

Mr. Bruneau: Mr. Chairman, I think the questions that have been asked really go very deeply to the issue. When I think about education and research, which typically are the subjects we've been dealing with here, they have to do with information, with knowledge, with the capacity to apply it, to extend it.

If we look at what's going on in our world today, we are all very conscious of how access to knowledge and information is changing dramatically. We are also conscious that there is no economic good of greater value than knowledge and the capacity to apply it.

You cannot sustain a monopoly to control the most important economic good in our society. In fact, if I look at the college system, the monopoly is gone. If I look at our university system, it is going; it isn't quite gone.

What I would suggest we need to do, as a matter of policy, is to ensure we begin opening up alternatives that allow other than the existing interests in the system to put alternatives before us and before those who want the education. One of the ways of doing this is to put more of the resources in the hands of the buyer of the service, no question.

From my perspective, suggesting that we will have a system that is essentially unchanged ten years from now, a system that is not changed in some fundamental way, is a bit like suggesting that everybody will still go downtown to shop in Toronto because that's the only place you could get to before the automobile became available.

The automobile changed the way we lived. The way information is becoming available will change the way we learn, the way we create information. The Internet today is causing a fundamental change in the way in which many people do research, and the interesting thing is that it is not a state monopoly.

I'm not suggesting that you dismantle the whole thing, but the object of policy should be to create alternatives.

I run electric utilities. Let me tell you, electric utilities as monopolies have not been great innovators, but the world has changed around us and every crown corporation in the electric power business will be fundamentally changed, not because electricity is less important but because it is too important. The same is true of knowledge. It's because it is too important that we cannot accept a system that becomes restrictive in the access provided - restrictive by way of cost or by way of capacity.

.2035

The Chair: Thank you, Mr. Bruneau. Terry Anne Boyles.

Ms Boyles: I would like to speak to the question. In terms of the colleges, institutes and CEGEPs of the country that are our members, there has been an extraordinary approach to program rationalization and elimination of duplication of needless programs. Many of our institutions in the country are now less than 50% public-funded. We have 1.5 million part-time students who are self-funded or funded through companies in the institutions. That is a priority sector growth for the college boards of governors, public boards of governors, their institutions in the country.

We're also talking with our colleagues in the private and commercial colleges in Canada about some of the effectiveness and efficiencies that could come from national occupational standards. We believe that if there were national course standards, at least, with some regional differentiations for employment in areas, there would be significant cost savings. There would be elimination of duplication of programs. We would all be playing on an equal playing field. Yes, we'll compete against the best of them, because we believe we have a good product. If we don't have a product in that particular marketplace, then we'll move out of it.

Sheridan College just announced the elimination of six programs within the last couple of days. At the same time, they've announced the strategic alliance with Walt Disney. It's those types of creative solutions that they're looking at.

I wish to re-emphasize that our presentation did not talk about the cuts under the federal-provincial transfers, nor did we talk about the impact of the recent now ``employment'' insurance programs. Our discussions are about how you move into a new way of doing things, a new reality that all of us must work at.

Mr. Solberg: If I could respond, Mr. Chairman, the point I was trying to make is that it would be much easier to accept some of the arguments here if people came here to talk about the things they're doing to make sure their sector is the most efficient it can possibly be - that they'll be at such-and-such a point by such-and-such a time, and will use the funds they are given in the most efficient way possible.

But what we've heard, and I guess to a degree I share the chairman's frustration, is don't gore our ox. I understand that, but this is an exercise where we're calling on you for some help. We already know you don't want us to cut your sector. We're asking for some help when it comes to figuring out where we could make some cuts down the road. If you came to us with the plan, perhaps it would make it easier on your sector down the road, if indeed there are cuts coming in your area.

Ms Boyles: Just for the record, I believe my response was misinterpreted. I believe very much that within our sector we're making very dramatic cuts and changes and modifications, and are trying to do that in a partnership and collaborative way.

In terms of the presentations from most people here, I think we're responding very specifically to the list of questions we had. Certainly in our preparation, we didn't look at an analysis with specific examples. We'd be most pleased to provide those to the committee if it would be helpful. We certainly have examples from across the country.

The Chair: Is there anybody else? I hate to say no to Mr. Weiner because I know he'll get very upset. He has his hand up again.

Maybe Mr. Dinsmore would....

Mr. Dinsmore: To respond at least in part to the question, there are certainly efficiencies and they are difficult to tabulate. I can assure you that the university members of the Corporate Higher Education Forum are all dedicated, as presidents of their institutions, to getting the most out of the money they receive from the public treasury.

But the fact remains that there is an obvious need to shift responsibility for the costs of education to the beneficiaries. This is a very difficult problem, and I sympathize with students. I understand clearly that debt burdens are hard to tolerate over a lifetime in the kind of economies we live in today. But as I mentioned earlier, I think we have lost the understanding of the need to economize for things that are highly valuable to us personally and to our society. The notion of saving for education is something that has not been very much in our set of priorities over the last 30 years. Maybe the federal government can give it a kick-start with stronger incentives. I think we're going to have to start thinking in those terms if we're going to be able to afford the costs of education.

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The Chair: Mr. Horan, please.

Mr. Horan: In the sector of charities, I'll tell you how we've actually cut costs. In the last12 months we've reduced our national board of directors by 50%. We've slashed travel. We don't travel. We use E-mail, fax, telephone.

We've relied upon the volunteers. Many of the people sitting around this table, their researchers, their school boards, have given free time. Free time for many of these people means that they're not putting it someplace else.

I'm here tonight. Even my presentation has been checked by researchers at universities who gave freely of their time to try to put their ideas together for me tonight, as a charity. They didn't charge a consultant's fee. We don't have any money for a consultant's fee. It's the same when it comes to doing this. Often we rely on universities to put it out for us at no cost. Often we rely on researchers. Dr. Steffy from the University of Waterloo is an excellent example. The man has put hundreds and hundreds of hours into a research database, allowing researchers across this country to join up in the area of learning disabilities and actually talk to each other.

The Chair: Thank you very much.

Last on this round, responding to Mr. Solberg, is Mr. Caron.

Mr. Caron: I wanted to address a couple of things you mentioned, specifically about the need for competition in universities. It is something we have heard about a lot in the last four or five years.

We have to understand that since the federal government's involvement in funding universities and colleges, universities have never been structured to be competitive. The structure was there to actually allow access to post-secondary education to those who needed to get the required financial aid, to eliminate the barriers to accessibility.

