[Recorded by Electronic Apparatus]
Thursday, October 31, 1996
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[English]
The Chairman: Order. The finance committee of the House of Commons is pleased to have this round table this afternoon with representatives from various important sectors of our economy and society.
We're going to start off with three-minute presentations on what you would like to see us do in the next budget. We will then get into discussions and questions with members.
I want to make sure that every one of you has enough time after that to expand on your case, if you haven't had the opportunity to do so. Then you will each have 30 seconds to sum up at the end.
We're very pleased to have with us today, from the Canadian Federation of Students, Brad Lavigne, its national president. Perhaps you'd like to start the presentation, Mr. Lavigne.
Mr. Brad Lavigne (National Chairperson, Canadian Federation of Students): Good afternoon. I would like to thank the members of the House of Commons finance committee for inviting me here today.
For those unfamiliar with the Canadian Federation of Students, it is comprised of 400,000 college and university students at 60 colleges and universities across Canada. Today I will go into general comments about the state students find themselves in today. Then we're going to list some concrete proposals we would like this committee and the government to have a look at for the next budget.
It will come as no surprise to members of the committee that these are very difficult times for many post-secondary education students, with cuts in funding, increases in tuition fees, lack of summer employment, high unemployment rates among our members and other high school students this past summer, and increases in student debt.
Student debts in this country have risen dramatically in the last six years. Before 1990, students were graduating with an average debt of $16,000 with the first degree. After 1994, students have been graduating with debts in excess of $24,000. That's a significant increase for an education. I am here today to outline some reasonable and pragmatic plans for how to bring down those debt numbers as well as to provide some much-needed relief for students.
Before I get into those details, I'd like to reiterate the federation's support for the infrastructure for innovation program proposed by the Association of Universities and Colleges of Canada, the Canadian Association of University Teachers and the National Consortium of Scientific and Educational Societies.
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The basic outline of the proposal is quite simple. We recommend that part of the second Canada infrastructure works program be devoted to the modernization of Canadian universities' research infrastructure. Assuming the total budget for phase two of the infrastructure program will be $6 billion, we suggest that 20% of the funds be earmarked for investments in university infrastructure.
We think this proposal is consistent with the goal of making strategic investments in Canada's future, as outlined in the economic and fiscal update from October 9 by the Minister of Finance,Mr. Martin. While the authors of the proposal have not stressed its benefits as a job creation program, it is worth considering that based on an analysis of the current infrastructure program done by the federal government, the implementation of the infrastructure program would create approximately 20,000 jobs with the $1.2 billion earmarked for the infrastructure for innovation program. That relates to $60,000 per person for each year of employment. It will have a lasting effect on the economic growth and marketable skills of Canadians.
In comparison with the options that are available to the government, our call for an infrastructure for innovation program makes sense. The chief economist for the Royal Bank,Mr. John McCallum, using a standard econometric model and simulations of the effects of a$3 billion tax cut or an equivalent reduction of the unemployment insurance premiums paid by employees and employers, has shown that both of those options - the tax cuts and the reduction in EI premiums - would create fewer jobs than the infrastructure program. The $3 billion tax cut would create about 15,000 jobs, while the overall jobs created in the EI premium cut would be between 15,000 and 30,000, much less than the $1.2 billion and 20,000 jobs in our call for the infrastructure for innovation program.
The three granting councils - the Medical Research Council, the Social Sciences and Humanities Research Council, and the Natural Sciences and Engineering Research Council - would definitely have an important role to play within the infrastructure proposal if it were implemented. As it is, we think they should be spared from any further cuts, and we would like to see the House of Commons finance committee reiterate its support for the councils this year.
Now, as for our package for the coming budget, I would like to present three elements in our relief package. The first is updating the allowable deductions for grants and scholarships. The second is offering tax credits for mandatory ancillary fees and student union dues so that they receive the same treatment as tuition fees. The third is to create a new category of special opportunities grants for students with parental responsibilities.
Two of these measures are best described as tax expenditures. We have done our best to quantify the amount by which federal tax revenues would be reduced if they were implemented, but our estimates should be seen as educated guesses at this time. However, the chair of the higher education caucus of the Liberal Party, Mr. Peter Adams, has indicated his willingness to have the preliminary estimates evaluated by officials from the Department of Finance, which we plan to do in the very near future.
Let's take a look at the three independently. The first is the deductions for scholarships and grants. Currently the deduction has been on the books and has been -
The Chairman: I think we're familiar with this. Could you go right to the topic? You have given us your three points. If there's time you can come back to it, Brad.
Mr. Lavigne: I'll just review the forgone revenues, then. I'm sure they will be of great interest to the committee.
An hon. member: All in the name of tax simplification.
Mr. Lavigne: Yes.
The amounts for the scholarships and grants would increase from roughly $5,000 to $2,000 per individual. This measure would cost or forgo government revenues by $255 per student receiving a grant. The overall cost to the federal government would be approximately $30 million.
About the tax credits for ancillary fees and student union dues, at present students receive a tax credit of 17% for tuition fees.
The Chairman: How much would it cost us, Mr. Lavigne?
Mr. Lavigne: It would be $29 million.
I'll skip right to the special opportunities grants for students with parental responsibilities. If we follow the same model outlined in the current plan, if we offered the same amount of grants as currently for students with disabilities and women in non-traditional fields, the total would be roughly... I don't have it.
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An hon. member: It would be $87 million.
Mr. Lavigne: In total, the relief package is $85 million.
The Chairman: Thank you very much, Mr. Lavigne. This is very interesting.
Next, from the Association of Canadian Community Colleges, we have Mr. William Day.
Mr. William Day (Chair, Association of Canadian Community Colleges): Thank you,Mr. Chair. It's a privilege to be here. I represented the organization two years ago, and it's a pleasure to see many of the same faces around the table and doing well.
The Chairman: It's a pleasure to see you back, sir.
Mr. Day: Thank you, sir.
While I am representing an organization today that contains 175 colleges, CEGEPs and institutes of technology across the country, I am not here to speak on behalf of the needs of those institutions. It is our intent to very quickly describe needs that we see in the economy and needs of lifelong learners. There is no question in the mind of anybody around this table that the opportunity and necessity for lifelong learning is universal, so we take that as a given.
We wanted to specifically address skill shortages in critical industries, and to remind this committee that we are currently facing a shortage of skilled workers in a number of high-technology and new and knowledge-based economic sectors. Recently both the telecommunications industry and the software industry sectoral councils - both devised under the leadership of the federal government, of course - have publicly stated that they are facing a shortage of skilled workers. Paradoxically, we're all aware that Canada is suffering from a persistent unemployment problem, with figures fixed roughly at the 10% level.
Canadians, especially young Canadians, have consistently looked to the national government for guidance in career choices and career options. Human Resources Development Canada has played a significant, beneficial, and at times critical role in the area of career planning. The department's Job Futures publication is just one example of its involvement.
Given the employment situation facing young Canadians, and in our judgment the persistent difficulties in acquainting young Canadians with the tremendous opportunities currently available in these developing industries, we believe it is very important that the federal government provide an information campaign to young Canadians about these opportunities, with as much force as it can muster.
Furthermore, we want to point out that the Canada scholarships program in science and technology, previously run by Industry Canada, was a national program that did send out a very strong message to young Canadians. We regret that this program has fallen into abeyance. We recommend that the federal government implement a scholarship program aimed specifically at encouraging young Canadians to enrol in science, technology and engineering studies. We see this as including, but not being limited to, community colleges, CEGEPs and institutes of technology. Obviously this policy applies with equal force to the universities and to the research level as well.
We want to emphasize that we do not view ourselves as carrying a special plea for one type of institution. We believe we are talking in terms of economic development, the welfare of the country, and of course opportunities for young Canadians. We also believe that Human Resources Development Canada should undertake a focused campaign in support of this scholarship program.
The second and last major point I would like to make - which I hope my colleague, Robert Gillett, will be able to speak to - is that we wish to address the matter of federal student debt relief, which our colleagues from the Canadian Federation of Students have touched on with some emphasis.
