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.
Senior Economist, Canadian Centre for Policy Alternatives
Not just the cuts to CRA, but the reallocation of people who do reporting compliance being moved from international business and large businesses to small and medium-sized enterprises.
Conservative
The Chair Conservative James Rajotte
Thank you.
Sorry, I'm just trying to be fair to all members here.
We'll go very briefly to Mr. Adler, please.
October 27th, 2014 / 4:45 p.m.
Conservative
Mark Adler Conservative York Centre, ON
Thank you, Chair. Thank you all for being here today.
We've had a very fulsome discussion over the last couple of weeks in terms of the forthcoming fiscal dividend, and what policy options we should be pursuing, either in terms of paying down the debt or perhaps finding new and creative ways to spend it so we can create more jobs and long-term prosperity for Canadians.
Unfortunately, I don't have a lot of time but I do want to pursue a couple of angles here.
Number one, Ms. Reynolds with Restaurants Canada, you mentioned before in your presentation about the introduction of premium cards by credit card companies. A lot of credit card companies are doing this. They're getting platinum and all kinds of different incarnations. Have you found that has increased the level of spending or it's just the same level of spending but people just have more cards now?
Executive Vice-President, Government Affairs, Restaurants Canada
People are using their cards more. It used to be that you pretty much paid cash when you went to the grocery store, or when you went to a quick service restaurant. Now you use your credit card for all kinds of expenditures that you didn't used to.
Conservative
Mark Adler Conservative York Centre, ON
Are you finding that someone who had an XYZ card before and used that in a restaurant and is given a premium XYZ card now spends more money or the same amount of money as they did when they had the basic XYZ card?
Executive Vice-President, Government Affairs, Restaurants Canada
Our members' experience is it's not increasing how much they spend on the card.
Conservative
Mark Adler Conservative York Centre, ON
Thank you, that's what I need to know.
You also indicated that you have 1.1 million employees in direct jobs that you create within the restaurant industry, and a quarter of a million indirect jobs that are related to the restaurant industry. So you could clearly speak with some authority in terms of what it takes to create jobs. Lowering corporate tax to 15% federally, lowering the GST from 7% to 6% to 5%, putting more money in the pocket of Canadian families, all of which we have done, has that served the restaurant industry well, number one in terms of job creation, number two in terms of putting more money by EI premium cuts into the bank accounts of restaurant owners that they can in turn use to reinvest and create more jobs? Could you answer both of those for me, please?
Executive Vice-President, Government Affairs, Restaurants Canada
I can agree with that statement and I can also say that our members are also being faced with much higher costs in other areas as well. Higher food costs, higher energy costs, and particularly higher labour costs. I don't know what kind of job creation we'd be able to provide, given that we probably are recognized as having some of the lowest margins of any sector.
Conservative
Executive Vice-President, Government Affairs, Restaurants Canada
Absolutely.
Conservative
Mark Adler Conservative York Centre, ON
Can you talk a bit about interprovincial trade barriers? I know the restaurant industry has been pretty vocal on dismantling trade barriers whereas we as a government have been very aggressive. Since 2006 we have already negotiated 43 international bilateral trade agreements, yet within Canada interprovincial trade is sometimes...the restrictions are more stringent between provinces than they are between Canada and another country.
Executive Vice-President, Government Affairs, Restaurants Canada
Alcohol would probably be the best example of that. We also have problems with supply management, and the differences between production allocation for chicken for instance is a big problem for us. If there's anything we would like to see addressed in interprovincial trade barriers it's got to be those associated with our supply management system.
Conservative
Mark Adler Conservative York Centre, ON
Ms. Yalnizyan, you asked Mr. Chan earlier about the Liberal plan to eliminate EI premiums. Who owns the money in the EI account?
Senior Economist, Canadian Centre for Policy Alternatives
Workers and employers do.
Conservative
Mark Adler Conservative York Centre, ON
Correct. The Liberals plundered it for $50 billion in the 1990s and early 2000s, and the Supreme Court ruled that was illegal. Is what the Liberal Party proposing now not very similar to what happened back then?
Conservative
Senior Economist, Canadian Centre for Policy Alternatives
The rules are made by the federal government, including you. You just introduced a tax cut. You made the rules for that. The federal government makes the rules but does not pay any of it.
Conservative
Senior Economist, Canadian Centre for Policy Alternatives
But you make the rules. I didn't write that rule.
Conservative
The Chair Conservative James Rajotte
I suspect that's a longer discussion you will continue over time. I wanted to follow up on a couple of brief items. Mr. Mahaffy, in the previous presentation you made to the committee you talked about expansion of designated stock exchanges in terms of what would be an eligible exchange for investors. You mentioned there's a list of 40 exchanges, but this is too limited and the government ought to look at expanding that list. For our information here today can you itemize some of the exchanges that the Canadian government ought to look at expanding?
Chair, Industry, Regulation and Tax Committee, Portfolio Management Association of Canada
As a brief summary a number of exchanges are listed in the Income Tax Act. The registered investments that may be invested in them are deemed to be the designated stock exchange. It is a very limited list, mostly North American and European exchanges. The world has been shifting. The global investments have increased and yet not many exchanges have been added to that list over the last 20 to 25 years. For example, the Korean exchange is not on that list. A registered account cannot directly purchase a security such as Samsung. There are no South American exchanges. The Brazilian exchange is not on that. We encourage the government and the Department of Finance to find ways of adding more exchanges to the list of designated stock exchanges, allowing Canadians to better diversify their registered investment savings, but off the top of my head Korea, some Russia exchanges, and Brazil would be good examples.
Conservative
The Chair Conservative James Rajotte
Okay, I appreciate that. If you want to follow up with more suggestions, please do so to me, and I'll share them with all the committee.
Chair, Industry, Regulation and Tax Committee, Portfolio Management Association of Canada
Thank you.
Conservative
The Chair Conservative James Rajotte
There's been some interesting discussion about the stock option deduction. On the face of it, I think Mr. Howlett makes some strong points.
Mr. Magrath, from your perspective, or your organization's perspective—I don't know if it's fair to put you on the spot—do you have any perspective on this deduction and whether the government ought to look at eliminating it?