Evidence of meeting #51 for Finance in the 41st Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was capital.
A video is available from Parliament.
Conservative
The Chair Conservative James Rajotte
I call the meeting to order.
This is meeting 51 of the Standing Committee on Finance. Our orders of the day, pursuant to Standing Order 83.1, have us continuing our conversations on pre-budget consultations 2014.
In the first panel this afternoon we have five witnesses.
First of all, we have back again, from the Canadian Centre for Policy Alternatives, Ms. Armine Yalnizyan.
Armine Yalnizyan Senior Economist, Canadian Centre for Policy Alternatives
If I come here often enough, you'll get my name just like that.
Conservative
The Chair Conservative James Rajotte
Yes. You'll have to keep coming back here. Welcome back today.
From Canadians for Tax Fairness, we have the executive director, Mr. Dennis Howlett.
From Restaurants Canada, we have Ms. Joyce Reynolds, the executive vice-president, government affairs.
From Portfolio Management Association of Canada, we have the chair, industry regulation and tax committee, Mr. Scott Mahaffy.
And from Tax Executives Institute, Inc., we have the vice-president, Canadian affairs, Mr. Paul Magrath.
Welcome to the committee. You will each have five minutes for your opening statements, and then we will have questions from members.
We will begin with the Canadian Centre for Policy Alternatives.
Senior Economist, Canadian Centre for Policy Alternatives
It is my great pleasure to be here, and it is an honour to be here with all of you. Thank you so much for keeping on. I'm so proud of Parliament right now.
I thank you for the invitation to discuss how we can improve Canada's taxation and regulatory regimes. I would like to present for your consideration three proposals to improve the short game, the long game, and the strong game for Canada's public revenues and the rules that govern them.
With respect to the short game, economic growth is slowing around the world and in Canada. Both the IMF and the Bank of Canada have downgraded growth expectations very recently, and we expect the fiscal outlook will reflect that.
Since July, when these growth rates were downgraded, oil prices have plunged by 25%, and they continue to fall this week on the markets. The exchange rate of the Canadian dollar has fallen by about 6%, which means we are getting less for the oil we are exporting and all of our imports are increasing in price. Add in a U.S. economy that is growing in its energy independence, the fear of a triple-dip recession and deflation in Europe, a looming credit crisis in China, and there is absolutely no shortage of reasons to worry about how difficult it's becoming to attain and maintain budget balance in the coming months.
While there is a risk adjustment factor of $3 billion built into the federal budget of 2014, plunging oil and gas prices could wipe out up to $4 billion from federal revenues alone. In addition, your pledges to military action to fight ISIS abroad and enhance security measures to fight terrorism here at home will cost us more.
Despite these growing fiscal pressures, we know the Government of Canada is committed to more tax cuts. The EI reductions and the doubling of the child fitness tax credit and making it refundable will take about $255 million out of the public purse next year. Two remaining large commitments from the spring 2011 election campaign will take billions more. Of course there's been much debate over the income splitting proposal, which would cost $3 billion in its original form. Less attention has been paid to the proposals to double contributions to the tax-free savings account, which one study in the Canadian Tax Journal estimated would result in a loss of 6% of federal revenues on maturity.
Each of these tax cuts simply reward existing behaviour rather than incentivizing new behaviour. Tax credits for children's fitness, even when refundable, recover a small factor, a fraction of the costs, leaving enrolment for most physical activity programs unchanged for most young families. Employment insurance premium reductions flow to small businesses whether they create or eliminate jobs. The tax-free savings account and income splitting proposals encourage saving rather than spending, not working rather than working.
Since tax measures that reduce rather than enhance economic growth work in a direction opposite and contrary to your short-term policy objectives, my first recommendation is that the Government of Canada not proceed with tax cuts at this time.
The long game means we need to broaden the tax base. Population aging will cause labour shortages, reduce revenues, and increase expenditures over the next 20 years. At the same time it is expected that at least $1 trillion of wealth will be transferred between generations of Canadians. The dependency ratio, which is the ratio of those who are too young or too old to work, will rise over the next 20 years. But even so, it will not match the dependency ratio of 1961, the biggest difference being that there will be more older dependants than younger than in 1961.
In 1961 the federal government accounted for 16% of the economy. This was an era that preceded programs like medicare, the Canada assistance plan, and post-secondary education expansions.