I don't propose to repeat powerful and accurate statements about student debt load, but I think all of us are aware of the rapidly growing load for individual students. We do strongly endorse, in some fashion, the concept of a student debt relief plan based on post-graduate income. Our organization stands ready to work very hard with any agency designated by the federal government to investigate that idea. We believe we have information available from around the world from analogous institutions that have been working in this area. We would be happy to participate in this.
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Mr. Chair, I would like to remind the committee that our particular sector of the educational enterprise deals with a huge number of Canadians, all adult. We deal with approximately 500,000 full-time students per year - a very large proportion of the Canadian population - and 1.5 million part-time students per year - an even larger proportion of the Canadian population. In other words, our institutions see a cross-section of the working population of the country every year.
The people on whose behalf we are speaking are, in the best sense of the word, ordinary Canadians. They are not privileged people. They are ordinary people who are struggling to change their lives for the better. Our perception is that at this time, many of these people are having increasing difficulty in returning to learning, not because the facilities aren't there - they are there and they're working well - but because of a simple inability to finance their return. This includes working Canadians as well as non-working. Again, information in this area is at your disposal on request from our association.
Thank you very kindly.
The Chairman: Thank you very much, Mr. Day.
Perhaps we could turn now to Mr. Brown and Mr. Weiner, who are representing the Canadian Teachers' Federation.
Mr. Harvey Weiner (Deputy Secretary General, Canadian Teachers' Federation): Thank you, Chair. I will do the introduction on behalf of the federation, but first let me express personally to members of the committee our appreciation for the opportunity to present to this finance committee on what the upcoming budget should contain.
We have distributed some notes for members of the committee, but we want to make it clear at the outset that because of the short notice, we were not able to prepare the kind of detailed presentation and submission that we normally prepare for the Minister of Finance. We still intend to do so, and we will circulate copies of it to members of the committee as well. We would be very interested in knowing your deadline for reporting to the minister so that we can do this in a timely fashion.
The Chairman: If possible, we would like to have your submission within about ten days, at least in point form. And I give you notice that you'll be invited back here again next fall -
Mr. Weiner: Thank you very much.
The Chairman: - as will all of you.
Mr. Weiner: I think you will find, however, that despite the comments I have made, the major points are covered quite adequately in the notes.
Let me say at the outset that from the perspective of our federation, the needs of children should be the highest priority for the upcoming budget. By meeting the needs of Canadian children in this country more effectively, we will meet the needs of the educational community and help teachers do a more effective job of educating. We believe those needs can be met in a number of different ways.
In looking at the balance between federal spending and revenue measures, we believe there is something out of kilter. We have to look to a better balance, and focus as well on the unacceptably high rate of unemployment that is having a very serious impact on the children we teach.
We believe as well that there is a need and there are possibilities for tax reform that would be more progressive. We note that the reduction of the number of tax brackets from ten to three has not resulted in more progressivity, but rather in less. We also note that while most OECD countries increased their reliance on corporate income tax between 1965 and 1993, Canadian reliance has been cut almost in half, from 3.9% to 2%.
We believe the issue of the Canada health and social transfer is of paramount importance. In our own studies - and we would be prepared to provide you with details of them - we have seen results that indicate a worsening of the already severe problem of child poverty. This has been recognized as well, I think, by the Liberal policy convention in a motion passed this weekend on that issue, with a ``whereas'' indicating that Canadian children in poverty increased from 14.8% of the child population to 21.3% in 1993.
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As well, we believe that as a result of some of the cutbacks in federal funding, a number of very important programs have become more vulnerable to cutbacks. Provincially these programs have had a negative impact on children.
These, Mr. Chair, are a number of the points we would like to address. In the discussion of these issues, we would be prepared to put forward a number of ideas. We think a couple of very good ideas actually came out of the policy convention, and we hope they will be part of the government program leading up to the election and will in fact be implemented.
One idea is the notion of trying to design an integrated federal child tax benefit in collaboration with the provinces. This is an idea that has tremendous merit, and we would like to see it pursued to the greatest extent possible.
In closing, Mr. Chair, I would like to tip my hat at least once to the government for the recent commitment to provide a GST rebate to school boards on book purchases for students. We think it is a good first step. We believe that more can and should be done about the taxation of reading materials for students. Thank you.
The Chairman: Thank you very much, Mr. Weiner.
Next is Mr. Robert Gillett from the Algonquin College of Applied Arts and Technology.
Mr. Robert C. Gillett (President, Algonquin College of Applied Arts and Technology): Thank you, Mr. Chairman. I am also representing college presidents from across Ontario today.
The Chairman: Good.
Mr. Gillett: The comments we would like to make to this committee today, Mr. Chairman, focus on students and some of the needs we are seeing for our students.
Brad Lavigne covered some of the points, but we think the federal government should consider an income-contingent loan repayment scheme that definitely links the ability of the student to pay afterwards to the loan schedule designed for them.
We think there always will be a cost-sharing arrangement, with students bearing part of the costs, but as Brad has already touched on, students are leaving $20,000 to $30,000 in debt after a college education. Depending on whether they find work or their own personal situations, it's becoming increasingly hard for them to survive. You have heard from the ACCC on the federal student debt relief bill. We think that should be considered, and we are certainly prepared to work with the federal government in any way to assist in developing new options for students.
We also think, as Brad has mentioned, that student loan plans must look at the full cost to the student. Today, with information technology and the kind of costs students have to incur to have the technology to work at home and to do the programs being put forward, new considerations have to be brought into those equations.
We would also like to encourage the federal government to reconsider apprenticeship issues. There is a tremendous need for apprenticeship in the country today, and the decision by the federal government to get out of this field is most problematic. We see people in great need of that apprenticeship training, and the access is disappearing very quickly. We express our concern and we hope for some reconsideration of those issues in the future budget.
We would also like the government to foster training in any way possible. We realize many of these issues are provincial, but the need for training as a building block for our economic future couldn't be greater. As you know, colleges are now turning away more students than they are accepting because we don't have the capacity to deliver. We are looking at electronic ways of delivering to try to meet that capacity, but with the employer community looking at 17 years of education as a minimum for successful jobs today, we clearly have to find a better way to accommodate more people and make it as open a system as possible for success for our students...and I mean students of all ages.
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We have an older group of students coming to college. Our average this year at Algonquin is 25 years of age in the first year. Across the system I believe it's 27. The student coming from high school is no longer the norm. The majority are coming with family responsibilities and work responsibilities. We think this has to be taken into any economic scheme the government thinks about if it wishes to facilitate this building block.
We would ask the federal government to give this every consideration, because we think it will mean our economic health for the future to have these well-trained people ready to be part of the workforce of the future.
The Chairman: Thank you, Mr. Gillett.
We turn now to the Canadian Federation of University Women. I welcome Betty Bayless and Susan Russell.
Ms Betty Bayless (President, Canadian Federation of University Women): The Canadian Federation of University Women appreciates this opportunity to present its views at the pre-budget hearing. CFUW represents more than 10,000 women university graduates in 129 clubs across Canada.
Within the broad framework of the budget, we believe all allocations must be subject to careful gender impact analysis. Based on CFUW policy, and with particular reference to the well-being of women and girls, we have identified seven priority budget areas.
The Government of Canada has made commitments at the eight major United Nations world conferences since 1990. These include women's equality, the rights of the child, human rights, eradication of poverty, reproductive health education for all, action to safeguard the environment, and shelter strategies. We hope the government will allocate funds to implement those commitments.
We also ask that childcare and the alleviation of child poverty have a priority in this budget. As the lead group for the post-Beijing follow-up of the girl child in Canada, we urge the Government of Canada to collect disaggregated statistics on both girls and boys.
As the government implements the current round of pension reforms, it is essential to review the impact of each reform on women, who are 57% of the CPP beneficiaries. Women are the majority of non-standard and part-time workers, who also need access to pension plans.
