Proceedings of the Standing Senate Committee on
Agriculture and Forestry
Issue 15 - Evidence - Meeting of February 13, 2007
OTTAWA, Tuesday, February 13, 2007
The Standing Senate Committee on Agriculture and Forestry met this day at 7:04 p.m. to examine and report on rural poverty in Canada.
Senator Joyce Fairbairn (Chairman) in the chair.
[English]
The Chairman: Last May, this committee was authorized to examine and report on rural poverty in Canada. Last fall, we heard from a number of expert witnesses who gave us an overview of poverty in our country. On the basis of that testimony, we wrote an interim report, which we released in December and, which by all accounts, really struck a nerve across the country. For too long, the plight of the rural poor has been ignored by policy-makers and politicians — well, not any more. We are now beginning the second phase of our research.
Our goal is to meet with rural Canadians, the rural poor and the people who work with them. We want to hear first- hand about the challenges of being poor in rural Canada and we want to hear first-hand what we can do to help. I should also say that this is the first time in our knowledge that there has been such a study by a committee, either in the Senate or House of Commons.
To this end, the committee is holding some preparatory meetings here in Ottawa ahead of its planned travel to rural communities across the country.
This evening's witness, appearing by videoconference, is Sue Rickards, the project coordinator for Neighbours Alliance of North York, a multi-purpose community association in New Brunswick. I believe it is pronounced NANY.
NANY's current focus is programming for disadvantaged rural youth. Sue has worked in rural communities for the New Brunswick Housing Corporation for eight years. Her experience in the field of rural poverty has given her invaluable insights into the process of socio-economic development in marginalized communities.
Sue teaches a course on community change and development in the department of adult education in the University of New Brunswick.
Sue Rickards, Member of the Board, Neighbours Alliance of North York: I am delighted to be with you. My presence here is accidental. The Honourable Claudette Bradshaw, who was meant to be the witness, deferred to me. The paper you have in front of you, which I wrote for her in 2000, is about the plight of the unemployed and people living in poverty in New Brunswick; it is still relevant, unfortunately. Nothing was ever done with the findings of that paper, so I was quite thrilled to know that a Senate committee might really read the paper and take it to heart. It touches on many of the issues you are looking at.
I should add that, since that paper was written in 2000, NANY has been very involved in and around the town of Nackawic, where the St. Anne-Nackawic Pulp Company Ltd. went bankrupt and shut down the whole region about three years ago. That mill has reopened with a new owner, but not everyone is sure about its sustainability. I am having a lot of experience with single-industry, dependent rural towns. You might want to ask me about that. I thought I would mention that to you.
I understand my time is limited and there is so much to cover so I picked the issues I feel most strongly about and the ones about which I think you may be hearing the least.
The first one is your point about the dimension and depth of rural poverty. I do not think we really understand how deep rural poverty is because it is compounded by isolation. Everyone talks about outmigration: ``Anyone with any get up and go has got up and gone from rural New Brunswick.'' I am here to tell you many of them are not going, and will not go, for a number of reasons that may not be very greatly appreciated.
I am speaking now of young people between 18 and 30 years of age. The ones that we have been working with at NANY, as a group, are frightened about what they do not know. They have never been exposed too much outside their own communities and schools. They are afraid to try anything new because they fear they will fail, and they have been exposed many times to failure, in particular in school. They are also afraid that they will succeed, which means the bar of expectations will rise a little higher. They have a tendency to hunker down and stay home, take apart snow mobiles and grow hydroponic marijuana. They will stay there until someone coaxes them out. They have a strong attachment to their home communities and families. Some who have left and gone out West have bounced back home because of that.
They live in a small world where their horizons are not broad because they are physically isolated. They rely a great deal on television and computers, which gives them a fragmented and unrealistic view of the world. They see things for which they have no context, so they do not know how to judge or assess them in terms of how they will be affected by them. The school system does not contribute to broadening their horizons because there is not much in the curriculum for them. The school system is geared to those who will move on to post-secondary education, but 75 per cent of our kids do not move on.
As well, there is the changing nature of work opportunities. At one time, kids could quit school and go to work in the woods, but they can no longer do that. They require better skills to get a job these days. Students need Grade 12 to stack frozen pies at the McCain's plant. All of these things contribute to keeping them stuck in their little bubble world where they have grown up and where it is very safe. Even though much of their world is not nice, at least it is what they know.
In terms of dimension and depth, at times people do not understand that, in the Maritimes, certainly in New Brunswick, we have a different perspective on poverty. I do not mean to overgeneralize, but we enjoy and profit from very small benefits. We do not consider ourselves poor simply because we have less money. The value of many of the things that we have cannot be measured by money, such as clean air, clean water, beautiful countryside, solid communities, family and extended family and low crime rates. These are the things that make life worth living, even if we are not rolling in money. We do not always consider ourselves poor in the same sense that other people consider that we are poor. We have an active underground economy in trade and barter. We know those things are not legal, but often they are the necessities, especially for the group of people we are concerned with.
Much trading of services and many under-the-table jobs allow people to sustain themselves between odd jobs — which are paid informally — and government cheques of one kind or another. People also count on the occasional win at bingo or the lottery because that can help them to pay off debts or to buy something special. We have our own methods of dealing with what we consider to be poverty. However, all of that is not to say that it is not mean because rural poverty is mean and harsh. The conditions I have seen that many people live in are desperate and there is a great deal of family violence and alcohol use. Much of it is brought on by the dependency syndrome that our social programs perpetuate — but we can talk about that later, which I am sure you will want to do.
I will skip over the comments on key drivers and measures to mitigate poverty because they are in the paper, and I am sure you have heard a lot about that, and there are no new comments at this time. Instead, I will move on to the conclusion, because I do not want to exceed my time limit this evening.
There is no lack of opportunity for employment in rural Canada but the issue is how to connect people living in poverty to those many opportunities and how to integrate them into the socio-economic mainstream. First, they have to be coaxed out of their communities because they will not come out on their own. To do that, I have found in my experience that they have to trust you; and in order for people to trust you, you have to build a relationship with them, which takes time. Often, policies are made on the basis of research, which can be done so quickly and superficially that it never touches the ground, thus missing important issues. I hope, as the committee tours the country on this issue, you will have a chance to ``get on the ground'' and truly understand how people are living and the impacts that these issues have on them.
The challenge is to design and implement the mechanisms that enable people to make the transition from unemployment to the workforce. That can be done through community economic development — CED — which I am sure is a term you have heard. CED means different things to different people. In New Brunswick, we have had top- down CED, which does not work by definition, but that is the only thing we have been able to get off the ground. When a community needs economic development, the strategy is to send in the consultant, have some focus groups, write a big report, make a strategic plan and put it away on the shelf. The consultant leaves and that is the end of it. The government then proceeds to try to find some big company that will come in and bail us out. That is what happened in Nackawic.
That method is not community economic development but rather it is top-down economic development. The kind of economic development that we need at the community level is asset-based community development. What assets does a community have that can be built on? That is the key to success in building the kinds of economies that create jobs for everyone and communities where people can make the transition from being unemployed and on assistance to the workforce or to running their own businesses.
There are three key things: First, start viewing rural areas as the key component of environmental sustainability. Second, create policy that emphasizes stewardship rather than depletion of natural resources. We are beginning to understand the importance of our water, trees and other natural resources for our survival. We need to have asset- based community development. Third, enable non-profit organizations to develop social enterprises that can serve as incubators for transitional learning and employment leading to mainstream jobs or business creation.
