Finance Committee on May 28th, 2015

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

This was borrowing to spend.

[Aaron Wudrick]

Yes. I suppose the question is are there other ways for them to save money. There are some things we prefer to spend on than others. As I said, we're certainly big critics of the fact that they've spent more than they've brought in for quite some time.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

We've seen that women's participation in the workforce is at its lowest rate since 2002 in Canada. Other G-7 OECD countries are struggling with this exact challenge. Should we be doing something about this in Canada? Should we be finding ways to help women participate more in the workforce?

[Aaron Wudrick]

I think the question here is, if you're referring to income splitting and whether or not it discourages women from entering the workforce, I think there are two ways to look at it. You could say you're encouraging people to stay home, or you could take the view that you're simply removing an obstacle to people who would like to stay home.

We don't take a position at the CTF on whether women should work or not. We think that's up to every individual woman, every family. I think most people agree with that. It really depends on whether you view it as empowering them to make a decision they wouldn't make otherwise or—

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Thank you.

Ms. Decter, your numbers out of Quebec are somewhat striking: almost cutting in half the number of single moms on social assistance, greater participation of women in the workforce, and a greater productivity for the province overall. TD and others have pointed out that investment in affordable child care actually delivers back $1.70 for every dollar put in.

[Ann Decter]

It's really a net revenue generator.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

A net revenue generator.

[Ann Decter]

It's preventive. It reduces costs down the road.

Imagine you take half of the single mothers living on social assistance and their children go to child care. They get the benefit of all that happens every day in day care, and all of the literature is now clear that it's very beneficial. At the same time, you get the mother going to work. They grow up with an example of someone who goes to work every day. They get out of that kind of poverty trap. I think we all know that when we were growing up, whatever our parents did was something that we thought was a normal thing to do. Well, if the normal thing to do is to receive a cheque, and there's no chance of getting out of that hole, then kids grow up with that kind of attitude—or they can grow up with that kind of attitude.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Cullen.

We'll go to Mr. Saxton, please.

[Andrew Saxton, Conservative, North Vancouver, BC]

Thanks to our witnesses for being here today.

My first question is for Mr. Heath.

Mr. Heath, do you believe that the family tax cut helps to ensure tax fairness between two- and one-income families?

[Jason Heath]

I believe it endeavours to do so, but I think it only does it partially because of the $2,000 tax credit limit. In particular, there's a big difference between a family earning $100,000 per year as a single income earner and two $50,000 income earners. The big discrepancy between income tax payable in a lot of average families like that I don't think is necessarily rectified by the $2,000 tax credit limit.

[Andrew Saxton, Conservative, North Vancouver, BC]

Should we increase that limit?

[Jason Heath]

I would be inclined to consider increasing it. My suggestion was to increase it more for the people who might be encouraged to do other good things for society, like stay home with a young child. I suggested, in particular, raising the limit to $10,000 for parents with children under the age of six. It's more a social reason than a tax reason to suggest increasing the limit.

[Andrew Saxton, Conservative, North Vancouver, BC]

Thank you.

Mr. Wudrick, do you agree that the family tax cut helps to ensure tax fairness between one- and two-income families?

[Aaron Wudrick]

Yes, we do. We think, as I stated earlier, that it's a question of like versus like. If you have a household earning x dollars, we don't think that household should pay different tax depending on whether it's being earned by two spouses, one spouse, two spouses earning about the same or two spouses earning a vastly different amount. From a household perspective we think the expenses are comparable and so we think they should be treated the same from a tax standpoint.

[Andrew Saxton, Conservative, North Vancouver, BC]

Thank you.

Does the Canadian Taxpayers Federation also agree that the tax-free savings account is a helpful vehicle for people to save for the future?

[Aaron Wudrick]

Yes, we're supportive of the TFSA. That's my understanding outside the scope of this part of the bill. We're supportive of mechanisms that empower Canadians to make decisions about saving for their own future rather than the government doing so.

[Andrew Saxton, Conservative, North Vancouver, BC]

Thank you very much.

Mr. Laurin, can you explain the private sector practices with regard to sick leave and how the private sector differs from what the government is now proposing with changes to the public service sick leave?

[Alexandre Laurin]

In the private sector it's rare to have a policy whereby sick leave can accumulate to another year. Even in the public sector it's becoming increasingly rare.

[Andrew Saxton, Conservative, North Vancouver, BC]

Would you agree that these changes make it fairer for younger or newer employees?

[Alexandre Laurin]

I'm not sure if it's a question of fairness among employees, but it would be a question of fairness for the compensation package that public sector employees receive in comparison with the total compensation package that private employees with similar qualifications receive. If there's too wide a discrepancy, that's a problem.

[Andrew Saxton, Conservative, North Vancouver, BC]

Do you agree with these changes that are being proposed to the public service sick leave regime?

[Alexandre Laurin]

I think the new powers being acquired will greatly help the negotiations and will help this new long-term disability regime to be put in place, and that's a positive if we lose $1.5 billion from the debt.

[Andrew Saxton, Conservative, North Vancouver, BC]

Thank you very much.

Mr. Cross, can you please explain your organization's opinion on the difference between voluntary and mandatory savings vehicles? In particular, you have the tax-free savings account, which is a voluntary vehicle. Do you agree this is a good vehicle to help Canadians save for the future?

[Philip Cross]

I think when it comes to pension savings, we're very much of the view that voluntary is better than mandatory.

One of the problems with pensions in this country—and Malcolm Hamilton now researching at the C.D. Howe Institute, has done a lot of work on this over the years—is that people are scared a lot by financial institutions into saving too much. I did a study last year and I looked at what chartered banks recommend and when they had something on their websites, they universally said replace 75% to 80% of your income. Most people outside of banks say 50% to 60% is more than enough. The result is we end up with a lot of people saving too much. Malcolm has openly said that the number one problem with savings among older people in our society is that people die with too much money.