FINA Committee Meeting

STANDING COMMITTEE ON FINANCE

COMITÉ PERMANENT DES FINANCES

EVIDENCE

[Recorded by Electronic Apparatus]

Thursday, October 16, 1997

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[English]

The Vice-Chair (Ms. Paddy Torsney (Burlington, Lib.)): I'll call this meeting to order.

I guess we've had a slight change of plans. We welcome you, Ginny Guiboche, to our committee, and Miguel as well. Instead of having a panel or a round table, as we thought we were having, I thought we would give you the benefit of the first 45 minutes or hour.

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We're here to hear your ideas about what should be in the next budget. We're giving you a copy of the minister's statement, which you probably haven't had a chance to read in the last 15 seconds. But it is there for you, and if you have any further information that you want to submit to the committee following this meeting, you're more than welcome to do that.

Around the table, just for your information, are a lot of new members of Parliament, who are just about as nervous as you are—some of them. We will have rounds of questions from them after you have finished speaking. I might suggest that you speak for about five minutes. If you go over that, fine; if you speak less than that time, that's fine too.

The committee's intention is to hear from as many Canadians as possible right across the country about their ideas for where we need to make changes, where we can make further investments, and if they have any comments on their performance to date.

So I welcome you as a representative of the Saskatchewan Council for International Co-operation, and I give the mike to you, Ginny.

Ms. Ginny Guiboche (President, Saskatchewan Council for International Co-operation): First of all, I would like to thank the group for the opportunity to come speak to you today. I really hope that the absence of all these other groups doesn't mean they don't think you're going to take these ideas and make use of them, because I think that last year some of them were rather frustrated about that.

Anyway, I'll get started with some of our ideas. The federal government has been making progress in deficit reduction. There's really no doubt about that. However, its methods of doing so have been to abdicate its responsibility to the people and leave it up to the corporate sector to set rules and standards, not only for the business and social services in Canada, but for the operation of the entire global economy, it seems.

The Saskatchewan Council for International Co-operation does not support the creation of a nation or a world where the rich are allowed to get richer and the poor to get poorer. The government proved itself entirely without the will to challenge this trend, it seems, and the corporate sector is allowed to control our global economy.

Today is World Food Day, which marks the founding of the UN Food and Agriculture Organization, the FAO, in Quebec City in 1945. The theme of World Food Day this year is central to the elimination of hunger and poverty in Canada and abroad with fair trade. Fair trade means that the producers of products are paid a fair price and treated fairly in their workplace.

Today, the operations of global trade are governed by institutions such as the General Agreement on Tariffs and Trade, the GATT, and the World Trade Organization, both of which are seen largely as agents of the developed world.

Instituting trade policies that favour richer countries by the Canadian government without the knowledge or endorsement of the Canadian people is playing a major role in the negotiation of the Multilateral Agreement on Investment, the MAI.

While the members in this agreement, the MAI, are limited to the Organization for Economic Cooperation and Development—the nations in this organization—it's clear that the agreement itself will have effects far beyond this group of nations, which is the constitution for the whole global economy, written without participation by any but the world's most prosperous nations, and leaving out the developing world, which contains most of the world's population.

Agreements such as these enable transnational corporations—several of these have corporate assessments greater than the GNP of New Zealand, and none of them have constituencies or national loyalties with anybody—to have greater freedom to move their capital and manage markets without government restraint. Competitive advantage is gained through setting up operations in which there is a large pool of cheap labour and weak environmental legislation, so they can do whatever they want.

In Canada, the MAI will free corporations of any obligations to buy locally or fulfil any obligations to local workers, consumers, or the environment. It will remove Canada's ability to place restrictions on foreign investment, and it will take away Canada's right to protect cultural industries.

We fail to see how any part of this agreement will improve the well-being of the average Canadian. The only people to benefit are the massive corporate giants.

In fact, SCIC, Saskatchewan Council for International Co-operation, urges the Government of Canada to take a stand for the people and lead a movement toward the institution of the Tobin tax on international currency speculation.

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We hope that the Department of Finance will agree that international currency speculation creates no value added for nations involved and contributes mainly to instability in currencies and the raising of interest rates. At least corporate financiers could be encouraged to use their money for long-term investment rather than speculation, because the only ones who gain anything from currency speculation are the speculators themselves.

The Tobin tax, originated by Nobel-prizewinning economist James Tobin, supposes that a tax as small as 0.25% per transaction would discourage much speculation and raise an estimated $300 billion U.S. in the world. This is even anticipating a slowdown in currency trading.

All that is needed is for most nations in the world to organize themselves and agree to impose this tax. The tax would be deducted automatically by the institution performing a transaction, just as service fees are deducted now. International campaigns in support of the Tobin tax are already in action in Canada and around the world.

We believe this is an idea that merits consideration. Canada's share of the Tobin tax revenue might be in the neighbourhood of $7.5 billion per year. These funds, along with the government's current planned spending increases, should go into meeting basic human needs in Canada and increasing Canada's contribution to fighting global poverty through international development.

The sad truth is that Canadian official development assistance to the ODA is at a 30-year low, having fallen in 1996 to only 0.31% of the GNP. This means that Canada has fallen in rank from fifth to eleventh place in the amount of money given for overseas development assistance.

Assistance to least-developed countries has declined from 0.14% of GNP in 1992-93 to a low of 0.08% in 1995-96. It really looks like Canada has apparently abandoned its goal, which it extracts from the red book, of restoring ODA to the United Nations target of 0.7% of GNP. In fact, ODA has experienced cuts disproportionate to those of other government departments: 40% for ODA, but an overall average of 23.5% for federal program funding.

According to its own publication, “Canada in the World”, the Canadian government heeded the call for a broader concept of security in which sustainable development is a precondition for human security and acknowledged the role of international development co-operation in achieving this security. This broader concept of security is established in relation to perceived threats facing Canadians from a deteriorating environment and an increasingly hostile world with threats such as mass migration, crime, disease, environment, overpopulation, and underdevelopment.

Interdependence, for the government, implies that our well-being and national interest are inextricably linked to global development. I would hope that this interdependence is recognized in the current budget, because it really hasn't been recognized that this common security does depend on our overseas development budget.

In past years, this government has boasted about making unpopular, but courageous, decisions in the struggle for Canada's fiscal revival. By that, you meant cutting social programs, reducing transfers to provinces for health and education, and raising taxes. This government even stood by other decisions by the unpopular Brian Mulroney, such as the GST and Canada's participation in NAFTA.

Today, SCIC is asking you to make truly courageous decisions: don't exact the price of fiscal restraint on our own people who can't afford it; stand up for the little guy and against the global power elite; open the MAI negotiations up to national scrutiny and institute an open discussion of the cost and benefit of Canada's participation in this deal; be the first government in the world to lend its support to international movements calling for a Tobin tax on international currency speculation; and restore Canada's commitment to fight hunger and poverty globally through international development by cancelling planned cutbacks to the ODA in 1998-99, and by instituting the UN-recognized target of spending, 0.15% of GNP, in the 48 most needy countries in the world.

Thanks for this valued opportunity to express our views. I am open for questions.

The Vice-Chair (Ms. Paddy Torsney): Thanks, Ms. Guiboche.

We'll start with a five-minute round. Mr. Ritz.

Mr. Gerry Ritz (Battlefords—Lloydminster, Ref.): I totally agree with you that the MAI should be open to scrutiny. We need to know what we're getting into, what the repercussions will be.

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I may be a little bit naive here, because we're definitely not up to speed on it here in Canada at this point, but as I understand it, I'm not sure how far along it is or how close the negotiations are to anything critical to Canada's future. We definitely need to know about the pros and cons of what the MAI encompasses.

You talk about Canada restoring its role in developing countries, feeding the poor, and so on. I have no problem with that. Where I do have some problem with what you're saying is in the fact that I don't see the government playing a large role. I see the private sector—I'm thinking of the Canadian Foodgrains Bank, the Mennonite Central Relief Committee, and similar things in which the aid is going directly to the people—as a better way to do it, not government to government. When we tend to see government-to-government investment, we see it going into things other than food or health and welfare for the people of the country involved. So I would like to see a little difference there in your presentation.

Other than that, there are always going to be differences...“large corporations are the root of all evil”, or various things like that. Certainly, a lot of what you said has credibility, but that's more a comment than a question at this point, I guess.

Ms. Ginny Guiboche: The Overseas Development Assistance Program budget does include the money that goes to private NGOs that do work in developing countries. This does include their budget, which is going way down from all these cuts, and although it does include government-to-government aid, we're also seeing the effect on the NGOs, who are increasingly unable to do a lot of work in developing countries due to the reduction of their budgets almost every year.

A lot of people have a problem with the MAI because it has been done so secretively. The Canadian people really need to have some kind of choice on and input into this before it just becomes policy. It's a far-reaching agreement.

I don't think we need to think just about Canada. I think we need to think about all the countries in the world. If developing countries have no input into this agreement because they're not at the right stage of development right now, then they just won't have any choice when they are. They're just going to be export-processing zones in which the people are treated very poorly. I don't see how that can improve Canada's future. When people are not happy in their own country, civil unrest eventually comes about. Refugee situations then increase, and Canada is seen as supposed to be taking in more refugees, which irritates a lot of people as well. Countries interact with each other and there is an interdependence. You just can't ignore that and only think about what happens within our borders.

The Vice-Chair (Ms. Paddy Torsney): Monsieur Perron.

Mr. Gilles-A. Perron (Saint-Eustache—Sainte-Thérèse, BQ): Thank you, Madame, and bonjour.

In your statement, Madame, you mention that you disagree with what this government is doing by cutting social programs, if I read you properly. In this way, this government is cutting over 50% of its transfers back to the provinces in those social programs. As Mr. Martin announced yesterday, when it is making money it is planning to reinvest on a 50:50 basis, with 50% used to pay back its debts and 50% used to create new programs.

Do you think he should be giving the money picked up in those government cutbacks back to the provincial governments in order that they can manage their social programs?

Ms. Ginny Guiboche: I think it would be good to have provincial management of social programs. The provinces are quite aware of what their needs are locally. They would be in a better position to allocate those funds, especially if they do take consultation from community members. It's fairly difficult for the federal government to do that very well in each community across the country.

Mr. Gilles-A. Perron: Thank you.

The Vice-Chair (Ms. Paddy Torsney): Mr. Nystrom.

Mr. Lorne Nystrom (Qu'Appelle, NDP): Thank you very much, Madam Chair.

As the only Regina member here, I want to welcome you to the city of Regina and to the province of Saskatchewan. Along with my colleague from Battlefords—Lloydminster, I hope your stay is fruitful and enjoyable. From what I understand, the weather out there is going to co-operate today.

The Vice-Chair (Ms. Paddy Torsney): It's better than what they offered us in Vancouver.

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Mr. Lorne Nystrom: I also want to welcome you to the committee this morning.

I wanted to let you know that just yesterday I signed a private member's motion to have Parliament consider a tax on international financial transactions. It's one of many private members' bills. They don't always get to be debated in the House, but at least it'll be on the order paper. It'll be a forum to try to push the idea of taking a look at it from a Canadian point of view and it may be debated.

Because there are so many private members' bills, we have what's called a lottery, where so many are drawn every once in a while and they get to the floor. At least there will be one filed when Parliament goes back into session next week.

I wanted to ask you to elaborate a bit more on your ideas for a so-called Tobin tax and how we should be looking at getting this structured and started. Of course it has to be international. You can't get two or three countries on their own doing it, because capital will just flee out of those countries. Can you just elaborate a little bit more on your ideas on a Tobin tax and what you'd like to see us do as parliamentarians to at least explore the idea? Like any other idea, it may take a long time to bear fruit.

Medicare was first promised by the Liberal Party back in 1919, but it didn't actually become reality in this country until the 1960s. Hopefully this will be a lot faster, but do you have any advice to give to the committee?

Ms. Ginny Guiboche: I think your introduction of a private member's bill is a very good starting point for people to get talking about it, because people have to be aware of what it is about before we will start to get a lot of support for it.

I think that even if we are the first country to start doing it, we won't really be losing any money if people don't speculate on our currency. I don't see how our long-term development is really affected. The only people who gain money from currency speculation are the speculators themselves.

So if we do institute the Tobin tax and charge a fee, we can charge double the 0.25%, meaning that the country from which the currency speculation is instituted that doesn't have the Tobin tax in place won't be in a tax haven because they will be paying double the tax rather than the tax that they would pay to each country in which speculation occurred.

Does that make sense?

So even if we don't have a whole group of countries who are co-operating, I think eventually countries will start to co-operate, because they can make a lot of money from this. The government can really do quite well, and I don't think the government loses anything by instituting this.

Mr. Lorne Nystrom: My second question is more general, in terms of foreign aid and development of the world and the developing world, and so on. How much of our GNP do you think we should be spending on foreign aid and foreign development?

In times of depression/recession, countries tend to look inward. Our budget has been cut back, as you've said, and the same has been true in most countries around the world. Now we're reaching a stage, as Mr. Martin said yesterday, at which we're going to have our books balancing in this country, albeit that a huge national debt remains. But western Europe is in a similar situation, and so are the Americans.

As we move into this new chapter, into a new century, a new millennium, what do you think our target should be as a country with our relative wealth? What do you think the target of the developed world should be in terms of our obligation towards the developing world?

Ms. Ginny Guiboche: I think 0.7% of the GNP is a good goal.