As well, I would suggest, as stated in the paper, incentives for the private sector to hire marginalized people who have been deemed unemployable. Often such people are employable under the right conditions and with the right kinds of support.
If you want to talk more about the social enterprise concept, feel free to ask questions.
The Chairman: Thank you for the unique and activist-style presentation. Senators, we will begin questions right away.
Senator Mercer: Thank you, Ms. Rickards, for your presentation. I am from Nova Scotia and your description of North York is similar to ones that we can hear about many areas of Atlantic Canada and of the country. I appreciate the way you have put it.
As an aside, when I saw the acronym NANY and Claudette Bradshaw's name, I thought she was NANY. She always treated us so well when she was here as a member for Moncton-Dieppe and we appreciated that.
Reinforcing failure is a syndrome I have seen for many years in Atlantic Canada in my own province. How do we create positive images for people in communities? You commented that sometimes people are frightened to succeed because once they do the bar is raised to a level they are not sure they can attain. That has happened to many of us from Atlantic Canada over the years.
We need to find some way of having role models that young people and not so young people can aspire to. Perhaps you can make a comment on that.
Ms. Rickards: Where I have worked primarily is in the welfare culture with men and women and young people. What is clear right across the board is that they have no confidence in themselves. All of our systems tell them they do not measure up.
Because our systems are based on the charity model, we give them the cheque and we require nothing from them. We give them the education; we give them the health care; we give them everything except responsibility. What they lack is the feeling that they are worth anything.
They need to participate — and I am not talking about chain gang workfare, which is the worst thing you can do to people. The second-worst thing is to not let them do anything. Where we have been successful in combating this failure syndrome is where we have made sure that every person we have been involved with had a role to play, and could do it successfully.
Senator Mercier: I think that is very good.
Our next witness today will be from the Atlantic Canada Opportunities Agency, or ACOA. Do you think ACOA has been able to provide positive examples and role models that are needed, not just for people but for communities? It goes beyond just individuals. It goes to whole communities' attitudes about themselves and their place in the world.
Ms. Rickards: No; speaking from my experience with ACOA, it is totally useless.
Senator Mercer: That will set up our first question for our next witness. It is an important one.
Employment Insurance, EI, has been there to provide the support and Atlantic Canadians have been criticized in the past as being dependent on EI. First, is this true? Second — and I will not coach you about how to answer this — if it is true, is it the desired form of maintaining income that the people in your area want?
Ms. Rickards: Well, it is not the first choice of anyone to be on any kind of welfare or EI. However, due to the seasonal nature of so much of the work, very often that is what happens. People get stuck in a certain place or certain type of work and it is not easy for them to move from one season to another, or from one job to another.
I think the answer there is, first, a seamless income-support system, so they are not jumping from one system to the other all the time. Second, there should be some encouragement for work that spans every season — and it could be different work in every season. What we found with the people we were working with in their communities is that a lot of people who were on EI through the winter made things or did other income-generating things, if they had the market or the support for that.
Senator Mercer: My last question — and I hope one of my colleagues will pick this up as well — concerns the fact that 75 per cent of the young people do not go on to post-secondary education. That is an extremely high level. Is the province doing anything to help address that issue in New Brunswick, to make that number lower?
Ms. Rickards: They are trying, but they are not reaching them because this is the group that is so lacking in confidence and options. Post-secondary education is not appealing to them because they have had such a lousy experience in secondary school. Most of the young people that I have worked with who are on the marginalized end of the scale are there because there was not anything in the curriculum for them.
There is no vocational education anymore; everything is either academic or computer-based. These are the kids who could tell you where every fish is but they could not pass a science test. They could not write it down but they could tell you everything you would need to know about growing hydroponic marijuana. It is not that they are stupid; it is that they have not had the kind of education that suits their learning style. That is the biggest issue. Once the school system can grab hold of that, address it and give students alternative methods of learning, I think we will see a huge shift in that number.
Senator Segal: Thank you for your presentation and your spirited focusing in on the people most at risk and most in difficulty.
I want to focus on the issue of income security. I am referring to page 4 of your paper, where you say:
. . . gains from employment are offset by losses from support systems. For example, people living under one roof are deemed by the New Brunswick welfare regulations to be one economic unit, supported by one cheque. So two adults living in the same house cannot individually receive government income support, even though they would qualify for it if they lived alone. A woman with children often cannot receive financial assistance if there is a man in the house with an income. In rural areas, sometimes there are extended families, parts of families or more than one family under one roof because separate housing is unavailable, inadequate or unaffordable. Yet they can be deprived of a significant part of their income because they live together — unless they lie.
In your judgment, how fundamental is a basic income floor that people can count upon to the ability of families to break out of the cycle that you reference so clearly — and young people, especially, to be able to get to school and try to develop some career options for themselves?
I know that the Minister of Finance, in his economic document in the fall, talked about an income supplement for people who might fall into the category of ``working poor.'' Regardless of how an individual made an income, if he or she did not have enough income to live over the poverty line, to have all that is needed to live effectively, the federal government would top it up in the same way as the GST tax credit now for people who earn less than $30,000.
Do you believe an income floor is fundamental, or is it irrelevant to the discussion? It is not about income but about motivation.
Ms. Rickards: It is absolutely essential. If you had an income floor, that would enable people to say, okay, I can count on that and I can go from there. You would see amazing things happening. So much of this fear and worry is due to the insecurity and the low levels of income. All of these machinations about who is getting what cheque and that sort of thing makes for a very complex and competitive system.
I believe that we have it backwards. Some philosopher said: In order to make people happy you must first make them moral. However, someone else said: No, that is backwards. In order to make people moral you must first make them happy.
Is it not easier to enable people to live comfortably so that they can move on instead of always looking over their shoulder, always waiting for the power to be cut off, always trying to get to the food bank? To me, it is quite essential. It would be a dream come true to have an annual basic income.
Senator Segal: You made reference to taking apart snowmobiles and growing high-quality marijuana. We get beyond that. Some of the other outcomes that we often associate with people who have no income — alcoholism, family abuse, heightened illness, obesity and the rest — have huge social costs. In terms of what you have observed in the community in which you are working, relative to the impact on the local correctional system, healthcare system, policing system of this income insecurity, can you give us a sense what the dynamics would be? Is this something that would be at the margins or a mainstream problem from your perspective?
Ms. Rickards: The problem, and it can hit anybody, is that the welfare system or the dependency sucks the life out of people. It sucks their self-esteem right away, along with their confidence, especially men. Girls can always have babies, which would give them something to do, and then they have an income. However, what do guys do? Nobody needs them. What can they do? They can get a minimal cheque on their own, or they can have a family and do the best they can that way, but in the end the cheque is going to come any way, whether the guy does anything or not. So, he feels useless. He gets angry and frustrated. He drinks, smashes up the place, throws the child against the wall. If you dig deeply enough into this issue you will find, at the base of it, I believe, the fact that we deprive people of responsibility with the systems we have now.
Senator Segal: You mentioned the notion of asset-based development. There is quite a debate in social policy circles in the U.S., Europe and Canada about whether we have income-based social support or asset-based.
For example, council housing was given to low-income residents in the United Kingdom by the Thatcher administration. The theory was: Give these people the houses in which they live; give them ownership, give them some reason to want to preserve that and give them some equity. Over time, those communities in fact began to improve.
