Advancing the Competitiveness Agenda

May 7, 2008

Thank you for the opportunity to appear before the Committee this afternoon to speak to Bill C-50.

The views of the Canadian Council of Chief Executives on Budget 2008 are a matter of record.  We believe that it builds on the important tax cuts announced in the October 2007 Economic Statement by adding several measures that will have a positive impact on Canada’s competitiveness at relatively low cost to the treasury.  I would note in particular the creation of the Tax-Free Savings Account, which gives families a powerful and flexible tool to help them save for everything from retirement and education to a new home.

I have just returned from Calgary, where our members met individually with the Premiers of Manitoba, Saskatchewan, Alberta and British Columbia and also held a roundtable discussion on the state of the economy.   Clearly, the economy of Western Canada is firing on all cylinders, but the outlook is considerably more troubling in Ontario, Quebec and much of Atlantic Canada.

The subprime mortgage crisis in the United States has had a significant impact on growth prospects in that country.  Real estate prices in that country continue to fall.  Both consumers and businesses there are finding it harder and more expensive to borrow.  The result is likely to be continuing weakness both in the U.S. dollar and in demand for goods and services in Canada’s major export market.  This reinforces the need for Canada to take a prudent approach to fiscal policy and the management of public spending. 

Bill C-50 includes three specific provisions to support the broad thrust of the budget.  Allow me to offer a few brief comments on each of these issues: Employment Insurance, student aid and immigration.

First, we strongly support the creation of the proposed Canada Employment Insurance Financing Board.  The business community has argued for years that Employment Insurance premiums should be set by an arms-length body and that the funds collected through these premiums should be managed in a segregated fund. 

We have a continuing concern about the tendency to use the Employment Insurance system to provide benefits that might better be characterized as social programs.  Over the longer term, we believe that money raised through Employment Insurance premiums should be focused more precisely on its core mandate of providing insurance against temporary job loss and that other programs should be funded through general revenue.  However, the creation of the new Board marks a critical step in the right direction.  

Next, I would like to speak to the issue of student aid.  In an increasingly knowledge-based economy, we must ensure that every single Canadian is both able and motivated to participate in post-secondary education.  This may be through university or college, through apprenticeships or through other forms of training and lifelong learning within and beyond the workplace. 

The Canada Millennium Scholarship Foundation got off to a rocky start, but over time found ways to work constructively with provincial governments and became a catalyst for innovation in improving access to post-secondary education.  The government has opted to dissolve the Foundation and replace its scholarships with a new and more robust approach to student aid.  The design of the new rules will be critical in ensuring that federal resources allocated to student aid are as effective as possible in overcoming financial barriers to success in post-secondary education. 

I also believe that the government should move to preserve and build upon the research capacity developed through the Foundation.  Here, I would suggest passing its research mandate and funding to the Canadian Council on Learning, which has become an important and credible source of information about how Canada is doing in the field of education and what policies work best in enabling every Canadian to achieve his or her full potential.

Finally, I would like to speak to the provisions of Bill C-50 that affect immigration.  Canada is facing serious and growing shortages of skilled labour.  These shortages are most acute in the resource sector, but they are affecting businesses of all sizes, in every industry and in every region.  These shortages will only get worse as our population ages.

Both Canadian employers and potential immigrants today face a huge frustration, a backlog of some 900,000 applications that under current rules must be processed in the order they are received.  The result is that a skilled worker, ready to contribute to Canada’s economy, faces a wait of up to six years before even having his or her application processed.

This legislation would give the Minister of Citizenship and Immigration some discretion to set priorities within the system.  This provision should help to speed the flow of immigrants with skills that are urgently needed in our economy.  While any legislative provision for ministerial discretion may cause concern, the process outlined in this bill for issuing ministerial instructions provides both transparency and accountability. 

The current system is not working for immigrants and is not working for Canada.  We need improvements now and we cannot waste years more in pursuit of perfection.  Whatever flaws anyone may see with the process proposed here, it represents a clear improvement that will start to make a difference right away.

On all three of these issues — Employment Insurance, student aid and immigration — Bill C-50 moves public policy toward better solutions.  In each case, there is more work to be done.  But we support the intentions of the bill and are prepared to work with the government to ensure that the resulting new programs and institutions achieve the best results possible for Canadians.