Finance Committee on Oct. 26th, 2006

[Diane Ablonczy, Conservative, Calgary Nose Hill, AB]

Do they give directly to cities, though?

[Cecil Bradley]

Well, that's a mechanical question. The money can go to community groups that provide immigrant settlement services. The issue is that we have a problem in the major cities where immigrants are having a difficult time integrating into the community, getting the language training they need, getting the job integration services, and so on and so forth. And in most instances, the problem is a lack of money. If the federal government can be a more generous partner with community groups or city agencies in providing immigrant settlement programs, then we're going to have a smoother process for new Canadians.

[The Chair, Conservative, Brian Pallister]

Mr. Bradley, I must cut you off there.

Madam Ablonczy's time has elapsed, and it's Judy Wasylycia-Leis's opportunity to ask questions now.

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

Thank you, Mr. Chairperson, and thanks to all of you for all your presentations.

Going very quickly, starting with Jill and John, you've presented a very innovative proposal for modernizing the income security system. I think it would be important for you to tell this committee who you brought together to arrive at this proposal, how you involved business in the development of the proposal, and why business as well as community organizations think it's a cost-effective way to go.

[Jill Black]

The people involved from the business side are listed in our report. They included, though, very senior people. We're talking about two senior economists from two of the major banks, Don Drummond and Warren Jestin, and people like the chairman of Noranda, the CEO of KPMG--a number of people--as well as people from all of the other sectors I mentioned when I spoke.

I think that's important. The people who were involved in some cases were involved on the part of their organizations, but in a number of cases they were involved because they personally care about the issues and felt they were important.

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

How could we advance this idea, because it is so major? Is there a way to do it on a pilot basis, or is there a way for the government to move on it on a phased-in basis?

[John Stapleton]

Well, the proposals we have for a working income tax benefit are already on the books. They were in the last economic statement of the Liberal government as well as carried over into the budget of Mr. Flaherty. So that's a very important entity to support.

We also talked about refundable tax credits. We have a number of boutique credits right now, the single-purpose credits like the GST credit and various different refundable credits in Ontario. We think we need to bring all of those credits together in a way that is really much more transparent. It would be very easy for work to begin to bring those credits together and to support a working income tax benefit that works in harmony with the refundable credits.

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

Thank you very much.

Moving on, Tanya, Rick, and Rainer, is it true that Canada is one of the few industrialized countries in the world that doesn't have a national housing policy? What's the impact of that?

Secondly, with respect to SCPI funding, which we were worried about this summer--it was put back--from the Treasury Board website it now looks like this government may be eliminating 99% of the program, going from $133 million down to $2 million.

What would be the impact of the loss of SCPI, or most of SCPI, to the work you're doing?

[Tanya Gulliver]

Thank you.

Yes, we are one of the only countries without a national housing policy, which means people die on our streets every day. Two to four people die every week in the city of Toronto as a direct result of homelessness. There are millions of people who are precariously housed and at risk of becoming homeless at any time.

In terms of SCPI, some people would call the services it has provided a band-aid, but I would call them a lifesaver. It's more like a compress than a band-aid, because there's no other place for people to go. We would rather see a national housing strategy and not need to have millions of dollars going into services that are just making life a little more comfortable for people and keeping them warm. But 9,000 beds in transitional housing were created in the first few years of the program. Programs that were funded included psychosocial services, emergency health addiction services, education, and life skills. Those are things that will help people maintain housing once they're able to achieve it.

Dri, for example, is a former tent city resident who has now been housed for four years as a direct result of a rent supplement program. Those are the kinds of things that are really important. We spend $5,000 easily to keep a family in a shelter for a month. We spend $1,000 to $2,000 to keep a single person in a shelter for a month. A few hundred dollars in a rent supplement program or providing social housing would eliminate those high costs.

[The Chair, Conservative, Brian Pallister]

Dri, there are just a few seconds left. Go ahead, please.

[Rainer Driemeyer]

It's cheaper to do it the right way, and it saves lives. We are losing I don't know how many people across this country because of homelessness. The SCPI is important.

[The Chair, Conservative, Brian Pallister]

Thank you very much.

We continue now with Mr. McKay, for four minutes, sir.

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

Thank you, sir.

Sorry to be so brief about this, but Mr. Toycen, thank you for the endorsement on Bill C-293. We were before the foreign affairs committee on Tuesday, and it was well supported by that committee. So again, thank you for your hard work.

Mr. Bradley, I'm glad to see that the Martin-McGuinty agreement on corporate tax collections has been fulfilled by this government. Let me ask you a particular question.

As you know, the TTC is a pretty important mover of people around here, and its capital stock leaves something to be desired at times. The government's proposal is that transit passes somehow or another will solve all those problems. So if your choice was between capital improvements for the TTC--be it buses, subways, whatever--versus a transit pass, and you had to choose, what would you choose?

