Evidence of meeting #37 for Finance in the 39th Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was bank.
A recording is available from Parliament.
3:50 p.m.
Conservative
Jim Flaherty Conservative Whitby—Oshawa, ON
As you know, in this bill we are making a major change with respect to EI in moving EI out into what will be the new Canada Employment Insurance Financing Board, a crown corporation.
But Mr. James can respond to the issue.
3:50 p.m.
Bloc
Paul Crête Bloc Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
Minister, I would like you to answer. There is $54 billion in accumulated surpluses. You are now giving back 2 billion. Don't you think that is stealing $52 billion from the people who have paid premiums for years and who have contributed the most to fighting the deficit? Now you are not in any way giving them back their due.
3:50 p.m.
Conservative
Jim Flaherty Conservative Whitby—Oshawa, ON
As you know, historically there have been many criticisms by both employers and employees with respect to the surplus. The purpose of creating and managing a separate bank account, which this bill will do, will be to hold and invest any excess EI revenues from a given year until they're used to reduce premium rates in subsequent years. So this is an important advance with respect to that issue.
3:50 p.m.
Bloc
Paul Crête Bloc Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
Is there not a flagrant contradiction between your statement about sound and rational money management in the context of the current economic slowdown, and the fact that you have only made provisions for a $2 billion cushion, whereas the Canadian Institute of Actuaries, which is neither a political party nor a partisan organization—it is actually a group of insurance experts—is of the view that a $15 billion reserve is required for the system to survive?
3:55 p.m.
Bill James Director General, Employment Insurance Policy, Department of Human Resources and Social Development
With respect to the proposed reserve in Bill C-50, it's correct that it's proposed as $2 billion. That's an amount the government feels is appropriate vis-à-vis the rate stability provisions in the legislation.
3:55 p.m.
Director General, Employment Insurance Policy, Department of Human Resources and Social Development
It's important to recognize as well that should that reserve ever be depleted, the government will stand behind the continued payment of employment insurance benefits in that situation. So there is no concern at all that until the reserve is brought back to its intended level, those payments would not be made by the government. The amount of the reserve takes account of the design of the program today and current economic conditions and is considered appropriate in those regards.
It's important to note that the other—
3:55 p.m.
Bloc
Paul Crête Bloc Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
Mr. James, do you agree that the $2 billion is for just one year? For the system to survive a full economic cycle, as it should, it would actually take $15 billion, which is what the actuaries are calling for, out of respect for the people who get benefits and pay premiums under the plan.
3:55 p.m.
Conservative
The Chair Conservative Rob Merrifield
The time has gone, but I'll allow a very quick answer to that.
3:55 p.m.
Director General, Employment Insurance Policy, Department of Human Resources and Social Development
Just to reiterate, the $2 billion reserve that has been set aside is considered appropriate for the parameters provided for in the legislation. The legislation contains parameters in terms of how much rates can increase or decrease, so there are stability provisions in there—and the $2 billion reserve takes those into consideration.
3:55 p.m.
NDP
Thomas Mulcair NDP Outremont, QC
Thank you, Mr. Chairman.
First of all, I would like to welcome our finance minister, Mr. Flaherty. I would just like to take a few seconds to say how upsetting I find it that the officials from his department are unable to speak French. As a minister and like all committee members, he has the right to use the official language of his choosing.
I noticed the same thing when the budget was tabled, when I was accompanied by my close associates. We could not get a single complete answer in French from the officials. I think it is quite simply because the Department of Finance of Canada operates exclusively in English.
My question for the minister is about a statement he made earlier. He talked about Ontario's share. He said Ontario was satisfied with its share of the $1 billion trust that was created. He mentioned $350 million.
I would like to know from the minister how he went about determining that this amount was fair. Does he consider Quebec's share to be fair?
3:55 p.m.
Conservative
Jim Flaherty Conservative Whitby—Oshawa, ON
Thank you, Mr. Mulcair.
Let me say first that your assertion that the Department of Finance works only in one of the official languages is not correct. I have been the minister for more than two years, and I can assure you that a lot of the department's work is conducted in the French language.
That said, the $1 billion trust is distributed per capita. So the $350 million or so for Ontario is apportioned in that way, as is the apportionment for the other provinces, including Quebec.
In terms of their being satisfied with it, they've said some very nice things about it. I generally interpret that as satisfaction.
3:55 p.m.
NDP
Thomas Mulcair NDP Outremont, QC
I asked if it was fair.