When you talk about asset-based community economic development, are you talking about reversing the kind of needs assessment that we often see done by the United Way — look at the benefits assessment, look at the strengths of a community and see how you can maximize those? Are you talking about trying to make sure that individuals have the assets they need so as to have some flexibility and capacity to participate?
Ms. Rickards: I think we are talking about two different discussions. The asset-based community development that I am referring to is based on a perspective; it is not a measurement per se. It is a perspective on what this community has.
For example, if you look at Nackawic, we have a lot of trained labourers now who do not have work. Of course, they are the ones who are leaving. We have an environment. We have beautiful scenery, fishing and all kinds of opportunities for outdoor enterprises. Those are the assets we have. We also have people who are willing to learn and people who know the land. On an individual scale, if you go into a really marginalized community and look at the people who are there, they say: He is the drunk, he is no good; but wait a minute, he is a really good carpenter when he is sober. You look at the carpenter; you do not look at the drunk. That is what we mean when referring to the micro level of asset-based development.
Senator Peterson: In view of all you have said Ms. Rickards, do you think the rural way of life can be sustained over the long term? You have lack of an economic base and single industries closing down. In Saskatchewan, our youth cannot wait to leave the rural areas and go to the cities. What do we face? What are we chasing here?
Ms. Rickards: Well, I think it is critical for the rural communities to be sustained because they are the basis of a lot of the resources that we have; that is where they come from. I do not think it is really feasible to abandon them.
However, I also think we have to find a different way to work with them. I know Saskatchewan has different issues than New Brunswick and the Maritimes, so I cannot make a generalization on it. However, certainly in our part of the world we do have other opportunities that we can pursue in terms of products from the forest and from agriculture that might make our communities sustainable in the long run.
Senator Peterson: Do you have examples of those or are you still working on them?
Ms. Rickards: We are still working on them, but we were very keen on eco- tourism, and still are, to a certain extent. We are very interested in doing outdoor education.
Apart from that, we are interested in developing other products from agriculture and from forestry. Our area is historically significant, in terms of the loyalists that came to the Saint John River Valley, so there is a lot of traditional furniture that could be copied and could be sold.
There are other people who know much more about this than I do, but there are other products that can be cultivated along with the forest, in the forest, which can provide cash crops in ways other than cutting down the trees.
Senator Callbeck: I want to ask you about something in your paper — that is, gaps in government economic development policy. You say that there is no lack of opportunity in rural Canada, and then you talk about these gaps. You have mentioned that there is no transitional support for people on welfare that want to go into business. That could apply to any low-income person in rural Canada. That is very familiar to me because I was involved with the Prime Minister's Task Force on Women Entrepreneurs back in 2003. Everywhere we went, we heard from women that they would love to have an opportunity to with able to borrow maybe $300 or $600 or whatever to start a small business.
When you say there are gaps in the government's economic policy, I would like to hear your suggestions. What do you think the government should be doing?
Ms. Rickards: There are two things that come immediately to mind. One is the micro-credit loans that you are alluding to — a fund from which low-income women or anyone could borrow small amounts of money. A lot of these are happening now through community loan funds. They are growing up from the grassroots — sort of organic things. Making money available for those kinds of loans to community loan funds would be a very effective way for the government to make a dent here. A lot of times, all that is needed is just a thousand dollars or a small amount of money.
If you look at the loan funds that are already doing this, such as the one in Saint John, it has done remarkable work with very limited resources. Supporting organizations like that would be one suggestion.
The other one would be support to the social economy — that is, permitting us to start social enterprises, which is an enterprise with a double bottom line — not only to make a profit, but to train people as they are working. The Human Resources Development Association, HRDA, in Halifax is the granddaddy of those programs in Canada. It has been running businesses that have been operated by income-assistance clients who are moving through from welfare to self- sufficiency by working.
I have been involved in a couple of these in New Brunswick. I do not really have time to go into them right now, but Monquarters at Work, which is mentioned in my paper, is one of them. That was a very small effort, but it got two families off welfare with virtually no investment. It just requires time and marketing assistance, and being able the marshal the forces of all the government departments.
For example, these women were making products out of old clothing, but when it came time to sell their products they could not smile because they had rotten teeth. They got all their teeth extracted, because in New Brunswick, with welfare, you cannot have dental work done — you have to have new teeth. Two of these women got all their teeth extracted — talk about motivation — and then were able to become entrepreneurs because they could smile. Where are the gaps? The gaps are everywhere.
Senator Callbeck: On that community loan fund, did the money come from the government and then the community runs it? Is that how it operates?
Ms. Rickards: No; the initial funding came from the community. It was a community fundraising drive. I believe there are five community loan funds in New Brunswick and one of them is rural. Certainly, if NANY, for example, had a community loan fund to tap into, we could be helping a lot more people than we are.
Senator Mitchell: I have really been impressed by the passion of your presentation. I am wondering if you ever thought about going into politics.
Ms. Rickards: It has been suggested.
Senator Mitchell: We have the party for you.
You mentioned in your opening comments that many of the young people you work with could describe every fishing spot along whatever stretch of shore but that they would have difficulty writing it down. Could you elaborate on the literacy issue and how the cuts to literacy recently may have affected your community?
Ms. Rickards: New Brunswick is not proud to be known as having the worst literacy rate in Canada — except for Nunavut, I guess. Of course, there is a problem in the schools. The schools are not able to overcome the deficits that these children bring into school.
I worked with preschool kids, for example, who have never seen a book, never held a book or a pencil in their hands. I sat in the back of my pickup truck lots of time playing crazy eights with four- and five-year-olds just to get them to recognize the numbers.
This is what I am talking about in terms of richness of an environment. They watch TV and that is all they do. I think there are literacy issues on both ends of the spectrum. The preschool family literacy issues are huge, and there are literacy issues on the other end, where the kids are coming out not competent to read and digest the kind of things that are required to be in a lot of the job markets today; then you need to have the adult literacy. At that point, where a kid has come through school, cannot read very well and has lost all confidence in his or her ability to learn, you are back to square one in terms of helping them along and helping them to feel they can do it.
I would not swear that the literacy money was being used most effectively; I do not know. However, cutting literacy at this stage of the game is cutting off your nose to spite your face, really.
Senator Mitchell: I am going to quote you on that.
Ms. Rickards: I do not mind.
Senator Mitchell: I notice you list child care as one of the issues in freeing women — usually it is women — for the workforce. Interestingly enough, it is often women who have the greatest success with small business, so there may be a double implication with this. Have you noticed whether the $100 per month that has been given out has helped create child care spaces? What would you envision for a successful early childhood education program? Should that have been cut?
Ms. Rickards: Well, the $100 is useless. That is probably the frozen turkey in the freezer at the bootleggers.
Senator Mitchell: Can I quote you on that, too?
Ms. Rickards: These are things that have been said to me. I am not a creative person; I only learn by listening.
As far as child care is concerned, you have to have a different model in a rural area, obviously, because there are too many issues of distance and qualification. I am not really sure how to approach that, but what we have done is to either find someone who is capable of providing good child care and then making it possible for the mom to take her child there and pay for it, or have someone come into the house — a relative, but someone that the mother trusts.
Senator Mitchell: One child care initiative that is current is the idea of supporting business to set up child care spaces. You can imagine that might work in a downtown Toronto area, where there are huge businesses with enough people with young enough children to actually make it possible to have a business set up a day care; however, in your area, surely there would not be many businesses that would be able to utilize this program to set up day care spaces.