In terms of the mandate of each university, if I look in Ontario for example, the mandate of Trent University or the University of Ottawa is very different from the mandate of the University of Toronto.

We have studied the question of vouchers, another element that would add to the competitiveness of universities and colleges. We don't agree with the concept of vouchers because it will create too much competition among universities. Universities would spend most of what they received in terms of vouchers to actually promote their public relations sector. Obviously a lot of universities, such as the University of Toronto - we're talking about the Canadian Ivy League, if you like - McGill and Western will be at a certain advantage compared to other universities.

At the end, with the adoption of such a system and the adoption of a system of competition among universities, it would be really unfair. I guess in Alberta we could refer to competition between Lethbridge and the University of Alberta or Calgary. You would see the University of Calgary and the University of Alberta actually prospering, while the University of Lethbridge, which would receive a lot less funding, a little less attention, a little less prestige compared to the other institutions, would actually decrease in quality.

We believe that the current system is not perfect, fine. But it is still better than another system that would promote 10 or 12 universities across the country and just give up on the other 80, 90 or100 universities. We have problems with bringing in that kind of competition with universities.

Mr. Solberg: Instead of seeing that happen, wouldn't you see more specialization? Wouldn't you see an end to a lot of duplication, where a program that's not very successful in putting people into the workforce would eventually be eliminated? That would really be an albatross when you tried to advertise your university. If you're talking about the excellent job you've done of placing people in jobs and you have a particular program that's not doing that, it would make sense that you get rid of it. You would become more efficient by doing that. I think you would see more specialization.

Mr. Caron: I guess you are referring to a form of rationalization in universities.

Mr. Solberg: Right.

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Mr. Caron: We have to be careful with rationalization. When rationalization is done in order to cut universities and reduce expenses, it then becomes very dangerous, because the quality is not really looked at.

Mr. Solberg: If I can, just while you're on that, wouldn't you force universities and colleges to put more of their resources into the teaching end so that they can turn out people at the end who are high-quality graduates who would then go into the workforce? Wouldn't you force them to do that as opposed to, for instance, maybe putting their money into bricks and mortar or into other areas that may not pay off in terms of putting people into the workforce?

Mr. Caron: In doing what?

Mr. Solberg: If you have that voucher system where there's competition in terms of people arriving at a university or college because they know they have an excellent record of placing people in jobs, I'm saying the voucher system would create the type of competition that would force universities and colleges to put more of their resources into the teaching side as opposed to, for instance, bricks and mortar, or a heavy administration, or whatever it is.

Mr. Caron: I don't agree with this comment. I think most of the money universities would receive.... First of all, vouchers means there would be a decrease in government spending.

Mr. Solberg: It depends on what regime you're talking about. What we've always said is to take the $2.2 billion and put it into vouchers. We're not talking about income-contingent repayable loans, we're talking about vouchers. It would also eliminate the leakage that goes into the provinces now, because there is a certain amount of money - and I know you'll acknowledge this - that doesn't get from the federal government down to the universities.

Mr. Caron: The problem, as I said before, is the fact that most of this money won't necessarily go to increasing the level of teaching that's been done in universities but to increasing the public relations sector, the marketing sector, of universities to attract those students. At this point it's very obvious that this principle of competition will have the bigger universities, the most prestigious ones, actually trying to grab more and more and more of these vouchers and thus expanding, and spending their time doing that.

Now, if you are allowing this system of vouchers and allowing free competition between universities, what you will in fact do is force those large universities to actually spend that money to expand and get even more students and invest more and more in marketing in order to get those students. Very little of that money would actually go into increasing the level of teaching.

We have to recognize also the deciding factors that push students to actually go to an institution. It's not only teaching. Teaching is part of it. The level of research is part of it. We have other factors we have to regonize as well.

Mr. Solberg: Yes, of course, but those people who wanted to go to a research facility would take their vouchers there, and there would be a competition between research facilities, then, to get those vouchers. Again, it would increase the efficiency of those places.

Mr. Caron: As I've said, basically it will make twelve ivy league universities down the road. The rest of the universities will actually be neglected by the government and by the students because they can never actually increase, and increase in quality, because of the principle of natural selection, if you like.

The Chair: Mrs. Brushett, please.

Mrs. Brushett (Cumberland - Colchester): I'd like to clear the record here on a couple of things. Mr. Weiner has indicated we haven't looked at the taxation or the revenue side of this equation in any way. I would like to suggest that we have. We taxed the banks last year. We taxed the banks again this year. We've withdrawn some deductions for seniors, which in essence is taxing them more. The list goes on. We have taxed them, and we will look at more.

On the other side of the equation, when you talk about the banks and the profits, we all agree they're certainly too high. But you must remember, it's mostly teachers' pensions and these kinds of investments that are in those banks. It's the pension funds that are invested there. So you're reaping the benefits of the profits the banks are making.

I point that out to you because this challenge, trying to reduce the deficit and stimulate the economy, is very complex. Each and every person is involved in it in some way or form.

My question tonight goes back to the fundamental of education. As I understand it, each and every one of you is involved in either boards or teaching, supporting the education system in some way. I think you've all failed miserably in the sense that we still have 40% of our kids dropping out of secondary schools.

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We can talk about research, which is a long-term investment, and we can talk about all the ways we can serve our society through greater means, but the immediate urgency of our whole society is why these kids are dropping out of school, and the cost burden of this on society overall. That is an immediate question for all of us to address, fundamental to deficit and debt reduction and the whole production economy as well.

I open that up to anyone.

The Chair: Ms Pierce.

Ms Pierce: I would just like to correct the statistic that 40% of our high school students are dropping out. The latest studies show it actually is probably 18% or 19%.

Mrs. Brushett: In the greater Montreal area it's 45%, and in Nova Scotia 40%.

Ms Pierce: If we're looking at national statistics we're looking at 18% or 19% on drop-outs.

I think one thing we have to keep in mind is that one of the fastest-growing innovative programs at school boards is programs for adults who drop back in. I think we have to look at both sides of the equation when we're looking at the drop-out rate.

Mrs. Brushett: It's very costly to drop back in a drop-out system.

Ms Pierce: I think we can argue the figures and the merits of dropping back in or dropping back out, but I think the studies show that schools have tried to be innovative, and have tried to address the needs of drop-outs in many different ways. We're looking at all kinds of programs. We're looking at programs in shopping malls. We're looking at alternative delivery mechanisms. We are trying to address the concerns of those kinds of students who find it difficult to succeed in sort of the normal school environment. We can provide you with all sorts of information on the innovative programs we are undertaking to help those students who drop out.

