Finance Committee on May 31st, 2006

[The Chair, Conservative, Brian Pallister]

I'm sorry, you should have what?

[Garth Turner, Conservative, Halton, ON]

Three minutes. That's the only way everyone is going to participate.

[The Chair, Conservative, Brian Pallister]

If we can get consensus from the committee on that, we'll proceed in that manner. If not, then we have to stand by the standing orders. That's why they're there.

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

I don't agree. For the moment, in view of the witnesses who are present, we should proceed as usual. If there's any reason to change our procedure, that should be done in the steering committee or later during our proceedings.

[The Chair, Conservative, Brian Pallister]

Fair enough. We'll proceed under the standing orders that we had adopted, and we'll make time for a discussion at a future meeting.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

Mr. Chair, on a point of order, I think you have consensus that everybody is willing to participate on this round, just for the next hour, to share time. We already see the numbers dwindling, so if you can maybe ask, once the witnesses are done, that we share the time evenly, I think you'll see there's a bit of consensus.

[The Chair, Conservative, Brian Pallister]

How am I to proceed, then? We don't have consensus. Mr. St-Cyr disagrees.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

He said he'd be willing to go down to five minutes on his first round, if I understood him correctly.

[The Chair, Conservative, Brian Pallister]

So will we then proceed with the five minutes for the first round? Is that acceptable to all members?

[Some hon. members]

Agreed.

[The Chair, Conservative, Brian Pallister]

Very good. Thank you.

Thank you for your patience, witnesses. We appreciate you being here today.

I understand we have Mr. Peacock here, from the Association of Fundraising Professionals.

Mr. Peacock, would you like to commence?

[Rob Peacock, President, Association of Fundraising Professionals]

Yes, sir. Terrific. Thank you, Mr. Chairman.

Good afternoon, everybody.

I am pleased to discuss Bill C-13, an act to implement certain provisions of the budget, on behalf of the Association of Fundraising Professionals.

The Association of Fundraising Professionals, AFP, represents over 28,000 individual professionals across 180 chapters throughout the world. In Canada we have 2,700 registered association professionals, of which I am the past chair of the association.

We are extremely pleased with the changes in the tax treatment of the gifts to charities proposed in the recent budget, and AFP applauds the federal government's leadership and all parties for the commitment to eliminate the capital gains exemption on marketable securities. AFP has championed this particular proposal over the course of the last nine years, and to see it through this year was very gratifying.

In a recent report from TD Economics, it was estimated that this type of giving might increase by as much as 50%. As you recall, the Prime Minister noted in a recent address made on May 24 that this tax incentive has already sparked a $50 million charitable gift to a foundation in Ontario. In fact, the Globe and Mail covered another gift yesterday for $37 million, given this particular provision in terms of building capacity.

There are major donors across the country who have been waiting tor this type of incentive so they can also make their gifts to all different levels and types of charities. The opportunity for charities to build their capacity and expand the programs has now multiplied, thanks to all of you from all parties in agreeing to this particular provision.

It is important for the government to show that it supports the charitable sector because non-profits play such a significant part in our economy. In 1999 Statistics Canada estimated that the economic contribution of the sector was 6.8% of gross domestic product, greater than some business sectors, including both agriculture and automotive manufacturing.

There are more than 81,000 registered non-profits in Canada that receive approximately $10 billion in contributions annually, according to Statistics Canada. In a recent Cornerstone of Community: Highlights of the National Survey of Non-profit and Voluntary Organizations study, the non-profit sector posted $112 billion in revenues in 2003 and employed more than two million. In addition, these organizations draw in two-billion volunteer hours across our country and the equivalent of one-million full-time jobs.

AFP strongly urges the federal government and all parties for your support to pass Bill S-204, recently introduced, that would create a government-recognized national philanthropy day. It is important to note that government recognition would require no funding for this particular bill. Supporting the national charitable sector through such a national day is important for several reasons: giving to charities can help both the provinces and the federal government; and national philanthropy day is a special day to set aside, on November 15, to recognize and pay tribute to the great contributions in philanthropy each day.

Thank you very much for your time today. I appreciate it.

[The Chair, Conservative, Brian Pallister]

Thank you, Mr. Peacock.

I'll apologize to the witnesses for having to restrict you in your comments, but as you can tell, our committee members are anxious to ask you questions and we are limited in our time.

Would any of you object to our carrying on perhaps for 10 or 15 minutes longer? Does any committee member have a problem with that? We used up 10 minutes of our discussion time.

[Some hon. members]

No.

[The Chair, Conservative, Brian Pallister]

Do any of the witnesses have a problem with our continuing longer than our scheduled time?

