Thank you, Chair.
I will not go on too long in my opening remarks, to make sure there is lots of time for the committee's questions.
Before I begin, let me congratulate the chair and all members of the finance committee for their work over the past few months on the annual pre-budget consultations. Along with my own consultations as the Minister of Finance, the finance committee's pre-budget consultation helps ensure that Canadians have the chance to make their voices heard. Recommendations flowing from this committee's hearings always inform and influence the ultimate budget content. I urge the finance committee to conclude its work. I know you're in the process of preparing your report, and I look forward to receiving and reviewing your findings.
First, however, I want to urge the committee to study and adopt Bill C-47, the Sustaining Canada's Economic Recovery Act.
The Sustaining Canada's Economic Recovery Act is one of the many measures the Conservative government has taken to address the global economic crisis. The act contains many provisions that are key to Budget 2010 and is thus an important part of Canada's Economic Action Plan, which helps create jobs and contributes to economic growth from coast to coast.
Since July 2009, nearly 430,000 net new jobs have been created in Canada. Of those, 380,000 are full-time jobs. The IMF and the OECD both project Canada to lead the G-7 in economic growth over the next five years; we're not alone in recognizing the strength of the Canadian economy. The Economist magazine calls Canada an economic star; the OECD says “Canada looks good—it shines, actually”.
Our government is on the right track on the economy and for Canadian families. However, as we have said all along, the global economic recovery remains fragile. That's why we must continue to implement Canada's economic action plan and move forward. Bill C-47, the Sustaining Canada's Economic Recovery Act, does precisely that, moving forward to ensure that our economy continues to stay on track.
The act includes measures to help Canadian families get ahead: by indexing the working income tax benefit, or WITB; by allowing RRSP proceeds to be transferred to an RDSP, a registered disability savings plan, on a tax-deferred basis; by allowing a 10-year carry-forward for RDSP grants and bonds; by further strengthening federally regulated pension plans; by measures to cut red tape, helping registered charities with disbursement quota reform, allowing taxpayers to request online notices from the Canada Revenue Agency, reducing the paperwork burden for taxpayers; by measures to close down tax loopholes, such as better targeting of tax incentives for employee stock options and addressing aggressive tax planning relating to TFSAs or tax-free savings accounts; by measures to protect consumers, such as improving the complaint process for consumers when dealing with the financial services industry; and finally, measures to promote clean energy, such as expanding access to accelerated capital cost allowance for clean energy generation.
Clearly the Sustaining Canada's Economic Recovery Act introduces key measures to support Canada's economic recovery. I would like to highlight a few of the aforementioned measures—only a few—starting with closing tax loopholes.
Our Conservative government understands that ending tax loopholes is necessary to ensure that all taxpayers pay their fair share of taxes.
In order to broaden this objective, measures were announced in Budget 2010 and are included in this act regarding the taxation of employee stock options. For instance, changes proposed to the taxation of stock option cash outs will address aggressive tax planning strategies. These strategies have enabled some individuals and businesses to avoid paying taxes on a portion of stock-based compensation.
I'm happy to report that this move in support of fairness has been welcomed even by business. I can't say that the closing of these tax options has been uniformly welcomed by business, because I have heard some concerns expressed by some businesses about the fact that we are taking away a rather lucrative tax option that has been exercised by some. But I think most of the business community accept the fact that we need to have a level playing field and that the key is lower taxes overall, not special tax options that certain groups can take advantage of.
In fact, that view is reflected by John Manley, the president of the Canadian Council of Chief Executives. Here's the way he put it. He said:
...our members have always felt that if you get the system right everybody's going to benefit. ...if you said to them, would you rather have some special treatment on options or would you rather have very competitive corporate income tax rates, they would say we will take the latter, thank you very much. Keep the rates as low as you can. Forget any special loopholes. ...having a fair tax system is going to be the top priority.
Mr. Chair, before I conclude, I would like to address important measures in Bill C-47 related to the RDSP. One of the most important actions our government has taken in support of persons with disabilities has been the creation of the registered disability savings plan. The RDSP helps parents and family members provide long-term financial security for a severely disabled child.
The Sustaining Canada's Economic Recovery Act includes two proposals to further improve the RDSP.
Under the current rules for RRSPs and RRIFs, a deceased individual's RRSP or RRIF proceeds may be transferred on a tax-free basis to the registered retirement savings plan or income fund of a financially dependent infirm child or grandchild. To give parents and grandparents more flexibility in providing for a disabled child's long-term financial security, Bill C-47 proposes to allow a deceased individual's RRSP or RRIF proceeds to be transferred on a tax-free basis to a financially dependent infirm child's or grandchild's RDSP as well.
The second improvement to the RDSP would allow a ten-year carry-forward of Canada disability savings grant and Canada disability savings bond entitlements in an RDSP. Colleagues, this recognizes the fact that many families of children with disabilities may not be able to contribute regularly to their plan. This will give them more opportunity over a longer period of time to top up those RDSPs.
Both proposed changes will further ensure that RDSPs give Canadian families peace of mind, helping them save for the long-term financial security of a loved one with a disability.
Tina Di Vito, director of retirement strategies at BMO Financial Group, called the changes fantastic measures, adding:
...the benefit will be huge. This will allow more people with disabilities to get the care they need. With the RDSP, Canada is leading the world in showing how smart policy can help provide financial security and independence for people with disabilities.
Mr. Chair, in summary, this act will help ensure that the Canadian economy continues to move in the right direction. With support from Canada's economic action plan, the Canadian economy has started to recover. We must continue to provide the steady guidance that has allowed Canada to continue on the right track to recovery.
With that, I invite the questions of the committee.
Thank you, Chair.