Ms. Rickards: We have very large and very small businesses, but I think that would probably be more appropriate in a hospital or a government facility. I think it is a good idea, generally speaking — particularly when you have shift work, because there are a lot of women who do not have a place to leave their kids when they are working odd shifts. It is a very knotty problem, and I do not have a good solution to it. All I can say is that right now it is a big issue.
Senator Di Nino: Let me also applaud you for your forthrightness and passion; I think you are a great ambassador for this cause.
You have made some very strong statements, which I happen to agree with. You were talking about systematic dependency and one of your comments was that dependency sucks the life out of people. If I did not quote you correctly, I apologize.
Ms. Rickards: Close enough.
Senator Di Nino: Thank you. I use a couple of different terms. I say ``aid enslaves,'' as an example, and I think we are talking about the same thing. Your message to me has been somewhat conflicting when you talk about an annual basic income. How do you deal with that conflict?
Ms. Rickards: To me, that is the starting point. At one point, we did have a very good program in New Brunswick for workers who are 40 to retirement age, where they could get a basic $12,000 a year, no strings attached, but whatever they earned over that was theirs to keep until they got to a certain threshold — maybe it was $20,000 or something like that. The basic idea was that a person knew there was going to be that money; that was the person's launching pad, and from there, the individual could go on to earn. For example, that meant a person could afford to buy steel-toed boots, a car that would get him or her to work and proper food to provide the necessary energy for the day instead of eating junk. It is not really a cushion but more of a catapult.
Senator Di Nino: In other words, it is the priming of the pump that eventually would be withdrawn or no longer required.
Ms. Rickards: That is right. The priming of the pump is a good analogy.
Senator Di Nino: You were quite critical of the school system and suggested that there is no vocational education. Again, what are you saying that you would like to see in the education curriculum?
Ms. Rickards: I am talking about hands-on learning opportunities. We used to have shops-training available for students — auto mechanics and woodworking, for example. These courses were removed from our schools in New Brunswick in the 1990s with the focus on computers. They cancelled the home economics and shops courses. In Nackawic, with the dropout rates and with so many students going nowhere with their lives, the school instituted its own version of hands-on learning, which they could not call ``vocational education'' because that was out but instead called ``enterprise education,'' and they started businesses in the school. One of the businesses they started at Nackawic was building cedarstrip canoes and paddles. They got the equipment, started a workshop and taught these young folks how to make canoes and paddles. That program kept many students in school. There are still graduates of that program today who are itching to go into that business but there is no mechanism for us to get from where they are now to where they would like to be.
Senator Mahovlich: Are your communities active in sport? I find that morale is a key problem in many communities where there is high unemployment. When youngsters participate in sport, it can help to compensate.
Ms. Rickards: Yes, they participate in sport if they have enough money to buy the equipment and if they can find a way to get home after practices and games. Some of our kids live 60 kilometres from the school. In our communities, the town kids play the sports and the kids who live down the dirt roads are marginalized in that way.
Senator Mahovlich: Getting to the sport and back home is a problem.
Ms. Rickards: Yes. Another problem is being included in any kind of psychological sense because there is quite a divide between the town kids, who generally have more money and advantages, and the rural kids.
Senator Mahovlich: Are teachers involved in coaching and encouraging kids to participate in sports?
Ms. Rickards: Some teachers and some parents are very much involved, but part of the problem is that many teachers in our country schools do not live in the communities where they teach. They commute and often do not have the time to get involved as much as they might like to.
Senator Mahovlich: In Toronto, there is a real demand for labour, in particular during the summer when building construction starts up again. I have run into many people from Newfoundland who spend four or five months in Toronto working and then go back home when the season ends.
Do people from New Brunswick do this?
Ms. Rickards: Yes. Currently, they are travelling to Fort McMurray and Calgary to work.
Senator Gustafson: I should like your comment on pockets of poverty. For example, when the Prince Albert Pulp and Paper Mill shut down it created a big problem in that area. In Saskatchewan, if the farmers are not doing well then people at the lower end of the scale are in big trouble. How do you deal with such pockets of poverty?
Ms. Rickards: I wish I had the answer to that question. Seasonally, there is a movement of labour ability out of those areas. The people remaining simply will not leave for any reason and will stick it out to the very end. The issue becomes what there is for them to do. Many examples of communities once considered to be dead in the water, in Saskatchewan and right across the country, have literally come back from the dead by reinventing themselves. The best source for that kind of information, if you are not already aware of it, is the magazine Making Waves. It is from the CED people in British Columbia. The website is www.cedworks.com, but it can also be found by searching ``making waves.'' The magazine lists many such towns and communities. The CED works with towns and communities in crisis and helps them to rebuild. There are many good examples.
Senator Gustafson: Saskatchewan has a booming economy right now in everything but agriculture. The oil fields are booming and we hear about it on the radio every day. There are problems in the pulp mills and in agriculture. I talked to a farmer who said that he cannot afford to hire any help for his farm because the wages he is prepared to pay cannot compete with those that the oil people pay. There are different degrees of poverty and reasons for that.
Ms. Rickards: That is right. In New Brunswick, the people who sit on the lowest rung of poverty, who were once written off, are working in Tim Hortons, for example. They used to work in the potato harvest, but now they are working at Tim Hortons. It is a lot more comfortable not being out in the cold and wet. Now, the potato farmers are in dire straits, because there is no one to harvest the potatoes and no one to pick the apples and strawberries or to bring in the hay. Therefore, we are seeing immigrant help. Mind you, if farmers could pay more, so that people could cover the costs of their transportation — the labour force is out there. The labour force is in this dependent population, but the incentives, the way the system works and the way people are treated, makes them run for cover. They cannot climb out of that hole and get into that workforce.
Senator Gustafson: Their only problem is they have been too productive.
Senator Mercer: I will go back to the discussion on schools and Senator Di Nino's question. February is Black History Month and in the Black community there is talk about role models. This committee is fortunate to have Senator Oliver as a sitting member because he is a perfect role model in the Black community in Nova Scotia. You said that many teachers do not live in the affected communities. One of the best ways to help people is to provide role models, and one of the role models they need is teachers who actually live in their communities. Has there been a program to address that?
You talked about micro-credit loans, which is an interesting angle as well. Is there a role for credit unions and co- ops to help solve the problem?
Ms. Rickards: To the latter question, I would say that, yes, there is a role. Certainly, the cooperative model is the way to go in approaching many of these issues.
As for the role model issue, I think there is a perennial problem of getting men teachers into elementary schools where that sort of a role model is most badly needed.
As far as I am aware, we are not dealing with that in any concrete way.
The Chairman: Ms. Rickards, thank you. As we head out toward Atlantic Canada, that is what we need to hear. I am sure we will hear a great deal more when we visit the provinces.
Our next witnesses are from the Atlantic Canada Opportunities Agency, otherwise known as ACOA, which was created in 1987 to increase opportunity for economic development in Atlantic Canada and enhance the growth of earned incomes and employment opportunities.
With anywhere from 39 per cent to 56 per cent of Atlantic Canadians living in rural areas, much of ACOA's work is focussed on those areas.
With us this evening are two representatives from ACOA's community development program, which oversees much of ACOA's rural efforts.
Ms. King is director general of the community development program and Ms. Perron is a director of the community development program.
