EVIDENCE

[Recorded by Electronic Apparatus]

Tuesday, November 5, 1996

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[English]

The Chairman: Order.

The finance committee of the House of Commons is very pleased to be in Fredericton to carry on with our pre-budget consultations.

We are pleased to have with us five witnesses this morning in our first round table: from the New Brunswick Federation of Labour, John Murphy; from the Fredericton Area Coalition for Social Justice, Brian McIntosh; from the Premier's Council on the Status of Disabled Persons, Randy Dickinson; from the New Brunswick Federation of Agriculture, Maarten van Oord; and from the Lighthouse Family Resource Centre, John Mahar.

Thank you all for being with us.

Would you like to start off and give us an overview of your presentation, Mr. Mahar.

Mr. John Mahar (Owner, Lighthouse Family Resource Centre): Thank you very much for allowing me to come back and address the committee once again.

Given that all my colleagues are representing other interests, I'm not sure exactly where I fit into this, but I do come to you as a private individual, a private businessman. Although my corporate name is under the Family Resource Centre, let me assure you that we are very much in the business of trying to achieve a profit. Whether we do that or not sometimes is in doubt, but that's what I come to you as.

My point of view comes to you somewhat like the child psychology tests where you put a child in a room with two cookies and you tell him if he wants a cookie now he can have it, but if he will wait until you return he can have a second cookie. I'm hoping that my point of view is that I'm the person who's prepared to wait for the longer term to have the second cookie. What I have to say will probably not particularly be what is current social policy or what may be advocated by others, but it's very much what I think we need in our country for the long term.

First and foremost, I feel that as we address financial policy, we must continue not only to eliminate the deficit but to start cutting the debt once that is done. I think the opportunity is very much before our country now. It seems we're very much in tune with that in the country and open to realizing that we need to get our financial house in order. I think we can do that by continuing to make prudent cuts in expenditures, not by increasing taxes.

One of the problems we have is that socially people feel we're all overtaxed. Whether we are or not remains to be seen, but when we have that perception it means that we create significant underground economies when we try to increase revenue by taxation. I would suggest that we continue on that road as rapidly as is fiscally prudent and that we get our deficit in order, not unlike what I have to do in my own business. The banks will not support me if I continue to lose money year after year.

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As a country we have a slightly different situation, but I have to run a very tight ship, and I suggest we try to do that as a government.

Further to that, one of the strong building blocks of our country has traditionally been the family. I'm not going to try to define what the family is at this point in time, but suffice it to say that -

The Chairman: Oh, go ahead. We've been having trouble wrestling with that one in Ottawa, too.

Mr. Mahar: I don't think I'll wade into that. At that point it's social policy, not financial policy.

I would suggest that if possible, we take steps to uphold people's rights to raise families in a more traditional way, shall we say. If I choose to be the sole breadwinner in my family and my wife chooses to stay home and raise the children, which I think in time will be proven perhaps one of the better ways - it's not necessarily the only way or the best way, but it's a better way that small children have a caregiver at home - please work on ways that I'm not penalized in the tax system. My single income may be the same as a dual income, but there are benefits of taxation credits on the dual income that I don't have as a single.

I feel we should be supporting those who choose to stay at home with children, but I don't feel we should be doing that by direct outlay. I know there have been proposals to effectively pay people to stay at home because we're paying others to subsidize day care. I am very much opposed to subsidizing day care as opposed to subsidizing those who stay at home. If we can make the business climate and the social climate in our country such that we are emphasizing those situations, I think that through education and through time a lot of these situations will rectify themselves.

To bring in a matter of social policy in speaking about abortion, which people have wanted to ban socially, I was gratified yesterday to hear a radio report that said what we have is a generation of teenagers growing up who are finding it hard to put themselves together. They wish to go out and demonstrate about saving a tree, and yet at the same point in time our social policy on abortion is what it is.

I think education will bring that around, and it's the same thing with the family. If we can give a financial benefit for supporting the family, then I think we will see a lot of that rectify itself and we won't need to be meddling in the social policy. The financial policy, economics, will cause people to make their choices and do what they see fit.

One of the things along with that is that we would cut our transfers to the middle class. Basically, it's been said that the middle class is the largest beneficiary of government largesse, whether it be grants to the arts or the direct transfer of the child tax credits or the child tax allowance. Most of those are going into the pockets of families who could probably get by without them.

The unfortunate thing is that it seems that when government dips into one pocket to spread that around, there are certain inefficiencies in the course of getting it to the other pocket and putting it back in. Those funds tend to sometimes slip through the fingers or go to support an administration or a bureaucracy that we may not need. So if we had ways of cutting back on our total tax burden and then eliminating some of these transfers, that would be a possible way.

Because of some paper situations in my own personal situation, I got by last year without it. We really did not miss it because we adjusted ourselves accordingly, and I've saved the government the cost of administration in sending me that cheque every month for the last year. It's nice that it's back in place at this point, but having learned to live without it, I think we could probably continue to at that point.

That's not to say that we should cut off those who really are in need of that. I'm not, in the American way, one who says this is totally free enterprise in our country. I like the fact that I'm a Canadian and that we do have a social conscience, but I'm also very much in support of the fact that if we're going to have a social conscience, I'd better be prepared to put myself on the line to deliver those social things. I can't expect the big government to do it for me, because big government is notoriously not as efficient in doing it as a local organization may be.

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I feel that we should allow people to be rewarded for initiatives in job creation. One of the things I find when I am in my circle of friends is that I do not have a lot of initiative to go out and make more jobs in my businesses, to hire more people to do whatever, because I am not going to see anything particularly additional accrue to me. When I look at the next dollar I make, it very likely will be taxed at 50%. That is not sufficient initiative for me to go out and take the risk of hiring additional people or trying to expand my businesses at that point.

Further, I would suggest that we eliminate the regional business development agencies. My experience has been that if a company receives a regional business development grant, whichever it would be - even a loan - for the first three years we tend to spend based on that grant. For the next three years we tend to spend as if we still had that money coming in. By the end of six years, chances are that in the six-year period we've upset the competitive balance in the area. At the end of that time, some of these companies may find themselves bankrupt, and the jobs that should have been there are lost.

These moneys are oftentimes seen as free for the taking by owners and employees alike. Unfortunately, sometimes these breed dependency. We've seen that in certain areas of our economy here we have become dependent on government transfers and subsidies. When they're removed, they have not not necessarily changed the basic structure of our economy, particularly here in Atlantic Canada. All they've done is make us dependent for a year. Really, if we had been forced to live on our own for that period of time, chances are we would have done better at that point.

I applaud the government's move in the last budget, though, to foster volunteerism and the act of donating. When I'm personally involved in delivering something, whether it be social policy or whatever, when I'm involved in a volunteer or charitable organization I can have more say, and oftentimes can have it more effectively.

Finally, I have a comment that touches on our local riding. If we're going to deal with national fiscal policy with regard to National Defence, either we fund them at the level that they can do what we ask them to do, or we don't ask them to do what we're asking them to do.

Thank you.

The Chairman: Thank you, John Mahar.

Maarten van Oord.

Mr. Maarten van Oord (President, New Brunswick Federation of Agriculture Inc.): Thank you very much for the opportunity to speak to you today. I'm president of the New Brunswick Federation of Agriculture, the largest farm organization in New Brunswick, and I'm glad to be here.

I have to cite a conflict of interest, because some of your colleagues are in Edmonton today, and I think I'm supposed to be there as well. They're on the committee on natural resources and are talking about rural development. We had to make a choice where to be. But since I live close to Fredericton, I decided it was going to be Fredericton.

The Chairman: You made a very wise decision.

Mr. van Oord: Well, since I don't get paid for mileage, I agree with you.

Some hon. members: Oh, oh!

Mr. van Oord: I hope, though, we have a good discussion today. I hope we will also talk about such things as the GST, the future of adaptation funds, which I believe should not be called subsidies, but development funds. We live in an extremely fast-changing world, and I'm not sure that on its own business can always afford to adapt to the changes.

I think research is very important to us. Canada has been lagging behind, even though in the past we have done some fantastic research in agriculture. Canola was a Canadian invention, really, through research. It has had a big impact on our agricultural industry. We should not leave research behind. It is extremely important that we have research done if we want to continue to be competitive in this world.

The other thing I believe needs a lot of attention - and everyone is aware of it - is the environmental aspect of our society. We have to live in this world, and so do the generations after us. I think the environment is an extremely important part of our lives. It has to be so. Sometimes I feel agriculture gets a negative name in that area, but I think the awareness among farmers is very high in relation to their responsibility towards this world. I believe that is what is called stewardship. I personally believe strongly that surely we have to be good stewards of this earth.

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I'd like to make a few remarks regarding deficit reduction and cost recovery. I'm going to use a bit of a negative example to challenge you, because I believe that to preach is one thing - and that's not easy - but to practise is a lot harder. I'm having a little bit of difficulty with the way our government at times is practising.

We believe deficit reduction is necessary. I don't think government ultimately is any different from my own family. If I spend more than I make, I'm going to have trouble. Having been a father, and remembering that sometimes as father and mother we had a hard time paying the bills, climbing out of the hole is terribly hard. For a while you seem to be paying double - for your current expenses and for those you haven't paid in the past.

So I believe it's extremely important for government to reduce the deficit. How you go about it is a very big question.

I would like to offer a little personal comment. I believe that what the society can handle and do is a lot more important than what some credit agencies feel we should be doing.

As the last speaker, I also strongly believe - as I am sure a few more people around this table do - in social justice. I think that's a duty we have as citizens of this country. We have a duty towards each other.

The big problem we see with this cost recovery is that we, as producers, have no way to recover from the public the increased cost to us. It's a monster cost recovery. The government is into cost recovery, but we don't know how we, as producers, can recover our increased costs.

