Evidence of meeting #33 for Finance in the 41st Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was information.
A video is available from Parliament.
Liberal
Emmanuel Dubourg Liberal Bourassa, QC
I won't be able to add much in one minute.
Mr. Howlett, you probably feel that this measure aims to show that the government is fighting tax evasion. However, in reality, stakeholders do not think this will affect major change. Of course, recovering funds is important. Every taxpayer must pay their fair share, but this is not the type of measure that will help achieve that balance.
Executive Director, Canadians for Tax Fairness
Yes, I think these are important steps forward, but they aren't adequate to the size of the problem that we're facing. I welcome them, but I'm hoping the government will consider further steps because this is a big challenge.
I agree with Mr. Keddy that it's a difficult problem to crack. I do have some sympathy for the Canada Revenue Agency in trying to deal with this problem. They need some further help to be able to do it.
Conservative
Conservative
Mark Adler Conservative York Centre, ON
Thank you, Chair.
Thank you to all the witnesses for being here today.
Initially, I wanted to go to you, Mr. Hayes, to talk about LSVCCs. I won't have the time, but I would like to pursue that with you at some point.
I do want to ask Ms. Fralick about consumption taxes on cigarettes. I mean all of us who've studied economics know the Ramsey rule; you apply consumption taxes to goods of inelastic demand in the hope that it will minimize the welfare costs associated with them.
Are we at a point now where it doesn't matter how much added tax we place on cigarettes, people are still going to buy them at the same level as they were before? Have we reached that point yet?
President and Chief Executive Officer, Canadian Cancer Society
We don't believe so, thus the recommendation this time around that it was well beyond time to increase the federal taxes. You'll have noticed that several provinces also view that they still have room to put more taxes on. Ontario was talking about that today. The B.C. government increased their tobacco tax a couple of weeks ago, so there is room.
It's not just about revenue grab, I don't think. I know it's been—
Conservative
President and Chief Executive Officer, Canadian Cancer Society
Consumption is going down. Depending on the study that you look at, we'll say there are 20% who are smoking in this country, but it's down as low as 16% in some populations. The population we are concerned the most about.... Your question, I think, speaks to addiction. Those who are very deeply addicted—we know that addiction to nicotine is a very strong one—will certainly pay a great deal to get the product to which they're addicted. We believe there's still room to move.
For the Canadian Cancer Society, one of the biggest areas of focus is young people. I said in my comments, “no new smokers”. This is why, with young people, the price point is especially important. Those who are addicted, they're adult. They have been smoking for years. We do everything we can to help them stop smoking, if they're going to. Part of that is the pricing issue, but you're right, they will continue to find the money to fuel that addiction. For young people, we don't want them to start.
Conservative
President and Chief Executive Officer, Canadian Cancer Society
It's been going very well. I don't have the specific numbers. Mr. Cunningham probably does, and could quote the statistics. I believe it's around 16%, 17%, and dropping year over year. The challenge we face is not a budgetary issue, but it is around flavoured tobacco. That is something that should be banned. We can talk about that today or another time, but that is something that is an introductory process for young people. It is a significant concern for us.
E-cigarettes are another issue. We don't have as much evidence, but there's a lot of research going on in that area as well.
President and Chief Executive Officer, Canadian Cancer Society
E-cigarettes are a relatively new delivery mechanism for nicotine in the States. They've not been regulated in Canada to be used with nicotine. It is a cigarette-like device that vaporizes. You inhale; you feel like you're smoking. There are flavours that can be delivered through this mechanism. It's being positioned both as a harm-reduction approach, similar to Nicorette patches and other approaches, but it's also an introduction to cigarettes and a way tobacco can be delivered.
Again, the evidence is less clear on that front. I know it's not a budgetary issue, but certainly the flavoured tobacco is very clear for us, and we urge the government to take a look at that.
Conservative
Mark Adler Conservative York Centre, ON
Yes, okay.
There's still even room, then, you would say, to increase the taxes on cigarettes even more.
President and Chief Executive Officer, Canadian Cancer Society
We believe so, yes. The increase that this current budget would place on tobacco, you heard me refer to as an inflationary adjustment. When you look at the costs that have gone up, the cost of tobacco has stayed stagnant federal tax-wise for about 12 years now. I mentioned the discounting issue. In response, the tobacco industry has offered discount brands. The tobacco is basically the same, but the pricing is much lower. The real price of tobacco has done nothing but go down over the last decade to 15 years.
Conservative
Conservative
Mark Adler Conservative York Centre, ON
Two minutes, okay.
All right, Ms. Tedds, some other time.
Mr. Howlett, you come here as a tax expert. What are your credentials for claiming you're a tax expert? We had before a couple of lawyers who have studied tax law. They're tax lawyers. They're well educated in the field. What expertise do you have?
Executive Director, Canadians for Tax Fairness
I have worked in the past for the Ontario Fair Tax Commission.
Conservative
Executive Director, Canadians for Tax Fairness
—in adult education, so my specialization is more in the area of—
Conservative
Executive Director, Canadians for Tax Fairness
No, but I do have some background in tax and work around taxes.
Conservative
Mark Adler Conservative York Centre, ON
Okay. I guess you pay your tax. That's what makes you an expert in tax.
Canadians for Tax Fairness, how are they funded?
