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Evidence of meeting #70 for Finance in the 41st Parliament, 1st Session. (The original version is on Parliament’s site.) The winning word was clauses.

A video is available from Parliament.

On the agenda

MPs speaking

Also speaking

Gordon Boissonneault  Senior Advisor, Economic Analysis and Forecasting Division, Demand and Labour Analysis, Economic and Fiscal Policy Branch, Department of Finance
Sue Foster  Acting Director General, Policy, Appeals and Quality, Service Canada
Margaret Strysio  Director, Strategic Planning and Reporting, Parks Canada Agency
Stephen Bolton  Director, Border Law Enforcement Strategies Division, Public Safety Canada
Michael Zigayer  Senior Counsel, Criminal Law Policy Section, Department of Justice
Garry Jay  Chief Superintendent, Acting Director General, HR Workforce Programs and Services, Royal Canadian Mounted Police
Jeff Hutcheson  Director, HQ Programs and Financial Advisory Services, Coporate Management and Comptrollership, Royal Canadian Mounted Police
Darryl Hirsch  Senior Policy Analyst, Intelligence Policy and Coordination, Department of Public Safety
Ian Wright  Executive Advisor, Financial Markets Division, Financial Sector Policy Branch, Department of Finance
Nigel Harrison  Manager, Legislative and Parliamentary Affairs, Department of Fisheries and Oceans
David Lee  Director, Office of Legislative and Regulatory Modernization, Policy, Planning and International Affairs Directorate, Health Products and Food Branch, Department of Health
Anthony Giles  Director General, Strategic Policy, Analysis and Workplace Information Directorate, Department of Human Resources and Skills Development
Bruno Rodrigue  Chief, Income Security, Federal-Provincial Relations and Social Policy Branch, Department of Finance
Gerard Peets  Senior Director, Strategy and Planning Directorate, Department of Industry
Suzanne Brisebois  Director General, Policy and Operations, Parole Board of Canada, Public Safety Canada
Louise Laflamme  Chief, Marine Policy and Regulatory Affairs, Department of Transport
Judith Buchanan  Acting Senior Manager, Labour Standards Operations, Human Resources and Skills Development Canada
Mark Hodgson  Senior Policy Analyst, Labour Markets, Employment and Learning, Department of Finance
Stephen Johnson  Director General, Evaluation Directorate, Strategic Policy and Research Branch, Department of Human Resources and Skills Development
James McNamee  Deputy Director, Horizontal Immigration Policy Division, Department of Citizenship and Immigration
Graham Barr  Director General, Transition Planning and Coordination, Shared Services Canada

7:05 p.m.

Chief, Income Security, Federal-Provincial Relations and Social Policy Branch, Department of Finance

Bruno Rodrigue

I don't—

7:05 p.m.

Liberal

Scott Brison Liberal Kings—Hants, NS

I just wanted to make...and I appreciate very much your being here. I understand the difficult position you're being put in.

Thank you.

7:05 p.m.

Conservative

The Chair Conservative James Rajotte

Mr. Van Kesteren.

June 5th, 2012 / 7:05 p.m.

Conservative

Dave Van Kesteren Conservative Chatham-Kent—Essex, ON

Thank you, Chair.

I just want to maybe add a few thoughts about this particular issue. I was going back in my notes, and I recollect...I think it was a professor from the University of Toronto who we had in. I liked what he said, because often what we hear is a lot of opinion. And opinion is great. We all have our opinions, and often they're formed by some good information. But this particular gentleman quoted the OECD, and I think he quoted at the same time the International Monetary Fund. That basically reinforced what this government has said, which is.... And it's not rocket science. When you know that at one point there were seven people supporting one retired and that's going to shift to four to one and then three to one, the writing is on the wall.

I often marvel...and I wonder if the opposition is reading the paper and seeing what's happening in countries like Greece, and it's now coming to a crisis point in Spain—countries that haven't addressed this issue. We are being warned repeatedly by organizations that have no skin in the game, when there's no reason why they wouldn't give us a fair analysis, and they're saying the same thing: we have to make adjustments. This government has done this, and not in a cutting method or a draconian way. It's giving us ample time to give people an opportunity to prepare for these changes.