Mr. Lorne Nystrom: Yes.

Ms. Ginny Guiboche: I really don't buy into our having to cut and cut. I think fair taxation of large corporations would really balance our books. There's no need constantly to look for ways to cut things.

Some things that are included in the overseas development budget really shouldn't be there. For instance, CIDA Inc. doesn't belong in the overseas development budget. That's not development; that's trade, and it should be in that budget.

They also include in the ODA budget settlement fees for refugees who come to Canada. That's not money spent for overseas development; that's settlement in Canada, that's social service programming, that's federal programming. We're hiding these things and making it look as if we give more than we really do, because that's not really development.

The Vice-Chair (Ms. Paddy Torsney): Mr. Nystrom, thank you.

Mr. Brison.

Mr. Scott Brison (Kings—Hants, PC): Thank you, Ms. Guiboche, for being with us this morning.

I think the challenge we have, as a relatively small country in an increasingly global environment, is how we play a role or how we maintain a position as a strong middle power in terms of affecting change and affecting policy internationally.

There has been an international phenomenon, and that is the decline of the role of the nation state in actually participating in the setting of policy and guidelines. That's something that has come with globalization. Technology has played a significant role with that.

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I think it's very important for us to consider, whether it be the Tobin tax or negotiations on things like MAI, that almost all of these types of things have to take place or be discussed through international fora, either through OECD or a trade organization, or, depending on the type of policy, the UN.

In terms of MAI, I agree with you, there has to be more consultation with Canadians on something as important as MAI. However, I don't necessarily agree with you that MAI in principle is a bad thing. I think in the long term it can provide benefits to all participants. There is an accession clause for developing countries to enter MAI. You can proceed with an MAI through OECD countries a lot faster than you can through WTO, which takes a lot longer because of the variance and the divergence of interest and backgrounds of those countries.

I think anything we do...and even in negotiation of the Tobin tax. I share Mr. Nystrom's concern that with something like the Tobin tax, it almost has to be entered into or considered and discussed through international fora with our trading partners. Otherwise, we would be effectively penalizing some Canadian interests.

Now, you were saying that only the traders or the speculators benefit. We do have a fairly strong financial industry in this country that employs a lot of people, and I don't think any unilateral decision on something like the Tobin tax would be responsible without discussing with them the ramifications on both their business and their competitiveness internationally, which has become more important.

In terms of aid, we do have a responsibility to work with and assist nations and developing countries less fortunate than ourselves. One of the best ways to help those countries is through trade and through providing opportunities for them to participate in economic growth. Except in direct food aid, one of the negatives about direct aid to some of these countries is that if it's not done properly you can sometimes inflate their exchange rate and make their products less competitive internationally, thereby providing further impediment to their participation in international markets and an opportunity to actually create wealth for their country. So we have to be very careful that we structure that aid, or any aid, to avoid that phenomenon.

We now have, in a post-deficit environment within Canada, I guess a very fortunate circumstance in that we have a decision to make about what we're going to be doing with a surplus. Some people think we should be passing some of that back to the consumers and small business people through tax relief to try to stimulate the economy, especially to try to reduce unemployment through the reduction of payroll taxes. That's something our party advocates, the reduction of payroll taxes, especially EI taxes, which are a tax on jobs.

In terms of spending, part of the elimination of the deficit has been on the backs of the provinces, where, depending on the province, especially in Atlantic Canada, where I come from, it's been a tremendously difficult several years. We don't have the local tax basis where the provincial tax base is to pick up the slack, which has had a significant impact on health care, education, and social program spending, which has really cut to the bone for a lot of people.

Were you saying that you feel the provinces are still the best people to be implementing the social decisions within Canada?

Ms. Ginny Guiboche: Yes. I mean, there is some room for federal influence and discussion, but I think provinces deserve the responsibility to institute the programs.

Mr. Scott Brison: With regard to MAI, I have just one question. What type of format or discussion would you like to see within Canada on MAI in terms of consultation? What sort of consultation would you like to see?

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Ms. Ginny Guiboche: I would like to see planned meetings in the major cities in Canada, and I would hope every province has at least one opportunity for people to speak, so no one feels they didn't have the opportunity. Make sure everyone is included.

On what you were saying about banks, banks make record profits, and just because they lose a bit of money from not being able to speculate on currency trading.... I really can't see how they would be impacted by that.

I can give you an example. In Regina the Bank of Montreal has recently closed two branches. The Royal Bank has closed one. They are just putting people out of work. And for what reason? They make lots of money. There was really no reason to close branches.

I see that the banks are always going to tell you they are going to lose money if you do such and such. I don't see why we should be letting the corporate sector control our nation's fate.

That's basically what's happening with this MAI. The corporations are telling the government what to do now.

About ODA, you spoke about direct assistance increasing the interest rates and such—

Mr. Scott Brison: Currency exchange rates.

Ms. Ginny Guiboche:—for other countries. ODA through NGOs does not do that, and NGOs can then go and do the work in that country through their partner organizations. It doesn't have to be direct aid to the country. Their budgets have been cut substantially.

The Vice-Chair (Ms. Paddy Torsney): Mr. Gallaway.

Mr. Roger Gallaway (Sarnia—Lambton, Lib.): From this side of the table, thank you for coming here this morning.

I've heard of the Tobin tax, but I must confess I really don't know anything about it. I should point out that when you talk about banks you're touching on a subject that I think unites all Canadians, our dislike of those institutions.

I'm more interested in what you've had to say...because in Ontario at one point about 10 years ago we had a land speculation tax because the real estate market was very hot. Of course the great problem was...and it doesn't exist any more, because it was absolutely unenforceable. It's very difficult to tell when a person is speculating and when a person is actually legitimately purchasing property. I have to ask you the question, then—I'm being somewhat anecdotal about this—from the perspective of a transaction, how does one tell the difference between a speculative transaction as proposed under the Tobin tax and an otherwise legitimate transaction? Or is it just an across-the-board imposition of a tax?

Ms. Ginny Guiboche: You mean people changing money because they are travelling to that country?

Mr. Roger Gallaway: Yes, that would be one reason, but I'm also thinking of perhaps a corporation changing money for legitimate business reasons.

Ms. Ginny Guiboche: Basically, a 0.25% tax would not deter people from doing business. That would deter only people who want to do a large amount of money speculating, because that would make a difference in their profits. A 0.25% tax is not going to make a difference for people who are changing money to do business.

Mr. Roger Gallaway: I don't want to put words in your mouth, but what you're suggesting, then, is that it would be a 0.25% tax on any currency exchange, period.

Ms. Ginny Guiboche: Yes.

Mr. Roger Gallaway: So to call it a “speculative tax” would not be correct. It's just a tax.

Ms. Ginny Guiboche: It's just a tax. Basically it's not going to deter people who are changing money for legitimate reasons. We could have an upper limit whereby people who are changing very small amounts of money are not affected by this tax, because there would be no benefit to collecting a 0.25% tax on $1,000.

Mr. Roger Gallaway: Having regard to the fact that something like 60% or 70% of the people of this country live in very close proximity to the border, do you not think that would drive people to American financial institutions?

Ms. Ginny Guiboche: To do what?

Mr. Roger Gallaway: To do their banking.

Ms. Ginny Guiboche: To do their banking? I don't think people want the inconvenience of constantly having to change things into American dollars or Canadian dollars to do various things in Canada. They may just have to pay the tax more if they are changing money within Canada, because they couldn't always travel to the United States.

Mr. Roger Gallaway: I'm thinking of southern Ontario, where I live. There are 8 million people who live within, at most, 60 minutes of the border. It's a significant proportion of the population of Canada.

Ms. Ginny Guiboche: I really don't think it's practical for people constantly having to be going to the States to do their financial business.

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Mr. Roger Gallaway: What you're proposing then is that anyone who is exchanging money is going to pay the tax.

Ms. Ginny Guiboche: We could have an upper limit under which people wouldn't have to pay the tax, because small amounts of money for people to go places is not speculation.

Mr. Roger Gallaway: Okay, thank you. That's all I have.

The Vice-Chair (Ms. Paddy Torsney): Mr. Iftody, we have time for a quick question.

Mr. David Iftody (Provencher, Lib.): I get to ask my question just when Miguel is waking up.

The Vice-Chair (Ms. Paddy Torsney): That's okay. Miguel can participate. We don't mind.

Mr. David Iftody: Thank you very much for being with us today, Ms. Ginny Guiboche.

In our discussions prior to your presentation we were talking about non-governmental organizations. I was particularly interested, of course, in Canadian ones. I mentioned to you that I had worked with aboriginal groups for many years, and in downtown Regina and Winnipeg we know that there are many problems right here in our own backyard with a lot of these folks. I would have liked to see some focusing on that. Perhaps that was my misunderstanding of your organization.

To preface some of my questions—I'll take a different angle in them—I must say that I spent some time in central and eastern Europe last year. I hope to be going back to Romania. My grandfather was an immigrant from Romania. He came here about a hundred years ago and settled in western Manitoba. I've spent some time going back and working on development aid projects.

I met with the Romanian ambassador last week, and what struck me in my conversations with him and certainly with the officials there—I hope to be meeting people in Bulgaria, as well, to talk about these things—is that they are very interested in investment.

Romania, for example, is fighting very hard to get into the European Union. The aid coming from the European Union is aid in terms of infrastructure and investment. The aid that they are looking for from Canada is through the World Bank, the International Monetary Fund and others. The nature of aid seems to be changing and has changed significantly over the past 20 years. My general understanding of what they are after are such things as are provided by the Export Development Corporation. That's my first comment.

My second comment is related to that. I don't want to go too far into that because I want to ask another question.

We announced the other day that for the first time in 27 years we in Canada don't have to borrow internationally to pay our own bills. Under your proposal there would be another $7 billion a year tax, which I think would complicate things in terms of the current account deficit. I appreciate the level of the tax, 0.25%. Nonetheless, I want to ask you why the free movement of capital is, perhaps inherently in your question, a bad thing. Don't you think that Canada and Canadians would suffer as a result of that, because the large corporations would pass it down to consumers? They would pass that tax down to the workers and average Canadians. Secondly, if they were barred from doing that somehow and they couldn't do it, the capital would flee the country.

Those are the two problems we have, if you could respond to them, please.

Ms. Ginny Guiboche: The first was...?

Mr. David Iftody: The first one was related to aid and the strategic nature of aid for Romania, Bulgaria, and other such countries. The second one was on the Tobin tax.

Ms. Ginny Guiboche: I know that a lot of countries are interested in trading with Canada and other countries and that's where they're looking for some of their money. But that's not humanitarian aid; that's trade. I think it is good for countries to get started on that, but there are still people—not the government, but the people there—who need some assistance with meeting their basic needs. That's what ODA money is for. It's not for trade.

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I do appreciate that trade is important in order for the country to get started on the road to recovery. It is a good thing. I just don't think we can forget about meeting the basic human needs or the role that NGOs play in that, because they do a lot with the money they get. They don't pay their people as much as CIDA employees get, but they do a lot more work. These people do not live extremely well in these countries, but they do live okay, even though they don't get paid that much. They do good work. CIDA employees go there and they get paid a lot, but they don't do much.

I really think we need to make sure that the money we spend is being well used. So although I do recognize that trade is important, meeting basic human needs is as well.

The second one is about the Tobin tax and the fleeing of capital. What does having money speculators speculating in Canada do for Canada? Does it do anything? This is not rhetorical. I am asking if it does anything besides make money for the money speculator.

Mr. David Iftody: I represent an agricultural riding. One of the things I've learned since becoming a member of Parliament—before that, I knew nothing of the trade and speculation business—is that in agriculture and natural resource produce and trade, speculation and hedging to provide those products on international markets is growing. With all of our trade and wood products now, and with our mining products, in the emerging hog business going on in Saskatchewan, and in the cattle industry as well, that speculation and hedging is very much a growing part of the agricultural business, and they have to do this. Likewise in Manitoba. I have friends who are exporters, and they have to engage in this.

So to answer your question very briefly, it is, fortunately or unfortunately, a large and growing part of the newly emerging agricultural business.

Ms. Ginny Guiboche: If they are actually engaging in businesses in other countries, that's trade, it's not money speculation. That's what I'm getting at. This is a tax aimed at people who are just speculating on money, who are basically trading in currencies in order to gain a bit of money, not trading.

Mr. David Iftody: I can't answer your question, but that's a good point.

Thank you.

The Vice-Chair (Ms. Paddy Torsney): Thank you, Mr. Iftody.

Mr. Ritz, do you have a couple of questions?

Mr. Gerry Ritz: I have just a couple of points on what has come up in the discussions.

I'd like to commend you on your presentation. It's been very good.

You talked about the Tobin tax, and said it would not really be a hindrance to business transactions at a quarter of a percent.

Ms. Ginny Guiboche: That's according to James Tobin, a Nobel award-winning economist and the person who advocated this tax.

Mr. Gerry Ritz: Right, I understand that. On the other hand, is speculation in anything not a business transaction? Why would a quarter of a point deter a money speculator when it doesn't deter a speculator in automotive products?

Ms. Ginny Guiboche: Because when you're speculating on currency, the amount of percentage that you're going to gain is very small, so 0.25% does have a big impact. It would really discourage a lot of speculation, and the amount that does occur would still produce money for Canada.

Mr. Gerry Ritz: I guess that would have to be proven. We're talking in abstract terms here.

