Finance Committee on Oct. 26th, 2006

[The Vice-Chair, Liberal, Massimo Pacetti]

Thank you, Ms. Ablonczy.

Mr. Savage, you have five minutes, please.

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

Thank you, Chair.

I want to speak with Ms. Rothman and Ms. Di Giovanni.

I like the fact that somebody has come here and said exactly what they feel about the taxation system. We've had a lot of people come and talk to us about the need. Some of them tiptoe around the GST cut, saying that it maybe helps a bit here and there. But the bottom line is that it's taking money out of the fiscal capacity of the federal government to reduce poverty. The budget we've had, in my view, doesn't even speak to the people on low incomes. The brochure that was used to talk about the budget said how Canadians would benefit from the budget; a family purchasing a $200,000 home would save $1,280 in GST. In the budget speech, it was a $350,000 home. A family buying $20,000 in new furnishings would save $200. So there are huge numbers of Canadians to whom this is irrelevant; it's never going to actually happen. My friend Rick will go through all the ways that low-income people benefit when they buy their Cadillacs and fancy houses, and all that sort of stuff.

But the fact is that if you're going to help those most in need you have to target.

And they said the GST actually helps low-income people because they don't pay tax.

But there are other measures, and you mentioned the child tax benefit, which we introduced in 1997. You indicated that it has actually reduced poverty by 8.9%. The Caledon Institute, whom I met with a while ago, had a higher number than that; I think they said it was somewhere in the range of 20%.

But I like the idea. I like personal income tax reductions. I like raising the threshold before you pay and lowering the lowest marginal rate. But I really think that what you're talking about here, which is the Canada child tax benefit, may be the way to go if we care at all about people who are the most marginalized.

We have heard, possibly, that if the universal child care benefit—

[Laurel Rothman]

[Inaudible--Editor]...it's the family allowance.

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

I think I agree with that very strongly, and I may have mentioned that a couple of times around the country. Absolutely. But if they're going to do it—and I don't agree with it—it should have gone through the low-income supplement of the child tax benefit, or the child tax benefit itself.

Can you just talk a bit about the benefit of increasing the child tax benefit to $5,000, and what you think that would do?

[Laurel Rothman]

Yes. I was just commenting to Ms. Ecker, whom I've had an opportunity to talk with over the years.

We have to look back to 1998, the first year of the child benefit, and what has happened to the labour market. We know about the growth in part-time and precarious work, unfortunately. So while we have made some important progress in reducing poverty with the child benefit.... I need an analogy here: low-income families are getting the cart ahead of the horse, or the horse ahead of the cart. Full-time work is not yet a real pathway out of poverty.

We did some work and basically asked, how are we going to get people above that poverty line? If you look at Europe, you know how they do it? They are better at preventing people falling below the poverty line. But separate from that, if we had a higher minimum wage—let's call it that, though I know the feds are not the major player in that field—closer to about at least $10 an hour, that would bring most single individuals above the poverty line in most communities. But it wouldn't handle the issue of family responsibility for children. And you raise the child benefit.... Just to remind people, we will be at roughly $3,200 a year by next July 2007, so it's not impossible; we're two-thirds of the way there. That would better recognize the full cost of raising a child and would bring you above the poverty line.

Having said all that, though, without some stable, secure housing, it won't make enough of a dent in big cities like Toronto, Vancouver, and Calgary.

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

Do you want to add anything to that?

[Caroline Di Giovanni]

We rely on Campaign 2000 to do the number crunching, but we are very much supportive of looking at solutions from a number of different approaches. We're not just asking for more money in the child tax benefit, but for housing and wage security.

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

Yes, I understand. Thank you very much.

You talk about the federal government establishing a specific transfer for post-secondary education; I agree with that concept.

The one thing I don't necessarily agree with is your call for tuition fees to be frozen and lowered. I disagree with that because, again, for the same benefit, if you want to help those most in need, target those most in need. Reducing tuition from $4,300 to $4,100 doesn't help anybody get to university who isn't going there now; it just makes it easier for those who are already there.

[The Vice-Chair, Liberal, Massimo Pacetti]

Thank you, Mr. Savage.

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

Thank you.

[The Vice-Chair, Liberal, Massimo Pacetti]

Mr. Wallace, five minutes.

[Mike Wallace, Conservative, Burlington, ON]

Thank you, Mr. Vice-Chair.

I have a question for David--and I'm going to speak it, not sing it.

Opera organizations have been in front of us elsewhere, and I have never had the chance to ask this question. You are asking in your proposal here that the Canada Council go to an additional $100 million over time. I need clarification on that. In our budget for 2007 we added $20 million, and next year we're adding $30 million, so it's an added $50 million. That makes it right now, this year, $156 million, I think.

You want us to add an additional $100 million over the $50 million we're adding over the next two years?

[David Baile]

That's correct. Last November the then government committed to essentially a $5 per capita increase to the Canada Council, $150 million in sustained funding. The current government has committed, as you just indicated, to $50 million.

We're delighted to see that, but there are two issues with it. The first major concern is that $50 million isn't committed into the future. At this stage it's still a one- term--

[Mike Wallace, Conservative, Burlington, ON]

So you're afraid it will be backed out again.

[David Baile]

Exactly. And over the longer term, we are hoping to see the full investment originally committed.

[Mike Wallace, Conservative, Burlington, ON]

Are you looking for it to be a $250 million project in a certain year? Is that what you're looking for?

[David Baile]

In total, actually, we're looking at a $300 million project. We haven't identified a specific year for that. We realize that there are lots of pressures and that we'll have to work in partnership with the federal government on this.

[Mike Wallace, Conservative, Burlington, ON]

So even though you got, in two years, whatever the addition is--

[David Baile]

Basically $200 million.

[Mike Wallace, Conservative, Burlington, ON]

Yes, but before we took over, before the on-paper promise from the Liberals, it was about $100 million. Is that where it was, or do we know?

[David Baile]

It was about $150 million.

[Mike Wallace, Conservative, Burlington, ON]

So we're adding the $50 million in two years, to $200 million.

[David Baile]

That's right.

[Mike Wallace, Conservative, Burlington, ON]

And the extra $100 million brings us to $300 million.

[David Baile]

Yes.