The other reality we're dealing with, of course, is that two-thirds of the students don't go on to post-secondary education. We have to try to address their needs as well in looking at innovative school-to-work transition programs, whether it's apprenticeship programs, programs that work with sector councils, or transition-to-jobs programs.

If we're trying to look at priorities we have to look at priorities in terms of our youth. Youth unemployment and youth despair in terms of getting jobs is one of the things we have to address if we're looking at priorities.

So we can give you information on the drop-out rates we're looking at and the diversity of programs we are providing at the secondary level for both adults and youths.

The Chair: Mr. Weiner.

Mr. Weiner: I have two comments on this issue. Ms Pierce has mentioned the stats. These are not our stats; they're Statistics Canada stats. I would ask Mrs. Brushett if she's aware of what the drop-out rate was in 1970, in 1950, or whenever. I think you would be horrified, Mrs. Brushett. It was over 50% in the fifties and sixties.

We're not saying 18% is good enough. We recognize that there are pockets where in fact it is as high as 40%, as you've pointed out. There are things to be done there, and we are trying to address it. We do need the help of the community in working with those.

The issue of drop-outs was not a very major issue in the sixties and seventies because kids who dropped out dropped into jobs, which are no longer available.

Mrs. Brushett: Absolutely.

Mr. Weiner: Kids who drop out now are very highly visible. As a matter of fact, if we look at the high school graduation rate just at the beginning of the century, approximately 10% or 12% of Canadians actually graduated from high school. But we had a different kind of economy. We're very conscious of that. So we're not busting our britches and saying....

We have progressed tremendously. Of all the OECD countries we do have the highest number of years of education, etc., but there's a lot to be done. I accept that. We certainly have more work to do in that particular area. But let's use the right figures and not point to one pocket in the country. There is an average of 18% to 19%.

The Chair: Thank you, Mr. Weiner.

Mr. Weiner: Next point, quickly, on taxation.

The Chair: I'm sorry -

Mr. Weiner: There was a point made in reference to a comment I made.

The Chair: Mr. Weiner -

Mr. Weiner: Let's be fair. I think we're here to listen to the people around the table.

Mr. Grubel (Capilano - Howe Sound): That's inconsiderate. That's a fact; you're talking too much relative to everybody else.

The Chair: I think we should be here to listen to Mr. Weiner.

Mr. Weiner: I'm not suggesting you're here to.... I think you're here to listen to all of us.

The Chair: I'd like to do that, Mr. Weiner.

Mr. Weiner: You did say you were available for - -

The Chair: Yes, and I would like to do that. I will give you as much chance as you want to speak after we've gone. I have to be fair to our 14 witnesses here at the table in terms of allocating time and I have to be fair to our members of Parliament here. So I have a little difficulty -

Mr. Weiner: The initial comment was directed to me. It was a comment in relation to a point I made on the revenue side.

The Chair: Okay.

Mr. Weiner: It was directed to me.

The Chair: We would love to hear you, Mr. Weiner.

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Mr. Weiner: Thank you, sir.

I recognize, and I think our federation does, the complexity of the task. We are aware efforts have been made to look at the revenue side. We would not want to suggest there haven't. But we think in this country there is a predominant opinion that has been encouraged and fostered by all political parties that there is no room to look at the taxation side. We're saying the present taxation system is unfair.

There has been a lot of talk by the government about tax reform and tax review. There really has been very little done in that area. We do think that in a number of these areas raised by the universities and by ourselves, if a case can be made that there is a way of increasing tax revenue and providing rebates to those who are less fortunate in our society, a little more attention could be paid to that side of the coin.

The Chair: Mr. Rothschild.

Mr. Rothschild: I'll be brief in the interest of allowing others....

I would like to go back to the comment made by the previous member before he left, on the issue of efficiency and on the issue of trying to be helpful in making constructive proposals. Before I do that, I want to make an observation on the point of view that research is an issue in the longer term.

It's not an issue in the longer term, Mrs. Brushett, it's an issue of continuity. It is true that the investment we make now will have an impact in the long term and that the impacts we're witnessing now came from investments we made awhile ago. In other words, we have to continue the process. Stopping things is permanent.

I have sympathy for members sitting on the other side who feel there is a litany of, ``Hurrah for me, take on the other guy.'' However, if you were to conclude from the presentations you have heard that this in fact the philosophy you're hearing, I think you're making a bit of a caricature with respect to some of the presentations.

The association I represent is mainly composed - or the largest group is composed - of business people who do not have a direct self-interest in the issues at hand. They are merely giving their opinion as to the consequence of some of the issues revolving around the scientific research base of this country and the importance of it. We have made a contribution to the government on the issue of priority. We made it in the appropriate forum on the S and T review. We'd be more than happy to share it with the committee and table it with you so that you can review it as well.

We are awaiting the government's report on all of the contributions made by Canadians across the country on this issue.

Regarding efficiency, I know the previous member was referring to education, but we'd also be pleased to make available to the committee information on the relative effectiveness and efficiency of the Canadian research community in universities. Our data suggests in terms of return on investment, value for dollar, efficiency and effectiveness, Canada leads the G-7 in this field. I'll table this material for the committee, if you are interested.

The Chair: Thank you, Mr. Rothschild.

Is there anybody who'd like to intervene right now?

Mr. Dinsmore: Just very quickly, with respect to ways in which we can address this problem of people ceasing their education at an adolescent age, there is no question that when you interview young children who are not interested in their studies it's mainly because they don't know where they're going. There has to be a far better system of connecting young people with opportunity - in their own minds. I don't think this country has done a particularly good job relating the requirements of the workplace to the needs in education and allowing the individual learner to effectively self-manage the process of learning.

I think we have to put responsibility into people at a young age, while they're in high school. This already is being done in Great Britain and other countries, where students are beginning to develop their own portfolios. It is necessary to provide them with the information they need to make the choices that will provide, in effect, cost savings in education, because they won't be redundant in the system.

I recommend that we find ways of delivering that information to young people and equipping them to manage their own learning throughout their lives.

The Chair: Thanks, Mr. Dinsmore.

Lastly, Mr. Deans. You've been very patient. Thank you.

Mr. Deans: That's fine.

I just want to reply to Mrs. Brushett's question by saying I think the question in itself indicates the need for research and development. You're asking why students drop out. Well, that's a question for research and development. Those sorts of questions are what people research in university. Those are the concerns of grad students. Those are the subjects they talk about.

