Finance Committee on Oct. 6th, 2011

[Art Sinclair]

I know Conestoga College combined federal and provincial investments and spent about $100 million over the last two years.

From our perspective and our recommendation, it's highly unlikely we'll see another $2 billion program, which I believe KIP was. We'd like to assert right now that this is, in fact, a priority not only for our community but we think for the national business community. Everyone has expressed an interest in skills development, whether you're in construction, information technology, biotechnology, or all the life sciences. Everyone has a skills shortage.

As a community, we've identified that increasing the capacity at our local post-secondary educational institutions, not only ours, but across Canada, is one of the areas that can address the skills shortage.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

Maybe if you could provide for this.... I would put that challenge out to all municipalities, the impact it has had, because this is new. This is kind of breaking ground for the federal government. We've all seen significant projects within all of our ridings. Even in this cross-country tour we're hearing more and more, and if we could hear that and see the changes made....

I want to talk just quickly to the chamber from Lambton.

Mr. McDonald, in this area of the world, people don't realize--I think somebody mentioned it at the last panel--that this is flat country, and I think most of your costs for the municipality, at least in Chatham-Kent, are for bridges. Those things aren't very sexy when we talk about the infrastructure fund. I know that in our riding those were addressed and our municipality took advantage of those. Did you have an opportunity to do those, and what impact did that make on your budget for Sarnia?

[Garry McDonald]

Well, many of those bridges that you're speaking about would be through the County of Lambton, and following their budget as we do every year, they've done a very good job in programming that work. But I know when it comes down to the final lower tier--not the county level--they are struggling.

I know in my own community of Plympton-Wyoming, where I live, local bridges are a challenge for them. They need to have some sort of continued support in order for the population to deal with that.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

But you were able to access those funds from the government.

Then very quickly, Mr. Tufts, the PRPPs, the government's been.... And I know somebody else is probably going to continue on with this line of questioning. We too are very concerned about the lack of pensions in the private sector. What are your feelings towards the--

[The Chair, Conservative, James Rajotte]

Very brief response, please....

[William Tufts]

Certainly I think the recent announcements from the finance minister have been on track in terms of what needs to be done, and we're very strongly in favour of the PRPP program, the pooled registered pension plan.

[The Chair, Conservative, James Rajotte]

Thank you.

We'll go to Mr. Brison, please.

[Scott Brison, Liberal, Kings—Hants, NS]

Thank you very much to each of you for appearing before us.

To one extent or another in both panels this morning we heard from witnesses who presented, on behalf of their organizations, specific proposals on the tax system. Earlier in our hearings, this round of pre-budget consultations, we heard from the Certified General Accountants or CGA Association of Canada, who are advocating broad-based tax reform in Canada and have called on the federal government to commence a thorough study of our tax system with the hope of building a more competitive Canadian economy and a fairer tax system.

We haven't had a real study of the tax system since 1971 with the Carter commission, which, among other things, eliminated the inheritance tax and brought in capital gains tax.

I'd be particularly interested in terms of the business organizations here. Would you advocate that one of the recommendations of the committee be that the government mandate a thorough study on the potential overhaul of the Canadian tax system in general and look at all aspects of the Canadian tax system?

[The Chair, Conservative, James Rajotte]

Who would like to handle that? Mr. Brison, do you want someone in particular...?

[Scott Brison, Liberal, Kings—Hants, NS]

I said the business organizations. I thought that was obvious.

[Art Sinclair]

Our board of directors of the Chamber of Commerce currently has four chartered accountants on it. I really couldn't make a commitment. From our perspective, our members are just trying to deal with business, particularly in the manufacturing sector, on a daily basis, and long-term planning becomes secondary, so I really wouldn't be able to make a commitment on behalf of our organization on that broad-based reform.

[Scott Brison, Liberal, Kings—Hants, NS]

It would be helpful to get back to the committee on this. We're one of the few industrialized nations that hasn't taken a serious look at their tax system.

If you were to try to identify one word to describe the changes in the Canadian economy since 1971, it would probably be the word “everything” in terms of the Canadian global economy.

In terms of pension reform, the provinces and the federal government have been engaged in discussions, and there seems to be emerging, with the exception of a couple of provinces, some level of consensus around opening up the CPP, to a CPP being well managed, diversified both geographically and in terms of sectorally and geographically, with low fees. The cost structure of the CPP is very competitive. To enable the 60% of Canadians in the private sector who do not have pension plans currently to be able to invest directly in a supplemental CPP-type approach as small-business owners in some cases, in other cases, employees, do you think that merits further discussion and working with provincial governments and employers, and to broaden the access to the Canada Pension Plan?