[A witness]

No.

[The Chair, Conservative, Brian Pallister]

Very good.

Then, Mr. Battle from the Caledon Institute of Social Policy, please proceed.

[Ken Battle, President, Caledon Institute of Social Policy]

Thank you, Mr. Chair.

I'm going to try to explain a very complicated program as simply and as quickly as I can. I passed out a simple graph--there's a French version beneath it--that says “Net Universal Childcare Benefit”. I'm going to speak to that graph.

As you know, the universal child care benefit is the showcase of the government's social policy agenda in the last budget, and it's certainly the largest part of its child care plans. I know in the previous session you talked about other aspects.

I want to focus on the child care benefit itself. There are basically three major flaws with it that I want to bring to your attention, and then I want to propose a practicable alternative.

It's an unfair program in three ways. First of all, it's devilishly complicated in terms of looking at the actual amount of benefit that families are going to end up with at the end of the year. They're all going to receive $100 a month for each child aged five and under, but that benefit is going to be taxable and is going to be financed in part through the elimination of the young child supplement, which is part of the existing Canada child tax benefit. What it means is that you would literally need to be a tax accountant or a social policy wonk to figure out the actual amount of benefit you will end up with at the end of the year. This graph shows you how bizarre the distribution of benefits actually is.

There are reasons for this. The taxability is not based on family income in the way the Canada child tax benefit, GST credit, and other income-tested benefits--the guaranteed income supplement--are based. It's based on individual income. It's the individual income of the lower-income parent in the case of couples; in the case of a single parent, it's the single parent.

That means that the amount of tax that each family type is going to pay on the new benefit is going to vary considerably. It also means they're going to lose the $249-a-year young child supplement, which mainly benefits low- and middle-income families. We end up with a distribution of benefits where the largest net benefit is going to go to one-income families at $250,000 a year. They're going to get more net benefit than welfare families.

Welfare families are going to get more net benefit than working poor families, which is going to raise the welfare wall higher again. We tried to get rid of that through the national child benefit. It means that different kinds of families, whether they're single-parent or two-earner couples or one-earner couples of the same income levels, are going to end up with different amounts of benefits.

One final point, Mr. Chair. There's a simple way to solve this. Deliver the $1,200 benefit through the existing Canada child tax benefit. That's a transparent, fair benefit that we give virtually every family. It's really $1,200 a year, not a pretend $1,200 a year.

[The Chair, Conservative, Brian Pallister]

Thank you, Mr. Battle. I'm sure there will be questions on your issue.

Mr. White, please, from the Canadian Alliance of Student Associations.

[Toby White, Government Relations Officer, Canadian Alliance of Student Associations]

Thank you for having me here today to speak about the bill.

The recent federal budget contains several positive measures for students, but there is still much to be done. If scholarships and bursaries are made tax exempt, then students will be able to use their awards as intended, to cover the growing costs of post-secondary education. This is a particularly significant benefit for graduate students who receive research funding.

One concern we often hear from students regarding student financial assistance is that their parents' income is unfairly assessed. By lowering the amount of expected parental contribution, the government will ensure that thousands of students who previously could not get financial aid will now qualify.

Lifelong learning is important for all Canadians. This budget makes important steps towards providing assistance and opportunities for those who choose apprenticeship training.

There are some problems with this budget, however. While the government is well intentioned in acknowledging the costs of textbooks and supplies, a tax credit is not the way to go. Tax credits are an ineffective method of assisting students. Yet 40% of our student aid budget is already spent in this way. The best way to improve access is through targeted grants, such as the proposed apprenticeship incentive grant.

Students are tremendously disappointed that this budget does not echo the previous commitment to extend the Canada access grant. This denies thousands of students from low-income families of much needed assistance.

The creation of a PSE infrastructure trust, which has already been talked about a lot today, is important for colleges and universities. We're concerned that this does not follow the spirit of Bill C-48, the intention of which was to improve access.

Our colleges and universities need a new funding arrangement. The government campaigned on a promise of a dedicated education and training transfer. We look forward to further development on that and hopefully seeing that in a future budget.

Finally, what our post-secondary education system needs most is leadership. The council of the federation has been working to make this a priority, and it's time for the federal government to join a national dialogue on higher education. The Prime Minister should call a first ministers conference on the matter and lead the way towards a truly pan-Canadian vision for post-secondary education.

[The Chair, Conservative, Brian Pallister]

Thank you, Mr. White.

Andrew Van Iterson, from the Green Budget Coalition, thank you for being here. Please proceed.

[Andrew Van Iterson, Program Manager, Green Budget Coalition]

Thank you.

Good afternoon, everyone. Thank you for inviting me here today.