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I know your question was directed towards secondary students. My experience is not with secondary students, so I have to reply back, and again the nature of the question sort of forces me to talk about the expenditure side. But maybe the reason so many university students are dropping out, particularly the grad students, is levels of tuition as well as the inability to transfer credits, etc., the lack of national standards. Those are reasons students drop out from university.

In addition, for graduate students it takes many of them a long time to get through their programs. Something needs to be done in reorganizing that. Again, one of the problems is the lack of jobs and economic support for grad students while they study.

The Chair: Mr. Pillitteri.

Mr. Pillitteri (Niagara Falls): Thank you, Mr. Chairman.

I must scold you a little, Mr. Chairman. We did other hearings across the country. We gave the opportunity of the round table discussions for individuals to ask questions of each other. In the case tonight, Mr. Gaffield and Mr. Weiner, we would have had the opportunity to show who was owning the banks and what interest they had with each other so they were able to express those views. So we would have saved that part of it, Mr. Chairman.

The Chair: I'll apologize, Mr. Pillitteri.

Mr. Pillitteri: But my question is to Mr. Caron.

Mr. Caron, I have three children and I've paid for six degrees among the three of them. I don't own those degrees, Mr. Caron. My children do.

Last year I recall that I did a pre-budget hearing and a young student made a presentation. I asked him how much he was paying for tuition. In comparison, he was not so well informed. As a matter of fact, since he was a student, I corrected him that it was half of the price he would have had to pay in the United States at a public-funded university, let alone those private universities.

But you asked a question on accessibility and affordability. You compared it to CAP, the Canada Assistance Plan. Once you have had that education at the lowest possible cost, you do own that education. A lot of times you can ask what is your contribution. Because I'm always held hostage to those who say that if you don't fund us as you should, I could take it away from here and go practise somewhere else. This is a constant answer we're getting. What is your responsibility to what you're receiving and what are you going to give back into this household?

Mr. Caron: I can understand what you said about post-secondary education and tuition fees because my father had three children and he had to help them go to university at the same time as well. So I perfectly understand what you're saying.

Your intervention about the tuition fees in Canada and the United States is not accurate at this point. With the recent changes we've seen in Ontario, for example, where tuition fee changes are not -

Mr. Pillitteri: It's not in place yet.

Mr. Caron: Right. Tuition fees next year will reach about $2,800 per year per student. I'm talking about an arts and science program. In the United States you have state universities funded by the state at $3,200. I'm talking about Canadian dollars here. So I think the gap has become closer and closer and we can't say we have an affordable system compared to the States. Yes, there are the private universities, the Ivy League. I don't believe this is the best system, with a limited number of elite universities and the remaining universities being considered as basic and being unable to expand because they aren't being given the possibility.

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In terms of the question of investment and the question of what the graduates from a university will do in society, we have to remember that jobs are very difficult to find, even for graduate students or students who have just graduated from university.

Statistics from the Canadian Council on Social Development showed that 8% of people from18 to 64 years of age with some kind of post-secondary degree, either from college or university, were unemployed. Data released back in 1992 showed that 24% of university graduates were either unemployed or underemployed.

This makes it very difficult to contribute back to society, which should be the role of the person who is actually getting an education. That's why we are saying that post-secondary education is the responsibility of society because society is getting back everything it gives. It's an investment, because society is getting back in terms of the education it provided the student.

Then, in return, we have people who think about our society, who think about expanding the parameters. We have engineers, we have lawyers, we have doctors. It's not individual. The trend now is to see that the individual is receiving individual benefits. But in fact society is getting much more than the individual will receive.

Moreover, this is benefiting the government side, even financially. If you can actually get a job and get a paid job that allows you to make money, even if you're contributing to society, you're giving a good part of it to government under taxation.

Now maybe there's not enough being given to governments. That's the problem of fiscal inequity we see in this country. But I think the problems we are seeing right now, that graduate students or students who have graduated from universities can't give back that much, is because of unemployment and the poverty that follows.

I released that 8% figure. There is an even larger number: 10% of the same adults - 18 to64 years of age - with some form of post-secondary education are actually living below the line of poverty. It makes it extremely difficult. You have all those worries, even when you are studying and right after you're studying, about repaying all this debt load that for some of my friends reaches $35,000 to $40,000.

You have to consider getting a job, a job that can actually sustain yourself. Afterwards the student will think about giving something back to society.

Mr. Pillitteri: I just have a little question. You quote all those statistics. Some of us can read too. It depends on where we take the statistics. Did you try to find out the percentage of people without post-secondary education who have no jobs?

Mr. Caron: Yes, we have those numbers as well.

Mr. Pillitteri: But you never took them with you; you only remember your sector.

The Chair: Do you have those figures?

Mr. Caron: I will still say that having a post-secondary education is an asset for the future of the individual. There are no arguments there.

What I'm saying sincerely is that it's not always the case either, and it's not all perfect. It actually becomes more and more difficult for the individual to make that decision, that gamble, to actually accumulate the huge debt load for a benefit he might never reach personally.

The Chair: Mr. St. Denis.

Mr. St. Denis (Algoma): Thank you, Mr. Chairman, and thank you all for being here.

In view of the time and in the interests of letting you have what time is left to speak, I'll just make a short comment, and say that I agree with Mr. Caron.

In response to my Reform colleague's comments earlier about a totally free market system using vouchers, for example, in a system like that we wouldn't have Laurentian University in Sudbury or Mount Allison in New Brunswick. We would have fewer bigger facilities.

My question - and I would leave it to you just to send us something afterwards - is just to take our minds outside of Canada for the moment. We are criticizing ourselves as a nation for the way we are handling our finances and the way we are handling our education system, and that's fair. We should always do that.

I'm wondering if any of you have access to information that would tell us if other countries, presumably industrialized nations, have tackled these same problems differently than we have and have found solutions that might be appropriate for us. I invite you to send that to us, through the clerk, for our edification. Can we learn from some others?

I leave it at that, Mr. Chairman, and pass to you.

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The Chair: Thank you, Mr. St. Denis.

Who wants to respond to...?

Mr. St. Denis: It's an invitation to send us something if they have any information.

The Chair: Mr. Bruneau.

Mr. Bruneau: Mr. Chairman, at the heart of some of what we've talked about.... There has been discussion about the tax system, but there's another side to that, and that is the creation of wealth: innovation, enterprise development, the capacity to create more wealth in the country. In anything but the shortest term, that has to be the goal. If we think we're going to work our way out of this with the system we have, with the constraints on finance or constraints on the funds available, we're kidding ourselves. It is going to become a different system.