CFUW's health agenda includes retaining health care standards, sustaining the Women's Health Bureau, funding the women's centres of excellence, gathering relevant health and social statistics, supporting the Women's Health Network, and continuing drug testing research for women. We ask the Government of Canada to include these considerations in its budget plans.
We believe the federal government must continue to monitor and even alleviate some of the impacts of transfer payments. The implementation of the CHSTs has negatively impacted post-secondary education in terms of higher tuition fees, reduced student services and programs, and fewer qualified faculty.
We are concerned that under the new Canadian student loan program, women need an average of four years longer than men to repay their loans because of their childcare responsibilities and lower-paying jobs.
I would like to digress at this point and compliment the government. At our prairie meeting in early October, Secretary of State Jon Gerrard announced matching funds of $1.25 million for five chairs for women in science and technology at universities across Canada. We really appreciate that.
We suggest that this government reinstate funding for the eradication of violence against women. This continues to be a serious issue for women and their children in Canada.
Finally, since women have not yet reached full equality in Canada, we support the continuation of a well-funded and viable status of women department that provides valuable community project support, internal policy development and independent research.
Thank you for your time.
The Chairman: Thank you. You've given us quite a shopping list there, Ms Bayless.
Ms Bayless: We have quite a shopping list indeed.
[Translation]
The Chairman: From the Canadian Academy of Engineering, Léopold Nadeau.
[English]
Mr. L.M. Nadeau (Executive Director and Secretary, Canadian Academy of Engineering): I appreciate the opportunity to appear before this committee.
We have already submitted a wide variety of recommendations concerning science and technology in Canada. Many of the recommendations I will summarize today coincide with recommendations of various groups, including the Standing Committee on Finance, with the NABST report and with the government's own Science and Technology for the New Century report.
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The Chairman: How about the red book?
Mr. Nadeau: With the recent improvement in the economic situation in Canada, it is now essential to deal with the serious unemployment problem that everybody knows exists throughout the country. We must recognize in Canada that to create jobs, wealth and prosperity it is essential that a series of actions be taken or reinforced.
The profession I represent here today fully agrees with the standing committee's previously expressed view that the promotion of education, research, innovation, science and technology, essential to building our economic future, must be a national priority. The recent adoption by the federal government of a renewed science and technology policy and strategy is a step in the right direction, but it must be followed without delay by several firm and practical decisions regarding immediate action. These reports are fine, but unless they lead to action they're a waste of time.
We believe the government must recognize that a major factor in job creation, for instance, is our ability to translate basic research into wealth-creating products and services. The government must take steps to achieve this goal. Government should foster the integration of the research activities of Canada's engineering faculties and schools with the country's industrial and economic interests. In most developed European countries the engineering profession is considered part of the economic side of operations in those countries; it is not so considered here in this country.
We feel the government should encourage and strengthen strategic collaborative research arrangements among government, university and industrial labs and promote cross-sectoral and multi-disciplinary partnerships. The government should provide NSERC with the funds necessary to successfully accomplish the goals and university/industry roles expressed in its latest strategic plan, particularly the financial assistance required by universities to undertake joint research with industry.
Government should enhance efforts to foster innovation in Canada. It should ensure stability and predictability in the government's research funding. It is very difficult for the research establishments, both in universities and elsewhere, to know where to go when they are not sure from year to year of the amount of money that might be made available to assist them. The government should develop in these fields an open client-server attitude in all its science and technology activity. It should promote technological entrepreneurship and facilitate for small businesses, particularly in the emerging high-tech companies, access to adequate capital. Finally, it should actively open government laboratories to industry and perhaps consider transferring fundamental research to universities to assist them in their role.
This is a brief summary of the views we've expressed many times to various government agencies. We'll be prepared to discuss this further if necessary.
The Chairman: Thank you very much, Mr. Nadeau.
Lastly, from the Learning Disabilities Association of Canada - no strangers to us - James Horan, president, and Chandra Hapuarachchi. Welcome.
[Translation]
Mr. James Horan (President, Learning Disabilities Association of Canada):Mr. Chairman, ladies and gentlemen, thank you very much for your invitation.
[English]
On behalf of the three million Canadians who have learning disabilities, I thank you for this opportunity.
The Learning Disabilities Association of Canada, much like other charities, is facing a financial crisis. Yes, some of it stems from government cutbacks, but we also recognize that all sectors, including charities, must reduce their dependence upon government funding. The difficulty comes in that there's an expectation that charities will fill the social program gaps left by the government. But that is unrealistic. Really, the challenge is to find a balance of healthy partnerships between charities and private and public sectors.
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In response to cutbacks, charities like ours have worked hard and will continue to work hard to try to diversify our funding base, to try to find new funding, to try to increase our private sector fund-raising efforts. The learning curve for us has been steep and our preliminary results are modest. It's our hope that this committee will encourage corporations to support charities.
In September of 1996, the Learning Disabilities Association of Canada presented a brief to this government on the tax disability credit. The brief called for the disability tax credit to recognize the expenses incurred by parents of children with learning disabilities and to recognize that these expenses really are legitimate. These are things like psycho-educational assessments, tutoring, assistive devices, having work taped from books onto tape so that young people can listen to the information, and all kinds of therapy services, whether speech or occupational. The list goes on, but we know parents do need that disability tax credit and we know their expenses are legitimate.
This fall our honorary solicitor presented a brief concerning the Young Offenders Act. It's the second example of how someone like us, a volunteer organization, can actually contribute to the present discussions. It's very extensive. Do you know that up to 75% of young offenders have learning disabilities? Now is the time to do something. We concur with this government's making the streets safer. That is important. But bringing down the crime rate has a lot to do with literacy, as much to do with literacy as with law.
We propose that all adolescents, if they need to be identified, be identified at the point of becoming at risk or at least during that first offence, and that we make meaningful programs available to youth at risk. There should be coordination of inter-agency treatments for some of our very high-risk young people.
I think Paul Martin put it well when he said, spend a little bit of money now or spend enormous amounts of money on bigger and better jails. We certainly agree with the minister.
We believe we have the ability to make some very important changes in this country. I want to talk about two examples.
Last year I came before this committee and talked about a guide we were considering putting together, a guide to understanding learning and behavioural problems in very young children, between the ages of four and seven. I talked about how we were going to do that. We were going to do it with partnership, and we've done that. The Bronfman family foundation, children's mental health, the youth unit of Health Canada and Imperial Oil all bought into it. It's been amazing. Parents have found it user-friendly, giving very simple answers to some of the questions they've always had. As one parent recently said to me, ``It lifted a weight off my shoulders because now I have some answers.''
Our second accomplishment, which is brand new and is bringing literacy within reach, is the ``Cue Cards for Learning''. This literacy project focuses on identifying and teaching adults with learning disabilities, and it was made possible by the National Literacy Secretariat. It recognizes that there are some very basic rights that individuals have: the opportunity to learn to read, write and compute.
We've been offering workshops to Correctional Service educators in the last few weeks and the response is overwhelming. In fact, it is so overwhelming that we now find ourselves with a brand new difficulty. How do you reprint the manuals when you lack the finances? We're also finding that if you go to some of the big urban centres and look in the streets where some of our literacy workers are working...you can use the manual and you'll see it.
I think sometimes we don't offer congratulations when congratulations are due. We would like to congratulate this government for its support of the disability task force because some - not all, but some - of those recommendations we do support. They include a Canadians with disabilities tax act that would ensure consistent action, coordination and accountability; accessibility to government information services; changes to the disability tax credit; designation of an existing minister or secretary of state as minister responsible for disability issues; and support for national organizations of people with disabilities from the Government of Canada, by providing core funding.
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In closing, I would like to acknowledge that a year ago the Learning Disabilities Association of Canada appeared before this committee to present the need for improvements in the area of charitable tax credits and personal donations. Now we'd like to simply thank this committee for having heard our views and for having ensured that positive changes are being implemented. Thank you very much.
The Chairman: It's a pleasure to see you again.
[Translation]
We may start with Mr. Dubé.
Mr. Dubé (Lévis): I would like, first of all, to ask you a very specific question. The representative of the Learning Disabilities Association of Canada just told us that they found it very difficult to reprint two or three manuals. Is it their intention to also publish a French version?
