Sure—if that's okay, Professor Mintz?
Evidence of meeting #34 for Finance in the 39th Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was system.
A recording is available from Parliament.
Evidence of meeting #34 for Finance in the 39th Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was system.
A recording is available from Parliament.
5:05 p.m.
Professor, School of Policy Studies, University of Calgary
I'm sorry, the paper and what?
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Conservative
The Chair Conservative Rob Merrifield
Professor Mintz, the request was to obtain your speech and your paper, if that's all right.
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Liberal
John McKay Liberal Scarborough—Guildwood, ON
I mean the one you gave today at the Economic Club of Toronto.
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Professor, School of Policy Studies, University of Calgary
Oh, okay.
You can get the paper. It's released today on the website. I did not write the speech.
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Conservative
The Chair Conservative Rob Merrifield
Okay. Those usually are the best kind.
I want to thank you both for coming in. Oh, there is one more quick question.
Go ahead, Mr. Pacetti, please.
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Liberal
Massimo Pacetti Liberal Saint-Léonard—Saint-Michel, QC
I've asked this question before and I think John was alluding to it, but it was a little bit contradictory, Professor Mintz, so that's why I want to ask it.
There's no doubt the government needs x dollars to run the government, to provide the services. Whether it's $200 billion or $300 billion doesn't really matter. We talked about the idea that payroll taxes should go for certain benefits; we talked about unemployment perhaps going for benefits. At what point should they no longer go for benefits?
The airport taxes came out a couple of years ago. All of a sudden it was a tax grab, and the government got addicted to it. Probably the same amount of money was not invested in security for airports, but they seem to have just generated endless amounts of revenue.
I'm using that example because it was brought to light, but you brought up another example with the excise tax. Should governments be all over the place? In a sense you say the excise tax should go into general revenues, but then you turn around and say that perhaps the excise tax should come down--that we should introduce a carbon tax and that some of that money should go back to the people who are paying it. At what point should we do that for personal taxes? What should we do in terms of corporate taxes?
The question is, when should we be using dedicated tax, and when should we skim a little bit off the top to really get the taxpayers for whatever we can?
5:05 p.m.
Professor, School of Policy Studies, University of Calgary
I'm certainly not going to profess that you should skim the taxpayers as much as possible, but with respect to the environmental tax and the question of what you do with the revenues, I'm suggesting it should be very similar to what B.C. did. I would highly recommend that the revenues be used to reduce taxes and not go into government spending.
Certainly there are people who are going to have a different view on that, partly because the emissions issue, I think, is going to be particularly concentrated in two parts of Canada, Ontario and Alberta. Through the tax reductions and the way that you could do the offsets, I think you could do it in a way that would be regionally neutral as well, because otherwise this tax could end up creating major transfers among the regions, which could be highly problematic in a political sense.
I'm not saying the money should be dedicated. That's different. Dedicated taxes are like the Canada Pension Plan: the money is hived off and put into a special fund, and then the benefits come from that fund. If the EI system ends up being a separate fund, and money goes into that fund and then funds those benefits, then that actually becomes a dedicated payroll tax. In a sense the EI payroll tax was not as dedicated before, because it went into general revenues and--
5:10 p.m.
Liberal
Massimo Pacetti Liberal Saint-Léonard—Saint-Michel, QC
I understand, but I'd like to know what your opinion is. Should the government lean towards collecting money and using it for benefits? Should it be doing more with CPP, EI, the airport security tax? Should it be doing more funds like that, or should everything go into a pot? That's the short end of the question.
5:10 p.m.
Professor, School of Policy Studies, University of Calgary
I see your point.
I always worry about too much rigidity in budgeting. I worry that if you create a lot of dedicated funds and everything else, you do create that problem.
In the case of the CPP, I think it was quite wise to put it in a special fund, because there were federal-provincial aspects associated with that. I think there could be a case for EI if you really wanted to run it more like an insurance fund, just like workers' compensation programs at the provincial level, but I'm not sure I would like to start seeing a whole bunch of funds created for everything else. At that point I would be cautionary, just as your question suggests.
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Liberal
Massimo Pacetti Liberal Saint-Léonard—Saint-Michel, QC
Okay, great.
Professor Milligan, would you like to comment?
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Assistant Professor, Economics Department, University of British Columbia
I defer. That was fine.
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Conservative
The Chair Conservative Rob Merrifield
Thank you.
We want to thank both of you, Professors Milligan and Mintz, for lending your time. It was a very interesting discussion, as was reflected by the number of questions from the committee. Thank you very much for joining us today and contributing to our study. Thank you.
Before we adjourn, we do have a budget in front of us that we have to pass prior to getting witnesses in here tomorrow, so I would entertain a motion to accept that budget.
Mr. McKay moves the motion.
(Motion agreed to) [See Minutes of Proceedings]
5:10 p.m.
Conservative
The Chair Conservative Rob Merrifield
There is one other issue, which is that it appears Bill C-50 is going to pass the House. It will likely be here next week. My suggestion to the committee would be to put Wednesday's meeting off to do Bill C-50.
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Liberal
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Conservative
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Conservative
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The Clerk
Wednesday is OSFI.
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Liberal
Massimo Pacetti Liberal Saint-Léonard—Saint-Michel, QC
No, it's just that it took him forever to come.
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Conservative