I would like to speak very briefly to the voucher system. With a voucher system you cannot expect that you stick with the monopolies we have put in place by legislation for the awarding of degrees. Leave the degree-awarding and the monopoly to examine, but you cannot continue to say that because we have the right to examine you, we will also tell you where, when, and how you're going to learn.

Our world is saying there's a vast array of approaches becoming available on how, where, and when you can learn things. Standards and examinations are important, but start opening up the system and you will see innovation that will find a lot of cheaper ways to do things. Those who want to buy the highest quality will be able to do it. Those who want something else can do it as well.

The issue of wealth creation that I wanted to come to really goes back to the original comments I made. I've heard some comment around the table about protecting fundamental research. The way we're going at it today, we will not protect fundamental research until we understand there is quite a different enterprise in the utilitarian activity of engineering and engineering research and recognize that in how we support it within our universities and in the real value of interconnectedness with industry. Until that happens we will never create the wealth we're capable of creating if we evolve the system. What we will do is exactly what we're doing now. We're telling scientists to be like engineers, be applied, get out there and be utilitarian, and we're going to get lousy engineering and little wealth.

For 40 years in this country we've been telling engineers to be like scientists. I'm one of them. Let me tell you, you have lousy science and not a lot of wealth created.

We have to find the balance. When we find the balance, we protect the right and support the pure science and get the real value from it. At the same time, when those with the utilitarian agendas interact, that's where the wealth gets created.

Let me tell you, it's rarely a question of deciding how you're going to do it and driving the applied research. It's that chance occurrence. If you can establish an environment, particularly within universities, in which you have the utilitarian in close contact with those who are asking the fundamental questions and are very good at creating knowledge, that's where the seeds of wealth will be formed; that's the balance.

The Chair: Thanks, Mr Bruneau.

I would like to turn to Mr. Grubel.

Mr. Grubel: Thank you, Mr. Chairman.

I have been on this side of the table. I've been at universities for 30 years until I had an attack of temporary insanity and ran for office. I worked my way through graduate school. I have two children who have gone through graduate school and one who still is there. So I appreciate the wisdom that came from this side, but I must say that I'm terribly disappointed by the lack of perspective. Education and the production of knowledge is not the most important product of the world. Just listen to doctors coming here. I've sat here for hours listening to farmers, to poverty groups. Ladies and gentlemen, that's not right.

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Mr. Weiner, you have easy talking. With the self-assurance that characterizes everything you say, you tell us there are all kinds of people out there who are willing to pay more taxes. Let me tell you, going out the way I do, knocking on doors and having coffee parties, is a very salutary experience.

If you make more than $50,000 a year in this country, you belong to the top decile of the income distribution. If we had time, I would like to go around the table and ask what percentage of all income taxes is paid by that top 10%. Let me tell you what it is: 50% of all the income taxes are already paid by the top 10%. I'm telling you that from my experience of coming from academia and going down on the street, those 10% are not only telling me they are going to use the political system and not re-elect me if I raise taxes on them; they're also telling me that they and their children have alternatives - and those are not in Canada - if I squeeze them any more.

We have had witnesses here from the science establishment who have told us that they have trouble recruiting people for high-tech applications of the science that you all want to be produced, because these people go to the United States. They can't keep them here. They get the same pay but get twice as much in their after-tax income.

Now you have easy saying, coming to us here and scolding us for having the wrong priorities. I would just like to introduce an element of realism.

Mr. Caron, I urge you some day to read the studies of the returns to education, private and social. Read a bit of history. When my class graduated 30 years ago, we didn't all have jobs lined up. We didn't all have an opportunity to go and get what we wanted. Some of us were unemployed. Do you have no perspective on history with respect to every generation having its difficulties?

I'm really saddened by the idea that you people don't understand how serious the problem is with this deficit. Do you know that last year this government, which was elected on the basis that they.... They are all Liberals. Do you know what that means? They are compassionate people. They pride themselves on their compassion. They cut $4 billion out of program spending last year. That is the beginning of the cuts you're getting. Do you know what happened because they didn't cut enough? The increased interest they had to pay wiped out all of those cuts. We were this year exactly where we were the year before. That, ladies and gentlemen, is the power of compound interest. You ought to have that perspective when you come here.

None of us enjoy listening to all the heartbreaking stories that you give us and the bragging about how important your government support is for the future of society. None of us want to cut. I can tell you only one thing. This is a two-way street. I have listened to you. If you think the cuts you got last year and that are coming next year are bad, you just wait. There are some people who professionally are looking into the future and the economy, and they are telling us that very soon we're going to have a recession. Very soon the political cycle will say there can't be any more cuts. Some are saying there is a high probability that we will have another referendum crisis, at which time the interest rates will go through the ceiling.

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The cuts coming down your way are going to be much, much more than you're getting now. You have to develop a change in attitude. As an old professor, I'm obviously lecturing, but this is a good audience.

I just want to tell you, please take this perspective with you. We are all convinced - you don't have to convince us - that there is great merit to education, great merit to research. We believe you. We need help on how we can get out of this trouble. We ask you, please, for understanding that when more cuts come it's not because we don't think your work or your incomes are important. It is simply that in this country we have gotten ourselves into a terrible mess.

The Chair: I would like to ask no more than three people to respond to this.

Mr. Fitzpatrick, you've been very good to me tonight. You have been so undemanding. Would you start off please, sir?

Mr. Fitzpatrick: You may be sorry.

I feel like an old professor talking to a slightly younger professor. We all know the shit's about to hit the fan. That's the bottom line. I think we're all concerned about the free fall and the long-term effects of the free fall.

There are a number of things I think people want to look at: tightening the myriad government programs currently available to the private sector; placing realistic limitations on the flow of capital; taxing cigarettes again; and reducing the number of MPs. God knows we've reduced the number of people out there working in every section of the private sector.

I'm a little concerned that every time I pick up a piece of paper the creation of wealth is sitting there. I read the national action plan for nutrition, which talked about feeding people in the inner city and creating wealth at the same time. I thought that was a poor linkage, to say the least.

I'm concerned about the training of qualified people. I know everyone's going to take a hit. I think the one thing my sector, the research people, would like to see is someone to actually sit down and look at what is the minimum capacity to keep this research engine going, which drives university, which drives everything else.

We read in the red book certain requirements. We read in many of the government reports a great deal of support for our position. I'm waiting for the S and T review. I hope it's going to have some advice for us in where we're going.

I'll tell you, if the S and T review does not clearly reflect what's gone on in the community, if it says nothing but an internal review of government spending in government labs, a lot of people, old and young professors, are going to be asking why the hell not.

