Finance Committee on Dec. 4th, 2007

[Bill Andrew]

None.

[The Vice-Chair, Liberal, Massimo Pacetti]

Mr. Dykstra, five minutes.

[Rick Dykstra, Conservative, St. Catharines, ON]

Thank you.

I just want to go back a bit, Adam, with respect to some of the requests you had.

A couple of things. One thing was providing tax incentives for employer-sponsored training programs and work-related supports. One of the things we did in the 2006 budget was address the issue of apprenticeship and the lack of attention that's been paid to that.

The trades industry, quite frankly, over the last 20 years or so...and obviously seeing that here in Alberta is probably the greatest example as any in the country. We've seen a lot of pick-up on the program, both from an employer perspective in terms of the additional tax credit they get at the end of the year from hiring an apprentice and, likewise, from the apprentice's ability to at least have a tax write-down on some of the tools he purchases and the equipment he needs.

Were you thinking a bit more about that type of program in terms of encouraging an employer-sponsored training program?

[Adam Legge]

I was thinking of programs like that, but also across the board, beyond just the trades, into continuing education, companies that provide either corporate training or individually based training to help them gain and increase skills and therefore become more productive. It could be tax credits or some kind of program like that. I think it depends upon the skill set and the type of training they want to offer. But our largest position is that we need to become more productive, more skilled, and more educated as a population and a workforce.

[Rick Dykstra, Conservative, St. Catharines, ON]

One of the other proposals you put forward that interested me was encouraging Canadian companies, for one thing, to constantly increase the skill of their employees, and for another, to reinvest in new equipment and technology, thereby improving productivity and environmental performance.

One of the things the industry committee recommended to the finance minister was the accelerated capital cost allowance for this exact recommendation you're making. We've seen a huge uptake from companies across the country; in particular, Quebec has really picked up on the ability to invest. I believe we're up to about $1.8 billion in the total of new investment in the country since the announcement in the budget, getting at the exact issues you referred to in the recommendation.

One of the points we've heard from a number of our presenters, both when we're talking about the value of the dollar and when we're speaking about pre-budget consultations and what we should do for the manufacturing industry, is that they believe the window is pretty short for this. It was in the 2007 budget, and they're talking about either extending it to five years from the two years that exists or actually going to an additional five years.

What would be your recommendation, and how do you see the benefits, in terms of why you think it's a good idea?

[Adam Legge]

Our idea as to duration is to propose that it be an indefinite extension, in the sense that if we wish our Canadian companies to be competitive globally and continually reinvesting in productivity to compete at a global level, this is a program that will incent companies to do so. It is a move we very much applaud the federal government for making. We would recommend that it be extended, because combined with the value of the Canadian dollar at present, Canadian companies are in a very good position to increase their productivity through the purchase of technology and machinery. That is a position we really need to be taking.

A number of studies in the past while, by the TD Bank and others, have highlighted the declining productivity of the Canadian economy and Canadian companies. If we really want to become competitive and to pass higher-level skills to our employee base to help with increasing economic well-being, this is the kind of credit that should be considered indefinitely.

[Rick Dykstra, Conservative, St. Catharines, ON]

Thank you. I appreciate your comments.

Mr. Tait, I have a short question. I'm trying to determine why the Hutterites are set specifically out of section 143. Is there any other community in the country that faces that same sort of issue? I apologize; it's the first I've heard of it.

[Gordon Tait]

No, it's a good question.

From our discussions with Finance and the Canada Revenue Agency, we're not aware of any other group or organization that files under section 143. The terminology in that section never uses the term “Hutterite”, but it does describe the lifestyle of a Hutterite colony.

Going back to 1961, the general allocation rules were pretty similar to what happened inside regular and normal agricultural businesses at that time. Section 143 is a good example of legislation recognizing the unique nature of this organization. Prior to 1961, they filed as a religious organization and took a religious exemption, so they did not pay income tax. This recognized that there is a business there, and it is an agricultural business.

The colonies agree with that, and they are more than happy to pay tax on their profits. Because they take an individual vow of poverty, without section 143 the taxation system would be very different, and there would be some challenges I think with respect to some of their cultural and religious beliefs.