The Green Budget Coalition represents 21 of Canada's leading conservation and environmental organizations, which collectively represent over 500,000 individual Canadians as active volunteers and paying members.

We believe that Canada's future prosperity depends on the effective integration of environmental, economic, and human health objectives, and we advocate the internalization of social and environmental costs into market prices through revenue-neutral fiscal reform.

The 2006 federal budget and Bill C-13, as they stand, do very little for the environment. The greatest impact of the budget really lies in what was omitted. It really left those of us within the environmental community with faith that comprehensive action to preserve clean air, clean water, a stable climate, and our cherished nature is still to come.

Today I want to highlight one prime missed opportunity for this budget to create greater long-term economic, environmental, and human health benefits at no net additional cost and that could instead cut spending.

This budget should start to phase out the over $1.6 billion in annual subsidies to the oil and gas, nuclear, and mining sectors. These subsidies, in the form of tax expenditures, tax exemptions, and direct subsidies, contribute to industrial inefficiency, unsustainable energy consumption, and unnecessary pollution and health damage. In particular, subsidies to the oil and gas sector cost the federal government about $1.4 billion per year.

The accelerated capital cost allowance, ACCA, for oil sands development is a prime example. It was established at a time when costs were higher for industry and fuel prices were lower. But the oil and gas sector is now one of the most profitable industries in the world, and the ACCA for oil sands development is now outdated and unnecessary.

The funds freed up through phasing out these tax subsidies would be more wisely used for other purposes, be they tax cuts or advancing Canada towards cleaner air and a more secure energy future by investing in energy efficiency in clean, renewable energy.

In a similar spirit, the Green Budget Coalition urges the government and committee members to support amending Bill C-13 to reverse the announced renewal of the investment tax credit for exploration, the so-called super flow-through share program to subsidize mining exploration.

This program was introduced as a temporary measure in October 2000, but is no longer necessary, again due to higher commodity prices.

We want to commend the government for amending the Income Tax Act to reduce the capital gains inclusion rate on ecological gifts from 25% to zero. This was long in coming and a good choice.

To summarize—

[The Chair, Conservative, Brian Pallister]

I hate to cut you off on that point, sir, but I'm sorry. Thank you for your presentation, Mr. Van Iterson.

We now have Leslie Wilson, from Wee Watch.

[Leslie Wilson, Vice-President, Wee Watch Enriched Home Child Care]

Thank you.

My name is Leslie Wilson, and I'm with a company called Wee Watch Enriched Home Child Care.

We have licensed private home child care agencies in Ontario and in B.C. We have been around for almost 20 years, and we would have over 3,000 children in care in around 1,200 homes on a daily basis.

At this time, we are very pleased with the initiatives set forth by the Harper government. We feel that the best place for children to be raised is in their own homes, by their own parents. This government has recognized this and is prepared to reward parents who are able to stay at home.

For many reasons, it is obviously not practical for all families to allow a stay-at-home parent. We feel that our system best replicates a child being at home.

The $1,200 allowance being suggested will help to close the gap between unregulated, unlicensed care and a licensed setting. Parents may now be able to afford this type of spot versus a private individual. Under the old proposed system, spots were going to be created, but it was unclear if parents were going to be able to afford these spots.

However, there needs to be some stipulation put on this money. We need to make sure it is being used for day care. We feel this money should be directed to parents towards licensed care, whether in a situation like ours or in a licensed centre.

The ultimate goal is for the well-being of the children and to ensure they receive the proper programming and stimulation required during their early years. Perhaps tax incentives could be used for this. For instance, it would be tax free if it was used in a licensed setting.

The added consideration that needs to be looked at is the individual who is already receiving subsidized care. Should they receive this money if they are already receiving licensed care for less than $100 a month? Can this money be redirected to bring in more children from the waiting lists?

We would also like to comment on the $250 million being allocated to new day care spots. Our information tells us that the cost to create a spot in a day care centre is approximately $5,000. In a licensed home setting, the cost is well under $1,000, with very little infrastructure required.

Consideration needs to be given to all scenarios. The large city centres traditionally ignore licensed home care in any of their expansion plans. Ours is by far the most efficient model and would allow parents access to far more licensed spaces at affordable cost. In addition to this, licensing regulations favour the individual providing day care in an unlicensed setting versus someone working for an agency.

It is our hope through this budget process that we will be able to close the gap and help parents afford quality licensed care for their children.

Thank you.

[The Chair, Conservative, Brian Pallister]

Thank you, Madam Wilson.

We have with us today the Honourable Andrew Thomson, finance minister from the province of Saskatchewan.

Welcome, sir. Please proceed.