Finance Committee on Oct. 24th, 2006

[Michael Savage, Liberal, Dartmouth—Cole Harbour, NS]

That's pretty significant.

You mentioned the underground economy and never got a chance to talk about that a little bit. That is an issue in Nova Scotia. We see it even in the fishing industry as well, where people sort of sell off their boats and don't pay tax. Can you talk about whether you have some specific recommendations in connection with your industry?

[Suzanne Bona]

What was started was a payment reporting system. Quite frankly, all that's done is to put a heavier burden on those of our companies that report, and it's not necessarily addressing the issue of people choosing to not pay tax and to avoid the system altogether. We have no one recommendation. We ask that you look at closing the gap in a variety of ways and to really recognize the amount of tax you're losing and in turn end up charging the rest of us more. We do, and have come to the table several times with the government to recommend a variety of measures.

[Michael Savage, Liberal, Dartmouth—Cole Harbour, NS]

I'm sitting beside the former Minister of National Revenue, and I'm sure he's listening with interest.

Am I still going, or am I done?

[The Chair, Conservative, Brian Pallister]

No.

[Michael Savage, Liberal, Dartmouth—Cole Harbour, NS]

Thank you.

[The Chair, Conservative, Brian Pallister]

But you did very well with the time you had.

We go now to Mr. Pierre Paquette.

[Pierre Paquette, Bloc, Joliette, QC]

Thank you, Chairman Pallister.

I want to thank you for having sent us your briefs. I see that some of you have traveled from New Brunswick to Halifax to be able to give us your demands.

My first question is for Mr. Westcott. If I understand correctly, the basic unit for spirits is not the same as for wine and beer, which creates a distortion that is detrimental to spirits. The federal excise tax on wine and beer is based on liters whereas, for spirits, it is based on alcohol content. That's why you're saying that wine and beer receive a subsidy of 900 million dollars.

Did I understand correctly?

[Jan Westcott]

Yes. One of the issues in comparing tax systems, tax rates, or tax approaches is to have a common effect. The Government of Canada doesn't have a common approach to these things. Some products are taxed for excise on the basis of the amount of alcohol in them in terms of absolute alcohol, while some products are based on the amount of volume, so it's very difficult to even get a comparison, because of the different approaches.

We've been asking the Department of Finance for a number of years to at least adopt a common approach, so that when everyone looks at this, they can see what the relative tax burdens are. We've not yet been successful, but certainly one of the early steps that could be taken to help everyone understand the different levels that are being applied is to come to a common unit of measure in terms of the application of tax.

Honest to God, I think only the people in the excise division actually understand the nuances of the different approaches and how they compare with each other. It's very difficult for us to do that. We do it; certainly it would be very difficult for the ordinary layperson to do that, but unquestionably it is one of the issues that need to be addressed--so your understanding is correct.

[Pierre Paquette, Bloc, Joliette, QC]

Thank you.

This question is for the New Brunswick Childcare Coalition.

If I read you brief correctly, you're asking the federal government to reverse its decision to abolish the national childcare program which has been replaced by an amount of $1,200 per child. That amount is taxable, I should underline.

Are you asking the government to abolish this measure in order to restore the previous program or would that amount be on top of the program? One could easily see the government paying $1,200 per child per year through a reimbursable tax credit while at the same time restoring the national childcare program. I would like to know what your expectations are about this.

[Jody Dallaire]

I believe that the $1,200 measure has a different objective. The point is not that parents don't need money to pay the costs of educating their children but one should not believe that it is a childcare program. It doesn't create new spaces in any childcare program.

That amount cannot have the immediate effect that is desirable for low-income families. What we want is transfers to the provinces so that they be able to build a childcare system. In my province, only one child out of eight has access to approved childcare services. Also, when parents have access, the services are barely affordable. Parents have to pay an average of $500 per month for services which are not always of good quality. Indeed, because of the salaries that they're able to offer, those organizations can't always hire and retain trained staff.

[Pierre Paquette, Bloc, Joliette, QC]

Thank you.

Mr. Morley, you've referred to the Halifax Gateway. As you know, we have passed legislation as well as a whole series of measures about the Vancouver Pacific Gateway.

Does the federal government support the concept of a Halifax Gateway?

[The Chair, Conservative, Brian Pallister]

Unfortunately, you'll only have 30 seconds to answer.

[Fred Morley]

I'll respond in English. Thank you.

I believe we have the support. We have not yet formally asked for support for the Halifax Gateway Council and the Atlantic gateway, but I believe that the Government of Canada will have a two-ocean policy and will step up when necessary.

[The Chair, Conservative, Brian Pallister]

Merci, monsieur.

We continue now with Mr. Del Mastro.

[Dean Del Mastro, Conservative, Peterborough, ON]

Thank you, Mr. Chair.

I'm going to start with Mr. McKelvie.

First of all, I noted your approval for the reduction of the GST, and we heard your request to try to fast-track the reduction to 5%.

I wanted to ask about your recommendation number two, which speaks of no further harmonization of the GST with provincial taxes. Is it correct that you do have harmonized sales taxes here in Nova Scotia?

[Robert McKelvie]

Yes.

[Dean Del Mastro, Conservative, Peterborough, ON]

Could you talk a little bit about your experience with that? I know that in Ontario we see that as a positive step, because right now in business you have to file two tax returns. It's a very inefficient system.

There would be some savings, with the CRA collecting sales tax revenues. Could you talk about why you see that as a negative?

[Robert McKelvie]

I think that in Nova Scotia businesses in general applauded the harmonization of the tax, especially for the tax credit rebates that you receive.

[Dean Del Mastro, Conservative, Peterborough, ON]

So it's good to the level that you have it now; you just don't want to see it taken a further step. Is that what I'm to understand?

[Robert McKelvie]

Are you speaking about the GST?

[Dean Del Mastro, Conservative, Peterborough, ON]

You have a harmonized sales tax here now, and you're okay with that system.

[Robert McKelvie]

Yes.

[Dean Del Mastro, Conservative, Peterborough, ON]

That's great. I just wanted some clarification on that.

The Nova Scotia Home Builders' Association, again, is positive on the GST reduction, and that's duly noted.

We did put in significant incentives for training skilled workers. We've heard a lot from post-secondary education advocates, and I really believe skilled trades are a very valuable form of post-secondary education. In fact, I've argued many times that we haven't necessarily kicked in the workforce that is conducive to what we need in our economy right now. We have an enormous demand for skilled trades, and we're not really filling it.

Can you talk a little about the incentives we put in place to assist employers and workers in developing skilled trades and whether or not you think a continuation or an expansion of this would be warranted?

[Suzanne Bona]

It's certainly also a question of numbers. Our population isn't growing in exorbitant numbers. Our approach has been that you can deal with what you have here on the ground, but we're also dealing with global competitiveness for our skilled labour force. I think the government has to look at the immigration policies for that.

As well, we work actively with the community colleges across the country and different industry trades to create the best skill programs. Apprenticeship is certainly one of those that can help encourage employers to utilize younger tradespeople. We work on many levels to try to get the workers from where we can, but it is a question of numbers. The average age is still 58 for plumbers in Nova Scotia, and you're causing injury and accidents because you have people who are older trying to do jobs.

[Dean Del Mastro, Conservative, Peterborough, ON]

Right, and I think that may come back to the notion that one form of post-secondary education is necessarily much better than another. I think people need to be open to the notion that you can earn a very good living in the skilled trades.