Mr. Sorbara.
Evidence of meeting #4 for Finance in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was infrastructure.
A video is available from Parliament.
Evidence of meeting #4 for Finance in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was infrastructure.
A video is available from Parliament.
4:25 p.m.
Liberal
Francesco Sorbara Liberal Vaughan—Woodbridge, ON
Thank you, Mr. Chair. Thanks to the panellists for your kind and thoughtful comments.
I'll try to make my questions as direct as possible so that I can ask as many as possible.
This question is for Mr. Ross.
Yesterday I asked one of the presenters from the Cattlemen's Association about labour shortages in their sector on a scale of zero to ten. The individual gave me a score of eight. Even though we have excess slack in the economy, we see certain sectors facing labour shortages. What would you put your number at?
4:25 p.m.
Director of Business Risk Management and Farm Policy, Canadian Federation of Agriculture
I think it's hard to put one definitive number on it. As a group that represents so many diverse commodity groups and different structures of farms, that number probably varies from commodity to commodity.
We did a study about two years ago looking at some of the major residual risks facing Canadian agriculture, and labour came out at the very top of that list in terms of an upcoming constraint that is going to limit our ability to capitalize on some of the emerging trade opportunities that we're seeing. At the same time, I think it places constraints on our ability to identify succession and really move forward as an industry.
For certain sectors, I think that an eight is very much warranted. In others, across the board, I think it's very much a concern for our entire membership.
4:30 p.m.
Liberal
Francesco Sorbara Liberal Vaughan—Woodbridge, ON
Thank you.
You identified a bill that had been proposed in the past. What was that bill number again?
February 17th, 2016 / 4:30 p.m.
Director of Business Risk Management and Farm Policy, Canadian Federation of Agriculture
It was Bill C-691.
4:30 p.m.
Liberal
Francesco Sorbara Liberal Vaughan—Woodbridge, ON
Thank you.
It was nice to see three economists, and a fourth here, in a room all agreeing that we need strategic investment in infrastructure to get our economy growing again.
Mr. Jackson, I think we need to point out that in our platform we've proposed the Canada child tax benefit that will provide higher or increased benefits to nine out of ten families in Canada, tax free, means tested, or income tested, and according to the Caledon Institute, will lift 300,000 children out of poverty. I think we need to point that out. It's a major step forward on the equality issue and generally helping middle-income and low-income families.
On the guaranteed income supplement issue and how the clawbacks work and the levels, in our platform we've put in a major billion-dollar proposal of roughly $920 for single seniors on the guaranteed income supplement, a 10% increase that will benefit 1.3 million retired Canadians, one million of whom are female, and lift 85,000 to 100,000 out of poverty.
I think we need to identify those two major steps that our government is undertaking to improve the lot of many Canadians. I think that's a great first step.
I see you've identified some other arguments in the tax cuts that you may or may not like. What would you review on the tax expenditure side with regard to the $100 billion of tax expenditures that are out there?
4:30 p.m.
Senior Policy Advisor, National Office, Broadbent Institute
I'd draw your attention to a study that was just put out by Michael Wolfson, former assistant chief statistician, noting that the government had promised to review tax expenditures benefiting those at the very high end of the income spectrum. The two that would leap out would be the special treatment of stock options and the amount of capital gains that is not subject to tax.
I think on the stock options we all know it's a little tricky in how you limit it without completely obliterating it for tech start-ups and so on. A massive amount of the stock options deduction benefits senior corporate executives who are compensated through options as opposed to regular salary. I think there's a significant amount of money to be made there.
4:30 p.m.
Liberal
Francesco Sorbara Liberal Vaughan—Woodbridge, ON
Mr. Tapp and Mr. Wright, I think we get involved in using terms like “GDP ratio” and “strategic investment in infrastructure”, but I think it comes down to getting Canadians working again and getting our economy growing again. We're growing at a real rate of 1% and change. Mr. Wright, I think the nominal rate you've pegged is around 4%.
4:30 p.m.
Senior Vice-President and Chief Economist, RBC Financial Group
On a long-run basis.
