Finance Committee on Nov. 19th, 2014

[Andrew Saxton, Conservative, North Vancouver, BC]

Thank you.

Our government recognizes the good work that charities and charitable organizations do across this country, helping disadvantaged Canadians as well as those in need. They also display the great generosity of Canadians and their compassion.

How does Bill C-43 cut red tape for Canadian charities and help them raise more funds? Can you give us some examples of which charities will benefit?

[Joe Oliver, Conservative, Eglinton—Lawrence, ON]

Our government, as you suggest, recognizes that the charitable sector plays an essential and irreplaceable role in our society by providing valuable services to Canadians, including those most in need. Thanks to the work done by this committee, our government is continuing to respond to the report entitled “Tax Incentives for Charitable Giving in Canada”. The report recommends, as you know, that the government reduce the administrative burden on charities. It recommends that the government amend the Criminal Code to remove an antiquated restriction and allow charities to conduct their lotteries through the use of modern technology. We're doing just that. The bill amends the Criminal Code to allow charities to conduct lotteries through modern technology.

Each year charities in Canada raise hundreds of millions of dollars to support worthy causes through lottery sales, but outdated legislation forces them to process and activate all the sales manually and then send customers their tickets by mail. In order to reduce these costs, Bill C-43 will amend the Criminal Code to allow charities to conduct various aspects of lotteries through the use of a computer. It will also allow charities to use modern e-commerce methods for purchasing, processing, and issuing lottery tickets and receipts.

Prominent Canadian charities, including the Heart and Stroke Foundation, the Canadian Cancer Society, and SickKids hospital, report that allowing for the use of computers could save millions of dollars each year in administrative costs for all charities that run lotteries. For example, the Heart and Stroke Foundation identified potential savings of $1 million in annual administrative costs. The charities will be able to use these substantial savings to support their important work.

[The Chair, Conservative, James Rajotte]

You have 30 seconds.

[Andrew Saxton, Conservative, North Vancouver, BC]

That's it.

[The Chair, Conservative, James Rajotte]

Okay. Thank you, Mr. Saxton.

Mr. Brison, you have five minutes, please.

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

Thank you, Mr. Chair.

Thank you, Minister and officials, for joining us today.

When your financial officials appeared before this committee, they admitted that Finance Canada had not done any internal analysis on the small business job credit.

Do you think it's acceptable to introduce a measure that costs $550 million without doing any internal analysis about its potential impact on job creation?

[Joe Oliver, Conservative, Eglinton—Lawrence, ON]

The department does not analyze every measure that we introduce. If we don't do it, we look to those who have expertise, and in this case we looked to the Canadian Federation of Independent Business.

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

Are you aware of the methodology they used?

[Joe Oliver, Conservative, Eglinton—Lawrence, ON]

We are aware that they have expertise. They've spoken to their members. I have had an opportunity to speak to them and I've had an opportunity to speak to many small businesses in my riding in Toronto and elsewhere around the country.

You know, you may not want to listen to small businesses. We do. They are the biggest generators of employment in the country.

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

So you're not aware of the methodology they used to come to that number.

[Joe Oliver, Conservative, Eglinton—Lawrence, ON]

I am aware that they have spoken to their members and they do the regular type of analysis that you'd expect them to do.

I mean, when you invest over half a billion dollars, there is a macroeconomic impact, and we're very comfortable there will be significant job creation.

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

So when the Parliamentary Budget Officer's analysis, in which the methodology is transparent and available to any of us, showed that the job credit would create 800 jobs over two years, did you ask your department to reconcile the difference, the delta, between 800 jobs versus 25,000 from the CFIB's estimate? Did you have a curiosity as to why there was such a delta?

[Joe Oliver, Conservative, Eglinton—Lawrence, ON]

Well, yes, we have received a number of estimates from a variety of organizations on a variety of topics. Sometimes one looks at them and decides on the face whether they seem to make sense.

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

“On the face”; what about below the surface?

[Joe Oliver, Conservative, Eglinton—Lawrence, ON]

When the CFIB says it's a big, big deal for small business and it's good news for people looking for jobs, we're influenced by that. When they say that small businesses should be thrilled with this announcement—because time and time again they've told us that payroll taxes like EI are the biggest disincentive to hiring—we're influenced by that, because they have the expertise on the ground.

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

So you're satisfied with no analysis on a $550-million expenditure.

[Joe Oliver, Conservative, Eglinton—Lawrence, ON]

We are satisfied with their analysis.

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

You said you do analysis for certain expenditures. What would trigger that? Is $550 million not big enough of an expenditure to do an analysis?

[Joe Oliver, Conservative, Eglinton—Lawrence, ON]

What I said is that we don't do analyses on every expenditure.

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

So why wouldn't you have done an analysis on this one?

[Joe Oliver, Conservative, Eglinton—Lawrence, ON]

Because we didn't think we needed to do another analysis when we already had received one. We knew that this was a good-news story for small businesses. The small business organizations have been asking us for a long time for this break.

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

Minister, the PBO also told this committee that around 10,000 businesses in Canada pay between $14,000 and $16,000 in EI premiums. These businesses are close to the threshold, the cap of the program, which, according to economist Jack Mintz, could create a disincentive for hiring or a disincentive to growth.

For those 10,000 businesses in Canada that are between this threshold, are you concerned that this actually creates a disincentive to growth, according to economist Jack Mintz, Mike Moffatt, and a group of economic leaders?

[The Chair, Conservative, James Rajotte]

A brief response, Minister, please.

[Joe Oliver, Conservative, Eglinton—Lawrence, ON]

I think his comments have been parsed. He didn't critique the whole program at all.

I should tell you that we did analyze aspects of the proposal. As I mentioned, they are going to benefit 90% of businesses, 780,000 businesses. So we looked at that and we are comfortable that there would be a significant benefit.

[The Chair, Conservative, James Rajotte]

Thank you.

Thank you, Mr. Brison.

We'll go to Mr. Keddy, please, for five minutes.