Finance Committee on Nov. 20th, 2013

[Gerald Keddy, Conservative, South Shore—St. Margaret's, NS]

Thank you, Mr. Chairman.

Welcome to our witnesses. This is an interesting discussion.

There has been a lot of discussion around the table about fiscal responsibility, the fact that tax havens are unfair and ineffective and how we mean to get rid of tax loopholes. Although I don't think every witness is on the same page, I think most would agree that is the direction the government needs to take.

I want to come back to that in a minute, because I'm puzzled by something.

Before I do that, the Canadian Taxpayers Federation recommends that we amend the Financial Administration Act so that no legislation could be tabled in the House or in the Senate without a detailed forecast of its true cost. Over the lifetime of legislation, many of us, on the both the government side and the opposition side, agree on sunsetting legislation over a period of time. But is that a practical suggestion? Legislation can be in place for 20 years. Once you get beyond three or four years, it's almost impossible to predict what's going to happen with the world economy and how it will affect us.

Within reason, is that a reasonable or responsible request?

[Gregory Thomas]

These estimates go to cabinet, so there is no reason they shouldn't go to Parliament. If that had been in place, then the government wouldn't have all the embarrassment it had over the cost of replacing our air force. There is a consensus that Canada needs an air force, and everybody realizes that it costs quite a bit of money to equip an air force. So if the forecast that went to cabinet had gone to Parliament when the thing was tabled, we would have all been a lot further ahead. That's all we're suggesting with that.

[Gerald Keddy, Conservative, South Shore—St. Margaret's, NS]

I might have some sympathy for the ask on how we have real costs of real expenditures, but lifetime costs, I don't think are accurate and I don't think they're practical. So I think somehow or other we have to couch that in real terms.

My next question is for the Retail Council of Canada. The government is currently monitoring the impact of tariff reductions. We did that in economic action plan 2013, and we're doing that in an attempt to address the price gap, especially between Canada and our largest trading partner, the United States.

Do you believe that it's a step in the right direction? I'm not saying it's a cure-all or a panacea, but is it a step in the right direction to level out retail costs?

[Karl Littler]

First, as I noted earlier, retailers were delighted to see the government beginning the process of tariff reduction and obviously we're calling for more, recognizing the fiscal position in which the government finds itself.

The tracking exercise, for which we're working very closely with officials at the Department of Finance and the Nielsen Company, actually is obviously still out in the field. There are a lot of other issues that affect the price gap. There are some legitimate distinctions, distributional costs, transportation costs, and so on. There is a factor called country pricing with which you may be familiar, where a supplier will supply goods at higher prices to Canadians than they do to elsewhere in the world.

I know that the department in particular is spending quite a bit of time thinking about ways to address that, including potentially easing the path for parallel imports, or the grey market as they're known. There are some limitations to Canada's ability to control the prices at source for non-resident entities from which goods are imported and so that presents a challenge, but, as noted, in dealing with that price gap certainly a move to address the tariff burden would be greatly appreciated and obviously it's the beginning of a long process and we applaud it.

[The Chair, Conservative, James Rajotte]

Twenty seconds.

[Gerald Keddy, Conservative, South Shore—St. Margaret's, NS]

Then I'll just make a quick statement.

I think all Canadians understand the fact that we have to pay tax in order to have the goods and services that we require and government needs that money for its expenditures, but I'm looking at a group of you there, with the exception of one, that are not-for-profit and don't pay tax. Yet we're talking about tax loopholes and everything that gets caught up in the tax loophole, and I'm just wondering if this is not another one.

[The Chair, Conservative, James Rajotte]

Thank you. Thank you, Mr. Keddy,

Monsieur Caron, s'il vous plaît.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Thank you very much.

Mr. Thomas, bear with me for a second, I'm asking you a quick question but it's related to another thing I will be asking you after.

Are you aware of who coined the phrase “survival of the fittest”?

[Gregory Thomas]

Darwin?

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

That's what everybody thinks, but it's actually an economist by the name of Herbert Spencer back in the 19th century. He was actually using the evolutionary insights of Darwin and trying to apply them to sociology and societies. I must say that what I've seen in your brief reminds me a lot of what we were seeing in the 19th century with this guy who actually had lots of followers.