[Cecil Bradley]

I'd hate to be put in the position of either/or, because I think we have to work on both sides of the market. A transit pass encourages people to give transit a second look. It lowers the net after-tax cost of transit and makes it a more attractive alternative to the private automobile or other options that people have, and to that extent it's a good idea.

Where the difficulty comes, at least in some cities in Canada, is that the supply of transit services has been dramatically constrained over the last decade. We simply haven't been building system capacity, and I think that is particularly true in Toronto. We desperately need really suprisingly large amounts of money in order to refit or retrofit the capital that we have installed, and we certainly need large amounts of money to expand the system capacity so that we can serve new passengers that hopefully tax credits will bring to us.

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

Thank you. I'm a big supporter of the Scarborough subway, as you well know, and it's $100 million per kilometre. No amount of transit passes is going to cover that $100 million.

To these other folks here, in the very few seconds I have left, I'd like to address WITB, the working income tax benefit. It is a great idea, but I can't get my head around how you're going to do it so that the folks on the low end of the scale, working from support to income, are actually going to get that benefit. In whatever time I have left--three seconds--can you encapsulate that idea and how it would work?

[The Chair, Conservative, Brian Pallister]

You have a minute and a half.

[John Stapleton]

It would be a refundable credit that you would put through the tax system and through the income tax return. In fact, when somebody reported their employment income and that employment income was at a certain level, they would simply be paid a cheque, whether on a monthly basis or some other regimen, in the same way as the national child benefit supplement is now paid to low-income people.

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

What would happen to the benefit I received, if I'm on welfare assistance or some other form of assistance? That's the big issue. There's a transition point between employment and unemployment, where it's almost better to be unemployed. Help me through that transition point.

[John Stapleton]

That's the most important part. If you take a province like Ontario where there's a 50% recovery rate on social assistance, when people start to earn and they reach a certain threshold amount, which we have suggested is about 600 hours a year, they would start to receive, through their income tax return, an ascending amount of funds. That's exactly how the working income tax benefit is set up. So in the subsequent year you would start to receive that income.

Some people who are on social assistance and working at the same time may be able to receive a small amount of money from a working income tax benefit, while those who are completely off social assistance would be able to get the full amount, over a range of income.

[The Chair, Conservative, Brian Pallister]

Thank you, sir.

We'll move to Dean Del Mastro now, for four minutes.

[Dean Del Mastro, Conservative, Peterborough, ON]

Thank you, Mr. Chair.

Mr. Davis, I'm actually quite happy to hear that you're cranky here this morning. It shows me that you're passionate about what you do, and that means a lot, as far as I'm concerned, for somebody who is in a public service capacity.

You mentioned—and this is less a question about the GST and more a question about the role you were playing last night—$84 million was cut from the budget last night. Did you have an overall budget reduction, or did you have increases in expenditures, or was it a combination of both?

[Bruce Davis]

The gross budget for this year is larger than the gross budget for last year. However, when the province gives you additional money, they typically earmark it for very specific things such as a new program, a new initiative, or whatever. The wiggle room or the discretionary budget we have after certain priority programs are paid for is actually shrinking. As our heating bill goes up, for example, we don't get any more money for the heating bill.

We're being squeezed on some of these non-aligned expenditures, so we're having to cut. For example, we're taking ESL funding from children who are new to Canada and we're using that ESL funding to pay our heating bill. So last night we had to make some tough choices. But the gross is actually going up, based mostly on salary increases, 2% increases per year for the next three years. That money has come from local property taxpayers.

Your piece of the puzzle doesn't solve all the world's problems, but if we can plug that into some things that children need...or we could be creative--and I'm speaking to a member of the government side here. We could be creative, and if you wanted to give us that GST rebate and earmark it for energy efficiency projects or to plug it back into some neat, innovative things, we would entertain that.

There are lots of ways of doing this in a smart way so that we can provide an ongoing dividend for years to come.

[Dean Del Mastro, Conservative, Peterborough, ON]

Thank you. I appreciate that.

As a sidebar, hospitals also pay GST. I know that my hospital in Peterborough saved $64,000 due to the reduction in the GST that Mr. McCallum is not in favour of. It was a form of direct funding to my hospital.

[Bruce Davis]

Your Peterborough school board came out two weeks ago endorsing this GST cut. I don't know if they sent you the letter yet.

[Dean Del Mastro, Conservative, Peterborough, ON]

They're good friends of mine.

Mr. Beaucage, is the initiative for aboriginal housing on-reserve and off-reserve of $750 million over two years--there are also some social transfers in that money--a step in the right direction?