You talk about more taxation on large corporations as the answer to a lot of the ills in the country. I'm wondering if you have an amount in mind. Do you know what large corporations are paying now? How much more should they pay? What's equitable? What's fair? Is there a side effect to over-taxation of large corporations? Mr. Iftody talked on capital fleeing the country. Would we not see large corporations leave if we were to overtax them?

You have to realize that it's the corporations at all levels that are the ones creating the jobs. Whether you're talking about the unionized employees of a large car assembly plant or the local fellow at the lumber yard, there's a corporate effect in there that is being taken advantage of in their paycheques. If you were to overtax the corporations, they would then just pass it along in extra costs. One example that pops into mind of course is the banks. If you were to tax them more, all of their service charges would climb accordingly in order that they would continue to make the targets they have set.

We have a lot of large union pensions and private sector pensions invested in the banks. Do those people not have the right to a fair return on their investment whether or not we all hate the banks, as Mr. Gallaway stated? They are a stationary target. It's easy to go after them.

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I guess that's basically all I was thinking of as you were speaking to the other fellows.

Ms. Ginny Guiboche: I don't think you can let banks dictate your taxation policy. We are a country, and we have a government to make sure we have fair taxation. I just refuse to let us be dictated to by the banks. It's not a good policy.

Banks, even though they make a lot of money.... As I just mentioned, recently in Regina we've had three branches close. What is that for? Basically, it's to make the bank more money. Banks will always want to make more money. It doesn't matter if we fairly tax them or not, they're always going to complain. They're always going to make more money. I don't think banks do a lot of bad, but they are in business to make money, just like any other business.

So I think we need a level of fair taxation. If we had that, we wouldn't have to tax the lower-income people so much and we could alleviate some poverty in Canada.

Mr. Gerry Ritz: You're talking about bank closures. Are they driven by bank greed to make more money or are they driven by the new style of banking, electronic banking, where you can pay your bills from home now? They've given you programs such as that.

I'm not advocating that the banks are good, bad, or otherwise; I'm just tossing that out.

Ms. Ginny Guiboche: I see lots of people in those branches before they close. This is just banks wanting to consolidate, to have fewer employees, and to make more money.

Mr. Gerry Ritz: But do they in fact have fewer employees, or are those employees, instead of being behind a teller cage, now behind a telephone in an answering system somewhere doing your banking by phone?

Ms. Ginny Guiboche: No. According to the recent statistics released from the banks they are decreasing the number of employees. I don't actually have a number of what I would consider fair taxation of corporations, because I really didn't prepare that as part of my brief. I can't comment on that right now.

Mr. Gerry Ritz: Fair enough. Thank you.

The Vice-Chair (Ms. Paddy Torsney): Thank you, Mr. Ritz. Perhaps we can ask some of those questions of the banks themselves. They probably have some comment on that.

Ms. Guiboche, thank you very much for coming and presenting to us today. We appreciate your showing up on time and being in good form for the presentation.

We have some other presenters for the next group that we might put on the schedule right now so that we can alleviate the pressure on the next group.

So thank you for coming this morning and for bringing us some direction from the little guy.

Ms. Ginny Guiboche: Thanks for the opportunity.

The Vice-Chair (Ms. Paddy Torsney): Members, if you can stay at the table, we're going to have a representative from the Canadian Mental Health Association make a very short presentation and entertain a short round of questions. Then we'll move to the regular panel at 10.30 a.m.

Mr. Hylton, I understand you have a statement that's now being photocopied. Fear not, we can listen while you begin your presentation. But do they have your only copy?

Dr. John Hylton (Executive Director, Canadian Mental Health Association): Yes. Perhaps we can start into it anyway.

The Vice-Chair (Ms. Paddy Torsney): You can get settled, if you'd like. By way of introduction, we are the finance committee, and this is our second stop in a cross-country tour. You are Dr. John Hylton, executive director of the Canadian Mental Health Association. In terms of format, you've probably observed that we have some rounds of questions.

Our clerk will now give you back your copy. If you would like to make an opening statement, we then will entertain a round of questions.

Dr. John Hylton: Great. Thank you very much. As you said, I'm executive director of the Canadian Mental Health Association. I'm also an elected member of the Regina District Health Board, one of the new regional health boards among many that are being formed across the country to take responsibility for delivery of health services. In my case, the Regina District Health Board serves southern Saskatchewan. I am also a professor at the university.

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But I am not here representing any of those bodies; I'm really here as a private citizen with some biases that maybe come from my experience in working in the health care sector for a number of years.

First of all, thank you very much for the opportunity to come and meet with you today. As your staff may have mentioned, I have been under the weather. The bad news about this was that since finding out about the opportunity to meet with you on Monday, I have mostly been home. But the good part of this was that when I was channel surfing yesterday, I didn't find Oprah, but I did come across the Standing Committee on Finance in which those with the Minister of Finance made their presentations.

So I feel like I have had a real recent briefing on the issues that are before your committee. That was kind of fortuitous. There wasn't anything on that I found more interesting, so maybe that says something about the importance of the work that your committee—

The Vice-Chair (Ms. Paddy Torsney): Hopefully, that's why you are in good form today.

Dr. John Hylton: Well, who knows? But thank you for coming to Regina as well. We really do value the opportunity to have input into public policy. I guess it's in the nature of the consultations that very often Regina is the place that's not on the list of places that committees come to. So we really do appreciate the opportunity to have some input.

I understand that your committee is planning a very extensive process, one of the most extensive consultation processes that have been planned. You are certainly to be congratulated.

You have picked a great day: it is supposed to be up to 20 degrees in Regina today. I don't know if you know this, but you are only five minutes away from the largest urban park in North America. If you have an opportunity for a break, Wascana Park and Wascana Lake are nearby. I'm sure that by the end of the day you'll be ready for some fresh air.

My comments will be very short. I understand that only five minutes is available. I really only have a couple of main points that I want to make today.

First, on the fiscal climate, there is all the discussion about the fiscal dividend. A widespread discussion I'm sure will have debate as well about what to do with the flexibility we now have in the country between tax reductions, dealing with the debt, and spending priorities.

I think the current government has signalled that it wishes to adopt a balanced approach in which it isn't a matter of choosing from among the three, but trying to balance them. I want to say that from my point of view, that is where most Canadians are at as well. I don't think most Canadians are looking for the government to zero in on only reducing the debt, only looking at concessions on the tax front, or only increasing spending. I think they are looking for a balanced approach.

That's my first message. I think that's the appropriate way for the government to go at this stage.

The debate will be heated. I'm sure you will hear lots of presentations from people on the far left and far right who will advocate that all the flexibility should be used in one of the three areas, but in my opinion, that's not where the country is at or where most Canadians are at. I think they are looking for selective spending in targeted areas that will produce important results. I think they're looking for the debt to be dealt with, and I think they are also looking for tax reductions when, as a country, we can afford to do that.

The area of spending priorities is what I want to spend my time talking about. The first point is that I think there should still be an opportunity for increases in government services and a need for a balanced approach. I think you're going to hear many proposals as a committee—the government will hear this as well—about where the spending should occur. There will be many proposals, ideas, and contenders for increased spending in many areas of government responsibility. Of course, it is not going to be possible for all of those to be acted upon.

I think there is a growing consensus in the country. I think it is certainly so in this part of the country that social programs and the social safety net should be a top priority, and that there is an opportunity for the federal government to play more of a leadership role, even while being respectful of the responsibilities and jurisdictions of provinces.

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During much of the past decade, the federal government has really backed away from what was previously a much more prominent role in many areas of spending on the social safety net and social policy. I think Canadians are looking for the federal government to play more of a leadership role in those areas. They want their government to provide leadership directly and also in terms of the way cost-sharing programs are managed with provincial and territorial governments.

The social policy area is a big area of government spending now. It always has been, and I guess it always will be, so it's easy to say we should spend more. But I think Canadians are probably concerned about the past record of simply throwing money at problems, and their support will be contingent on a more targeted approach, more specific objectives identified, more accountability, more evaluation, and more achievable results. I think the government is certainly looking at that as well.

My own view is that when resources are scarce—they certainly continue to be so now even though there is more flexibility—I think the resources should go to those who are most in need. That is a principle that the government really needs to look at very seriously in determining its spending priorities.

When we look at the recovery that has been happening in our country, it's not a recovery that has been as broadly based as one might hope. There are segments of our society, sectors of our society, that have been left behind.

I was very pleased yesterday when watching the discussion on the cable network to hear this as the focus of a number of the members of the committee itself. I know Mr. Loubier, Mr. Riis, and others were talking about child poverty, food banks, single-parent families, and other issues, and I think these concerns are on track.

These are not the only groups; certainly there are the aboriginal people and certain disabled people. Unfortunately, the statistics indicate that they have not been caught up in the recovery we've been experiencing in Canada. The unemployment rates are as high among the disabled as ever. Some indications are in fact that they're even higher than they have been in the past. We recently had the task force report from Andy Scott that addressed some issues there.

With aboriginal people, the same is true. There are some indications of a widening gap. We had the royal commission report on aboriginal people, which had many recommendations that called out for government attention. Certainly the issue of child poverty was raised by many members of the committee yesterday.

These are some of the marginalized and dispossessed groups that have not been caught up in the recovery. In my opinion, justice calls out for us to address, to the extent that we have any flexibility in the spending area, these as the areas to be addressed, because this is where people are most in need.

There will be a lot of talk about health care being a priority. There certainly is every indication that the current federal government is looking at that. But the point I want to make about whether it's health care, justice, or other areas, is that I think it's all too easy for governments to address the symptoms of problems, rather than the underlying problems.

If it's health care, there will be lots of people who will be calling for more hospitals and doctors, and that's not a bad thing. If it's justice, there will be lots of people who will call for more expenditures on policing, courts, and correctional facilities, and that's not a bad thing and in many areas of government spending.

But look at what's really behind that. Health is a good example. We know that only about 25% of health is determined by health services. Most of what determines health relates to social and economic conditions. The social and economic inequities in the country are what place demands on systems of health, justice, and many others.

So in a way, it's all too easy for governments to respond to the symptoms, because there are always lobby groups there who say they need more money. They say that if they are given more money and more resources, they can do more, but that doesn't necessarily address the underlying inequities that give rise to the needs.

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It seems to me that the more daunting challenge and the more important challenge for government is to look at those basic inequities in our society—and I have given three examples: disabled people, aboriginal people, and people living in poverty, particularly single-parent families, predominantly headed by women—and to really target the flexibility that we now have, as a result of our recovery and the fiscal climate, to try to address some of those inequities.

In summary, I have three main points. I believe that most Canadians support a balanced approach to using the fiscal dividend. That is not choosing from the list of three, but doing all three in a balanced way: dealing with the debt, dealing with taxes, and selectively looking at spending priorities.

The second point is that I think most Canadians want their federal government to play more of a leadership role with respect to pressing national priorities in health and social policy.

Thirdly, I would like the government to do the right thing, as opposed to what might be the easier thing, and to use its fiscal flexibility to target social and economic conditions of marginalized groups in Canada.

I think that would produce as much as we can in an ongoing process in one baby step after another. It seems to me that that will help lead us to improvements in quality of life for Canadians, and also improved quality in our country as a society will lead us to that goal of social justice.

Those are my comments.

The Vice-Chair (Ms. Paddy Torsney): Thank you very much, Dr. Hylton.

We have a very quick round of questions available to us, so I encourage members to be very quick. If you really don't have a question, maybe we can pass.

Mr. Ritz.

Mr. Gerry Ritz: The only comment I would make is that you talk about a balanced approach, and I certainly agree with most of what you said today. It was a very well-thought-out presentation.

The one point that I may stress a little more is that debt reduction becomes a little bit more imperative when you start to look at the interest we are paying on that debt, $42 billion a year at today's interest rates, which are, if you will, low interest rates.

The more we can conquer that, the more money we will have to put into the balanced approach.

It's always easy.... I know that in my own household budget, if there are excessive bills it is easy to let them slip and just pay the minimum all the time.

If we allow governments to do that, then we will never get a handle on the debt problem we have.

I know it is going to mean some more hurt for a little while, but, in my limited estimation, the more quickly we get on top of that, the more quickly we will have more money for the social safety nets, health and education, which are imperative.

Dr. John Hylton: I think most thinking Canadians would agree that the debt and the deficit are something that must be dealt with. The amount of priority that different people would put on it of course would differ, but you use the analogy of getting rid of those interest payments and where we would be if we didn't have those interest payments. Obviously, it would be a totally different picture and would allow many more possibilities that are available to us today.

At the same time, even if you look at the household situation, you may have a debt to pay off, but it does not mean that you cut off the electricity or stop grocery shopping. You try to keep it in some kind of balance.

That's what Canadians are looking for. They are looking for some kind of balance, because I think they do see a role for the federal government. They see some gaps in that social safety net. They are concerned about that. They are looking for leadership.

They don't want a free-flowing spending program that will get us back into the kind of predicament we were in before. I believe that something that is more selective, something that is more targeted, would receive widespread public support so long as it does not jeopardize the overall program of dealing with the debt, which strong public sentiment says needs to be addressed.

Mr. Gerry Ritz: Yes, as long as it is a fair and equitable system that is implemented, where everybody pays their fair share.

Mr. Gilles-A. Perron: In your statement, I think you forget one point. What about spending money on creating jobs?

