Finance Committee on Oct. 17th, 2006

[Jamie Golombek]

The idea of a tax-free savings plan is that it would allow anyone to contribute to the plan. Of course, the investments in that plan could be far-reaching. For simplicity sake, we would say all the normal investments we would allow in an RRSP, which are detailed extensively in the current Income Tax Act. They avoid things like putting paintings, valuable cars, and vintage coins in there. Marketable securities, mutual funds—

[John McKay, Liberal, Scarborough—Guildwood, ON]

So it would look a lot like an RRSP.

[Jamie Golombek]

It would be almost identical, yes.

[John McKay, Liberal, Scarborough—Guildwood, ON]

No deduction going in, and no income on the way out.

[Jamie Golombek]

No income on the way out, that's right.

[John McKay, Liberal, Scarborough—Guildwood, ON]

Mr. McCallum asked you a question about the take-up of RESPs for low-income folks, and I guess I'm not as optimistic as you are with respect to low-income people picking up on a plan like this.

I'm glad to see on item number two that you noticed the Conservative proposal in the campaign of this cycling around the capital gain is just administratively impossible. I think it's a better idea, and I don't know whether it's a good idea, but it's a better idea to just create a lifetime exemption. I think that's probably administratively a lot simpler.

I agree with you on increasing the limit on the RRIF age. I think 73 is a little aggressive; restoring it to 71 would make some more sense.

I have a question with respect to your fourth proposal, which is the GIS clawback. I understand it from the GIS recipient, but on the other hand it's difficult for me to understand how you would take a chunk of cash that a person has saved over a lifetime in an RRSP, which is essentially tax-postponed money, and then when it comes to being withdrawn it effectively becomes tax-exempt money.

[Jeffrey Dale]

Right now under the SR&ED program if you are a Canadian-controlled private corporation and you make your claim for your SR&ED credit, the amount of your credit is refundable. So you're correct, a cheque is written back to you for that.

Our proposal was to try to take a look at all the other thirteen proposals that have been made to you, and one of the common issues is refundability. So how do you make it refundable for all SR&ED claimants and research performers? So if they would make a claim, and it would have to be on a go-forward basis that you would do this, they would make their claim as they all do now for the SR&ED amount and instead of it just being accumulated into a credit pool, from now on that would be available to be a refundable credit from CRA, as it is today for CCPCs.

[The Chair, Conservative, Brian Pallister]

You have four minutes, Mr. St-Cyr.

[Thierry St-Cyr, Bloc, Jeanne-Le Ber, QC]

Thank you very much, Mr. Chairman.

Thank you for joining us and for participating in these consultations.

I have a question for Mr. Elliott regarding cooperative and affordable social housing. I tend to agree that investment is needed to improve the quality and quantity of affordable housing units in our communities.

Are there other options that we should be considering? Has your organization thought about other initiatives that the government could pursue to assist people in need of housing?

What happens when the government, a Crown corporation or a state-owned company disposes of public lands? In my riding, for example, the Canada Post Corporation is selling off a large tract of surplus land.

The land will be sold to the highest bidder. Generally speaking, the party that can afford to pay top dollar will have the resources to build luxury condos on the site. There is no incentive for people to build housing cooperatives. Could the government promote the construction of social housing by making this land available or by selling it off at a lower price to housing cooperatives?

[Ken Elliott]

Certainly cooperative housing is always looking for land we can build housing on. We would welcome that.

[Thierry St-Cyr, Bloc, Jeanne-Le Ber, QC]

I'd like to know if this happens often.

Another problem encountered by groups and individuals wanting to build a housing cooperative is soil contamination. This is a common problem in low-income working-class neighbourhoods. Even if the funds can be found to purchase the land and build the cooperative, there simply isn't any money for soil decontamination. To all intents and purposes, these projects cannot get off the ground.

Is this a common problem? If it is, the federal government could help cover the cost of decontaminating the soil or, at the very least, clean up the soil before a project gets under way.

