Thank you, Mr. Chair and members of the committee.
The Confédération des syndicats nationaux, or CSN, is a trade union organization with nearly 2,000 member unions who together represent 300,000 working women and men, primarily within Quebec.
The CSN welcomed the changes made to ensure that personal taxation is more progressive by introducing a marginal tax rate of 33% for taxpayers earning more than $200,000, and reducing the rate for the second tax bracket from 22% to 20.5%.
The CSN believes that the government must limit the many tax benefits that disproportionately benefit high-income earners. In our brief, we suggested a few measures to protect the tax base. The CSN welcomes the recent government initiative to correct unfairness due to the increased recourse to tax planning based on private companies under Canadian control.
We think it is unfair to allow income splitting between an owner-shareholder and his or her spouse and adult children when they do not actively participate in running the business. It is also unfair to allow the conversion of surpluses into capital gains that are taxed at a lower rate, when they should be taxed as salary or dividends.
Finally, it is not normal that the tax treatment of passive investments held by a private company provide a financial advantage to the owner-shareholder that is far superior to what is available to the middle-class taxpayer who invests in a registered retirement savings plan, an RRSP, or a tax-free savings account.
Wealth accumulated by Canadian individuals in tax havens is estimated to be $300 billion, which results in annual losses of tax revenues of approximately $6 billion. After the United States and Germany, Canada is the country most affected by the transfer of multinationals' profits. By rejecting motion M-42 introduced by Bloc Québécois MP Gabriel Ste-Marie, the Trudeau government and Conservatives gave their approval to the use of tax havens by businesses.
In its election platform, the Liberal Party of Canada promised collaborative leadership. However, with regard to the Canada Health Transfer, or CHT, the Trudeau government instead imposed on the provinces an annual increase based on Canada's nominal gross domestic product, GDP, that has a cap of 3%. The federal government is encroaching on the provinces' jurisdiction in health care by making access to certain funds conditional on provincial investments in mental health and home care.
The agreement that the Government of Quebec reluctantly signed is insufficient, since according to Conference Board of Canada forecasts, health care costs will increase on average by 5.2% every year from 2015 to 2035, far beyond what is to be found in the CHT agreement.
CSN is pleased that the federal government intends to make more investments in infrastructure to improve the competitiveness of Canada's economy,even though this will result in higher budget deficits. However, the new element of the federal public infrastructure investment strategy is the large-scale use of public private partnerships, or PPPs, through the new Infrastructure Bank of Canada. According to the Fall Economic Statement 2016, the federal government estimates that the private sector could finance up to 80% of the cost of certain infrastructures.
The CSN believes that a change of this magnitude should have been subject to public debate. The approach proposed by the federal government raises several problems.
The Trudeau government continues to focus on the development of the oil sands, which is absurd given the challenges of climate change. That said, Budget 2017-2018 includes some measures that could accelerate the modernization of Canada's and Quebec's industrial fabric and are compatible with the industrial policies promoted by the CSN.
With respect to the renegotiation of the North American Free Trade Agreement, NAFTA, the CSN believes that this is an opportunity to correct the deficiencies in the current accord. In order to do so, major changes must be introduced. First of all, a new NAFTA agreement should fully take into account the protection of citizens' and workers' rights. In addition, the new accord should fully integrate issues related to the protection of the environment. The new agreement should not prevent the Canadian and provincial governments from implementing public and economic policies needed for socioeconomic development. Also, the new accord should allow us to protect certain strategic sectors such as supply management, which we hear a lot about in the news, as well as public procurement, the telecommunications sector, and cultural industries. Finally, the CSN urges Canada to take advantage of the renegotiation of NAFTA to eliminate the right of multinationals to sue countries, which implies the elimination of the dispute settlement mechanism between investors and states, that is to say the famous chapter 11 of the agreement.
In the area of labour training, the government intends to undertake a major reform of labour market transfer agreements. In particular, it plans to amend the Employment Insurance Act in order to broaden the eligibility criteria for training programs and the services provided under these agreements. The CSN supports making these training programs available to groups that are underrepresented in the labour market, provided that the government continues to improve the employment insurance program. There is much work to be done to make this program responsive to the realities of the working world, even though we must acknowledge that the current government did act on this matter.
Finally, Budget 2017-2018 announced the creation of an entity that will identify the skills that Canadian employers are looking for and require, while proposing innovative approaches to procurement and skills training. The creation of this federal body calls into question the labour institutions that Quebec has created over the years. In addition, the CSN believes that skills acquired through this training must be transferable in order to further the independence of working men and women.
Thank you, Mr. Chair.