When I was in Ottawa a few weeks ago, I heard that the cost recovery programs by this government are supposed to save more money than the GST is bringing in. You're talking about an immense amount of dollars.

I'd like to use the example of the Pest Management Regulatory Agency. This agency will test and approve or disapprove new pest control means. This agency's budget has gone from$14.2 million in 1994 to $34 million in 1996. The agency had 129 employees in 1993, and it's planning on having 408 within 2 years. At the same time, productivity is down.

Now, the federal government is proposing a 60% cost recovery on this agency; it's the producers who will ultimately have to pay for it. In the States there is a similar agency. Their cost recovery is 15%, and the 15% will stay in place until the year 2001.

In agriculture, exports are very important. We come very close to $20 billion - I think we are up to around $18 billion right now - in agriculture. The country to which we export most of our goods is the States. We believe that with things like this, with an unequal cost recovery, we're creating an unlevel playing field, and our playing field isn't simple anyway, especially in Atlantic Canada. Our infrastructure is far from perfect. In addition, we have to deal with a climate that is very challenging at times. So those are the facts. How can the government expect us to export more while there is such a big difference in cost recovery from the private industry?

I believe those kinds of things should not be allowed. It's sad to say that even though the government has often used words like ``partnership'', ``consultation'' and things that sound like heaven on earth, it seems to stick to that. We, as agricultural organizations, have tried to deal with this pest management agency, to sit down and talk with them. So far talking to a brick wall would have had the same effect. Basically they have not been willing to talk to us.

So I'm a little cynical and a little sad that we are trying to expand an industry in Canada, an industry that has gone through very good times and very tough times. As far as management is concerned, I think the Canadian farmers are doing an excellent job - or else we wouldn't be here today - and I do not believe it is wise for government to implement things just for the sake of cost recovery, without looking at the effects.

I like to use that as an example of the difficulty we have with the way you are approaching many of the programs. I hope we can have some discussion today with the people here on how we should go about it for the future.

Thank you.

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The Chairman: That's the first time we've heard about the PMRA, but thank you very much -

Mr. van Oord: No, I'm sure you haven't.

The Chairman: Randy Dickinson, please.

Mr. Randy Dickinson (Executive Director, Premier's Council on the Status of Disabled Persons of New Brunswick): First of all, again, I want to welcome you to the capital city of New Brunswick, where I'm pleased to see an opportunity for some dialogue with people involved in providing advice to the finance minister on the potential content of the upcoming federal budget.

Having participated in this type of round table before, I'm pleased to be here again...[Technical Difficulty - Editor].

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The Chairman: Sorry about the delay. Can we come back to order.

Mr. Dickinson, you buggered up the system the first time; let's see if you can do it properly this time, okay?

Some hon. members: Oh, oh.

Mr. Dickinson: Well, first of all, again, I'll welcome you officially to Fredericton, and welcome the opportunity to be here to offer some input to the consultations.

Actually, I'm very pleased that the technology has failed you here this morning, because, first, I hope that will make you remember the comments I'm going to make about issues relating to persons with disabilities. Second, it points out that sometimes when we become over-reliant on impersonal technical equipment -

Some hon. members: Oh, oh.

Mr. Dickinson: - we pay the price, because when we need it the most, it's not there to carry us through. So I think it's more important, as well, to rely on people and what they mean to our country.

The Chairman: You staged this demonstration very well. I congratulate you.

Mr. Dickinson: Thank you.

First, I want to remind you that I represent the Premier's Council on the Status of Disabled Persons. That group is an advisory body to the provincial government on matters relating to issues affecting people with disabilities. It's a non-partisan group. It's made up of representatives of the disability community who sit as volunteers on a sort of board of directors.

I happen to be head of a small secretariat. We cover all disabilities, all age groups, and that's another important thing to remember, because we cover a spectrum of issues.

The good news is that I don't have a long formal brief to present to you, because your own government just released the report of the Federal Task Force on Disability Issues on October 28. The title is Equal Citizenship for Canadians with Disabilities: The will to act.

I'd like to draw your attention to that report as you go through your deliberations in planning for the budget process. There are a number of recommendations in that report that relate to tax reform, income security issues and other initiatives concerning employment that will benefit not only Canadians with disabilities but also the Canadian economy in terms of economic development and growth, job creation and providing the supports to Canadians with disabilities so that they can take their place at the table in an equitable way.

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We're not trying to base our pleas for assistance on charitable means. We're talking instead about doing the right thing to invest in the future of Canadians as a human resource.

If we look at the demographics of the Canadian population, we see that we have an aging population and a shrinking workforce. As we talk about our competitiveness in the international global marketplace, we are going to have to tap into the previously underutilized resource of persons with disabilities not only to assist them in entering the workforce but also to encourage them to stay in the workforce.

A lot of the policies in terms of tax benefits and employment initiatives are generally an all-or-nothing approach rather than a flexible system of supports that only gives the level of assistance required in order to enable that person to be independent. By making the system more flexible, we can use the same amount of overall resources to get better outcomes for more people, without adding to the overall cost of the system.

We're not doing aid. We understand the need to control the deficit and the debt. However, we believe in the past, unfortunately, governments at the national level have not always made the wisest choices, the fairest choices and the equitable choices in determining how we spend what resources we do have generated either through tax revenue or other income sources of the federal government.

We think there are ways to reform the system that can meet the social agenda of the country as well as complementing effectively the economic agenda of a country that is both affordable and sustainable for the long term, while meeting the basic tenets of human and social justice.

Just look quickly at the table of contents of that report. I'm sure you've all had a copy by now, or you will get one when you get back to your constituency office, or in Ottawa. The index covers topics like the gap between saying and doing: message received; aboriginal Canadians with disabilities: keeping hope alive; federal organization and approach to disability issues; legislative reform: a response of government; the opportunity to work; labour market integration; disability income; and dealing fairly with the cost of disability.

In that report they have provided 52 coherent, complementary recommendations that are believed not only to be achievable but also to actually reflect the input from the various components of the disability community.

This is a watershed report. It's the first time in all the years I've been involved, working with the disability community, that we actually have consensus and commitment from the consumers, representing a variety of types of disabilities, who believe the messages in that report will move the future forward for Canadians with disabilities in a way, as I said before, that's affordable, sustainable and fair.

Getting away from the disability task force report - which, again, we hope everybody will pursue and read carefully - if you look at some of the broader issues, I think we also need to look at the whole concept of tax reform. I remember that at our meeting last year we heard from a number of presenters about the concept of fairness.

I ask you again, as the finance committee of the Parliament of Canada, if you could explain to me why there is more merit in having a higher tax benefit for a contribution to a political party than there is for that same amount of money when it is donated to a charitable organization that's buying wheelchairs for people with disabilities, or providing social supports to Canadians in need.

It is perhaps an opportunity here, since I understand that in the reforms being made to the next elections act you're going to be reducing the length of the election campaign in the next federal election. Therefore I hope you can reduce the amount of paid advertising that will be required by the registered political parties.

So perhaps you could offer to reduce the tax benefit you're receiving as a registered political party. It should at least be reduced to the same level as charitable organizations that are issuing tax receipts for providing useful, meritorious and demanded sources of support that the community at large supports, regardless of which political party they might be affiliated with.

That would set an example that you're not just preaching but actually trying to do something to produce equity in the system of taxation by setting the example as a political entity, as well as a government entity.

I look at the issue of family trust. The people in the disability community certainly support the concept of providing tax benefits to families who are trying to provide the cost of caring for a family member with a disability. We believe if there's a rationale for a family trust, it should be limited to a single generation, in other words, to the lifetime of that person in need.

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Then the assets of that family trust should go back into the public domain to be taxed at fair and equitable tax rates. Whatever balance that is then left over should to go into the inheritance for the subsequent family generations.

We believe current Canadian tax law, as it relates to family trusts, is disproportionately favourable to the wealthy families who are not providing their fair share of the costs of maintaining health care and the infrastructure of roads and services publicly provided across the country. While they complain about social programs, they themselves are indirectly benefiting, perhaps more in a dollar way than those with less income in a more disadvantaged position to start with.

I support government intervention and tax breaks for small business and medium sized-business, particularly the entrepreneurs who are creating new jobs in Canada, which, as I said before, I hope will tap into the labour market by utilizing more persons with disabilities as employees and not just social assistance recipients.

But I question the tax system that favours large corporations and banks, the difference in terms of the mortgage rates. My mortgage rate doesn't go down when the interest rate goes down, but the bank rate on credit card interest continues to remain high. The bank rates on mortgages that were previously assigned remain high, yet what I get paid on my deposit immediately drops if there's a change in the interest rate. So it's a one-sided relationship.

We look at the bank profits, and we feel there is a disproportionate attention paid to attacking people with disabilities, as an example, who are deemed no longer eligible for the disability tax credit. They are immediately pursued aggressively. They are denied the GST credit and the child tax credit. That's garnisheed, and the few hundred dollars they might owe is pursued aggressively with active interest. Yet large corporations that are in arrears and owe taxes are not given much enforcement attention.

We think that's an inappropriate use of government enforcement resources in the tax system. You're going after the small offender as opposed to the large, untapped corporate resource.

In dealing with the tax system, we think there should be a change to the appeal mechanism that provides more information and support to average taxpayers. I've had an opportunity to assist a number of individuals over the past year, just trying to find a phone number and a mailing address to which to send relevant file information. Each piece of correspondence received from Revenue Canada has a different return address or a phone number with no address, and no name of an individual to whom correspondence can be addressed. Each time you call the office, you're dealing with a different official, so you don't know if there's any continuity in the case file, or even what is in the case file, because nobody seems to know where all the documentation is collected at any given point in time.