It just amazes me. This is something that is so clear, so absolute, that I can't understand why it's not being embraced by the opposition.

I just want to share Paul Martin's Red Book. The Liberals love to try to take the credit for some of the good things that are happening, and rightfully, Mr. Martin made some important changes. One of the things he says in his Red Book is:

The Canadian population is growing older—first, because our birth rate for the past three decades has been below replacement....

He is saying that we have to meet this demographic challenge. This is nothing new. This is something that has been debated for many years. This government has recognized that we don't want to go down the same path that countries like Greece and Spain and Italy and Portugal have gone down. We want to do the prudent thing, and that is to make adjustments but give people enough time so that they can prepare for those adjustments.

7:10 p.m.

Conservative

The Chair Conservative James Rajotte

Thank you, Mr. Van Kesteren.

Monsieur Caron, please.

7:10 p.m.

NDP

Guy Caron NDP Rimouski-Neigette—Témiscouata—Les Basques, QC

I would like to go back to the argument that we absolutely have to act now because it will be impossible for the cost increases to be assumed by the government or by all Canadians.

The information confirmed by the government was that the amount that will be saved by these measures in 2030 will be about $10.8 billion. In 2030. In today's dollars, that means about $6 or $6.5 billion.

The GST reductions that the Conservative government has put in place since it was elected in 2006 amount to two per cent. As the government says, the GST has gone from 7% to 5%. That was a cost to the treasury. Each one per cent is between $4 and $6 billion, to be on the safe side. So the amount that the government is no longer collecting because of the two per cent reduction in the GST is between $8 and $12 billion. The government made the choice to reduce the GST by two per cent, costing the public purse between $8 and $12 billion per year. And yet it comes up with a plan, not announced or debated during the election campaign, that increases the age of eligibility for old age security, which will save $6 billion per year in today's dollars.

Governing means making choices, and the Conservative government has made its choices. With the harmonized sales tax, it chose to give tax reductions for which our retired Canadians are going to have to pay by working two years longer. Someone who is 53 today will receive $12,000 less in old age security than someone who is 54 today, given that the change goes into effect in 2023.

So please do not tell me that the current program cannot be paid for by Canadians as a whole. As has been mentioned, the OECD has shown that it can. The Parliamentary Budget Officer said so too. The chief actuary of the Canada Pension Plan, who also looks after the books of the old age security program, has also shown that things can be adjusted without resorting to such draconian measures.

We completely agree with the need to deal with the question of demographic change. But this measure alone does not address the situation and does not represent an overall assessment of the situation. It is just one action in one of the programs that provides economic security for our retired Canadians. It simply scratches the surface of the larger problem we have to come to grips with.

In those terms, the argument that we cannot afford the program at the moment and that we absolutely have to increase the age of eligibility makes no sense, given the choices the government has made in the past.

According to the Chief Actuary of Canada, the cost increase of the program, as a percentage of the GDP, is about 1%. And that 1% is being used to justify taking away $12,000 in income from people currently under 53, while those 54 or older can keep it.

Nothing has been done to convince the opposition, Canadians and Quebeckers that this scheme is fair and appropriate.

That's it.

7:15 p.m.

Conservative

The Chair Conservative James Rajotte

Okay. Thank you.

Ms. Nash.

7:15 p.m.

NDP

Peggy Nash NDP Parkdale—High Park, ON

I just want to get on the record, once again, our concerns around OAS. Comments that we're going to end up like Greece if we don't make that change are absolutely ridiculous.

Quite frankly, the government can't have it both ways. They can't say the government is running the best financial management of any country in the world—which is not accurate—to claim credit for doing things well, and at the same time say that if this change isn't made, we're going to end up where the country is almost bankrupt. It's simply not the case.