[William Tufts]

No, we don't. I think one of the key factors of that is to look at the GDP in terms of employment across Canada. What's the number-one employment sector in Canada? I would suggest it's probably the public sector. The number two relates to financial services. It would have a devastating effect upon the financial services industry to socialize the additional retirement savings plans into the CPP.

[Scott Brison, Liberal, Kings—Hants, NS]

For individuals on a voluntary basis to buy into....

[William Tufts]

Yes, I think the government's on the right track with the PRPP program. That was the best of the two options that were in front of Canadians in the last election. There are some very serious considerations that need to be looked at in terms of providing that security that Canadians are going to need. One of the things we have a challenge with in terms of the business community is additional mandatory contributions into that PRPP plan and whether or not employers are going to have to contribute to that. I think certainly something has to be done for Canadians. The average Canadian at age 65 has an RRSP value worth $60,000. How long is that going to take you into retirement?

Certainly there is some inequality between the public sector employee pensions and the private pensions. Something needs to be done to equalize that.

[Scott Brison, Liberal, Kings—Hants, NS]

I appreciate that.

I just have one more question on the transit side. I represent Kings--Hants, and of course Kings Transit is one of the best examples of public transit in rural and small towns. What are the best ways through public policy we can bring the benefits of public transit to rural and small-town Canada?

[The Chair, Conservative, James Rajotte]

Very briefly.

[Michael Roschlau]

There's no question the needs in small-town or rural Canada are enormous. They're going to increase as the population ages in the next generation, and there definitely needs to be some work done in developing policy to help emerging mobility needs in small communities across this country.

[The Chair, Conservative, James Rajotte]

Thank you.

We'll go to Mr. Hoback, please.

[Randy Hoback, Conservative, Prince Albert, SK]

Thank you, Chair, and thank you all for being here today.

Actually, I'm going to take off from Mr. Brison's question, because I have a large rural riding. When you talk about a dedicated one percent, when I look at communities like Kinistino, Nipawin, or Weldon, they don't have any public transit. If you said that it was dedicated one percent to public transit, they would look at me cross-eyed and say the numbers wouldn't be big enough to do anything, and they would ask why they are being forced to do this when they could use that money towards sewers, roads, or something else that actually would be beneficial in that community.

So how do I square that round peg in a square hole? How do you go right across Canada and say that's what we need to do when you know there are a lot of small communities that would never trigger that?

[Michael Roschlau]

I must say—and that's an excellent question—that I am always amazed at what's actually out there and what the needs are that we don't see on the surface.

I remember not long ago attending a municipalities association meeting in western Canada and talking to municipal councillors from small communities under 1,000 people about their mobility needs. At first glance, the answer was, “Well, we don't have public transit”. My next question was, “Well, how do people who can't drive get around?” They said, “Well, the seniors home has a van and the Lions Club has a van”. When I asked who paid for them, they said the municipality kicked in a few thousand and there were charitable donations. There was this, that, and the other thing.

So you do have public transit: it's just that nobody knows about it and we haven't done an inventory. I think that's where we need to start with the small communities. We need to find out what's there now and use the resources we have to broker those services to create a more universally accessible form of publicly available transportation, especially as our communities start to grow and the population ages, because people can't continue to rely on their friends and families to drive them everywhere.

[Randy Hoback, Conservative, Prince Albert, SK]

Thank you for that. Those are good points, actually, very good points that again enlighten my breadth of knowledge here, and I appreciate that, I really do.

Mr. Sinclair, I am going to go to you at this point in time. There are members around this committee who think we should take the corporate taxes, crank them back up another 2%, and redistribute those funds to all the people that you laid off from doing that.... What would your members say if we went to them and said that we were going to crank up their business taxes by 2%? What would the impact be?

[Art Sinclair]

Well, no. We support cuts in taxes as a way of generating economic opportunities. I think that's generally the position of the Canadian Chamber of Commerce, the Ontario Chamber of Commerce, and the business community in general. That's why we've made the recommendation for no new increases in taxes, personal or corporate.

[Randy Hoback, Conservative, Prince Albert, SK]

So it would have a negative effect on your business community if the tax rate were to go up, correct?

[Art Sinclair]

Yes, particularly here in southwestern Ontario, where we're competing with the Great Lakes states. I think that's a concern as well. But then again, a lot of the IT companies that are competing on global markets are very concerned about any increases in corporate taxes--or in any taxes, for that matter--because they compete in a very competitive global market. Again, I think our members would be strongly opposed to any tax increases.