I know you're going to hear a lot of different points of view, some on the right side of the agenda politically, some on the left side, but I think we're not here to pursue a special interest. We're here to pursue an agenda of equity and fairness. We want the government budget to invest in people's futures.

We don't believe the federal government's fiscal powers are being used adequately to address the issue of generic income security. We think there is a need to remember to stop watching American politics on cable TV, and to get back to what makes Canada great, what makes Canada a nation.

What makes Canada different from the Americans is our sense of social justice, our willingness to invest in a system of programs and services that meet the universal need of the country, without being overly concerned about who is currently in a position of have and have-not.

We look at the Americanized system of privatization, giving out government services to the private sector. Although there may be some room for that, our experience in Canada is not good when we look at examples like the Pearson Airport sweetheart deal. Privatization there usually means skimming the cream off the top, and using capital assets that have been paid for by federal tax dollars and then turned over to a small sector in the private sector that is going to make the profits.

Ladies and gentlemen, I'm not here to put you on the spot necessarily, except to remind you that as members of Parliament and advisers to the Minister of Finance, you have the opportunity to help recommend choices. We all make priority decisions in our personal finances. Nobody I have ever met has ever said that they had too much money, that they had all the things they wanted, or all the things they needed.

What you do in your personal finances is to make choices. You decide what kind of house you'll live in, what you can afford. You make choices if you want something more than something else. That's where you spend your priorities.

I think if we take the overall assets of the federal government, if we creatively manage the tax system, if we use the federal power of fiscal control to address not only the economic agenda but also the social agenda, we can make tax reforms I noted earlier.

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We can improve the administration of government in terms of reducing the number of unnecessary boards and commissions. We can maybe even eliminate the Senate. We can look at whether we are operating a system that delivers services based on evidence and getting the outcomes desired, and whether they are supported by the public at large, and not just a small, right-wing, well-advantaged group that is are currently making decisions.

Ladies and gentlemen, I'm here without a prepared speech, but I'm going to listen to the rest of the dialogue, and hopefully we'll reply.

Again, I remind you that the Federal Task Force on Disability Issues already has the information you need to give advice to your minister on what to do with the tax system, and on other income security measures that, again, have been recommended by people in your own system. We believe this is achievable, affordable and realistic, and is not just some pie-in-the-sky, philosophical statement.

Thank you.

The Chairman: Thank you very much, Mr. Dickinson.

Mr. McIntosh, please.

Mr. Brian McIntosh (Co-coordinator, Fredericton Area Coalition for Social Justice): To begin, I've heard a lot about preaching and practising today, and being a preacher, I think I know a little about that. I believe I'm here to practise what I preach. Speaking personally, I think the gospel compels me to speak publicly on issues of import, particularly as it relates to the protection of the poor in our midst.

I represent the Fredericton Area Coalition for Social Justice. A budget is about values and vision, about the kind of Canada desired by the government. The ear of the government, whether Conservative or Liberal in the last 15 to 20 years, but particularly the current Liberal government, has been bent only by those who espouse a divisive vision, including values of competitive advantage, privatized self-sufficiency and self-interest, social insecurity, poor-bashing and corporate welfare.

Our coalition believes in a different kind of Canada, one marked by cooperation, social security, the eradication of poverty, near-full employment, and justice, hope and dignity for all.

We've joined with a number of organizations, both in Manitoba and nationally, including labour organizations, to put numbers and policy to the vision and values we share by developing an annual alternative federal budget in the last number of years.

This is the one from last year. I hope your committee has seen this document. It's grounded in the following principles from the people: a commitment to near-full employment; an end to poverty; the protection of basic human rights; stronger social programs and public services; environmental improvement; economic equality between women and men; a fairer tax system; and a more equitable distribution of income.

Its abiding central recommendation - which I haven't even heard yet today, and which successive governments have ignored - is that the best way to cut the deficit and debt is to create jobs, which expands revenues and cuts the massive cost of unemployment.

When it comes to job creation, the key red book promise in the last election, this federal government is a failure, plain and simple. They haven't come close to job creation targets, and the national unemployment rate hovers around 10%. If you included the underemployed part-time workers, those who have given up looking for work, the real unemployment rate would be a staggering 17% or 18%, or approximately 2.6 million Canadians. In the Atlantic region this number would be over 20%.

If, on the other hand, we cut unemployment to 4%, our economy would be $100 billion larger, and the budgets of all governments could be balanced with money left over for needed new programs like child care. There would even be enough revenues to give working people a break in their taxes.

This may sound like fantasy to those who have had the debt-wall argument put in their faces by government and big business for so long, but cutting the unemployment rate, let's say, by just 1 percentage point would give the economy about a $20 billion boost, and cut the $33 billion federal deficit, or the now lessened federal deficit, substantially.

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Yes, Martin and company have managed to marginally cut that deficit, but at what cost, and on whose backs? Randy just talked about choices, and we believe there are a set of other choices that could be made, ones that don't depend on disciplining labour or creating structural unemployment.

In macroeconomic and fiscal policy there are a number of things we can do, and I'm going to be quite specific. First, we can lower interest rates even a little more than where they are now, stimulating spending - rather than saving - and growth in export industries.

Second, we can require the Bank of Canada to increase its holdings of federal government bonds by an annual amount equivalent to 2% of outstanding net debt for each of the next 5 years. This will then equal at that time about 15% of our outstanding debt, and significantly reduce debt-servicing charges, since the bank is publicly owned.

Third, we can convert Canada Savings Bonds into debt victory bonds, making them redeemable with flexible rates.

Fourth, we can require all retirement savings plans to hold a minimum proportion of federal bonds in order to qualify for tax deductibility.

Fifth, we can tax the overseas earnings of insurance and other companies.

Sixth, we can gradually eliminate the allowable 20% foreign investment quota on tax-assisted pension plans.

Seventh, we can introduce a surtax on interest earnings by Canadians on holdings of foreign bonds.

Eighth, we can introduce a Tobin tax, internationally argued, on international financial transactions, in cooperation with other countries.

The alternative budget has been attacked by Bay Street bankers and bond traders, because it would cut into their profits and because they aren't really interested anyway in creating jobs, but are interested, rather, in their own wealth. Chartered banks hold almost $80-billion worth of federal government bonds. Something must be done about this.

The alternative budget also has a series of concrete ideas on job creation, such as expanding the national infrastructure program to improve roads, bridges and mass transit, something just now being picked up by the federal government, and, I must note, only in a pre-election period.

We can limit long work hours in keeping with the recommendations of the national advisory group on working time.

We can encourage more educational and family leave.

We can renovate housing to create jobs, and serve environmental goals by making older houses and apartment buildings more energy-efficient.

We can invest in community economic development initiatives, and both established and emerging cooperatives.

We can tie subsidies and loans, or development funds, or whatever you want to call them, to the development of good, well paid, skilled jobs.

We can selectively expand social programs, which would create good, new jobs.

Again, I mention a national childcare program, which is sorely needed in our country.

Finally, I want to make a few remarks about the tax system. We must remember that this tax system is the one democratic means we have to redistribute wealth. This is where the analogy between family and country breaks down just a little, because the country, the federal government, has the power to tax. Families don't have that power, and so we must use it fairly.

Right now the tax system is working regressively rather than progressively. We believe there should be some fundamental shifts in the current tax system to make it fair, and these would include - again I'll be specific - introducing a wealth tax on inheritances, perhaps only exempting spouses.

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These would also include an excess profit tax on banks. I believe it's obscene that banks such as the Royal Bank of Canada made $15 billion in profit, or whatever it was, and the CIBC made a profit of $1 billion, laid off 1,500 employees in 1995 while its CEO, Al Flood, had a flood of money, $1.9 million, as his salary.

These fundamental shifts would include the elimination of a number of corporate tax loopholes and deductibles, such as lobbying expenses, through which profitable corporations pay little or no taxes. The country's own Auditor General estimates that this would bring in $40 billion a year, twice the amount generated by the GST.

We can impose a minimum corporate tax -

The Chairman: Did you say that eliminating the deductibility of lobbying fees would bring in $40 billion?

Mr. McIntosh: Eliminating all corporate tax loopholes and deductibles -

The Chairman: Oh, okay.

Mr. McIntosh: - such as lobbying expenses and others.

We can impose a minimum corporate tax. We can create two more high-income tax rates for individuals over $100,000, and over $150,000 yearly.

We can reduce taxes for low-income individuals, thus making the tax system more progressive.

We can charge a surtax on luxury items, only affordable by the rich.

We can adjust the tax system to help preserve the environment, penalizing those companies, for instance, that don't meet regulations.

Finally, we can crack down on tax cheats - Randy mentioned this as well - and do more to collect the over $7 billion in owed back-taxes by corporations.

To close, the federal government could choose a different path from the ``echo-speak'' of the BCNI. It could create hundreds of thousands of jobs as a pillar of economic recovery. It could increase tax revenues by increasing employment. It could create a just tax system by making profitable corporations and rich individuals pay more. It could reinvest in public services and social programs. It could restore hope for thousands of unemployed or underemployed New Brunswickers and Canadians.

They claim there are no alternatives to the current course. We say they're dead wrong, and when they're wrong, Canadians' spirits die.

Thank you very much.

The Chairman: Thank you, Mr. McIntosh.

Finally, from the New Brunswick Federation of Labour, we have John Murphy.

Mr. John Murphy (Executive Secretary, New Brunswick Federation of Labour): Thank you very much, Mr. Chairman, and members of the committee. Going last, I guess I have the luxury of either commenting on what others said before me, or sticking to my own remarks. I don't have a prepared text.