Senior Economist, Canadian Centre for Policy Alternatives
This is not the time to cut the federal role, which is what is anticipated, but broaden it. There is room to raise rates. But another approach is to broaden the tax base by extending the GST to financial activities and services; capping lifetime contributions to tax shelters, such as the tax-free savings account; introducing an inheritance tax; eliminating deductions for stock options and capital gains; tightening tax expenditures; and tackling tax evasion more vigorously—and this is my last recommendation. The strong game means that you get tougher on tax crime, not more lax.
In 2007 a departmental performance review of CRA noted that the reporting compliance sector conducted 27,000 audits of international and large corporations and recovered $5.7 billion. It also audited 321,000 small and medium-sized businesses and recovered $2 billion.
Clearly, CRA can be a profit centre for the Government of Canada if the staffing is maintained, yet the reporting compliance department will see a 25% reduction in staff, with more staff taken away from criminal investigations and auditing international and large businesses, and more people put on small and medium-sized businesses. At the same time, just weeks ago CRA announced it would be reducing red tape. This is the wrong direction to go in for a government that prides itself on being tough on crime.
Thank you.
Conservative
The Chair Conservative James Rajotte
Thank you for your presentation.
We'll now hear from Canadians for Tax Fairness, please.
Dennis Howlett Executive Director, Canadians for Tax Fairness
Thank you for the opportunity to provide input on the next federal budget.
Our message is that the federal government needs to increase its revenue in order to have the resources required to reduce income inequality and poverty, boost investments in social and physical infrastructure, and tackle climate change.
The government can do this by, number one, not introducing any more unfair and ineffective tax cuts. The finance minister is expected to declare that there will be a surplus, and announce more tax cuts in the next budget. But before considering any further tax cuts, the government should evaluate what previous tax cuts, totalling an annual $43 billion since 2006, have accomplished in terms of their stated objectives.
Let's examine a few examples. The corporate income tax cuts did not boost investment or stimulate job creation. Jim Stanford convincingly demonstrates in a chapter of a book we published called The Great Revenue Robbery that business investment spending in Canada has declined since the federal government began reducing corporate income taxes. According to Statistics Canada there is now $630 billion in dead money in cash reserves that is not being invested to create jobs. Far more jobs would have been created if the government had kept this money and invested it in infrastructure and public services. This is backed up by a 2011 study by the finance department that shows the infrastructure spending had a 1.6 multiplier effect, while tax cuts had little or no multiplier effect.
Many of the boutique tax cuts have also not generated the intended results. The children's fitness tax credit, for example, went disproportionately to upper-income families, and according to a University of Alberta study it did little to encourage participation in youth sport.
Given the clear evidence that tax cuts have been unfair and ineffective, it's sheer madness to consider income splitting for families in the next federal budget. An analysis by Queen's University tax law professor Kathleen Lahey that was done for Canadians for Tax Fairness shows that almost 30% of the benefit of income splitting would go to the top 10% of families with incomes of over $170,000. If supporting families is the goal, then a far better way to do this would be to fund quality, non-profit child care.
Second, we need to close unfair and ineffective tax loopholes. Many of the tax loopholes, tax breaks, disproportionately benefit the wealthiest and increase income inequality. They also make the tax system more complex, making it difficult for an ordinary taxpayer to know all the deductions and tax benefits they might be entitled to claim without the assistance of a professional tax expert. The most unfair tax loophole, in our view, is the stock option deduction that allows highly paid company executives and directors to pay at half the rate of tax on their compensation that is given in the form of stock options. This policy exacerbates the problem of growing income inequality when the government should be doing more to close it.
According to the tax expenditures and evaluations report of the finance department, the stock option deduction costs the federal government $785 million a year. If losses to provincial governments are added to the total, the revenue would top $1 billion. How can we justify subsidizing the incomes of the wealthiest Canadians and then claim we don't have the resources to end child poverty or ensure clean drinking water for aboriginal communities?
Executive Director, Canadians for Tax Fairness
Third, more, not less, needs to be done to tackle tax havens. There have been some encouraging steps made by the federal government. The last two federal budgets had measures designed to do something about tax havens, but I'm very worried that with recent actions, including, according to a report in The Globe and Mail, Finance Minister Oliverquietly stopping efforts to investigate the corporate use of tax treaty shopping, and the recent cuts to the Canada Revenue Agency, it would seem that the government is going back on its commitment to tackle tax havens.
