Finance Committee on Oct. 21st, 2010

[Gary Corbett]

Where I come from, the professionals need to be part of the solution. Unions really have a bad name, in terms of the general feeling in society, but I remind you that the solutions are found on the shop floor sometimes.

There are some projects we're working on with departments and agencies to try to identify cost savings, and I think if we did that en masse across the public sector, we could really make a big difference in the situation the country is in.

[Pascal-Pierre Paillé, Bloc, Louis-Hébert, QC]

Just one moment. I would like to be clear on what you are saying. Basically, if there was a questionnaire, a survey or a consultation involving members of the public service, a number of solutions would be found within the departments to enable the government to save money.

[Gary Corbett]

We have in fact come up with some solutions in the past and through working.... I point to one particular initiative in Public Works and Government Services Canada called “Get rid of it”. Management and union went through, working together, to identify basic wastes, and they were able to save time and money. So it can be done.

[David Campbell]

Our members are small and medium-sized businesses. Every day in the past year they've had to make extremely difficult decisions on employment, on managing their business. If they don't, they go out of business. They don't get money thrown at them because they were mismanaged companies.

We support, and many of our members are members of, the CFIB. They work hard. I talked to one of our members last week in northern Ontario. She's working 70 to 75 hours a week. She's had to lay off four employees. She doesn't know what's going to happen to the economy up there.

All we're suggesting is that the government has to make the same kinds of difficult decisions across the board. Yes, there are many professional people who should be well paid. Do you need as many? That's my point.

[The Chair, Conservative, James Rajotte]

You have one minute left.

[Scott Marks]

One of the things we've asked for here today is for the fire service statistics to be compiled through Statistics Canada. We believe the infrastructure and all the elements of that are clearly in place. It's more a matter of will to get the information out to the provinces and require the provinces to submit that information. That information would be invaluable to public health and various agencies could utilize it for public safety. That's an element we see that has all sorts of value-added to government agencies at little or no cost.

[Normand Lafrenière]

Our pension system, within the mutual insurance companies, is much less generous than what currently exists in the federal government. Despite that fact, our system is seriously underfunded. We are currently evaluating how much money would have to be injected in order to keep our system afloat.

We are fortunate to have a defined benefit program, but it is not fully indexed to inflation, like the federal government plan. Federal employees retire on average between two and two and a half years earlier than in the private sector, which creates a huge difference. A great deal of money is invested in the pension plan and is therefore not invested in the private sector. That difference is unacceptable.

[The Chair, Conservative, James Rajotte]

Very briefly.

[Corinne Pohlmann]

We believe one really low-cost way to make government more efficient and also enhance productivity is to deal with red tape and with paper burden and regulations. We believe we've given some strong ideas to the government on how they can start streamlining regulations and red tape at the federal level, and it can work at provincial levels as well. I think if we can focus on that, and start reducing some of that, we can probably bring more efficiencies to government and greater productivity to the private sector.

[The Chair, Conservative, James Rajotte]

Merci.

Ms. Block, please, for a five-minute round.

[Kelly Block, Conservative, Saskatoon—Rosetown—Biggar, SK]

Thank you very much, Mr. Chair.

Thank you, all of you who came to present today.

I would like to make one quick observation for the Canadian Association of Mutual Insurance Companies. I believe our government has made a commitment that we will not allow banks to sell insurance even on their website. I believe we stand by that commitment.

My next question is for CFIB.

Our government understands that small and medium-sized businesses are the backbone of our economy. In fact, I think we're celebrating Small Business Week this week.

My colleague graciously reminded me that you just put out a report. I'm from Saskatoon, so I believe our cities ranked fairly well in terms of being a place to start a new business.

In the past year we have been studying pension reform, retirement income security, and we've heard other witnesses suggest doubling the CPP. That's something that some members of the opposition actually favour. I want to have you talk a little bit about one of your recommendations to not increase mandatory CPP premiums, but instead offer incentives to boost coverage among SMAs. I'm wondering if you would just tell us what you think some of those incentives would look like.

[Dan Kelly]

There's a variety of ways that can happen.

I have to say, to start, that we are quite concerned that Minister Flaherty has opened the door to increasing Canada Pension Plan premiums, together with Minister Duncan in Ontario. That is a huge concern to our membership. We've ratcheted down, I think with your help, the employment insurance premium increase that was scheduled for a couple of weeks from now, but we are quite alarmed that CPP could easily eclipse whatever benefit is provided on employment insurance.

Let's not forget, payroll taxes in Canada are going to be going up dramatically in the next few years. Workers' compensation premiums are going up across the country, governments have increased minimum wages right throughout the recession, EI is going up despite doing that at a lower amount, and CPP may increase if in fact the governments do go ahead with that plan.

