Finance Committee on Nov. 9th, 2017

[Hassan Yussuff]

Without a doubt, I think that the ability to go to work and deal with reality, which we all enjoy, is paramount in our lives. When individuals are going through situations such as domestic violence, it's critical that their workplace be as supportive as possible, but in addition, that it be a safe place where they can go to escape the violence.

Too often, the abuser will reach right into the workplace. If employers are not cognizant of that fact and do not screen the call if somebody calls up, they just leave the situation the same as in the violent home, with the person on the phone disturbing you from your work. Recognition of this as an issue has to be dealt with in the workplace.

Of course, in the regulations there will have to be other things. It will have to be dealt with so that the employer truly provides a safe environment for those who are experiencing domestic violence, to ensure that the workplace does not become another place where they're going to experience violence.

We have been working with our affiliates across the country, trying to raise the consciousness of Canadians, our own members, and employers at the bargaining table. I think there's obviously recognition and change going on, but as you know, the statistics on domestic violence are quite sad. Despite all that we have done, we haven't done enough, and I want to be blunt. For the most part, this violence is coming from men.

We have to do a better job. As a society, we have to figure out a way to elevate this conversation, because in 2017, when you look at the number of women still experiencing domestic violence, I think the reality we see is that we haven't done a good job.

This is not just about the federal government. It's also about the provincial and territorial governments working together as to how we can deepen the conversation and also change attitudes and behaviour so that this reality does not continue to be part of our society moving forward. This is one small step, but it's an important step.

More importantly, we need to make sure we get it right, because it can be a vehicle for the provinces and the territories to follow when they are not yet in that domain.

[Greg Fergus, Liberal, Hull—Aylmer, QC]

Thank you very much, Mr. Yussuff.

Professor Lee, I would like to ask you a quick question. Thank you for your analysis. I certainly share your concerns about the balance between our seniors and the active population in the workforce. It is very important.

You raised that question, and you gave Japan as an example. You also added a note of caution by saying that Japan was not really the greatest example of immigration. We know that Japan has a minuscule immigration rate, for various reasons. That explains why it is in that predicament.

However, Canada has chosen its path. For 50 years, we have placed our bets on immigration. I am here because my parents came to Canada. I know that is the case for a number of people, including Mr. Kmiec. A number of members around this table are in the same situation.

[The Chair, Liberal, Wayne Easter]

Greg, this was supposed to be a brief question to Mr. Lee.

[Greg Fergus, Liberal, Hull—Aylmer, QC]

I'm sorry.

Is immigration a key factor for compensating, in part, for the shortage that we're going to have in the workforce?

[Dr. Ian Lee]

I really do believe this is a very important issue. I believe it's an important part of the solution. Yes, we are a nation of immigrants. Of course we all are, as former Prime Minister Mulroney said many times. My own father came from England. My mother's parents came from the highlands of Scotland. I think if we go back one or two generations, we've all come from somewhere else.

However, that wasn't the question you asked. Economic immigration—I won't get into the issue of other types of immigration—is very, very important. You've probably received conflicting advice. Some statisticians say, “Look, it won't solve our problem, because you're bringing in the same profile of the population.” That suggests that we should be weighting toward younger economic immigrants rather than older economic immigrants.

[The Chair, Liberal, Wayne Easter]

Thank you all.

We're now going to our five-minute rounds.

Go ahead, Mr. Poilievre.

[Pierre Poilievre, Conservative, Carleton, ON]

My question is for Dr. Lee. He was speaking about the economic and financial challenges associated with a massive wave of retirements—the “grey tsunami”, as he called it. I want to ask him about what I believe is an accounting problem, one for which I don't have a solution but one that I believe incentivizes governments to make short-term financial decisions at long-term costs.

Let me give you one example. We have a rule in our registered retirement savings plans that requires that retired people convert their RRSPs into RRIFs—income funds—and that they begin withdrawing funds at a fairly precipitous pace out of their RRIF so that they can have it as income and it can be taxed. There is no long-term financial benefit to the government in requiring these withdrawals, because the money will be taxed later anyway. If the person kept that money until they turned 85 and then took it all out, well, they would be taxed all in that 85th year of their life. By virtue of the fact that they're forced to take it out at 71, they are taxed earlier, it is true, but they are not taxed more.

Now, why do governments do this? This answer is that if a government today were to get rid of the mandatory withdrawal rule, that government would have to take all of the revenue loss. Some future government would get a revenue gain. Ten years down the road, people would start to take that money out, and it would be taxed in some future government. No present-day government would want to accept the revenue loss of allowing that deferral to go on. Even though there's no long-term cost to the crown, there is a short-term cost to the political government of the day.

When it comes to expenses and obligations that governments accept, let's say the government were to settle a lawsuit to pay out millions of dollars over three decades. Under our accounting system, the full cost of that decision is actually borne in the year the decision is made, not in the year the money is paid out. That's to ensure that a present-day government has to account for the financial costs of the future obligations it decides to take on.

Is there some way that principle, which applies to expenditures and obligations, could be embedded in the accounting of tax revenue?

[The Chair, Liberal, Wayne Easter]

That question is for you, Dr. Lee. Go ahead.

[Dr. Ian Lee]

I'll be very brief. I'm not a tax accountant at all. I'm aware of the debate around the issue you're suggesting there. I really am aware of that, and I apologize; sorry.