Secondly, do you believe that local government is in the best position to take care of those social programs? Your comments, please.

[Translation]

Dr. John Hylton: Good afternoon and welcome to Regina.

[English]

Certainly job creation is very important. The experts in health care, to give one example, are increasingly pointing to the links between poverty and health. Of course, if you don't have a job, if you can't compete in the marketplace, then you are going to be dependent on public support. In our country, very often that means poverty. So all of these things do go together; and you are quite right, job creation and the promotion of jobs are extremely important for a healthy society. I certainly agree with that.

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About the role of local government, the leadership role that can be provided by the federal government does not necessarily always involve the federal government doing. They can facilitate others in doing. Certainly there's the opportunity for the federal government to be respectful of the jurisdiction of provinces and territories and municipalities and to assist them in meeting their objectives in these social policy areas. My point is not that I think the federal government should do all these things but that there is a leadership role for the federal government to facilitate our moving in some positive directions. So my view would not be that the federal government should take over the jurisdiction of the provinces in these areas.

The Vice-Chair (Ms. Paddy Torsney): Mr. Brison.

Mr. Scott Brison: I commend you, Dr. Hylton, on a well-thought-out presentation. I assume it has to do in no small part to your having studied at Saint Francis Xavier University, which is not far from my riding and has produced some great Canadian leaders.

In any case, on targeted social spending, we always look at the social safety net as social spending. We rarely look at it in terms of investing in the future. We are now firmly ensconced in the information age, and we are also in a free-trading world. So for one of the first times in history we have an opportunity to increase the Canadian economy by investing in what will be a comparative advantage, i.e., the minds of young Canadians. A study was done a few years ago in which $1 invested in children up to the age of 3, targeted investment in high-risk situations, yields $7 by the time they hit 27. That directly affects those marginalized groups you speak of.

Education is a provincial jurisdiction, but there are a lot of Canadians who would like to see leadership federally in areas of testing, for instance, or in areas where we can actually effect a national education advantage for young Canadians. How would you feel about that?

Dr. John Hylton: My belief is that Canadians feel there is room for national standards in a whole number of areas. Education might be one of them. Health is certainly another area, one I'm more familiar with. I think Canadians take some comfort in the provisions of the Canada Health Act and would like to see a strengthening of that and more leadership in the development of standards. I think Canadians want to know that wherever they go in Canada they will have reasonable access to a core set of services, which are their entitlement by virtue of the fact that they are Canadian citizens. So I think there is an opportunity and there is a role and Canadians would welcome leadership in a number of those areas.

To come back to the point Mr. Perron was making, I don't think it necessarily means the federal government has to do it all. A lot of things can be done by way of facilitation. Certainly that happens now in health care and many areas that involve provincial jurisdiction. Education would be just one of a long list where that is not only possible but desirable.

The Vice-Chair (Ms. Paddy Torsney): Thank you, Dr. Hylton. My colleagues from the Liberals have agreed not to ask a question at this point, because we do have a panel of guests who are here to speak to us.

Thank you very much for your presentation today. If anything else comes up, you are more than welcome to send it in directly to the committee.

Dr. John Hylton: Thank you very much for the opportunity, and thank you again for coming to Regina.

The Vice-Chair (Ms. Paddy Torsney): No problem. Thank you very much.

We will adjourn for a matter of minutes.

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The Vice-Chair (Ms. Paddy Torsney): I'll call the meeting back to order.

We have several representatives around the table. I understand we have most people's presentations before us. What I'll do first is introduce everybody for context. Colleagues, if you want to log who's where, our first person is Ms. Brown, representing the University of Regina Student Union. We then have Peter Morin, representing the Saskatchewan Child Care Association. We also have Ms. Olson.

Where are you from?

Ms. Lana Olson (Member, Board of Directors, Saskatchewan Child Care Association): I'm with the SCA.

The Vice-Chair (Ms. Paddy Torsney): Oh, as well. That's terrific.

Mr. Wells is here representing the University of Regina. Mr. Buck is here from Frank Buck Agencies. We then have three characters from the Saskatchewan Wheat Pool: Mr. Demyen, Mr. Shauf, and Mr. Schmeiser. We have Ron Goetz, from the Saskatchewan Motion Picture Association. From Canada West Equipment Dealers we have Mr. John Schmeiser. And we have Jean Lara, who is here from the Immigrant Women Society. Finally, we are very happy to have the mayor of Regina.

Thank you very much for arranging the great weather, Mayor Archer. You'll have to speak to Mayor Owen. He didn't do quite as good a job in Vancouver.

Guests, we have roughly an hour to get through this round. You have about four or five minutes maximum. If you don't need your time, that's terrific. Don't feel the need to fill that time. We'll then try to have some questions. Obviously, the less time you take and the less time I take will add more time for questions.

Ms. Brown, you're up first.

Ms. M. Brown (President, University of Regina Student Union): I'll be quite brief.

The position of the University of Regina Student Union, in conjunction with other schools that are members of the Canadian Federation of Students, is that the process of deficit reduction has been too fast. Moreover, the message that has been employed has not necessarily been sensitive to the needs of ordinary Canadians. We feel we've seen a shift of the burden of the deficit now to the individual. We actually use post-secondary education as a case study of this shift. To give you a few examples, student debt in Saskatchewan has increased by 250% since 1988, and our tuition fees have gone up 110% since 1988. For this budget year, the average student debt load will be in the order of $28,000.

We feel this is not an investment in the future of Canadians, and it is not a way to address any financial difficulties that the country is having. Instead, we are imposing a burden on students, and it is in fact a burden on the economy. We are asking for a change in the way of thinking about how to handle these fiscal realties, and actually asking for the federal government to take a leadership role in shifting the burden off of individuals so that they can meaningfully participate in the Canadian economy.

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We've seen some signs of that with, for example, the introduction of the millennium scholarship fund, but that actually is a further example of this shift to individualized problems. It is noted that it's not simply a case of the fact that bright students can't afford to attend post-secondary education; there is a problem with all students affording it.

So what we're actually looking for is increased funding and a system of grants that are available to students who have reduced economic opportunities so that both university and college is accessible to all.

The Vice-Chair (Ms. Paddy Torsney): Thank you. Mr. Morin and Ms. Olson.

Mr. Peter Morin (Chairperson, Saskatchewan Child Care Association): I'd like to thank you for the opportunity to come and speak before you. It was interesting; when we came into the room, Mr. Brison was taking away most of my presentation. He was talking about investing in child care as opposed to spending. It seems that this committee is already well aware of the benefits of investing in resources such as child care. The payback, the three for seven, is good payback.

There are other paybacks as well. We invest in a lot of programs in this country to, for example, keep teen parents in school. The Department of Health funds a number of programs for that here in the province. That might not be necessary if we intervened at an earlier age and created situations where teens don't get pregnant because they have the self-esteem and the resources not to find themselves in that situation. There are a number of paybacks. I won't go into great detail about those.

The Saskatchewan Child Care Association would really like to see a national program for child care. We were kind of excited about the blue book the Liberals had—and I apologize to the non-Liberals at the table—because we saw it as an opportunity for a truly national child care system, one that would make child care affordable to all people.

One of the ironies about the child care system, at least in Saskatchewan, although I think it's consistent across the country, is that child care is affordable to the wealthy, it's affordable to the poor because government subsidizes the poor, but average middle-class people—and the middle class is a fairly large range, at least here in Saskatchewan; it could be as low as a family income of $25,000 on up—quite often can't afford child care. In fact, it's those people down at the lower end of the so-called middle class who can't afford child care.

As a business person I also have some concerns about the availability of child care. I recently had a single-parent mother working for me. She worked for me for about a year. There were a number of problems with child care. She couldn't afford child care. You might argue that if I paid her better then maybe she could have, but I have a counter-argument you probably don't want to hear.

This particular lady simply went back on social assistance. The struggle to try to be employed, look after a family, and look after the child care just wasn't workable. Now she's collecting social assistance, which I think is negative.

One last thing I'd like to talk about is the funding of organizations. The Saskatchewan Child Care Association has been funded by the federal government for a number of years. When I first got involved with the association it was Secretary of State. Several years ago it was indicated to us that our funding would be cut 10% each year. That went along for two or three years.

We actually didn't have a problem with that. We had made the decision prior to this that we wanted to get off government funding as core funding and become self-sufficient. But what's happened in the last year is that the funding is now coming through Status of Women, which as a male I kind of object to, because child care is not just a women's issue.

More importantly, the method of funding has changed. In order to qualify for funding this year we have to do a project. To do that project we have to hire somebody, which would cost us about $9,000 or $10,000, or we have to use our internal resources, which means we can't do the work of the association. That's really set back the association. I've seen that change in the type of funding negatively affect a number of organizations, not just the Saskatchewan Child Care Association.

So we would encourage you, when you're looking at programs, not to knee-jerk cut off funding or change the method of funding so that it's not tenable for organizations. A lot of organizations do a lot of good work for the community, give a lot of volunteer time, and that's lost if the organization is not able to survive because of changes in funding.

Thank you.

The Vice-Chair (Ms. Paddy Torsney): Thank you, Mr. Morin.

Ms. Olson, I think you're included in those comments.

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Ms. Lana Olson: Yes.

The Vice-Chair (Ms. Paddy Torsney): Mr. Wells.

Mr. Donald Wells (President and Vice-Chancellor, University of Regina): Thank you very much for giving me the opportunity to make a few comments today.

I'd first of all like to comment on the budget reduction area and some of the things around deficit reduction. I'd like to comment on some of the decisions taken in 1996 or announced for 1997, and then make some comments on priorities.

With regard to budget deficit reduction, it's my view that you can't spend money you don't have. It is important that we retain in Canada in the public domain control of our spending on government priorities and social services, and that it not be New York bankers who pull these strings.

So I think it's good to have done it, and the progress is probably as good as it could have been, but I think there should have been much less offloading onto the provinces. I recognize that there are few alternatives, but in particular I think it's important that our government be sensitive to those areas of expenditure that are investments for the future.

My view is that it's important to continue to reduce the accumulated national debt but with a sensitivity to research and education, which are the two activities that will make us competitive in the future in a knowledge economy. Research will give us the tools with which to compete and education will give us the capacity to use those tools.

I'd like to commend the government on the creation of the Canada Foundation for Innovation, introduced in the last budget, and on its commitment to maintaining the widest possible access to post-secondary education and to addressing the serious problem of student debt, as announced in the Speech from the Throne and the Prime Minister's response to it.

The three initiatives that were announced are most welcome—the creation of the Canada Millennium Scholarship Endowment Fund, the providing of increased assistance for students with dependants, and making further positive changes to the Canada Student Loans Fund. However, I'd urge us to look much further. These are good steps, and a little more than first steps, but they certainly don't solve the whole problem.

With regard to priorities for the future, I have four points. It's essential that the government increase its funding for the three research councils as proposed by the AUCC and its partners. Our competitiveness as a nation in future years will depend on our having up-to-date knowledge that's available only through basic research. We can't just get basic research from what others are doing. We have to be a member of the club, as it were. We have to be at the leading edge if we're going to have that knowledge. We cannot be transferring to job creation old knowledge or secondhand knowledge. We have to be at the forefront. So I'd urge you to increase the funding for the three research councils.

I'd like to pay particular attention to the Social Sciences and Humanities Research Council. It's often forgotten. Quite often people in government ask, well, what does it have to do with economic or other development of our country? I'd suggest that it has a lot to do with the development of our country and our social values. I would urge you to pay particular attention to SSHRC.

I'd urge you also to enhance student assistance. There are many different ways. Different student groups have made many suggestions. I think it's important to remember that our students are the people who in the future will make Canada competitive. They must have first-class educational opportunities. They have to have, in my view, the best opportunities in the world if we're going to be a first-class nation. So it's important that our students have the educational tools they need to lead the way.

I'd next mention the need to enhance support for the education in particular of first nations and other aboriginal people. In the years ahead it's going to be even more important for our nation, in some parts more than others, but I think our nation as a whole, for our aboriginal population to be able to participate fully in the economic development of our nation. There's a major role they can play. I urge the government to be sensitive to that.

The fourth item is not in the notes I submitted, but I do want to mention it. I have a lot of concern about the brain drain. It's a concern many universities across Canada are sharing. We're losing very important people to the U.S. while we are gaining from the rest of the world, but if you look at this situation in detail, we're losing some of our most outstanding faculty and most outstanding younger people. Many of these people are the ones who would create the climate for job creation in the future.

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So we're losing part of our investment, and I think there are two basic reasons, at least reasons I have had identified to me. We cannot be competitive in providing facilities for our younger faculty members and they are seeking more attractive opportunities elsewhere. Secondly, there are too many financial disincentives, partly through the tax structure, partly otherwise, for these people to feel they can afford to stay in this country.

Those are areas I think need to be addressed, at least with the concept or the concern about the brain drain in mind.

The Vice-Chair (Ms. Paddy Torsney): Thank you, Mr. Wells.

Next we have Mr. Buck.

Mr. Frank Buck (F. Buck Agencies): Thank you, Madam Chairperson. I will try to be very quick here. I did not understand that we would have such a short time to make our presentation. I worked through the night and early morning to finish my presentation, and I had based it on about a 12-minute presentation. Anyway, I'll continue. I've distributed eight points under the process of deficit reduction and I'll speak to those in the same order.