The problem is actually growing, not lessening, and much more needs to be done.
Finally, more revenue is required to reduce income inequality and poverty, boost investment in social and physical infrastructure, and tackle tax havens.
Conservative
The Chair Conservative James Rajotte
Thank you very much for your presentation.
We'll now go to Restaurants Canada, please.
Joyce Reynolds Executive Vice-President, Government Affairs, Restaurants Canada
Thank you, Mr. Chair. I'm also delighted to be back in Ottawa again.
I'm here representing the $68 billion, 1.1 million employee restaurant industry. We have lots of ideas on how Canada's taxation and regulatory regimes could be improved, but given the five-minute limit, I'm going to focus on two.
One is in the area of regulation. There's a pressing need for regulation in the area of credit card acceptance fees. We're happy to hear that could be addressed as early as this week.
And, one tax has a disproportionate impact on the labour-intensive restaurant industry, and that's payroll taxes.
There is rarely an issue that unites the entire restaurant industry, but skyrocketing credit card acceptance fees is one. Regardless of whether we are talking about a table service or a quick service business, independent operator or chain, large or small, even an institutional food service provider, all are handcuffed by a credit card system that they have to use and that has costs that they cannot predict or control. There are 93% of our members who identify credit card fees as a serious concern, with 79% saying these have a big impact on their bottom line.
Restaurants Canada has been raising the alarm bells about the proliferation of premium credit cards and their impact on merchant fees since 2008. These premium cards, which provide insurance, travel programs, cashback, and other perks to cardholders have fees that are up to 25 times higher than standard ones. lnterchange fees charged to Canadian merchants are higher than almost anywhere else in the world.
Our payment system has evolved from a cash and cheque-based system to one where the Canadian dollar is primarily transacted electronically with control by private enterprises. Associations representing merchants have come together in an unprecedented way to pressure credit card companies and their issuing banks to reign in their fees. Quite frankly government has been pressuring them for a long time as well. But the credit card companies and issuing banks continue to sweeten the reward pot for cardholders and raise prices at will in one-sided negotiations with merchants.
Last year the Competition Tribunal ruling, in response to concerns raised by the Competition Bureau to unfair business practices by Visa and MasterCard, identified a regulatory framework as the solution. The longer it takes government to intervene, the richer the rewards to cardholders become and the harder it becomes to unravel this arcane system that is costing Canadian businesses $5 billion per year.
The credit card company's return from a restaurant meal already can be as high, or higher, than that of the restaurant operator, who creates the jobs and makes the community investments. In addition, the restaurant operators must also pay credit card fees on the sales tax they collect on behalf of governments as well as the tips that customers leave for restaurant staff, revenue streams that the restaurant operator cannot access or control. Card issuers collect more than $40 million annually in merchant fees on the sales tax portion of the restaurant bill alone.
As a result, Restaurants Canada urges government to ensure the budget commitment on credit card acceptance fees results in a significant reduction. We're looking forward to that this week. Ideally, we would like to see a regulatory cap on interchange fees, with rules preventing the introduction of other merchant fees to recoup lost interchange revenue, and we would like you to stop credit card companies from profiting from taxes collected on behalf of government.
On payroll taxes, our members have consistently identified payroll taxes as an obstacle to job creation because they are a tax on jobs but they are also the most regressive form of taxation. Those individuals at the lower end of the payroll scale pay the highest amount proportionately.
According to the 2014 budget El operating account projections, the El account will have a $2.4 billion surplus in 2015-16 and a $6.4 billion surplus the following year. This provides government with an opportunity to restructure this payroll tax to make it less regressive.
El premiums place a disproportionate tax burden on lower-income earners and have a particularly negative effect on the labour-intensive restaurant industry. They provide a disincentive to hire young, inexperienced workers, whose tax rates compared to their wages is disproportionately high.
A year's basic exemption would be the most efficient and cost-effective way to deliver payroll tax relief to the groups most affected. Similar to the $3,500 per year basic exemption in the Canada and Quebec pension plans, the YBE refers to the annual earnings in which premiums are not applied and not to the first $3,500 of earnings.
Currently, employees earning less than $2,000 per year can apply for a full El premium refund. Those employees earning slightly more than $2,000, however, cannot, despite having no chance of qualifying for El benefits.
