Finance Committee on April 16th, 2013

[Yanick Labrie]

If I may,

Mr. Alexander may be better placed to establish what kind of impacts childcare investments can have. I had the opportunity to conduct a brief analysis of the situation in Quebec, where, as you know, there is a universal program that enables childcare to be provided for seven dollars a day. Unfortunately, because the program is not specifically aimed at the poorest families, it is benefiting families who are better off first and foremost, even if that is simply because these families have more contacts. People who are better off may be more motivated and more of them manage to benefit from this seven-dollars-a-day day care system.

[Peggy Nash, NDP, Parkdale—High Park, ON]

It is a universal program.

[Yanick Labrie]

This has been very well documented.

[Peggy Nash, NDP, Parkdale—High Park, ON]

People with lower incomes should perhaps have increased access.

[Yanick Labrie]

Exactly.

In fact, the problem of lack of spots in seven-dollars-a-day daycares is serious. People with lower income should be able to benefit from this system. However, they are unfortunately not those benefiting from it. I do not know whether this is because they do not have the means to go to the centres. Families with a single working parent cannot take advantage of this type of program. The idea would be to ensure that assistance is targeted to the least fortunate.

[Peggy Nash, NDP, Parkdale—High Park, ON]

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you. Merci.

[Gregory Thomas]

If I can pick up on—

[The Chair, Conservative, James Rajotte]

Sorry. I apologize, Mr. Thomas and Mr. Lammam. We're well over time in terms of Ms. Nash's round. If there's anything further you wish to submit to the committee, I'm happy to submit that to members.

I'm going to have to move on now to Mr. Jean, please.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

Thank you, Mr. Chair.

The line of my questioning is going to relate to aboriginal Canadians, the 1.2 million Canadians who are in the lowest income earning capacity currently. They're the youngest, fastest-growing, highest percentage of incarcerated, lowest-educated population in Canada. Fifty per cent of them make under $10,000 a year in annual income.

The Fraser Institute has put out several publications, and I know it's neither one of your gentlemen's expertise, as far as I'm aware, but I do want to ask you if you see a correlation between resource revenue and wealth for aboriginals. Specifically, because I am from Fort McMurray, what I've seen over the last 30 to 40 years in Fort McMurray is that there is definitely, in my mind, a serious correlation between resource development in our north and riches of aboriginal Canadians.

For instance, Dave Tuccaro, who I've known for about 40 years, I think has been identified as the richest aboriginal in Canada, selling his businesses just recently for over $100 million. I know many others, including many relatives of mine, who have more than $1 million in cash in the bank who are aboriginal Canadians born on reserves and are treaty aboriginals.

But I do also see that there is a great disparity among aboriginal Canadians. What I didn't realize until I researched what the Fraser Institute has looked at is that Inuit Canadians actually make more money on average, more median income per average, than non-aboriginal Canadians, which surprised me somewhat. There is a correlation I think as well with the north's resource development and Inuit. It would support my thesis that resource development is very important to aboriginal Canadians and the wealth transfer to them.

Of the two gentlemen, I know one is appearing individually. But would you two gentlemen from the Fraser Institute agree that resource revenue is very important to the increase in wealth for aboriginal Canadians, who are among the poorest, lowest educated, and highest incarcerated in Canada's population?

[Jason Clemens]

With the caveat, as you opened your question, that this is not an area of expertise for either of us, I think given that caveat I would certainly agree with you that there is an enormous opportunity for aboriginal groups, Inuit groups, across the country to replicate the success observed by many aboriginal groups that are harnessing their resource wealth to improve their communities. In fact, the Fraser Institute is launching shortly a major initiative along these lines.

Secondly, which is important, we have large population areas of Canada where, due to an aging demographic generally, business will have no choice, to be blunt, but to find and discover new mechanisms by which to integrate the aboriginal communities around their areas into the labour force much more successfully than we've done. That is really purely a matter of an aging population, and as you've said, one of the only growing areas of the population in some of these communities—Saskatchewan as a province is a great example, as is Manitoba—is the aboriginal community.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

To be fair, on the integration, Syncrude, for instance, has received many awards from the aboriginal community, a gold level in the Canadian Council for Aboriginal Business's progressive aboriginal relations program. Some 12% of Syncrude's workforce of 8,000 are aboriginal Canadians. Suncor I think is about 9%. So there is tremendous success in northern Alberta and the richness by them....

There was a paper that was published by the Fraser Institute, by Gordon Gibson, who has an MBA from Harvard and is the Fraser Institute's senior fellow in Canadian studies. He served in the Prime Minister's Office under Pierre Trudeau and was an MLA and leader of the B.C. party. He is suggesting that identical tax regimes should be applied everywhere by repeal of section 87 of the Indian Act. Would you agree with that?

[Jason Clemens]

I would defer to Gordon on that issue. As you said, Gordon is the expert, and I would hesitate to.... I'm sorry, I'm reluctant to comment on an issue I haven't researched. Gordon has, and he has a particular view on that.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

Certainly he's a senior fellow for the Fraser Institute, so he's backed up by the Fraser Institute in relation to this particular recommendation. It's published.

[Jason Clemens]

No, I understand, but we need to be clear: the Fraser Institute doesn't take any particular position on any issue. We publish scholars and researchers as part of our mandate. Our board, our supporters, our staff don't necessarily agree with a particular researcher. Gordon has published a paper that went through peer review and it was determined to publish it. So that is Gordon's view.