We got the invitation to come here last week - which we appreciate - and I imagine so did others. We were here last year as a number of others were, as well.

You people certainly are just a committee. You deliberate, hear, and make recommendations. That's all you can do, and I appreciate that fact of life you're confronted with.

But in deciding whether or not, as an organization, we come here, we have to decide if it is the best use of our time. Is the committee really listening, is the process really working in such a way that the views are brought forward?

At the end of the day we feel, well, first of all, we don't have much choice in the matter. If we don't come when we're given the opportunity, regardless of the short notice, and we don't take advantage of it... But at the same time, this democratic system allows for this type of opportunity, and people should take advantage of it. Certainly, we are taking advantage of it, being optimistic that your committee, and you as chair, are seriously listening to the people of Canada as you go across the country, and your recommendations will reflect the type of input you're receiving.

I have to stop and ask myself, and I think even members of the committee should as well... That's the reason I mention this short notice. I use that as a reason. I quickly looked at the number of business organizations that are going to appear before you here in New Brunswick - I don't know what's happening elsewhere - and there are very few. Normally speaking, you would have had some at this session.

In all fairness, Mr. Mahar is speaking for his own particular company. I don't believe he's here representing a business organization, and I think that speaks volumes. I think it speaks to the fact that business is quite content it has now manoeuvred the federal government down the road of laissez-faire capitalism and people are, if anything, of secondary consideration. Some previous speakers alluded to that, and I think it's important that the government get back to people values and start to put a different definition on what society is all about. The definition now being played out by the government of the day is a corporate definition of society and many of the results are corporate-driven results.

.0900

I'd like to shift and talk a bit about the employment situation, the unemployment situation, and the jobs or lack thereof. As far as we're concerned within the labour movement, within the organization I speak for, the New Brunswick Federation of Labour, there's a serious, serious problem confronting this province, this nation, and that is the problem of unemployment. I don't want to get into a debate over the stats, so let's just leave it at it's serious. A lot of economists are starting to say that too, and -

The Chairman: I think everybody at this table agrees with you. It's a real problem.

Mr. Murphy: I guess the question becomes what, if anything, are we going to do about it? Do we see a need to do something about it? From some of the documentation I read, for example - and this isn't documentation necessarily developed here in Canada, but there are international organizations the Government of Canada is part of, such as the OECD - documentation the average person at Tim Horton's doesn't get to see, they're talking about full employment being 8% unemployment. If that's the logic being delivered in these types of international gatherings and that's the logic being brought home by those who attend on behalf of the Government of Canada, and if it's played out in reality in this country, I don't think there will be a will to do anything about what everybody agrees is a serious problem, and that's the problem of unemployment.

They argue if we allow unemployment to go below 8%, other situations will develop that will cause other serious problems; for example, inflation. So what are we going to do about it? We're going to have unemployment above 8%. We're going to eliminate what they call labour market rigidity, for example, or any power the trade union movement supposedly has, whether it's in this country or any other country.

I'm shocked when I see the World Bank and others attacking the existence of employment standards. The very fact that they exist or exist in a manner we might consider progressive...and they say we have to go in the opposite direction.

The unemployment situation is serious, and I'm going to give you three examples that simply relate to my family situation. There's this idea that people don't want to work or haven't taken training or don't want to take relevant training. When they take relevant training, they're going to have to be guided by whatever vocational counselling type of system we have in place. Whether it's effective or not, I guess they can't determine that.

I have three situations. All of them are my nieces, so they're women.

One has one university degree, a general arts degree, and couldn't find employment. She went back and took a basic business one-year technology program and is currently classified as employed. Why? The same bank that had her for her cooperative education training hired her on a part-time basis. She's balancing that particular day a week with the bank. Remember, she has five years of training as well as high school and the job she's had since she was a teenager, which is working for a supermarket a couple of days a week and staying at home. That's her future at this time, unless she goes back and once again tries to get some additional training. Where that will lead I don't know.

Another niece has five years of university, including a general arts degree and a language degree. She's living in Montreal currently, but she's from Atlantic Canada and is unable to find employment in her field of training.

A third niece took two years of a science degree and then took a more specific training program, a lab technology two-year program, which is a very intense program and has very high standards in this province. Guess what she's doing? She's drawing blood half a day a week and just recently, I'm told, went to work part time at a major retail store.

.0905

To me that reinforces the seriousness of the lack of meaningful job opportunities, and that's only in my immediate family situation. Somehow we have to start to do something about it, because the real story is being hidden. I've talked about underemployment and part-time employment, which are excessive in this country. Then there's the stats themselves with respect to unemployment.

Then we get into what's happening with industry. Industry told this committee and the government to get out of its hair, to do the right things in terms of the tax regime, the regulatory regime, and so forth, and that it would deliver the jobs. Well, a lot of Canadians, ourselves included, are starting to ask about the jobs. They're not there and there is no projection they're going to come. Maybe but maybe industry's approach to delivering a fair social economic program for Canadians and Canadian society is wrong; maybe but maybe.

How long do we have to wait to come down one way or the other? I guess the powers that be in government are going to have to decide that. The spin-off of what's happening is serious and, as you are well aware, Mr. Chairman and members of the committee, delivers many social problems that are extremely costly to the people of Canada. We don't even put sufficient dollars into addressing that particular situation.

As a labour organization and a socially oriented organization, we think government is compounding the problem through its very aggressive and deliberate downsizing of the public service. It's not just the people who are impacted by that, but the services are also impacted by those actions of our federal government.

Some economists are saying that overkill is part of the reason our economy at this time is not as strong as it should be, given the reduction in interest rates and so forth. They say a number of people or organizations continue to say you have to focus on the deficit, as Mr. Martin has said, and focus on the debt. It's to be acknowledged that the deficit has to be managed, the deficit has to be looked at, but we ask ourselves who is paying their fair share? Who is properly and fully contributing to dealing with the deficit-debt situation?

I use the analogy that Canadian society is supposedly one big family. If workers are paying their fair share through direct and indirect taxes, lost job opportunities, and the inability to contribute through meaningful employment and the revenue it generates to reduce the deficit, they're doing their fair share. So are a lot of others, including seniors who continue to pay taxes, but what is the corporate world doing?

Brian alluded to some of the figures the choices people have come up with. A lot of people say, no, they're not doing their fair share, particularly when we look at the scandalous profits that a lot of the big corporations, including the banks, have started to make over the last couple of years. At the very same time they're downsizing their workforces. They're not doing what they promised the Government of Canada they would do, which is deliver meaningful job opportunities for Canadians.

I'm sure you've had your committee communications from our parent body, the Canadian Labour Congress. We're talking about a federal budget here, so I know there have been communications.

No doubt there will be some additional meetings as you get closer to making your final decisions and recommendations, but one of the things we've talked about in the labour movement is the need to ensure that interest rates remain down - not just down because of a variety of reasons and then, all of a sudden, as a result of some stimulus to the economy, there's a slight increase in inflation and the brakes are back on through high interest rates.

I won't get into what we've argued using the analysis of our economists and the analysis of the economists connected with the choices exercise, but they say some of those tactics have put us where we are in terms of the high debt this country has, which is due to high interest rates. However, some of the very specific activities we'd like to see this committee recommend the federal government spin out from the next federal budget are activities to stimulate the economy.

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We've had this period of not having had enough stimulus, and it's desperately needed to do something about the very serious unemployment problem. We're talking about direct government spending, which some people, particularly those within the business world, don't like to talk about. Certainly there are areas that are extremely valuable and will have both direct economic benefits and extremely important social benefits for the people of Canada.

One is the national childcare program, which as you're well aware has been talked about but not enough done about.

Another is a new national infrastructure program, which our government is talking about again, but we don't know the details of it or to what extent, if at all, it will be pursued.

A third area, which was mentioned by one of the previous speakers, is the environmental infrastructure. There is a lot of potential there for job opportunities, and there is an economic return to the federal government when it spends the money. More importantly, we have to be the stewards of our environment if there is going to be any type of environment left as we go into the next century.

The Chairman: Thank you.

Mr. Murphy: There are two or three other areas I'd like to quickly mention.

One is research and development, as the previous speaker mentioned, whether it's in the area of agriculture or fisheries, which is important to this region.

Finally, a report entitled Report of the Advisory Group on Working Time and the Distribution of Work came out a few years ago. It was a unanimous report on the part of the business people, including one lady who was from the banking industry, and the labour representatives who were on that committee. They made a number of recommendations on how we can generate more job opportunities for Canadians, and they were basically talking about the redistribution of work.

One, for example, was limiting the excessive overtime that's going on in this country. Another was one some of the previous speakers alluded to, which was encouraging in various ways training and retraining and job leave opportunities. That report should and must be dusted off and redressed in the context of the budget decisions that are going to be forthcoming.

I would end with that, Mr. Chairman.

The Chairman: Thank you very much, Mr. Murphy.

[Translation]

We will start questions with you, Mr. Laurin.

Mr. Laurin (Joliette): Mr. Mahar, I was somewhat surprised by your comments on a few points. You sound to me like a typical businessman starting up a new business. A businessman will be willing to accept some losses over the first three, four or five years, knowing that in the sixth year, his business will become viable and will generate a profit. So I can understand that you would be willing to have just one cookie a year during the first five years knowing that you will get two or three in the ensuing ones. That is clearly a businessman's rationale.

But during that time, while you are getting your one cookie, what should we be giving to students, the unemployed, the self-employed, the disabled and seniors? During that waiting period, how should the government provide reasonable care to those people in a way that would be acceptable to business people such as yourself?

You said the middle class should pay more taxes. If I'm not mistaken, the middle class is currently the highest taxed group in Canada. I would like you to expand on that statement.

