Finance Committee on Oct. 17th, 2006

Evidence of meeting #34 for Finance in the 39th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was housing.

A recording is available from Parliament.

On the agenda

Pre-budget consultations 2006

MPs speaking

Also speaking

John Murphy Chair, National Council of Welfare

Michel Rouleau President, Conseil canadien de la coopération

Mark Goldblatt President, Canadian Worker Co-operative Federation

Judy Cutler Director, Government and Media Relations, Canada's Association for the Fifty-Plus

Phil Upshall National Executive Director, Canadian Alliance on Mental Illness and Mental Health

Lu Ann Hill Executive Director, Aboriginal Institutes' Consortium

Gilles Séguin Board Member, Ontario Museum Association

William Gleberzon Associate Executive Director, Canadian Association of Retired Persons

Jeffrey Dale President and Chief Executive Officer, Ottawa Centre for Research and Innovation

Ken Elliott President, Co-operative Housing Federation of Canada

Margaret Eaton President, ABC CANADA Literacy Foundation

Jamie Golombek Chair, Taxation Working Group, Investment Funds Institute of Canada

Al Cormier Executive Director, Electric Mobility Canada, Canadian Courier and Logistics Association

Mike Tarr Chair, Board of Directors, Credit Union Central of Canada

12:55 p.m.

President, ABC CANADA Literacy Foundation

Margaret Eaton

We're speaking strictly about reading and writing, but what we found about literacy is that in fact you can lose literacy skills; someone who actually has a grade 12 diploma but is involved in a job like long-distance trucking and isn't using his literacy skills could actually lose those skills over time. If they lose that job, then they find that they have to upgrade to get another job that has a higher level of literacy. Literacy is a flexible and mobile thing; it's something you have to keep up and keep using.

12:55 p.m.

Conservative

Dean Del Mastro Conservative Peterborough, ON

Okay, thank you.

Mr. Golombek, one of the things you talked about was the capital gains exemption and the fact that it would be somewhat difficult to police. I didn't have time to read the entire brief. Are you advocating just an extension of a capital gains exemption up to a certain level, or are you calling for the complete termination of the entire capital gains tax?

12:55 p.m.

Chair, Taxation Working Group, Investment Funds Institute of Canada

Jamie Golombek

An end to capital gains tax would be an ideal scenario; given it would probably be too costly for the current federal government, maybe a limit could be put on it, as was the case a number of years ago. Maybe it's $100,000 or $200,000. You can do the math on whatever the right number is.

I think the concept you originally suggested in the election document--to just eliminate the tax on everyone's gains, or at least to defer it until they reinvested it within six months--is administratively very difficult to track.

12:55 p.m.

Conservative

Dean Del Mastro Conservative Peterborough, ON

I think the intent under the deferment was basically to recognize that people's risk tolerance changes over time, and to allow them to move money around by actually taking away the barriers that are currently leaving the funds stagnating.

12:55 p.m.

Chair, Taxation Working Group, Investment Funds Institute of Canada

Jamie Golombek

Yes, we find that. It's often referred to in behavioural finance as the capital gains lock-in effect. People are reluctant to sell an asset that may no longer be performing because of tax reasons, and from an asset allocation position it makes sense to maybe diversify into bonds and fixed income as someone gets a little older.

12:55 p.m.

Conservative

Dean Del Mastro Conservative Peterborough, ON

It's a big barrier to investment.

12:55 p.m.

Chair, Taxation Working Group, Investment Funds Institute of Canada

Jamie Golombek

Absolutely.

12:55 p.m.

Conservative

The Chair Conservative Brian Pallister

Thank you, Mr. Del Mastro.

Margaret, before I let you go I'll just tell you that as a former high school teacher one of my greatest and most satisfying memories was working with young people who were challenged in their reading ability, seeing the progress they were making, and following their progress years after. Of course, as all teachers do, I've taken some satisfaction in that. So I appreciate your commitment to what you're doing.

On behalf of our committee, thank you all very much for being here today.

We are adjourned.