[English]
Mr. Horan: Yes. Of course, all of our documents at the national level are in both official languages. In fact, this one isn't ready yet because we want to ensure that the translation is correct.
[Translation]
Mr. Dubé: This is an issue that I find very interesting. I will direct a more general question to anyone who wishes to answer it. I was a member of the Standing Committee on Human Resources Development. Everyone knows that, a year ago, three different sectors, health, welfare and education, were combined in a single program under the Canadian Social Transfer. You certainly have a more definite opinion as to the behaviour of each province in that respect.
Without blaming them, as it is their right to distribute those funds between the various sectors as they see fit, we have witnessed a move toward more ambulatory care in Quebec and budget cuts in other provinces.
I think that education is the sector in which cuts have been felt the most - and I stand to be corrected. Unfortunately, it is not very good for the future of our young people. We might also mention the other assistance program for students, but I think the situation is clear. People think that student debt is heavy enough. In your view, have provinces reacted rather equally to the Canadian Social Transfer or have some of them made more cuts than others in the field of education? It is a good question, but quite a difficult one.
The Chairman: Who wants to answer this question?
[English]
Mr. Day: The question is diabolically difficult. I have had the pleasure, however, of being associated with people from a number of provinces. My perception is that the provincial governments in general have tended to view education at all levels as a continuing high priority. Certainly the rhetoric indicates it is a high priority.
My perspective as a working administrator is that while there have been reductions in all provinces at the margin, it does continue to be a very high priority, including in Quebec. The tactical response of provincial governments, however, has been almost unanimously to say publicly that they will not replace direct, federally funded programs.
In other words, we're all aware of the fact that there are block transfer payments to the provinces that the provinces distribute as they see fit. Historically, there have been very large amounts going to institutions in provinces or directly to students. Those funds are now being withdrawn. Our presentation to this committee really was talking about students who are affected by those withdrawals.
Generally speaking, Canadian provinces are not replacing those funds. For example, if apprenticeship moneys are withdrawn, the provinces are not automatically replacing those apprenticeship funds. I have personal experience in British Columbia and Saskatchewan, but my understanding from other colleagues is generally that this is the position of provinces. So when the federal government withdraws from directly funded programs, there is a direct follow-through in terms of reduced support for learners.
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I hope, Mr. Chair, that this has not been too lengthy. In defence I must say it was a very, very difficult question.
The Chairman: It was a diabolically difficult and long question.
Wilfred Brown.
Mr. Wilfred Brown (Director, Economic Services, Canadian Teachers' Federation): Thank you, Chairperson.
With respect to elementary and secondary education, between 1995-96 and 1996-97 there are budgeted cuts in provincial funding for elementary and secondary education of $928 million, or 3%. As you can expect, these vary widely by province, from slight increases in two or three provinces to a planned cut of 8.5% in Ontario.
As well, we have other evidence that the spending per pupil in schools has begun to decline in actual and real terms. Pupil-to-teacher ratios and class sizes have begun to increase as well in the last two or three years. The evidence for this comes from Statistics Canada data.
The Chairman: Mr. Weiner.
Mr. Weiner: To supplement, I think there was implicit in the question a request for our view - or hopefully more substantively, some evidence - as to whether in fact the cuts have been made on an equitable basis,
[Translation]
Is it the question you asked? Have provinces distributed those cuts on an equitable basis between education, social services and health?
Mr. Dubé: Yes.
Mr. Weiner: If it is the case,
[English]
we have some data here. The source is David Perry and Karin Treff, the Canadian Tax Journal, and I can cite volume 44, number 3, 1996, pages 760 to 778. The figure Dr. Brown gave you represents a 2.9% cut. In terms of the cuts for health and social services, which are not broken down, the percentage is 1.1%, or $677 million.
The figures Dr. Brown was citing for elementary and secondary education are, as he indicated, from the Statistics Canada education price index. We have those and they show a considerable decline, as he had mentioned previously. They are available, and we can certainly make them available to members of the committee.
The Chairman: Merci, monsieur Dubé.
Mr. Benoit.
Mr. Benoit (Vegreville): Thank you, Mr. Chairman.
My first question is for Mr. Day. You were talking about the types of people you have as students at your colleges across the country, almost two million students, full-time and part-time. You said it's made up of a cross-section of ordinary Canadians who are struggling to make their lives better. I would like to ask you how their struggle has changed over the last three years. Are things easier for students now than they were three years ago, or the same, or more difficult?
Mr. Day: I meant what I said when I referred to our constituency as being a true cross-section of the population. Perhaps operationally that is the difference between higher education as represented by universities and colleges, institutes and CEGEPs. That is not to suggest that university students are all upper-class, but there is a profound difference in the socio-economic mix of our mean student population. Therefore, the answer must be differentiated.
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You cannot generalize about our student body. It is possible, however, to say that the average student in a Canadian CEGEP, community college or institute is an adult. They tend to be in their mid-twenties, as my colleague pointed out. Most of them are married. Many of them are single parents.
We also have in our constituency a very high proportion of people who are in workforce transition. An increasing number are people who left high school at or before graduation, found work for several years, and as young adults are now beginning to understand better how the world works and the need to make major decisions quickly. These people tend to find themselves in programs ranging up to two years in length, perhaps three but more often two. Because of simple economic pressures, they cannot afford to go to school for four, five or six years. These people are tending to find a fiercer and fiercer environment within which to try to study full time. Of course, we all know part-time learning takes a very long time to complete and therefore has more emotional strain for young people. When I say young, at my age almost everybody is young.
The Chairman: Watch it.
Mr. Day: It's okay, Mr. Chair. You are too.
Seriously though, I would say that our type of student is finding it progressively more difficult to maintain a place in full-time programs extending past the one-year level. I know this can be backed up by attrition rates in programs, and also increasingly by those of us in have-not provinces. I'm not coming from Ontario or British Columbia; I'm talking about my personal experience in the last few months in Saskatchewan.
Entire groups of people are no longer appearing. They are there in the population, and our colleagues in the CEC tell us they are there, but they can no longer muster the resources to engage in programs. I work at the Wascana Institute in Regina. We are now finding that entire cohorts of students in the population, who need the programs we have, are no longer appearing. That's a result of support systems declining under them.
That's the best I can do, sir.
Mr. Benoit: To pursue that a little bit, as you know, in Paul Martin's budgets last year, over this present year and in the two upcoming years, there will be $6 billion to $7 billion in federal transfers for health, education and welfare... I'm sure you're feeling part of that in your area, which is partially federally funded. By contrast, in our Fresh Start platform, which we've just presented across the country and will continue to present, we're proposing putting $4 billion back in to help in education. I'd like you to comment on that.
That is one area; health and education actually are two areas in which Reform has said from the start that spending should not be cut. Our zero-in-three plan, which we campaigned on very honestly and openly in 1993 - a sound plan - had no cuts whatsoever to health and education.
By the way, had that plan been put in place, today we'd be sitting around this table talking about what we'd do with the surplus, whether we would lower taxes, increase spending in certain key areas, or reduce the debt, or probably what combination of the three. That is what we're proposing in our new plan as well, but it's much more difficult now. I would like you to comment on what effect this might have on the students attending your institutions.
The Chairman: Who would like to answer? Mr. Day?
Mr. Day: Mr. Chair, is there some reason the diabolical questions are all coming to me?
Mr. Benoit: That one can be directed at anybody who would like to respond.
Mr. Day: That was just a good-natured response, Mr. Chair. It's a privilege to try to address those.
I will come at the question sideways. In my opinion, it's important to remember that to somebody who is relatively young and struggling to find a place in a very turbulent economy in which traditional jobs are literally vanishing before our eyes, the opportunity to take training and education is literally the only way out. There are no alternatives for people trapped in a situation in which their old job has vanished.
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I'm trying to pick my words carefully so tat I'm not perceived as arguing on behalf of institutions. As I've already said, the institutions are there. They will not go away. The issue is access to those programs, and my colleague from Ontario has described that too. We're witnessing increasing numbers of people who simply cannot access the only mechanism society holds open to them to change their lives.
