Finance Committee on Oct. 26th, 2006

[Daniel Braniff]

Thank you for the question.

First of all, it follows that if you spend more time in the workforce, you've had more time to save and you have learned how to save, and if you've worked hard, it follows that you might have accumulated some degree of wealth. I don't think we should penalize people for doing that.

Secondly, I think the issue as to the seniors.... If you look at averages--I'm not qualified to challenge your figures--it doesn't sound like the group I'm representing. If you look at the nineteen organizations, they aren't the upper echelons of our society in terms of wealth. They are people who have worked hard, they've worked overtime, they've saved as much as they can, and they're trying to survive and be independent and self-sufficient. I think we should encourage that in our society, and I think the overall thrust of this section is to make Canada more competitive. Certainly we don't want to penalize people who have in fact made their contribution to society.

As far as the rest of society is concerned, as I mentioned, in our group, and I think represented here...I doubt if there's a person here who doesn't anticipate the idea of being able to retire and fulfil their life dreams with some degree of dignity and independence. As I mentioned, the persons who suffer the most are women. I'd refer you to the November issue of the CARP magazine, which has an article about the widow's tax, because the accumulated penalty of these taxes in the long run falls on the woman in a family because she lives longer. It's not just to accumulate more wealth. She lives longer and she's the one who might be left alone. Maybe she had a husband who had a pension that died with him. She's the one who has to downsize, move into smaller quarters in order to survive, or be dependent.

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

Unfortunately, I have very little time. I will have to talk to you afterwards on several of those points. I have to keep moving here.

To Mr. Weinfeld, the Conservative Party, in its platform, promised you your first ask here, which is deferral of capital gains, and they have basically abandoned that because it's administratively impossible. They ran into the realities of the Department of Finance, who basically told the Minister of Finance that this is a crazy idea and it just won't fly. So would an alternative idea, say something in the order of a $100,000 lifetime exemption from capital gains, be an idea that would be a second choice for you?

[Calvin Weinfeld]

I'm not sure that benefits either side of the fence. It's a pretty minimal amount of money to the individual, and it's a significant loss to the government, I would think.

I think the Canadian Real Estate Association--and correct me if I'm wrong--addressed this to a small extent in their proposals. But I noticed when I was reading through them that it's not necessarily an administrative issue, because people have to account for it in their own taxes. It's already a responsibility, and they're breaking a law if they don't come clean about it.

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

The issue is that you're going to be chasing this capital gain around and around and around, and there are going to be all kinds of weaves and dodges and things of that nature, making it difficult.

I agree with your RRAP issue. I think that's a good program that should be extended.

How much time do I have left?

[The Chair, Conservative, Brian Pallister]

None. Thank you very much, Mr. McKay.

We'll continue with Mr. Dykstra.

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

Thank you, Mr. Chair.

The tough part for you folks, as well as for us, is that almost every one of your organizations has made presentations in the last few weeks, so we're tapping each other on the shoulder trying to determine how we can make sure we ask some questions that are not going to repeat what we've already done. We appreciate the work and effort that have been put into them.

I did have a question, Calvin, with regard to your point about the deferral of capital gains. In a way, that already happens with respect to...you can depreciate the property over a period of time, and when you sell it, pay the deferral on that. How would this pay off the deferral of the depreciation? How would your recommendation be different from what currently exists?

[Calvin Weinfeld]

I'm not sure I understand the existing principle. I deal with a lot of smaller investors. This category affects an enormous number of people who are generally not thought to be in this category. We're talking about average Canadians who have managed to muster enough to get some investment, thanks to things like RRSP involvement, which may give us--

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

That's exactly whom I'm referring to. Your point is clear. I'm not trying to cut you off, but we don't have a lot of time, so you can fire away at it.

Currently, on smaller apartment buildings--for example, duplexes and triplexes--you can depreciate the property in terms of the amount of money they're worth from one year to the next, based on the capital depreciation.

I wonder how that would be different from what you're suggesting in terms of the deferral.

[Calvin Weinfeld]

I'm not sure I understand the accounting side of this enough to be able to give you an intelligent answer.

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

Fair enough.

Annalisa, one of the things that we committed to in our last budget was the $200 million that we've invested in university-based research. You talked a lot about the importance of that, spending more money in that area. We have committed $200 million over the next two years to do that.

I'm wondering how you work with universities in terms of research, not specifically your company but within the industry.

[Annalisa King]

There are a couple of things. One is that we appreciate the fact that you've committed this money.

Where we think there can be some improvement is rather than putting it into the hands of universities that may duplicate their approaches in terms of charging after one specific thing, diversify it into centres of excellence. One would be animal health; one would be food safety at various universities or various government facilities across the nation that allow us to be more efficient with that spending, as opposed to some of the redundancy that exists between federal and provincial desires to improve. That would be one area. It's not actually a money issue; it's not putting more money against it.

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

Yes, I was going to say that.

[Annalisa King]

It's creating a little bit more focus in terms of where that money goes and coordination between what the federal and the provincial governments are providing. Sometimes you're laying money on top of each other. In some cases, we could see it going to different areas or, for that matter, assigning certain areas of the country as certain centres of excellence.

Saskatoon has a unique centre of excellence around veterinary science. Manitoba is great with grains.

Targeting the funding as opposed to putting more....

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

Fair enough.

Elizabeth, I'm going to ask you a bit of a tough question. I know I don't have a lot of time left, but I do want to get this in.

One of the folks sitting beside you is venture capital and one is obviously business. Your focus is in terms of delivering child care.