[English]

Mr. Mahar: I think I had a couple of areas that did not come across as well as I would have liked them to.

First, I did not have one cookie for that six years; I had no cookies for that period of time. I was waiting for the delayed gratification.

Second, I was not advocating that we tax the middle class more. Actually, I was advocating that we eliminate some of the transfers they are receiving but may not require. What we would have is the government not taxing on one hand and giving it back to us on the other hand. I was advocating that they eliminate some of the taxes we're currently paying while eliminating some of the support payments that are being made. Those support payments would continue to be made to those in need, and that would include the poor, the elderly, and those who are truly in need at that time. Those who are not in need would not receive these payments.

.0915

Perhaps an example of that is Old Age Security. I applaud the government that now you do not receive an Old Age Security cheque every month in the mail if your income exceeds a certain level. At one time you received it in the mail and then it was clawed back. There was a bureaucratic cost to that. Now, if you do not require it, which is based on an annual means test, you do not receive it during that year. This is an example of efficiency we could move towards more.

[Translation]

Mr. Laurin: When you suggest eliminating some transfers, do you mean you would like the federal government to not transfer a billion dollars to the Atlantic provinces to harmonize the GST? Is that the type of transfer you were referring to that the government should not make?

It is approximately a billion dollars, or $930 some million, that came from other provinces and benefited the Atlantic provinces. Are those the transfers the government should reduce?

[English]

Mr. Mahar: I particularly am not in favour of the way it was done, that it was taken from a deficit reduction program to cushion the effect to the Atlantic provinces.

We enter an entirely new element of discussion when we enter the HST. As a small business individual, certain costs are being loaded onto me that I'm not particularly pleased with. The representative of the Federation of Labour said that business was not representing itself here. Well, perhaps we've taken it that it's going to happen - and I won't use the term Forrest Gump used about what happens - but if government is going to tell us what's going on in business, we'd best make the best of a bad situation after it's occurred.

In terms of that transfer to the Atlantic provinces to cushion them, if we're going to harmonize the tax...it was one of those things that may not necessarily have needed to have been done. We may have had to bite that bullet. I mean, we can argue about the transportation subsidies we in Atlantic Canada said we needed for years. The federal government has removed them, and we will have to get by without them. It may require some changes. It may mean that Mr. van Oord's colleagues will have to switch to growing grain to feed their animals. It may mean that some farmers will be forced out of that. It may mean that some consumers whom I am currently selling to will have to pay a higher price for goods manufactured in central Canada.

It also may mean that Atlantic industry will then pick up the slack and start those industries that are at maximum disadvantage because of transportation. If we're not receiving a transportation subsidy, perhaps we can manufacture goods in Atlantic Canada that currently are being manufactured elsewhere and for whose transportation we're being subsidized.

[Translation]

Mr. Laurin: Thank you. I did not quite understand the problem Mr. van Oord was talking about when he spoke about the cost recovery programs in agriculture and the regulation of pest control. I am not very familiar with that area and I would like you to clarify what you meant, perhaps by giving some examples.

[English]

Mr. van Oord: I'll gladly do so.

What I mean by cost recovery is that in the past programs were supplied by government. They no longer are. There is a cost to having, for instance, food inspection. The fee for this inspection is now charged to the producer and no longer taken care of by the government.

.0920

The big problem we have as producers is an increase in those fees. For instance, in the potato industry in New Brunswick, a not-too-big farmer has seen an increased fee of about $5,000 a year to do certain tests needed for export. How do you pick up that $5,000 from the marketplace if you are in an open market in a competitive situation? There is no way many producers can recover the increased costs in the fee structure.

The fee...is under the Department of Health, and if the agency that registers pest control means pesticides, or what we like to call crop protection means. What is happening is that because of the very high level of cost recovery, farmers no longer will want to buy certain products because they're too expensive.

There are a few problems with that, quite a few. One is that especially with crops grown only on small acreages - and I'm not talking about wheat or barley, but speciality crops, such as cabbage - the cost of the new product is too high.

We have to realize that with this new technology, some of the new products are a lot safer than the old products. It will not happen that those new products and very often those safer products are going to be tested at all, because there is no way the producer can afford to bear the cost of the testing.

One thing that worries us very much is the fact we have been trying to have as level a playing field as our trading partners. Let's face it, in agriculture by and large our biggest trading partner is the States. In the States we see a level of cost recovery of 15% for the next five years, while in Canada we are talking about 60%.

If a playing field is no longer level, we're at a disadvantage and we can no longer compete. That's what worries us in the agricultural industry very much: we had to create more jobs, as we talked about.

I think some of those people had some fantastic comments, because we're talking not only about insurance but also about the social expense being very high.

[Translation]

Mr. Laurin: I have just one last question, Mr. van Oord. What do you suggest? That we subsidize research? That we subsidize the exporting of those products? What solution would you recommend to the government?

[English]

Mr. van Oord: If we take the best management regulation agency as an example, we'd like to know why, compared with the States and England, we have many more people working there and fewer products approved. We don't seem to have any willingness to cooperate with other countries on research. Why, if the States has done a certain amount of research on a product, can't we use that same research here? Why invent the wheel again? Why don't we cooperate better with the States? They want to cooperate with us. I think we can do things a lot more efficiently and a lot more cheaply when we're willing to work together, but we're not.

As one of the MPs in Ottawa mentioned, it almost looks as though there is a bit of kingdom-building going on within this agency. We cannot afford that kind of thing.

The Chairman: Merci beaucoup, monsieur Laurin. Mr. Grubel, please.

Mr. Grubel (Capilano - Howe Sound): Thank you, Mr. Chairman. I'd like to have a quick comment on the visions of the world represented here today: one by Mr. Mahar, one by Mr. Murphy and one by Mr. McIntosh. I think they're both valid, but they are really in a sense Utopias.

Now, I have spent my life looking at attempts to put either of those Utopias into action historically or across the world. I must say that the countries that chose the road advocated by Murphy and Mr. McIntosh typically end up so poor, so down-trodden, their ability to produce goods and services...that the poorest are infinitely worse off than the poorest in the kind of vision that Mr. Mahar represented, where private charity or local government takes care of those people. That leads me to a question for Mr. Dickinson.

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Mr. Dickinson, could you please delineate for me, in your own view, where the distinction should be between federal and provincial responsibility with respect to the disabled?

Mr. Dickinson: Let me give you an example. If we talk about the issue of health and health care, not only the delivery of medically necessary services in hospitals and physician offices but also health prevention, health promotion, if we want to have a country that provides some sort of basic equity across the nation, although the Constitution provides provincial authority for the delivery of health care services, there has been, and will hopefully continue to be, a national responsibility for the federal government to use its spending powers, particularly -

Mr. Grubel: Mr. Dickinson, could you please answer my question? I've heard this rhetoric before. Could you answer my question? Where is the line? Why is the disabled the responsibility of the federal government? What do you see the federal government doing?

Mr. Dickinson: I see the federal government hopefully providing some leadership. I was trying to use the example of the health care system, where you have the difference between the constitutional authority versus what makes us a nation and what will continue to make us a nation. There has to be some role and responsibility for the national government, or you, as a member of Parliament, are holding a seat in a government that's redundant and irrelevant. I hope you don't feel that's the case.

I would think there is a role for the federal government to provide some direction to the country for social and economic policy that will benefit Canadians as a whole. There has to be some balancing of the interest between the need to generate jobs and profits and the need to provide services and programs for the disadvantaged.

Look at yourself. You might be in an accident or have an illness whereby you become disabled. You may not need those services for persons with disabilities today, but you're only an accident or an illness or a birth in your family away from being directly and personally involved.

Christopher Reeve played Superman -

Mr. Grubel: Yes, yes, yes.

Mr. Dickinson: Yes, I'd like you to dismiss people because we don't have the same point of view as you.

Mr. Grubel: No, no.

Mr. Dickinson: That's why we're here today: for you to listen to us for a change.

Mr. Grubel: I asked you a question.

Mr. Dickinson: Yes, and I'm trying to give you an answer.

Mr. Grubel: You're not giving me an answer.

Mr. Dickinson: Well, you're not giving me a very clear question, because I don't want to frame my answer just to something you want to hear. I want to frame my answer to something I want to say that represents the views of Canadians with disabilities.

Have you read this report, sir?

Mr. Grubel: I have not read that report.

Mr. Dickinson: It will perhaps be the answer to your question.

Mr. Grubel: Who's the author of that report?

Mr. Dickinson: It's the Federal Task Force on Disability Issues, which had representation from the disabled community, which sat in on the public hearing and consultations. It consulted with Canadians and organizations across the country that are directly, personally, and intimately involved with disability issues.

I'll give you a concrete example. If you can't see the big picture, let me bring it down to smaller terms. The example is the current disability tax credit under Revenue Canada. Everybody who qualifies for that tax credit gets the same tax benefit under the credit as it currently exists, regardless of the amount of direct costs related to their disability. For example, if you need sign language interpreter services because you're a deaf person, if you have to purchase your own wheelchair or your health benefits, or if you have to buy a computer adaptation to have a voice synthesizer because you're blind, the tax benefit you currently receive is the same as the benefit for other disabled persons, whether you have a minor expense or a major expense.

The report recommends reducing the basic disability tax credit amount, which anybody can claim if the person qualifies as a person with a disability. Therefore, by readjusting the credit, those who actually have real out-of-pocket expenses they can prove will be able to recover more of those costs under the expanded credit, and those who don't have extra related costs they can verify will get less of a benefit. The overall cost to the tax system may be neutral, but those who actually have direct expenses will get more.

