Finance Committee on Sept. 29th, 2011

[Scott Brison, Liberal, Kings—Hants, NS]

But you'd recommend that Stats Canada and the government seek better information in this area.

Monsieur Pineau, the question of income averaging is raised by you from the perspective of the cultural communities. I would urge you to think about it more broadly than that, because increasingly with young people, or with people working on a contract basis, income levels can change dramatically. I think the committee ought to consider the idea of income averaging more broadly than just in cultural communities. In fact it could affect very positively a wide range of Canadians working in a wide range of sectors.

I would appreciate your thoughts on that.

[The Chair, Conservative, James Rajotte]

Just very briefly, sir, please.

[Alain Pineau]

Income averaging is an issue that has been put forward for years by the cultural sector. We're again making the case, in particular because of the specifics and because of the statistic I quoted, that 26% of our people are self-employed in the sector. As I said, that's twice the national average in the rest of the economy. The answer we've always received, through a series of ministers of finance, has been that it also applies to others, and therefore you won't have it.

[The Chair, Conservative, James Rajotte]

Thank you.

Thank you, Mr. Brison.

Mr. Hoback, please.

[Randy Hoback, Conservative, Prince Albert, SK]

Thank you, Chair.

Again, thank you for being here this afternoon.

Just as with the previous group, I read through your submissions and saw stuff I'd like to ask all of you about. Of course, you're all aware of the five minutes that you each had to speak; well, I only have five minutes to ask questions. Maybe I'll just zone in on a couple of areas.

Contraband tobacco is definitely something that I want to talk about. My constituents have been very clear to me that this is something they want to see some action on, one way or the other. We've had some great debates amongst our constituents--i.e., maybe the taxation's too high on contraband and we just should drop the taxes; then it's no longer a market for contraband. Then there's the argument that if you did that, you'd encourage more smoking and you'd see the other effects in there. It's one of those issues where you're damned if you do and you're damned if you don't--if you'll excuse my language.

So I'm kind of interested in your suggestions and some of the discussions that you've had around your group. You had your three suggestions. Is there anything outside those three suggestions that you think we should concentrate on?

[Gary Grant]

Yes. I think a greater public awareness will help bring an end to the problem.

I know that both the federal and provincial governments have promised in the past to bring forth public awareness campaigns to educate the public about the dangers of contraband tobacco. I mean, about 75% of people don't smoke, so this type of thing is not on their radar screen. And even a lot of the people who are doing it think it's a victimless crime, forgetting about the numerous victims that are involved, from retailers to our youth to organized criminals being out there and to the victims of the government--the taxpayers--for not getting the funds they need to do proper things in our society.

So there should be a public awareness campaign. Some people out there don't know that their kids are buying cigarettes from a criminal out of the trunk of a car. I teach at Humber College, and one of my students told me that in his last year of high school, two fellow students were selling contraband cigarettes out of their school locker. Where did they get them? They got them from their parents, who went to some of the smoke shacks and bought them. They were using it to supplement the family income.

So it really is an issue. I think if more people knew how many victims there were, that it's not a victimless crime, that it's something that deals with organized crime, that it is severely impacting our youth as the smoking rates go up again, there might be a lot more people who voluntarily stop buying contraband cigarettes. Also, hopefully a lot more people will speak to their MPs and MPPs and city councillors to demand that something be done.

[Randy Hoback, Conservative, Prince Albert, SK]

I'm sure you've talked to different police forces in regard to this, and about some of the frustrations they have. What have they said to you about the implications in a situation where they go out and make an arrest, and it goes through the legal system and...? Do they view it as just being an exercise in frustration, or is there actually some teeth?

I know we have some new criminal legislation coming in right now, which of course our opposition members are against. I think they look at a victimless crime as the victim actually being the guy committing the crime, not the person the crime's being committed on. In this case, they would look at the smugglers as being the victims instead of the kids at the high school.

I think you quoted the fact that something like 43% of students--the ones who are smoking, I assume--are using contraband. I think the numbers around Parliament here are based on a survey last year; it was something like 80% or 85%. Don't quote me on those numbers.

Again, your public awareness makes a lot of sense to me, because you're talking not just about the victims and the people involved. We also don't know what's in these things. We don't know what else they're selling, either. They might be selling cocaine and other drugs. What else is on their menu of things that kids can buy from them?

Do you have any comments on that?

