Status of Women Committee on Nov. 28th, 2007

[The Chair, Liberal, Yasmin Ratansi]

Merci. Vous avez un minute.

Do you want to give it up? That's fine.

Ms. Mathyssen, you have five minutes.

[Irene Mathyssen, NDP, London—Fanshawe, ON]

Thank you, Madam Chair.

Professor Lahey, I recognize that you have great expertise in this area. In your opinion, what should the goals of gender budgeting be?

[Prof. Kathleen Lahey]

Is your question what is the overall social economic outcome, or are you asking more concretely what pieces of paper should be generated?

[Irene Mathyssen, NDP, London—Fanshawe, ON]

I'm asking, more specifically, about the socio-economic goals. What should we be looking to achieve?

[Prof. Kathleen Lahey]

Ideally--well, it shouldn't be ideally--I think Canada has been committed for a long time on paper to achieving the full social economic equality of women, and I think until all of those differences are eradicated, gender budgeting should continue to look at, quantify, analyze, and eliminate every single one of them. There is no reason to single out any one aspect of Canadian society and say “This should be immune”. The differences between women and men are too pervasive, they're too interlinked, and they're too mutually reinforcing to ever be able to be taken apart to leave some in place.

[Irene Mathyssen, NDP, London—Fanshawe, ON]

That leads into what actually happens. In Budget 2007 the consultations related specifically to women were held with the Canadian Nurses Association, the Native Women's Association of Canada, and REAL Women of Canada. Certainly the CNA and the Native Women's Association are significant groups. Should the government expand budget consultations beyond that, with more women's groups, and if so, with whom?

[Prof. Kathleen Lahey]

I think at this point budget consultations should be held with as many women's groups as possible and with as many pro-poverty groups as possible as well. We should not focus only on gender, because one of the big interfaces is poverty. I think that any group that feels negatively affected by the way the fiscal functioning in Canada is conducted should be allowed to make submissions. I think constricting and attempting to stage-manage the testimony that ends up in front of the Standing Committee on Finance ensures that the full picture is not going to get out.

[Irene Mathyssen, NDP, London—Fanshawe, ON]

The Department of Finance identifies one of the challenges of carrying out GBA as being that it is very often difficult to determine which segment of the population will benefit from specific changes. Can this be overcome? I recognize it's a challenge, but can it be overcome?

[Prof. Kathleen Lahey]

With respect, I believe that with the extraordinarily high level of understanding available to the Canadian government about gender-based analysis, it is not possible that it is difficult to identify who receives what benefits. Canada was one of the architects of gender-based analysis at the very outset. It originated in CIDA. It was exported and adopted by the ILO. The UN adopted it. The expertise is not only here in Canada, but it's very much a product of Canada's very rich history of respect for diversity and support for the less fortunate. So, with respect, I do not see how that is possible.

[Irene Mathyssen, NDP, London—Fanshawe, ON]

You mean we should stop making excuses and get on with it.

[Prof. Kathleen Lahey]

Absolutely.

[The Chair, Liberal, Yasmin Ratansi]

You have one more minute.

[Irene Mathyssen, NDP, London—Fanshawe, ON]

Okay. I'll be very quick and I'll be very political.

Are budgets inherently political?

[Prof. Kathleen Lahey]

Yes, budgets are inherently political. I'll give you the example of the gender budget in Australia. It started out in the early 1980s with the Labour government. It was enacted at that time and was the product of the hard work of Yuri Grbich and a group of tax policy experts there who were committed to bringing gender budgeting out into the open.

Gender budgeting was carried on in Australia for quite a long period of time. If you look at the 2007 Australian gender budget, with respect, it reads like a campaign speech. It contains no analytic material; it contains statements about what we are doing for women, and political slogans find their way in there. There is no data. It is not an evidence-based account. It is a document that any fiscal expert would think was perhaps written for Political Science 101.

[The Chair, Liberal, Yasmin Ratansi]

Thank you, Ms. Mathyssen.

We now go to Ms. Davidson.

[Patricia Davidson, Conservative, Sarnia—Lambton, ON]

Thanks very much, Madam Chair, and thanks very much, Professor Lahey, for being here and imparting your knowledge to us today. It has certainly been interesting. I think what this committee has decided we're going to study is a huge undertaking; when we put this idea forward and agreed that it was something we were going to do, I think we all knew that. I think hearing your presentation and the presentation from Professor Philipps today has brought that message back to us loud and clear. It is a huge undertaking.

I think the purpose of this meeting today was to help us work out the parameters of how such a study could be performed and be successful. We know several other countries have entered into this gender budgeting process. I think Australia was the first one--and you've referred to Australia a couple of times in your comments--but there have also been several others, such as Sweden, Finland, and those areas, as well as Africa, South Africa, India, and others. What isn't clear to me is how we start this process. It has been stated that the finance department is critical to it. HRSDC has been mentioned, and the justice department has been mentioned, but what is the first step we do to start this process?

Further to that, have these other countries that have started the initiatives continued on with them, and have they been successful? A question was asked about measuring and determining whether or not they were successful. Has anybody gone that far? Have they measured their success, and if so, how have they done that?

