Finance Committee on Nov. 29th, 2007

[Janet Ecker]

I think one of the points we make is that it's not a question of having the lowest taxes. We're not doing a race to the bottom. What we're looking for are tax rates that are competitive with those jurisdictions that we do business with, that we compete with. So we think setting targets for where we might want to have both business and personal tax rates would be an appropriate thing to do. We're not advocating a particular level; we're just saying take a look at where other jurisdictions are, and we want to have the most competitive tax picture in the window.

[The Chair, Conservative, Rob Merrifield]

Thank you very much.

Monsieur St-Cyr, you have five minutes.

[Thierry St-Cyr, Bloc, Jeanne-Le Ber, QC]

Thank you, Mr. Chair.

I thank all of the witnesses for being here.

Ms. Vandenberg, I greatly appreciated your Timbits-supported presentation that I was able to benefit from. Your demonstration clearly shows the kind of effort we all need to make and underscores the importance of investing, helping people throughout the world and contributing to international development. The objective of dedicating 0.7% of the GDP to overseas development assistance is one shared by many other countries, and is a goal of distinct altruism and solidarity.

Many people also say that this is a form of economic development. So long as there exist places that are extremely poor, there will be social and economic problems, and fewer markets to benefit our own economy.

Do you subscribe to the philosophy that overseas development assistance is not just an act of pure altruism, but is also a way of resolving conflicts in the world and developing our own economy?

[Elly Vandenberg]

Wow. Thank you very much for your question.

I should first say that World Vision's mandate is that we see the fullness of life for each child. It's a humanitarian and development and advocacy organization. So we have humanitarian objectives; but, absolutely, in terms of advocacy objectives, there are reasons beyond humanitarian issues for why we support increased overseas development assistance—absolutely.

And there is self-interest, as well.

[Thierry St-Cyr, Bloc, Jeanne-Le Ber, QC]

All right.

From a more technical standpoint, and I am not sure if this is a translation problem. In the French text, you propose to, “raise the federal tax credit, which is at a 29% maximum, for Canadians who make charitable donations”.

I want to make sure I understand correctly. At present, what is the maximum percentage that can be claimed on a tax credit, and to what level would you like this increased?

[Elly Vandenberg]

Thank you.

It's a similar question to Mr. Dykstra's, I believe.

Right now, for us, it's 29%. We would like to see it higher, and I welcome the suggestion from Mr. Dykstra that we come forward with what our ultimate goal for that is, and that we suggest a strategy for how to get there. I don't have one at this present time, and would be happy to work on that with World Vision.

[Thierry St-Cyr, Bloc, Jeanne-Le Ber, QC]

All right. Thank you once again for all the work you are doing.

I would like to ask a question to our three witnesses who are joining us from the north via videoconference. I am going to set aside the subject that you raised today. I would like to hear you talk to us about global warming. Last year, this committee travelled to Whitehorse. We visited communities that are particularly hard-hit by global warming, more so than communities here in the south.

Is this something you yourselves are experiencing, and is it of concern to you? What effects of climate change are you beginning to notice in your own communities?

[The Chair, Conservative, Rob Merrifield]

Ms. Gunn.

[Lynda Gunn]

It is a concern, infrastructure-wise. Depending on where you are in the north, across the three territories there are issues of permafrost thawing and not providing stability for buildings. This causes concern here in Nunavut, because, depending on which community you're situated in, you may or may not have good foundations for your buildings. Many of our buildings, especially municipal and territorial government assets, are older, built back in the sixties, so there is the issue of age, but also of stability, especially when you consider potential permafrost thaw. Additionally, there is pipe infrastructure concern, and whether or not we have stability with the permafrost for pipes.

And then there is the lack of predictability for road construction and also for our shipping season. That in itself is complicated, because we have such a short shipping season. As we have no roads or highways or trains leading to Nunavut, we are totally dependent on shipping the bulk of our materials for construction for all manner of our infrastructure solely by ship. If we want to take the cheapest way and get the best bang for our buck, it's by ship. We only have a four-month shipping season, and if we can't make the ship in the budget year, then we have to wait another year before we can build.

Winter roads have been a critical problem, especially in the NWT and the western part of Nunavut, supporting mineral exploration and extraction activities. Where the ice is not freezing as it should, as in the case of supporting NWT mineral extraction last year, they couldn't use the winter roads to transport the materials required at the sites.

[The Chair, Conservative, Rob Merrifield]

Please make your point very quickly.

[Lynda Gunn]

Social upheaval is mostly to do with culture. We have very much a traditional hunter-gatherer society up here. Most Inuit are unemployed. They're wholly dependent on going out and gathering their food to sustain their families.