Eleanor King, Director General, Community Development, Atlantic Canada Opportunities Agency: My colleague and I appreciate the opportunity to talk with you about the work of the Atlantic Canada Opportunities Agency in Atlantic Canada. Your interim paper, which I had the opportunity to read, based on the other presentations and your research, indicated a premise that was of interest to us — that is, the most effective and often most direct route to poverty alleviation is through economic growth, employment and some form of rural economic development.
Through this presentation and our responses to your question, we hope to provide additional information for your review.
Established in 1987, ACOA's mandate is to increase opportunity for economic development in Atlantic Canada and, more particularly, to enhance the growth of earned incomes and employment opportunities in the region. Although the agency's program tools and policies have changed over the past 20 years, the overall goal of ACOA has always been to help the Atlantic region realize its full potential in terms of productivity, economic growth and standard of living.
With partners in all levels of government, the private sector, academia and non-government organizations, ACOA works to advance economic opportunities and innovation to serve the needs of businesses, organizations, individuals and communities. The Atlantic economy is built on the region's many geographic, linguistic and cultural communities, from small remote villages to larger urban centres. The opportunities and challenges vary significantly. The agency's approach requires flexibility, based on community realities — their strengths and challenges — while still being strategic on a regional level to stimulate and maximize economic growth.
Recognizing the correlation between innovation and productivity, agency programs place emphasis on fostering research and development, technology adoption, skills development and the improved access to capital that is required to make these kinds of investments in innovation possible.
The transformation of the Atlantic economy is expected to continue, with new high knowledge industries being developed and primary industries adapting to new technology-driven competition. The region's knowledge-based economy has broadened, with the development of industries such as information technology, life sciences, bioscience, ocean technology, aerospace and defence.
The response to ACOA's Atlantic Innovation Fund has emphasized many of these areas as ACOA targets investments in large, cutting-edge R & D projects, in the region's private sector and its research institutions. These projects are aimed at developing new technologies that can be commercialized to simulate new product development and growth in new and existing firms in the region. Of the 161 projects approved to date under the AIF program, 43 are located in rural Atlantic Canada, with an investment of $104 million, representing 24 per cent of the total ACOA investment.
In 1990s, 70 per cent of the jobs created by new firms in Atlantic Canada were attributed to small businesses. The business development program and other ACOA programs are helping entrepreneurs to start up and expand businesses, optimize trade and export opportunities, develop new tourism products and improve business management practices to grow and compete in the global economy. The Atlantic market is too small to absorb all the goods and services the region can produce, so trade is vital to Atlantic Canada's economic growth. Exports directly create one out of every three jobs.
A large proportion of Atlantic Canada's exports are closely linked with the region's natural resources. However, increasingly, growth in exports from the region is now often in non-traditional sectors. From 1993 to 2000, Atlantic Canada was the only region where rural exporters outperformed urban exporters.
Since 2002, the agency has funded the development and delivery of an international trade and investment training program directed toward Atlantic Canadian small business counsellors, advisers and economic developers. It has also increased its emphasis on sector-specific missions, both in Europe and the United States, which are important for rural enterprises. For example, aquaculture missions to Norway build on the increasing role that aquaculture plays in Atlantic rural development; as well, there have been seafood missions to the United States and a women's export initiative, which provides mentoring and missions to Boston. One of your colleagues, Senator Callbeck, has participated in one of those women's trade missions. It is interesting to note that almost half of all women entrepreneurs in Atlantic Canada come from rural areas.
In Atlantic Canada, small and medium-sized enterprises do not have access to the broad diversity of financing products and institutions that exist in developed urban areas of other Canadian provinces. There are financing gaps that impede the development and growth of a number of Atlantic-based small and medium enterprises in a variety of industrial sectors and geographic regions. The agency is interested in supporting projects that deliver access to new capital for Atlantic small and medium enterprises, promote capital retention in the region and/or provide significant leveraging of funds from other sources.
I should now like to speak more directly to the work that is being done in community economic development within rural Atlantic Canada.
As the chair has already indicated, Atlantic Canada has a high percentage of rural population. Some of the recent statistics I have looked at indicate it is 46 per cent overall, with Newfoundland and Labrador having the highest and Nova Scotia the lowest. For this reason, ACOA's efforts in community economic development have focused on the rural area.
Atlantic Canada has a number of communities in transition — those with limited economic capacity and infrastructure, and those requiring assistance in order to capitalize on economic opportunities. These communities are typically found in the region's more rural and remote areas. In some cases, they have experienced an economic downturn through industry closure and demographic declines, or have limited new job growth that has resulted in a smaller population and a limited economic base.
The region's larger towns and urban centres face different opportunities and challenges. The opportunities of economic growth, the challenge of globalization and international competitiveness factor into their daily decision making. Embracing innovation and developing and retaining a skilled workforce are critical for their future growth.
As in other regions of Canada, the building of economic capacity in Atlantic communities relies to a large extent on community-level leadership through local economic development organizations — and, to an increasing extent, through municipal and local government. In the Atlantic region, ACOA has 36 points of contacts — regional offices, district offices and field account managers located throughout the region. We support other key community economic development organizations, again spread throughout the region and directed by the communities themselves through local board of directors. This network of organizations works in a collaborative, cooperative way to address the many challenges of community development. Local ACOA staff work closely with these organizations to monitor progress and facilitate cooperation, and with community groups in the sometimes lengthy process of project development, ensuring financing is in place and giving tools and recommendations to improve planning, facilitating and brokering contribution and participation by other players.
ACOA investments are designed to address a number of Atlantic issues. Our natural resource-based and seasonal rural economy needs economic diversification. Skills development and transformational change is required, based on community and regional assets. Limited economic infrastructure in rural communities requires development of both economic infrastructure and capacity, and significant demographic shifts, such as out-migration, have resulted in limited availability of skilled people in small communities.
ACOA's principal program for community development is the Innovative Communities Fund, launched in July 2005, with a funding of $175 million over five years. The primary focus of the fund is to enhance community or regional infrastructure through the development of competitive, productive and strategic industry sectors, to strengthen community economic infrastructure and to support initiatives that enhance the capacity of communities to address economic challenges and utilize strengths and assets. ICF invests in non-commercial projects, proactive investments and strategic community capacity building. The projects are based on community priorities and strategic plans. Since its inception, ICF has supported 209 projects, for $86 million.
Your interim report highlights the importance of the Community Futures program and its recognition as a best practice by the OECD. In Atlantic Canada, the Community Futures program supports 41 Community Business Development Corporations — CBDCs — in rural areas, focused on lending to small and medium enterprises in various sectors, filling a gap in access to capital.
During the last 10 years, CBDCs have issued 13,000 loans, totalling $376 million, to businesses in their communities, levering an additional $360 million in private-sector investment and financing. CBDCs invest in the start-up and expansion of more than 1,000 businesses annually, positioning them as key supporters of the rural economy.
They are filling the financing gap left by the absence of traditional sources of financing in rural areas and the reluctance of financial institutions to invest in high-risk, low-value loans, generally under the $150,000 mark. Key sectors, including retail, manufacturing, tourism and resource sectors that are most prevalent and integral to rural economies represent the majority of CBDC investment.
I hope this short overview of the work of the agency has provided groundwork for your questions. We look forward to your next report and the recommendations that you will be making on the issues of rural poverty. If there is any way we can be of further assistance, please do not hesitate to ask us.
The Chairman: It is interesting that Community Futures is something that has had a welcome presence in Western Canada as well.
