Thank you very much. I am Adam Legge, volunteer committee chair for the Poverty Reduction Coalition. It's a community collaborative, supported by the United Way of Calgary and Area, that aims to reduce poverty in Calgary. We work collaboratively with all orders of government, the business community, social service organizations, and community members.
In terms of criteria to guide federal taxation decisions, we encourage the federal government to review its tax and spending programs through a filter that ultimately improves the well-being of all Canadians. We feel that decisions regarding taxation policy in Canada for individuals and for corporations should be based on three key concepts: incenting individuals to become skilled and to work; being globally competitive; and providing supports that will enable people to be part of the workforce to their greatest potential.
On incenting individuals to become skilled and to work, taxation policy should be supportive of individuals and companies that make investments in increasing skill levels and education. A highly skilled and trained workforce performs at the upper end of the value chain and results in higher returns. Both individuals and corporations benefit. Taxation policy should never discourage one from working, but unfortunately, the welfare wall experienced by many at lower income levels creates a disincentive to entering the workforce at a higher level of productivity and income.
Collectively, taxes and reductions in benefits should flatten and make the marginal effective tax rate an incentive to work rather than a disincentive. Canadians exiting social assistance through employment should be encouraged. In this regard, the federal government's commitment of $550 million per year to the working income tax benefit is to be applauded. This program should be increased to see greater advancement into employment by those on social assistance or at lower levels of income.
In being globally competitive, Canada's taxation rates should be competitive with other OECD and G-8 nations in order to attract and retain not only companies, but people, our most critical resource, particularly in a time of labour shortages. Studies by the CD Howe Institute indicate that some Canadians face a very high marginal effective tax rate, as high as 80%, depending on the province and the level of income, and therefore Canada is one of the most expensive jurisdictions in the OECD from a taxation perspective. Efforts should be made to reduce the marginal tax burden, particularly for those at lower income levels. Additionally, taxation reduction should focus on income taxation rather than on consumptive taxes. Canadians and corporations both benefit when we have a competitive tax system.
In terms of providing the supports that will enable people to be part of the workforce to their greatest potential, what the federal government needs from Canadians more than anything else is for as many as possible to be employed. Yet barriers exist for many to be employed. These barriers are those things that you and I take for granted every day. They include things like child care, elder care, transportation, and housing.
The recently introduced federal tax program given to employers who acquire day care spaces for their employees' families is a positive example currently in place. More of these programs are needed to assist with elder care and child care to enable more Canadians to be productive, earn income, and generate economic well-being. This would also include transportation support for those who need assistance with transportation.
Additionally, tax changes should also favour investments that grow the stock of affordable housing. Changes such as the elimination of capital gains on donations of real estate to registered charities that provide perpetually affordable housing would be beneficial. One interesting note is that under the current Canadian taxation system, one gains a greater benefit from donating land for ducks than from donating land for humans. Further, an elimination of GST on construction materials associated with affordable housing and affordable rental housing developments would create further incentives.
Both individual Canadians and their employer corporations benefit from an increased capacity to be part of the workforce and to focus on productivity and other life matters.
On behalf of Jim Dinning and Nancy Laird, our PRC co-chairs, and our 90 volunteers, thank you very much for the opportunity to present to you today.