The process has been too fast. It appears to me governments have become very insensitive to the hardships created by drastic changes in funding. The small business sector, primarily comprised of middle- and lower-income people, is immediately affected by cutbacks. Downsizing has had a very negative effect on personal incomes and therefore income tax payable. The current financial situation was not created over a five-year period, and certainly it was not small business or working people who overspent or underpaid taxes. If the total debt is to be eliminated, it must be planned over a very long period and must take into account economic well-being and our ability to retire debt without creating hardships, as is now the case.

It is a known fact that small business creates a lot of economic activity and new jobs. I read with interest that Mr. Iftody's constituency had the Prime Minister out on the weekend and he made the statement that 80% of the million jobs created over the last four years were created by small business. Yet we seem to be the first to bear the brunt of cutbacks. For example, if small businesses were to cut their expenses and their staff, including payroll, to the extent done by governments and big business, what kind of devastating effect would that have on our economy? As is often the case, we must suffer as a result of someone else's mistakes.

Program cuts at the federal level are, or become, an indirect form of tax hikes for some. Cuts to employment insurance eligibility eventually result in many going on welfare, for which provincial funding has been reduced. Some children must return to the family for financial support. This has an effect on small business.

While cutbacks and downsizing can improve the bottom line, often other costs result. Is the problem of grain movement the result of too much downsizing? Was the problem with the recent VIA Rail accident at Biggar one of sacrificing safety for the bottom line? We can be certain that if we do not adequately monitor all forms of public transportation, lives will be lost.

The so-called offloading of programs to the provinces and reduced federal transfer payments have a direct effect on individual local business. With a more restricted tax base, and burdened with a huge debt from past governments...these shifts of financial responsibility are unrealistic. An example is the apparent cuts in funding for off-reserve aboriginals, which, I understand, cost the provincial treasury in Saskatchewan approximately $200 million per year.

It appears the employment insurance fund, with a reported surplus of $14 billion, paid for by workers and small business, is being used to balance the budget. I find this quite intriguing as a way, probably, of juggling funds. I understood originally this was always set up as a separate fund and the big concern was the depletion of the fund and therefore rates had to go up. Who pays for the rate increases but small business and the workers?

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The drastic cuts in benefits and increased costs in premiums have produced this so-called “surplus”, not better management by our government. At the same time the federal government is announcing an increase in CPP premiums. That, of course, will again be paid by workers and small business. These are nothing more than tax grabs from those least able to pay.

Our federal government is ultimately responsible for the well-being of its seniors and should ensure that we maintain a fully funded, fully portable national pension plan. Has the inclusion of disability benefits undermined the original plan? I believe that to be the case, and I'm not sure we aren't getting private disability plans off the hook in some regards.

While as individual business people we do not oppose profits, governments have no understanding of how squeezed workers and small business are, while the elite on Bay Street are plotting the rapid decline in the deficit. When I was in Ottawa two weeks ago I read with interest about the tremendous increase in expenditures by stockbrokers on $5,000 dinners, cigars and wine, etc. I'll tell you, out here it doesn't make us feel terribly good. Those least able to fight back are being asked to pay too much.

About priorities, I believe the federal government has a responsibility to develop a more equitable sharing of the national wealth. We must restore a major portion of funds to provinces for continuation of essential education, health, and social programs. We should implement a truly national program to help rebuild our Trans-Canada Highway and not expect the provinces to pay all the costs.

Long-range planning should replace the current four-year political agenda. The general public is becoming more and more cynical about governments and politicians. As a result of the inequitable influence on how our tax dollars are managed, individuals and small business feel left out of the total process.

The development of a more equitable tax system across this country should receive top priority. As an interim measure, a portion of any future surplus should be used to help provinces with high debt loads and higher than normal tax rates.

In conclusion, I must tell you this paper was prepared without the help of any high-priced consultant-lobbyists, i.e., lawyers, accountants, or management consultants. The comments are my own, with assistance from several academic and business leaders.

My final point is that it is difficult to help prepare a budget without knowing the projected surplus. Then again, the federal Minister of Finance doesn't seem to know that either.

Thank you for this opportunity. Who knows, greater equality of opportunity across this country may also resolve some of our unity issues.

The Vice-Chair (Ms. Paddy Torsney): Thank you, Mr. Buck.

To all the presenters so far, you're doing a really good job on this whole time thing. Thank you. You've set a pretty stiff course for the next five presenters.

Mr. Shauf.

Mr. Marvin Shauf (President, Board of Directors, Saskatchewan Wheat Pool): Good morning. Saskatchewan Wheat Pool appreciates the invitation to participate in this process. It's a welcome opportunity to provide input into current and future federal expenditures and programming that affect western Canadian agriculture.

The federal government is to be complimented on its progress in getting the fiscal situation under control. The likely achievement of a federal budget surplus during the next fiscal year presents the federal government with broader flexibility to address the needs and aspirations of Canadians. The improved fiscal picture has already resulted in lower inflation and interest rates. Agriculture, as a capital-intensive industry, has gained from the current interest rate environment. In addition, as an export-oriented industry, agriculture has benefited to the extent that low interest rates have competitively placed our currency and our goods versus that of other major agricultural exporters such as the United States. It's important to our sector that the benefit of low interest rates and a competitive currency continue. We encourage fiscal policy in the future that is supportive of these objectives.

The process of deficit reduction has involved significant cuts in government program expenditures. Agriculture, and especially the western Canadian grain and oilseed industry, have contributed more than their share to this objective. For example, the end of the Crow benefit for western grain transportation has meant an annual saving for the government of $560 million. Since 1994-95, safety net funding has been cut by 30%, from $850 million to $600 million currently. The agricultural budget was cut by 19%, and some $30 million annually was taken out of research funding.

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Those are two examples of places where it would be appropriate for the government to look at some increased expenditures on safety nets and agricultural research. Both of those are sensible investments for the future.

Furthermore, government user fees have risen significantly since that time. Examples include the licensing of pest control products through the Pest Management Regulatory Agency and inspection services offered by the Canadian Food Inspection System. The industry is now also paying fees on marine services for the shipment of grain.

These additional fees are unfortunate in two respects. First, they reduce the competitive position of our exports versus that of other countries. This only undermines the ability of the industry to meet the government's export target of 3.5% of world agricultural trade. Second, government expenditures on such activities remain fully acceptable under Canada's World Trade Organization obligations. Cuts were not and are not required.

Given the state of federal finances, we believe there should be a moratorium, if not a roll-back, on cost recovery through such fees and charges. Where cost recovery may be justified, it should occur only when the services represented can be commercialized and where there's competition amongst the providers of the service.

Recently legislation was introduced in the House of Commons to amend the Canadian Wheat Board Act. This legislation provides for the creation of a producer-funded contingency fund to backstop the operations of the Canadian Wheat Board in adjustments in prices to farmers. We view this possible contingency fund as another charge against producer income. We also think it will not be necessary. If the government is committed to proceeding with such a fund, we recommend that it fund it initially. If a claim against the fund occurs, that amount could then be reimbursed by producer contributions.

Although Saskatchewan has enjoyed a near-average harvest of a high-quality crop, the result has been an economic disappointment for many. Several areas have suffered drought, prices are below those of last year, and higher production costs have squeezed margins in farm income. This environment should be taken into account as future agricultural program expenditures and user fees are being considered.

In summary, we urge the federal government to continue its deficit reduction path and to cease instituting new taxes on agriculture by cost-recovery fees and other levies.

The Vice-Chair (Ms. Torsney): Thank you, Mr. Shauf.

Mr. Goetz.

Mr. Ron Goetz (Past President, Saskatchewan Motion Picture Association): I'm representing the Saskatchewan Motion Picture Association. I've been on the board of directors of that organization for seven years. Today I speak to you as the past president.

I wanted to talk to you first about the success of our industry, but in the last couple of presentations I've made I was acutely aware that good news is always difficult when you go back to ask for more investment from the government. Still, I want you to know the industry is alive and well in Saskatchewan, as it is in the rest of Canada. But I want to leave you with a thought before I make some formal comments.

I'm also a small producer in Saskatchewan. I employ eight people, of whom six are under the age of thirty. So there's an industry that's being developed.

In our industry government plays a significant role with the investment dollars it provides. Our company uses 25% to 30% of those types of dollars to support our industry. That's significant because of the jurisdiction we live in. In the world we see lots of private industries that have been able to invest in film and video and cultural production. Unfortunately, in Canada we are not blessed with a number of private investors who can simply roll up to the table and invest in these types of productions. Nor do we have audiences large enough to support a pay-to-watch or pay-to-view or pay-at-the-theatre kind of proposition. Therefore, the people of Canada and the people of the provinces become key investors in production.

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With that in mind, I am speaking today in support of the federal government, which contributes to and stimulates the production of Canadian film, television, and multimedia productions. These programs include Telefilm Canada, the Canadian Television and Cable Production Fund, and the Canadian Broadcasting Corporation. Each brings an important contribution to the growth of our industry.

Film, video, and multimedia production impacts on many areas that are important to the people of our country: economic growth, job creation, international trade, and most significantly, our Canadian culture. The film, video, and new media industries employ people in highly skilled, creative, technical and administrative positions. These are jobs that have a bright future, are attractive, and offer hope and inspiration to our younger generation.

Our film and television productions play an important role in the cultural diversity of our country. They reflect our way of life to ourselves, to the rest of Canada, and to audiences around the globe. It is important that when our children absorb culture via the television set or the movie screen, that they absorb Canadian culture as a part of that mix. Film and video are powerful media that influence how we see ourselves and how the world views us.

The Canadian Television and Cable Production Fund, introduced in 1996, is an excellent example of how the public and private sectors can work together to achieve a common goal, and I commend the government for this initiative. That fund supported the creation of more than 375 television programs, employed approximately 19,600 Canadians, and levered an additional $625 million in private money.

As a final note, I would like to stress the importance of regional allocations. In the regions, we still have the challenge of isolation from the centre, particularly with respect to access to broadcasters and investors, who are mostly positioned in the east, primarily in Toronto. Regional incentives help to ensure that all parts of this country are given equal opportunity to contribute to our economic and cultural well-being. They have allowed Saskatchewan's film industry to grow and become a contributor to the economy and to the diversity of Canadian culture. Thank you.

The Vice-Chair (Ms. Paddy Torsney): Thank you very much, Mr. Goetz. You'll be happy to know that many of us attended the 30th anniversary of Telefilm. They did the Atom Egoyan film in Ottawa.

The other Mr. Schmeiser.

Mr. John Schmeiser (Canada West Equipment Dealers Association): Thank you for the opportunity to make a presentation with respect to the next federal budget.

It is our belief that with a proper course of action from our federal government, our industry and our communities can prosper. We feel that the federal government should set its priorities in the next budget on tax relief, which we believe will have a positive impact on job creation in our communities.

The most important tax category for our membership is the small business deduction. Our concern is that the $200,000 small business deduction and related 16% tax credit, as permitted by subsections 125(1) and 125(2) of the Income Tax Act have not kept pace with economic developments in Canada. Specifically, our members believe that the $200,000 small business deduction and our tax credit mechanism should be reviewed with respect to providing for some form of increase to the limit or for rate reductions.

The intent of the small business deduction legislation is to provide qualifying corporations with more after-tax income for reinvestment and expansion. Our members believe that the benefits permitted have not been kept up to date and require immediate action and review.

This presentation has been developed with the assistance of the Ontario Retail and Farm Equipment Dealers' Association. We also have the support of the Quebec equipment dealers association and the Canadian Automobile Dealers Association.

Most of our member firms are family owned and operated enterprises that have a desire to support the agricultural community they reside in. The majority of our dealers are located in small-town locations. As a result, the members typically represent a major employer for the surrounding areas. The economic benefits created by the members through the employment and reinvestment of their capital within the local business region provide substantial spin-off benefits that keep many of the affected communities alive.

The nature of our dealers' industry and business is very capital intensive. The cost of acquiring and financing inventory has increased dramatically in recent times. The result is tightening margins and fewer available funds for reinvestment and debt repayment.

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In addition, the general agricultural economy and government legislation does not allow for increased costs to be passed on to customers. It is very apparent that equipment dealers have been negatively impacted by the diminishing buying power of the dollars they have available for reinvestment into their businesses.

The net after-tax dollars relating to the $200,000 small business deduction is approximately $157,000. This number has not changed for about the last 12 years. Using a 2.5% inflation rate, these same 1985 dollars would only leave approximately $116,000 for reinvestment into business.

A traditional source of financing for small businesses, the owner-manager in our industry, is affected by that. For these individuals to continue to invest their investment dollars in small business, there must be an adequate return on their capital. The diminishing impact of the small business deduction is making capital-intensive businesses, such as agricultural equipment dealerships, less attractive. Thus, the future success of the industry is greatly impacted by such initiatives as the small business deduction.

The members of the Canada West Equipment Dealers Association ask that a review of the present levels of the small business deduction be performed with a view to increasing today's limits either in the form of increasing the $200,000 business limit or through a tax rate reduction. Of particular concern is that the business limit has not kept pace with inflation and the cost of doing business. Measures should be enacted to ensure that the business limit receives future indexing, subject to a catch-up adjustment.

This is supported by the national Liberal caucus task force on jobs in small business, which reviewed this issue as part of their report “Clearing the Path: Jobs and Small Business”, as reported by Tony Valeri, member of Parliament. This report confirms the earlier 1994 recommendation made by a small business working committee, which recommended a graduated tax rate up to a ceiling of $400,000.

