Finance Committee on Oct. 23rd, 2012

[Randy Hoback, Conservative, Prince Albert, SK]

I don't want to cut you off, but unfortunately I only have five minutes.

[Barry Blake]

No, that's fine.

[Randy Hoback, Conservative, Prince Albert, SK]

There's one more important thing I think we need to talk about, and that's intellectual property. How important is it to your sector to make sure that we have intellectual property correct insofar as legislation is concerned?

[The Chair, Conservative, James Rajotte]

Just give a brief response.

[Barry Blake]

I'll make a quick response.

We have asked the government to support the Beijing treaty on intellectual property, the WIPO or World Intellectual Property Organization treaty signed in June in Beijing. We're hoping that Canada will be one of the next to sign on to it. It is absolutely essential. If we can't secure both economic and moral rights to our images, as individuals and as a country, that money is gone into the void, and we'll never see it back, so thank you for the question.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Hoback.

Mr. Caron, go ahead.

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

Thank you very much.

I love this system, as it allows us to talk about really different issues. However, these issues are totally relevant to the budget that will be presented. Thank you for being here and making your presentations.

My first question is for Ms. Eng.

You briefly touched on what kind of improvements to Old Age Security you would like to see. We know that the Prime Minister made an announcement about that in Davos, Switzerland. Afterwards, the amendment was discussed in the House, included in the latest budget and adopted. I am talking about the fact that the eligibility age was raised from 65 to 67.

Was that a surprise for you when it was first announced in Davos? Had you already heard about that possibility?

[Susan Eng]

In actual fact we were surprised by it, but we also were asked about it a month before, by a journalist. Although we didn't take that as fact, we nonetheless did our research to see how our members would respond to such a proposal. When the announcement was made in January, we already had the response of our members. They were very much vehemently opposed to such a change, and that opposition did not change over the months that the measure was going through Parliament.

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

One of the main arguments the Conservative Government has used to justify raising the eligibility age was that, according to them, the program was unsustainable, it would eventually become unprofitable and the situation had to be remedied.

Is that also what you think?

[Susan Eng]

Well, we realized there was going to be an increasing number of people reaching aged 65, and that's a fact. However, the burden of that group is a set amount. We estimated some $2 billion to $3 billion a year, which is a sizeable amount, of course. However, our recommendation was that there were other places in the budget to find such an amount and that there was no need to go after this particular program. Some of the examples we gave were the massive savings that could be garnered in the health care system, through withdrawal from military spending in Afghanistan, and so on.

We raised the point that there were other places where you could find the savings, if the issue was an issue of budgetary strain. However, the changes, as they have now been put through, actually postponed the effect until the bulk of the group that's causing the problem, purportedly the baby boomer generation, has mostly passed through. Therefore, the actual factual support for making this change has minimized.

Nonetheless, from our members' perspective, in addition to not accepting that it was absolutely necessary for the fiscal health of the country, they also felt this was something they had paid into, something that was an earned benefit. It was part of our social safety net. They found this was an important value that they wanted to see maintained.

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

Thank you. I have about a minute and a half left.

Mr. Allen, quickly, I will ask you the same question Ms. Nash asked. However, I do have another question.

Has Engineers Canada looked at what could be viewed as our infrastructure deficit? The Federation of Canadian Municipalities and other groups, such as TD Canada Trust Bank, are determining what amounts should be invested and what our current needs are. The projections I have seen mentioned an amount between $250 billion and $500 billion.

Have you conducted an assessment? What could that amount be compared to?

[Kim Allen]

The number is extremely large. I think there's general agreement on that from everybody who's gone through it. You're talking in the order of hundreds of billions of dollars of infrastructure deficit.

I'm not sure it's that important that we know exactly what it is. It's more important that we actually get on a plan that starts renewing, rebuilding, and putting investments into that infrastructure. We're continuing to build new infrastructure that will become old infrastructure before we deal with the old infrastructure that we have to continue to repair.

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

I need a very quick answer to the next question, as I have another one I would like to ask Ms. Genshorek.

Considering how much needs to be invested, do you think an infrastructure program should cover more than four or five years and span over a very long period so that planning can begin based on those hundreds of billions that need to be invested?

My question is for Mr. Allen.

[Kim Allen]

Yes, absolutely. Infrastructure needs to be a life-cycle plan, so as soon as you build something, you have to plan how you are going to renew it, maintain it, and maximize and extend the life of it. This is really an ongoing plan. It isn't a program. It has to be the type of strategy such that when we look at it, when we build infrastructure, we don't put it in and say that it's going to continue to work forever. It will fall apart, and it does need to be repaired.

[The Chair, Conservative, James Rajotte]

Merci.

We'll go to Mr. Adler, please.

[Mark Adler, Conservative, York Centre, ON]

Thank you, Chair. As the keeper of the time, would you let me know when I have roughly a minute and 30 seconds left? I'd appreciate that. Thank you very much.

Welcome to all of the witnesses who are here today. This is a very interesting panel, and I would like to pursue questioning with all of you. I would like to engage all of you, but I can't, because of limited time, so I'm going to start with Mr. Hayos.

I want to talk to you about tax as an instrument of public policy. We use different instruments of public policy to achieve various outcomes. Using the tax system is a very coercive one, but it also has the opposite effect. In your submitted brief, you say, “We fully support the reductions made to the general corporate income tax rate over the past few years, and applaud the government for having fulfilled the commitment to lowering the rate to 15% this year”.

I would like you to give the committee, and particularly the members of the NDP, a basic lesson about how, first, corporations do not pay tax, people pay tax, and that bird has been plucked; and second, about how lowering the tax rate to 15% has led to jobs, has led to growth, and is leading to long-term prosperity, making Canada a very attractive destination for investment. Could you please comment on that?

[Gabe Hayos]

The first thing you have to understand is that capital is mobile, and it takes into account all the factors in making a business investment, of which tax is one of the important factors. If the cost in a country like Canada is relatively low in the tax area, it attracts business, and the business invests money in both capital and labour. That's how the multiplier effect works, and you produce greater benefits to the Canadian economy. That's what I would say.

[Mark Adler, Conservative, York Centre, ON]

Thank you.

We had a representative from the Canadian Union of Public Employees with us yesterday. He said in questioning by one of our members that deficits do not matter, that public deficit does not matter. Could you comment on that? Does it or does it not matter?

[Gabe Hayos]

Yes. Deficits matter tremendously. I think that, really, the analogy is no different from that of an individual who has to borrow. I think we have to be able to manage it. As we see in Europe and other places, when the deficit is out of control and we're borrowing, and the risk to our repaying those borrowings gets greater, the interest cost gets greater and we have an effective loss of revenue in the form of interest. Deficits are a hugely important thing. Trying to manage them and keep them under control is very important.

[The Chair, Conservative, James Rajotte]

You have a minute and 30 seconds.

[Mark Adler, Conservative, York Centre, ON]

Thank you very much.

I would like to ask a number of the different representatives here today....

Mr. Hayos, how many members does the CICA have?

[Gabe Hayos]

It has 82,000 members.

[Mark Adler, Conservative, York Centre, ON]

It has 82,000. I'm going to ask you a simple question.

Of those 82,000, did any one of them ask you, in anticipation of your appearance here today, Mr. Hayos, to go before the finance committee and tell members of the governing party that they want a carbon tax, which appears on page 4 of the NDP platform, and which would take $21 billion out of the pockets of Canadians? Did any one of them ask you to do that?

[Gabe Hayos]

No, they didn't ask me.

[Mark Adler, Conservative, York Centre, ON]

Thank you.

Mr. Paton, I'll ask you the same question: how many members do you have?