[Ken Elliott]

I think any time a housing co-op is built, we pay very close attention to the condition of the environment where we're planning on building. I don't think contamination is restricted to your riding. I think it's a fact of life across Canada, and we have to be very careful about what we do and how we do it. I don't think this body would be responsible for doing the environmental cleanup of a particular area unless it was on federal land, but certainly it's always a concern. When we build housing co-ops or any type of social housing, we're very careful about the environment where we build.

[The Chair, Conservative, Brian Pallister]

Thank you, Mr. Elliott.

We'll continue with Mr. Dykstra now, for four minutes.

[Rick Dykstra, Conservative, St. Catharines, ON]

Thank you, Mr. Chair.

I have three folks I would like to speak to, so I would ask that you be quick. I would much appreciate it.

Mr. Elliott, one of the comments we heard from Mr. McCallum asked you a very unfair and leading question, I think, in the sense of what this government hasn't committed to social housing. In fact it has, whether it is aboriginal reserve housing or off-reserve housing. Also the government has invested $800 million into social housing on a per-capita basis to the provinces. In fact, I think you mentioned you're from Newfoundland, which will receive over $20 million of that funding.

I just wanted to hear from you that the commitment this government has made to social housing in this country is a pretty good one.

[Ken Elliott]

There's no question we appreciate the fact that this government fulfilled the obligations that were made of $1.4 billion. There is no question we're pleased with that. However, most of that money is still sitting in trust funds, and we would like to ensure that the government continues to--

[Rick Dykstra, Conservative, St. Catharines, ON]

Let me just point out that the reason it's in a third-party trust fund is to ensure it's actually spent.

[Ken Elliott]

True.

[Rick Dykstra, Conservative, St. Catharines, ON]

Thanks.

I also wanted to follow up.... And it's too bad Ms. Wasylycia-Leis isn't here, because she was talking about the person in Manitoba who was working the phone on the educational issue. The organization she worked for had a help line, a LEARN line. Last year it received 333 calls, which is less than one a day, and one-third of those who called were people with a grade 12 education or more who called the wrong place. So I don't know if that's a great example of success. It's a bit, but it's a bigger story than was indicated.

Ms. Eaton, I wish I could ask you a couple of questions, but I'm hoping to get a little bit more detail about your foundation and how your funding is received, how it's allocated, and the benefits derived. I'd really appreciate getting that.

Mr. Cormier, one of the questions I had for you related directly to the examples you highlighted. Could you expand briefly on the success of one of them--I think you mentioned Purolator.

[Al Cormier]

Yes, Purolator already has about 15 hybrid electric vehicles in its fleet, realizing fuel savings in the order of 40% to 50%. They have placed an order for a larger quantity.

That's typical of fuel savings in hybrid electric vehicles in commercial and personal use.

[Rick Dykstra, Conservative, St. Catharines, ON]

The previous government spent hundreds of millions of dollars on hydrogen power with really no tangible results. One of the things you talk about is a different technology. Could you explain how we could make sure that didn't happen again, and get some immediate positive results from the three-year program?

[Al Cormier]

The hybrid electric technology is available now and is already in use in private vehicles. We were looking for greater use in commercial vehicles.

The hydrogen technology, when it comes about, which may be years away, will need the hybrid electric drive we're putting into our vehicles, so it will go hand-in-hand with hydrogen fuel cells or other fuel cells, when they come about.

But we're ready to go now. The industry is there. It's been tested and it's proven and the results are quantifiable right now.

[Rick Dykstra, Conservative, St. Catharines, ON]

Thank you.

[The Chair, Conservative, Brian Pallister]

Thank you, Mr. Cormier and Mr. Dykstra.

We'll continue with Mr. Savage now.

[Michael Savage, Liberal, Dartmouth—Cole Harbour, NS]

Thank you.

First of all, Mr. Cormier, you mentioned that the subsidy or the credit you're looking for would amount to $20,000 per vehicle.

[Al Cormier]

On average.