Evidence of meeting #50 for Finance in the 41st Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was unions.

A video is available from Parliament.

On the agenda

MPs speaking

Also speaking

Arthur Cockfield  Professor, Faculty of Law, Queen's University, As an Individual
Mike Moffat  Assistant Professor, Ivey Business School, As an Individual
Eric Dillon  Chief Executive Officer, Conexus Credit Union, Credit Union Central of Canada
Bruce MacDonald  President and Chief Executive Officer, Imagine Canada
Jon Cockerline  Director, Policy and Research, Investment Funds Institute of Canada
Brigitte Alepin  Tax Expert, Agora Fiscalité, As an Individual
Jennifer Robson  Assistant Professor, Kroeger College, Carleton University, As an Individual
Frances Woolley  Professor, Associate Dean, Carleton University, As an Individual
Clay Gillespie  Member, Board of Directors, Conference for Advanced Life Underwriting
Andrea Mrozek  Executive Director, Institute of Marriage and Family Canada

5:45 p.m.

Executive Director, Institute of Marriage and Family Canada

Andrea Mrozek

No, it did not.

5:45 p.m.

Conservative

Dick Harris Conservative Cariboo—Prince George, BC

A point of order, Mr. Chair.

5:50 p.m.

Conservative

The Chair Conservative James Rajotte

Mr. Harris, please.

5:50 p.m.

Conservative

Dick Harris Conservative Cariboo—Prince George, BC

Mr. Chair, this is the finance committee. I think we're here to discuss the financial health of our country. I'm sure Mr. Brison has some individual points he'd like to get across, but he might want to tailor his questioning of the witnesses a little bit more to the issue at hand.

Thank you.

5:50 p.m.

Conservative

The Chair Conservative James Rajotte

Thank you, Mr. Harris.

As we know, colleagues, relevance is interpreted fairly broadly by speakers.

I think that's testing the bounds of relevance, Mr. Brison. That may be a valid public policy debate, but let's go back to pre-budget consultations.

5:50 p.m.

Liberal

Scott Brison Liberal Kings—Hants, NS

Perhaps we should test income splitting with gay married couples who have eight-month-old twin daughters just to see if it works in terms of equity. Maybe Ms. Mrozek would support that; I'm not certain, based her organization's past.

In any case, Ms. Robson, you wrote a recent column suggesting that NDP child care would let very high-income parents pay the least for child care. Now, that seems like an odd result of public policy, but would you expand on that?

5:50 p.m.

Prof. Jennifer Robson

First of all, I'd like to say that I am pleased that child care is back in terms of public policy debate. I think that's an important step in the right direction.

I think what concerns me is that if we try to overlay a universal flat fee system on top of the existing universal child care benefit, which has some concerning aspects to it—I can say more on that in a moment—as well as the existing child care expenses deduction, again, if you compare and contrast what families at different taxable income levels would end up paying, the combined effect of all of those moving parts essentially means that, yes, the higher-income family gets the far better break and ends up actually being able to claim a much more valuable deduction. So their child care costs are actually quite a bit lower.

October 21st, 2014 / 5:50 p.m.

Liberal

Scott Brison Liberal Kings—Hants, NS

Thank you.

In terms of income splitting, Ms. Woolley, is there a real risk of subordinating the secondary income, or the lower-income worker? You could have a higher-income earner, a tax lawyer, as an example, and then the lower income in the union could be doing something really important for society, like running an NGO. Is it possible that we would actually subordinate some really important and valuable and meaningful work being done by the people in the family who just happen to be paid less, and as a result there's a risk, in terms of productivity but also in terms of societal benefit, to income splitting?

5:50 p.m.

Professor, Associate Dean, Carleton University, As an Individual

Dr. Frances Woolley

To the question that the person running the NGO is now encouraged to step down from that position, yes, absolutely; I think this is why economists are concerned with efficiency. You're distorting people's choices, and you lose benefits when this happens. You start interfering with the choices people make, and that's generally not a good thing.

5:50 p.m.

Liberal

Scott Brison Liberal Kings—Hants, NS

You expressed some concerns about the child tax benefit, but many believe that the child tax benefit was hugely beneficial for low-income Canadians. Is there a way to address the marginal tax rate issue in terms of the clawback?

Also, should we be looking at increasing significantly the working income tax benefit and the child tax benefit and, at the same time, addressing some clawback issues to benefit the people who need it most? Is that one of the most progressive directions we could take?

5:50 p.m.