I would just point out very quickly that I'm not sure that those forecasts would in fact unfold in that way—that is to say, that there would be a mass rush and that people would go at a certain point. I'm just thinking about universal retirement. Mandatory retirement for professors was taken out about five years ago. People predicted that there would be huge numbers of professors working well into their 70s and 80s. The averages haven't changed at all.

[Michael McLeod, Liberal, Northwest Territories, NT]

I have a point of order.

[The Chair, Liberal, Wayne Easter]

I didn't see you before, Michael, when you were trying to raise a point of order. If we can let Mr. Lee answer this question, then we can go to your point of order.

[Dr. Ian Lee]

To answer your question, on the accounting side, if you're asking me about government accrual accounting in the public sector, Mr. Poilievre, I believe that would be one solution, as opposed to using cash accounting, if I understood your question.

[The Chair, Liberal, Wayne Easter]

Mr. McLeod, you had a point of order earlier and I didn't recognize that you were raising your hand for a point of order. Go ahead.

[Michael McLeod, Liberal, Northwest Territories, NT]

Thank you, Mr. Chair.

I take offence to what Mr. Lee just said. He stated that everyone has come from some other country. As an indigenous person and an MP for a riding that represents indigenous people, I think that's not a true statement, and we would have lots to say about that. I think maybe he should reconsider and retract that comment, Mr. Chairman.

[The Chair, Liberal, Wayne Easter]

You've made your point.

Do you want to add anything further, Mr. Lee?

[Dr. Ian Lee]

MP McLeod is absolutely correct. I wasn't referring to first nations peoples, indigenous peoples. I was referring to people who came from elsewhere.

[The Chair, Liberal, Wayne Easter]

Mr. Poilievre, we won't take that time away from you. Go ahead.

[Pierre Poilievre, Conservative, Carleton, ON]

Thank you.

We do now have accrual accounting when it comes to the expenditures of the government. I'm wondering if there is a way we can account for, in the tax system, decisions by governments that are made in the present but that have long-term revenue consequences.

Let me give you another example. The government is proposing measures to penalize passive investment within Canadian-controlled private corporations. That will force a lot of people to take their money out of their company and to be taxed on it in the present so that they can save for their retirement outside of the company. If that happens, yes, the government will get a short-term burst of revenue, but all of that money that would have stayed in those companies and been taxed nevertheless later on when it was taken out will no longer be available five or 10 years down the road as it would otherwise have been. In fact, in this case, even if there are no behavioural consequences to the policy decision, there will be a long-term revenue loss, because not only will the government not be able to tax that money down the road, but any growth on that money will never have occurred and therefore will not be taxable either. Therefore, the government gets the benefit of a short-term burst of cash into its coffers, even though the long-term financial implications are negative for the crown and, in this case, as it turns out, for the taxpayer. There ought to be some way that the accounting system can take into consideration the long-term loss of revenue that is a definitive result of a short-term tax measure decision.

[Dr. Ian Lee]

I'll be very quick. I'm searching my head for articles I've read, and I'm pretty certain that Professor Mintz at the University of Calgary has published something on this issue. I promise the chair I will provide that article to the committee. I'm pretty certain he has looked at the financial consequences of extending mandatory drawdown of RRSPs at 71. I'll provide it to the committee.

[The Chair, Liberal, Wayne Easter]

Ms. O'Connell is next.

[Jennifer O'Connell, Liberal, Pickering—Uxbridge, ON]

Thank you, Mr. Chair.

Thank you all for being here.

Mr. Davis, you talked about nurse practitioners and the changes that this will bring for people with MS and in particular for those who maybe don't live in city centres or in areas where they have quick access to doctors. Even in big city centres, frankly, they may not have quick access to doctors.

What does this mean in terms of members with MS getting access to the types of tax credits or filling out the forms for the government that will then enable them to move through the next process and receive either a tax credit or whatever else they might need? What does that mean for those people who don't live in close proximity to a doctor or medical practitioner?

[Benjamin Davis]

I would agree with regard to the concerns in rural areas. We hear lots of stories of people with MS who sometimes have trouble finding the services they need. Therefore, this particular decision to enable nurse practitioners to assist in signing off on a particular portion of something like a disability tax credit is helpful, because it would expedite the process. The sooner someone with MS or a similar illness or disability has access to the supports, the better.

[Jennifer O'Connell, Liberal, Pickering—Uxbridge, ON]

Thank you.

Have you heard any feedback about getting access to nurse practitioners? Is this measure something you think will help dramatically to improve that, or do we still need to work on making sure there are adequate nurse practitioners available as well?

[Benjamin Davis]

I haven't heard that specific piece of feedback, so I can't comment.

[Jennifer O'Connell, Liberal, Pickering—Uxbridge, ON]

Fair enough. Thank you.

Ms. Pasma, I believe you mentioned changes in terms of time off for cultural aboriginal practices. We heard testimony from officials on this bill. I believe you said in your testimony—and if I wrote it down incorrectly, please correct me—that there should have been consultations on what constitutes aboriginal indigenous practices.

However, we heard testimony from officials who said that in fact there were consultations done with the indigenous community. They provided examples of things that they were not limited to, and my colleague, Mr. McLeod, asked questions about how this would result in practice.

The testimony we've heard is that those consultations absolutely did happen and that the wording around this measure was done specifically as a result of those consultations.

Are you suggesting that the consultation didn't take place?