Any action by government that will assist students to get into training programs I would view as a positive, beneficial move, both for the economy - because people are our only resource - and for the individuals, because an increasing number of people who cannot break into the economy pose a dangerously increasing level of social instability. Imagine how those of us around this table would feel after two years of being without a job. What happens to your value system? What happens to your attitudes? What happens even to your own morality of what's right and wrong? That's what we're dealing with at the front line in training institutions.
The Chairman: Thank you very much, Mr. Day and Mr. Benoit.
Ms Whelan, please.
Ms Whelan (Essex - Windsor): A couple of our presenters talked about the level of student debt on completion of post-secondary education. I believe it was Mr. Day who made the comment that he would endorse, or suggest, different scenarios around the world. I wonder if he could outline a couple of those for the committee.
Mr. Day: Within our framework of government and background, I think the most appropriate models to look at are those in Australia and New Zealand, which probably most people around this table are at least generally aware of as currently being conceptual leaders in re-engineering education.
New Zealand, which of course is a small and highly integrated country, has probably moved further than any other country with our style of mixed education opportunities. The response there has been that it has been extremely difficult to implement this type of program. Currently in New Zealand, the original high hopes for equity have been difficult to realize, because to track individuals and their incomes and fine-tune a payback schedule based on that is a very costly enterprise. However, the rewards have been sufficient to keep them in the game. The governments have not withdrawn from the income-contingent repayment model. They are still struggling to find the right way to do it.
I would suggest that those are therefore the places we should look at most closely if we are inventing our own system.
Ms Whelan: My understanding of the way the New Zealand system works is that a certain percentage of debt is added to your income and you pay tax on it and that's how the debt is erased. Is that correct?
Mr. Day: Relatively speaking, yes.
Ms Whelan: Does Australia operate the same way?
Mr. Day: No. It varies state by state.
Ms Whelan: Is there a major difference in Australia?
Mr. Day: I'm afraid I can't generalize about Australia. In its own way Australia is as varied as Canada in the application of these models.
Ms Whelan: I have one other brief question on apprenticeship training. As we all know, the federal government's role is not to interfere in a strictly provincial jurisdiction, but I've had it put to me a number of times that there is a possibility to do training through our military, which is a federal body. I wonder if Mr. Gillett would like to comment on that.
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Mr. Gillett: We saw the federal government playing a key role in apprenticeship. In Ontario alone, since 1988, you've taken $174 million out of apprenticeship. You're now down to funding only $38 million of apprenticeship training, and our understanding is that by 1998 you will be out of it entirely.
We do not think that's progressive. It's going in the wrong direction. A significant number of individuals are now left with no opportunity to pursue apprenticeship opportunities.
I think Mr. Dubé's question was true. When you got out of it, nobody else picked it up. It is just being dropped as an opportunity for education for a group that desperately needs it.
So I think it is a very real issue, and I hope the federal government will reconsider its strategy. I don't think it's a direction that's going to be economically sound in the long term. We definitely need apprentices in Canada. Certainly every predictor for Canadian global growth is for highly skilled growth. We need highly skilled individuals and people who can produce products, and apprenticeship did that.
The Chairman: Ms Brushett.
Mrs. Brushett (Cumberland - Colchester): Mr. Nadeau, you have suggested that perhaps basic scientific research should leave the government laboratories and go to universities only. Should basic science research move to the universities entirely?
Mr. Nadeau: Not entirely, but some of the basic research being done in government could well be done in universities. That would assist universities in training people for the future more adequately. This is one of the recommendations the engineering profession has made to government repeatedly: that some of these operations of government laboratories could well be transferred to universities.
Does that answer your question?
Mrs. Brushett: Yes, it does. Because I'm working on some of those areas on task forces, I appreciate the comment.
I have another follow-up about the Canada scholars type of assistance you wanted for engineering science students. Is that the model you're looking at, the old Canada scholarships program, or something a little different?
Mr. Day: From the perspective of tertiary education - that is, institutes of technology, colleges, CEGEPs - the science and technology scholarships were very successful - very successful - in doing two things. One is that they heightened in the colleges, the institutes, and the secondary schools the value the larger society places on this kind of education and training. This therefore encouraged people, especially young women, I might add, to consider seriously things they would otherwise never have done, because it's a signal from society at large that this is not only appropriate, it's desired. Most people respond to expectation, so the reduction and elimination of that type of expression of social support have an immediate effect on enrolment patterns.
The second, again from our perspective, is that the power of the program was that for the first time it offered opportunities to people who were training in technologies, not simply moving on to that enormously valuable area of higher research, which obviously must be supported. It opened up new avenues, new expectations, in bright young people to think of technological, applied science applications, which normally in Canadian society, as I think we're all aware, have historically been an undervalued or downplayed aspect of training. Remember, this country was built on the backs of people who were trained elsewhere. They were not trained in Canada. We are still struggling to shift these social attitudes.
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Our perspective, then, is that the scholarships do open real opportunities for real people who otherwise couldn't participate. Perhaps more powerfully, they assign a social value to that kind of training and education. We all know that we still suffer from a lack of that kind of training.
I hope this has answered your question.
Mrs. Brushett: I agree 100%. Thank you very much.
The Chairman: Mr. Horan, do you have something to add to this?
Mr. Horan: Thank you, sir. When someone who is learning disabled goes to university, they've beaten the odds by actually getting into the institution. All kinds of young people from across the country who are learning disabled and who are in a university or college setting work really hard sometimes because they see things backwards or they don't compute things in the same way you and I would.
It takes such a long time to do things that they therefore need some specialized services. Sometimes it's tutoring. Sometimes it's an assistive device. Our young people are finding that those services are starting to be cut back in some settings, through no fault of the universities or colleges. Some of our young people are saying that they're holding down a second job or that their mothers or fathers are now really involved because they're carrying not only the cost of their tuition and books, but the cost of tutoring and the assistive devices. And the list goes on and on.
We see that some of those young people who desperately want to make it to the end and convocate, and have the ability to do so, are slipping away because the type of service and the extent of service they need isn't there. We have to somehow find a balance to meet some of those needs.
Mrs. Brushett: Thank you very much. I appreciate those comments. I've seen a lot of it too. The young women who come into science and engineering have benefited immensely - they're people who would never have entered those fields - and it has put a higher value on that sector of society, which is part of the focus of our future.
The Chairman: Thank you, Ms Brushett. Mr. St. Denis, please.
Mr. St. Denis (Algoma): Thank you, Mr. Chairman, and thank you all for being here today. As always, these are stimulating discussions.
I would like to focus my question on a point raised in Mr. Weiner's and Mr. Brown's statement on page 3. It has to do with the issue of national standards and the possible impact of the CHST. It's suggested here that it's negative.
By way of preamble, a comment was made at a previous round table on the question of R and D in Canada and connectivity among the private sector, the government R and D labs, academia and all sectors involved with R and D. It occurs to me that in the area of education we generally don't have connectivity between the future workplace and the student today, and between R and D and what's happening in the industrial world, and so on.
You suggested here, Mr. Weiner, that the CHST puts pressure on national standards. In fact, right now the federal government passes money on to the provinces in a larger envelope for post-secondary education funding, and we've established a cash floor for that. Even though the federal cuts to the provinces were 4% - while taking a 7% hit ourselves - we don't acknowledge generally that there are no national standards in education.
Is there a place for the federal government, maybe in relation to this connectivity, to create standards from coast to coast that will get everybody working together so that we can not only achieve fiscal targets federally and provincially, but so that we can all do a better job in ultimately delivering an educated and happy student to the workplace in the passage of time?
Mr. Weiner: You raise a very good point, but all of us around the table - and I think you mentioned it in your preliminary remarks - are aware of the jurisdictional issues and the sensitivity. When I talk about elementary and secondary education to federal politicians, sometimes ears close because the initial reaction is that they really have nothing to do with that. They deal with post-secondary education.