Sadie Perron, Director, Community Development, Atlantic Canada Opportunities Agency: I will work with Ms. King to answer questions.
Senator Mercer: It is odd that you should ask, Ms. King, whether there is anything you could do to help us with this, because we are about to embark on a trip to Atlantic Canada this weekend. I am eager for my colleagues to see the most beautiful part of Canada.
I am a big supporter of ACOA, but the agency is being criticized constantly as not working, whereas some of the numbers that you have reported show us that it is working. First, it would be helpful to the committee if, on a province-by-province basis, you could give us some examples, perhaps not tonight but later on, of programs that have worked and ACOA investments that have been successful. Obviously, some things have not worked, and we should know about those as well, so we can learn from that information.
Second, you talked about rural development and about the importance of exports to Atlantic Canada. I cannot remember the exact percentage you used. Most of Atlantic Canada is rural. I was born and raised in Halifax, but I know from my work in the Senate, that the province of Nova Scotia, with the support of New Brunswick and Prince Edward Island, is promoting the Atlantic gateway, in particular through the Port of Halifax, which is working at only 40 per cent capacity. That brings me to underutilized capacity. Has ACOA looked at taking some of the projects working in rural parts of Atlantic Canada to help to develop the export markets to increase business in rural Nova Scotia and to increase exports through the Port of Halifax, thereby driving up the benefit to an underused existing resource?
Third, my colleagues might be interested in hearing about ACOA's financing loans that are repaid. Could you tell us whether ACOA takes some of that money and reinvests it in present or future ACOA endeavours?
Ms. King: On your first question, we have some examples that we can provide this evening; but, certainly, we can provide you with additional information if the examples that we have simply whet your appetite and you would like more information.
Ms. Perron has some examples from New Brunswick that speak specifically to things that work.
Ms. Perron: First, in terms of repatriation and retention of youth, the regions organize a weekend annually to which 20 youth are invited to learn about the region and its opportunities. During the weekend, youth have an opportunity to understand the strengths and opportunities in the region. The measure of success to date is that 50 per cent of the youth who participate in this kind of weekend return to the regions within six months after they graduate. We have done this for three years running and have found that, when our youth learn about the opportunities and jobs in their regions, they have a much better chance of returning.
Second, research and development is an important part of Atlantic Canada. In a northern, remote community of New Brunswick, the agency has been able to invest in capacity building for the Coastal Zone Research Institute. We have funded some hard and soft infrastructure to facilitate bringing together three research centres on peat moss, fisheries and aquaculture. The result of ACOA's support of this infrastructure capacity has resulted in a hub for R&D in northern New Brunswick that provides technology and knowledge transfer to the industry, to the general public and to professionals. More important, this centre has been successful in winning some Atlantic Innovation Funding and in being more aggressive in its efforts to find research dollars through other granting councils to perform research in northern New Brunswick.
Cutting-edge world-class research is happening in northern New Brunswick. The facility has been able to attract key professionals with Ph.D.s and has become the basis for the creation of cluster coastal development in northern New Brunswick. Those are two examples that ACOA is being proactive and is working in New Brunswick.
Ms. King: I can give other examples, one being Hospitality Newfoundland and Labrador. Through funding from ACOA with our Innovative Communities Fund and through our Tourism Atlantic office, Hospitality Newfoundland and Labrador runs the Gros Morne Institute for Sustainable Tourism. They train tourism operators for the Atlantic region to build on the interest in eco-tourism. They look at sustainable product development and delivery, and the provision of information. They train, share best practices and provide models to facilitate that. To date, they have worked with 286 individuals across Atlantic Canada to help them to see the benefits and to expand within their areas. Of those, 165 were tourism operators and another 121 were partners for the various tourism operations.
In Newfoundland, the Fisheries and Marine Institute of Memorial University received funding assistance to establish the Safety and Emergency Response Training Centre in Stephenville. They provide training courses in the areas of oil and gas, industrial, fish harvesting, marine transportation and aviation. The centre was identified as a priority for economic development by the Town of Stephenville and by the Regional Economic Development Board of Stephenville. The centre opened in November 2003; in 2004-05, 529 students were trained; and in 2005-06, 906 students were trained. It was an exponential growth in the use of the facility, which now employs eight full-time and six part- time faculty and staff in Stephenville. The community of Stephenville has had some significant changes in their economic outlook over the last couple of years. This is an example of a project that put existing facilities to use and that has had some very positive results. Obviously, there are other examples from across the regions that we could provide to the committee.
In response to your question on financing and reinvestment, I have some information on our Business Development Program and the loans to small and medium enterprises. Since the inception of BDP, $854 million has been expended and $318 million has been collected to date. Those funds are reinvested in the program to go out again in loans to other small and medium enterprises.
Obviously, with any process of doing loans, there are some writeoffs and defaults, but the numbers are smaller than perhaps most people might think. In the information I have here, the cumulative rate of defaulted contracts and/or writeoffs was 15 per cent. It is not a huge number when you look at the same kinds of default records for banks, who are also involved in providing loans to enterprises as well.
Your second question related to whether there had been any work that was taking place in terms of what was happening in rural areas and how that might assist in areas like Halifax in terms of the use of the port. I am not aware, at the moment, of any specific initiatives, but I know from discussions with ACOA staff in Nova Scotia that they are very sensitive to the issues around the use of the port and are looking at how we can ensure that activities in rural and urban areas are complementing each other. I will try to acquire additional information and would be happy to provide it to you once I am able to do that.
Senator Segal: Is micro-finance anywhere on your radar?
Ms. King: We were one of the supporters for the recent international conference on micro credit in Halifax. It is something that we have looked at. We do, with the CBDCs, obviously have the potential to do small loans. Obviously, the smallest of the loans that the previous witness was talking about, $500 and $1,000, may not be the most common kinds of loan that the CBDCs would be involved in, but certainly there is some potential there for the smaller loans that would be required by the entrepreneurs, $5,000 to $10,000. We also have potential to do work with our Seed Capital program, which provides smaller loans up to $15,000 or $20,000 to young entrepreneurs, but we do not have a micro-credit program, per se.
Senator Segal: How do you think ACOA connects with the reality beyond your presentation, which I found to be most constructive and thoughtful and, frankly, troublingly optimistic? We are talking about communities with absolutely crushing levels of unemployment. We are talking about jobs in forestry and fishery and tourism which are not there the way they used to be for reasons of automation and technology and change, as well as educational requirement. We are talking of levels of rural poverty that are commensurate with the worst in Canada and some other parts of the word.
I understand you are not a social agency. You are an economic, I guess, point of leverage financed by the Canadian taxpayer to help economies and local opportunities grow. However, you cannot be insensitive to what the communities in which you operate are going through. When you sit down at the table and look at your own programs and the quality of loan applications coming in and the relationship with local banks and community foundations, where does it take you as people on the front line? What do you conclude when you see the disconnect, in a sense, between some of the people who are doing very well, who you are helping to do well and break through, and that other community, which just cannot get to where your applicants are because they have other, more compelling, problems?
Ms. King: We have a variety of programs and tools that are able to use, but clearly ACOA does not do any of this by itself. We are working constantly with the provincial governments and other partners. Certainly, as you say, we are not insensitive to the realities of the region. We see tremendous out-migration of youth from all four provinces, Newfoundland and Labrador in particular. There are a number of youth that are leaving and an aging population in a lot of these small and rural communities.
