Evidence of meeting #83 for Finance in the 41st Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was benefit.
A recording is available from Parliament.
11:15 a.m.
NDP
Raymond Côté NDP Beauport—Limoilou, QC
Thank you.
Mr. Wudrick, I gather that you are very critical about the complexity of the tax system. The complexity means that individuals are unable to find their way around it by themselves.
11:15 a.m.
Federal Director, Canadian Taxpayers Federation
Yes, thank you.
We've long been critics of the complexity of the system. We think the system is needlessly complex. We are not fans of continued what we call boutique credits targeted at very specific groups. We think broad-based tax relief is the way to go. As I said, it puts us in a difficult position because we are an organization that likes lower taxes, but we don't like more complicated taxes. We're often presented with lower but more complicated taxes, and it puts us in a spot where we are not unhappy but not entirely thrilled either.
11:15 a.m.
NDP
Raymond Côté NDP Beauport—Limoilou, QC
Talking about balanced budgets, Mr. Wudrick, you were very critical of the use of the surplus in the employment insurance fund. There is also the fact that, because part of the contingency fund was used to achieve that balance, Canada has been deprived of resources set aside to support the provinces and the municipalities in times of disaster.
I would like to hear your comments about the detrimental aspects of the methods used to achieve a balanced budget.
11:15 a.m.
Federal Director, Canadian Taxpayers Federation
This is a long-standing problem. It actually precedes this government as well. We think that treating EI receipts as a spare fund to dip into is a serious problem that needs to be rectified.
Going forward, we welcome the lowering of EI premiums being collected in order to ensure that money isn't being treated as a spare bag of cash for governments to use to balance budgets.
11:15 a.m.
Conservative
11:15 a.m.
Conservative
Dave Van Kesteren Conservative Chatham-Kent—Essex, ON
Thank you all for being here with us this morning. It's been an interesting conversation.
I'd just like some clarification. Mr. Côté was talking about the complexities of filing returns.
Mr. Cross, I think you were not disagreeing, but I think the premise of the question was that the people who are not filing their returns are not filing because of the complexity. Would you agree with that? I think you said, if I heard you right, that there is a fair amount of complexity for corporations and businesses; however, they're not stopping the return of their taxes.
11:15 a.m.
Senior Fellow, Macdonald-Laurier Institute
You're right. I've never seen polls on why people for their personal income taxes are referring to H&R Block. It might be the increased complexity. It may be the growing lack of numeracy in our population. I don't know.
11:15 a.m.
Conservative
Dave Van Kesteren Conservative Chatham-Kent—Essex, ON
Thanks. I would agree with that. I think that maybe has to be studied. We certainly can't say emphatically that it's complexity and that's why people aren't doing it. Thank you.
I want to get this straight, too. Mr. Cullen has gone now, but he made mention of productivity dropping when inequality rises. Now, that's a broad statement. I don't know if anybody commented on it, but I personally feel that that's.... I look at a country like the United States, which has a huge variance in incomes, and we learned in the last panel that they have a much higher productivity rate. A statement was made. I don't think anybody challenged it.
Is there anybody here who would agree with that statement?
11:15 a.m.
Director of Research, C.D. Howe Institute, As an Individual
I tend to disagree. There's no consensus in economic studies that shows there's a negative impact on the economy from increased inequality in developed economies. I can point you to a number of studies to that effect.
11:20 a.m.
Conservative
Dave Van Kesteren Conservative Chatham-Kent—Essex, ON
Okay. I don't think we need to belabour that point any further.
Mr. Heath, congratulations. You have two kids?
11:20 a.m.
Conservative
Dave Van Kesteren Conservative Chatham-Kent—Essex, ON
Three kids. Wow.
I'm glad you're here. You made some statements, and everybody's entitled to do that, but can I be so bold as to say that maybe you're not an expert on the subject. I have eight kids and 32 grandkids and I can tell you—
11:20 a.m.
Voices
Oh, oh!
11:20 a.m.
Conservative
Dave Van Kesteren Conservative Chatham-Kent—Essex, ON
—if I were to have anyone of our kids sitting here, they would say, “God bless you for that new tax credit.” They love it. The mothers love. The dads love it. I'm not saying that everybody is in agreement—Mr. Dionne Labelle, for instance, thinks it's a bad idea—but is it safe to say that there are lots of moms and dads out there who just think this is a great idea?
11:20 a.m.
As an Individual
Do you mean specifically the family tax cut credit? I would say that there are, but given how few people will actually be able to benefit from it specifically, and given how small the benefit is, I don't know that people are exactly jumping for joy. I certainly haven't seen it within my own day-to-day working with clients and speaking to people. I just don't know if it's a compelling enough benefit to—
11:20 a.m.
Conservative
11:20 a.m.
Conservative
Dave Van Kesteren Conservative Chatham-Kent—Essex, ON
And I'm speaking on a broader personal level, and I'm telling you that there's just a great response. It's an opinion.
11:20 a.m.
Conservative
Dave Van Kesteren Conservative Chatham-Kent—Essex, ON
Okay, thank you.
Mr. Cross, I want to tell you that I really appreciate your testimony. You've been here a number of times and you've always had some great testimony for us.
Mr. Wudrick, you were a little critical on the balanced budget.
Mr. Wudrick, wouldn't you agree that if in my household I had an unbalanced budget and if I was spending more money, you really wouldn't care if you were the bank? You would say, “Balance this thing”. Sometimes we might not agree with how people do it, but at the end of the day, if I'm taking in $1,000 a month and I'm spending $1,200, I have a problem, and I have to address that.
Would you address that about the balanced budget?
11:20 a.m.
Federal Director, Canadian Taxpayers Federation
Let's be absolutely clear that we're supportive of balancing budgets. We don't think it's a wise idea to continue borrowing for the sake of borrowing. We wish it hadn't taken this long. We wish, for example, the stimulus hadn't occurred. That's all in the past. As I said, we've been critical, and we think the government deserves equal credit for clawing its way back.
11:20 a.m.
Conservative
11:20 a.m.
Conservative
11:20 a.m.
Conservative
Mark Adler Conservative York Centre, ON
Thank you to all the witnesses for your presence today.
Mr. Wudrick, I want to begin with you. We as a government have lowered taxes 180 times since 2006. We've lowered the corporate tax rate, lowered the small business tax rate, lowered the GST, and lowered EI premiums. All of these measures we've undertaken empower individuals and businesses to make decisions to either spend or save. It gives them a choice.
For business, what they primarily tend to do with the added money is expand and create more jobs and employment and more economic opportunity for Canadians.
We've heard from other quarters that when we cut taxes as our government has been doing, it is a cost to the government, which to me is a little puzzling, and I hope you can clarify this. When we as a government cut taxes, is that a cost to the government, as in the government owns that money, or is it just putting more money back into the pockets of hard-working Canadians?