As another example, the current tax provision provides up to $5,000 a year for attendant costs if you're employed. If you're a person, say, who's a quadriplegic and needs a full-time attendant - and the employer doesn't pay for that attendant - why should there be a limit of $5,000 if you're actually spending $10,000 or $12,000 for the attendant service you require in order to maintain yourself in a good job and pay taxes? Why shouldn't you be able to recover the actual cost as it relates to the disability, so that you can then compete in the labour market without creating extra cost for employers or creating a reduced income for that person with the disability that creates a disincentive to get off social assistance, Canada Pension disability benefits or whatever because you can't improve your net income because you yourself have to pay those expenses related to your disability?

.0930

Those are the types of things this report addresses, not in a philosophical airy-fairy, left-wing...person who doesn't understand budgets and bottom lines. It's talking about investing in people to reduce the inequities so people can compete fairly and be treated fairly and equally when it comes time to get a job, keep a job and provide a decent standard of living based on their effort to improve their own situations, with the assistance of government but not necessarily with total support for all their day-to-day expenses and living, which any other citizen would also be competing for.

Mr. Grubel: With all due respect, I come from a region where there's a great deal of dissatisfaction with the excessively heavy hand of the federal government. I represent 80,000 people.

I asked you a question.

Mr. Dickinson: Fortunately, so far you don't represent the government of the country at large, because a majority of Canadians still believe in social justice. A majority of Canadians still believe that the federal government has a role in economic and social policy. A majority of Canadians still believe -

Mr. Grubel: I don't have to listen to this. I can tell you, this is not why I travel around the country, to be lectured to like that.

I have some 80,000 people who voted for me. For you to say that I do not care about social justice is an insult, and I'm not going to take it from you!

Mr. Dickinson: Well, that's your choice. I'm here because you invited us here to listen. If you choose not to like the message I give you, that's your prerogative.

Mr. Grubel: I asked you a question. You're not giving me the answer. You're not asking the question. You're going off on some rhetoric.

Mr. Dickinson: I'm giving you an answer that you don't perhaps enjoy and like -

Mr. Grubel: You're not giving me an answer. Give me an answer.

I want to know, in your judgment, the responsibilities of the provincial government and the federal government with respect to caring for the disabled. Can you please give it to me?

Mr. Dickinson: Read this report.

Mr. Grubel: Give it to me right now. I want it in the record, to be read by the Minister of Finance.

Mr. Dickinson: I'm suggesting there's a federal government responsibility and role -

Mr. Grubel: What is it?

Mr. Dickinson: - to use its spending power to provide transfers and income protection to Canadians with disabilities and other disadvantaged Canadians, and provide some sense of equity across the country so those individuals who have a basic need will have a decent, basic standard of living.

In terms of Canadians with disabilities, I'm requesting that the federal government use its federal spending powers, in particular the tax system, to provide cost recovery so the expenses that are directly related to disability are compensated through tax recovery, so the Canadian with a disability can compete fairly and equitably with a person who doesn't have a disability, in terms of the costs that relate directly to his or her disability.

I'm also ensuring that the provincial government still maintains its role for local delivery of services to health care, education and employment that are provided for under the constitutional direction, but supported in terms of the federal government by providing equity across the country through the long historical establishment of providing transfer payments and support to the regions of those provinces that have a need to provide a minimum standard of service that is equitable across the country.

I welcome the fact that the western provinces are in the position of being ``have provinces'', but when this country was first formed, the Maritimes and the Atlantic provinces were the ``have'' provinces. We were in a position at that point where we didn't need that assistance. Hopefully at some point in the future we won't need it again.

But as a Canadian - not as a New Brunswicker, an Albertan or a British Columbian - I believe this federal government and future federal governments have an obligation and a role to protect the nation, protect the country and preserve the opportunities for all Canadians wherever they live to have roles in that country as citizens of the country.

Mr. Grubel: Can I ask you another question, please?

Mr. Dickinson: Certainly.

Mr. Grubel: What exactly is the tax advantage offered to family trusts?

Mr. Dickinson: My understanding is that there are a number of trusts that are currently provided protection in Canadian tax law where assets of the family trust are passed on from generation to generation without paying inheritance taxes and are protected. People are enjoying the benefits of using the family home and property, etc., without paying taxes on that property.

.0935

The argument that has been used to defend that, which was that it was a measure that also benefits Canadians with disabilities, is a smokescreen. As I said in my presentation, we support the idea of a family member having the opportunity for the protection and trust of assets for the family so that the parents of a disabled son or daughter can leave the family home without taxes to that person to use for their enjoyment for their lifetime. But at the end of that person with the disability for whom they were providing, the assets of the family should be taxable.

But the reality is that most family trusts in Canada protected under current tax law are not for the benefit of persons who have an infirm member of the family. They are wealthy Canadians who are passing on the assets of the family from generation to generation without paying tax.

Mr. Grubel: Do we have an inheritance tax in Canada?

Mr. Dickinson: We have some tax, but I'm saying there are current loopholes in the tax system under family trusts. Research has been done on that work. We're not talking about hundreds of thousands or millions of dollars; we're talking about hundreds of millions of dollars in lost tax revenue that could be available to the government of the day to help reduce the deficit and debt without impacting on social programs that benefit the country as a whole.

Mr. Grubel: Mr. Dickinson, we had hearings on family trusts. What you're describing to me refers to the issue of whether or not we have an inheritance tax. The problem of recovering money passed on from generation to generation exists with or without family trusts. Correct?

Mr. Dickinson: You're not understanding me. I'm not talking about inheritance; I'm talking about family assets that are passed on from generation to generation without any tax.

Mr. Grubel: But we asked tax lawyers several times whether the family trust is an instrument that could be used for avoiding tax. With the new law, it was said that whenever the inheritor of a family unit dies, it becomes inherited - that's the first generation - and all the capital gains are deemed realized and have to be paid. This is exactly the same as if you are not holding your assets in a family trust. It is identical.

The only way the government can recover those hundreds of millions of dollars - it's billions, according to some - is by having an inheritance tax for both individuals and family trusts. Otherwise, you're treating family trusts inequitably, differently. There is no gold buried anywhere that can be gotten by the government enacting laws or by treating family trusts differently.

So I urge you to please look at the evidence on this. There is no money to be had without an unfair treatment of individuals.

Mr. Dickinson: I respect your opinion. I guess we'll have to agree to disagree, because I think that is an area where further research might be appropriate.

Mr. Grubel: I recommend it to you. I will take you up on readings to try to find out what in your vision, and in the vision of all those people, is the distinction between federal and provincial responsibilities.

I have come here genuinely to try to find out more about this world so I can give advice to my party and constituents about what is going on in the world. I really did not appreciate you tearing into me in the way you did. I asked a perfectly legitimate question. With all due respect, you were very intemperate in the way in which you answered me.

The Chairman: Mrs. Brushett.

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

I welcome each of you here this morning. It's a pleasure to be back in Fredericton again.

It was alluded to earlier that because we don't have business people at the table, perhaps they may not have been invited or they're so totally satisfied. I think perhaps there was short notice, but everyone received the same notice. Business had been extended that invitation as well.

.0940

I've been before most of you here last year. It is an annual event. So you might be prepared in future years to have your presentations available to be heard.

One thing I did want to highlight is about bank profits being so absurd. The word was ``obscene''.

I would ask each of you to consider just who shares in those bank profits. Not that I'm a great defender of the banks, but is it not the pension holders of this country, people looking toward their retirement and those who have invested in stocks or mutual funds through the banks to share later on in the senior years of life, who will be enjoying some of those profits as well?

I wanted specifically to direct a question to Mr. Murphy. He said the government must create activities to stimulate the economy.

I'm not sure you're aware, Mr. Murphy, but a few years back, the government developed labour-sponsored venture capital funds. I suspect you are aware.

There are approximately 17 of these funds in Canada today. Their whole purpose is to allow labour to generate and create those jobs through investment throughout the regions of this country, particularly in the rural regions, which we've stressed this last couple of years. I'm told by a researcher, having sat on this finance committee for the past two years, that our treasury forsakes approximately $8 billion annually through these tax credits so as to allow labour to generate jobs in this country.

Are you aware of this? Is this happening in New Brunswick?

Mr. Murphy: Yes, I am aware of this. I'll expand on how it is happening in New Brunswick, hopefully.

But first I'll deal with your remark with respect to the banks and the fact that a lot of their dollars do involve investments by pensions. That's true, but regardless of how anybody in Canadian society gets their dollars, at the end of the day, there must be fairness in reality and perception. It doesn't matter whether workers, pensioners, or corporations are making money in an obscene fashion.

I think those in Canadian society, if they haven't yet reached it, are quickly reaching the position such that something has to be done in terms of what's happening in the banking industry. I think that's been a matter of record and of discussion by the appropriate people who look at the banking industry within the House of Commons.

With respect to your very specific question about labour-sponsored venture capital funds, yes, I can say that I am aware of them and the objective behind them. It's true that these billions of dollars, as you said, are being forgone by the treasury because of the nature and purpose of these funds, which is to save and create jobs.

I will go on record as saying, in case you are not aware, that we, the New Brunswick Federation of Labour, are a sponsor of a venture capital fund. We just recently received funding assistance from our provincial government in the form of a repayable loan and from ACOA in terms of operating assistance, which is also repayable.

The objective behind the exercise is to get out and operate, which we're not doing at this point in time, and hopefully sell shares by the first of the year. We'll generate share capital. We'll then proceed to do what the funds should be doing, which is saving jobs. More importantly, this should be providing that badly needed venture capital to allow new, emerging enterprises to get up and running when they can't get the types of financial assistance they're looking for.

A number of business organizations in Canada, particularly in Atlantic Canada, have alluded to that. The Canadian Federation of Independent Business has said that a lot of their membership cannot get the venture capital they need. They fingered the banks, saying they've been extremely reluctant to put venture capital funds out.

