Finance Committee on Sept. 15th, 2009

[Tina Kremmidas]

Exactly. We don't think there are going to be major inflationary issues in Canada.

[Thomas Mulcair, NDP, Outremont, QC]

When was the last time you saw something happen in the States that didn't happen here?

[Tina Kremmidas]

I'm sorry. I said the U.S. is hoping that inflation will be out of control so they can get out of their deficit headache. We don't foresee that inflation is going to be a major problem going forward, for a number of reasons.

[Thomas Mulcair, NDP, Outremont, QC]

Mr. Yussuf, Mr. Jackson, good morning, and welcome.

I'm going to speak in English because I know it will go faster for both of you.

The Liberals and Conservatives took $57 billion out of the employment insurance fund and gave it to Canada's richest corporations. When they took the $57 billion out of EI, a lot of people said, “Well, who cares if they put it into general revenue? It's still government money.” In fact, every single company and every single employee is obliged to pay into EI, whether that company is making money or losing money or breaking even. All of that money that was purpose-built for the specific events we're going through now, an exceptional case where we have 1.7 million unemployed in Canada, was given in the form of a $60 billion tax decrease by the Conservatives, backed by the Liberals. In fact, the Liberals said they would have cut corporate taxes even more.

So we have this massive transfer. A company like EnCana benefited to the tune of hundreds of millions of dollars by those tax reductions, whereas a company in the forestry or manufacturing sector that had not made a profit and had therefore not paid taxes got nothing of those tax returns.

Isn't that the base cause of the problem we're in right now in the EI fund as the Conservatives, despite their promises not to tax more, are about to whack companies and employees with a $19 billion new tax to refund the EI program that they stole and gave to Canada's richest corporations?

[Hassan Yussuff]

First, I think the money that was paid in by workers and employers should remain there for the purpose of providing benefits. The fact that it has been treated as general revenue for quite some time is simply unacceptable. It is not general revenue; it is a premium that has been generated to provide benefits for workers. Yes, if you look at the math between the tax cuts and the amount of money that was spent, you can argue it came from the unemployed workers of this country to a large extent.

In terms of our solution, of course, the government should reimburse the fund for the money they take out as a first step.

We also want to be very clear with this committee, and I think it's critical that we do that. We don't see EI premiums as a tax. Some may want to characterize it as that, but we don't see that. For many of our members who pay their EI premiums, it is with the expectation that they will get benefits at the end of the day. I think it is important. This is a program that is paid into jointly by employers and workers with an expectation that they will receive benefits should they lose their jobs. The unfortunate part with the 1.7 million plus the hundreds of thousands who are not qualified for benefits is that they are not receiving anything. I think that's a disservice to the program itself. More importantly, if you continue to argue that EI premiums that are paid are used for general revenue, I think you're doing a disservice to the people who actually take an interest and are defenders of the program.

[Thomas Mulcair, NDP, Outremont, QC]

But based on past behaviour--

[The Chair, Conservative, James Rajotte]

You have one minute, Mr. Mulcair.

[Thomas Mulcair, NDP, Outremont, QC]

One minute?

Based on past behaviour.... I mean, you're quite right, it's a social program and it's supposed to be there for a purpose. It's dedicated. So when that $57 billion was taken out and paid over, they were equivalent: the amount given in tax reductions to the most profitable corporations corresponds to the amount stolen from EI by the Conservatives, backed by the Liberals. But by putting it into general revenue, we indeed are making it a tax for all intents and purposes, but a tax even on companies that have lost money or have broken even, which otherwise wouldn't have had to pay the taxes and did not benefit from the tax reductions because they hadn't been paying taxes. In particular, if you were in manufacturing or forestry, you were subsidizing the oil sector and the banks.

Interestingly enough, when you go through the lists of corporations that contributed to the Conservative Party--when corporate donations were still allowed--number one on the list is EnCana. Number two on the list is the Bank of Nova Scotia. Who profited most from the tax reductions that the Liberals and the Conservatives concocted by stealing the EI fund? EnCana and the Bank of Nova Scotia.

[The Chair, Conservative, James Rajotte]

That will have to be a comment, because you're out of time, Mr. Mulcair.

[Thomas Mulcair, NDP, Outremont, QC]

Thank you, Mr. Chair.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Mulcair.

We'll go to Mr. Pacetti, please.

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

Thank you, Mr. Chairman.

Thank you, witnesses, for appearing.

