Evidence of meeting #6 for Finance in the 39th Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was students.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

  • Pierre Le François  General Director, Association nationale des éditeurs de livres
  • Claire Morris  President and Chief Executive Officer, Association of Universities and Colleges of Canada
  • Darryl Smith  President, Canadian Dental Association
  • Bob Harvey  Member, Tax and Fiscal Policy Committee, Certified General Accountants Association of Canada
  • David Bradley  Chief Executive Officer, Canadian Trucking Alliance
  • Pierre Sadik  Senior Policy Advisor, Sustainability Specialist, David Suzuki Foundation
  • Nathalie Bourque  Vice-President, Global Communications, CAE Inc., SR & ED Tax Credit Coalition
  • Peter Look  Vice-President, Tax, Nortel, SR & ED Tax Credit Coalition
  • Carole Presseault  Vice-President, Government and Regulatory Affairs, Certified General Accountants Association of Canada
  • Susan Mullin  Vice-President of Development, Association of Fundraising Professionals
  • Margaret Lefebvre  Executive Director, Canadian Association of Income Funds
  • Chris Tabor  Manager, Queen's University Bookstore, Canadian Booksellers Association
  • Michael Atkinson  President, Canadian Construction Association
  • Gerry Barr  President and Chief Executive Officer, Canadian Council for International Cooperation
  • Amanda Aziz  National Chairperson, Canadian Federation of Students
  • Mark Yakabuski  President and Chief Executive Officer, Insurance Bureau of Canada

5:40 p.m.

Some hon. members

Oh, oh!

5:40 p.m.

President, Canadian Construction Association

Michael Atkinson

--so I think it's an apolitical feathering of the nest that's been going on for some time.

But in all seriousness, it is very disturbing to my members, 90% to 95% of whom are small business employers, to have what amounts to a payroll tax and then find out that the government is taking more than is required for the needs of the fund, knows it's taking more than is needed in the fund, and then ties the hands of the chief actuary and the Employment Insurance Commission and absolutely forbids them to look backwards in setting future rates. In other words, you're not allowed to correct your past mistakes or miscalculations.

The throne speech did make a commitment to look at the governance and management of the EI fund, but with no specifics. I think that opens the door for this committee to make some strong recommendations to change how the rates are set for that fund. I can guarantee you, if the EI fund was running an annual deficit, this would have been fixed a long time ago.

5:45 p.m.

Liberal

John McCallum Markham—Unionville, ON

Thank you very much.

I'll move on now to Madame Lefebvre.

We've had many discussions over the government's broken promise on income trusts, but I think today, rather than debating the overall issue, you're here on more specific issues.

I would find it rather unusual that so little has been done to manage the transition. You say there's no certainty or legal clarity on the transition period, no legislative framework to facilitate conversion back to corporate status. Aren't these yawning gaps in implementation? My question, if you wish to go there, goes to motive. My feeling is that the government is really out to destroy income trusts. If that's not the reason, how do you explain this yawning gap in the implementation process?

5:45 p.m.

Executive Director, Canadian Association of Income Funds

Margaret Lefebvre

I think the main way I would explain it is that this was a piece of legislation that was rushed in, and the implementation was simply done on a very ad hoc basis. Specifically, most of the implementation measures in fact refer back to a press release that was issued on December 15, and in that press release there is a statement that this is a policy that was being announced by the government and that can be changed from time to time. The enormous concern, from the point of view of ongoing business, within the framework of the policy as passed into law, is the fact that it's extremely difficult to plan how you're going to implement when the implementation rules are not clear and when there is a statement on record that they could change it from time to time. We are looking for a statement from--

5:45 p.m.

Liberal

John McCallum Markham—Unionville, ON

So you mean this is a law that states that this is the law, but they can change it from time to time as they see fit, by regulation?

5:45 p.m.

Executive Director, Canadian Association of Income Funds

Margaret Lefebvre

In actual fact, that is not clear. So what we are looking for is a statement of intent, a statement that says this is what we will recognize, this is the intention. That is how they dealt with the transition, for example, from an income trust to a corporate entity. They specifically said that the unit holder will not suffer tax consequences. There has not been a change in the law, but the statement was enough. We would look for a similar statement dealing with the issuers.

5:45 p.m.

Liberal

John McCallum Markham—Unionville, ON

Thank you very much.

5:45 p.m.

Conservative

The Chair Rob Merrifield

Thank you very much.

Monsieur Crête, you have seven minutes.

5:45 p.m.

Bloc

Paul Crête Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC

Thank you, Mr. Chairman.

First of all, I want to commend you, Mr. Barr, for the work carried out by your council. It is important to maintain that awareness on a daily basis within our society, which is in a privileged position, compared to the rest of the planet.