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But the connectivity, as you say, is there, and it is there even in terms of the funding or lack of funding provided by the federal government to the provinces. Even though, as we know, some of the funding is targeted for post-secondary or for health or for social services, provinces trying to balance or juggle this will inevitably look at our sector, as they do at others.
I would not want to let your comment about the lack of connectivity... I think a lot of terrific initiatives have been taken to try to bridge some of the gaps that have traditionally existed, despite some of these factors. More can be done. It would seem to me that in the world in which we're living today, and in the country in which we're living today, everyone agrees that education and training are a key or top priority.
So surely we can do better and do more, in the case of the federal government, in working together with the provinces to come up with ways to collaborate to ensure that these various transitions between different types of lifelong learning or education are handled in a more effective way. That's certainly a personal dream and objective I have. I know it's very dear to hearts within our own federation.
Our federation - and I'm very frank about it - suffers very much at times from the same problems the federal government does in trying to deal with the provinces. But it seems to me we have to do more to try to overcome those aspects.
As we've indicated in our paper, the absence of standards, guidelines and ways in which to bridge these particular issues is of concern. It is becoming of more serious concern as funds dry up and decisions being made create greater inequities for a lot of the children we're trying to educate.
The Chairman: Mr. Day.
Mr. Day: Perhaps I could add a grace note to Mr. Weiner's comments relating strictly to the tertiary level of education, the kinds of institutions we've been referring to.
I think there is a slightly different pattern there. First of all, the CMEC, as a backdrop, is in my judgment an increasingly effective informal mechanism for developing necessary consistency to cross-systems. The CMEC is now sponsoring annual and biannual meetings of people from across the country.
However, we are feeling in colleges and institutes a very benign and positive force in the direction of consistency of standards from two points. One is the international standards movement, which is affecting all of us. It doesn't matter what province we're in; we're all familiar with ISO. These movements are pushing us gently but irresistibly into an international marketplace with consistent standards.
Also, sectoral councils, which were an invention of the federal government, are proving to be increasingly powerful and benign in moving us all gently towards standards right across the country. The impact of sectoral councils' work on curriculum development with us across the country, in both languages, is working to provide consistency across the board. It's not everywhere, but it is developing very powerfully in five sectoral councils at this time. In my judgment, within ten years the other twenty-odd will also be in that position.
The withdrawal of the federal government from apprenticeship is the one black spot, from my perspective, on this scene, as my colleague from Ontario has already pointed out. The clear withdrawal of the federal government, in many people's opinion, could be the death knell of the so-called red seal program, which does provide for national standards in trades training. Increasingly, as provinces are sucked into running their own apprenticeship programs, there will be tendencies for the provinces to drift apart. This would be sad, but it would be consistent with increasing issues of barriers to labour force movement across provincial boundaries. I think that's felt most keenly in Ontario and Quebec because of the existence of provincial boundaries across which people move in large numbers.
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To the degree that provinces run their own apprenticeship programs, I think increasingly protectionist values will start to show up in who actually gets trades work. That might be worth mulling over when we think of the long-term effects of withdrawal from apprenticeship.
Mr. Lavigne: Another area I think this committee and the federal government should be concerned about in national standards is the field of student aid. As provincial resources are drying up and there's less and less money from the provinces, we're beginning to see walls being erected in student aid. As we all know, it is crucial to foster an environment of mobility so students from a principal residence can study in another province and get the type of education they desire outside their home province.
We need a commitment from the federal government that it will maintain a strong and influential role within student aid in addition to all the academic and curricular matters that have already been mentioned. We must keep mobility, and in order to do that we must keep a federal presence in student assistance.
Mr. Gillett: Now, with the World Wide Web and electronic delivery of courses, world standards are becoming critical. We are going to have to settle that question very quickly, because you no longer have an audience that's local or national; it's international. They're all judging accreditation standards by what they get, and Canada is being judged the same as every other country on the Web.
The Chairman: Mr. St. Denis, that was an excellent question.
Mr. Grubel, please.
Mr. Grubel (Capilano - Howe Sound): I'd like to ask something about the apprenticeship program. In the olden days before big government, and I know in Europe now, two types of skills were provided and added to human capital in two distinct ways. One was knowledge, human capital, which is perfectly portable. For example, if you've been trained as a plumber you're a plumber. In the olden days and in Europe, it used to be that you hired yourself out as an apprentice to a plumber and you would be paid practically nothing. In the Middle Ages, in fact, these kinds of people paid their masters to learn something. In essence they paid for their own human capital formation.
I went through this in a German managerial program. I was paid practically nothing for two years. But I thought I was getting a great bargain because after all, when I was through I could easily recoup the cost of not having earned anything during those two years. Also as an assistant professor at a university...they were paying very little and I was going through that same apprenticeship later on.
Then there is the other side: if the skill that is acquired can be used only in the firm in which it can be used, then typically the employer pays for it by essentially paying people at a high level even though they are not as productive yet because they're still learning. The reason is that once a person leaves that company the skill learned is not worth anything. Therefore that's the way it's done.
Have we totally abandoned this model of human capital formation through apprenticeships in Canada? Where does the great need for federal funds come in if we do it in the way I've just indicated?
Mr. Gillett: I don't think it has been totally abandoned, but I don't think many workers today want to go back to that original model of being almost serfs and slaves to companies.
I'll take your German example. I think you are also aware that in the European model companies must put apprenticeship positions out. It's part of the funding program. They're penalized fairly heavily in the tax situation if they don't work with the government to make apprenticeship positions available for training in the companies. We don't have the same system in Canada.
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The debate right now seems to be about how much the individual should pay, how much the government should pay, and how much the employer should pay. It's the question of sharing those costs that seems to be the debate. The trouble is that until this is resolved, if the federal government continues to withdraw, there is very little opportunity to allow the debate to come to a realization and set up a scheme that works for all.
Mr. Grubel: That's a slightly different story from the one you told us.
Mr. Gillett: I don't think so.
Mr. Grubel: Let me explain the sense in which I interpret it. You said these programs are collapsing, that people are not going out there any more. I suggest that if they really want to get themselves a high income for the rest of their lives, they should make a little sacrifice during the period. Now, I don't blame them and I don't blame you for asking for more from somebody when presumably you're getting it for free. You're free to ask for this here, but is it really fair that the rest of us be required to pay through our taxes for someone who will then be a plumber making very high wages? You probably have called a plumber recently. Why should we be paying for him when in the past, it worked perfectly well when the individual made the sacrifices when young in expectation of recovering those benefits later on?
Mr. Gillett: First of all, I think the range of salaries in apprenticeship positions is significant. Many come out with not a very high level of salary. They do contribute to their own cost of education in many ways. It is not a totally funded situation for the person while learning.
I understand your comment, but it was never intended to say that the person rides free on the federal government for an extended period of time and has no obligation. Right now, though, there is no alternative to the present system. Right now the training is disappearing.
Mr. Grubel: That I really don't understand. If we ran out of plumbers, electricians, painters and all those kinds of things tomorrow, the wages would go up. People would be flocking into the program unsubsidized by the federal government, and they would be working for two years as an apprentice in expectation of those wonderfully high wages.
What we have here is a deliberate system - and I don't blame you for being a part of this system - that says there is a big uncle out there who could be counted upon, but he's now nastily cutting back and this system will come to an end.
I just find that it is self-interest pleading. I cannot see that it is in the interest of society that we as general taxpayers... Some of the money that goes to the rich plumber, to the rich carpenter, to the rich people who are getting these kinds of apprenticeship programs, may be coming from very poor people. Where is the equity? The money is not being printed in Ottawa. It has to be taken away from somebody else. Is that really fair? Maybe it's a good thing the government doesn't have that money to finance those kinds of apprenticeship programs.
I'll give you something to think about. I would like to ask a question of Mr. Weiner. Please,Mr. Weiner, would you describe to me how you and your federation would make the income tax more progressive in today's world? We now have a top marginal tax rate of 55% in Ontario. Where would you like to take it?
