Evidence of meeting #65 for Finance in the 40th Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was region.
A recording is available from Parliament.
Conservative
Mike Wallace Conservative Burlington, ON
So if the bill were clear, and somehow CRA were able to do it--I don't know how they would do it--if you had to list your occupation and what you did for education in your CRA form, in your tax form, that could reduce the take-up on that actual credit. Is that correct?
Conservative
Mike Wallace Conservative Burlington, ON
Then there was some confusion about whether this was a credit or a deduction, and I used the example of some young individual in a first job making $30,000. So based on the bill, 40% of that is $12,000 and they are allowed to deduct $3,000. So they deducted $3,000 from their gross, because it says gross salary here, so now they are taxed on $27,000 instead of $30,000. This is a credit, which means that after all the deductions, including the $9,000 you get as a personal exemption.... Let's say they owed $4,000 in federal tax. So $3,000 of that could be deducted and they actually owed $1,000. That's what you mean by a credit. Is that not correct?
Parliamentary Budget Officer, Library of Parliament
That's correct, sir. That's assuming, again, that they have the space within their $8,000.
Conservative
Mike Wallace Conservative Burlington, ON
Okay. So it would be, from a tax perspective, I don't want to say “cheaper”, but if it was treated as a personal deduction, like our personal exemption that we already have, our $9,000, whatever it is--I don't even know what it is any more, but I know we keep moving it up--then the balance of their income would attract all the other deductions they have. That would be actually less expensive. Is that not correct?
Conservative
Mike Wallace Conservative Burlington, ON
The Speaker of the House rules these things like this. Because we're reducing taxes for individuals, they're votable, but in actual fact this is a cost to the government, whoever the government of the day is. Is that not right? The treasury will be getting less money if this credit gets passed and put into law. If we wanted to balance that, we would have to find revenue from other sources to make up the deduction that people would get from this credit. Is that not correct?
Parliamentary Budget Officer, Library of Parliament
Well, sir, yes, we're talking about forgone revenues, so there would be a cost to the fiscal framework. If we wanted to keep things neutral, we'd have to find other measures, certainly.
Conservative
Mike Wallace Conservative Burlington, ON
There's nowhere in the bill.... This takes it in isolation. We've heard that provinces have some sort of regional credits and so on. There's no sense this is replacing that. This would be for a young person in addition to what they're getting now. Am I not correct, that when you looked at this, you didn't look at what they're getting elsewhere?
Parliamentary Budget Officer, Library of Parliament
Yes, we did, sir.
In one of the annexes, Jason Jacques, the author, spent time talking to the different provinces. Five provinces have graduate retention types of programs. I think Quebec's is the only one that has a regional dimension. We provided you with an analysis of what's available in the different provinces and to what amount.
Conservative
Mike Wallace Conservative Burlington, ON
But they're viewing this bill as an addition to that. Did you get any response from the provinces on how they felt about this?
Assistant Parliamentary Budget Officer, Expenditure and Revenue Analysis, Office of the Parliamentary Budget Officer, Library of Parliament
In general, the discussions with the provinces were of a technical nature.
Conservative
The Chair Conservative James Rajotte
Thank you, Mr. Wallace.
We'll go to Mr. Rafferty, please, for seven minutes.
NDP
John Rafferty NDP Thunder Bay—Rainy River, ON
Thank you very much, Chair.
Thank you for being here, Mr. Page.
To continue with what Mr. Wallace was talking about, I'd like to ask you more opinion questions rather than technical money questions. In your discussion with the provinces, was there any indication the provinces would be the ones who would designate these areas? That they're not going to buy into it unless they have an opportunity to designate those areas themselves?
Parliamentary Budget Officer, Library of Parliament
We really didn't have that type of conversation with them. In the analysis that Jason and Sahir undertook we looked at health regions. Those health regions were designated by the provinces. We have 90 of them across the country, and Statistics Canada can match up economic and socio-economic information for those health regions.
NDP
John Rafferty NDP Thunder Bay—Rainy River, ON
Can we reasonably assume the provinces will have a hand in the designated areas? The reason I ask that is of course because in my province of Ontario, as far as health care and doctors in underserviced areas are concerned, places like St. Catharines became underserviced areas. I would be concerned that's going to be a problem in the overall figuring out of this.
Parliamentary Budget Officer, Library of Parliament
I would just add to that. Given that there may be a need if we were to move forward with this in a policy context in terms of using the Regional Development Incentives Act, you'd have to update the regulations in those regions anyway. It would be for you to decide in a policy sense how you would want to involve the provinces, but I think you'd have to do it anyway.
NDP
John Rafferty NDP Thunder Bay—Rainy River, ON
I want to ask your opinion about this particular bill and the benefits of it. I agree there are benefits in this bill to underserviced areas of the country. Would another mechanism be more effective--for example, a remote area tax deduction for everyone in the area? This is not a dollar question, but an opinion question.
Parliamentary Budget Officer, Library of Parliament
We haven't looked at that. I'd be more comfortable if you asked us to look at other instruments from a cost perspective, which is generally the way we look at these things. We'd have to undertake the analysis. I'm not comfortable providing an opinion without doing the analysis
NDP
John Rafferty NDP Thunder Bay—Rainy River, ON
Okay.
In the figures you looked at, and this bill specifically talks about young workers, new graduates, younger people, in terms of mobility and getting people into remote areas, would you think older workers would also be part of this? Particularly considering the unemployment changes that happened in the last couple of years, and people being more mobile and needing to go to other areas, was there anything in your undertakings that showed that older workers are also being more and more mobile?
Parliamentary Budget Officer, Library of Parliament
We spent a lot of time with a professor from the University of Ottawa, looking at his studies. He spent many years looking at mobility and education.
Assistant Parliamentary Budget Officer, Expenditure and Revenue Analysis, Office of the Parliamentary Budget Officer, Library of Parliament
In the information the Ministry of Finance in Quebec provided, they also provided demographic information. The bulk of the take-up was in the demographic group 20 to 24, and the balance, 25 to 29. So it gives you some sense of a situation with their specific program or tax credit in terms of where the propensity to take up this credit was greatest.
NDP
John Rafferty NDP Thunder Bay—Rainy River, ON
Thank you.
One other thing that was clarified for me earlier in the hour was that not just universities and colleges but apprentices and tradespeople would qualify for this and the answer was, yes, they would under this bill. Were those sorts of numbers taken into account when you were doing your calculations?