Finance Committee on Oct. 4th, 2011

[Dr. Brian McMillan]

There are two things.

First, many of our programs do have a business element to them because a number of our graduates will go out and become self-employed. I would say that in about 65% or 70% of our programs, the students will develop a business plan, whether it's photography or whatever the case may be.

In the area of financial literacy, actually our student unions have been quite active in that regard. One of the biggest challenges is young people managing their money when they leave home. It doesn't always go to groceries, as we can appreciate. There are programs run through our student associations, and the colleges work with the student government to provide them resources. They bring in people from the community to talk about how to manage your money, how to do a budget, etc.

[Shelly Glover, Conservative, Saint Boniface, MB]

That's excellent.

We actually are looking to put in place a leader of our financial literacy task force to implement some of those recommendations. Do you think that's a wise thing for this government to invest in?

[Dr. Brian McMillan]

I do.

If I can wear another hat, I also sit on the national board of Junior Achievement. I've been involved with them for 20 years now, and I think they have some excellent financial literacy programs across all grade levels. I think they do a pretty good job.

So we may want to take a look at what's working and how to leverage that. That would be my suggestion.

[Shelly Glover, Conservative, Saint Boniface, MB]

Thank you.

I'd also like to point out that the FCAC has quite a bit of information on their website. They actually work with the schools to promote an education plan. Teachers have been very satisfied with the help they're getting.

Have you heard of the program?

[Dr. Brian McMillan]

No, I haven't.

[Shelly Glover, Conservative, Saint Boniface, MB]

Please use it, and feel free to share it with your students.

I actually asked for the study books and the teachers' books so that I could teach my own adult children about financial literacy. So please, feel free.

I'd like to turn my attention for just a moment to--

[The Chair, Conservative, James Rajotte]

Very brief.

[Shelly Glover, Conservative, Saint Boniface, MB]

Very brief? Okay.

Ms. Smith-MacDonald, you mentioned $23 billion. I'm wondering if you could tell me what programs are inefficient right now within government and that you would see us perhaps redirect funding from to pay for your recommendations.

[Louise Smith-MacDonald]

I think there's a lot of money spent by all levels of government to try to reduce poverty in this country--

[Shelly Glover, Conservative, Saint Boniface, MB]

But what are the specific programs?

[Louise Smith-MacDonald]

Well, I believe there are training programs, I believe there are work programs--

[Shelly Glover, Conservative, Saint Boniface, MB]

Do you know of any specific ones, though, not just generally?

[Louise Smith-MacDonald]

No, I'm sorry; I wouldn't be able to say federally.

[Shelly Glover, Conservative, Saint Boniface, MB]

So you didn't study those.

[Louise Smith-MacDonald]

No.

[Shelly Glover, Conservative, Saint Boniface, MB]

Okay.

[Louise Smith-MacDonald]

I just believe that, from the results, what has been going on is not working. When we look at the results, when we look at women's lives, when we look at levels of poverty in this country, obviously the money that is being directed at this is not working.

[Shelly Glover, Conservative, Saint Boniface, MB]

I would argue that it is working. In fact, I have people phoning me quite frequently saying that the program they have taken has actually pulled them out of--

[Louise Smith-MacDonald]

Training programs have been very successful for women. Training programs through community colleges have been very successful. But there is a level before this that women aren't ready to access.

[The Chair, Conservative, James Rajotte]

Thank you. We'll have to continue this conversation later.

We'll go to Mr. Brison, please.

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

Thank you very much, Mr. Chair.

Thank you to each of you for your interventions this morning.

Ms. Smith-MacDonald, some of your constituents and the people you serve are similar to the people I grew up with. One of the things I observed in the little elementary school I went to, where there were 23 kids in grade six and only eight graduated from high school, was that those who did drop out--in many cases women dropped out and became part of the group that's currently without a diploma, certificate, or degree--had arrived in grade one without any educational background because their parents didn't have the capacity. That was not because they were bad parents; they just did not have the literacy skills to read to those kids.

To what extent could early learning and child care, and a robust program of early learning and child care, help break the multi-generational poverty that exists in rural Canada?

[Louise Smith-MacDonald]

Making early childhood development programs available to everyone would be a huge step in the right direction. Currently day care seats are very limited. They're limited because there aren't enough of them and they're limited because women can't afford to access them.

There is also a great need, I think, for education in terms of allowing young moms especially to know that this is a very important step in their parenting. Young women who drop out of school, a lot of whom I work with, didn't have a good educational grounding themselves, and therefore they don't see a huge value in it. Mind you, when those same women are 30 and 35 years old, they come looking for training programs because they realize that's what they need. They need an education.

So I think early childhood development programs are hugely valuable, but they have to be accessible to everybody.

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

Thank you very much.

With regard to the Canadian Real Estate Association's recommendation concerning income properties, one of the ways you can sell that is to look at what's happening to the capital markets these days. For those people who always say, “I never buy stock, I buy only mutual funds”, we will find out at the end of this month what the reality is. The issue of financial literacy, which Ms. Glover raised, is an important one.

Whether you look at the Harvard endowment funds or hospital foundations or the CPP Investment Board, they always put a little money in real estate. You have 20% or 30% in real estate. You also have some in publicly traded equities and some in private equities, but there is always some in real estate, and we should be trying to encourage Canadians, as individuals, to do the same thing. So your proposal, which is a fairly modest proposal, simply enabling the rollover, is one that actually creates good financial planning incentives as well, or at least gets rid of some of the disincentives or barriers to it. So I would add that to your....

Mr. St-Pierre, I fully support your idea that we need to modernize our tax system for this country to be competitive and more fair.

The last time we had a tax reform or a study of our tax system in any meaningful way was in 1971, and that was by the Carter commission, which actually brought in capital gains tax in the first place. We had the inheritance tax before that, which made Canada a good place to die in but not necessarily a good place to build anything in.

Do you think one of the things we should consider is taking this whole tax reform idea away from short-term politics and maybe using things like royal commissions? They were probably overused in the seventies and eighties, but there haven't been many for a long time. Is that one thing we should consider to really get the best possible advice--to actually have a royal commission on tax reform in Canada?

[Denis St-Pierre]

CGAA Canada believes that an outside party might bring something new to the table, someone who would not have a particular idea. When you have a bunch of experts panels...we've been saying that for a few years now. We said that last year, too. And the government is not a stranger to these types of consultations. There's been the advisory panel on Canada's system of international taxation and an expert panel on securities regulation. Maybe it's a royal commission. But certainly people still talk about the Carter commission, which predates my birth. That means it had a significant impact on what we did, and maybe now is the time to redo that whole exercise.

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

The selflessness of your organization to be promoting tax simplification, when your members benefit disproportionately from tax complexity, is really quite impressive to all of us.

You mentioned the boutique tax credits. There's been a proliferation of boutique tax credits. You're suggesting getting rid of a lot of the boutique tax credits and instead perhaps lowering tax rates on lower and middle income or some other measures. Has your organization quantified the cost of some of these boutique tax credits?