I know your organization. I have followed your organization for a long time, even before I was a member of Parliament. I think your organization actually has done some good work in the past, especially regarding waste in governance. I think we all need those insights to be able to improve government, to make sure it works well. But what I'm seeing before me is not suggestions for waste. It's a political program. It's a political and economic program for governance. It's not waste reduction. It's not waste elimination.

I have some problems believing.... How many members did you say you had at the beginning? I think I missed it.

[Gregory Thomas]

We have 84,000 supporters and about 23,000 of them sent us a cheque last year.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Thank you very much. I'm really surprised that you can have annual general meetings inviting 84,000 members and you could actually come up with this program. Is that how it works? You say supporters. Do you have members? How many members do you have?

[Gregory Thomas]

We're not a membership-based organization. Like many other not-for-profits, we have been around for 23 years. We have a self-sustaining board, similar to many of the foundations such as the World Wildlife Fund, Tides, and others.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

I understand.

[Gregory Thomas]

We have the broadest...we've had more individual people who have sat down at their kitchen tables and written us cheques than all but three or four political parties in this country.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

I don't deny that, but what I want to know is how many people participate in your policy writing, because that's germane. You have 84,000 people supporting policy writing of this kind, especially since you peg yourself as a government watchdog. This is not a government watchdog. This is a political program that you're representing. In—

[Gregory Thomas]

You asked how many participate. In our last survey of supporters, we had over 7,000 people on Senate abolition, so the Canadian Taxpayers Federation, late to the party, has joined the NDP in advancing the cause of Senate abolition—

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

And I thank you for that.

[Gregory Thomas]

—after soliciting the opinions of our supporters.

We believe that we have a very straightforward.... Similarly, you don't find us talking about marijuana laws very much, because our supporters are divided on it and it has very little to do with government waste. That's an issue that we don't talk about much.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

I understand that, and there are things you propose that I agree with, but this is going so far off where you usually go that I don't even know where to start on it.

Actually, I do know where to start. I'll start at EI. What you're suggesting, basically, is to remove the whole rationale of the program, which is to pool the money that actually helps. You're trying to put it by regions. It doesn't go by regions. It goes by individuals. Individuals and businesses are actually putting the money into this. The government doesn't pay a cent.

What I want is for this plan to be able to actually help the people in need. We do that best by pooling the money. What you're suggesting is to basically say that I will be responsible for my own situation, you will be responsible for your own, and so on.

Obviously, those who are well off, those who are successful, and those who have good jobs will only be responsible for themselves. But people in my area, which is still highly dependent on seasonal work, have nothing to gain from this. Basically, in your presentation, you almost called the whole situation from which they are benefiting criminal. I find this very offensive, because inasmuch as people are using EI often in seasonal work, that's because of the nature of the work. That's because of tourism. That's because of fisheries.That's because of agriculture. That's because of forestry. That's still a large part of the economic activity in my region.

I want to help to diversify the economy of my region so that it will be less dependent on it. I want the government to participate in this so we'll be less dependent on this. What you are suggesting is to me highly offensive, because it refers back to the mentality that government has nothing to do to actually help with inequalities and that we're all responsible only for ourselves, which is to me anathema to what good government and good governance are about.

[The Chair, Conservative, James Rajotte]

We have time for a very brief response, Mr. Thomas.

[Gregory Thomas]

That's a good point.

What we regard as criminal is the seizure of the public service pension fund surplus by the government for deficit reduction in the 1990s. The $57 billion in excess EI tax that was paid and that was seized and not used for EI, and also the $16 billion in extra EI taxes that is going to be charged between now and 2016: that's the real crime. It's government taking from the people.

Thank you for the chance to clarify that.

[The Chair, Conservative, James Rajotte]

Merci.

Mr. Adler, please.

[Mark Adler, Conservative, York Centre, ON]

Thank you, Mr. Chair.

I want to thank all the witnesses for being here this afternoon.

I would like to focus my questioning on Mr. Moist.

In CUPE, how many members did you say you have?

[Paul Moist]

We have 630,000.