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Evidence of meeting #58 for Finance in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was budget.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

Ted Cook  Senior Legislative Chief, Tax Legislation Division, Tax Policy Branch, Department of Finance
Sean Keenan  Director, Personal Income Tax Division, Tax Policy Branch, Department of Finance
Brian McCauley  Assistant Commissioner, Legislative Policy and Regulatory Affairs Branch, Canada Revenue Agency

3:55 p.m.

Conservative

Jim Flaherty Conservative Whitby—Oshawa, ON

I can tell you that most of the western economies are going in exactly the same direction, because of the reality that the life expectancy of a male in Canada, when this plan was introduced, was about 69 years of age. Now—

3:55 p.m.

Liberal

Scott Brison Liberal Kings—Hants, NS

So it's not based on sustainability in Canada.

3:55 p.m.

Conservative

Jim Flaherty Conservative Whitby—Oshawa, ON

Now it's about 79 years of age. The life expectancy of a woman, similarly, is now in the eighties.

3:55 p.m.

Liberal

Scott Brison Liberal Kings—Hants, NS

The baby boom generation and the whole demographic shift have been with us since the 1950s. You were probably aware of that during the election. If so, why didn't you speak about this change to OAS during the election?

3:55 p.m.

Conservative

Jim Flaherty Conservative Whitby—Oshawa, ON

Well, we made it clear during the election campaign that we would ensure that we had long-term fiscal stability in Canada. That is our brand around the world—a brand with respect to which Canadians can be quite proud.

3:55 p.m.

Liberal

Scott Brison Liberal Kings—Hants, NS

Raising the OAS will also raise the age of qualification for the guaranteed income supplement, which helps the poorest of the poor in Canada. Will you consider amendments to exempt these most vulnerable Canadians, the people who get the guaranteed income supplement, from these changes?

3:55 p.m.

Conservative

Jim Flaherty Conservative Whitby—Oshawa, ON

The question usually comes in another way—that this change might impose some burden on the provinces. We made it clear, explicitly, in the budget documents that we would compensate the provinces and territories for any increased social assistance costs they incur as a result of this change, which is many years away.

3:55 p.m.

Liberal

Scott Brison Liberal Kings—Hants, NS

You're saying that people can work longer today than they used to. That's true for a politician, a lawyer, or an accountant, but if you're a manual labourer—a pipe fitter, a carpenter, or a fish plant worker doing physical labour—that may not be the case. In fact, for many people in those roles their bodies need a break at 65.

Will you consider amendments to exempt some people doing heavy physical labour, for example, from these changes?

3:55 p.m.

Conservative

Jim Flaherty Conservative Whitby—Oshawa, ON

There's a very interesting program funded in the budget called ThirdQuarter. The Manitoba Chamber of Commerce created the program. It's an Internet program to match people aged 50 and over, with their attributes and qualifications, to available jobs. This has been very successful in Manitoba, and we're going to fund its expansion across the country.

One doesn't have to do the same job for one's entire life. Many people do not. In fact, it will be more common in the future for a person to have multiple and different jobs in their lifetime than a single job.

3:55 p.m.

Liberal

Scott Brison Liberal Kings—Hants, NS

So you don't think it's different for somebody in heavy manual labour, compared to somebody who is a professional and a sedentary worker, as an example.

3:55 p.m.

Conservative

Jim Flaherty Conservative Whitby—Oshawa, ON

I don't agree with what you just said.

3:55 p.m.

Liberal

Scott Brison Liberal Kings—Hants, NS

Well, you seem to be a little out of touch, Minister, with the challenges that average Canadians are facing.

3:55 p.m.

Conservative

Jim Flaherty Conservative Whitby—Oshawa, ON

I certainly couldn't keep up with the honourable member.

3:55 p.m.

Liberal

Scott Brison Liberal Kings—Hants, NS

Minister, 38% of Canadians earn less than $20,000 a year, and 40% of the people getting old age security make less than $20,000. You're telling them it's no big deal; they have 11 years and can save a little more money, set a little more aside.

How can you actually tell people making less than $20,000 a year that they just need to save more money? Don't you think that sounds a little out of touch with the challenges faced by low-income Canadians?

3:55 p.m.

Conservative

The Chair Conservative James Rajotte

Please make a brief response, Minister.

3:55 p.m.

Conservative

Jim Flaherty Conservative Whitby—Oshawa, ON

I think what's out of touch is not realizing that people in Canada are living longer and healthier lives.

3:55 p.m.