This was recognized as a need for action in the long term. We disagree. We ask that this issue be reviewed and acted upon immediately. The ramifications of such a change would be substantial in terms of economic implications for the communities that all small businesses operate within. Additional capital could be employed in the business, and this would have a dramatic impact on the surrounding community in terms of providing greater opportunities for employment, business growth, and spin-off spending.

Thank you for your consideration.

The Vice-Chair (Ms. Paddy Torsney): Thank you Mr. Schmeiser.

Ms. Lara.

Ms. Jean Lara (Immigrant Women Society): I would like to thank you for inviting us here. I hope you did not make a mistake in inviting us, because of my background. We talked too much in my country, so we were thrown out. We spoke the truth. My husband was a newspaperman in my country, and I was in television too. We spoke the truth, and then we were kicked out. But I know Canada is a beautiful country; it will never happen.

I represent the immigrant women of Saskatchewan. I have nothing written formally, because last night I was busy helping another organization with their fund-raising, the Indo-Canada Association. So I really didn't have time, but I made notes on the things I could present. What I will say comes from my heart, because I experienced first-hand what it's like to be an immigrant.

First, on education, what are our concerns? The recognition of our diploma is very important. While it's true that IQAS exists in Edmonton to evaluate them, a new immigrant cannot even afford to pay $150 just to have his or her diploma analysed. Not only that, even getting the credentials from back home is so difficult. It costs money. So this is one important factor that I would like to mention.

Second, job training is very important, because when you come from a different country, you have to learn this system, the Canadian way. So we need that job training program.

This should be culturally sensitive. Why do I say culturally sensitive? Let's say for example that you have a program from Monday to Friday. Immigrants work Monday to Sunday, so you have to tailor-make your program to fit the time they are available.

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So these are things that even if we want to improve.... Usually immigrants do not want to be on social assistance, to be recipients. They want their dignity. They are proud people, and they're not accustomed to that.

In terms of job training, first, recognition of the Liberal mandate to make job training culturally sensitive. Then what? You train us for all jobs. What do we have, nothing? Where do we go? So I don't say that's bad, but it should be job development projects.

From an immigrant's perspective, there are some areas that I would like to present based on my other connections with them. For instance, in home care maybe we should try to empower them, have a system where they could be empowered by owning their own home care. If you look around, you will find out there is no home care for senior immigrants. This is another specific area. You see, we like to eat our food, but the food you have, we don't want. What happens? Do you realize that by eating our food...?

For example, I remember when I was in Berlin in the sixties, on a tour of Germany. We were five Asian women. My God, we loved to eat rice. When we were in Berlin we asked where the Chinese restaurant was. That was the first thing we asked in Berlin. You see, those things are important, because we feel better if we can eat the kind of food we want. Perhaps it's thinking about it.

So those are the areas—home care, child care. As well, in terms of foreign importing of our clothing, how many women know how to sew? We could have a co-operative. How do we start them off? In one family there are about eight, and they can operate a home-based business. They're good at that.

So these are areas of empowerment. In one family they can be trained in sewing. Perhaps they could sew gloves, for instance, or scarves. It's as simple as that. So I believe we could help them. They have no money to start with. You should advocate this. I don't know how; that's your problem.

In terms of justice, we want more emphasis on crime prevention, especially concerning youth. We do not know our youth sometimes. Immigrants get integrated, and honest to God, sometimes you want to choke the law is so difficult. Crime prevention would let them be aware, especially concerning drug addiction, alcohol and prostitution. This is very important. Prostitution is an area we should look into, because it's nice to sell Asian beauty, you know. It's easy for pimps to sell.

Another area concerns the victims of violence. I told them we wanted education for our women and men, because their understanding, due to culture and tradition, is different from the mainstream. It's so hard. I have been trying for the past six years in this area, but they never listen. All we're asking for is a fund to have a continuous education program to let them know what the police are like here, what are the laws and everything.

For instance, we advocate very hard to get the man out of the house in case of violence at home. Guess what? None of us were appointed justices of the peace.

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Another area is agriculture in the Saskatchewan context. Saskatchewan is agricultural country, yet there is no emphasis on how we could train people to become farmers. Okay, let's have the training. Now, to start a farm takes millions of dollars, so you have to look into that. Most of the children of the farmers are leaving their farms, I've heard; I don't know if that's true. You should give us training. There might be some immigrants who would like to be on the farm, but there are none. Do you have any?

On social assistance—I've mentioned this already—I'm concerned about the seniors. Maybe the federal government should come in and help the Saskatchewan government on this matter.

On the arts, immigrants have many artistic talents. Mayor Archer, you may have heard Stella Salido sing. She was second in Miss Saigon, and she's not very old. She can be a future star if we give her enough support.

We don't know. We bring in many artists. I know a Vietnamese artist who is a composer, a lyricist, and a pianist. But we are a small-fry organization; I'm the only one hired there, and maybe next month I'll be out because we have no more funds. Nobody has looked into that. What if we have a star coming from Saskatchewan and going to that area, the artistic industry? And not only that, so many artists.... Look, I will just give the example of my husband. He died of a heart attack because of frustration. He was the number one writer in my country. He worked for the United Nations. But when he came here.... It's frustrating, and it's very, very hurtful.

Last, immigration. Federal Immigration never handled the immigrant women of Saskatchewan. I mean, they did for a little while, but not any more—zero. We do not get any funding from them, and I'm tired. I don't know where this statement will go, but I hope something will happen. They do not even recognize our organization as settlement agencies.

I won't say anything much further, but you investigate that. That is what's important.

Secondly, I would like to point out that Saskatchewan is the best place to start your life anew. Coming from a different country, I remember very well when we were exiled and my husband told me, “We will go to Saskatchewan”. “What, Saskatchewan?” I said. Then I looked at the [Editor's Note: Inaudible] international routes—I'm a city girl; I had been travelling all over the world—and yet it's not in there. “Where do you want to take me? Saskatchewan?” “Well, that's agricultural country.” My impression had been that it was full of mountains and I had to pass mountains to get water. I never realized it was flat land. I was on the plane, and I said, “Oh, it's flat”.

He told me before we came to Canada that he had gone all over Canada and made an analysis of each and every province. In my country he wrote a series of articles about Canada, because he had been invited by the embassy to go there. He asked if I realized that Saskatchewan was the conscience of Canada. That's a pile of bull, but that's what he said.

True enough, from the time we landed here...yes, this has been the best place. Federal Immigration should route the immigrants to come here. It's easy here.

Thank you.

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The Vice-Chair (Ms. Paddy Torsney): Thank you, Ms. Lara.

A voice: Madam Chair, I would like to take a second, please, to excuse myself. I regret that I have to leave. I'm sorry, it's not because it's not interesting. I shall be back in about half an hour.

The Vice-Chair (Ms. Paddy Torsney): Thank you.

Thank you, Ms. Lara. It is good that all of us were listening, because I think you gave several people tasks as a result of your presentation.

Mr. Archer.

Mr. Doug Archer (Mayor, City of Regina): Thank you very much for the opportunity to make a presentation on behalf of the city of Regina to the standing committee.

The issue of deficit reduction and debt reduction I think is an important one, not only for members of Parliament but for all Canadians.

I say that within this context: I think there are limits to the degree to which we, of today's generation, can transfer today's costs of public service on to future generations. I can't tell you that I have any magic solution as to how fast or how slow it should go and how you should address that issue, but I do know that we could not continue to do into the future what we were doing without creating severe hardship for future generations of Canadians. That kind of thing is ultimately unacceptable to me and I think should be unacceptable to everyone.

The challenge is to find a proper balance.

I would like to flag the fact that success may be something the government feels good about. I think it should feel good about being successful in virtually eliminating the deficit.

But that success has not extended to everybody in the country. There is still a totally unacceptably high level of unemployment. As you may have caught on the television last night, there was an observation from someone that the standard of living of most people has not changed in many years. So while we have had some success in starting on the road back to economic prosperity, an awful lot of work still needs to be done to spread that success out.

I would advocate that, if there is relief for anyone, it be addressed to those who have paid the highest price. That does not mean necessarily the highest tax. It is the highest price in terms of their ability to enjoy the kind of standard of living that we wish for ourselves and that we want for all our friends and neighbours, not all of whom have been able to enjoy that.

We in Regina have had some particular challenges. The cutbacks have impacted on the provincial government substantially, and we, more perhaps than any other community in Saskatchewan, and perhaps in the national context more than most, have been hit by those cutbacks in both federal employment and provincial employment.

A goodly number of jobs are being transferred out of this city to Winnipeg. We find that difficult to understand. I just refer you to the back page of my presentation, where you can see the employed labour force in the five major prairie cities. You just have to look at the percentage of change that you see in the final column over the past four years, 1991 to 1995. There has been a considerable amount of economic growth in Calgary, Edmonton, Saskatoon and Winnipeg, but virtually zero job creation in this community.

We are very concerned about that. We believe that we have dropped off the federal government's radar screen, virtually, when we see this kind of situation occurring. Yet jobs are being moved out of this city to Winnipeg when they can just as easily be moved the other way if one wants to do that. I'm not advocating that this happens, particularly; I'm saying that this community, as well as others, needs some support.

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I'll touch briefly on some of the areas where I think the federal government should be providing economic emphasis, not out of context with the overall economic and financial plans you have in mind in terms of addressing deficit and debt but within that context.

An increasing percentage of oil production is coming from the province of Saskatchewan. I'm told that it's upward of 20% now. I'm also told that virtually no federal money is spent here on research. At some point I think there has to be some acknowledgement that in fact there is a significant contribution to the Canadian economy coming out of this province. We really should be seeing some effort to provide some balance to the research being done on an ongoing basis by the federal government, and not exclusively by the federal government. We have a challenge to deal with our province and with the private sector, and we'll do that, but since you're federal representatives we want to emphasize your role in this. I think the federal government has a role to play. We would look forward to a federal investment in Regina's research and development park at the University of Regina.

Another area in which a strategic investment can be made is in the area of tourism and training with respect to the Royal Canadian Mounted Police training academy here in Regina. Certainly the training side is receiving attention, but I would suggest that there are opportunities to look at the RCMP within a tourism context.

I shake my head at the way more and more money seems to be spent on jamming more and more people into Banff when, really, part of the challenge should be to spread the tourism opportunities out across the country rather than to try to concentrate them more and more, to the detriment of the national park itself, the environment, and ultimately the quality of the experience. There are other opportunities, and we'll be presenting a significant proposal in this regard. I just flag that as something that's coming up in the future.

There has been reference to the twinning of the Trans-Canada. I find it very difficult to understand how it is we do not have a national highways program. In particular, I can tell you that if there is any thought whatsoever about having a high-speed rail corridor between Windsor and Quebec City supported at the federal level, with tax dollars coming out of the prairie provinces when support for airports and highways is non-existent, then there is going to be an uproar coming from this part of the country. It's completely unacceptable to think that this would happen.

To the best of my knowledge, there is no federal commitment to do that. I don't want to say that there is a commitment. I just flag it for you that if this is part of a larger discussion, there are issues outside of Ontario and Quebec with respect to transportation.

I know this is an important environmental issue for Canada, a country trying to deal with global warming and greenhouse gases, but we have our issues out here as well. We would find it difficult to provide a subsidy to central Canada, Ontario and Quebec, through our federal tax dollars if that were to be contemplated without having similar support for our transportation needs out in the prairie region.

I want to touch on the national infrastructure program. I think that has been an exceptionally good program. I say that because it reaches into every community across the country. Not every community can say it has a federal presence. In fact, most communities recognize that they do not have a federal presence. Many people say that the federal government may be a lot of things, and it may be important, but they don't see it in their daily lives.

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I would suggest to you that in fact the national infrastructure program is a program that provides unity to our country and provides a federal presence literally on the ground. I don't mean to use that as a pun, but it is right there in front of people and it makes the federal government real and tangible. I think it's important when people are paying taxes on an ongoing basis that they see something that's real and tangible, not necessarily in Calgary and Regina and Winnipeg but in every community all across the country. But that doesn't happen very often, and it hasn't happened very often.

The final point I want to make—again, I refer you to the back page of the presentation—is that we've been working to try to establish a Regina development agreement for over two years. We have not been making very much progress, I am sorry to say, yet we see the federal government has supported development agreements for at least the last 15 years in the city of Winnipeg based on the need to provide that community with support. There's a development agreement that has been put in place in the city of Edmonton. Yet when you look at the situation we have in our community, where Edmonton has had job growth of 6% and Winnipeg has had job growth of 5%, Regina is at 0.4%, and we're having trouble putting together a development agreement.

That's what I mean when I say I think this community has fallen off the federal government's radar screen. I think we need to be put back on the national agenda, not at the expense of others but simply to recognize that we are a community. We do have our needs. We simply ask for some consideration of issues that are important to us in this community.

Thank you.

The Vice-Chair (Ms. Paddy Torsney): Thank you, Mayor Archer.

We'll now go to questions. Colleagues, I might suggest that you direct your questions specifically to an individual. If people want to add a comment that's specifically relevant to that question and to something somebody else around the table has said, I encourage you to make it quickly and concisely.

I would also suggest that we make our questions very short. It's almost a quarter to the hour, and we should look at finishing at about quarter after the hour. But we'll see how we go.

Mr. Ritz.