One of your comments struck me in terms of making sure there wasn't a cost or a budget amount attached to what you would like to see happen. What do you say to the two people sitting beside you in terms of the investment they're going to have to make to be able to get to the level you are suggesting? I'm putting aside whether or not we agree or disagree on the delivery of child care. What do you say to them when it comes to having to cut into what they're trying to do in terms of providing jobs and making sure that people are working? One of the things you pointed out was equality to women, and obviously the busier business is, the more opportunity women are going to have to get into the job force and stay in the job force and improve.

[Elizabeth Ablett]

I would say that what we're asking for doesn't in fact cut into anyone else's needs or interests. I would say that it actually complements it. It has been shown, and we can go through some of the research—I'm afraid I don't have it memorized—that an investment in children and early learning, and a quality environment for these children, actually is an investment that benefits across the sector, as I said, through labour force attachment and through allowing women and parents to participate more actively in the economy and in these people's businesses. I would say that it doesn't cut into anyone else's interests by any means. It in fact contributes to and complements it.

[The Chair, Conservative, Brian Pallister]

Thanks, Mr. Dykstra.

Just as a follow-up to Mr. Dykstra's question, one of the initiatives the government has spoken about is an initiative to partner with businesses in the development of quality child care spaces. I'm just curious. Annalisa, perhaps you could outline if that's something your company does engage in now, or is that something you might be interested in engaging in?

The reason I ask the question is because we've heard from several other presenters on the day care topic who have been quite pessimistic about the potential for that working, and I want to know what potential you see, if any, in that particular direction.

[Annalisa King]

We would be interested in something like that. We cover Canada. We have over 120 manufacturing facilities, many sales offices, and so on. So one-size-fits-all wouldn't necessarily work for us.

We do see a significant number of women in the workforce, particularly in the processing areas, where the incomes aren't as high. Something like that would be a benefit, and it certainly would help with our labour strategy and some of the issues we have. Again, particularly in western Canada, but in Ontario as well, it's hard to get workers within the processing facilities. Those are the types of things that provide added value that we would partner with government on, quite frankly. It wouldn't be something that would be solely provided by government. But those are the types of things that allow us to combine our efforts, get more labour into the facilities, and make them happier. It would work.

[The Chair, Conservative, Brian Pallister]

All right. Thank you very much.

Judy Wasylycia-Leis.

[Judy Wasylycia-Leis, NDP, Winnipeg North, MB]

Thank you very much, Mr. Chairperson.

Thanks to all of you for your presentations.

While we're on the topic of child care, why don't we stay on this for a moment? I think one of the concerns we've heard about the government proposal investing in child care through cooperation with businesses is not opposition to the idea but the fact that the numbers are so small that it's not going to make up for the loss of the programs that were in the works with each provincial government. I think we need to just hear a little bit from Elizabeth in terms of the need, and perhaps responding as well to Rick Dykstra's question about the fact that it helps create a competitive advantage for Canadian business and is a real investment for the future.

[Elizabeth Ablett]

I would say on the federal child care spaces initiative—and we know there are large employers, both public and private, who might have the capacity or interest in investing their own resources in creating child care spaces—there are two major problems with this. One is that it really cuts out a whole swath of communities across the country, particularly, I would say, in Ontario, where there are not large employers, where you're really cutting out smaller employers. For them, although they would love to participate and would love to create child care spaces, the cost of creating that space and operating that space over the long term in a stable, high-quality way is just far too high.

It has been tried in Ontario before, under the Harris government, and, quite frankly, there wasn't very much uptake. There were some large corporations and public employers who did this; however, when it came down to it, a lot of them didn't follow through. It was truly unfortunate.

So the first issue really is on the uptake, the interest, and the capacity to invest in this over the long term.

The second issue is that although it's great--I'm very pleased to hear that Maple Leaf Foods and other large public and private employers would be interested in creating these spaces in their workplaces--the fact is that it takes it out of the community. One of the benefits of the system we advocate for, this non-profit, universally accessible system, is that it really ties in families with their communities, it increases their involvement in communities, and it allows the child care services and programs to really be customized to the community's needs--not just the workforce's needs, but the community's needs. I think that's a huge factor.

So, yes, absolutely, I applaud the idea of employers being willing and interested, but I think there's a greater need than that, and that comes from the communities.

[Judy Wasylycia-Leis, NDP, Winnipeg North, MB]

Thank you.

How much time do I have, Mr. Chairperson?

[The Chair, Conservative, Brian Pallister]

You have three minutes, Madam.

[Judy Wasylycia-Leis, NDP, Winnipeg North, MB]

Oh good.

I just wanted to say one more thing to Elizabeth. I've often said to my colleagues that if we could organize a field trip to some of the day cares you represent, it might help them to understand that we're not talking about, as they sometimes think, institutional child care places that aren't creative places of learning and development. I just thought it might be useful on that score for you to circulate the photos of children that you've brought, just so everyone can get a good picture of happy kids.

[Elizabeth Ablett]

Absolutely, happy kids.

[Judy Wasylycia-Leis, NDP, Winnipeg North, MB]

Let me go to Michael for a moment.

First of all, Michael, I want to thank you. Back in the spring, when our committee was considering this budget process, you were kind enough to submit a paper called “Budget-Making: From Public Consultation to Citizen Deliberation”. That was circulated to our committee and it was part of our discussions.

As you can see, we probably haven't really reflected a lot of your ideas. It's hard to change this process because we are sort of constricted in terms of time, in terms of money, and I think in terms of ideas.

I'm just wondering, now that you've sat through a bit of it.... First of all, I'd like you to submit again, for this coming year, if you would. Secondly, based on what we have to do in a certain period of time, what could we do to change this process to make it more democratic?