4:30 p.m.
Liberal
Francesco Sorbara Liberal Vaughan—Woodbridge, ON
If there was not a time to undertake public investment with the fiscal capacity of the Canadian government where interest rates are—I think the 10-year yield is at 1% and the long bond is maybe at 2%—I don't know when you would do it, because now is the time: the multiplier, every $1 of infrastructure investment gets you about $1.50 back.
Should we limit the length of time we undertake such an investment to three years? Should we go further out?
You've identified a $25-billion deficit, not on that topic but just to the degree to which we should invest in public infrastructure. Because we all know the Bank of Canada governor has noted that investments in infrastructure enable long-term economic growth.
4:30 p.m.
Research Director, Institute for Research on Public Policy
Is the question then to encourage infrastructure over which horizon?
4:35 p.m.
Research Director, Institute for Research on Public Policy
Something I've noted is a bit of a disconnect between....You say there's excess capacity in the economy; that's certainly true. We're getting different signals through the labour market and through product markets, so it seems as if the unemployment rate is around 7% and that there may be room to get more Canadians back to work, as you say, and then on the product market, we might be 1% below potential, that type of thing.
Certainly at the aggregate level, it doesn't seem as if there's lots of room in the labour market, although certainly we could be doing better things there. It depends on whether the unemployment rate in Canada could be 6% rather than 7%. In that case, there's certainly a lot of excess capacity there that could be used.
In terms of the planning horizon that should be used for infrastructure projects, as I said earlier in my remarks, there's the short term and the long term. I think it would be a mistake to look at most of these infrastructure projects on a short-term horizon. I think we had done infrastructure over two years in the economic action plan, which provided a lot of stimulus, a lot of good jobs, but I think there's a difference between filling potholes and building roads and bridges. If you're looking across what can be done in two years, I think people have to see that it takes a while to work with multiple levels of government, and the horizon of five years may not be long enough; a horizon of 20 years may not be long enough for some projects that need to get done. I think it just depends on which project it is and looking to get the most important ones first on the priority list and pushing them out the door when they're ready.
4:35 p.m.
Conservative
Phil McColeman Conservative Brantford—Brant, ON
Thank you, Chair, and thank you to the witnesses for being here.
I'd like to ask each of the organizations here that have presented requests for this budget to include things you'd like to see—I think there are four, as I don't believe these other gentlemen had fiscal money asks—have you quantified what they are? Can you give me an estimation? Has your organization asked for specific amounts of money in this budget?
May we start with Mr. Jackson?
4:35 p.m.
Senior Policy Advisor, National Office, Broadbent Institute
Our brief is really addressing, I think, the priorities that the government set out in being elected. We see those as very much guiding. We really try to allocate priorities to their priorities, rather than come with a whole new set of issues.
4:35 p.m.
Conservative
4:35 p.m.
Director of Business Risk Management and Farm Policy, Canadian Federation of Agriculture
I think on each ask it varies. A number of the tax provisions we speak to are cost neutral. They're more about addressing red tape that exists in the system and some of the unintended accounting difficulties that arise.
For example, the changes on labour policy are more about changing the policy environment and some of the incentives, I guess, that are being sent to producers currently, or rather, the amount of information available to them. There's not really a dollar ask associated with those.
4:35 p.m.
National Chairperson, Canadian Federation of Students
If you look through pages 4 onward in the submission that we provided, there are costings for each of our recommendations.
4:35 p.m.
National Chairperson, Canadian Federation of Students
Many of them are actually cost neutral. It's about reinvestment of existing funds that the federal government is spending in and around post-secondary education into policies and programs that we find would be more efficient actually increasing accessibility.
4:35 p.m.
Conservative
4:35 p.m.
President, National Farmers Union
We have nothing specific, but in general, following the dismissal of the elected board members of the Canadian Wheat Board and the Wheat Board's being privatized, we now have an increased part of the total revenue of the exports of grain going to multinational corporations, and farmers will get a reduced amount. We basically have taxes going offshore and eliminating taxable incomes in Canada. That should all be part of an accounting of net fiscal capacity—