Status of Women Committee on Nov. 28th, 2007

[Prof. Kathleen Lahey]

Going back to the changes that were made in 1987, we used to have a rate structure that had something like 13 or 14 different income brackets, and they were very small, and they got larger very gradually. It resulted in a very smooth tax rate curve. When the 6% rate was jacked up to 17%, and when the very top rate was suddenly dropped from 34% down to 29%, we were left with three brackets, which almost produced a flat line. But even within that, you see tremendous gender differences in the way in which the restructuring of the rates impacted men and women. For example, there were something like 900,000 taxpayers who had been in the 23% bracket, who woke up one day and found out that their tax rate had dropped to 17%. Of those, 68% were men. They got tremendous tax cuts. But the women who had been taxed at the 6% rate woke up and discovered that they were now taxed at the 17% rate--an increase of 11 percentage points on the very lowest. Sixty percent of the people who jumped from 6% to 17% were women.

You go through every one of the brackets--and I did this because I was shocked at what was going on at the time--and you see that you have this double-whammy at each of the new stages, where the average incomes of men are being dropped radically and, because the women always have lower incomes in each income bracket, their rates were jacked up dramatically. At the very top, something like 77% of the people who experienced the federal rate reduction from 34% to 29% were men.

So this had a tremendous impact on women, which has played out every year for 20 years. The cumulative effect of that tremendous restructuring, on gender impact grounds, on women has been just one of the big pieces that has had a very negative effect on women.

I don't know if that's enough of an answer, but I'll stop there.

[The Chair, Liberal, Yasmin Ratansi]

Thank you, Ms. Minna.

We now have to go to Mr. Stanton for five minutes.

[Bruce Stanton, Conservative, Simcoe North, ON]

Thank you, Madam Chair.

I'm going to divide my time with Ms. Grewal.

Professor Philipps, I was intrigued by the whole narrative in your discussion today about the unpaid caregiver. That seems to me to be a very critical component, and part of our work here is to try to get some scope on how we should proceed with this study. I wonder if you have any suggestions on how we might properly reflect on those issues in a study. Could you suggest--and maybe you don't have that right in front of you right now, but it would be very helpful for the committee to tap into that somehow. This may not be a group in society that we could easily get representation from. Do you have any thoughts on how we might better tap into that ?

[Prof. Lisa Philipps]

I think it's critical to attend to it as part of a gender budget analysis. As I said, I would love it if the committee could look at women in both of their main roles, as paid workers and as unpaid caregivers. They're usually doing both at some point in their lives.

I think if you took the approach of really looking at women as individuals, not as dependants or members of a household, you would get a lot further in terms of asking whether caregivers' interests are being advanced or are being protected. When we just look at the household, and whether the household is getting a tax cut, a lot is hidden in terms of the caregiver not necessarily benefiting. So it's really crucial to look at how we could deliver resources directly to caregivers--not through more dependency credits but through more direct programs. That would be my suggestion.

[The Chair, Liberal, Yasmin Ratansi]

Ms. Grewal.

[Nina Grewal, Conservative, Fleetwood—Port Kells, BC]

Thank you, Madam Chair.

Thank you, Professor Lahey and Professor Philipps, for your time and your presentations.

Like most Canadians, I suppose, when I think of the federal budget, I think of spending. But of course that is only one part of a budget. Revenues are equally important components; all of us know that. As a professor and a researcher who specializes in tax law, can you suggest how this gender budgeting may change the way our government collects revenue?

[Prof. Lisa Philipps]

I'm sorry. Is the question for me?

[Nina Grewal, Conservative, Fleetwood—Port Kells, BC]

Either one of you can answer that.

[The Chair, Liberal, Yasmin Ratansi]

Professor Philipps.

[Prof. Lisa Philipps]

Perhaps I'll make a brief response, and then I will have to leave.

I think, as Professor Lahey said, it would be extremely revealing. If we had a gender breakdown of how the tax system impacts men and women, it would reveal some inequities that would immediately seem very intolerable, which are currently deeply hidden in the tax system.

By bringing those to light, without even making a specific policy recommendation, it would be a tremendous service and an improvement in our budget process.

[The Chair, Liberal, Yasmin Ratansi]

Before you leave, Professor Philipps, I have two things to ask you.

You said internal to government, collect, analyze, and publish gender disaggregated data. I would like to know what sort of disaggregated data should we be looking at. If I'm putting you on the spot at the moment and you could send it to us later, we would really appreciate it. That's number one.

Number two--you have talked about it, and I think everybody needs to get their heads around it--spending departments should have responsibility. What sort of spending departments would you like us to focus on, because we need to focus on it? Would it be HRDC, for example? Would it be only those departments that are very socially focused, program-driven?