Mr. Gerry Ritz: I'll direct my questions to Mayor Archer.

You've touched on a lot of points that most places in Saskatchewan are feeling. I'm not talking specifically about Saskatoon, but the smaller communities out there.

In my particular riding we're feeling a tremendous growth spurt because of the oil and gas industry. You guys had a little bit of a shot in the arm a couple of years ago with the upgrader and things like that, which has since gone down.

You talked in terms of the infrastructure program. I agree that the one good point out of that was that it let you target the funding as opposed to an airport program; when you didn't need an airport, you had to take it anyway. I suggest that this was probably the best part of that. The downside to it, of course, was that three levels of government were spending money and there was still only one taxpayer picking up the tab for it. Hopefully, they gained in your choices.

Do you see the amalgamation of governments at the municipal level? At the risk of being a devil's advocate, I'll ask you whether the administration of Regina could take over the City of Moose Jaw and save costs. But that's a terrible example.

Mr. Doug Archer: It is. Then it's time to take over Ottawa.

Mr. Gerry Ritz: There you go. There are days when you could have it.

Is the amalgamation we're seeing in other provinces and so on—they're talking amalgamation of RM services—a way to go?

Mr. Doug Archer: That hasn't been an issue for the City of Regina. We regard ourselves as being a large enough municipality that amalgamation simply doesn't come to the fore.

Mr. Gerry Ritz: But we see it in Toronto, and that's a large centre as well.

Mr. Doug Archer: I think you have to take a look at what costs you're actually saving. From what I have seen and heard about what's happening in Toronto, I'm not sure it's necessarily a good idea. But I'm pretty distant from that, so I can't make an informed comment on it.

Mr. Gerry Ritz: Okay. In your one scale here, you talk about labour forces leaving the Regina area and so on. Calgary, Edmonton and Saskatoon are showing growth. Regina, of course, is negative. Is there any coalition between that in your business and property taxes? Is that chasing people away, or are you right in line there with everybody else?

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Mr. Doug Archer: We looked at our taxes as they exist today and amongst Saskatchewan cities, and we are right in the middle. Six are higher and six are lower. We are exactly in the middle.

That having been said, we are taking the step to phase out our business tax starting next year. We will completely eliminate the business tax in 2000. So we're trying to do what we can within our own context to address the concerns of business people and encourage investment and job creation.

Mr. Gerry Ritz: It definitely hit the hardest at your level of government. You're closest to the people and you've taken the hit when the buck kept not coming down. I sympathize with you.

I'll let everybody else carry on.

The Vice-Chair (Ms. Paddy Torsney): Thank you, Mr. Ritz. Mr. Nystrom.

Mr. Lorne Nystrom: Thank you very much, Madam Chair.

As the hometown MP, I'm not sure who to ask questions of—unless you give me an hour. I think I'll start off with one of the more topical issues, the Canada Pension Plan and unemployment insurance benefits, now called employment insurance benefits.

I'll start with you, Mr. Buck. You mentioned that as a small business person who employs a number of people in the insurance business, the burden of the huge EI payments, where there is a large surplus of several billion dollars, is very difficult on small business. As you know, in the next six years, if the CPP legislation goes through, the premiums will go up by 73% for both the worker and the employer.

I wonder if you can run through for the members of the finance committee what impact it really has on small business, perhaps using your operation as an example of what real impact that has on your plans as a proprietor and what impact it has on people you employ.

Mr. Frank Buck: I don't have my financial statements in front of me, but we employ six people. I suppose the cap, which not everybody reaches, probably is in the order of $3,000. We haven't done any projections, because we haven't known for sure, and I think that's what small business and any business person, as well as the individual, wants to know. What is the impact? Is this going to happen, and if so, why is it going to happen? Does it make sense to tag all the costs of those increases onto the worker and the business person, or should some of that come out of general revenue?

I'm sure there are general revenues that go to subsidize other areas of government. It doesn't matter whether it's support of education, etc., but the impact, if it's a 73% increase, as you suggest, means probably a $5,000 to $6,000 increase per year. In the tight economy we have, that's a tough thing to swallow.

We are limited in terms of what we get paid by the insurance companies. We can't bargain with them for higher rates. In fact, the trend is the other way. If the banks or credit unions ever get their way, we'll be even worse off. It seems to me there is so much insensitivity—

Mr. Lorne Nystrom: Worse off in which way?

Mr. Frank Buck: In terms of our market share. So we have to think about that, and about what's happening in our industry. Mayor Archer, who is a fellow competitor here in the city, knows full well that a lot of people are talking about merger, getting bigger, to withstand the competition from the banks, the direct marketers, etc., most of which takes place in larger centres. So you have a further effect on local business trying to compete in the international marketplace, as well as other factors.

For instance, governments usually place their insurance with brokers out of New York. They don't even use Canadian brokers. Farm Credit Corporation moves to Regina and brings a lot of people in, but who do they place their insurance with? A broker based in New York. Those are all the things that have an effect on us as businesses.

To get more specific, I would like to know, and I think it's a duty of the government to let business people know, well in advance. There should be more planning and consultation with small business. I'm not talking about the Chamber of Commerce or the Canadian Federation of Independent Business, who don't represent me as a small business person. I refuse to join them because they don't represent my point of view.

The Vice-Chair (Ms. Paddy Torsney): Mr. Wells, do you want to comment?

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Mr. Donald Wells: It's a very brief comment. I am not expert enough to comment on rates and whether they are appropriate or not, but I do want to be sure that members of the committee will keep in mind that when these charges or these taxes apply, they also apply to organizations like universities. Quite often that's forgotten. It's just like cutting our grants, and I hope you will keep that in mind.

Mr. Lorne Nystrom: The other point Mr. Buck made in his paper is that the deficit reduction has been too rapid. That seems to be at odds with what you hear in general from the business community. They've been the big supporters of a very rapid attack on the deficit and the debt. I wonder why you would be at odds with the mainstream business community on this. How does this impact on the small business community? You seem to be differing here from Thomas d'Aquino or Conrad Black. I'm not sure if he's a friend of yours or not, but....

Mr. Frank Buck: The gentleman who had to leave—is it Mr. Perron?—congratulated me outside of this room on my presentation, but he said, “You missed one thing, and that is government waste”. We sit back as small business people and watch governments throwing money away all the time. I could prepare another long presentation on my views of government, having worked there at one time.

In terms of being at odds with other people in the business sector, my question is, who is that other business sector? This morning I heard Paul Martin on CBC radio and I also heard the response from some of the investment dealers. Everybody's not gloating but very impressed with what the federal government has done. My comment is that it's not the federal government that has created and paid for the cutbacks and the supposed surplus that's coming, but it's us as individuals. We always have to remember that that's where the money eventually comes from.

As for being at odds, I don't think we have a proper voice as small business. We don't have organizations. We don't have the money to hire lobbyists. We don't have the money to hire lawyers or accountants or management people to make these presentations to government and to be heard.

That's why sessions like this are very important. I wish there was more time, because I think all of us could get into some interesting debates and comments.

The Vice-Chair (Ms. Paddy Torsney): I encourage you, Mr. Buck. A lot of members of Parliament across the country are going to participate in town halls and usually they provide a lot more time to debate. So hopefully your member of Parliament will be doing that and you'll participate.

Mr. Brison.

Mr. Scott Brison: Mr. Buck, I come from a small business background, so I appreciated and enjoyed your comments. If we can take something back to Ottawa with us, from your comments or from some other comments, including those of Dr. Wells, it is that high payroll taxes kill jobs and make it more difficult to hire. I think that's an important message for us to take back to Ottawa with us. It can improve the jobless situation for Dr. Wells' graduates and Ms. Brown's peers when they graduate.

In terms of Jean Lara's comments, in one comment that resonated with me, when you mentioned the access for women in particular, you were speaking of immigrant women's access to capital and the role that the Canadian banking industry or system plays in that. You were saying that it does not play a particularly successful role in that. This dovetails with a meeting I had this week with some members of the Canadian Bankers Association. I raised the same issue. It is very difficult for small business people, in particular the young. The Canadian banking system has to a certain extent abdicated its responsibility to lend to small business.

Micro-lending is something that has been successful internationally in providing access—especially to women—to capital, be it the Grameen Bank in Bangladesh or various models of that in inner city communities, and even in Nova Scotia in the community of Lockeport.

Are you familiar with micro-lending or the Grameen Bank?

Ms. Jean Lara: No. This is the problem here. We are not aware of what exists. When we come to a new place, we know nothing. We don't even know the streets. What we want right away is to earn some money and survive. Some of our women have all the intelligence and tenacity to do things, but they do not have an opportunity. For instance, when we go to the bank, we cannot even borrow money unless we have established a credit line.

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Mr. Scott Brison: You can only get money if you don't need it, is what you're saying.

Ms. Jean Lara: That's right, although we want to.

Second, I would like to give you a specific example: the nannies. We organized the nannies in Saskatchewan. I'm glad you talked about this. When somebody dies in the family back home, they don't know where to borrow money, so we established a co-operative from which they could borrow $2,000: $1,500 for plane fare, and $500 for whatever funeral expenses there are.

Mr. Scott Brison: That's interesting, Ms. Lara. You're operating what is, in a sense, a micro-lending organization. That's very positive. You already recognize some of the benefits that—

Ms. Jean Lara: Yes, I realize that. I started co-operatives in Israel. It works for small people, but who wants to help us?

Mr. Scott Brison: That's leadership.

The Vice-Chair (Ms. Paddy Torsney): Mr. Brison, I think Mr. Buck wanted to comment as well.

Mr. Frank Buck: As you probably noticed, I have a lot of opinions on a lot of issues, of which one is about the banks. I personally worked in a financial institution for seven years prior to working in government and then in the private sector for almost twenty years. I invested in a certain bank, which I will not name, six times the amount of money that I wanted to borrow for my company for a line of credit. This was fully secured and had very little exposure. They turned me down.

There are all kinds of examples of that out there. So when you look at the opportunity to expand.... I think you made the comment that if you don't need the money you can get it. So that's what's going to happen. As soon as I get enough money and pay off all my debts and want a line of credit that I don't really need, then they'll give it to me.

Also, look at service charges. Is it any wonder that the banks are making huge profits? It's not necessarily the margin on interest rates as much as it is on all these extra charges every time you turn around.

We were, at one time, with a bank that charged us $50 a month just for the opportunity to have a line of credit sitting there. At that time we were small, but that happens all the time.

Look at foreclosures in terms of the cost to humans and to business, lost business opportunities, and the ruthless way in which they're handled. That's a final comment.

The Vice-Chair (Ms. Paddy Torsney): Thank you. Ms. Brown, you wanted to comment?

Ms. M. Brown: I just wanted to jump in on the comments that were made on employment insurance and the Canada Pension Plan. As a young person who is facing 17% youth unemployment, it's actually very much in our interests for a strong employment insurance program to exist. There's the fact that a lot of jobs nowadays are for a very short term, and corporations continue, despite prosperous times, to downsize. We do not want to see this program further reduced. What do see that it used to be a self-sustaining program. We have seen it being decimated.

I am very fearful of that happening to the Canada Pension Plan. As I near the completion of my degree with about $30,000 of debt, I'm not sure how I would start a private pension fund of my own. So if the federal government withdraws from this area, that would be a very frightening prospect for students right now.

The Vice-Chair (Ms. Paddy Torsney): If I may comment, some of us are working to sort out the CPP so that there will be one for your generation and mine when the time comes. Thank you.

Mr. Roger Gallaway: There were a number of issues raised by Ms. Brown, President Wells, and His Worship Mayor Archer that had to do with research. I don't know how many times I'll forget it, but I want to ask one question: how would you foresee the federal government encouraging research? Would you see it through a direct infusion of cash or tax incentives, or would you see just the federal government entering into the field of research generally?

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Mr. Donald Wells: I would respond to that question in several ways.

First, it's important to recognize that there's a major difference between what I would refer to as basic research and applied research and development, although if you look at the activities of people, there is a continuum, and you can't draw the sharp line. But as far as motivation goes, there's a big difference, and things like tax credits and so forth are very good for supporting very applied research and development activities; they very seldom contribute to basic research.

One of the trends of recent years has been for all of the research programs supported by the federal government to be moving in the direction of applied research and development. This comes about because of the efforts to leverage the funds and to get private sector participation.

This is laudable, but I think we have to recognize that there is a price, which is that we've reduced our expenditures on our basic research. I should say that I'm a member of the AUCC research committee and I'm also on its board of directors. In one meeting, an official said to me that Canada has always been a leader in basic research, so we should now put our money elsewhere.

I would say that this is one of the most shortsighted comments I have ever heard. It says that we should give up what small advantage we might have by being active in basic research and having state-of-the-art, leading-edge knowledge, and now start applying that knowledge after it becomes obsolete and out of date.

I urged better, increased support of the three granting councils. It's the AUCC's position and that of our partners that the funding for the Medical Research Council of Canada and NSERC should be increased by 50% over the next relatively short period and SSHRC be increased by 60%. I personally would go to a higher percentage for SSHRC, because first of all, it's very small support for the activity it's trying to support, and it has also suffered quite a bit in recent years.

I think the best way is to support these research councils, which are well established and have very high standards in the use of that money, which should be of interest to the government. I would not think that the answer would be for the government to enter into more research activity on its own. We already have a resource that we call universities. Why would we not use an existing resource? I would rather see the research shifted the other way.

