Finance Committee on Oct. 6th, 2011

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

I was unaware that I was going to get the remainder of the time, but that's fine. How much of an expert I am we'll see.

I actually want to go back to a comment made by Mr. Adler. What people talked about was transparency of unions. Well, at union conventions, the union's budget is presented. At monthly meetings of union locals, their books are there and open. That's a side that most people don't really understand about the functioning of unions.

There is a thing called the Rand formula, from Justice Rand's ruling in regard to who pays union dues and who doesn't pay union dues. They ruled that even though you don't want to be a member of a union, if you benefit from the collective bargaining, and you're in the workplace, you pay union dues. But these are association dues. These are not income. It's not income in the form that it would be taxable, because this is a not-for-profit organization and the rules have been there for a long time. It's not like they're raising money in the public where they can raise more money or pay taxes on it. There's a misconception there.

I'd like your comments on that.

[William Tufts]

Yes, I think we need to really evaluate these rules. Perhaps it's time for a change of the rules. I don't know how appropriate the Rand formula still is in this day and age. I think employees should have an option as to whether they participate in unions, particularly when there is strong political motivation by--

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

But they do have that option, sir. Excuse me just for a second. They do have that option. They don't have to join the union; they have to pay union dues.

[William Tufts]

They have no option to pay dues.

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

There is a distinction there, and that's what Justice Rand said. We're not going to require anybody to join the union if they don't wish to, but if they participate in the workplace and they receive the benefits of that negotiation, they share the obligation of the cost. That was all. It's not about union membership; it's about who pays union dues.

Then Mr. Lavigne took that to the Supreme Court a second time, and they ruled in the union's favour again.

[William Tufts]

I think that's probably a legitimate point. However, I do have a problem with the members of working families, for example, who were required to contribute to that political campaign when perhaps many of them didn't have the same political views that the working families campaign contributed to.

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

I won't comment on that one, because I'm unaware of the campaign.

[William Tufts]

Yes, it was a $500-million campaign that was put together by a federation of unions in the province of Ontario. The Ontario English Catholic Teachers Association mandatorily required that each of their members dole out $60 in order to fund some of the initial funding on that campaign, and other unions, particularly in the public sector, were involved with it. I think everybody's aware of the implications today of who is elected in the election.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Marston.

We'll go to Ms. McLeod, please.

[Cathy McLeod, Conservative, Kamloops—Thompson—Cariboo, BC]

Thank you.

I won't get into the debate right now, but our first panel was a panel of economists, Mr. Marston, but anyway....

In terms of recommendations and consensus, Mr. Tufts, I just want to say that I appreciate the fact that you were having recommendations. In actual fact they are still defined benefits, but you just had recommendations to make them more cost-effective. I appreciate that.

I heard a couple of people talk about the red tape. Because I am on the Red Tape Reduction Commission, I just want to quickly say that we have a parallel process that is also going to feed into the budget. You may be aware that we put out the report of what we heard, and the more important report, of course, is what we're going to do about that. So I'm really looking forward to that particular initiative moving forward and also feeding into the budget process.

What I would like to do is focus in on a specific recommendation, and I thought it was very interesting, in terms of Canada Revenue Agency. I maybe don't recall, but I don't remember the T3 issue coming to the forefront in any of my previous discussions. Is that something that was generated through your particular organization? Have you got any idea how many people are impacted? Is there a reason you just suggested all people delay personal filing, versus those who might have T3s?

I think most people recognize that when there's a deadline you have that crunch and people just defer it for two months. Could you maybe talk a little bit more about where you came through on that particular recommendation?

[Debra Taylor]

Sure.

It was recommended by our economic policy committee, by a chartered accountant who's in public practice. I am also a certified general accountant, and I'm in public practice. I prepare about 840 personal tax returns annually. I would say that the issue with the T3s is that a T3 slip is derived from the income of the trust, so it flows through to the owners or the beneficiaries of that trust in relation to the proportion they own. The earnings come up; they go down. There is a trust return. There's a T3 slip one year; there's not a T3 the next year. So it's not necessarily consistent. As the income or losses in that trust go up or down, so does the need to issue a slip.

The organizations have until March 31 as a deadline to issue those slips, as opposed to the T4 slips that have to be out by the end of February. So increasingly, with the clients the public accountants are trying to deal with and file their taxes on time, it is coming right down to the last week of April to try to push these returns through. In 2008 there was a backlog of tax returns, and CRA that year actually extended the electronic filing deadline to May 6 to accommodate for the push on these returns.

If the returns are filed late, there's a 5% penalty to the taxpayer. If the taxpayer misses the same slip twice, which has also happened with clients in my practice, the penalty becomes 50% of the value on the slip, regardless of the tax consequences. So it can be quite punitive. It's not the individual who's created the issue; it's the fact that the deadline for issuing those slips and the partnership slips is March 31, and through mailing and what not it's really created a problem.

