Finance Committee on Oct. 26th, 2006

[Deputy Grand Chief Alvin Fiddler]

I need more than thirty seconds, but I'll try.

I don't know the best way to answer that question. It seems to be the opinion of a lot of people that we get billions and billions of dollars a year, and things are getting worse. For example, with Kashechewan, we wanted a review of where the resources were going, whether they were reaching the community, where they're desperately needed. Last week I had a meeting with Health Canada, and they told me they had put $360 million in Ontario. I said, “Well, we don't see it here.”

I asked for a review from Health Canada. I wanted Health Canada to review those resources so that I could tell the chief in Kashechewan how much was actually reaching his community. There has to be an assessment of where those resources are going and how much is reaching the communities. So I'd like to recommend that as well.

[Dean Del Mastro, Conservative, Peterborough, ON]

Thank you.

[The Vice-Chair, Liberal, Massimo Pacetti]

Thank you, Mr. Del Mastro.

Judy Wasylycia-Leis.

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

Ms. Rothman, I don't know how many budget consultations you've been a part of, and the situation continues to get worse. It's always hard for us to hear the stats about how poorly Canada fares. You pick up the newspaper and see there are record surpluses, and then you hear people talking about putting more money into tax cuts or against the debt. Nobody from the business community talks about dealing with poverty. Why can't we get through to folks? How do we do this?

[Laurel Rothman]

Finn, I don't know if you were involved in the joint project, which was focused somewhat on Toronto but had important recommendations to the feds. Toronto City Summit Alliance and St. Christopher House looked at some important issues for modernizing the income security for adults. They made some recommendations that many of us had made.

I don't know. What we do know is that Canadians don't like to walk down the street and see homeless people. They don't like to know about children being left alone because they don't have child care. It doesn't make sense to people that work is not a pathway out of poverty. Almost one in two low-income children has a family that's in the labour force all year, but they can't get full-time work. I'm talking about the labour market. You all know I strongly support public investment, but how about the private sector doing its thing as well?

Why can't we get through? I'm not sure. You look at opinion polls and health, education, and poverty rank continually high. The GST cuts did not gain a lot of popularity from people. So do we want to give up another $4 billion to $5 billion in public revenue in this country? I don't know. Since 1980, we've made virtually no progress. I'm not sure what else to say, except that we're going to keep saying it in whatever colour, shape, and way we can.

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

Thank you, and thank you for all the work you do as part of Campaign 2000, and Caroline, thank you also.

Back seventeen years ago we set the goal of elimination of child poverty. Now the situation is so bad that you're down to recommending a 9.9% target rate. What does that represent in terms of the overall problem, and will this help?

[Caroline Di Giovanni]

I agree with Laura that Canadians feel this is very important. We believe basically that if the government leadership can assume this as an issue that they really find important--if they agreed this is a priority and set a priority that's achievable--it would be an important step. That's why it's only 9.9%. I'd love to make it 5%, but let's take what we can do. If you set it that way, and then by a combination of wage security, child tax benefit, and ability to work together with both the provinces and the cities for housing and with industry for stable employment--rather than part-time employment with people putting together two or three part-time jobs to try to have an income--and if there could be a commitment to those identified ways of doing things, policy issues, then you could begin to achieve the targets. Once you have reached the first target within an acceptable period of time--which is why we've made it so broad, with a 9.9% target by 2010--then you set the next target.

England after Thatcher was at a 25% child poverty rate. By setting these achievable targets and reaching them and feeling that this was an important achievement and moving on to the next and reaching that, they are now at the 5% level. That is a doable thing to do. That's why we have put it at that mark. We'd love to make it lower, but you can't be too pie-in-the-sky.

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

This is helpful.

Laurel, do you want to add something?

[Laurel Rothman]

I will add that indeed I think the targets are staged. That is a 25% target over five years. Over ten years we could look at cutting it in half again. That is what UNICEF is recommending. That would fit in with commitments for the millennium development goals for an industrialized nation like Canada. How about the committee recommend to Minister Finley that there be--I don't know what you'd want to call it--something that would highlight how the U.K. did it? Look, we have Premier Danny Williams committing to having Newfoundland at the lowest poverty rate by 2010.

[The Vice-Chair, Liberal, Massimo Pacetti]

Just to be clear, our report is going to be to the finance minister, Minister Flaherty.

[Laurel Rothman]

I clearly understand that.

[The Vice-Chair, Liberal, Massimo Pacetti]

We have enough things to do. We are going to have problems deciding what our priorities are going to be. We don't need to go to see Ms. Finley with some recommendations.