Ms. M. Brown: I have a couple of points there. I would agree on the applied-versus-basic debate, which is that we need to continue to work with basic research and just add another element, which is to maintain the autonomy of research that universities do. We don't want to see a movement toward simply developing whatever technological necessities that various corporations say they need. That completely overlooks the element of serendipity in discoveries. I think that some of the medical advances we might like to have in coming years, and other discoveries, will come through universities having strong, autonomous programs.

I think we do need to maintain and increase the funding for this. There is a role for more government funding. There is also a role for corporate funding through an education tax that could be applied toward the funding of universities and research, which in the end will benefit all with the discoveries that universities make available.

The Vice-Chair (Ms. Paddy Torsney): Mr. Buck might have an opinion on that. Mr. Archer.

Mr. Doug Archer: I would not disagree in any way with the observation on basic research. There is an area of research that is never going to be privately funded and will always have to have public support, but it does strike me that there is room within the research framework for partnership arrangements with the private sector and universities to bring together government priorities and the skills and abilities of people in the university community together with needs that we have within the community as a whole within industry and manufacturing.

• 1405

It is clear that there are those needs in our economic sphere for research, and if they can help us to produce jobs and benefit to more people, not only in our own communities but around the world, then it strikes me that we should try to lever the impact of federal dollars available for that kind of applied research.

The Vice-Chair (Ms. Paddy Torsney): A quick question, Mr. Gallaway.

Mr. Roger Gallaway: Mayor Archer has been talking about the lack of manufacturing growth in Regina and at the same time Ms. Brown has been talking about universities and colleges being accessible to all. Somewhere in between there are people who, for whatever reason, can't or won't go to university or college.

I am just wondering what exists in the province of Saskatchewan to ensure that there are people who receive training in what would generally be known as skilled trades. If you are going to have a manufacturing base, then you need a skilled workforce who are not graduates of universities or colleges but have skills such as tool and die making, so you can in fact have a manufacturing sector in a community or in a province. Is anything on that front occurring in this province?

Mr. Donald Wells: I will try to answer that and add a couple of factors.

We do have a skills training program in the province, and the provincial department that is responsible for universities is also responsible for the skills training part of the spectrum. It is through several means, one of which is our very fine technical institute here in Saskatchewan.

I also wanted to comment that if you look at the new jobs being created worldwide, and certainly in Canada, most of them require at least 17 years of education. For most of us that means something beyond a bachelor's degree.

I visited recently with a senior vice-president of a corporation that is actually in the auto manufacturing industry. Vice-presidents do a lot of fund-raising. This individual pointed out that his corporation could not fill jobs that are paying $100,000 a year and have to go out of the country to do so—and these are basically assembly line workers. I explored it further, and he pointed out that most of these workers really have to have the equivalent of a college or university education because of the modern assembly line being much more of a computer-operated, robotic kind of enterprise.

Similarly, there is a steel company here in Regina that has recently opened a new plant, unfortunately, in the United States, and I understand from the president of that corporation that most of his workers that he is hiring for the new plant, the modern plant, have engineering degrees.

So we have to keep in mind that if we look forward to the future, then not only do we need more people for the kind of skilled workforce that you are talking about who have come through the technical colleges and some of the other skills training development, but more and more we are going to need people with a higher level of education.

Right now in the oil patch in Saskatchewan they cannot find qualified people, and yet we have a lot of people looking for jobs. We have to work on that match. It is a very big problem. It is one that virtually every university president I speak with—and I think most other people in universities—is very concerned about. How do we find that match and still provide all of the freedom of choice that the students really need to have in such an important part of our system?

The Vice-Chair (Ms. Paddy Torsney): Mr. Iftody.

Mr. David Iftody: Thank you, Madam Chair. I appreciate that we are running out of time. I know it is lunch time, and since Jean's presentation I have had a tremendous urging for Chinese food. But we'll look after that shortly.

I just want to say that I am very pleased to be here and the presentations were excellent here this morning, touching on a number of topics. There are probably a hundred questions that I'd like to ask in order to continue this very helpful discussion, but I thought I might focus on the small business aspect because we haven't heard from Mr. Schmeiser. Perhaps you could comment on this. I want to tie in Mr. Buck's concerns, and also those of my friends from the Saskatchewan Wheat Pool.

• 1410

For the record, Madam Chairperson, I want to comment on something that one of the first presenters here this morning was talking about, which is money trading speculation. I wanted to make this point because it has just occurred to me. The Canadian Wheat Board does trade in the Canadian dollar with money provided by the Government of Canada. I'm told that in the last few years, this has resulted in several tens of millions of dollars in profit that went back to the farmers.

So there's one instance, Lorne, where it is extremely helpful, and you of course wouldn't want to tax Saskatchewan farmers, Mr. Nystrom. I know that.

Having said all that, I am particularly interested in the whole question of small business and tax relief. I wanted to make a comment. I'm going to ask you a question about what your preference would be—raising the $200,000 limit on a small business that's currently taxed at 23%; or lowering the tax level to, say, 18% on that $200,000? What would be more helpful?

I was going to suggest to the research bureau that this might be an interesting study that we could look at. I'm thinking that, particularly for women in micro businesses, the income is generally below $200,000. Most of the job growth—Mr. Buck had mentioned the woman entrepreneur in my home town riding—fits into that category creating two, three or four jobs. There has been an explosion of growth there, so maybe we need to look at this.

Perhaps you could comment on the point I was going to make. One of the policies of the government has been to keep inflation and interest rates low. On the borrowing cost on $100,000 for a piece of machinery in 1991, for example, it would cost you maybe $1,200 a month to pay for that. Currently, at 7%, it's a reduction of close to $4,800 a year in payments. I'm thinking that in terms of the average income of Canadians at $47,000, that might be a mortgage. If those reductions are made, that puts an after-tax profit of close to $5,000 a year back into the pockets of an average family. That would mean possibly a 20% or 25% pay increase. That's quite impossible, as Mr. Buck will tell you right now. If five of your employees came to you and said they needed a 25% pay increase, it would be impossible to do it.

With respect to keeping interest rates low so that farmers can buy or lease more machinery, for example, do you think the current policies should continue, or should we look at general tax relief? If there was a trade-off between those two, what would you prefer?

I'll start with Canada West, and perhaps the pool could talk about this as well.

The Vice-Chair (Ms. Paddy Torsney): Mr. J. Schmeiser can go first.

Mr. John Schmeiser: Ideally, we would prefer both an increase in the $200,000 limit and a decrease in the percentage. In terms of where we stand right now, we see the $200,000 limit as imposing severe restrictions on recapitalizing a business. Small business owners across Canada are taking money out of their businesses and are paying personal taxes on the money that they're taking out, or they're just taking out a shareholder loan. If there was an increase in the $200,000 limit, our belief is that there would be less desire to do that, and it would be easier to capitalize one's business, which we think would increase jobs.

There was a surtax of 2.2% imposed, and the rate has really stayed the same for the last twelve years. It was at 15% at one time. It's now down to 12%, but it's up to about 13% with the surcharge. If we had some assurances that the rate would remain constant, we would certainly support an increase in the $200,000 limit.

• 1415

There is one final thing on the financing of equipment. In terms of the interest rate, there is a significant difference in the interest rates the dealers are paying right now to finance their equipment for sale. Something that has to be kept in mind here is that the price of equipment has really skyrocketed since 1990. As an example, a top-of-the-line combine in 1990 would have gone for under $150,000. At today's prices, it's over $225,000. So from our perspective, it certainly is nice that the interest rates have gone down, but we're dealing with bigger dollars. When you have the small business deduction remaining constant through all of that time, it certainly does put some put some pressures on a farm equipment dealership.

The Vice-Chair (Ms. Paddy Torsney): Thank you.

I know there are probably some other people who want to comment. I did say we were going to try to end at 12.15, because I know people have other commitments. We have already lost two of our panellists, so I wonder if we could facilitate a one-minute statement, comment or plea from each of you. We'll start with Ms. Brown for a wrap-up, one-minute comment. Those of you who wanted to answer Mr. Iftody's question can speak to him afterwards, or you can use your one minute for that purpose.

Ms. Brown.

Ms. M. Brown: I'll just return to my theme of what we believe has happened through this process of deficit reduction. The deficit has been shifted to the individual, be that the individual small business owner or the students who now bear a huge burden of debt as they near completion of their degrees. I don't think there should be too much celebration for having conquered the deficit problem, because I think we're only on the verge of it. For example, students are unable to participate in the economy, to stimulate the economy, and to access those low interest loans that we were hearing might be beneficial to people.

What we are advocating is for government to again become involved in creating a climate in which all Canadians can access the economy. Specifically for post-secondary education, we're looking at having some of the funds that have been cut through the Canada health and social transfer put back in, and we're looking for a system of grants to address this student debt burden that exists.

Mr. Peter Morin: I guess I'll just take this opportunity to pick up on a point that I forgot to mention. With the national child care plan, that was for creating new spaces. I can't relate the situation to other provinces, but here in Saskatchewan it would have destroyed the existing child care system because it couldn't compete with the new spaces that have been created.

When government makes decisions, I think it has to remember that it's a bit like a Rubik's cube. Every time you change something, something else changes, and that one may not be a positive change. So when you look at changes for things like that, I encourage you take into consideration the impact that you are going to have on existing programs and services.

Mr. Frank Buck: I would like to react to the comments that I believe Ms. Brown made. I really support them, and I think that what we need in the future is more young people around tables like this in order that they can tell us what it's really like out there and how it's hurting. We just put two children through university, but we fortunately had our business to support them. A lot of people don't have that opportunity.

In summary, I guess my main concern is that the governments should have more consultations like this, and that they should be real consultations and not just window dressing. I think the effect on small business and workers is not known in advance by government. Even with our members of Parliament, as much as we speak to them on a regular basis, they don't always have the opportunity to get our message through to the House of Commons. That's just because of the order of speaking and the foolish way in which things sometimes happen in the House of Commons.

In summary, I'd like this process to continue in a very meaningful way—before governments act, they should have real consultations.

Mr. Marvin Shauf: I guess the message that we really want to leave here is that agriculture has picked up some major hits financially over the last number of years. Agriculture has had costs passed on to it and has had its funding reduced from the federal government.

• 1420

Agriculture has been told that it is going to get onto the international marketplace and compete without assistance from the Canadian taxpayer. It makes it very difficult when other countries are continuing to pass income to their producers. It makes it difficult for Canadian producers to compete in that international marketplace. The playing field is not level, and definitely it's difficult if there is a continued passing on of costs to producers for that trade to take place internationally.

The Vice-Chair (Ms. Paddy Torsney): Thank you. Mr. Goetz.

Mr. Ron Goetz: Generally speaking, what the industry needs is solid investors into our industry. Again, I continue to harp on the theme that it's going to have to be either the governments of this country or private investors. So that atmosphere needs to be created.

You will be lobbied in the near future, if you have not been already—I'm sure you have—for additional funds into what we in the industry call the “Sheila Copps fund”. We think that's a valuable thing to do. It will not only increase cultural attention but will also provide jobs for younger people.

The final thing is not to lose sight that our industry is really a number of small businesses. Most of our production companies are less than 10 people. We need them to be treated like small businesses, with that kind of support and some type of protection. We can't be treated as corporations. We just do not have the power to do that.

So if you could remember those two things, I'd appreciate it. Thanks.

The Vice-Chair (Ms. Paddy Torsney): Mr. Schmeiser.

Mr. John Schmeiser: The federal government has in the past recognized the importance of small business and the contribution it makes to our economy. We ask that this continue. As we approach 2000 and enter into a new century, the federal government has made some significant gains in getting its financial books in order. We feel that the time is now to implement some tax relief strategies out there to allow our economy to grow even more.

The Vice-Chair (Ms. Paddy Torsney): Thank you, Mr. Schmeiser. Ms. Lara.

Ms. Jean Lara: I would like to see more emphasis on immigrant settlement. The federal government should consider our organization and advocate for us, please, to help us in our programs.

As well, I agree with Ms. Brown about our youth. I would like to see an emphasis on that in the future. I have six children, and they're all in debt. Education, yes, is a very special point. They're also getting old. We need to emphasize our youth programs, because they are our leaders of tomorrow.

I would like to raise also the issue regarding nannies. We have a case where a nanny has cancer. Her breast has a lump, and she won't go for an operation. I'm having a hard time convincing her, because she's so scared she will be deported. I want to bring that up too, so that you will help us.

As well, economic development means business entrepreneurship for us.

The Vice-Chair (Ms. Paddy Torsney): Thank you, Ms. Lara, and to all the panellists for participating today.

Some hon. members: Hear, hear.

The Vice-Chair (Ms. Paddy Torsney): It's been great to hear your views and great for you to hear each other's views, because sometimes they may have differed from the opinions you heard before you came here today. If you do have any other ideas or any other input on the CPP or any other issues that the finance committee or other committees are dealing with, I encourage you to send that to your own member of Parliament or to members of Parliament—remember, it's postage-free—to make sure they're in.

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This committee will probably be starting to write its report around November 6, 1997, so perhaps by then you can get to us anything else you want to add. We will also be doing at that time the CPP consultations. I encourage you, if you have ideas or input on that, to get them to us.

This meeting will be resumed at about 1.30 p.m., about half an hour later than we anticipated.

Thank you very much and have a good day. The meeting is adjourned.