The Chair: Thanks, Mr. Fitzpatrick.

Mr. Weiner, I'm going to pass you by. There are two other people who have had far less time than you have, if you don't mind. Thank you very much.

Mr. Deans and then Mr. Rothschild.

Mr. Deans: I have to begin by saying I'm very saddened by the tone of your address to us and its lecturing style. To begin with, you talk about people being overtaxed in this country. Comparatively speaking, I don't think we are overtaxed if you look internationally, if you look at European nations.

You talk about people you speak to when you knock at doors, that if they're taxed any more they're going to leave our country. Well, I can use my father as one example. Recently he paid taxes in terms of I think six digits. I believe he voted for your party, but I'm quite sure if taxes were raised he wouldn't pull up stakes and go somewhere else. He is very proud of Canada. He has a great belief in the benefits of this country. So for you to say that people will pull up stakes and leave this country if they have to pay a little bit more, well, I'm sorry, I don't know if I share that belief.

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I'm really at a loss as to where else to go just because of the nature of your words. You talk about the necessity to cut, cut, cut, and about how things are going to get worse. You talk about the necessity of us reading history. Well, if my memory in terms of the 1920s is correct, I seem to remember calls that we need to devalue our currency, we need to devalue our currency, we need to devalue our currency - and where did that lead to? Your calls for cut, cut, cut remind me very much of that same scenario. I suggest maybe you should read some history as well.

Mr. Grubel: Are you trained as a scientist?

Mr. Deans: No, I'm not trained as a scientist.

Mr. Grubel: What are you trained as?

Mr. Deans: What do you mean by ``What are you trained as?''

Mr. Grubel: Well, do you always use a sample of one to generalize from?

Mr. Deans: What do you mean ``one''?

Mr. Grubel: Well, you told me that just because your father wouldn't leave this would mean there isn't a tendency for rich people to leave Canada if we tax them any heavier. Is that the basis of your evidence or is it just a sort of religious belief you have?

Mr. Deans: I can't speak for.... If you want me to speak about generalizations and go into that, I do believe many people in this country have a strong belief in the goodness of this country. The fact that they would leave because they have to pay slightly more in taxes - I do have doubts as to the validity of that.

Mr. Grubel: You're entitled to your opinion.

Mr. Deans: I'll add one more person. I'll add myself. I've just recently graduated. I was lucky enough to find a job - very lucky. I thought I'd won a lottery. I think I got that job because of the wealth of volunteer experience I put in. I worked for nothing while also working as a part-time person. I paid my taxes. I never squawked or complained about the level of them. But the thing that made me think about leaving - I've had experience teaching in Africa for two years - was that if my unemployment insurance ran out and I had to turn to welfare, I was on the plane. I was taking my education, going to Africa and teaching there.

So it wasn't the level of taxation but the lack of jobs that made me think about leaving this country.

Mr. Grubel: All I can tell you is that I have heard a number of people who are representing organizations that, contrary to your own experience, are daily in the business of trying to hire highly skilled people to run their organizations. That's what I'm reporting to you, plus what I hear when I do my work as a politician in the riding.

You have your beliefs. I want to introduce this as an element of realism to you.

The Chair: Thanks, Mr. Deans.

Lastly, Mr. Rothschild.

Mr. Rothschild: I don't need to be convinced about the seriousness of the deficit and the debt problem. I'm alarmed by it as well - extremely alarmed by it. But why can't we play this music in stereo? The economic climate of this country is an issue of wealth generation and controlling our fiscal house. Both are important.

If it's appropriate, I'd like to put a question to Mr. Grubel. I do not understand his vision and his concept of wealth generation. Where is it going to come from? Where do you think it's going to come from - without inviting you to give us another professorial lecture - in 30 words or less?

Mr. Grubel: The point I would make, and which I get from speaking to audiences on that subject, is that we all have to share in overcoming this difficulty. We all have to take lower living standards. That's the only way we can overcome the mistakes of the past. That is what we're being asked.

I know a lot has been cut at the university I have been at. We were the only university in British Columbia that took a nominal symbolic cut in pay. But there are enormous rents, as economists call them, in many occupations. That is where I believe we all have to pull together and get out of this difficulty.

Mr. Rothschild: Mr. Grubel, I don't know what your training is, but you still can play only in mono.

Mr. Grubel: That's one of the risks one takes in life.

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None of us, I can tell you - none of us - want to cut anything. I tell you I did not join the Reform Party and become a politician because I feel mean and want to cut anybody or anything.

Mr. Rothschild: But you're a member of an important committee of the House. Don't you have any vision on how to generate wealth?

Mr. Grubel: Sir, if you ever wish, I can send you the articles I have studied on that subject. Human capital in today's world is probably constituting 60% to 70% of all the wealth of the nation, including tangible wealth. I'm fully aware of this. But there is also a lot of rent. We all have to accept a slightly lower living standard.

The research I know about on the economic benefits of pure research are suggesting any small country that is not primarily riding free is giving things to the rest of the world. Some of the countries that have no basic research, or very low basic research, have done extremely well. They have just taken the basic knowledge from the rest of the world and have put their money into applied research. This is clearly documented in the literature.

So we can talk about this.... Maybe we should have a beer together sometime.

Voices: Oh, oh.

The Chair: That's a good idea, but if we're going to achieve that we'll have to sum up.

I promised you when we started - and you'll all recall this - that you would have as much time as you needed to get all of your ideas on the table. I want to honour that promise now. If you haven't had a chance to put your views forward, you will have that opportunity.

After that's done - and I particularly look at people who haven't occupied a lot of our time tonight - I'll give you each 30 seconds to sum up. Before we go to the thirty-second sum-up, who would like some more time? Mr. Gauthier.

Mr. Gauthier: I would like just to bring to the attention of the members appendix 1 of our document. It is a copy of a letter sent by Astra Pharma. We intentionally tabled that letter to demonstrate that there is indeed a need for Canadian PhDs. These people are international investors. Actually, they cannot contain any more the research they want to do in Sweden. They are planning to invest outside, in other countries. Canada is very seriously considered on the basis that we have excellent research capacities and enough qualified scientists to support their five- to ten-year investment here. You have here reference to their strategic group and the recommendation they made.