But as I say, the institute and its supporters and its board don't necessarily agree with Gordon or any researcher on any particular issue that we publish.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Jean.

We'll go to Ms. Glover, please.

[Shelly Glover, Conservative, Saint Boniface, MB]

Thank you, Mr. Chair, and thank you to the witnesses again.

I will first address Mr. Labrie.

Your economic notes are interesting. Since I read them in English, I will also ask you my questions in English.

There's a new release that was attached to the note, sir, and I'm not sure if everyone was able to see it, but I see that you've got five summed-up points. Do you happen to have the news release with you? No? I'm going to ask if perhaps you could send it to the committee. I think it ought to be taken into consideration when we form our recommendations. It does sum up very well things that you've already said about income inequality, including that the after-tax income for the poorest has increased by 23% between 1995 and 2000, that poverty is temporary, that income gaps are overestimated due to household size, that consumption gaps show little change, and that the data quality is likely distorted, especially due to the amount of income that is not fully declared. I would ask that you send that to the clerk, if you wouldn't mind, so we can take that into consideration.

But I do want to give Mr. Lammam an opportunity to rebut what Ms. Nash said about those studies. I, too, take issue with the way that was done and taken a bit out of context.

Go ahead, Mr. Lammam.

[Charles Lammam]

My point is just to reiterate the importance of income mobility and to emphasize that those studies are not considering it in their analysis. The problem with those studies is that when they're doing their comparisons of the income distribution, they're doing it at particular points in time. So if there is a gap between the top 20% and the bottom 20% in one year, say 1990, and they do the comparison 10 years later and find that it stayed the same or grew slightly, we can't draw policy conclusions from that alone because the people in the bottom 20% and the top 20% are not the same people year after year. This is why the findings in our study are so important.

What makes Canadian society so great is that people aren't stuck in those income groups. What's really great about our society is that you can transition from the lowest to the highest, and in very short time. The studies that were cited earlier do not account for income mobility, and therefore they provide misleading conclusions.

Let me just say one more thing about our study. We looked at income inequality the way people look at it in those other studies, but we follow the same group of people. So in 1990 we found that people in the top 20% earned about 13 times the income of people in the bottom 20%. That was in 1990. For the same group of people 19 years later, some in the bottom 20% had moved up to the very top, some moved up to the third income group, and some people in the top 20% initially had moved down. What we found is that now, in 2009, the average income of those in the top 20% was only two times the level of those in the bottom 20% initially in 1990—

[Shelly Glover, Conservative, Saint Boniface, MB]

That's a great point, Mr. Lammam. I'm sorry, I have to interrupt, but it's because I only have a couple of minutes.

Mr. Clemens has a quote from his study and I'm going to read it: “...in a comparison of income of the same group of people over time, income inequality declined significantly.”

Sorry, that's your study, Mr. Lammam, and I'd like to read that quote out so that we can perhaps make sure it gets into the report.

As Mr. Clemens was talking, as you're talking, Mr. Lammam, I'm hearing my life story play out in front of me. I was a single parent in high school, never finished grade 12, had to go on social assistance, finally went into university, got a policing job, had to use child care, but couldn't rely on day care during the day because I worked shift work—which is why I'm so proud of our government, which decided to give the families the money so they could choose their child care—and here I am now a member of Parliament. I happen to be, obviously, what you're talking about; you can't judge a book by its cover. And, no, we don't pick our parents, as Ms. Nash, tongue in cheek, said, but we do make life choices.

One thing I noted here today is that when you talk about the people stuck—the single parents, the drug abuse, alcohol abuse, no grade 12—in terms of the opportunity to move forward in Canada, as Ms. Carney said, there is equality of opportunity. Having said all of that, I noted that you did not say aboriginal people are stuck there, and that I found very interesting. So thank you for that.

[The Chair, Conservative, James Rajotte]

There are 20 seconds left.

Is there a brief response to that, Mr. Lammam?

[Charles Lammam]

Only to reiterate that that experience is the norm for Canadians. That's supported by the results in our study, that most Canadians follow that income trajectory.

[The Chair, Conservative, James Rajotte]

Thank you, Ms. Glover.

Colleagues and witnesses, I have some time challenges here. We have 15 minutes left in the meeting. I'm informed that one of the members wants to move his motion today. I am also informed another member wants to introduce another motion today, and we have a foreign delegation coming in at the end of this meeting.

I don't know if members want to move to the motions now. I'm looking for guidance, but the reality is that if we're going to allow for debate on the motions, it's probably best to go to them now.

I apologize to our guests for the shortness of the panel today. If there is anything further, please submit it to the chair and I will ensure that all members get it.

We want to thank you for appearing before us today, and also for our two guests appearing from Vancouver. Thank you very much for your presentations.

Colleagues, I'll move immediately to debate on Mr. Rankin's motion, which has been given the proper notice, and then we'll have a notice of motion par M. Côté par la suite.

Mr. Rankin, perhaps you can read your motion into the record, please.

[Murray Rankin, NDP, Victoria, BC]

Thank you, Chair.

Should I read the actual motion?

[The Chair, Conservative, James Rajotte]

Yes.

[Murray Rankin, NDP, Victoria, BC]

I think it has been distributed.