Finance Committee on March 20th, 2007

[The Chair, Conservative, Brian Pallister]

I've already called for the witnesses to come forward. We have invited them to do so.

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

Then I challenge the chair. I don't see why we wouldn't—

[Thierry St-Cyr, Bloc, Jeanne-Le Ber, QC]

Mr. Chairman, the committee is free to manage its affairs as it sees fit. If committee members are ready to vote, I don't see why we cannot do that right away.

[The Chair, Conservative, Brian Pallister]

Certainly.

[Thierry St-Cyr, Bloc, Jeanne-Le Ber, QC]

I'm ready to vote, but I can't speak for my colleagues.

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

Vote on the amendment, and the rest is easy.

[The Chair, Conservative, Brian Pallister]

There are three amendments before us, committee members—this, and two others from the Liberal Party.

I am reluctant, as I said. We have witnesses who have come to testify before us today. I'd like to proceed to having them do so now.

I invite the witnesses to come forward now so that we can continue with our deliberations on the next private member's bill. Please take your seats.

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

We'll challenge the chair. We'll have a vote on whether we're going to proceed to clause-by-clause, because I don't like things just hanging around.

Could you call the vote, Chair?

[The Chair, Conservative, Brian Pallister]

The chair has been challenged. Those who wish to support the procedural rulings of the chair may so indicate now.

(Ruling of the Chair overturned)

I see that we have an alliance formed here, so the chair's ruling is overthrown.

It was thrown out.

We've had a request to call for a vote; however, other speakers have indicated that they wish to speak to the amendment, so despite the attempt to call for a vote, I move now to Mr. Wallace.

[Mike Wallace, Conservative, Burlington, ON]

Thank you, Mr. Chair.

I was saving them for next time, but they're just so I can have clarification. If I'm wrong, maybe the mover of the bill could fill me in.

[The Chair, Conservative, Brian Pallister]

I should, by the way, point out that our official from Finance has vacated the facilities at this point. We no longer have him available to answer any detailed questions.

I don't want to sound petulant here, but I did indicate that we were moving on. Because of that, I feel somewhat responsible for the loss of resource people who are not with us now.

I'll go to Madame Savoie, on a point of order.

[Denise Savoie, NDP, Victoria, BC]

On the point that you're making, I feel very concerned about both the financial implications and the implications for those who absolutely need a grant system to pursue their post-secondary educations. We are not able to factor them in because we don't have the financial implications of either the amendment or of any future amendments. That's a concern to me.

[The Chair, Conservative, Brian Pallister]

Yes, it is a concern, Madame Savoie. You do have a quite legitimate point, but it's not a point of order.

I must move now to Mr. Wallace.

[Mike Wallace, Conservative, Burlington, ON]

Thank you, Mr. Chairman.

I have a quick question for the proposer of the bill.

We heard from the Finance people, who are no longer here, that we should cut it off at $550 million or whatever it was. Your response was that if the Government of Canada was not giving the grant portion of the money, and if the uptake was a certain amount, then it wouldn't matter for parents such as me. I actually have two teenaged daughters who I hope will attend post-secondary education. If the uptake were such, maybe we wouldn't need the grant portion and that would be a tax savings for the treasury.

Can I be clear that you are not proposing removing the grant portion of this in your bill?

[Dan McTeague, Liberal, Pickering—Scarborough East, ON]

Mr. Wallace, as a father of five children, I declare my conflict of interest right away.

I am not proposing that, nor does the bill propose that. I am simply suggesting that should this pass—and I believe it ought to—it will have two effects. One is that it will get a larger number of people contributing, and a larger number of students who can potentially take advantage of this. It will do tremendous work for the economy. More importantly—and this is something on which others can maybe comment—it won't require the same incentive.

The 25% proposed top-up is really to get people to invest after-tax dollars, for those who can. Clearly, between pre-tax and post-tax, you lose a lot of potential contributors. That's what the bill is trying to address.

[Mike Wallace, Conservative, Burlington, ON]

On that particular point, Mr. Chair, I disagree. If this bill is really designed to get the folks who can afford to pay this—and let's say lower- to middle-income Canadians—pre-tax or post-tax isn't going to make that much of a difference. I think it's those who have the cash to make the limits who are going to be taking advantage of it. Let's be frank about that.

I am certainly still in favour of the grant portion that's here. I'm very concerned that even the mover of the motion is suggesting that, well, if it affects the treasury, maybe we'll get rid of the grant piece because of the take-up side. I think that is the wrong approach for us to be taking. I am not going to my public to say I am supporting a position that because of the take-up we are going to get rid of the grant part, that all Canadians are contributing to the advantage of having students in post-secondary education and bettering our economy. I think you cannot do it; you can't pass this bill without consideration of that as a serious option that gets removed as.... I think it's disingenuous not to make sure it's in the record and on the record that we want to do this.

