Finance Committee on April 12th, 2016

[Phil McColeman, Conservative, Brantford—Brant, ON]

Yes.

[The Chair, Liberal, Wayne Easter]

Can we have it later in motions as well?

The motion is in order, as I understand.

The notice was given.

Is there any discussion on that? I think what's being called for is the Minister of Finance and officials on main estimates.

[Phil McColeman, Conservative, Brantford—Brant, ON]

I have copies of the motion.

[The Chair, Liberal, Wayne Easter]

Does anybody need copies? I think you've seen it anyway.

Any discussion?

Go ahead, Ms. O'Connell.

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

Thank you, Mr. Chair.

Sorry, I have no issue, it's just the date. Is there flexibility keeping in mind the minister's schedule?

[Phil McColeman, Conservative, Brantford—Brant, ON]

The reason for May 20 is that we have to have this done by May 31. There is a deadline on this, and we have a break week in there. We're thinking May 20 is reasonable given the fact that gives 11 days to our deadline and consideration of the break week.

[The Chair, Liberal, Wayne Easter]

That is the last week we sit before the break week. Phil is right, the deadline on estimates is May 31.

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

Mr. Chair, to be clear, it's any time that's the end—

[Phil McColeman, Conservative, Brantford—Brant, ON]

Up to May 20.

The motion calls for the minister to appear before the committee on the main estimates on or before May 20.

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

Okay, thank you.

[The Chair, Liberal, Wayne Easter]

Any further discussions?

Mr. Ouellette, and then we'll call the question.

[Robert-Falcon Ouellette, Liberal, Winnipeg Centre, MB]

I'd just like to say that I wish we could have brought this motion after the witnesses were done appearing, because we are taking time away from when we could be hearing their testimony. I understand; I have nothing against it—I think it's a great idea—but I'd prefer that we be able to hear from the witnesses.

I won't take up any more of their time, because they are here—

[The Chair, Liberal, Wayne Easter]

Okay. The point is noted.

(Motion agreed to)

Turning back to the witnesses, we go to Ms. O'Connell.

You have five minutes.

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

Thank you, Mr. Chair.

Thank you and welcome.

I'm somewhat confused by the line of questioning from the opposition, in the sense that the tax break—the $3.4 billion tax reduction—is not quite good enough; yet I've heard that spending an additional $210 million per year for the approximately two million people who take advantage of the TFSA....

Which is it? Do you want the tax reduction or spending $210 million more for only two million people who actually take advantage of that?

Are my numbers correct, in the sense that I heard you correctly; that it's only approximately two million who take advantage of maximizing the former amount of the TFSA?

[Miodrag Jovanovic]

Yes.

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

Thank you.

Am I correct that the savings from that change is $210 million?

[Miodrag Jovanovic]

For 2016-2017, yes....

I'm sorry; it goes from about $80 million in 2016-17 to $330 million in 2020-21.

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

It's $330 million—even more.

Thank you.

In regard to the question of my colleague from the NDP, something we haven't actually talked about or highlighted that I think is really important is that it's not only the reduction in that second bracket, but actually the expansion of the lower brackets themselves.

For example, in the first marginal tax rate bracket of 15% the highest income is going from $40,726 to $45,282. If you look at it, even in that bracket we're now actually expanding those who are taking advantage of the lowest tax rate.

[Miodrag Jovanovic]

Yes. These brackets are indexed to inflation, so yes, they increase on that basis year after year.

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

Right, but as you go down, it's not only that reduction in the second tax rate; all of the lower rates have been expanded, so that more people are captured in that lower income.

As I said, we haven't really talked about the fact that there are more people now who are able to take advantage of the lowest rate or, then, the middle rate. In fact, even when you look at the fourth tax rate, it has expanded again, so fewer people are within it.

Have you done an analysis on how many people this actually helps, just that expansion in the lower rates?

[Trevor McGowan]

I think I can answer that.

The updated numbers in the new tax bracket setting up the various thresholds are the numbers for 2016, and the previous numbers, reflected in the act, were for the 2009 taxation year and were automatically increased by another provision as a result of indexation. The figures that are reflected in the bill, then, are the ones for 2016 that would have been in place anyway, but with the introduction of a new $200,000 top threshold, the thinking was that it would be clearer to express all of the thresholds in terms of the 2016 numbers, so that there weren't some numbers for 2009 and some for 2016. They have all been brought up to their 2016 levels, which is where they would have been.

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

In terms of the increase in that top marginal rate, if you look at the average top 1.4% of those earners, you've indicated it's approximately $5,200 a year. For those making in the top 1% of the over $200,000, that works out to be about $14 a day. That's the increase to save $3.4 billion for approximately nine million Canadians.

I know you haven't done that calculation, but if we're looking at it, if we're breaking it down, that $5,200, approximately, for the average top 1.4%, that's what this increase means—approximately $14.

Again, you can't confirm unless you've done that calculation...but taking the same logic, the $5,200 divided by 365 days.

Thank you.

[The Chair, Liberal, Wayne Easter]

We'll accept your figures.

Mr. Liepert.

[Ron Liepert, Conservative, Calgary Signal Hill, AB]

Thank you.

I just want to, for my own benefit, confirm some numbers.

In round numbers, how many Canadians do not pay taxes?

[Miodrag Jovanovic]

It's almost 10 million.