We have put forward a variety of proposals. One that very few members of Parliament know about is the comparison between RPPs and RRSPs. If an employer puts money into the RPP plan on behalf of their employees, it's exempt from payroll taxation. If they put money into an RRSP plan for their employees, which of course is done by vastly more firms than for the traditional RPP plans, the RRSP payroll taxes have to be paid on top of the employer contribution to the RRSP plan. If you put in a few hundred dollars a month to an RRSP plan for your employee, you also have to pay EI, CPP, and workers' compensation on top of those dollars. You don't if you put that money into a registered pension plan. That is completely unfair, and particularly unfair to small businesses that can't even crack into regular pension plans.

That's one idea that we have put forward to address that problem. We have raised it with the Minister of Finance, and it does look like some discussion is going on about that very issue.

Our members do support some degree of voluntary expansion to the Canada Pension Plan program. The idea that we're most afraid of is, of course, a mandatory increase.

[Kelly Block, Conservative, Saskatoon—Rosetown—Biggar, SK]

Thank you very much.

My next question is to the International Association of Fire Fighters. I want to refer to recommendation 1. Briefly, what would be the structure for administering this fund? In other words, would this be a nationally administered program? Could you tell me what you're envisioning?

[Scott Marks]

It would be a nationally administered fund. Currently deaths in the line of duty are recognized provincially by the workers' compensation boards. When the provision would meet the requirement--when it would be deemed to be an occupational death--the benefit would be paid, and it would be administered at the federal level, yes.

[Kelly Block, Conservative, Saskatoon—Rosetown—Biggar, SK]

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you, Ms. Block.

Go ahead, Mr. Szabo, please.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Kelly, one of the statements you made near the end was that you're grateful to the government for reducing the EI increase. Can you explain how that worked?

[Dan Kelly]

Sure. The premiums on employment insurance are going to be going up, and they're going to be going up big time.

[Paul Szabo, Liberal, Mississauga South, ON]

How much were they proposed to be going up?

[Dan Kelly]

The maximum allowable increase, this year or any year, is 15¢ per $100 in payroll for employees and 21¢ per $100 in payroll for employers, because employers pay 60% of the cost of the program, while employees pay 40%.

[Paul Szabo, Liberal, Mississauga South, ON]

And that was planned for January?

[Dan Kelly]

That was set for January 1 of this coming year. We mounted a fairly significant political action campaign, and the government did limit the increase to 5¢ per $100 for employees and 7¢ per $100 for employers.

There still is a payroll tax increase coming on January 1, and many of our members are of course going to feel that pinch when they're trying to increases wages or determine their staffing levels for next year.

[Paul Szabo, Liberal, Mississauga South, ON]

The point is that the government made a mistake and they corrected it. We'll thank them for correcting the mistake of being too aggressive on this matter.

In any event, in your conclusions, one of your possibilities vis-à-vis EI performance is to eliminate or reduce programs not related to EI's core mandate. You haven't been very specific there. Why don't you put on the table a couple of things that you deem not to be in the core mandate and that could possibly be cut out of EI benefits?

[Corinne Pohlmann]

I can start with that. One of the areas that EI currently covers is training. It spends about $2 billion per year on training. That comes out of the EI account. Repeatedly, when studies have been done on how effectively that money is being used and whether the EI training dollars are actually helping people get back to work, the best that can be said is that there's maybe some moderate improvement.

We believe there are better ways we can use that $2 billion. In fact, that is one of the things that we think could fund an idea of an EI tax credit or an EI employment credit for hiring. It would allow employers a bit of a holiday should they increase their payroll over a set period of time. It would encourage them to hire more people and to train them. We think that going forward that's a more effective way to use training dollars than spending the $2 billion currently in the account.

[Dan Kelly]

I will add that right now about half of the spending in EI is not for benefits for the unemployed. It pays for all sorts of other things. Some have great value and are good societal goals, including maternity and parental leave benefits, fishermen's benefits, and a whole variety of pilot programs that are funded through EI. We're not saying that all those programs should be eliminated, but our members do question from time to time whether it is appropriate to pay for some of these Government of Canada social programs through a mandatory payroll tax and whether there could be other ways of funding some of them.

In addition to that, we think that a variety of pilot projects that EI pays for in the core EI spending area need to be further reviewed. Many of them were just extended by the Government of Canada in recent weeks, but there are a few that we think could be trimmed.

Finally, we are grateful that the opposition parties did take a bill off the table that had been put forward by the Bloc Québécois, a bill that was going to dramatically expand employment insurance benefits. The Liberal Party supported blocking that piece of legislation. We don't think there's any truck or trade right now for any dramatic expansion of employment insurance; unfortunately, some of our opposition parties have not been particularly helpful to us on that front.