Only two-thirds of the individuals eligible for the rebate actually receive it. In addition, the existing rebate applies only to employees and not to employers. As a result, Restaurants Canada recommends that government restructure the EI premium system to include a year's basic exemption, similar to the CPP/QPP YBE, as a way to alleviate the tax burden on low-income Canadians, and assist employers to expand payroll to provide more young people with entry-level positions and retain them in these jobs.
Thanks.
Conservative
The Chair Conservative James Rajotte
Thank you very much for your presentation.
We'll now go to the Portfolio Management Association of Canada, please.
Scott Mahaffy Chair, Industry, Regulation and Tax Committee, Portfolio Management Association of Canada
Thank you.
My name is Scott Mahaffy. I am the Chair of the Industry, Regulation & Tax Committee of the Portfolio Management Association of Canada. Katie Walmsley, the President of PMAC, is here with me today.
PMAC represents almost 200 investment management firms across Canada that manage total assets in excess of $900 billion, not including mutual fund assets, and $1.3 trillion when mutual funds are taken into account. PMAC members manage investment portfolios for, among others, private individuals, foundations, and pension plans. Our recommendations focus on how to improve Canada's taxation and regulatory regime, with the overriding principle that there should be fairness for Canadian investors.
PMAC is focused on various advocacy initiatives that are critical to improving Canada's taxation policy on investments and retirement savings. I'd like to highlight two tax policy areas where we believe better taxation fairness can be achieved for Canadian investors.
One of PMAC's recent advocacy priorities has been with regard to the negative impact of the trust loss restriction rules on investment funds that were contained in the federal 2013 budget, and the impact of these rules on Canadian unit holders. In simple terms, these rules extend the application of the acquisition of control rules as they currently apply to corporations, to apply to trusts, including investment funds formed as trusts. The objective of the trust loss restriction rules is to prevent the use of arm's-length loss trading transactions that have been developed and that purport to enable one taxpayer to access the unused losses of another. These rules unfairly capture legitimate commercial trust activities in an industry that represents, collectively, $1.3 trillion in assets under management.
Through various submissions to the Department of Finance, the minister's office, industry associations such as ours were able to work collaboratively on a solution to meet the policy objectives of the Department of Finance as well as eliminate the punitive and unfair impact of these rules on Canadian investors invested in these types of funds.
We applaud the federal government for its recent announcement that it will provide relief to investment funds from the application of the rules. We do, however, believe there may still be some gaps to the proposed relief that will continue to be unfair for certain investors in certain types of funds, and we will work with Finance staff going forward for further revisions to the proposed relief.
Another example where we believe more taxation fairness for Canadian investors can be achieved is the application of GST and HST on investment management services for retirement savings. Canadian investors should not be taxed for actively planning for their retirement. GST and HST are consumption taxes. In our view, building retirement savings is the opposite of consumption, and accordingly we fundamentally disagree with the idea that Canadians should pay taxes on services designed to help them build their retirement savings.
We recommend that the federal government work with the provinces to adopt policy positions taken elsewhere in the world and exempt consumption taxes on investment management services, or in the alternative, work with provincial governments to remove or mitigate the additional and uneven provincial portion of HST immediately.
In the area of regulatory harmonization, PMAC is a strong supporter of a robust, efficient, and globally competitive regulatory regime. We have long supported a national securities regulator, and commend the government and its provincial partners on its progress and commitments toward creating the cooperative capital markets regulatory system. The creation of the CCMR is a major improvement to the securities regulatory regime in Canada. It addresses the interests of Canadian investors and capital market participants and benefits all Canadians.
PMAC has long argued that the existing framework of a fragmented securities regulatory system is out of step with global standards and does not serve Canadians well. We urge the government to continue working toward participation by all provinces.
I would like to commend the government for its commitment to ensuring secure retirement for Canadians in moving toward various pension savings options that allow alternatives to current plans. Thank you. We believe harmonization of pension options should be a policy priority. We also urge the government to consider funding flexibility as a necessary priority, given Canada's longer mortality rates.
Finally, we applaud the federal government's recent announcement to move forward with the modernization of the pension investment rules that were contained in the federal pension benefits standards regulations first proposed in 2009.
PMAC thanks the committee for the opportunity to make these submissions. On vous remercie.
Conservative
The Chair Conservative James Rajotte
Thank you very much for your presentation. We'll now hear from Tax Executives Institute, Inc., please.