I want to get in on the subject of what this is actually doing. At one point, one of the ministers commented that we're doing this because other countries are doing it. Canada's demographics are not the same as Europe's. Our country is aging, but less rapidly than many other European countries, and our finances are in better shape.

The reality is that this kicks in for people who are age 54 and younger. It means no one who is a senior today is affected, but for people who are 54 and younger, they're going to be affected. By the time this takes effect, it's going to be coming up to the peak of the demographics of the baby boom. After that, the cost of OAS as a percentage of GDP will decline. It's scheduled to go from about 2.43% of GDP in 2012, up to its absolute peak of 3.16% in 2030, and then it falls back to 2.35% in 2060. This is a demographic bulge. It's going to go up and it's going to go down again.

To cut the benefits, not for the baby boomers who are creating that bulge, but for the people who come after them, in my view exacerbates intergenerational inequity. Baby boomers had better access to jobs, to education, and they will have better access to OAS and pensions, but the people who come after them are going to have less of everything. I don't think it's right and I don't think it's necessary.

After asking several questions of the minister and the Prime Minister in the House of Commons, and asking officials, we were not told what the impact of this change would be. Everyone refused to give us numbers. Then, the day after we sit as a finance committee, a Friday afternoon before a long weekend, the numbers came out, and it's $10.8 billion by 2030. In 2030, that's what the number will be.

What does that mean for people who are affected? OAS is just over $6,000 a year, so for a couple, for two years, that's about $25,000 out of their pockets. It's very significant for individuals. Yes, it's an issue we have to address, but this is not the right way to go about it.

This is not something the government campaigned on. We had an election a year ago. The government never mentioned it. It gets announced by the Prime Minister when he's with some of the wealthiest people in the world—an elite gathering in Davos. That's how the people who are going to lose $25,000 found out they're going to be impacted by this.

The people who will be impacted most may have 10 years or more to prepare, but the reality for people at the bottom end of the income scale is that they're not going to be able to prepare because they don't have the wherewithal to put that kind of money aside.

For all these reasons, we think this is wrong. It's the wrong move. It's the wrong measure.

If you're looking for $10 billion, you could maybe look at redrafting the military procurement and not pursuing the F-35s, where you were out $10 billion in your costing, and put that money into the pockets of Canadians when they need it most, in their retirement years.

Thank you.

7:20 p.m.

Conservative

The Chair Conservative James Rajotte

Thank you.

Your turn, Mr. Mai.

7:20 p.m.

NDP

Hoang Mai NDP Brossard—La Prairie, QC

Thank you, Mr. Chair.

Mr. Rodrigue, we were a little hard on you when you came here. That is typical of what is going on at the moment.This is not a personal attack: you had the information, but you could not provide it because the government did not let you. The next morning, the government provided the figure we were looking for.

Now that you are able to, can you tell us how much the government is going to save by changing the retirement age from 65 to 67?

7:20 p.m.

Chief, Income Security, Federal-Provincial Relations and Social Policy Branch, Department of Finance

Bruno Rodrigue

It will save $10.8 billion in 2030.

7:20 p.m.

NDP

Hoang Mai NDP Brossard—La Prairie, QC

Thank you for that information. We were very frustrated because we knew that you had it. This is a very concrete example of the government's lack of transparency. The Parliamentary Budget Officer has said that such a lack of transparency is unacceptable. Unfortunately, you provided a typical example of the way in which this government works. This is not a personal attack, and I thank you for providing us with the figure, because it is now on the record.

Mr. Van Kesteren often brings up the studies done by the OECD and the World Bank. I have a lot of respect for him and I know that he knows that the report deals with countries in general. Mr. Van Kesteren always says “in general”, but the Government of Canada asked the OECD to confirm that it applies specifically to Canada. Here is what the OECD concluded:

The analysis suggests that Canada does not face major challenges of financial sustainability with its public pension schemes.

There is no pressing financial or fiscal need to increase pension ages in the foreseeable future.

