Finance Committee on Oct. 28th, 2009

[Pat Martin, NDP, Winnipeg Centre, MB]

It's treated as part of your earnings. That's a taxable benefit.

[Michael Roschlau]

That's right, and it would be taxed as cash income at the margin of the individual's tax bracket.

You're quite right that this goes back to Nelson Riis' motion about 12 or 15 years ago, and there have been several others in the meantime. I think there was one from the Bloc at one point, and now there is the one introduced yesterday.

[Pat Martin, NDP, Winnipeg Centre, MB]

So we keep bringing it up and we keep voting on it--

[The Chair, Conservative, James Rajotte]

Thirty seconds.

[Pat Martin, NDP, Winnipeg Centre, MB]

--and we keep approving it, and it never seems to work.

I do hope it has more success this time around under Denise Savoie.It will be just in time for this year's budget. That would be good.

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Martin.

Colleagues, I'm trying to manage the time as best we can. We have a vote at 5:30, which will probably interrupt our next panel by about 30 to 45 minutes. I'm proposing that we take another round from the Liberals, the Bloc, the Conservatives, and then we start the next panel even before 5 o'clock, if we can. If we could do shorter rounds, it would be very helpful for the chair.

We'll start with Mr. McCallum.

[John McCallum, Liberal, Markham—Unionville, ON]

Thank you.

And thank you all for being here.

I have a question for Mr. Masnyk first.

I understand very much the importance of small business. And even though I used to work for a bank, I admire the insurance industry. But I have a potential concern with your proposal. From the income distribution point of view, I didn't see any income limit. If we had the Bronfmans, the Demarais, or the Stronachs, who have family-owned, non-public companies, would this rule apply to them or to people of that wealth?

Second, if you have assets in a small business with a capital gain, you get no tax. If it's out of the small business, you might get huge tax. You'd certainly have an incentive for relatively affluent companies to somehow shift the assets into the companies rather than their personal accounts, and I'm wondering if that might not lead to some abuse, potentially at least.

[Steve Masnyk]

Thank you, Mr. McCallum.

I think what I've proposed to the committee today is the principle that there should be an incentive for small and medium-size businesses to stay within family hands. The exact logistics or details on how it would work, what the cap would be, and what the minimum would be I would leave to the experts in Parliament to determine. I think that's the principle our members have asked us to present to you.

[John McCallum, Liberal, Markham—Unionville, ON]

We could quite easily get a cap on the size, but what about the potential for this inducing behaviour that could be construed as an abuse of the law?

[Steve Masnyk]

I think if it's inducing small businesses to remain within the family unit as opposed to transplanting to other parts of the country where everything is being centralized, it would be a good thing. I don't see how anybody could be opposed to that.

[John McCallum, Liberal, Markham—Unionville, ON]

Okay, thank you.

Perhaps I could ask Mr. Pekrul a question for clarification.

I understand that with CPP the current situation is that if someone drops out of work for a while to look after a child they get exemption in terms of pension calculation. But if someone drops out of the workforce for a while to look after a disabled or elderly person, they get nothing. Is that right?

[Ray Pekrul]

Yes, that's correct. We're recommending that there be a drop-out provision similar to the child care provision currently in the CPP.

[John McCallum, Liberal, Markham—Unionville, ON]

I agree with you. With an aging population and looking after elderly people becoming more and more of a problem, some sort of symmetry for the old and the young is a good idea.

[The Chair, Conservative, James Rajotte]

One minute.

[John McCallum, Liberal, Markham—Unionville, ON]

Mr. Thakar, we certainly strongly support what you're doing, and our leader recently said as much.

To understand, you have an SD Tech Fund and you want a new fund called the clean tech accelerator fund. They're both in support of clean technology. I don't quite know what the difference is and why you need a second new fund rather than more money into the existing fund.

[Sailesh Thaker]

Thank you.

I don't think it's necessarily a question of a new fund; it could be more money for the existing fund or under a new instrument that's created. But you're absolutely correct that the purpose is pre-commercial demonstration of--

[John McCallum, Liberal, Markham—Unionville, ON]

So there's no difference between them, just a new name.

[Sailesh Thaker]

Right.

[John McCallum, Liberal, Markham—Unionville, ON]

Okay, thank you.

[The Chair, Conservative, James Rajotte]

Thank you very much, Mr. McCallum.

We'll go to Monsieur Roy, s'il vous plaît.

[Jean-Yves Roy, Bloc, Haute-Gaspésie—La Mitis—Matane—Matapédia, QC]

Thank you, Mr. Chair.

Mr. Pekrui, I understand perfectly the situation you are describing, namely that a large proportion of women between the ages of about 55 and 65 are in a very difficult spot, especially those who are widowed and whose husband was previously getting an Old Age pension. The situation means that these women's income drops.

In your brief, you state that the age at which people can start receiving Canada Pension Plan and Guaranteed Income Supplement benefits should be lowered to 60. Even in industrialized countries, the trend is going the other way; people are waiting as long as they can to retire and start drawing benefits. This is the complete opposite to the current trend

In some European countries, access to pension benefits is being delayed several years so that people stay in the workforce as long as possible. The feeling is that even here, because of the precariousness of pension plans, the trend is more to delay by a year or two the start of Old Age Security, Quebec Pension Plan and Canada Pension Plan benefits.

[Ray Pekrul]

Thanks for the question.

The point we're trying to make is for women who are between ages 60 and 65 who are widowed and who would be able to receive an allowance under old age security. We're advocating that elderly women who are unattached, and oftentimes very poor, by a large percentage in our country also be eligible for that type of allowance or provision. So we're talking about only those women.

I know it looks like there's a call for the age to be reduced, but that is not our intention. Our intention is only to be able to provide some income, under old age security or under what was the survivor's benefit, to those women who are unattached and are clearly much poorer than the general population.

[Jean-Yves Roy, Bloc, Haute-Gaspésie—La Mitis—Matane—Matapédia, QC]

In your document, you talk about single women, divorced women and so on. To my knowledge — and you can tell me whether I'm right —, the provinces have an income security program that is more or less the same. For a single person, there's not much difference between Old Age Security, the Guaranteed Income Supplement and the income security program offered by the provinces.

[Ray Pekrul]

I don't know how to respond to that. I just know that group of women is particularly vulnerable and is often living below the LICO level.

[Jean-Yves Roy, Bloc, Haute-Gaspésie—La Mitis—Matane—Matapédia, QC]

Yes, that's right.