Our objective is to start putting that type of funding out there at the point in time we raise the capital. We should be on line to be measured on the basis of our performance -

Mrs. Brushett: When we come back before you next fall, you'll be able to tell us how many jobs you've created in New Brunswick due to the labour-sponsored funds.

Mr. Murphy: I think you know as much as I do how the funds work. You would appreciate that in a province the size of New Brunswick, you're not going to generate sufficient share capital, particularly in a venture capital fund, to have sufficient capital invested in year one. In years two and three, you gradually move into it, but that is the exercise.

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There are rules around that exercise, which are, in my own personal opinion, important rules or criteria, such as at which point in time you have to have a certain percentage of your capital back out there in risk ventures. Those rules are important and should be adhered to.

Mrs. Brushett: I think you'll find that there's plenty of venture capital to look for what might be a credible investment, or an investment that isn't an absolutely, totally crazy risk, for lack of better words. You could find an investment that will create the jobs that will keep our young people here. It is a problem of which we're very much aware. Again, we need to have sustainable jobs and investment that will give a future and a return. Whether it's labour or the banks, they're not going to invest if they're not somewhat secure in that investment.

I did have a question for Mr. Dickinson in terms of disability and how we handle it under Revenue Canada now.

It's been a grave concern for me these past three years as a member of Parliament how we have reneged on this $1,000 disability tax credit for some people who are, in my view, disabled, but who are not viewed as such by Revenue Canada. These people perhaps are earning $12,000 or $13,000 a year, and that $1,000 tax credit for their disability is very meaningful in that limited amount of revenue or income coming into their household.

I spoke this Saturday past, actually in the province of Nova Scotia, to the Canadian Diabetes Association. I asked specifically: What is a disability? How should it be defined? Is it abused? Is it not as specific as it should be?

The Canadian Diabetes Association communicated that perhaps adults with diabetes should not be considered disabled, but children with diabetes definitely should be, because for them it's a much more serious disease, requiring much more travel, medications and devices to assist them.

Do you have views as to what clearly is a disability?

Mr. Dickinson: I think part of the confusion in the general public and even people representing certain health organizations, conditions or even specific disabilities, is that it's not the diagnosis that should be used to determine whether a person is disabled. Consider, for example, whether you have diabetes, you're HIV-positive or have multiple sclerosis. Within any diagnosis, there are many levels or degrees of disability.

What we prefer instead, especially in terms of Revenue Canada, is to provide more information relating to the functional limitations on the activities of day-to-day living and also whether or not there are costs created by the health condition or the disability, whatever term you want to call it, that are directly related to that. These could be either technical aids or assistive devices in term of communication aids or mobility equipment. You may need the services of an interpreter, hearing aids, or whatever.

In the task force report, there's not only the option of changing the disability tax credit, but also the medical services deduction could be changed. So if you have direct expenses, whether you're labelled as disabled or not, and if you can recover those costs, you're put onto a level playing field.

Whenever you offer a benefit for a government program, whether it's the disability tax credit, Canada Pension Plan disability benefits, workers' compensation coverage or whatever, you need to have some way to draw the line in terms of determining eligibility. Wherever you draw that line, there will always be people who are either right up to the line, but not quite there, and other people who are on the other side.

Therefore, I think it's important to frame the information in terms of eligibility not on the diagnosis of a condition but on the costs related to caring for that condition or accommodating it and/or what level of disability that person has as it relates to functional limitations.

In other words, a person could be in a wheelchair as a paraplegic and be fully independent. They have no prescriptions because they have no illnesses or whatever. They function quite well. So the only costs they should recover would be the cost of the wheelchair and maybe the cost of the adaptations in their car. As far as employment, they're not at a disadvantage if they're working in an accessible location.

Mrs. Brushett: I have one quick follow-up, as time is always a real concern at these hearings.

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We haven't had that report distributed yet. May I ask, did you associate costs with the recommendation so that we would know what this would cost the treasury?

Mr. Dickinson: By the way, this report was not done by us.

Mrs. Brushett: I realize that. It was a task force.

Mr. Dickinson: The document doesn't cost out individual recommendations, but I know they've done some research on that. As I said, in most of the recommendations we see in here, it can be done through existing programs that are already in place.

Take, for example, VRDP. That's a program in place now. It currently expires on March 31, 1997. It's an employment-related program for persons with disabilities. They're talking about using the same amount of dollars, but in a more creative, outcome-oriented way.

There's the issue about the disability tax credit. As I said, the basic amount that can be claimed could be reduced if you can't provide receipts or identifiable expenses, while increasing the upper ceiling for those who do have that. We feel these can offset the cost.

A report just came out on October 28 -

Mrs. Brushett: Yes, we realize that.

Mr. Dickinson: - but I don't have information from the people who wrote the report as to how much detail they have in the costing. I will certainly be exploring that issue myself.

As a taxpayer, I'm concerned that we make recommendations that are affordable, sustainable and realistic, and not pie in the sky. The information I have from talking to all the people involved is that this is the type of report that does that, and I've read a lot of them over the years.

The Chairman: Thanks, Mrs. Brushett. Mrs. Chamberlain.

Mrs. Chamberlain (Guelph - Wellington): Thank you, and good morning.

First of all, I'd like to say to you that one of the reasons I'm here on the task force is that I am a Liberal member from Ontario. I came because I have never been to the Maritimes before, and I wanted to hear, for myself, from the people.

I find myself sitting here this morning listening to Mr. Murphy, for instance, talking about the 20% unemployment rate. Where I come from, it's actually below the national average. We're at about 8% unemployment, which is not wonderful, but compared with 20%, it's heaven, quite frankly.

For me, this is a learning experience to hear you speak of a number of issues. I think Mr. van Oord, quite frankly, hit the nail on the head when he talked about crawling out of the hole. It's hard. It feels like you're paying double when you're paying into the deficit and going into a negative position.

Mr. van Oord, I want to mention to you that we have heard the PMRA a number of times. The chairman, I hope, is going to approach the Minister of Agriculture and Agri-Food on this issue. I think we've heard from enough groups so that there is an issue around this. There appears to be a serious issue around that particular initiative.

I want to say to you that we do hear you. We're not able to correct everything, but when enough groups are able to get a message across, it is valuable to us.

My question is for Mr. Mahar. I appreciate you being here. You are the only business person. I would have liked to have seen a few more, quite frankly. I think that would have been a little more helpful.

You talked about rewards for job creation. What exactly were you talking about? Were you talking about taxation? When you made that statement, what were you referring to?

Mr. Mahar: I guess you could say I was probably painting with a very wide brush at that point.

Consider my own personal situation. I am currently employing approximately 11 people in two different businesses. Now, it would be very easy to make just one more job in each of those businesses to probably make a very large impact upon national unemployment and everything along that way. Unfortunately, as an individual, I am not able to make an additional job in either of those businesses and be guaranteed any return on my investment by so doing.

I have a saying, which I told to Mr. van Oord this morning, that I have a cow, and that cow is giving me less and less skim milk all the time. That is my business. Neither of them are what you would call particularly healthy at this point in time.

Now, we're surviving, thank you. I'm working probably 60 hours a week to do it, addressing the time of unemployment. I'll go back to Mr. McIntosh and use a scriptural intonation, that it is hard to find a hireling to do what the owner will do themselves, perhaps.

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The Chairman: But he doesn't want you to work overtime, so I would hope you wouldn't put in more than 37.5 hours per week, Mr. Mahar.

Mr. Mahar: Unfortunately, if I was only putting in those hours each week, I don't think I would have either business, nor would I have the 11 jobs to go along with it at that point in time.

But there's one thing in terms of delayed gratification that I'm looking to build. I have this hope that at least somewhere, at some point in time, I will be able to retire.

I had that opportunity actually probably handed to me. Somebody wanted to buy my cow for beef, if you will. In other words, they wanted me to shut down my business and sell my assets. I could probably live on those assets fairly well. I would get a far better return by probably disposing of them than I would by operating them at this point in time. Given my stage in life and that of my family, I want to hold it out that if they choose to, the possibility will be there for them to step in. But I don't wish to burden them if they choose to step in, and operate either of those businesses.

Now, if they don't, then I will consider that, and that's a different life stage. There are a lot of baby boomers out there who are going to have to make that decision.

Right at the moment, I find I have personally tailored my income to whatever I am allowed to, shall we say, put away and save for future retirement.

So the next dollar I add, if I decide that someone in my family, such as my wife, will be employed, or the next dollar I personally make, when I see I'm only going to get a 50% return on that, and because of the law of diminishing returns I'm going to have to probably work twice as hard to get that next dollar, it gives me disincentives to create the additional jobs to expand either of those businesses or to be, quite frankly, particularly aggressive in the marketplace to take the additional risk.

One of my businesses has to do with the construction industry. Due to the seasonal aspect and the risk nature of that, I could have a very good sales year. Unfortunately, there are those who are not able to pay me, or choose not to pay me. Most of the time, it's not a choosing not to but an inability to pay me at year's end. That means I don't take the additional risk of going out for additional expending.

Mrs. Chamberlain: Thank you very much.

I have to say, on a personal level I've learned a great deal being here today. I want to let all the participants know that.

The Chairman: Thank you, Mrs. Chamberlain.

[Translation]

Mr. Laurin: Mr. Dickinson, with regard to tax deductions, one of the suggestions you make is that the government reduce or eliminate the tax advantages for contributions to a political party.

I wonder about that, because when you ask for something, you must make sure it doesn't backfire. Those who currently benefit the most from political contributions are not your average citizen, but big companies who, regardless of the tax advantages, will always fund political parties because that is how they protect their lobbying.