You have thirty seconds, Ms. Wasylycia-Leis.

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

Thank you very much.

Finn Poschmann, I am going to ask you what my colleagues always ask the social justice coalitions: give us a price tag for your proposals. You make it sound very nice, but we have to recognize that tax cuts are an expenditure in the same way that spending money on anti-poverty efforts is an expenditure. Give us a price tag so that we can put this in perspective and judge what our priorities should be.

[Finn Poschmann]

On tax relief, the first thing to point out is that it's not just an expenditure. It has a payback to federal revenue, and I would say--

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

What is the evidence? Let me do what Garth Turner would do. Give us a price, then. Isn't it interesting--

[The Vice-Chair, Liberal, Massimo Pacetti]

Thank you. It's an interesting answer, Ms. Wasylycia-Leis--

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

[Inaudible--Editor]...the answer, like Garth Turner would, and now you won't even take a second and demand--

[The Vice-Chair, Liberal, Massimo Pacetti]

Cut it. Thank you.

We're going to five-minute rounds. We're going to go back and forth between the Liberals and the Conservatives.

We will start with Diane Ablonczy, then Michael Savage, Mike Wallace, John McCallum, and Rick Dykstra.

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

Thank you all for your presentations. We appreciate them very much.

Mr. Poschmann, do lower tax rates mean lower government revenue?

[Finn Poschmann]

All other things being equal, lower tax rates probably will tend to lower government revenue. It depends on what the tax is, however, on what activity it is attached to, and on what particular form of tax relief is on offer.

Some tax cuts are more likely to stimulate investment and to stimulate growth offsets. Other forms of tax relief, such as lump-sum relief to individuals, are far less likely to have a long-term payback.

The other thing to bear in mind is that one ought to think of this, Mr. Chairman, on a present-value basis--in other words, that the stream of benefits the economy derives arrives over time and won't arrive within one year.

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

Let's talk about capital taxes, because we've heard a lot about how those hurt investment and hurt the financial sector. You're an expert. Help us to understand, in one syllable words, why this is not a good thing.

[Finn Poschmann]

Capital taxes are first on the hit list for economists, simply because they are a penalty on marginal investment in the economy. Of all the forms of tax that are available to a government, it is the one that is most likely to impinge on investments and therefore limit downstream growth.

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

Mr. Wilson, I appreciated your presentation, because you were one of the few I've heard, in the context of child poverty, talking about the need to really address parenting skills.

I and many of my colleagues in the House of Commons were very poor as children. I won't go into chapter and verse, but take my word for it that we were very poor. I come from a family of seven children, and we all managed to become highly contributing members of society. It was because we benefited from very good parenting, I believe, and I give full credit to my parents.

I found this extremely refreshing, and I think you've hit on something important. By emphasizing the child part of poverty, we've actually missed the whole boat, because it's really the parenting that, in my view, is the key. Would you agree with that? Can you expand on the relationship there?

[Grant Wilson]

There are a number of aspects to that. One of them can be called supplemental parenting, in the sense of mentoring. Regent Park, here in Toronto, has a program like that, and it has been very successful. It has a tremendously high rate of success in high schools, with a low dropout rate of less than 5%. The people who worked on that project have done tremendously great work. They have supplemented parents. They have helped to give direction in these children's lives. They make sure they've done well in school. So they are supplementing the efforts of those parents.

One of the largest problems we have in this country is a lack of proper family law. We sit here and listen to politicians talk about how parents don't have the right to raise their own children, that they have a responsibility, and this kind of thing. We let people go out and fight. We saw the solutions in the 1998 report of the Special Joint Committee on Child Custody and Access, which don't allow parents to fight and spend money on lawyers in order to see their children if the other parent wants to use them as pawns--those were some of the recommendations--so we can get on with parenting children properly, rather than messing around with courts, lawyers, and costs. All this takes a toll, not only on the mental well-being of children, but on the ability of parents to do this.

We also have to look at the technology we have. If you look at the last ten years and what's happened in Internet services and where we're going, and we look at what we can do in the future, and the leadership role of this government towards the future.... We have parenting skills brought along.... There is a huge amount of technology that's going to change. The delivery of a lot of those things can be pushed. That's a technological term. It doesn't mean imposed. In any corporation or government, or whatever it may be, it's getting the right information to the right people at the right time.

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

I wish I had more time, and thank you for that. I'd be very interested in any studies you can provide on that issue.

Thank you, Mr. Chair.