Finance Committee on May 31st, 2006

[Dean Del Mastro, Conservative, Peterborough, ON]

Thank you.

Mr. White, I have a couple of quick questions for you. Are you aware that Budget 2006 allows students to earn up to $19,000 pure tax-free.

[Toby White]

Sorry, could you repeat that?

[Dean Del Mastro, Conservative, Peterborough, ON]

Budget 2006 has a provision allowing students to earn up to $19,000 pure tax-free.

[Toby White]

Yes, I am aware.

[Dean Del Mastro, Conservative, Peterborough, ON]

It's a major step forward. I know when I was a student I worked two jobs in the summer and one while I was at school. I would have liked that.

As well, Bonnie Patterson, the president of the association of Canadian universities, hailed the budget for keeping its promise on infrastructure investment.

I'm sorry; I'll get to your comment on this.

I would argue that what the minister was indicating was that if the universities don't have to invest in the infrastructure, because there's support there, in theory they would have resources they could apply towards the cost of tuition. Would you agree with that?

[Toby White]

Yes, and obviously there would be the possibility that institutions would use infrastructure money to pay for projects that otherwise would come from other sources. So there is the possibility that you would be displacing tuition income.

[The Chair, Conservative, Brian Pallister]

Thanks, Mr. White.

Madam Wasylycia-Leis.

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

Thank you very much.

I'd like to speak with the minister from Saskatchewan, Mr. Thomson. One of the issues we know is looming on the horizon is the fiscal imbalance and equalization. Some of us are worried that the federal government might simply be using the language of fiscal imbalance and announcing an intention to redress it, as well as correct the equalization formula, as a way to dump and run: to offload federal responsibilities and get out of as much government as possible, suggesting that it belongs in the hands of the provinces.

I'm wondering what we can do to find the right balance between addressing the inequities in the system now and not allowing the federal government any licence to abdicate responsibility in key national public policy areas?

[Andrew Thomson]

Certainly we would agree with the need to make sure that there still is a strong set of national social programs and that those need to be maintained. The difficulty we have today—which I think we all recognize from our home constituencies—is that provinces are bearing a lot more responsibility for the cost of the social programs that are being delivered. In order to simply maintain the programs that we have across the country today, we are going to need to make sure that there is more funding available, whether it's for health care, social services, or education costs. That can be addressed through the fiscal imbalance issue.

There are two other issues that need to be addressed. One is the fiscal imbalance issue as it pertains to more funding through the Canada social transfer and the Canada health transfer, and then there is the issue of equalization, which speaks to the general fiscal capacity of the provinces. Both issues will need to be dealt with. But I would agree that Parliament will need to be cautious to make sure that this is not an exercise in offloading.

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

From the papers today, it sounds like you're somewhat encouraged by talks with the federal minister in terms of equalization. I know that Saskatchewan has supported the idea of a 10-province standard but is concerned about the inclusion of natural resource revenue in the formula. The rumour is that the expert panel that's coming down soon will suggest that 50% of oil revenue be included. Is that a compromise that Saskatchewan can live with, or what advice would you offer at this point in terms of an appropriate equalization formula?

[Andrew Thomson]

We believe the equalization formula itself should revert to a 10-province standard, and all provinces, the wealth of all provinces, should be included. The natural resources should be excluded as those are clearly a provincial jurisdiction. This is consistent with the election promise of the Conservative government, and we would encourage that it be implemented.

At the same time, however, we recognize that there are issues about the pace of growth within equalization that will need to be addressed.

It is equally important to make sure that the CHT and the CST are increased, so that the populous provinces that are holding a great deal of the responsibility for these programs have appropriate financing. We essentially have provinces that are required to do more, without the resources available to them. We need to correct that imbalance.

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

I'm also a little worried that the federal government may try to use this opportunity to push the agenda of tax points versus increased cash transfers. What is your feeling on that?

[Andrew Thomson]

I think the concept around the tax points, going back to the Trudeau days, has really muddied the water in terms of equalization and in terms of the fiscal balance within the country. We would be reluctant to move to a tax point transfer program again.

We believe the solution really lies in a renewed funding formula for equalization and an improved level of funding through the social and health transfers.

[The Chair, Conservative, Brian Pallister]

You have 30 seconds.

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

Oh, shoot. Well, what can I do in 30 seconds? I'm almost using it up.

Let me ask Andrew this. Since we're talking about oil revenue, how in the world does any government, Liberal or Conservative, justify the millions and millions of dollars in subsidies to these multinational oil companies that are not doing anything to protect us from greenhouse gas emissions or to lead us towards renewable energy sources?

[The Chair, Conservative, Brian Pallister]

You have time for a brief response, sir.

[Andrew Van Iterson]

It's obviously a very short-sighted perspective. These companies are making record profits and they don't need our help in making more money.

But there are responsible oil companies, like Shell, that are doing good things by moving towards wind and solar power. We can put our money into that.

If we care about clean air—and I expect we may have a clean air act this fall—it makes no sense to subsidize pollution and the advance of polluting energy at the same time that we're trying to clean the air and save our kids from what we're subsidizing.

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

Thank you.

[The Chair, Conservative, Brian Pallister]

Thank you, sir.

Mr. Pacetti.

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

Thank you, Mr. Chair.

I have a quick question for the panellists.

Again, we're here to look at whether or not we're going to implement Bill C-13. I guess my question is going to be to all the witnesses. Do we accept it as is or do you have any suggested amendments? Could you basically give a yes or no, or tell us what you would suggest we should amend in the budget, which is Bill C-13?

If I can start with Mr. Peacock, what are your comments?

If I have additional time, I'll share my time with Mr. Savage.

Thank you, Mr. Chairman.

[Rob Peacock]

Sir, I'm sorry....

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

We're here to look at whether we're going to adopt Bill C-13 or whether we're going to amend it. Do you have any comments about Bill C-13?

This is not the prebudget consultation. It's a little vague as to what some of the groups here are asking for. We're here to adopt Bill C-13. Are you for it or against it?

[Rob Peacock]

Well, given what I'm representing here, I'm absolutely for it. It has literally transformed our sector, not only this week, but it will literally transform the charitable sector as we know it. That's why I'm here.

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

That's fine. Fair enough. Thank you.

Mr. Battle.

[Ken Battle]

The delivery mechanism for the universal child care benefits should be through the existing Canada child tax benefit.