I have to continue the discussion we are having now on unemployment because I think it's an important topic, and I understand that Mr. Mulcair is finally coming around in understanding what unemployment insurance is there for. I think that is the logic we are trying to use in the Liberal Party's position. I think it's clear that in the past when the Liberals were in government they put a reserve there for a rainy day. Today is that rainy day.

In fact, Mr. Yussuff, as you said, there are a lot of people who cannot collect unemployment insurance. The reason unemployment insurance is there, the reason people pay into it, is so that they can collect when it's a rainy day. Today is a rainy day. We have never had as many unemployed people as we have today.

So I don't see what the problem is in spending an extra $1 billion to make sure that people will be covered through their insurance premiums. The problem we're having is that they are insurance premiums. Why is everybody across this country paying the same premium yet are not entitled to collect the benefits to which they are entitled?

Now, yes, Mr. Mulcair can mash the numbers as he wishes, but the money that was used in previous years by the Liberal government was also used for items like research, which the people around the table are asking for. It has been used for infrastructure. It was used for health. It was used for education. So let's not quibble over where the numbers go, because I think the Liberal government has always been a good fiscal manager.

The question now is, what do we do in the next two to three months? Are we going to help the people who most need the help by giving them what is due to them, by giving them unemployment insurance because they paid into the program?

[Hassan Yussuff]

Our response has been consistent. We believe that the 360 hours we have calculated would, first, provide uniformity across the country. I agree with the point. I think a Canadian is a Canadian. There aren't any differences, regardless of what region of the country you live in. I think that in the context of people losing their jobs through no fault of their own, one of the basic understandings of the EI premiums they were paying is the expectation that they would get benefits. A large number of people, hundreds of thousands, have been disqualified because, of course, of the mishmash of rules we have across the country.

We again urge the opposition and the government collectively to have the government adopt some common standards across the country to help workers who are currently unemployed.

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

The time has come. The reserves are no longer being used for reserves; they are now actually being used for concrete action. The time has come. We can no longer make these adjustments piecemeal. We have to make adjustments to the system, and now is the time. Is that correct?

[Hassan Yussuff]

Without a doubt, now is the time.

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

Thank you.

Just quickly, Ms. George, in terms of the amount of spending that is going on with the government, they're spending money like drunken sailors. In their last report, they said they had spent 80% of the money that was already provided for in the stimulus package. What we've seen in the various reports is that they haven't actually spent that money. The money is only going to roll out in the future.

What would be your logic in reining in the spending when we don't even know how much they have spent? You're asking the government to stop spending when we don't even know if they've spent the money or what it has been used on. There has been no accountability in terms of the return we have gotten on that money.

[Shirley-Ann George]

Thank you for that question.

We're working on the assumption that the money that has been committed to be spent in the stimulus will be rolled out across the country as committed. We know that it does take some time to put in place programs and--

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

So you're assuming all that money is going to work and there will be a return.

[Shirley-Ann George]

We're making the assumption that all of that money will be put into the--

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

Which I'm not convinced of, but anyway....

Jim, just quickly, you're saying airports should not pay any tax because they're not competitive. I'm from Montreal and I don't see myself walking to Boston to take a flight to Toronto. Can you help me out on that?

[Jim Facette]

Yes, absolutely, I can. I'd be happy to help you out on that.

You may be from Montreal and you're not going to walk to Boston, but you may head south to Plattsburgh. If you look at the Plattsburgh website, Mr. Chair and other committee members, you'll see that Plattsburgh actually promotes itself as Montreal's U.S.-based airport. It's on the logo. Check the website out yourself. Secondly, the website is perfectly bilingual. Plattsburgh is going after Canadian travellers in the Montreal area; it's very, very real.

So if you think that Canadians are not going to other airports to get cheaper flights to Vegas or California or Florida, have a look around. You'll see that even in the Ottawa area they're going to Syracuse. If you look around and talk to family members, it happens every day.

In Montreal, if you read the strategic plan on the Montreal Airport Authority website, you'll see that rent is number one going forward.

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

So the airline is not paying tax at the Plattsburgh airport, is what you're saying?

[Jim Facette]

The business environment in the United States, in developing the airport, is very, very different. The Plattsburgh airport used to be a military airport and they upgraded to a civilian airport, or aerodrome, as we say in the business, solely on the backs of the U.S. taxpayers.

We don't have that advantage. It's a very different environment. The fee structure, the cost structure, at a U.S. airport is very different.

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

Thank you.

[Jim Facette]

You're welcome.