[Gary Grant]

You're exactly right; the Centre for Addiction and Mental Health study indicated that teen smoking rates in Ontario, which were declining, are now starting to go on the rise again, likely because of contraband. They said that 43% of the young people who smoked were smoking contraband cigarettes. Because of the cigarettes' cheapness and poor quality, the young people were smoking more of them, so obviously they would get hooked faster.

The problem I have as a father and a police officer is that if you buy these cigarettes off basically criminals, number one, yes, you can also get something else for the weekend, if you like. Would you like that baggy of cigarettes? Would you like a little ecstasy for going to the club this weekend? Would you like a bottle of vodka? No ID is required. They'll sell it to people 12 years old. The youth are also learning that it's okay to break the law, which is a very concerning thing to me. They hear that, yeah, it's okay to break the law, don't worry about it; I'll sell you this, and very cheaply.

I'm not sure if there was another point that you wanted me to cover.

[Randy Hoback, Conservative, Prince Albert, SK]

Just quickly on the police forces—

[The Chair, Conservative, James Rajotte]

Be very brief.

[Randy Hoback, Conservative, Prince Albert, SK]

—and their....

[Gary Grant]

The police services, even when I retired...it was sort of under our radar screen in Toronto. This was predominantly seen before as a Revenue Canada and an RCMP problem. Police officers, provincial and municipal, might get a seizure, and they'd call the RCMP or the revenue people. They couldn't do anything with it until those officers came.

The legislation has been changing. Ontario passed Bill 186 just before the legislature rose for the summer. It gives police greater powers for seizure and stopping and arresting. And I know the current federal government has a bill before the court. I think this would be very beneficial.

[The Chair, Conservative, James Rajotte]

Thank you.

Thank you, Mr. Hoback.

We'll go to Mr. Marston, please.

[Wayne Marston, NDP, Hamilton East—Stoney Creek, ON]

Thank you, Mr. Chair.

Not to diminish what we've just heard, the real crime sitting before this committee right now, in my opinion, is national poverty rates. The presenter Mr. Rainer talked about 20% of the cost of health care being directly related. We have an opportunity to make a significant difference in the cost to our health care, which is coming up for major debate in the next couple of years.

In Hamilton, we had a series in our local newspaper called “Code Red”. You mentioned a statistic in your brief: between one area of Hamilton that is poor and one that is more affluent, the disparity in the life expectancy rate was 21%. If we're talking about crime, that's our crime. It's a crime against the people, as far as I'm concerned.

The Social Planning & Research Council of Hamilton raised a report last Friday that talked about seniors' poverty in our community as well; there is 7.5% seniors' poverty. But the striking statistic is that women were living in poverty at two and a half times the rate for men.

So we've proposed an increase to the guaranteed income supplement. People receiving that receive approximately $15,000 a year, and the poverty rate is $22,000 a year. The government's response was $50 a month increase.

What is your response to that?

[Rob Rainer]

It's clearly insufficient, and I think it also points to half measures. We have a history over forty years of half measures on this, so our poverty rates have barely budged. In fact we're been around for forty years as an organization, and tonight we have an event at which we'll mark that occasion. I'm putting up some slides that show people who are homeless in the 1970s. You can see the exact same picture today, except that there's a Starbucks in the background that wasn't there in the 1970s.

It's a case of half measures, a lack of a comprehensive approach, too much patting ourselves on the back.

Yesterday we heard again from Dr. Jeff Turnbull, and also from Mark Chamberlain, a very prominent businessman from Hamilton who is very outspoken on this issue, that we do too much patting our backs about the things we are doing and not enough about what needs to be done. We have a long way to go, including for seniors. Despite the fact that their poverty rate, of all the demographic groups in the country, is the lowest, there are still very troubling concerns that the rate is bouncing in the other direction.

So we have a lot to do. Again, the Senate and the HUMA reports laid out a number of recommendations that I think are well thought out and well considered; lots went into them, and I would encourage the committee to revisit those documents.

[Wayne Marston, NDP, Hamilton East—Stoney Creek, ON]

Thank you.

Mr. Christie, 63% of working Canadians don't have a pension and have next to no savings. As well, there is a pressure in our country to move from defined benefit plans to defined contribution plans. And last week we saw the market drop 7% in that week.

Would you like to talk about the impact on someone who was about to start on a pension plan with a defined contribution, keeping in mind that we've been suggesting for over three years now that we need a phased-in doubling of the Canada Pension Plan because of the necessity to backfill for this situation?