Paul Magrath Vice-President, Canadian Affairs, Tax Executives Institute, Inc.
Thank you and good afternoon.
I am the tax director for AstraZeneca Canada but am appearing today as the vice-president for Canadian affairs for the Tax Executives Institute. TEI is the pre-eminent association of business tax professionals worldwide. Our 7,000 members work in-house for 3,000 of the largest companies in Canada, the U.S., Europe, and Asia. My comments are endorsed by TEI's approximately 900 Canadian members and other members whose firms have significant operations and investments in Canada.
The government's efforts to decrease the corporate income tax rate and broaden Canada's tax base have made our system globally competitive, increasing Canada's attractiveness to investors. By encouraging the provinces to adopt harmonized tax policies, the federal and provincial governments have realized substantial administrative savings, but Canada must remain vigilant as other countries restructure their tax systems, implement rate reductions, and lower marginal effective tax rates. In addition, the government should continue to reduce red tape and paperwork, increase electronic filing of tax forms, and ensure that CRA is well funded and streamlined in its audit and appeals procedures to maximize the efficiency of tax administration
Despite progress towards a competitive tax system, there is unfinished business. In 2008, the advisory panel on Canada's system of international taxation made two important recommendations that have not yet been addressed.
First, the panel recommended repealing the current process for issuing waivers of withholding taxes under regulations 105 and 102 and replacing it with a self-certification system for obtaining treaty benefits. Time does not permit me to explain why the current waiver process is not working. The advisory panel's 2008 report does that. A self-certification system for treaty benefits based on current information reporting requirements will maintain CRA's enforcement capability, but it will shift the compliance burden and costs to the certifying party. TEl urges adoption of the panel's recommendations for treaty benefit self-certification.
Second, the advisory panel recommended the Canada-U.S. tax treaty be renegotiated to eliminate withholding taxes on dividends between related group companies. The United States has negotiated a nil withholding rate for group dividends under many of its tax treaties. TEl recommends that steps be taken to ensure that Canadian residents benefit in the same way as do residents of other U.S. treaty partners.
Our final recommendation relating to Canada's international tax system is to go slowly in adopting the OECD's recommendations to curb perceived base erosion and profit shifting, known as BEPS. Over the last several budgets the government has already undertaken actions to curb base erosion, effectively implementing a "made in Canada" BEPS action plan. Those actions include adopting limitations on interest deductibility, curbing hybrid mismatches, and enhancing disclosure rules for aggressive tax planning. Also, Canadian taxpayers are required to provide substantial documentation of their foreign operations, which permits CRA to conduct risk assessments with respect to transfer pricing.
Because of varying economic conditions, budget constraints, and tax policies of participating countries, the OECD's recommendations may exacerbate the current patchwork of international tax rules and make it even more burdensome for taxpayers to comply while increasing the risks of multiple taxation. To avoid undermining Canada's tax system, TEl recommends implementing the OECD's BEPS recommendations only after careful consideration of their impact on the economy.
Our final recommendation is to improve the administration of the tax system by according CRA authority to settle disputes based on the “risks of litigation”. In 1997, the technical committee on business taxation pointed out that because of the “costs, delays and uncertainties involved in resolving issues at trial, it can be of benefit to all parties to achieve compromise” solutions. TEl concurs that, under a "risk of litigation” approach, a fair and impartial resolution can be reached that “reflects on an issue-by-issue basis the probable result in event of litigation, or one which reflects mutual concessions for the purpose of settlement based on relative strength of the opposing positions”. Large taxpayers are frustrated at their inability to resolve disputes with CRA at both the appeals and audit level.
Besides the uncertainty surrounding appeals and litigation, large corporations must pay 50% of the tax in dispute when it is reassessed. Prepaying amounts that may be refunded is a significant drain on financial resources that could otherwise be invested in the business and promote employment. More tools are needed to enable taxpayers and CRA to resolve disputes quickly. We believe our recommendation is one such step.
TEl thanks the committee for the opportunity to participate in this hearing, and I will be pleased to respond to any questions from the panel.
Conservative
The Chair Conservative James Rajotte
Thank you very much for your presentation.
Colleagues, we will begin with Mr. Cullen and we'll do seven-minute rounds for as far as we can go.
Mr. Cullen.
NDP
Nathan Cullen NDP Skeena—Bulkley Valley, BC
Thank you, Mr. Chair.
Thank you to all our witnesses.