What solution can you see to the absurd situation we have currently, which is that the Prime Minister of Canada is in Tanzania saying that additional monies are being devoted to this and that the only reason we cannot meet the government's current commitment is that growth in Canada has been stronger than what was forecast? Therefore, we won't honour our commitment as regards the percentage.

Is there a solution whereby, when we get richer and grow faster, we avoid reducing our contribution, in percentage terms, to the fight against poverty?

5:45 p.m.

President and Chief Executive Officer, Canadian Council for International Cooperation

Gerry Barr

You make a good point, sir, about the question of affordability. If Canada does not now reinvest in aid spending when it is so eminently affordable, when on earth will it do so? And it does go directly to the credibility not only of the Prime Minister, but also of the Government of Canada--and the credibility of Canada itself.

In the year 2000, world leaders used a uniquely powerful phrase with respect to the millennium development goals. The phrase they used was that they engaged between each other to “spare no effort” to achieve the millennium development goals. That is an unambiguously committed phrase. Since that time, since 2000, new aid spending in Canada is about $2 billion. Not more than 30% of that amount can be said to be identifiable as a contribution towards achieving the millennium development goals. So we have, with respect to the money already committed, not anything close to “sparing no effort”.

We have, I think--and Canadians increasingly recognize this--nothing in the performance of either the previous government or the current one that would give confidence to the idea that Canada is committed to grow its contribution to the 0.7% target, though one finance committee after the other has pleaded with the government to do so. And members of all parties have voted for those resolutions.

5:50 p.m.

Bloc

Paul Crête Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC

That means we need to finish our work in a reasonable manner. Also, the government has to make a serious commitment for the next 10 years, as you say.

Today, an international report was released which says that, in the short term, climate change will be the most significant cause of increased poverty on the planet. If we move forward with the percentage that you are suggesting, won't half of it be cancelled out—I'm not saying we shouldn't do it; I think we have to get there—because we will not have taken the necessary steps to mitigate the negative consequences of climate change?

5:50 p.m.

President and Chief Executive Officer, Canadian Council for International Cooperation

Gerry Barr

That's a pretty tough question. Climate change is going to have immense impact, especially on the world's poorest, almost no matter what. The real question is, how effectively can the world community marshal resources to help poor economies address this?

The principle of Kyoto is that those most responsible act first. That, unhappily, has not yet happened. The world's poorest countries will take the sharpest impact of climate change. But at a moment when aid resources are going to be plainly so imperative and essential, it really falls to us to make sure our resources are used in the most effective way.

The way in which Canadian aid spending is now undertaken diminishes the dollars we send abroad. Resources that are tied to Canadian sourcing never really see the inside of a developing country economy. Money is certainly spent for legitimate purposes, but not to reduce global poverty, support students in Canada, or for the settlement of refugee costs.

All these things have to be done, but Canada is harbouring these costs in its aid budget. The result, in our estimation, is that about 70¢ of every Canadian aid dollar actually make it to the developing world. We need to change that sort of thing as well. That's part of what Bill C-293 is about.

5:50 p.m.

Bloc

Paul Crête Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC

Thank you very much, Mr. Barr.

Mr. Atkinson, you talked about employment insurance. Would you support a decision to set up, once and for all, an independent employment insurance fund? In other words, 100% of contributions would be used for the employment insurance fund. There could be a joint employer-employee decision-making committee. That way, we would not end up in the same situation as occurred when the $54 billion—money belonging to employers, workers, and especially the unemployed—was used to fund Canada's deficit.

5:50 p.m.

President, Canadian Construction Association

Michael Atkinson

That's certainly one of the suggestions that's been made, but I think we would have to see the details and know exactly what the mix of representation on that governance board would be.

There are a number of other concerns about the EI fund that are somewhat beyond the control of employers and employees. So governments are important stakeholders there. We certainly wouldn't want to see the EI fund transformed into something it wasn't intended to be. I think both employees and employers are of one voice on that.

On the employers' side, we've had a number of situations where there has been an unwillingness on the part of the government to deal with substantive reports on EI because it's no longer a contributor. Historically, the federal government used to contribute 20% of the fund. Now it doesn't unless it goes into a deficit situation. When the government was an active contributor, it was easier to get its eye with respect to substantive reforms.

I'll give you one example that's in the report. Employer overcontributions are not refundable, but employee overcontributions are. The answer we get from the Department of Finance and HRSDC is that it would be too hard to keep track of employer overcontributions.

5:55 p.m.

Conservative

The Chair Rob Merrifield

Thank you very much.

We'll now go to Mr. Menzies for seven minutes.