[Prof. Kathleen Lahey]

I have not seen a meta-study that correlates budgetary responses with movement in the global indicators like the human development index, the gender development index, or anything, but it's very clear just from looking at the correlations that such a study would produce the evidence you are looking for. I have no doubt about that.

The other aspect of that, of course, is that if I can sit down with the limited micro-simulation software that Statistics Canada is willing to let the public have access to and pinpoint exactly which groups, at what ages, at what income levels, gain or lose if we change a particular provision--a spending provision or a tax provision--by a few dollars, a few hundred dollars, or whatever, and look at where they fall and who the winners and losers are, then you know the Department of Finance can do that, probably even on a bad day. So the information is there. Canada has the expertise. Statistics Canada and the Department of Finance together have the technical capability to do that.

Being able to continue is very much a function of political will, and I believe that is what happened in Australia and why its gender budgeting has become more of a symbolic gesture, as compared with some of the Nordic countries.

The real question is how to do this. Let me just go back to talk about the tax expenditure budget, which is a huge undertaking that was mounted by the Department of Finance in a very short period of time in the late 1970s, when it was realized that a lot of spending measures were disguised as tax measures and were escaping the rigours of the budgetary process. A team was struck within the Department of Finance and it was charged to develop a tax expenditure budget and come up with a justification for why it identified these items. It was done in a very short period of time, and it has continued ever since then.

So the ability is there. It seems like a huge undertaking, but that's partly because it's a huge undertaking to even make it okay in the budgetary process to talk about gender issues. There's almost more of a social obstacle to overcome rather than a technical obstacle.

When it comes to implementing gender budgeting, however, I would say that it should be a joint effort of Status of Women Canada, the Department of Finance, and an outside advisory group of experts, an all-party panel, that can bring perhaps through changes in government some moderating effect that could be described as academic objectivity, although we all understand that not everyone is going to agree as to who's really objective. I think some structure like that would get it going.

If this committee felt it was too hard to take on the whole thing at once, I would say do an in-depth study of income splitting of retirement income. I have micro-simulated what would happen if income splitting were carried out for all incomes for all taxpayers in Canada, and the effects would be absolutely devastating--annex A, the curve, would become much more dramatic in a year.

[Patricia Davidson, Conservative, Sarnia—Lambton, ON]

Thank you.

[The Chair, Liberal, Yasmin Ratansi]

Thank you.

Ms. Neville.

[Anita Neville, Liberal, Winnipeg South Centre, MB]

Thank you very much for being here today.

I just want to note that your study was done through the funding of the Status of Women, which, as we know, is no more.

Where you left off is where I was going to go, which was income splitting. I noticed when Ms. Philipps was speaking, you were nodding. I'd be interested in seeing that projection you made if it were extended, if you are in a position to share it. I think the committee would find that very useful and important.

I wonder if you could expand on three areas, and I know we're short of time. They are income splitting, the universal child care allowance, which you speak to here, and the other one that we were very surprised to note, and maybe it was our own ignorance, that low-income women who receive the national child benefit have to repay 25% of any deductions they claim for child care expenses. Those are the three areas I'd like to ask you to focus on, please.

[Prof. Kathleen Lahey]

I think the first one you mentioned is income splitting.

Income splitting as it has been introduced with respect to retirement income is an attempt to imitate the United States' method of income splitting, which is a system of reporting income that was deliberately enacted after World War II in order to stop the states from enacting community property laws. This was done because a number of people in the Treasury department in the United States government became very upset at the sight of all of the state community property laws that were giving women 50% ownership in all family property and all family income. This was unheard of.

Income splitting was deliberately adopted in order to remove the tax incentive for politically seeking community of property, and a number of states immediately repealed their community property laws. So the laws that applied to Irene Murdoch prevail in most of the United States, supported by income splitting.

I would say that income splitting is something that all women in Canada should come to understand in a lot more detail.

The universal child care allowance is a good example of a direct expenditure to individuals that has no gender analysis associated with it. The problem is that it's not enough money—and the gender analysis on a statistical level would show this, and people have done this—to enable a low-income person to overcome the fiscal barriers to taking on enough paid work to be able to exist. But for people who can afford to live on one high income, it is essentially a gift for which no accounting need be made. It's a very expensive kind of gift to make to high-income individuals in a country where poverty is still so rampant.

The various clawbacks that pertain to the national child benefit are the result of allowing this particular provision to be administered through income tax legislation. This is the way tax policy people think, to try to make sure that no one gets anything more than what they are entitled to. But it has the effect of putting additional barriers to entering into paid work in the road of those who have responsibility for the care of children and also live on very low incomes.

[Anita Neville, Liberal, Winnipeg South Centre, MB]

What would your recommendations be on that?

[Prof. Kathleen Lahey]

Repeal it, repeal it, repeal it—all three. They're all gender discriminatory. They all have negative effects on women.

Income splitting in particular is increasingly being repealed in every jurisdiction that has the political ability to take a look at it. In Germany right now, the government is spending something like two billion euros a year on income splitting, most of which goes to the high middle class and upper classes. It's not doing poor people any good at all.

So what's the answer? Repeal it.

[Anita Neville, Liberal, Winnipeg South Centre, MB]

Thank you.

[The Chair, Liberal, Yasmin Ratansi]

Thank you.

Ms. Grewal.