The Innovative Communities Fund, which is really the powerhouse for us of the community economic development side of ACOA's work, is designed to work with those communities that need help even in developing a project that they can work with. Our staff is on the ground in the communities; they know the circumstances and are there, in lots of cases, before any kind of major change in that community's circumstances occurs. These days, we often hear from industries that are thinking about changes that may result in an industry closure in a town. Certainly, there is a lot of work that is being done and ACOA is there, from day one, in terms of doing that.
Some of the projects that we do are very small projects. They are with communities that are in areas that are perhaps more rural and remote and have some of the challenges that you have referred to. Some of it is working to develop their capacity, even leadership capacity, and trying to provide the skill that will allow them to take a look at what they can accomplish. It is really doing an assessment of their strengths. Every community has assets; every community is different. Not every community will be able to have manufacturing or a high-tech sector; however, for those communities who want and need to look at what the economic opportunities are, there are potentials to do that.
When considering the linking of rural and urban areas, it is a lot easier when you have the rural areas that are adjacent to urban areas. However, when you are looking at some of the communities on the northern peninsula in Newfoundland and Labrador, there are no urban areas for them to link to.
So, it is a challenge. A lot of the work is very much groundwork and working with the community, but also with partners. Sadie has an excellent example of a community in New Brunswick where this kind of work was done.
Ms. Perron: It is in a region near Bathurst — the summer of 2005. We had seen the Smurfit-Stone closure and this community was already suffering because of the pending mine closure. This community today is very positive, and it is nearly two years after, but the community pulled together with all the partners. ACOA was present and we increased our proactive efforts in that community when that happened.
We offered the community help to study and prepare business cases on opportunities. We offered the flexibility that we have and the community was able to pull together some studies to say, ``These are the investments we want to make in the community.'' ACOA was there to support diversification and work with the small businesses that were affected because their market depended on Smurfit-Stone.
A lot of it was one on one. Sometimes it is just hiring some outside help at a thousand dollars. It does not look like a lot, but ACOA goes into these situations with a lot of tools and a lot of flexibility. We work with the community based on its needs. In the Bathurst region today, the situation is a positive one, and people see a future; it could have been a crisis. I must say everyone pulled together and offered all their flexibility and today the community, although it might not be striving, sees a future and is very positive. There is a real community pride that we will build on. The citizens see that there is a future and we are there to support, with all other partners, but it is a community-led effort. This is often an example that we cite. There are others as well, but it is a customized approach. We go in with a lot of flexibility, as our partners do.
Senator Mitchell: I am interested in your women's export initiative. Can you just describe that a little more — indicate what elements of the program there are and perhaps some of the successes?
Ms. King: The women's export initiative is not my immediate area; there are other people at ACOA who can give you that information in much more detail. However, my understanding is there are a couple of elements to that. One is providing export-readiness training for women entrepreneurs — getting them to see the potential that may be there for their particular business in export.
It is organizing specific trade missions that take a group of women entrepreneurs to Boston where a regime is set up for them of interviews with likely businesses that have some interest in their products. We work with the consulate in Boston to make sure we are making the reach that we need to have that access for those women entrepreneurs. The objective is increasing their interest in export, but also giving them access to market. A number of them have been able to make deals during these trade missions, as we do with our broader trade missions as well — bringing companies that have the potential to be more involved in export.
Senator Mitchell: What is it about having women working together in this way? Is there some dynamic that you do not get in a normal trade mission? I am quite interested in the success of this.
Ms. King: Again, prefacing this by saying it is not my area of expertise, my sense is that a lot of the companies run by women entrepreneurs would be smaller companies that might not see themselves as being able to position in our regular trade missions. This gives them an opportunity to work with trade and export to grow their businesses to the point where they may well then be interested in our regular trade missions.
Senator Mitchell: You mention in your presentation that increasingly the growth in exports from your region is in non-traditional sectors. Perhaps you have alluded to those, but could you give me some idea of what those would be?
Ms. King: Some of those I mentioned in my presentation were bioscience, aerospace, defence, information technology, ocean technology — a number of areas that are not our primary-resource sectors.
Senator Mitchell: Is the aerospace in Prince Edward Island?
Ms. King: Yes.
Senator Mitchell: You indicate here that you emphasize or support research and development.
Ms. King: Yes.
Senator Mitchell: Obviously, that is so important for the future, which I might say parenthetically is why we are so disappointed that R & D support was diminished by this government in this latest budget. However, what has made this technology possible? Is it the education of the people there? Is it some sort of geographic advantage?
Ms. King: There probably are a number of factors that would be involved. There has certainly been an increase in the levels of education in Atlantic Canada. As Ms. Perron mentioned before, we have been able to attract a number of very highly skilled people when the facilities are there for them to work.
Atlantic Canada has the benefit right now of the Atlantic Innovation Fund, so we have been able to work more on R & D. Studies I have read, which were not produced by ACOA, have indicated that, in Atlantic Canada, private sector does not have a lot of investment in research and development. Therefore, that is an area where more progress can be made.
It seems to be growing around some of the natural benefits that we have — some of the universities and the research that is taking place there. You are able to grow with that through the projects with AIF. However, we do not have the large scale R & D taking place that you would see in Ontario or Quebec.
Senator Callbeck: Before I ask questions, I must say that ACOA has been very successful in my province, Prince Edward Island, at stimulating positive economic development. There have been many successful projects that would never have gotten off the ground had it not been for ACOA.
I want to come back to micro-credit. I have a document here, which was not provided by ACOA. It says that, based on research funded and directed by ACOA that found gaps in access to credit in rural areas, the agency also provides micro-credit — small loans assistance through rural credit unions to small business.
Ms. King: I am not familiar with that program.
Senator Callbeck: Okay. I wanted to ask you, too, about the women entrepreneur programs. You mentioned the women's export initiative. As you say, I was involved in the one to Boston, and I consider it to have been extremely well done by ACOA.
The programs that came into effect around three years ago have been very effective in my province. We have many more successful women entrepreneurs than we had before those programs existed. However, there is a time frame on them, I believe. I am wondering what that time frame is; has the government started to assess these programs and when will we know what the future will be?
Ms. King: On the women in business initiative, I do have a little bit of information that should answer your question.
The initiative is set to expire in 2009-2010. The budget is $2.5 million per year, and our contributions on these projects average between 75 to 100 per cent of the total project costs.
Senator Callbeck: Is that $2.5 million what it has been; has it been increased or decreased?
Ms. King: That has been the amount for the program. Each year until 2009-2010, $2.5 million is there. That is designed to look at business support services, getting them involved in new activities to address identified gaps, again providing that help that is required for growth by women entrepreneurs.
It is interesting to note what has happened regarding the loans that have been done through the women's business initiative. At a recent meeting with the CBDC associations, I learned that the default on those loans is dramatically lower than our normal loan process — a couple of percentage points, I think. Certainly, the women entrepreneurs who are taking advantage of the loans through this initiative are able to pay back the money that they are receiving, which is obviously a positive indication of how things are going for them in their business.
Senator Callbeck: As you said, it is so important to rural Canada because half of the female entrepreneurs come from rural Canada.
Ms. King: Yes.
Senator Callbeck: I want to ask you about infrastructure, which falls under the Innovative Communities Fund. One of the issues identified in the report was lack of transportation in rural areas. Of course, it is fair to say that in rural areas you have a lower level of communication and information technology. What is ACOA doing in rural Canada to improve the infrastructure in transportation and information technology?