It's a good working mechanism; we just feel it needs to be brought up to date with the modernization that's happened throughout the rest of the Income Tax Act. As a matter of fact, it wasn't until 1997 that there was actually a recognition of income to a husband and wife at a Hutterite colony; only one adult number was actually permitted to file an income tax return.

[The Vice-Chair, Liberal, Massimo Pacetti]

Thank you, Mr. Dykstra.

Mr. Tait, let's continue along those lines. To bring the income tax situation up to date, shouldn't we be looking at increasing the age to 21? Do you think it's appropriate for kids of 15 to be in the workforce? Here we are, trying to promote education and lifelong learning, and we're going in the opposite direction. Religious purposes are fine, but I can't see it; it's just going to open up a Pandora's box.

[Gordon Tait]

That's a good question.

First off, we certainly recognize this is not a social policy issue. No other farming business, no other business in Canada, has a restriction as to the ability to employ people. There are many examples of children well under the age of 18 actively and gainfully employed throughout Canada.

[The Vice-Chair, Liberal, Massimo Pacetti]

I'd like to see some of those examples.

[Gordon Tait]

What about someone who works at a restaurant. I'm sure there are many people in this hotel who have jobs before they're 21 years old.

[The Vice-Chair, Liberal, Massimo Pacetti]

They're called part-time jobs.

[Gordon Tait]

If you take a farming situation in western Canada, for those of us who have been around farms, we know it's a common practice for individual children, and below the age of 18, to be actively engaged in the business of farming.

[The Vice-Chair, Liberal, Massimo Pacetti]

I understand that, but if we cultivate that in the restaurant business, I'm sure we can do the same thing. I'm sure we can get kids 15 years old to do the same thing in the restaurant business.

[Gordon Tait]

I'm sorry, I just don't understand the nature of the question then. These people are actively involved. Any other Canadian business, any other Canadian farm, non-Hutterite, has perfect and total freedom to allocate or pay wages to anyone. This group is not permitted to have any recognition of the effort they expend. They attend full-time public school. They're just actively engaged before school, after school, and all summer long.

[The Vice-Chair, Liberal, Massimo Pacetti]

I have another question. Are the Hutterites just out west? Isn't there a colony also in eastern Ontario or western Ontario, and in the Eastern Townships of Quebec, I believe. No?

[Gordon Tait]

No, there's not. There are Hutterite colonies in Manitoba, Saskatchewan, Alberta, and now there are two in northern British Columbia.

[The Vice-Chair, Liberal, Massimo Pacetti]

Okay. Thank you, Mr. Tait.

Mr. Christie, you talk about the fully funded programs, you believe in that, and one of the priorities you stated was child care. We haven't really heard much about child care. How is that going to help your unit or your organization, in terms of the people you represent?

The Conservatives have their own child care plan. I'm not going to debate that and I'm not going to go into that. How does that affect you? There was supposed to be a plan for employers to create some child care spaces. Has that helped? Has there been any headway? Have you seen any of that?

[Gordon M. Christie]

I haven't seen a lot of increase in that. I also sit on the Calgary Children's Initiative Council of Champions, and they've been very involved in children's initiatives for the last half-dozen years. We've been lobbying for a national child care program for decades now, and when Minister Dryden came out with a proposal, I guess it was a couple of years ago, it was a first step. It certainly didn't cover all the bases or go nearly as far as we want it to. But in Alberta things get twisted. You have to have a special agreement in Alberta. You couldn't have the same one we had across the country.

[The Vice-Chair, Liberal, Massimo Pacetti]

We have the same thing across Canada, the same thing in Quebec. We have child care. I'm just asking—

[Gordon M. Christie]

Actually, as an example, when I researched this, not just in Canada but around the world, we've very proud of the example we have in Quebec, and many times we use that as an example here in Alberta.

[The Vice-Chair, Liberal, Massimo Pacetti]

But the question is, has your employer created any day care or child care spaces with the funding that's been made available by the present government?

[Gordon M. Christie]

For the record, my employer has two employees, so, no, they would not have done that.

[The Vice-Chair, Liberal, Massimo Pacetti]

Okay.

Also in your brief you talk about your taxes being too high. But doesn't a general tax decrease for everybody still help poor people? Even though it's low, it still helps, does it not?