So the first criterion is the access to highly qualified and sufficient numbers of graduates, PhDs, in respective disciplines. I would like to table that as evidence that indeed, if we want to remain globally competitive and have access to these new sources of income.... I'd like to be a little bit more cheerful here. There is a lot of potential, a lot of opportunity, here, but if governments don't make sure they sustain what I would say is the optimal level of research infrastructure we need to be competitive and to be in the race - and we are in the race for these people here - we won't have access to these global investments, if you wish. I believe they are the name of the game.

The Chair: Merci, Mr. Gauthier. Mr. Horan.

Mr. Horan: Health Canada put forth support for families of children who are at risk, who have learning disabilities, including attention problems. We've received our funding and we've done really good work in phase one and two. We've done it with volunteers. We don't have the funding for phase three, but you know something? It doesn't matter. I'm going to find the funds. I'm going to make it work. Why? Because the whole program is aimed at helping families provide positive early experiences for their pre-school and early-school children. That means expenditures way down the line may not have to be incurred if we can help some of those high-risk families who have very young children right now.

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As I said, the investment you've made into this project has already started to pay dividends. We have people out there in those small communities waiting to actually get their hands on the material so they can go home to make things happen.

Again, it's going to be very tough. We have tough decisions to make around this table, especially organizations like ourselves that are involved in literacy at the grassroots level. We have some really hard decisions to make.

We can't cut much more. There's no place to cut. All we have now is the goodwill of Canadians and the goodwill of people around this table whose associates actually help us.

There's only one thing you could do for us. If you asked me what you could do, I would say Canadians need an incentive to support charities. The charitable tax credits for donations to federal political parties yield a return of 33% to 75%, while charitable tax credits for donations to charities yield around 17%. For example, a $1,150 donation to a federal political party is going to result in a tax credit of around $500, while a $1,150 donation to charitable organization will result in a $195 tax credit.

Ladies and gentlemen, we are not funded by people who give $1,000 on the table. We are funded by people who put silver, $20 bills and $10 bills in the pot in communities, and when it all comes together it makes it work for our organization. Thank you.

The Chair: Thanks, Mr. Horan. Guy Caron.

Mr. Caron: After having a professor lecturing, I will be the student criticizing.

I don't want to elaborate too much, because our views are pretty much consistent with those of the Canadian Centre for Policy Alternatives, which we are working with. If its representatives haven't presented yet, they will be presenting soon, so I don't want to expand on it too much.

If I can answer part of what Mr. Rothschild was asking, there are two main points. First, there are ways to actually generate wealth. There are inequities in the fiscal system that have to be changed. It has to be modified and corrected. The first one I see is the deferred tax system.

Companies in the private sector in this country actually owe the federal government right now $40 billion in taxes. I fully understand that this money cannot be collected incidentally or anything, but if I as a citizen delay paying -

Mr. Grubel: We've heard this so often.

Mr. Caron: If, as a citizen of this country, I actually delay paying my taxes, there will be interest charged to me. If interest at the Bank of Canada rate was applied to these companies' deferred taxes, which they are not paying because of their capitalization needs, you could generate$3 billion more for the country.

We're talking about the economy as well, which you can now split in two. We have the real economy, which is currently pretty much stagnant with very little growth. You also have a financial economy, a speculative economy, which is growing incredibly quickly. You've seen the Dow Jones pass from 4,000 to 5,000 points in the span of five or six months, which has never been seen before. The TSE has also followed this trend, even if it was less radical than that. Presently what we have in that financial speculative economy is virtually untaxed. Nobody has touched that. Nobody has even considered that.

So there are ways to increase revenues and generate wealth. I'm not saying that will answer all the questions - I'm not an economist - but I'm saying that cutting expenses and looking at cutting something that should be considered as an investment would be a grave mistake.

The Chair: Thank you, Mr. Caron.

Does anybody else feel he or she hasn't had an opportunity to put his or her case fully forward? Thank you. In that case, perhaps we can start with a brief summary from you, Ms Pierce.

Ms Pierce: Thank you. What I'd like to reiterate is that school boards are also facing a lot of fiscal realities. We are making some very tough decisions in very innovative ways. I'm sure we'd be very pleased to provide the committee with some examples of innovative ways that might be used nationally and federally to look at reductions and cost savings.

The Chair: Thanks, Ms Pierce. Mr. Gaffield, please.

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Mr. Gaffield: I think one thing we've learned tonight is that we have to do a better job helping you keep in touch with innovation in higher education. I think we've learned that.

Second, I think we learned that we need to be able to give you better access to studies - on high school drop-outs, for instance, and other studies - touching on social and cultural issues.

Third, we could probably do a better job of getting you the information you need in terms of national comparisons. There's an enormous amount of this data, and we can help you get that.

I'd just like to close by asking the question, where is the science and technology policy?

The Chair: Thanks, Mr. Gaffield. Mr. Horan.

Mr. Horan: There's no question, the present government has made some very valuable investments in our organization. Those investments have paid, and will continue to pay, dividends.

I know times are going to be very tough for us all, but I just want to let you know that tomorrow the Learning Disabilities Association of Canada is going to be there with or without any funding from anybody. Five years from now I am going to come back. We still will be here. We'll be stronger. We'll have more chapters. More people across the country will be working as volunteers on our behalf. There's no question, manuals such as those we present on adult literacy.... We will be there in every community, from one coast to the other to the far north.

Thank you.

The Chair: Thanks, Mr. Horan. Know what? I believe you.

Mr. Dinsmore.

Mr. Dinsmore: I believe this evening has barely scratched the surface of the substance of what we're trying to say. I appreciate the committee's dilemmas. I said that in my brief. Some terrible things have to be done to put order in our fiscal house. But the fact remains, I believe there is the capacity within the education and intellectual resources of the country to solve the problem, if not instantly, then certainly in the near term. I don't think it should be deprived.

The Chair: Thanks, Mr. Dinsmore. Mr. Fitzpatrick.

Mr. Fitzpatrick: Organizations like the CBHR are volunteer organizations. We have to rely usually on government publications for support of any of our initiatives. Reading the government publications, the experts' opinions on things, we think the government should recommend, or this committee should highlight in its report, that science and education research are investments, not necessarily expenditures.

The problem is, we compete, dollar for dollar, with everything else. Some scream louder than others. We want you to read your own reports. We want you to read the science and technology report that's coming out. We want you to look at capacity and make a wise decision.

The Chair: Thanks, Dennis Fitzpatrick. Clément Gauthier.

Mr. Gauthier: Excellent science and excellent post-secondary education do not necessarily guarantee we will have in the future a more competitive economy and innovative industries. However, without science you can be sure there won't be new industry in this country; there won't be economic growth; and there won't be, I would say, good jobs for Canadians in the future.