[Prof. Lisa Philipps]

I would think that is a major one. The justice department is also very important because it's responsible for developing specific legislative initiatives. So that's very important as well.

I apologize that I can't be more authoritative about exactly which spending departments, but I think you have identified the key one: HRDC.

I will think more about specific kinds of gender disaggregated data that would be helpful, and if I could communicate with you about that, that would be great.

[The Chair, Liberal, Yasmin Ratansi]

Thank you very much, and thank you for being with us. I'm sure everybody appreciates it.

[Prof. Lisa Philipps]

Thank you very much.

[The Chair, Liberal, Yasmin Ratansi]

Professor Lahey, you're not off the hook, so we will continue with the questions.

Ms. Grewal, you have approximately one and a half minutes, if you want to utilize that.

[Nina Grewal, Conservative, Fleetwood—Port Kells, BC]

Sure, I would.

Thank you, Madam Chair. I would just like to continue with my question.

A number of countries, as all of us know, particularly the Commonwealth countries, have been using some form of gender budgeting since the mid to late 1990s. I assume this has given researchers an opportunity to assess the success of these endeavours.

Could you please tell us what impact gender budgeting has on gender equality in those countries?

[Prof. Kathleen Lahey]

That is a very important question. I think the best answer is to take a look at which countries have been doing the most thorough and committed gender budgeting and then look at the very complex indicators that the UN, the World Economic Forum, and many other organizations have used, which attempt to bring everything from qualitative measures of life as well as economic indicators into the calculation.

I think it is very predictable that most of the Nordic countries, which have taken gender budgeting extremely seriously for quite a long time, are in fact the countries that have been most productive in increasing their gender and general human levels of development and have pulled very far ahead of Canada.

I will just give you one example. Although I'm not sure, I think it's Norway that is now working on closing the last ten percentage points in the overall development of women as compared to men, because there is so much thoroughgoing equality on all indicators in that jurisdiction. What they are doing now is initiating a campaign trying to explain to men that it is their responsibility to take paternity leave, to take parental leave, so that the burden of unpaid work does not sit solely on the shoulders of women. This was the next most important strategy that was revealed by using very careful statistical analysis. Where are the bottlenecks in closing that gender gap?

We can look to the use in various countries to get guidance.

[The Chair, Liberal, Yasmin Ratansi]

Thank you.

Thank you, Ms. Grewal.

We now go to Madame Thaï Thi Lac.

[Ève-Mary Thaï Thi Lac, Bloc, Saint-Hyacinthe—Bagot, QC]

My question is for Ms. Lahey.

Could you explain to us why tax credits aren't an efficient way to offer social programs?

[Prof. Kathleen Lahey]

That's a very important question as well.

The simple answer is because you have the tax department running the program. If your goal is to deal with poverty, you do not want to put the tax department in charge of solving a problem of poverty. If your problem is inequality between men and women, you do not want to put the tax department in charge of solving that problem. Their job is to raise revenue.

The secondary consideration--in addition to putting responsibility for that where it belongs, which is with the Minister for the Status of Women--is that when you deliver social programs through a tax instrument, there will always be a significant sector of the society that cannot access those tax benefits or is afraid for some reason to file a tax return in order to get that poverty relief. There may be people who have irregularities in their personal histories. There may be people who are simply afraid of the authorities as part of their cultural heritage. The list goes on and on. So the decision to deliver any social programming through the vehicle of a tax credit is a decision to cold-bloodedly plan to exclude at least 5% or maybe 8% of the target recipients from the program.

[Ève-Mary Thaï Thi Lac, Bloc, Saint-Hyacinthe—Bagot, QC]

Thank you.

What indicators favouring the establishment of gender specificity are not taken into account in structural policies?

[Prof. Kathleen Lahey]

I think annex B, which was distributed to you, lists a number of tax measures that, if they were disaggregated by their impact on women and men, would help reveal the extent to which innocent-seeming tax provisions have a disparately negative impact on women. That's one set of examples to simply break out some of those tax measures.

[Nicole Demers, Bloc, Laval, QC]

May I ask you a question, Ms. Lahey?

The government currently does not have an obligation to submit existing programs to the rules of gender-based analysis. It does so only for new programs or those that are significantly altered.

Don't you think it would be important to start from scratch with all this and to ensure that all programs are subject to the criteria and specific characteristics of gender-based analysis to ensure that they take into account your concerns about tax credits and that they also take into account women's economic issues?

[Prof. Kathleen Lahey]

Yes.

Definitely any suggestion that, starting in 2008, any new measures should be scrutinized through a gender perspective is not good enough. What's already in place is doing the damage. That needs to be scrutinized first, I would say.

[Nicole Demers, Bloc, Laval, QC]

Thank you very much.