Professor, Associate Dean, Carleton University, As an Individual

Dr. Frances Woolley

Yes. I would say that if you look at the poverty rates of families with children, there is no doubt the Canada child tax benefit has been part of really quite a remarkable reduction in poverty among families with children in this country.

But there is certainly room for reducing the marginal tax rates faced by families with children. I think about my niece, who is about to have a baby. She's a pharmacy tech. Her husband's a nurse. They're in Vancouver. I'm sure their household income is well over $100,000 a year, but it is pretty hard for them to get by, and they're going to get very little from the Canada child tax benefit. I think that thinking about those marginal tax rates would help families like that.

5:50 p.m.

Conservative

The Chair Conservative James Rajotte

Thank you very much.

Thank you, Mr. Brison.

We'll go to Mr. Allen, please.

5:50 p.m.

Conservative

Mike Allen Conservative Tobique—Mactaquac, NB

Thank you very much, Mr. Chair.

Thank you to our witnesses for being here.

I want to get feedback from Ms. Mrozek and Ms. Woolley on this first question. It's associated with the UCCB and the child tax benefit.

Ms. Mrozek, I'd like to ask you a question again. Could you repeat the percentages from the different parties in support of income splitting? I think you said it was 63% for the Conservatives. How many Liberals and how many NDP...?

5:55 p.m.

Executive Director, Institute of Marriage and Family Canada

Andrea Mrozek

For Conservative supporters, it was 65%, for the NDP, 55%, and for the Liberals, 54%.

5:55 p.m.

Conservative

Mike Allen Conservative Tobique—Mactaquac, NB

Okay. So 54% of the people who support Mr. Brison support income splitting.

5:55 p.m.

Executive Director, Institute of Marriage and Family Canada

Andrea Mrozek

True enough.

5:55 p.m.

Conservative

Mike Allen Conservative Tobique—Mactaquac, NB

Okay. Thank you for clarifying that.

You talked about increasing the UCCB and potentially enhancing the CCTB. Ms. Woolley, you talked about this as well. Is there a way that you thought of for possibly combining those two things in order to simplify things? We've been talking about the simplification of our tax system and everything else, both at the last panel and at this panel a bit.

Would you two have a comment on that? Or do you see them as being two disparate things that we should keep separate?

5:55 p.m.

Professor, Associate Dean, Carleton University, As an Individual

Dr. Frances Woolley

Yes, if I were a government that was committed to providing tax relief to hard-working Canadian families, that's what I would look to do. I would look to take the CCTB and the UCCB and roll them together, address some of the concerns with marginal tax rates, and address some of the other concerns, like the marriage penalty at the lower-income end, for example, with the CCTB.

5:55 p.m.

Conservative

Mike Allen Conservative Tobique—Mactaquac, NB

Ms. Mrozek, do you have a comment?

5:55 p.m.

Executive Director, Institute of Marriage and Family Canada

Andrea Mrozek

I'll speak in the broader sense of allowing families the freedom to choose what they want to do with the money they have in their pockets. On whether that's best achieved by rolling those into one, I would leave those questions for civil servants to address; they are much better versed in these things. The principle, though, remains: we think those are good tools to use. Also, they provide parents with greater leverage because they'll have more money.

5:55 p.m.

Conservative

Mike Allen Conservative Tobique—Mactaquac, NB

Okay.

Ms. Woolley, we might not agree on a number of things, but I think we do agree on this one: paying down the debt, and I think a certain amount.... When we look at the surpluses that potentially will be generated over the next five to six years, there's always the argument about whether you spend a little on new services or new programs, or a little on tax relief, or you pay down the debt.

Since you were one of the only ones on the panel who commented on paying down the debt, do you have a percentage that you would apply based on, let's say, a $6-billion surplus? What percentage would you have as debt repayment?

5:55 p.m.

Professor, Associate Dean, Carleton University, As an Individual

Dr. Frances Woolley

I don't know. I'm really not fit to answer that question.

5:55 p.m.

Conservative

Mike Allen Conservative Tobique—Mactaquac, NB

But you would think a portion would be reasonable to pay down the debt?

5:55 p.m.

Professor, Associate Dean, Carleton University, As an Individual

Dr. Frances Woolley

Yes. I would for sure.

5:55 p.m.

Conservative

Mike Allen Conservative Tobique—Mactaquac, NB

Thank you.

Mr. Gillespie, I have a couple of questions for you. When you talk about the RRIF rules, how would you see that working? I think the chair in the last panel talked about the change in the age or a change in the rates. Do you see a preferred method to go about doing it that would be more beneficial to our seniors? Also, if you look at changing that profile, is there any concern about seniors maybe withdrawing too much and then being left in a predicament?