I'd invite you to look at the study and the report that is actually with the Department of Finance. It talks about OAS and GIS, and that there is no pressure; it is sustainable. When we have the number, which is $1.8 billion in 2030, I'm not sure why the government is saying it's not sustainable and it's the end of the world.

Again, it's a question of choice. Clearly the government has made the choice that people living in poverty, especially the elderly, will have to work harder.

We've seen it from a lot of witnesses. We've seen how that will affect people and how bad it is, and how it affects the elderly and the poorest people. Basically, we're talking about the....

We are talking about the segment of the population that is most affected by this measure, that is the most vulnerable. It is a choice the government has made. I am happy that at least now we have the figures and that we can clearly see the government's decision and approach. It does things in secret and has to have its arm twisted before it provides any figures. It should have reacted, because the attack on Mr. Rodrigue was a little too much. The government looked quite bad: we knew that it knew the figures and that it was intentionally concealing them.

7:25 p.m.

Conservative

The Chair Conservative James Rajotte

Thank you.

Mr. Marston, and then Mr. Van Kesteren.

7:25 p.m.

NDP

Wayne Marston NDP Hamilton East—Stoney Creek, ON

Thank you, Mr. Chair.

I want to say that I have a high regard and respect for the member for Chatham-Kent—Essex.

I even looked it up, just so I'd be clear. I believe that when you say the things you do, you actually believe that it's the case. But as the previous speakers have pointed out, we're taking $10.8 billion away from seniors. There's a problem. Nobody is arguing that there's not something happening to the generations we're talking about. Agreed, it's $39 billion to $109 billion.

The hole in the government's view of this is very simple: when the numbers are looked at, they're not taking into account the projected growth in GDP between now and 2023. In essence, the government is saying they're not sure their economic policies are going to sustain the growth actually being predicted by the Bank of Canada. If we even got half the GDP growth predicted, this would be less than 1% of GDP. It would take 0.8% of GDP to cover this.

You talked about the need to address a challenge. We're saying to you that we should have looked at things in a more holistic view. There's no rush to be doing this. The reality is that when you take into account GDP growth, this is absolutely sustainable. That's why you have a divergence of opinion between the people who have looked at this—the OECD, the Parliamentary Budget Officer—and the side the government has taken their figures from. That's where your difference lies. The reality is that it's a difference in choice in how that gets addressed.

We're saying, quite simply, that taking two years of income away from seniors is hurting the wrong people. This is the wrong way.

When you look at the amount of taxation capacity that's been removed by this government—the change to the HST is roughly $14 billion a year, the change to corporate taxation is roughly $16 billion a year—that's $30 billion of fiscal capacity to address this situation. When you look at banks and places like that that are giving their executives billions of dollars in bonuses, how do you square that circle? It can't be done. We have to make a better choice than this one.

7:25 p.m.

Conservative

The Chair Conservative James Rajotte

Thank you, Mr. Marston.

Mr. Van Kesteren.

7:25 p.m.

Conservative

Dave Van Kesteren Conservative Chatham-Kent—Essex, ON

I suppose we could go around and around in circles. That's not my intention. I have the highest regard for the members across the way as well, and I firmly believe that they believe that's the right approach.

I would say this. The changes we are proposing will take place in 2027. There's ample time for people to get ready. I would even say, furthermore, that if we're wrong, that can be adjusted again. I'm willing to go to the people in Chatham-Kent—Essex, and when they ask me, “Dave, why did you make this change?”, I will look them squarely in the eyes and say that it was because I wanted to make sure that when the time comes, when they retire, the funds will be there.

When we talk about those countries, Ms. Nash, with all due respect, their problems are with their bonds. They can't satisfy the bond buyers anymore. It's a great big IOU, and no one trusts that. It's the situation not only in those countries. It's the same situation in the United States. In this country, we want to make sure that the funds will be there and that those people who are ready for retirement will be able to expect to have those funds in place.

I know this is prudent. I know the reasons we are doing this are the right reasons. I believe, as you said, that I can look my constituents squarely in the eyes and tell them that we're doing this in their best interest. I believe that most of them will agree with the stand this government has taken, too.

