Yes, employers and employees.
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.
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.
4:45 p.m.
Conservative
Mark Adler Conservative York Centre, ON
I was a little confused earlier when you said that you preferred the Liberal plan, which promises to have a moratorium for two years on the payment of EI, because it doesn't belong to the government to be able to do that. The Supreme Court ruled on it unanimously after the Liberals pillaged the EI fund for $50 billion between 1993 and 2006.
What the Liberals are proposing isn't even legal, so I was a little taken aback when you said you preferred their plan to a reduction that is approved by Parliament as proposed by our government.
4:45 p.m.
Assistant Professor, Ivey Business School, As an Individual
I'm not a lawyer and specifically what I said was that my preference would be an overall reduction in EI.
4:45 p.m.
Conservative
4:45 p.m.
Assistant Professor, Ivey Business School, As an Individual
No, they're both tax credits. Both of these involve paying EI to the government and then receiving a cheque at the end of the year based on your EI payments. This is not a reduction in payments. Corporations and their employees have to pay into these first and then receive a cheque later on.
Again, my preference would be to treat this as an insurance fund and not have any special programs around it and set the EI rates accordingly.
4:45 p.m.
Conservative
Mark Adler Conservative York Centre, ON
Thank you.
Mr. MacDonald, say that we do provide for a stretch credit, have you done the math to figure out how much more money that would throw into the charitable sector?
4:45 p.m.
President and Chief Executive Officer, Imagine Canada
I'm not an economist, but our chief economist's model looked at a range of scenarios concerning economic growth, income growth, people's responsiveness to tax credits, and the presence or absence of the stretch. We're conservatively estimating $234 million in additional gifts to charities.
4:45 p.m.
Conservative
Mark Adler Conservative York Centre, ON
Okay, fair enough.
Is there not a potential problem that because you're front-end loading it, people may give at the outset, and then it may just level off as time moves on as opposed to people constantly giving?
Is that not a risk with the stretch?
4:45 p.m.
President and Chief Executive Officer, Imagine Canada
I suppose theoretically that's the case. There are lots of Canadians who are new entrants into the marketplace. There are lots of Canadians for whom it will take time to get to a place where they will stretch their giving. We see this as a long-term program to help charities. I think it's going to take time to even really maximize this. I think it's a great idea.
4:45 p.m.
Conservative
Mark Adler Conservative York Centre, ON
Okay.
Mr. Dillon, I have a couple of questions for you. As a result of your now having to pay at the same level as banks and other financial institutions, have any credit unions gone out of business in the last years?
4:45 p.m.
Chief Executive Officer, Conexus Credit Union, Credit Union Central of Canada
Not to my knowledge, no.
4:45 p.m.
Conservative
Mark Adler Conservative York Centre, ON
The credit unions typically have, if you took it on a per capita basis, higher costs than banks, because they operate in markets that aren't traditionally served by traditional financial institutions. Is that correct?
4:50 p.m.
Chief Executive Officer, Conexus Credit Union, Credit Union Central of Canada
I would say that in the domestic retail banking that would be true, yes. It's hard for us to draw a comparison beyond that, because we're not engaged in the kinds of activities they are.
4:50 p.m.
Conservative
Mark Adler Conservative York Centre, ON
Yes, and your capital that you would lend out—and you're very active on that front, I know—the capital you draw on is really retained earnings and that's it. There's nothing else. Is that right?
4:50 p.m.
Chief Executive Officer, Conexus Credit Union, Credit Union Central of Canada
That's correct.
Again, in my credit union's case, 100% of our capital—99.4%, I believe—is actually retained earnings of the organization. Across Canada it's in the neighbourhood of 80%, whereas the banks' share of capital that comes from retained earnings is somewhere in the neighbourhood of 45%.
4:50 p.m.
Conservative
Mark Adler Conservative York Centre, ON
Take the mortgage sector, for example. They are CMHC insured. Is that correct?
4:50 p.m.
Chief Executive Officer, Conexus Credit Union, Credit Union Central of Canada
Yes, credit unions across Canada are CMHC-insured lenders.
4:50 p.m.
Conservative
Mark Adler Conservative York Centre, ON
They were CMHC insured before the increase in taxes. Is that correct?
4:50 p.m.
Chief Executive Officer, Conexus Credit Union, Credit Union Central of Canada
They were?
4:50 p.m.
Conservative
Mark Adler Conservative York Centre, ON
Yes.
Okay.
So that was a nice benefit that you had, paying lower taxes but getting the same benefit as the banks, correct?
It's just a fact.
4:50 p.m.
Chief Executive Officer, Conexus Credit Union, Credit Union Central of Canada
I don't know if that's a fair comparison.
4:50 p.m.
Conservative
Mark Adler Conservative York Centre, ON
Fair enough.
Meridian, where I bank, has $9.6 billion in assets. It has gone up $3 billion in the last seven years. They have 250,000 members. Do you think an institution like that should be taxed the same as a smaller credit union? In other words, should there be a graduated scale, perhaps, in terms of how credit unions could be taxed, and not just lump them all into one category and say that they're all financial institutions, so let's tax them all at the same rate? Maybe the bigger ones should be taxed the way the banks are, and the smaller ones should not be.
4:50 p.m.
Chief Executive Officer, Conexus Credit Union, Credit Union Central of Canada
Sure. I have two very quick points.
In my case, we manage $5 billion, which seems like a larger business. In the sphere of financial services we are one one-hundredth the size of the chartered banks. I think in the context of financial services, we are very much a small business. We've been trying to engage the minister's office in discussions about whether we should build a scalable model, whether there would be value in having something such as you've proposed, and we'd love to engage further with the minister on that conversation.
