Finance Committee on Nov. 6th, 2013

[Scott Brison, Liberal, Kings—Hants, NS]

On Special Olympics, I think you're a remarkable organization. In Nova Scotia we have one of the most amazing Special Olympics anywhere. The Edwards Family Charitable Foundation has supported that for a long time, so we thank the Edwards family and Special Olympics. It's a tremendous organization.

[The Chair, Conservative, James Rajotte]

Thank you very much, Mr. Brison.

We'll go to Mr. Adler, please.

[Mark Adler, Conservative, York Centre, ON]

Thank you, Mr. Chair.

Thank you all for being here this afternoon.

First I have a comment.

Mr. LeBourdais, I really enjoyed your presentation, so thank you very much for being here today.

Yesterday was, I guess it would be the 31st anniversary—it was in 1982—of the kitchen accord on the repatriation of the Constitution. You will remember in the agreement property rights were given up to the provinces in exchange for a charter of rights and freedoms. Initially, we were to have the right to property in the charter. Unfortunately, none of us in Canada has that right, but I do agree that there should be property rights on reserve inasmuch as we Canadians have them. I agree with you on that.

Ms. Anthony, first, the METC credit has been very successful in terms of the use of flow-through shares. Because of its success, expanding the tax credit to other risky sectors like high tech or whatever, how in your opinion would the expansion of a tax credit as such impact the charitable sector and charitable donations through the use of flow-through shares?

[Marilyn Anthony]

I can't answer it from a tax perspective as I'm not a tax professional myself. I can say that the possibility of its being extended to other industries could be beneficial to the charitable sector if it's used from a donation format. I want to stress though that the fact that it's available through mining, which has the double positive effect of helping rural and remote communities, the other industries wouldn't have the same impact as it does within the mining industries.

[Mark Adler, Conservative, York Centre, ON]

Yes, okay, that's very good.

Ms. Murumets, when I was young—

[An hon. member]

A long time ago.

[Mark Adler, Conservative, York Centre, ON]

It wasn't that long ago.

I remember coming home from school virtually every day and we'd grab our hockey sticks from the garage and we'd go out on the street and play hockey. We'd play late at night until we couldn't see the ball any more.

We don't see that kind of thing any more. What's gone wrong with our kids that...a fitness tax credit wasn't needed to exhort parents to get us kids into physical activity; we just did it on our own. What has gone wrong in our society that now we need government intervention to get our kids fit?

[Kelly Murumets]

The world has changed certainly and technology is here to stay. I gave you that statistic earlier about our kids spending almost eight hours a day, seven days a week in front of screens. We're trying to use screens for good as opposed to for evil. That is the fundamental point behind “Bring Back Play”: how do we help moms overcome the barrier of screens and the barrier of danger, perceived or real? We're not here to say whether it's perceived or real, but we know that's one of the barriers to kids just playing and being kids. We provide all kinds of inspiration, information, tips and tools, as I mentioned earlier, to talk with moms and then have moms talk with other moms. We go where moms are to provide inspiration and help one another, to let our kids be kids and yell “car” while they're playing ball hockey on the road.

[Mark Adler, Conservative, York Centre, ON]

Exactly, yes, because this is an absolute train wreck just waiting to happen. Our kids are getting fatter, and that will lead to all kinds of health issues. We either deal with this now or we pay through the nose later.

[Kelly Murumets]

It's not much later. I mentioned the economic statistics around Ontario and health care costs. That's in the next 10 years. That's happening now. If you think about hospital wait times, they're....

It's completely unsustainable, economically unsustainable, now.

[Mark Adler, Conservative, York Centre, ON]

What other jurisdiction can we look to that has done this successfully?

[Kelly Murumets]

You know, we're actually doing great work in Canada. ParticipAction has formal agreements with British Columbia, New Brunswick, and Nova Scotia.

I actually flew in on the red-eye last night from Vancouver, where we're doing some really great work. We're taking the federal moneys that the Government of Canada has invested in ParticipAction and leveraging that with British Columbian moneys and then private sector moneys. It's outstanding.

[Mark Adler, Conservative, York Centre, ON]

This is really an investment in our kids, in the welfare of our kids.

[Kelly Murumets]

It's an investment in the country.

[Mark Adler, Conservative, York Centre, ON]

In the country, absolutely, and our future.

[The Chair, Conservative, James Rajotte]

Thank you very much, Mr. Adler.

Mr. Rankin, please.

[Murray Rankin, NDP, Victoria, BC]

Thank you, Chair.

Welcome to all the witnesses. We have a time allocation motion which the government has brought in, and we have to leave shortly. I apologize that there isn't time to ask as many questions as I'd like to ask.

First, Professor Lahey, I've long admired your work. As a former law professor myself, your scholarship on the fiscal impact on women especially is extraordinary.

I would like to ask you to elaborate on two of your recommendations. Your second recommendation talks about eliminating the joint personal income tax system. You mentioned that it would save $4 billion a year to do so. You indicate that there would be a number of other benefits.

I wonder if you could elaborate a little more on that recommendation.

[Prof. Kathleen A. Lahey]

The recommendation is to eliminate all tax provisions that essentially reward a couple for making sure that one of the parents spends a significant amount of work time in unpaid work activities, such as supervising children's play.

This puts a lot of pressure specifically on women. They are the ones with the lowest incomes, and it's more cost-effective for the family to make sure that it is the woman's work that is taken out of the labour force. This puts pressure on families, because a woman's energies can only go so far. There are only 24 hours in a day. At the same time, it detracts from the family's total financial capacity.

If you were to take all of the joint tax measures out of the tax system, you would have, if you did a 100% job—I just finished doing this simulation—it would put $25 billion per year more in the hands of women, and women would have disposable incomes of $3,128 more per year.

A tremendous skew takes place that basically cheapens women's paid work and treats their unpaid work as a limitless free resource that we all can draw upon.

[Murray Rankin, NDP, Victoria, BC]

Right.

Do I have time for a follow-up, Chair?

[The Chair, Conservative, James Rajotte]

Yes. I'm going to push it as far as I can, Mr. Rankin.

[Murray Rankin, NDP, Victoria, BC]

I appreciate that.

There were so many things arising out of your presentation. You mentioned as well the recommendation about eliminating the transfer of tax credits between spouses. You presented us today with this table that shows what you call the upside-down benefits of parental income splitting. In your remarks, you talked about the great difference between the 39 whole dollars that low-income people are making and the up to $4,781 for high-income people.

Is your recommendation as simple as eliminating the parental income tax splitting, or are there any other ways, if they wanted to keep going with that, we could mitigate some of that lack of progressivity?

[Prof. Kathleen A. Lahey]

The most important and sensible thing to do would be to not do this, and to take the additional $2.6 billion per year that this would cost and put it toward the most important benefit that would assist people trying to lift their children out of poverty going forward.

If it were necessary to do some form of this, then it really should be completely cast as a refundable type of credit. It should absolutely be cut off very close to the phase-out point at which something like the Canadian child tax benefit is phased out, or at the most, the $112,000 level for the phase-out of the OAS. It should be reversed in effect, because to give $39 per year to people with the lowest incomes and $4,700 per year to people with the highest incomes is unethical.

[Murray Rankin, NDP, Victoria, BC]

It's ludicrous.

[Prof. Kathleen A. Lahey]

It's a waste of taxpayers' money and it essentially rewards people who are already in very privileged positions.

[Murray Rankin, NDP, Victoria, BC]

Thank you so much for showing us that data. I really appreciate it.