Evidence of meeting #117 for Finance in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was education.
A video is available from Parliament.
9:55 a.m.
Conservative
9:55 a.m.
NDP
Guy Caron NDP Rimouski-Neigette—Témiscouata—Les Basques, QC
Good morning. I want to thank all of you. Your presentations were excellent. Unfortunately, five minutes is really not enough to ask all the questions.
I want to begin with Mr. Richardson.
I will set the charts aside because they are always a bit misleading. I would like to focus on the tables you have submitted. You are telling us that the income inequality issue is relative because an increase in the Gini coefficient is not that bad, since the redistribution factor has not decreased. So the situation is not so bad, relatively speaking.
However, when I look at the figures, and especially those since 1994, I see that there are few changes to the Gini coefficient in Canada before taxes and transfers—be it for all families or economic families. Yet there is a marked increase in the Gini coefficient—so an increase in inequalities—after taxes and transfers. That increase is about 10% in both cases. I would go as far as to say that this correlates with the fact that the redistribution factor dropped by 20% during that time.
Would I be wrong to believe that, since 1994, the redistribution effect of Canadian policies has been decreasing significantly, thus leading to an increase in inequalities based on the Gini coefficient, after taxes and transfers? So there is a lot less redistribution in our system.
10 a.m.
Executive Fellow, University of Calgary, As an Individual
I think you're absolutely correct in your interpretation of the data in terms of the redistribution. Redistribution went up hugely from 1976, and particularly during the 1980s and into the early 1990s. Around 1994 it peaked, and there was a reduction in the scale as a proportion of the amount redistributed after 1994, though this has levelled out over the last ten years.
I think the reason historically—I'm not making any comment in favour of or against it—that this happened was that the redistribution in the late 1980s and early 1990s was being funded by deficit financing by the government, and in particular by borrowing by the government. Canada reached a fiscal crisis around 1995-96, and there was definitely a cutback of transfers to provinces and presumably of some of the services that are involved in redistribution, and that had an effect on reducing redistribution.
As I say, it's been pretty stable since then. It's a question of whether you think getting back to it would justify doing so through government borrowing. I don't think it's a good idea, because it's unfair to future generations. It takes you back to asking what you do and how you fund it.
10 a.m.
NDP
Guy Caron NDP Rimouski-Neigette—Témiscouata—Les Basques, QC
We can always debate that families in general paid for the deficit fight in the 1990s. The fact remains that the impact of the measures chosen by the government of the day—and continued by subsequent governments since 1994—have resulted in income being much less redistributed. In addition, after taxes and transfers, the Gini coefficient—or income inequality—has increased. Do you agree with that?
10 a.m.
Executive Fellow, University of Calgary, As an Individual
It did increase from the high point of equality and redistribution prior to 1994, as I said.
10 a.m.
NDP
Guy Caron NDP Rimouski-Neigette—Témiscouata—Les Basques, QC
I have two other questions for you.
First, I see that your statistics end in 2008. So they do not really reflect the impact of the latest financial crisis. I don't think the figures are available. The OECD has no figures either on what has been going on since 2008. Be that as it may, you have no statistics beyond 2008.
Second, I would like to hear what you think about the following issue. Redistribution measures in Canada generally consist of taxation or social programs such as employment insurance, old age security, and so on. I would like to know something. Let's say we are trying to reduce taxes and split income—a measure that has a regressive impact, according to Ms. Yalnizyan—and we also decrease transfers in employment insurance or old age security, as was the case in recent measures implemented by the government. What kind of an impact do you think that could have on the redistribution factor and income inequality?
10 a.m.
Executive Fellow, University of Calgary, As an Individual
I think it depends on exactly what's done. For example, with taxation, as we were discussing, it's possible, and in fact recommended by the OECD—and I think Michael Veall referred to it—that even if you want to increase tax revenues to do more distribution, the better way to do that is not by raising marginal rates, it's by removing various—
10 a.m.
NDP
Guy Caron NDP Rimouski-Neigette—Témiscouata—Les Basques, QC
What will be the impact on the redistribution factor....
10 a.m.