Mr. Weiner: When we look at the tax system as it exists today, both the income tax system and the system used to tax corporations, we see - and I think anyone who has eyes can see this as well - that the disparities between the rich and poor have increased, and the burden falls increasingly on those with less means than on those with more. I think all of us around the table remember a day when there were ten tax brackets rather than three.
Mr. Grubel: Is that what you're proposing?
Mr. Weiner: We are not necessarily suggesting that it be ten, that it be nine, or whatever.
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Mr. Grubel: What would be the top bracket?
Mr. Weiner: We are suggesting there is much that can be improved within our tax system to make it fairer, and we're not the only ones suggesting this. I think it was also recognized and supported unanimously, as I recall, at the recent Liberal policy convention. The delegates, as a priority resolution -
The Chairman: Unfortunately, that convention had no jurisdiction over Mr. Grubel.
Mr. Weiner: Yes, I understand that.
Mr. Grubel: Mr. Weiner, why don't you answer my question?
Mr. Weiner: What I am suggesting to you, Mr. Grubel, and we believe this, although you may not, is that the current tax system is not fair and equitable.
Mr. Grubel: Okay, what are you proposing?
Mr. Weiner: In terms of income tax, we believe it can be made fairer so that the burden falls more equitably on people with less means rather than more. We also believe that corporations, through a minimum tax or minimum taxes, can in fact pay a greater share than they currently pay.
Mr. Grubel: Fine, thank you. You answered my question.
Mr. Weiner: The details we can negotiate.
Mr. Grubel: Yes. Well, listen to me. You are here in front of national television and you are saying that this is an unfair country we are living in, that we need more progression in income tax. This is a very grave thing you are saying because we have had people sitting here saying this high marginal tax rate - the progressivity that we have here right now - is killing our high-tech industries.
I would like you to tell me this: it's at 55%, but do you think it should go to 65%, 75%? Should it go to 95%, which it was once in the post-war years? You've thought about this. You're a very thoughtful man representing a very important organization that thinks about these things carefully before going out and making statements that this country needs a more progressive income tax. That's what you said. What do you have in mind?
Mr. Weiner: Mr. Grubel, I don't know that I can say more than I have already said. I am not going to tell you that 55% should be 52% or 80% or 90%. Working together as Canadians in this country, I think we can come up with a system that is fairer than the one we currently have. When we have the percentage of families that are living in poverty in this country, the percentage of unemployment that we have in this country, and the burden that these people bear in contrast to that of others - who are perhaps taxed heavily, but who are nevertheless in circumstances where they live well, eat well, are well educated, and have the means to enjoy a lot of the luxuries of life - then it seems to me we have a very serious problem in this country.
Mr. Grubel: Mr. Weiner, would you just listen? May I say to you that people who make $50,000 a year have more income than 90% of all Canadians. Is it okay to say that? You belong to the top 10%. All of your teachers in the senior ages are included in that top 10%. Do you know what percentage of all personal income taxes are paid by that 10%? Take a guess.
Mr. Weiner: We recognize that it is the highest bulk of -
Mr. Grubel: We pay 50% of all the personal income tax, yet you now come to this committee and say it should be made more progressive. By definition that means the top 10% must not just pay 50%... Tell me, how much of all of the income taxes collected should they pay? You're a thoughtful man. You're not just an ideologue, are you?
Mr. Weiner: Mr. Grubel, I've given you a general response. I'll ask Dr. Brown to add to the response. In this debate I'm not going to start putting specific percentages on what each individual in this country should pay. I have indicated, I think, a problem - a problem not just for the organization I represent but also for many Canadians and political parties in this country that have the social conscience and interest in ensuring that every Canadian has the opportunity to enjoy not only a decent standard of living but also some of the benefits of life we all would like to have.
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Mr. Grubel: Educated people like you and me, in positions of responsibility, on these important issues have to go beyond rhetoric. I have also asked members of the NDP these questions. It is not good enough for the people of Canada to just hear that it is unfair and it must be solved somehow. You, as a highly educated person who has come here explicitly to make this statement, are in a position to give some idea of what you think. Should it be 50% that the top 10% pay, or 80%, or what? What do you have in mind? How progressive should it be?
Mr. Brown: Mr. Chairperson, we don't have any specific formula for how progressive it should be. Our concern is that the tax reforms of 1988, coupled with the decreasing importance of the corporate income tax, have over time reduced the overall progressivity of the tax system in Canada.
I'll read a quote from a study of tax incidence by W. Irwin Gillespie: ``This changing pattern of corporate tax incidence contradicts the claims by many owners of capital that their tax burden has increased.''
Mr. Grubel: Who are the owners of capital in Canada? Really, 70% is owned by the pension funds of workers. They are the ones getting benefits, if there are any, under taxation. Do you know that? Are you aware of that?
Mr. Chairman, I think I have made my point to reveal to people who listen casually to this kind of program that the left, who come here and spout these ideological positions, really have no idea about reality.
The Chairman: Mr. Weiner, do you wish to respond?
Mr. Weiner: I'll conclude by saying we are having a dialogue of the deaf. You believe you've made your point, and we believe we've made our point. We believe the majority of Canadians would agree with the thrust of our remarks, which is that this current system is by no means perfect and can be improved to provide more of the benefits of life in Canadian society to those who are less fortunate than the people seated around this table.
The Chairman: Susan Russell.
Ms Susan Russell (National Committee Member, Canadian Federation of University Women): On behalf of the Canadian Federation of University Women, I would like to endorse what my colleagues have said. I would also like to remind Mr. Grubel that Canada ranks second to last among developed countries for its treatment of children in poverty. We have 1.6 million children living in poor families. That is a national disgrace. Until the tax system is readjusted to put those children into some degree of comfort - we're not asking for a lot - I really think we have a problem in this country.
Mr. Grubel: Madam, I must say to you that the measure of poverty you are using is not one I am prepared to accept except on a rhetorical basis. Remember, this is approximately the bottom 20% of income distribution. These people are relatively poor. They do not live in poverty. If tomorrow the income in Canada tripled, these children, by the definition you are using to get 1.6 million, would still live in poverty. That is not what the majority of Canadians believe poverty means if tomorrow we doubled or tripled the income of everyone in Canada. This is a relative income measure.
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Maybe it should be more equal. I'm listening for proposals on how it could be done so that I can respond with the flip side of those arguments - such as that all the high-tech executives and engineers will leave - so we can discuss this rationally. But I don't hear it. Let's have more equality if possible, but with limits on the cost.
I do not accept the number that 1.6 million children live in poverty.
Ms Russell: I believe those are fairly reliable statistics that have been accepted. The national poverty association has put them forward.
Mr. Grubel: Of course.
Ms Russell: Mr. Grubel, I have travelled around the world. I have lived in other countries. Believe me, there are Canadian children who are suffering from undernourishment, malnutrition and abuse, and it is a national disgrace. I rest my case.
Mr. Grubel: But not 1.6 million. There is a small number.
It is a terrible thing that this is happening in this rich country, but you are not doing your cause any good by defining and obfuscating the concept of poverty. The concept of poverty that the poverty institute uses is based on Statistics Canada numbers. Each time they are released Statistics Canada says this does not measure poverty; this measures the percentage of people who live in the bottom quintile of income distribution. You are not doing yourself a service by so radically overstating the problem.
We should take care, very good care, of those you have found, and let us look for systems to do that. But let us not say that one-fifth of all children in Canada are living in poverty.
Mr. Day: Mr. Chair, I'd like to respond very briefly to some of the questions Mr. Grubel asked on apprenticeship. I'm moving from the sublime to perhaps the humble.
Mr. Grubel, I'd like to respond directly to some of your comments. You implied, or at least I inferred from your comments, that there were good old days in Canada when apprentices worked for very small amounts of money at a very young age and were thankful for it. Your description is largely correct as far as western Europe is concerned. The model you're describing is the so-called German model, which of course is German, Scandinavian, Austrian.