[James K. Christie]

Thank you for your question, Mr. Marston.

I will defer to my colleague, Michel St-Germain, from the Canadian Institute of Actuaries, who is a pension expert and will respond.

[Wayne Marston, NDP, Hamilton East—Stoney Creek, ON]

Thank you.

[Michel St-Germain, Member, Canadian Institute of Actuaries]

Thank you for your question. I'll try to address it. You're covering a number of points here.

The position of the Canadian Institute of Actuaries is that we need to encourage Canadians to save more for retirement, and in the package that has been distributed we have a number of options that are being analyzed, including an expansion of the CPP. We have provided through this paper the pros and the cons of this option.

Here are a couple of comments related to what you've seen. I think we need legislation in this country that is neutral in terms of whether or not an employer is encouraged to offer a defined benefit or a defined contribution plan, and this is not the case now. The legislation is very complex and frankly discourages employers from maintaining a defined benefit plan.

I want to say, concerning the expansion of the CPP, that it certainly is an option in terms of efficiency, but I would encourage you to look at an option that does not transfer additional burden to the younger generation and doesn't unduly encourage people to save, in the sense that there are in the population people who should not save. The advice we give to many individuals is that if you're young, have a mortgage, and have kids, the priority should be to repay the mortgage and take care of your kids. It is possible to defer saving to a later date.

[The Chair, Conservative, James Rajotte]

Okay. Thank you.

Thank you, Mr. Marston.

We're going to go to Mr. Van Kesteren, please.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

Thank you, Mr. Chair.

I'll follow Mr. Marston.

I'd like to go to you, sir, and I want to talk a little bit about poverty. I want to understand. When we hear those statistics, they're staggering. I don't think there's anybody who doesn't look at poverty, the type of poverty you're looking at: the homelessness, on the reserves, single moms, often people who really don't have much of a chance. And they didn't create these problems. These were problems they were either born into or sometimes circumstance. But isn't it true too that many of the statistics are moving targets? What I mean by that is aren't there many people in those statistics who are in flux, their lives are actually improving, and when we check them five years later we see they have improved? As I said, I'm not talking about people who were institutionalized at one time but now for whatever reasons, right or wrong, were opened into society. Is that a fair assessment?

[Rob Rainer]

The data does show that for most people who experience poverty, it tends to be a portion of their lives, not for their entire lives, although certainly there are those who sadly spend their entire lives from cradle to grave never escaping the conditions. So I think what that really points to...I'll just back up. We also know that the pathways into poverty are many.

Again we heard from Jeff Turnbull yesterday that among the people he treats right here in this community are two former professors who are homeless. How did two former university professors end up on the street? And we know that doctors end up on the streets, we know there are professionals, there can be politicians who end up on the streets. It points to the fact that we have not created a social security system that is there to catch people if they actually are falling. There are so many triggers.

Harriett and I met a woman in Montreal at a workshop we put on. She used to have two Mercedes in her driveway. She didn't go into the reasons for why she ended up on welfare in Montreal, but it happened to her. It can happen through divorce, it can happen through injury, it can happen through mental health problems, depression, etc. So we have to construct a better safety net than what we have to date, and I think we have the tools to do that.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

And it's also true, I think you would agree, too, that the measure of poverty that we apply in this country, of course, would be.... I returned from a trip to Ghana, and of course we would not use those same standards--not to minimize, but we need to take those things.... I think that's important, because I think the whole focus of our discussion, when we talk about our friends from the actuaries, and even from the insurance companies--and I don't say “even” to minimize that. But education.... We all have a role to play in these things, and as we improve our lot there....

Often I think this is politics and we criticize one another, but we'd all have to agree that this government--and successive governments as well--often does things that don't directly address those problems or don't appear to, but in essence do improve people's lives and subsequently we have a better society. Would you agree?

[Rob Rainer]

As I said before, I think we pat ourselves on the back too much. Yes, there are some things we do well. Yes, seniors' poverty has come down, but child poverty rates are pretty much the same as they were in 1989 when the House of Commons, the MPs at that time, said they were going to end child poverty by the year 2000. The problem was there was nothing to back that up. There was no plan, there were no investments; it was simply a statement of good intentions. So we have to go well beyond that. We have to stop patting ourselves on the back and look at what we still need to do.

[The Chair, Conservative, James Rajotte]

Three seconds.