Ms. Yalnizyan, I'll start with you and try to sum up a bit of what you were saying just in terms of some of the fiscal risks to the Canadian budget that were also reiterated by Minister Oliver with regard to the low oil prices internationally, threats to growth, and the government's decision to embed in this coming budget some very expensive items. Income splitting is one that stands out as is the plan that has been introduced in this budget implementation act, which we're dealing with right now, around taking money out of the employment insurance fund to use for a potential job growth strategy.
I wondered if you could talk to me first about the general threat involved in making these fiscal decisions as the government faces what it projects to be approximately a $10-billion surplus, given the realities of the global and Canadian economies and the risk to revenue for the Canadian treasury.
Senior Economist, Canadian Centre for Policy Alternatives
What I can say is what I did say, which is that the simple drop in oil prices since July, which is the last time that our growth rate was downgraded, could have up to a $4 billion direct first-round effect on federal revenues alone. I'm not including second-round effects and what that does to construction plans for expanding further construction and the development of oil.
What we do know is that we are also committed not only to tax cuts, but to working with our allies to fight ISIL. Undoubtedly the events of last week will mean there will be more expenditures on security measures for Canadians here at home, and in particular in this wonderful establishment that is the home of all Canadians.
I'm thinking that tax cuts have a very distant third or fourth role to play in what it is that needs to be considered to attain and maintain a budgetary balance, which is the goal of this government.
NDP
Nathan Cullen NDP Skeena—Bulkley Valley, BC
Thank you.
I want to talk about income inequality for a moment. You've made reference in recent reports to the personal income tax exemption, so taking low-income Canadians off the tax roll versus helping raise wages... Is there a comparison or a question to be made for government?
We recently introduced the idea of increasing the minimum wage for federally regulated employees over time versus what the government sometimes offers, which is taking people off the tax roll at the lower end. Is there any comparison, or is that an apples-and-oranges situation when considering tax measures?
Senior Economist, Canadian Centre for Policy Alternatives
Taking people off the tax roll at this stage, at the lower end, will not necessarily reduce poverty. It will further reward people who have figured how to do aggressive tax planning. What happens when you raise wages is that you do get a multiplier effect with respect to consumer ability to sustain the economy.
You could make the argument that reducing taxes, or increasing the threshold at which one is taxed, would do the same thing. It would give you more purchasing power, but the multiplier effect is much greater in terms of raising wages. It reaches people who could actually spend more money, rather than people who are already at the edge and would be just using it to pay off debt.
NDP
Nathan Cullen NDP Skeena—Bulkley Valley, BC
You mentioned this in your commentary, but I wonder if there are any specifics around what are sometimes referenced as boutique tax credits, something that the folks who do our accounting for us in this country wrestle with every day. They're very expensive in terms of a regulatory burden on Canadians filing taxes and also on businesses.
Has there been any assessment, to your knowledge, of what's called the free-rider effect on some of these boutique tax credits? You made reference to offering tax credits to incentivize people to do something they were going to do anyway, which is sometimes called the free-rider effect. Government reduces the revenue to encourage people to do something that, in effect, doesn't have any impact on what we were hoping to have an impact on, whether it's kids in sports or attending music programs or whatnot.
Have you seen any federal government assessment, or has your group done any assessment, on what percentage of people taking advantage of those tax credits were doing so and going to perform those activities anyway?
Senior Economist, Canadian Centre for Policy Alternatives
There was an appendix in the tax expenditures report of 2013 from Finance that indicated who was taking advantage of the tax-free savings account. It indicated that the people who were most benefiting were people who already had excess money, and they were older and richer—that was the highest proportion. Also, University of Waterloo economist Tammy Schirle—I might be incorrect in that—or it could be Kevin Milligan out of UBC, indicated that the universal child care benefit credit had the impact of keeping more parents at home, which might have been, in fact, its intended effect.
The point is, at a time when the economy is slowing you do not want to pull money out of the system that could be used to spend, which would increase economic growth, or have more people not work than work because you're worried about these continued—like Stephen Poloz, the Bank of Canada governor, calls—serial disappointments in growth rates, which we are likely to see for as far as the eye can see. In addition, at the end of that is population aging, which will also continue.
NDP
Nathan Cullen NDP Skeena—Bulkley Valley, BC
So having less participation, particularly by women in the workforce, would be a further drag on Canada's effective economy.