7:25 p.m.

Conservative

The Chair Conservative James Rajotte

Thank you.

We'll have Ms. Glover, and then Monsieur Caron.

7:30 p.m.

Conservative

Shelly Glover Conservative Saint Boniface, MB

Thank you, Mr. Chair.

I was actually hoping that I could convince you to move to the question. It's been quite a long time I've been hearing the same statements presented over and over again. My intervention is to encourage you, with the flexibility you've demonstrated and the long period of time that's been spent on this, to move to the next sections. Otherwise, we will not finish.

7:30 p.m.

Conservative

The Chair Conservative James Rajotte

I would very much like to move to vote on this. The reality is this will be a debate for the next four years and longer. We could debate it tonight until midnight. Members will make their points on both sides. I really would like to vote on these clauses if I can. I am asking if we can vote on these clauses and move on. It's up to the committee.

What I am trying to do is actually enable the parties to get all of their comments on the record, especially with respect to their amendments. The problem is, if we have another intervention, then the other side may say, “I am going to respond to that point”, and then it just goes back and forth. That's the issue. I think both sides have stated their case. Ultimately, it will be a vote and the Canadian public will have to decide between the two sets of arguments.

Do you want me to do these individually?

7:30 p.m.

Some hon. members

Yes.

7:30 p.m.

Conservative

The Chair Conservative James Rajotte

Okay.

(Clauses 445 to 448 agreed to on division sequentially)

(Clauses 449 to 460 agreed to sequentially)

(Clause 461 agreed to on division)

(Clause 462 agreed to)

(Clause 463 agreed to on division)

(Clause 464 agreed to)

(Clauses 465 to 467 agreed to on division sequentially)

Okay. I want to thank our officials for being here.

Colleagues, I am going to take a second health break to allow members to stretch their feet.

Thank you.

7:40 p.m.

Conservative

The Chair Conservative James Rajotte

I call this meeting back to order.

Colleagues, we are now at division 25, the Salaries Act, and this deals with clauses 468 to 472. I have no amendments for this division.

I have an amendment for the next division, which is the Seeds Act, but not for this one.

(Clauses 468 to 472 inclusive agreed to on division)

Okay. We'll move to the Seeds Act, which is division 26, with clauses 473 to 475.

We have an amendment for clause 475, but I'll ask Ms. Nash to speak to the issue generally.

7:40 p.m.

NDP

Peggy Nash NDP Parkdale—High Park, ON

Just generally, Mr. Chair, again, the Seeds Act coming before the finance committee doesn't seem to make much sense, but here we are. We've not seen any analysis on the impact of the privatization of seed crop inspection, so we're not clear on what that will mean for Canadians—and Canadians expect us to do our due diligence, especially when it comes to food safety issues.

Our concern is that these changes open the door to privatization in food inspection, which is an important function that government undertakes now, and I think Canadians want to know that their government is ensuring their food safety. They don't want that to change.

So we're proposing, with our amendment, to add a paragraph just to prevent conflict of interest for privatized seed inspectors. I will move that.

7:45 p.m.

Conservative

The Chair Conservative James Rajotte

Thank you for your comments.

I'll go to Mr. Hoback, please.

7:45 p.m.

Conservative

Randy Hoback Conservative Prince Albert, SK

Thank you, Chair.

Actually, the seed industry has been asking for this for quite a few years. What it does is it actually takes away the subsidization of the taxpayer on the audits that go on in the fields. That's the first thing it does. Second, it improves the efficiency and the service to the seed growers so they can actually get quicker approvals.

The CFIA did come before us and testify earlier on, and they basically clarified the fact that this has nothing to do with food safety. This has everything to do with regulating the actual seeds that farmers use to grow their crops. It's just a common sense move forward. Plus, they also told us that these inspectors will actually be trained by CFIA, so we can ensure that the inspectors who are going to the fields are trained by the CFIA, are monitored by the CFIA, and will do a great job.