The tax advantages for political party contributions are really an advantage for the average taxpayer, who can get back 75% of his contribution in taxes on a $10 or $20 donation. The best protection for the disabled people you represent is perhaps for political parties to get more funding from the public because, ordinary people have a better understanding of your problems than big companies do.

So when you suggest that those tax advantages be eliminated, you are saying we should take them away from average Canadians. So, tomorrow morning, political parties would be entirely controlled by big business.

The Bloc Québécois does get funding from its grassroot members. We do not accept any corporate contributions. I think our party is more democratic because of that. That is why I think it may be in your best interest to maintain those tax benefits.

I would like to hear your comments on that and on something else as well. You said the same resources could be used to do more. We have reached a point where we are wondering whether it is possible to do even more with fewer people. There have already been major budget cuts.

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I agree with you that there are still some areas that could be cut further. I think there may still be some room for budget cuts to the Canadian army and other areas, such as in some big companies. We know that in Canada, over 70,000 companies made a profit over the past five years and did not pay any tax. Those are areas we should focus on and where we could get more revenues.

I would like you to comment on what I have just said.

[English]

Mr. Dickinson: As an example, take the tax benefits for contributions to political parties. I was suggesting that the tax benefit could be reduced to the same level as a contribution to a charitable organization.

So we're not necessarily saying that they should be eliminated entirely, although that might be the point of view of some, but they could at least be reducing the tax benefit so that the consumer or taxpayer will get the same tax advantage of either supporting a popular party or making that contribution to support community and charitable organizations that are providing direct services to the disadvantaged, including people with disabilities.

On the issue of where you see opportunities for reductions in government without affecting the quality of services at the front lines, I gave an example earlier that maybe it's time again to revisit the issue of eliminating the Senate.

There are lots of issues in government, such as being involved with appeal tribunals of whatever, where the cost of appealing the decision on a relatively small amount of dollars or the cost to deliver programs to an individual for a very small amount of money, costs a lot more than the service that's being provided.

So I'm not saying we can eliminate government administration and bureaucracy entirely and I'm not saying we should eliminate all jobs in the government public service. What we should be doing is reviewing again the roles and functions of various boards, commissions and programs within government to see if we can find further evidence of duplication or where the cost of administering and delivering the program is completely disproportionate to the actual benefit being provided. Perhaps those benefits could be delivered through another mechanism, such as by the tax system or by adding that responsibility to another department.

I'll give you an example of that in terms of the structure of the current cabinet. No disrespect is intended, but we have a finance ministry and a revenue ministry. Maybe those could be combined in some way to reduce the administrative costs of delivering services without impacting on the quality and content of services to the public.

[Translation]

Mr. Laurin: Mr. Dickinson, last week, I went over the task force report on handicapped persons which you gave to us earlier. You are probably not expecting the government to follow all your recommendations. I would like you to tell me very briefly which are the two or three major recommendations you hold dear.

[English]

Mr. Dickinson: I would suggest, personally, that the first one is eliminating or recovering the costs that are directly related to the disability, whether it's through changes in the tax provision or by other programs. Say you need equipment, technical aids or support services that are directly related to a disability. Whether you paid for them yourself up front and get a recovery on those costs or whether they're provided through some kind of public program or tax benefit, I think that's a key priority to level the playing field and to make it cost-effective for the individual with a disability to enter the labour force.

So the second issue, then, is the participation rate in the labour force itself. We were talking about being upset about an unemployment rate of 17% or 20%, but the actual unemployment rate for Canadians with disabilities who are looking for work ranges anywhere from 50% to 80%. These are young Canadians of working age who happen to have a disability. If they had the right support and could get the costs of the disability covered, they could leave public assistance either partially or fully to become a contributor to the tax system, not just a beneficiary.

As we look at the demographics and the aging population, as I said earlier, we need to increase the rate of participation in the labour force.

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So the number one thing is recovering the cost directly related to disability. Number two is increasing the number of people with disabilities who are in the labour force. Number three would be the protection of human rights for Canadians with disabilities and to put in practice what we've been preaching, as Mr. McIntosh would say.

[Translation]

Mr. Laurin: My last question is for Mr. Murphy. I would have liked Mr. McIntosh to be here since I would have liked to have seen his reaction to this question.

Quebec has just held an economic summit which gave rise to several recommendations, including the two you just referred to. The Quebec government plans to restrict overtime and set a 40-hour work week, requiring that all overtime be shared with other employees.

The Quebec government also plans to ask the federal government to transfer a portion of the $250 million already in federal government coffers to meet family needs. We ask that the federal government withdraw from that area of jurisdiction and give the province the money it requires to redefine the family's vocation.

I would like to know whether Mr. Murphy thinks those are interesting proposals and whether he thinks the Maritime Provinces could apply the same rules.

[English]

Mr. Murphy: Certainly the idea...[Technical Difficulty - Editor]...just held in the province of Quebec certainly is something that would be welcomed in New Brunswick, provided all the various stakeholders enter into it in an equal partnership. In the province of Quebec the trade union movement, probably because of some of the economic influences developed through its solidarity funding and ventures like that, is more of an equal partner.

Here in the province of New Brunswick, at this point in time, it's the exact opposite, unfortunately. For that matter, the same applies to a lot of these social action groups. You heard from a lot of them this morning. You'll hear some of them during the rest of day. Our voices really don't count.

Take one issue as an example, the issue of the blended sales tax or harmonized sales tax; call it what you want. This government in New Brunswick supposedly consulted the people of New Brunswick on that particular issue. Well, we weren't consulted. As a labour organization, before the final decisions had been made, we weren't asked for our views. But the business community was asked for its views. There were selective hearings of the type that are closed to the media. I could go on with other issues.

So, yes, that getting together of the major stakeholders is a valuable and important exercise. It should be done not only in this province but also nationally.

Nationally, for example, take the reforms to the Canada Labour Code. Some of you may be familiar with this. It was a very valid consultation exercise. It was extremely valid. The record is there for you to look at.

The Canadian Labour Congress just spoke on reforms that had been brought forward in the House of Commons this week. They said they did not get everything they would have liked, but given the nature of the exercise and what government has done as a result of this exercise, it's a step in the right direction in terms of fairness for all the players.

That is not happening in the province of New Brunswick, and it's not happening nationally on a lot of other issues. Where there's a willingness on the part of all of the parties - I think the exercise with the Canada Labour Code proves it - you can have some tremendous results. It's a question of the government acting on those results.

I go back to the task force on the redistribution of work, for the want of better words. That was a collective exercise, and there was a unanimous report and recommendations, but there was no action.

With respect to the transfer of various dollars for various programs to provincial governments, in New Brunswick we're more leery of provincial authority being enhanced with respect to the spending of dollars on programs that were previously more strongly controlled by the central government. We're leery that the dollars won't be used in a fashion that will protect people. It's an area in which we're quite cautious as we move down that road.

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The Chairman: Is there anyone else who wants to ask questions?

I want to thank all of you for being here. I think you have either directly or indirectly made us aware of the incredible challenge we face in getting more and more Canadians working. This is a problem we face not only in Canada but also in most other countries in the world as the electronic and information revolutions have not necessarily created more jobs but taken jobs away.

We've heard today about the very human side of unemployment and how it affects individuals, and I think all of us are touched by this. I can assure you we've heard it in every other part of Canada too, and we are very concerned.

We've heard from you, Mr. van Oord, about the Pest Management Regulatory Agency. We know this has been bugging a lot of other Canadians as well. We will try to do something about it.

Mr. Dickinson, you talked very eloquently about the plight of those who are disabled. What struck me most about what you said was that this is not a case of charity, but about resources of which we are going to need more and more in the future. I believe that.

While I have not read the report, I've seen reporting on it. This is a report prepared under Andy Scott, a member of Parliament. It was described as very hard-hitting and good. So we look forward to working with them to study those provisions. The ones you talked about today are very important to us.

Just a little word on family trusts. I think when you study them, you will find that they impose tax disadvantages on those people who use them. They are not a tax break. Perhaps we should consider making them a tax break for those who are disabled. You do want to have an intergenerational transfer, which is critical in the case of Canadians with disabilities. These are actually a tax penalty to use them at present, instead of owning things directly.

I see here that banks are regarded as being pretty bad.

I like what we've done over the past few years in opening up the labour-sponsored venture capital funds so that labour can have a direct contribution. The government is putting up to 90% of those funds in through tax support to those labour-sponsored venture capital funds. It's one of the most heavily tax-subsidized programs in the country. We're looking forward to this new type of partnership, whereby labour can have a real say in what happens.

I'm glad you mentioned that, Mrs. Brushett.

In terms of the banks, as well, we've just issued a report in the House of Commons that will open up Canada to more competition in terms of banking. We think that's the way to go. Don't ask me to defend the banks, but when they do make profits, they do pay taxes. When their chief executive officers make huge incomes, they do get taxed at least 54% on that. Maybe the taxes should be higher. Maybe that's what you're saying.

As for Mr. McIntosh, I'm sorry he's not here. This is going to sound condescending, but I wish it were as simple as he points out. In just one of the contradictions, he says we have to get interest rates lower but we have to print more money so the Bank of Canada can hold Government of Canada bonds. Well, printing money means that you have inflation and that interest rates go higher. How do you then have lower interest rates?

So these are some of the contradictions we face. If there is a real magic solution out there such that it's going to be easy, I want to hear about it. I just wish it were that easy.

We will keep examining these things. Maybe there's a solution out there we missed. Maybe there's a solution nobody else has been able to find and work on that will allow us to get out of this double hole we're in without pain.

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That would be the ideal thing. We're still searching for that Holy Grail.

Thank you very much, on behalf of all members, for your excellent presentations to us here today.

The meeting is adjourned.

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