Conservative

The Chair Conservative James Rajotte

Thank you.

Thank you, Mr. Brison.

We'll go to Mr. Hoback, please.

May 15th, 2012 / 3:55 p.m.

Conservative

Randy Hoback Conservative Prince Albert, SK

Thank you, Chair, and thank you, Minister, for being here.

I just find it rather rich that a member of the Liberal Party is telling us we're out of touch. When you look back to the election results since the last election, I would say the Liberal Party is a little bit out of touch and the voters showed that.

Mr. Minister, after the budget I went back to my riding and talked about various aspects of it, and it was amazing how many people said it was a good budget for Saskatchewan. It's amazing how quickly the premier came out and talked about how good this budget was for Saskatchewan.

You talked about Forbes saying that Canada is the best place to invest or do business in the world. Where I come from in Saskatchewan it's pretty good there too, so we're pretty proud of that. We certainly appreciate the work you, your staff, and your colleagues are doing, not only here but abroad, trying to make sure we have a stable world environment—plus what Canada can do to buffer what's going on in the world.

I guess I'd like to talk to you about a couple of things. I think the opposition parties will actually agree with me on one. The other is on the political activities and registered charities, and what we're doing in the budget on that.

We've been having meetings and talking to witnesses about looking at ways to use tax incentives to increase charitable giving. One of the comments that keeps coming up is on transparency in charities—the ability to see what they're doing, how they're spending the money, what role they're playing, and how politically active they are or are not.

Can you expand on what's in the budget with regard to political activities and registered charities?

4 p.m.

Conservative

Jim Flaherty Conservative Whitby—Oshawa, ON

There's some additional funding in the budget for the Canada Revenue Agency to make sure that charities in this country are obeying the law.

The law permits a charity to spend up to 10% on advocacy matters for the cause they represent. That isn't always honoured, and we want to make sure that charities obey the law so that Canadians can rest assured that when they give their money to a particular charity they will know that the money will be used for charitable purposes. This is only to make sure the tax system is respected. These are tax-receipted contributions that people are making, and Canadians are entitled to know that the money is being used for the purposes intended.

4 p.m.

Conservative

Randy Hoback Conservative Prince Albert, SK

That's very true.

I have a kind of personal story. My uncle passed away a little while ago at the age of 84 or 85. I was amazed, when I got his mail, how many charities were sending him mail. He was a bachelor. Looking at the content of that mail, I wondered exactly what their intent was. Was it to help the intended people who needed help, or just raise funds for themselves? So what you're doing there will hopefully address some of those issues.

On a more cheery note, I think something we can get consensus on around the table is what we're doing with the penny. Can you maybe explain to opposition members why this is important and how beneficial this will be? Even school kids get this. When I go back to Saskatchewan and talk to kids in high school they say, “Why do we have the penny? It's just a pain, and so much weight in my pocket.”

4 p.m.

Conservative

Jim Flaherty Conservative Whitby—Oshawa, ON

Well, I'm sure the opposition would not be out of touch with the uselessness of the penny as an item of currency.

We've just produced the last penny at the Royal Canadian Mint location in Winnipeg. Pennies will continue to be distributed by the Mint until the autumn, but that's it. There won't be any more pennies produced—for a good reason. They cost 1.6 cents to make and people don't let them circulate; they keep them in jars at home. So we have to keep making more of them at 1.6 cents per penny. We'll save $11 million per year by eliminating the production of the penny.

The penny will remain in circulation. Things will continue to be priced including the use of the penny. In cash transactions, there will be a rounding up and rounding down. So if something costs, for example, $1.01, it would be rounded down to a dollar; then $1.02 down to a dollar, $1.03 up to $1.05, and $1.04 up to $1.05. That has worked quite well in other jurisdictions that have taken the same step, including New Zealand and Australia.

4 p.m.

Conservative

The Chair Conservative James Rajotte

You have 30 seconds.

4 p.m.

Conservative

Randy Hoback Conservative Prince Albert, SK

Of course, one of the things we're also dealing with, Mr. Minister, is the labour shortage in Saskatchewan. I don't expect you to answer that, but I guess it just comes back to saying that, coming from Saskatchewan and looking at Canada here, and then seeing what's going on in the global economy and what's going on in other parts of the world, boy, it's just a great place to live. I think we'd all say that, wouldn't you?

4 p.m.

Conservative

The Chair Conservative James Rajotte

Minister....

4 p.m.

Conservative

Jim Flaherty Conservative Whitby—Oshawa, ON

Thank you for that very helpful question.