As to the numbers, probably about 40% of my client base has either T3 or the T5013 slips. T5013 slips are issued by partnerships that are involved in the mining or the oil and gas exploration, so it's a high-risk investment that these investors are making. Again, those slips are coming out very, very late. And if they don't have the slip, then we either estimate what we think the slip will say, file the return, and then subsequently have to file an adjustment, or if they forget about that slip, then when CRA does the matching process starting in about July or August of the year, they'll get a notice saying “This slip was on file; you didn't report it; a 5% penalty, plus interest from May 1, compounded daily.”

[The Chair, Conservative, James Rajotte]

Thank you.

I'm sorry, Ms. McLeod, you are out of time.

We're going to Monsieur Mai.

[Hoang Mai, NDP, Brossard—La Prairie, QC]

My first question is for the Canadian Urban Transit Association.

You mentioned that the main recommendation is to have a plan, a Canadian transit policy framework. We know that we're the only country in the G-8 that does not have a national transit plan. We also know that we've submitted a bill to have that rectified. We've heard some comments regarding the fact that it's under provincial jurisdiction. Can you tell us what the difference would be in terms of having a plan, not necessarily imposing something on the provincial jurisdiction?

[Michael Roschlau]

Yes, thanks so much for the question.

I'll make one point of clarification before I respond. There's been a lot of talk in previous years about Canada being the only G-8 country without a national transit plan. That's not entirely true. We've done some broad-based research in the last couple of years to look around the G-8 and beyond and find out what's actually out there. There are varying degrees of national plans and strategies and we're steering away from that statement simply because there are so many variations out there. Each has something valuable, and I think that our challenge is to find what has worked best in other G-8 countries, in other important economies around the world, and create a real made-in-Canada framework. That's certainly what we're recommending.

There are clearly elements in Madam Chow's bill that we support strongly that would make an excellent foundation for a national framework, but given that there are multiple jurisdictions in this country that are responsible for urban and municipal affairs, and that constitutionally it is an area of provincial mandate, we feel that the dialogue is of ultimate importance in developing a national framework that works for the country, for the provinces, and for each community.

[Hoang Mai, NDP, Brossard—La Prairie, QC]

In terms of suggestions regarding the framework, do you have things that were actually brought forward or discussed?

[Michael Roschlau]

We do, absolutely, and I can enumerate a couple of them.

First, I think the linkage that Mr. Masse mentioned earlier about land use and urban development is critical. If we're to get a strong return on investment for Canadians in terms of the transportation infrastructure that we build, then that infrastructure needs to be aligned with the urban development that's taking place on the ground. In other words, no more subways to nowhere. We want to be building our transportation infrastructure where the people are going to be and where the demand will be concentrated.

Two, we need a long-term sustainable investment plan where we know what's going to happen for the next two, three, four or five years, so we can plan accordingly.

Three, we need to put in place the right tax incentives, and one of them is in our recommendations this year. Let's level the playing field between employer-provided free parking and employer-provided transit benefits. That's been a bone of contention for ten years. We need some R and D. We need some cutting-edge research and development to make sure that whether it's hard technology or soft technology, public transit can be at the cutting edge in Canada, as it is in the U.S., Europe, and other parts of the world.

Finally, we need to have accountability by all orders of government so that when the federal government puts in a billion dollars, it knows the money is going to the destination and doesn't disappear somewhere along the path, through the various treasuries, until it gets into the transit budget.

[Hoang Mai, NDP, Brossard—La Prairie, QC]

Thank you very much.

[The Chair, Conservative, James Rajotte]

You have one minute.

[Hoang Mai, NDP, Brossard—La Prairie, QC]

I would like to ask Mr. Delestrade a question.

It deals with the proposals you have made for reducing Canada's costs. You mention them in your brief, but I would appreciate some more details on the Canadian content, the creation of jobs in Canada.

What is the impact here?

[Pierre Delestrade]

Do you want me to talk about the Mercury program or about the helicopters?

[Hoang Mai, NDP, Brossard—La Prairie, QC]

What is it you are proposing?

[Pierre Delestrade]

Let me talk to you about the helicopter program.

We are well-established in Canada and our helicopters are Canadian. We have 200 people working in Fort Erie, not very far from here. The helicopters we could offer to the Coast Guard would have quite a significant Canadian content.

[Hoang Mai, NDP, Brossard—La Prairie, QC]

Can you give us a percentage?

[Pierre Delestrade]

That is difficult. It is not my area of expertise. Maybe Guillaume LePrince could answer that.

[Guillaume LePrince]

It's about 50%.