That has never existed in Canada, sir. In this country there has never been an apprenticeship system with the characteristics you describe. For apprentices in Canada the mean age right now is 24 or 25 years of age, and in many cases they are as old as 40 and 45. I will not go into the anatomy of why that is the case. I'm simply describing it.
Mr. Grubel: Thank you. I was asking for that information.
Mr. Day: That is the situation. Apprentices in Canada are adults. They are very often in workforce transition from very bad jobs into marginally better jobs. They normally are carrying family responsibilities. So it is a very different environment. That is what we're addressing in terms of federal support.
The Chairman: Mr. Weiner, you wanted to respond.
Mr. Weiner: Just briefly, because obviously we're coming at this issue of poverty from two perspectives.
I'm a person with an open mind and I'm always looking to learn and so on. I would suggest that if Mr. Grubel's thesis is in fact a better or more accurate thesis, this should be announced to the Canadian public.
Mr. Grubel: It has been.
Mr. Weiner: I'm sure it would bring a lot of joy and comfort to many people who believe they are living in poverty and have the kinds of problems that have been described to find out that this is really not the case and they are enjoying an adequate and good standard of life.
Mr. Grubel: That's very cheap rhetoric. We're talking about whether there are 1.6 million or 150,000, and we're asking whether or not government policy should be aimed and directed at1.6 million, by definition always in the bottom quintile, or concentrated on those who really need it. Society is overwhelmed by the figure of 1.6 million.
The Chairman: Mr. Benoit, did you want one last question?
Mr. Benoit: Yes, I have a very pointed question for Mr. Weiner.
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You're here on behalf of the Canadian Teachers' Federation. What percentage of the teachers that you represent support this movement towards a more progressive tax system, this increase in taxation and payroll deductions, when many - in fact, most - already pay 50% of their wages in taxes and payroll deductions?
Mr. Weiner: The policies we've enunciated in this presentation are supported by our teacher federations. They have been thoroughly discussed.
Teachers, I'm proud to say, are professionals with a very strong social conscience. In their classrooms they see the effects of poverty on children every day. They see children who come to school hungry, undernourished, abused, etc., all conditions that are related to impoverishment. They are very supportive of the notion of re-examining and rethinking the tax system and trying to come up with one that will share the burden in a more equitable fashion for the benefit of those families and those children living in those circumstances.
I'm very proud to be here today to say that. This is not a position that is held by one or two persons or by an executive committee. These are positions endorsed by each of our member organizations after good, solid, meaningful discussion with the teachers they represent.
The Chairman: Thank you, Mr. Benoit.
Is there anybody who feels we haven't given you adequate time to present your case? If so, I will give you the time if you wish; otherwise, I will ask that we sum up. Each of you will have a maximum of 30 seconds to give us that one point you want us to be thinking about when we go to sleep tonight.
Mr. Weiner.
Mr. Weiner: I'd like to make a plea for what I think is a potentially lost generation. I believe there is a very strong public appetite for investment in children and for investment in education and social services. When you are looking at the budget, recognizing the financial circumstances in this country, I strongly urge members of the committee to put a significant effort into that particular area.
The area of unemployment is also of deep concern. As we know, unemployment is a root cause of poverty. It seems to us - and we made this statement last year - that it is time for the minister to set some targets on reduction of unemployment in the budget.
The Chairman: Thank you, Mr. Weiner.
Mr. Brown.
Mr. Brown: I have no further comments.
The Chairman: Mr. Day.
Mr. Day: Thank you for the courteous hearing and the probing questions, which to us show that you have been listening hard. It's much appreciated.
The last item I'd like to point out is that there may be some rich plumbers. There are very few rich carpenters.
The Chairman: Mr. Gillett.
Mr. Gillett: Very briefly, we think that the continued investment in education and training by the federal government will have a pay-off, and we hope you will at least consider that in your long-term plans.
The Chairman: Thank you. Ms Bayless.
Ms Bayless: We came with a shopping list and we support many of the items in education that have been discussed. We would just like to remind you that as you consider the various areas in the budget, you must look at the impacts of whatever changes you make on women and children.
The Chairman: Thank you. Mr. Horan.
Mr. Horan: If the government were to ask us what one thing it could do for us, we would ask you to look at the disability tax credit and recognize that expenses incurred by parents of children with learning disabilities are legitimate.
Secondly, for those of you who are watching, we made a commitment to all of you who are learning disabled that we would continue to work in the area of literacy, in the areas of reading, writing and computation, and here is the newest example. We'll be back next year with one more example.
The Chairman: Thank you. Mr. Nadeau.
Mr. Nadeau: We urge the committee to impress upon the government that it is essential that funding for applied and targeted research not be further reduced.
The Chairman: Thank you, Mr. Nadeau.
The last word goes to you, Brad Lavigne.
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Mr. Lavigne: The much-needed relief that students require can come through very modest changes to the tax structure. We're hoping it will be updated. We're not asking for anything new to be done. All we're asking for is updates to the tax code as it affects students to provide much-needed relief and help bring down the overall student debt.
Thank you very much for your time.
The Chairman: Thank you very much.
Brad Lavigne, I started with you today and ended with you for a deliberate reason. We are concerned about your future. Everybody around this table, I think, was addressing their remarks based on what you said about trying to create the type of educational structure and system that will give our young people not only opportunities but excellence - excellence meaning standards measured not on a provincial or even on a national basis, as was said tonight, but on a global basis.
It's a real challenge. You have taken hits, as students. There's no doubt about it. You talked about the increases in tuition and the difficulty in getting employment to make things happen and pay for it yourselves. You've made a very compelling case in many areas.
Ms Bayless and Ms Russell, you have reminded us that even though great strides have been made in the last 25 years, women still have special needs in our society. You've also spoken eloquently on behalf of children, particularly children in poverty, as have others.
Mr. Nadeau, you made a good point. More applied science and research will help our economy.
I'm always pleased to have our colleges with us. Sometimes you've appeared with the universities and sometimes you haven't, but I know you are educating 500,000 full-time and1.5 million part-time people. You are sometimes the only rung up on the ladder for people who are in difficulty or who have insufficient education, or even for people who come from a full university education and don't have the skills, or for people in job transition. I know the wonderful work you do from my own experience in my riding. You have made some very important pleas to us tonight. You talked to us about the need for apprenticeship and training, and you reminded us that up until now, Canada has been built on the backs of those who were trained abroad.
Mr. Weiner and Mr. Brown, I will urge you in your detailed presentation to us to deal with the issue of whether people making $50,000 or more should have increased taxes or decreased taxes. We all in this room agree that we need a fairer tax system. We will work to make it fairer. The question is how, and that's why we're asking for your input.
Let me also say this. A high school teacher in Ontario may be making $65,000 or $70,000, if they don't go on to become a principal or vice-principal. Is that about right?
Mr. Weiner: Maximum.
The Chairman: Yes, and that's not a lot of money. We know teachers don't go into the profession with a view to getting rich. They have forsaken that by becoming teachers. They do it because of a love of teaching.
We are so indebted to these people who, if we've been lucky, inspired us when we were young in high school or university. It's always been one or two teachers who have taken us in hand and inspired us to go on and exceed and have dreams and visions. These are the people who have worked overtime without pay to work with us and to teach us, and all of us are incredibly grateful to the profession you represent.
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Lastly, Mr. Horan, I remember so well that you were sitting down there last year, and you said you had this program to create some manuals to help the learning disabled get educated. You said, ``I've run out of money. I don't know where I'm going to get that money, but I'm going to find it somehow and I'm going to have those manuals done.'' You have come back here with those manuals.
We salute you. This spirit of determination is an incredible inspiration to all of us, as is the job you are doing in assisting those people. Not only do they deserve our help, but it would be crazy to ignore the potential we have in every Canadian. It's in the interest of all of us to bring up that level.
Mr. Horan: Thank you, sir, because I will be back again and we will have more material.
The Chairman: You're wonderful. Keep up the good work.
Thank you all, on behalf of all members of our society. You are in one of the most important areas for the future of all Canadians. You deserve our support.
Some hon. members: Hear, hear!
The Chairman: Thank you.
The meeting is adjourned.