NDP
Guy Caron NDP Rimouski-Neigette—Témiscouata—Les Basques, QC
What will be the impact of those measures on the redistribution factor?
10 a.m.
Executive Fellow, University of Calgary, As an Individual
Tax is a factor, and programs that provide benefits are a factor. But there are also very important elements outside the numbers that we've seen here that provide redistribution, and those would be medical care for Canadians, education, travel services, and other things like that.
10 a.m.
Conservative
10 a.m.
Conservative
Brian Jean Conservative Fort McMurray—Athabasca, AB
Thank you for coming today.
I'm going to deal with what I think is one of the most serious situations.
But first I'd like to wish our Prime Minister, Stephen Harper, happy birthday. He's 54 today, and I think it's very important. He is one of the most important people to our economy, for certain.
I do want to talk to you, Peter, in relation to what I consider to be one of the biggest issues and dramas, and quite frankly one of the best opportunities we have in Canada. That is, of course, first nations people, with the highest rate of poverty of any group, the highest incarceration rate of any group, and the highest birth rate or fastest growing of any group.
I think it is the best opportunity, because to my way of thinking...and coming from Fort McMurray and knowing Jim Boucher, who used to live with my brother back in the seventies when he was just a young fellow, that is definitely a very successful situation—$130 million or $133 million in sales last year—but it's not an unusual story.
In fact, there is a true correlation. My nephew, Dwayne Jean, who is also a treaty aboriginal from Janvier—and I think you know him—started a business two years ago. He just told me—I was pinging him—that he did $2.5 million last year, and this year he's already at $5 million and the year is only halfway through. He has a company with 40 employees; he has water trucks and sumping. It is an amazing success story. He has $2 million in the bank. This is a guy who spent 10 years in and out of jail, in Drumheller in particular, but...tremendous success over the last few years. Why? Because there seems to be true correlation between successful aboriginal communities and resource development.
Would you agree with that?
10:05 a.m.
Chief Executive Officer, Assembly of First Nations
I think you're seeing an example of where it works. I don't think there are enough of those success stories across the country.
10:05 a.m.
Conservative
Brian Jean Conservative Fort McMurray—Athabasca, AB
That's what I want to concentrate on, what works, because it does work.
10:05 a.m.
Conservative
Brian Jean Conservative Fort McMurray—Athabasca, AB
I'm from Westbank originally. If you look at what's happening down there with the Louie family in particular in Osoyoos, they talk about capitalism, hard work, and self-reliance. This is a model that can work. It works in southern B.C., it works in northern Alberta, and it's very successful.
How can we get more aboriginals to work? How can we do this, with practical solutions?
10:05 a.m.
Chief Executive Officer, Assembly of First Nations
I think it's about fair and equal partnerships. I think that would be the starting point.
First nations are not anti-business or anti-development; they're pro successful partnerships, and I think you're seeing examples of where those occur.
There are too many examples in the Ring of Fire. We could talk about De Beers mines in some locations. We can talk about any number of examples across the country—
10:05 a.m.
Conservative
10:05 a.m.
Chief Executive Officer, Assembly of First Nations
There are challenges with the nature of the impact benefit agreements, with how the community actually benefits. It's not enough to come in, take out x billions of dollars of resources in the year, hire 40 people from the community, and call that the relationship.
10:05 a.m.
Conservative
Brian Jean Conservative Fort McMurray—Athabasca, AB
Would you call Syncrude's policy, where they have a mandatory 15% aboriginal employment—that's their goal, and they've been working on that goal—
10:05 a.m.
Chief Executive Officer, Assembly of First Nations
I can't speak specifically about that. I haven't had the time to go through that—
10:05 a.m.
Conservative
10:05 a.m.
Chief Executive Officer, Assembly of First Nations
It's also more about ongoing engagement, about developing not only the relationship on that particular location. It's also about the subsidiary business. It could be a percentage share in the actual operation itself. What's the ongoing engagement?
I remember talking to one of the resource extraction companies about their celebration of the number of wells they had developed in particular first nations to extract oil. When pushed to say why the company was doing this now, it was all about the duty to consult at the time. It was all a rights-based argument that took place.