Recently we had a tragic accident in which a young couple went through the ice with their ski-doo because they didn't know that the ice was not frozen properly. They were in their thirties. That is just the type of accident that we see all too often, more frequently lately because the hunters--

[The Chair, Conservative, Rob Merrifield]

I'll have to cut you off now. We have the point and we certainly appreciate the answer. I let you go actually about three minutes more than I should have. Thank you very much.

We'll now move on to our last questioner, Mr. Wallace.

[Mike Wallace, Conservative, Burlington, ON]

Thank you, Mr. Chair.

Thank you for coming late this afternoon, and I appreciate the presentations.

I only have a few questions, and I'll start with Mr. Johnson. I heard you loud and clear on the GST, but I'd like to ask you questions on the two other issues you brought forward.

I'm familiar with LEED, and I know you mentioned earlier in response to a question that your school board in particular built a couple of schools.

With respect to meeting the LEED requirements, depending on how much new equipment and so on, do you have a sense of what the difference is between a regular school and a school that meets the LEED requirements, and what kinds of dollars we are talking about?

[Rick Johnson]

Right now a lot of the environmentally friendly products that would go into one of these schools are more expensive. Having tax incentives so that the schools could purchase these products through the construction companies that are doing the work would enable savings.

One of the big benefits would be setting the example in the communities. We have thousands of schools across this country that are going to be there for a long time.

[Mike Wallace, Conservative, Burlington, ON]

If I'm going to make an argument with the Minister of Natural Resources that he has a program that people can apply to for LEED funding, do you have a sense of what the difference is between building a so-many-thousand square-feet school with LEED and without? Do you have that?

[Rick Johnson]

Percentage-wise, no, I don't.

[Mike Wallace, Conservative, Burlington, ON]

Okay. If you do that, I'd be happy to take it. I'm working on a project for my own community, a performing arts centre, and they're looking at a LEED issue. I'm interested in what that difference is.

The other point you brought forward was the aboriginal graduates, which I thought was interesting. You say Saskatchewan has introduced a program. How old is that program? Do you have any sense?

[Rick Johnson]

It's just been within the last couple of years. The idea of the program is to encourage students to stay in school and be successful--and to stay in Saskatchewan.

[Mike Wallace, Conservative, Burlington, ON]

On this side of the table, at least, we're big on evaluating whether programs are meeting their objectives or not, and if they're not we get rid of them. That's not always everybody's favourite thing. Have you had a sense of whether it has actually made a change in terms of aboriginals staying in school or not?

[Rick Johnson]

It's probably early in the process, but the initial feedback we're getting is that the students are staying in school. It is an incentive. It's dangling that carrot. Ultimately we want all those children to be successful, and the statistics show that aboriginal students are lagging behind.

[Mike Wallace, Conservative, Burlington, ON]

Okay.

Ms. Ecker, I'm going to ask you a couple of questions from your presentation, just so I have an understanding of where your group is coming from.

On the personal income tax piece, you talked about the high end--which a lot of people don't like to talk about--that the tax bracket begins at a lot lower income level. Is your group advocating changing the top level of the tax bracket just at that level, or do you expect us to move the brackets up all the way down the line?

I just want your opinion, particularly because you've highlighted it here. You have the low and the high. It is easy to talk about the low; it makes sense. But what about the high-income earners, and why would it be important for us to do that?

[Janet Ecker]

We have not advocated how you would do it, and again, we tend to take a lot of our lead on tax policy from the C.D. Howe Institute and some of the other groups that do a lot of work in that area.

But what is important about the high end--and you're right, it's not an easy argument to make--is that a lot of those individuals drive the innovation, drive competitive policies, drive the success not just in financial services, but in many other businesses and sectors.

If they don't want to come here, if they don't want to stay here, and if they have better financial opportunities elsewhere, we lose access to that talent and ability. Not only do we want the business environment for companies to be competitive, so that it is a good-value proposition, so they will be here with their jobs and investment, but at the same time we also need to be able to attract and retain the kind of highly skilled talent that we need to drive those companies.

The financial services sector does tend to be a sector that has very highly skilled and educated individuals. They are in great demand, especially when you look at the demographic challenges that are coming at us. We released a study earlier this year on the HR needs in financial services in the Toronto region. We are--not to put too fine a point on it--in a war for talent. They have a lot of options, those very talented individuals, and we want them here to drive economic prosperity, and therefore a better quality of life for Canada.

Tax rates are an important part of that.

[Mike Wallace, Conservative, Burlington, ON]

Thank you.

[The Chair, Conservative, Rob Merrifield]

With that we'll end this session of our presentations. We thank the witnesses. We thank you from the north--Geoff Ryan, Lynda Gunn, and Glenn Cousins--for your participation and your presentations, and we thank the witnesses here as well.

We will now take a quick break as we go in camera to do some committee business.

[Proceedings continue in camera]