If the trust is supposed to compensate for job losses due to the tax policies of his government and Quebec has, per capita, lost a lot more than Alberta, for example, does he think it is normal for Quebec to have such a small share? Should there not be other criteria beyond a simple per capita criterion?
Yesterday, the Crocs plant announced that almost 1,000 jobs would be lost in Quebec City. Those jobs are very hard to replace. Earlier, he made an emotional reference to our children and our grandchildren. Does he realize that in the Beauce, for example, there are companies that employ parents and grandchildren, and that generations have worked for companies like Le Baron, which are now closing because of the tax policies of his government? Why is he not doing more to help Quebec out here?
3:55 p.m.
Conservative
Jim Flaherty Conservative Whitby—Oshawa, ON
Well, we're not. There are more people who live in Ontario than in Quebec.
3:55 p.m.
NDP
Thomas Mulcair NDP Outremont, QC
I mentioned Alberta. That is the example I gave. It is about job losses, not population.
3:55 p.m.
Conservative
Jim Flaherty Conservative Whitby—Oshawa, ON
There have been some job losses in certain sectors in Alberta. There have been forestry job losses, as you know, in Quebec, in New Brunswick, in Ontario, particularly in northern Ontario. There have been significant job losses in the forestry sector in the province of British Columbia as well.
This is a $1 billion community trust set up in this budget, but this is not the end of what the government does—hardly! We have the older workers program, as you know, which we brought in via previous budgets, and which I can say was encouraged by your party before you arrived in Ottawa. I remember the discussions I had about what was desirable, and one of the major points made by your critic at the time, and the Bloc Québécois, was to try to do something for older workers between the ages of 55 and 64—which we did. And now we have put more money into this in budget 2008.
4 p.m.
NDP
Thomas Mulcair NDP Outremont, QC
This will be my last question, Mr. Chairman.
Table 5.4 of the budget, on page 201 of the English version, shows that starting in fiscal year 2008-2009, which just started on the first of this month, and over a period of just two years—two fiscal years—personal income tax is going to go up by 12%, which will be a budget increase, whereas corporate income tax is going to go down by 14% over a two-year period.
Does the minister consider this fair? Does his department have any studies to show that the GST reductions, which he and his government boast so much about, have actually benefited consumers? Or have they been absorbed by increased corporate profits?
4 p.m.
Conservative
Jim Flaherty Conservative Whitby—Oshawa, ON
On the GST studies issue, I'll have to get one of the departmental staff to speak to that.
On tax reductions, we've reduced taxes of every kind in Canada, including the personal income tax, since we came into office. Certainly we've reduced the consumption tax by two full percentage points. This is being reflected now, and Canadians know it, because they're filling in their tax forms and are seeing the size of their rebate cheques. This is something that is well known and has recently been communicated to me every day by people across Canada, who are saying how happy they are to be getting higher rebates than they expected.
On the question of the studies showing the benefits of the GST cuts for consumers, I'll get my colleague to respond.
4 p.m.
Chris Forbes Director, Fiscal Policy Division, Economic and Fiscal Policy Branch, Department of Finance
I don't have the numbers in front of me, but if you look, for example, at the consumer price index as issued by Statistics Canada, in January you'll see a sharp reduction in consumer prices. That goes to your question about whether the benefits of the GST cuts have been passed on to consumers. It indicates a significant slowing in the annual rate of increase in consumer prices, which would reflect the GST imposition. It's difficult to break it out to the dollar, obviously, but that's what we have seen in the January consumer price index.
4 p.m.
Conservative
April 16th, 2008 / 4 p.m.
Conservative
Ted Menzies Conservative Macleod, AB
Thank you, Mr. Chair. Because of our shortage of time here with the minister, I will be sharing my time with Mr. Dykstra.
I have just one quick point to Mr. Mulcair's comment about two official languages. The department did provide intensive briefings in both official languages for all members of Parliament, so I don't know that the minister was aware of the delivery of those two extensive briefings, but we do, at that department, operate in two official languages.
First of all, Minister, congratulations on getting your third surplus budget in a row passed. It's great to see that. Last weekend you were at a G7 conference, and there was lots of buzz back here about the financial discussions going on down there--G7 and the IMF. You alluded to it very quickly in your opening remarks. Regarding the fall economic statement and other initiatives we've taken, can you share with us perhaps how those compare actually with the United States, which isn't seeing the growth that we are, and the strength in their economy?
4 p.m.
Conservative
Jim Flaherty Conservative Whitby—Oshawa, ON
Yes, despite the challenge posed by that question, I'll see if I can respond.