The Chair: Merci, Monsieur Gauthier. Mr. Weiner, please.

Mr. Weiner: This country needs a coherent social policy, and I'd ask where it is. There are very few things Mr. Grubel and I would agree on. I do agree that we all have to bear a share of the pain, but I would plead that the children of this country be put first. I would plead for the 20% to 25% in this country who are living in dire circumstances. That's where the emphasis should be put.

We can be generating, and looking at ways of generating, more wealth, but we have to look closely at the revenue side. I still maintain that if the government does show leadership and does provide justification, the majority of Canadians, the middle class and the rich, indeed will pay a little bit more to ease the pain for those who are less fortunate.

That to me is the principal role of the federal government, to redistribute wealth in this country in a fair, equitable, and just manner. It is not being done at the moment. We can do better. We should do better.

The Chair: Thanks, Mr. Weiner. Mr. Rothschild.

Mr. Rothschild: We hope you don't walk away from this table thinking we've perpetuated the squeaky wheel syndrome. We're just here to remind you of both sides of the balance sheet equation. No country that is generating growth with jobs - the only statistic that matters at the end of the day - is avoiding that side of the equation.

Every group of Canadians that has studied this issue, from the old science councils, the economic councils, every NABST committee and subcommittee that looked at it with hundreds of members from all walks of life and from all political stripes, has supported the views you've heard around this table. It's an unusual and unprecedented consensus on these issues. We are not going to move ahead economically unless we listen to their advice as well.

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Mr. Deans: I agree completely with what Mr. Rothschild just said. I'd just like to talk about those buzzwords, ``being competitive in the global economy,'' and the need for us to do that.

I think there's an even greater need for us to be cooperative in the global economy. I urge this committee to put forth a renewed effort at speaking with other industrial countries so that some sort of agreement, in some sort of fashion, can be made to control speculative finance, to make the flows of finance much more predictable and stable within the global economy. That takes cooperation, not competition.

The Chair: Thanks, Mr. Deans. Mr. Caron.

[Translation]

Mr. Caron: I would like to thank you, as well as the members of the committee, for your invitation and for the patience you have shown towards us.

I do not wish to repeat what has already been said here, but I would ask the members of the committee who will be studying the country's financial situation to not limit themselves solely to what is going on in the United States, but to also look towards Europe, especially in the area of post-secondary education. I think that the point made by Mr. St. Denis is very pertinent. It is important to know what is going on elsewhere in the world.

Concerning access to post-secondary education - this is what interests us and our members - , I believe that Europe, and especially Ireland, have a lot to show Canada. Ireland is not a richer country than Canada, on the contrary, but last year, it decided to eliminate all tuition fees as of the year 1996-97. How is it the country came to that decision? That is what we are studying right now. I believe that there are useful examples to be found elsewhere than in the United States.

The Chairman: Thank you, Mr. Caron.

[English]

Mr. Savage: I have two points. I agree with what Mr Rothschild has said, so I won't repeat it.

Second, it seems to me that we should be thinking not only about how we can economize, but about how we can spend smarter. It seemed to me and to our members that the suggestions we made about redirecting EPF funds to student aid and research, even if they happen to be cut somewhat on the way, is spending smarter.

Mr. Bruneau: Mr. Chairman, it is clear we're at a time of great change. As has been explained, it is clear that we cannot enjoy our perceived quality of life, given the reduced resources.

The object of policy in the areas we have been discussing this evening should be to encourage alternatives and innovation and other transformations that, with the same money, deliver more results. Mr. Chairman, I think that applies in education. I believe it applies in research and development as well.

Thank you.

Ms Brown: I have two comments. I hope we - the committee and the group - haven't been talking at cross-purposes here, because I think we do recognize the nature of your problem.

I would reiterate what several people have said, we said in our original brief, and Mr. Martin has said: we believe the choice of the federal government is a two-track process. We have focused on the growth track, because we think that's the role of higher education and research. That's what we tried to do tonight. We're all a bit frustrated that at times there's a bit of a gulf there. The toughest job governments have is making long-term investments when your problems seems so short term. That's a tough problem.

We think the role of the federal government is to identify those longer-term investments that aren't going to yield immediately but will yield down the road to help us innovate, and to make those investments, despite pressures not to.

Ms Boyles: Solely from an association perspective, nothing in government spending is sacrosanct. It's all there to be looked at and reviewed in strategic ways. We support that.

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We believe that one thing the government could do most is to facilitate the strategic alliances between the partners - business, labour, educators, government - towards some of the messes such as the sector councils, some of the work on the evolution of national standards. Those things can help create wealth, can look at ways to make efficiencies and effectiveness work better in the country, and can leverage contributions, both cash and in kind, from all the other partners.

The Chair: Thanks, Ms Boyles. You've been very patient and we appreciate it very much.

I recall that when the community colleges were before us last year, one of the big debates was whether or not we had to have national standards in education. It seems to me, going back to last year's discussion with the educational groups and the educators, that this is less of a priority this year. Perhaps I have not interpreted the mood correctly, but it's more a question of whether the funds are going to be there to do the job, not so much that we have to have national standards.

If I recall, the representative from the community colleges said last year that it really isn't so much a question of national standards but international standards. This was reiterated by you, recognizing that we live in a global economy, recognizing that when it comes to education we probably have very high standards in Canada, comparatively. We're probably very fortunate and this is the reason we have such a high level of human capital. But in terms of research and development we're among the lowest of the industrialized countries - 1.49% of our gross domestic product. You have made a compelling case that we must link education directly to our economic future. You have made it eloquently. I believe that profoundly.

What also impresses me about what we have seen today is the linkages you have brought to us as a group. You have three or four industry groups here that are with you as educators, saying you've formed new partnerships and are forming new alliances to satisfy - probably more directly than we have in the past - the needs of the private sector for our future economy. It shows that you're working more closely together, educators and the private sector, to build those linkages, not working in isolation. We congratulate you on this.

You will recall that last year we concluded that our granting councils should not be cut at all. They received a very high priority. Perhaps as a result of that, they were cut less than a lot of other things; I don't know.

You have done a wonderful job today of reinforcing my view about the necessity for us not to cut down the tree just because we need the apples. Somebody said that it takes only the stroke of a pen to kill research, but it takes a generation to rebuild it. I think that same individual, Mr. Rothschild, also said that

[Translation]

when it is a strong economy, is there an alternative to education and research? I believe not. On behalf of all the members, thank you very much.

[English]

We adjourn until tomorrow at 9:30 a.m.