Ms. King: We would look at infrastructure in a couple of ways. Certainly, through our Innovative Communities Fund, we can be involved in projects that focus on community infrastructure. We would not consider roads under the ICF but rather something like incubation centres so that small businesses can set up offices and establish themselves. It might be other kinds of infrastructure development centres or community centres that allow conferences to be brought in or tourism infrastructure. The larger elements of infrastructure, like roads, water and sewer systems, and waste management facilities, are dealt with through Infrastructure Canada programs, which ACOA administers on its behalf in partnership with the provinces and municipalities.
The funds allocated to the Atlantic region through Infrastructure Canada have been utilized generally for green infrastructure programs, such as water and waste management. As well, money has been made available for roads, transportation, cleaning harbours in Halifax and Saint John, New Brunswick, and St. John's, Newfoundland and Labrador, et cetera. Various infrastructure projects are taking place under the auspices of Infrastructure Canada programs.
Senator Peterson: Would ACOA do business with the rural poor?
Ms. King: Certainly, we would do business with them through the community projects ACOA is involved with.
Senator Peterson: How are they structured? What is the threshold?
Ms. King: The majority of the loans provided to small rural communities would be through the Community Futures program under the Community Business Development Corporation. The average loan amount ranges from $20,000 to $30,000, but they can go as high as $150,000.
Senator Peterson: How are they secured?
Ms. King: Not all of the loans are secured.
Ms. Perron: The Community Futures loan is secured, but the CBDC's Seed Capital program offers a private unsecured equity loan to the entrepreneur in an amount up to $20,000. That is a personal loan to the entrepreneur under an ACOA program delivered by the CBDC. The usual Community Futures loan is secured with interest.
Senator Peterson: The latter is for the community group, so the abject rural poor are not directly involved. They would not fit into this program.
Ms. King: They would not fall under this program in terms of receiving loans but they could be involved in projects financed under the Innovative Communities Fund because those funds are non-repayable. A non-government organization working on behalf of a community would be able to receive funds that would not need to be repaid. Those funds would enable the building of infrastructure to allow the people of a rural community to participate in activities or projects.
Senator Peterson: I am concerned about whether the rural poor are receiving a benefit from this, but, as you said, they have to spearhead it and go after what they need.
Ms. King: Generally, the projects supported under the Innovative Communities Fund are based on community strategic plans and priorities identified in communities that would allow economic opportunities to develop in those communities. It is not a case of dealing directly with an individual but rather with a community as a whole.
Senator Di Nino: I will continue in that vein. The first witness, Ms. Rickards, from the Neighbours Alliance of North York, was not highly complimentary of ACOA in her description. Certainly, she left us with the impression that ACOA was not participating in the rural poverty issues that she so eloquently addressed.
I am not sure that it is fair of me to ask you to do this tonight but you might want to send this committee, given that it will travel to Atlantic Canada, some additional examples of where ACOA is addressing those rural poverty issues that seem so desperate in small rural communities in the Atlantic provinces.
One issue raised by Ms. Rickards and Ms. King is the lack of skilled workers for jobs that might be available. Ms. Rickards basically said that many of the people who out-migrate leave opportunities for workers who stay behind but those workers do not have the required skills to take advantage of the jobs.
Is ACOA's mandate flexible enough to consider a program in conjunction with NANY that could provide assistance and training of skills to young people who are left in the communities? Those skills might be needed in the communities, the surrounding areas or outside the communities.
Ms. King: ACOA would be involved in some areas and Human Resources and Skills Development Canada would be responsible for skill development, in general, and training individuals in that respect. Certainly, in many of our projects we work with universities and community colleges to look at expanding the availability of training to people in those areas. Certainly, ACOA would not see this as a primary mandate in terms of education, although we are involved in that.
Senator Mahovlich: The East Coast is loaded with good universities, and you mentioned the one that you worked with. Does ACOA work with other universities?
Ms. King: We work with every university in Atlantic Canada.
Senator Mahovlich: That is interesting. Have you assisted any of the aquaculture businesses?
Ms. King: Yes. We have worked in various sectors. Certainly, ACOA has had a variety of projects and programs in aquaculture, agriculture and forestry.
Senator Mahovlich: Have many foreigners invested in aquaculture businesses on the East Coast? I have heard that Norwegians are investing.
Ms. King: I am not in a position to answer that, but I could obtain the information for the committee.
Senator Mahovlich: ACOA has invested in aquaculture with different investors.
Ms. King: In those sectors, we work with the sector associations in trying to increase their technology development, looking at how they might work cooperatively across Atlantic Canada. A number of our investment fund projects would relate to aquaculture. Those could be with universities or private-sector research institutes that are looking at new product development.
Senator Mahovlich: You mentioned peat moss. I did not know there was a demand for peat moss.
Ms. Perron: There is a huge demand in the horticultural sector — all exports, including the Asian markets.
Senator Mahovlich: Ireland was loaded with it. When I went to Ireland, there was all kinds of peat moss. Are we going to start growing peat moss?
Ms. Perron: We already do heavily in New Brunswick and Quebec.
Senator Callbeck: In the early days of ACOA, I think you were involved in helping people in rural communities develop leadership skills so communities could take more control over their own economic development. Is that still happening?
Ms. King: Yes.
Senator Callbeck: Is it successful?
Ms. King: It would be the work being done mainly by the regional economic development organizations, which we support. They are the ones that are doing the hand-holding with the small businesses and communities, looking at how to develop leadership skills and increasing capacity.
Senator Callbeck: I am aware of those, so that is how you are doing that. That is fine.
Senator Gustafson: An organization like yours, and like Western Economic Diversification Canada, has to be looking at the future with great concern.
Chrysler is laying off 2,000 people, and other firms are laying off, and the workforce of China is working for $100 U.S. a month. We are heading into some days that will be very challenging. Does your organization look at that aspect and project down the road? We are spending what, $500 million a year or more? It seems to me we will face some very serious challenges.
Ms. King: Certainly, we support research and studies that are being done, looking at what some of the challenges may be 10 or 15 years down the road — particularly in terms of the labour force and the challenges with finding skilled workers with the level of out-migration that we have. We are looking at all of those issues and working with partners to try to come up with ways to address some of those issues in advance of those days.
We are looking at things like population strategies. Each of the provincial governments in Atlantic Canada has a population strategy, and we work with them. We look at things like retention of youth, as Ms. Perron mentioned earlier, and working with universities in terms of research and studies on issues that are there for the region.
Senator Gustafson: It seems to me that our young people today, once they get an education, want the white-collar jobs. Try to hire a plumber or a carpenter. Even though they are getting paid good wages, it is difficult to get them. Try to hire a bricklayer. We used to get bricklayers out of Winnipeg that came from Europe because we could not find Canadian bricklayers. That kind of thing seems to be compounding.
Ms. King: What I see in Atlantic Canada is that a number of the people that have skilled trades have gone to Alberta. However, the community colleges have tremendous programs and have great numbers of students; they are educating a number of people in trades — and at the university level, as well. They do go away to take jobs elsewhere. Obviously, we hope, at some point, they will decide to move back to Atlantic Canada and bring their skills and experience with them.
The Chairman: Thank you very much for attending here, and thank you all, colleagues, for your questions.
You are giving us a very good step up for the journey that we will begin on Sunday, going to Newfoundland and Labrador and then through Nova Scotia, New Brunswick and Prince Edward Island to start our trip. It has been terrific to have you here and I thank you very much.
The committee adjourned.