Evidence of meeting #82 for Finance in the 41st Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was tfsa.
A recording is available from Parliament.
10:50 a.m.
Director, Personal Income Tax, Tax Policy Branch, Department of Finance
What we've said is that the vast majority, at least two-thirds, of beneficiaries would be low- and middle-income families.
10:50 a.m.
Conservative
Andrew Saxton Conservative North Vancouver, BC
That was confirmed by the PBO in his report as well.
I think my colleague Mr. Cannan has a question as well.
10:55 a.m.
Conservative
Ron Cannan Conservative Kelowna—Lake Country, BC
Thanks, Mr. Chair.
Ms. Hardy, I have a follow-up to Mr. Cullen's question.
Just for clarification, the CST, which is the Canada social transfer payment, I believe has increased 3% per year. Is it $13 billion this year?
10:55 a.m.
Director General, Social Policy, Department of Employment and Social Development
I'm going to refer to my colleague from the Department of Finance regarding the total amount for the CST.
10:55 a.m.
Conservative
Ron Cannan Conservative Kelowna—Lake Country, BC
I think I was just reading that it was $13.5 billion and it's the third-largest budget transfer from our budget to the provinces and territories.
10:55 a.m.
Director, Personal Income Tax, Tax Policy Branch, Department of Finance
We can get back with that number. I'm sorry, but I don't have that number.
10:55 a.m.
Conservative
10:55 a.m.
Director, Personal Income Tax, Tax Policy Branch, Department of Finance
Again, I'm sorry, I can't comment.
10:55 a.m.
Conservative
Ron Cannan Conservative Kelowna—Lake Country, BC
The other question is whether the provincial auditors general then ensure that the funds are spent appropriately.
10:55 a.m.
Director, Personal Income Tax, Tax Policy Branch, Department of Finance
I can't comment on that.
10:55 a.m.
Conservative
10:55 a.m.
Liberal
Emmanuel Dubourg Liberal Bourassa, QC
Thank you, Mr. Chair.
I am going to go back to income splitting.
Earlier, we talked about what was in the Conservatives' platform. I would like to know how many assessments you have done on income splitting. Was there one two years ago, for example, in order to inform the government about how much it might cost, or is that just done as the budget is being prepared? As we know, the way in which income splitting was introduced has changed.
How many assessments has the Department of Finance conducted in support of this measure?
10:55 a.m.
Director, Personal Income Tax, Tax Policy Branch, Department of Finance
I really cannot give you an exact number. I can say, however, that briefing was constantly being done for a certain period, as is done for all the measures that are proposed.
10:55 a.m.
Liberal
Emmanuel Dubourg Liberal Bourassa, QC
Okay. Thank you.
Have you also assessed the impact of income splitting on men's and women's participation in the workforce?
10:55 a.m.
Director, Personal Income Tax, Tax Policy Branch, Department of Finance
The effect on workforce participation was considered when the credit was being designed. For example, the credit limit of $2,000 is simply federal. It may be claimed by the spouse whose income is lower. In our view, the design of the credit means a minimal effect on the decision to be part of the workforce.
10:55 a.m.
Liberal
Emmanuel Dubourg Liberal Bourassa, QC
I am sure you understand the crux of the question I am asking.
If the spouses have more or less similar income, the measure provides them with no advantage. Is that not an incentive for one of the two spouses to work less, or simply stay home, in order to take advantage of what income splitting offers?
10:55 a.m.
Director, Personal Income Tax, Tax Policy Branch, Department of Finance
As I mentioned, the way in which the credit was designed minimizes the effect very significantly. For example, for a family with a single income of $95,000, the other spouse may enter the workforce and earn $20,000 or $25,000. If there are day care costs as a result, that family could continue to receive the maximum credit of $2,000. In that case, access to the workforce has no effect on the credit. That is just one example to illustrate the way in which the design of the credit minimizes the effect on workforce participation.
10:55 a.m.
Liberal
Emmanuel Dubourg Liberal Bourassa, QC
To wrap up, some experts are saying that only 15% of Canadian families will benefit from income splitting. Based on your analysis, can you confirm or deny that figure?
10:55 a.m.
Director, Personal Income Tax, Tax Policy Branch, Department of Finance
There are 19.5 million families who submit a tax return. The credit will benefit about 1.7 million families with children, which is about the 15% you alluded to. Of those 19.5 million families, about 40% are single, are by themselves. So the notion of “family” has to be understood when these statistics are being used.
11 a.m.
Conservative
11 a.m.
NDP
Pierre Dionne Labelle NDP Rivière-du-Nord, QC
It has been said that this measure benefits couples most, especially when the difference between the two incomes is reasonably big. Is that the case?
11 a.m.
Director, Personal Income Tax, Tax Policy Branch, Department of Finance
The credit is limited to $2,000; its value depends, not only on the difference itself, but also on the relative position given the function of the amount transferred and the difference in rates. A family with a moderate income can also get the $2,000 maximum. It is not just limited to families with a very high income.
11 a.m.
NDP