I have as much time as I want, I think, Mr. Pacetti.

[The Chair, Conservative, Brian Pallister]

Well, depending on whether you continue to be somewhat relevant.

[Mike Wallace, Conservative, Burlington, ON]

Two points are that suddenly there has been a discussion—

[The Chair, Conservative, Brian Pallister]

Order, Mr. Wallace.

You don't have as much time as you want. You have as much time as the chair deems you to have, and I will deem you to be in order as long as you're relevant. Continue to be relevant, and you'll be continuing to speak.

[Mike Wallace, Conservative, Burlington, ON]

I appreciate that guidance, and I am summarizing.

Suddenly today we talked about removing the piece that's not in the bill, in terms of the grant side, which I think even the Bloc folks would find not favourable, because I think it does go directly to help those who—It's an assistance top-up that wouldn't be there, I think, under this proposal.

If the concept is that it gets more lower-income people involved in the program—part of the bill is to make it pre-tax—I don't think that makes a significant difference. It would be interesting to see what the statistics are in terms of low-income families being able to afford RRSPs, for example. It's probably not as great as it should be, but it's because they have cashflow issues, and they need to make those cashflow determinations as a family to survive from one week to another. I think it would be the exact same argument on their RESP.

So I think the system we have now is fine. We have made some changes to it in terms of the amount you're able to contribute over the lifetime of an RESP, and I think that's really based on the cost of the education to which it has gone. That was part of the first part of the bill.

[The Chair, Conservative, Brian Pallister]

Mr. Wallace, I'm sorry, you'll be allowed to continue, but Mr. Thibault had a point of order.

[Robert Thibault, Liberal, West Nova, NS]

It's not been easy for you, Mr. Chairman, but I don't think the member is discussing the amendment. I think he is debating the bill. I recognize that we cannot disagree on the bill, but on the amendment specifically.

[Mike Wallace, Conservative, Burlington, ON]

I appreciate that from the member, but I think the amendment has a number of components to it. We've been discussing one part of that bill in particular, but it makes a fundamental change to the private member's bill, in my perspective.

I'll leave it at that, though, Mr. Chairman. Those are my comments. I appreciate the time the committee has indulged me with.

[The Chair, Conservative, Brian Pallister]

Before I call for the vote, I want to go on record with a couple of points.

I think all of us should take very seriously the recommendations that come from this committee when we adopt bills. I think this particular amendment, as I endeavoured to point out earlier, is quite thoughtful on the issues it raises and tries to address. But I will sincerely tell you, colleagues, if we proceed to this vote and it makes the subsequent two amendments irrelevant, we are proceeding to adopt the bill as amended. It will follow logically.

Here are some issues we have not addressed. We have not addressed the issue of the grant. How the current granting program will interface with this proposal certainly remains to be discussed.

We have not properly addressed the revenue impact of the amended bill as proposed. There have been a number of points raised on this, including by the proposer of the amendment.

We have not thoughtfully addressed the issue of how this will impact differentially on certain families at certain income levels, and how these changes will affect them.

We have not discussed in any way the interface between the proposal we would be endorsing as a committee, if we proceed with this, as I fear we may, and the current program, and what impact it will have on the current RESP program. And although I would agree with the mover that the current program is underutilized, it is still utilized by 27% of Canadian families right now. We have not discussed that.

We have not discussed the impact this proposal may have on the rate of contribution to RRSPs. There's only so much revenue in Canadian families' budgets; there's only so much money to go around. What impact will the application of tax deductibility to RESP contributions have on RRSP contributions, in terms of the long-term security of those who should be saving for their own retirement? What will the impact be? We have not discussed that.

And we have not examined the issue of income splitting as it relates to income splitting from parent to child—because essentially this is income splitting we're talking about. We have not really examined the impact that would have.

And we certainly have not discussed, to my satisfaction, the overall impact this proposal will have.

I agree with the sentiments of the mover, as you well know. Most of us, of course, have proclaimed our support for the importance of investing in education, but we have not debated properly in any way the proposals that are before us vis-à-vis, for example, whether money should be going generally into furthering transfers for post-secondary education, as the budget did yesterday—in other words, global increases in funding as opposed to targeted tax incentives such as this.

We have not debated these issues. So I will certainly go on record as encouraging that we do that, because I take very seriously the quality of the recommendations emanating from our group here.

It was proposed that we call the vote.

Mr. Dykstra.

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

I have a quick point of clarification. Have we dealt with all the amendments or not? My understanding is that we've dealt with two amendments, and there are three.