Evidence of meeting #147 for Finance in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was workers.
A video is available from Parliament.
5:50 p.m.
Research, Canadian Union of Public Employees
I think that's a question for the federal public sector unions, and if you'd like an answer from them, I'm sure we could get you one.
5:50 p.m.
NDP
Pierre-Luc Dusseault NDP Sherbrooke, QC
Thank you, Mr. Chair.
I would like to thank the witnesses for being here today.
First off, I would like to thank Mr. Cousineau for his service in the Canadian Forces.
Then I just want to ask a question that everyone is asking. I don't know if the answer can be very specific, but we are all wondering whether the new lifetime pension benefits are better than the current benefits.
In terms of benefits, is the new pension plan for veterans, which is being proposed today, better than the one currently being used?
5:50 p.m.
Co-Founder, Paws Fur Thought
Thank you for your question.
I regret that I'm not able to speak about this subject in French, so I will answer in English, if that's okay.
5:50 p.m.
Co-Founder, Paws Fur Thought
Part of the problem of whether or not we can clearly delineate whether the old benefit suite is better or worse than the new benefit suite depends on what some of the objectives are. Indeed, in the last question I answered, I mentioned the difference between defined benefit and defined contribution. If we go to a defined contribution model in the new pension for life, that will alleviate any unfunded liabilities of the government in terms of future commitments that would have arisen had they stayed with a defined benefit under the previous pension act.
I think that the members of the committee are probably fully aware of somebody in government who has extensive experience in the pension market. In fact, his firm is based on that kind of actuarial science. I think that the Minister of Finance may want to weigh in and comment as to why we're looking at defining contribution as opposed to defining benefit.
5:55 p.m.
NDP
Pierre-Luc Dusseault NDP Sherbrooke, QC
Thank you for highlighting the issue around veterans and the gender-based payment disparities.
Mr. Janson, I would like to ask you a question about pay equity.
We were all disappointed that an important part of Bill C-74 was missing, namely, pay equity legislation. Everyone was expecting this legislation. It had been promised, but doesn't appear anywhere. We hope that we'll get it one day, but my hopes for the Liberal government are slim.
Another question has also elicited a reaction from the MPs on our side of the table. Pay equity is being promised, but the budget contains no financial commitment in this regard. Yet that is what would achieve equity.
Can you comment on that? Can you tell us how much this could be if the federal government decided to move toward pay equity?
5:55 p.m.
Research, Canadian Union of Public Employees
It's a good question, and in many ways it's hard to know what the cost would be for the federal government. Obviously, pay equity is the responsibility of employers, to be paying their employees equally.
The federal government has said that it's committed to a proactive regime. That's obviously going to involve more compliance, more regulatory burden on the federal government, so there will be a cost. I don't know what that would be, but as you've said, there was no money earmarked.
There's no legislation and no money earmarked. To us, that's two causes for concern. This is, as you said, one area where the government can demonstrate in real terms its commitment to gender equity. We certainly hope they follow through on the budget commitment to do so.
5:55 p.m.
NDP
Pierre-Luc Dusseault NDP Sherbrooke, QC
Do you have the same disappointment with pharmacare, which I believe the Liberals have been promising since 1998? Have you analyzed this question? Have you also been disappointed to see the slim proposition of creating another committee to study it? Yet the question is clear enough for most of us.
5:55 p.m.
Research, Canadian Union of Public Employees
CUPE has long had a position in favour of public pharmacare. This is obviously the unfinished work of our public health care system. We're fully behind the Canadian Labour of Congress' campaign that's currently under way. I'm sure you heard from the president earlier today about that. We're fully supportive of pharmacare, and as you say, quite disappointed to see that we're going to be studying rather than doing when Canadians continue to pay too much for drugs or let their prescription bottles go unfilled because of financial pressure. That shouldn't happen in this country.
5:55 p.m.
NDP
Pierre-Luc Dusseault NDP Sherbrooke, QC
Mr. Milligan, I have a question for you about the new workers benefit.
You proposed raising the threshold to $24,000. I didn't have time to check it in the bill, but is there an increase in that threshold over time? If not, as legislators, should we ensure that this threshold of $24,000 will be adjusted in 10 years? In 10 years, $24,000 will not be worth the same as it is today.
6 p.m.
Prof. Kevin Milligan
Yes, this is a good focus for legislators in terms of looking at that. The member asked an important question, to see whether these thresholds that are in the proposed legislation are automatically indexed to inflation every year. My experience with the existing working income tax benefit, the WITB, is that every year those thresholds are indeed indexed and the amount is indeed indexed. It increases every year so that people keep up with costs and inflation. In my view, it is important that the new Canada workers benefit does the same thing, that it maintains its purchasing power by automatically being indexed for inflation. That would allow us to keep the $24,000 upper limit of today at least constant for the workers in the future.
6 p.m.
Liberal
The Chair Liberal Wayne Easter
Thank you all. Before I go to Mr. Grewal, this question might be for you, Joël, or you can take it back to the various witnesses we've had from Finance and Veterans Affairs.
We had the officials from Finance, and I know the committee asked for some comparisons between the old benefit scheme and the new one. Could somebody ask the officials respond to this issue of different payouts based on gender?
I looked through my material and I can't quite understand it, but I think Mr. Cousineau's question is a valid one. Could officials from Veterans Affairs look at Bill C-74 and what's proposed in it, and give us a response to that question as to whether there is a difference based on gender? If there are ways to fix it in this bill, we should do it.
Mr. Grewal.
6 p.m.
Liberal
Raj Grewal Liberal Brampton East, ON
Thank you, Mr. Chair.
Thank you to the witnesses for coming today.
This is directed to BDC. Since we've had great economic growth of around 3.3% in the last year, have you seen increased interest on the part of entrepreneurs coming to the BDC asking for funds?
6 p.m.
Vice-President and Chief Economist, Research, Business Development Bank of Canada
Yes. There's more economic activity, and as a result of the investment, the number of SMEs that are investing is increasing. We have been busier.
6 p.m.
Liberal
Raj Grewal Liberal Brampton East, ON
Has there been a corresponding increase or movement in the default rate on bad loans that BDC carries?
6 p.m.
Vice-President and Chief Economist, Research, Business Development Bank of Canada
No, 2018 was a very good year that way. Our models show that when the economy is performing well, the default rate is lower.
6 p.m.
Liberal
Raj Grewal Liberal Brampton East, ON
We've seen a lot of entrepreneurs access BDC in and around Brampton East, which is a high-growth community with a lot of entrepreneurs. You guys do a lot of financing of trucking companies that are buying facilities.
Across the country, have you seen certain regions coming to you more, and do you guys have initiatives to help entrepreneurs in the north to access your funds or know about your programs? Even in our MPs' offices, we don't have any material on BDC. I think it would be a value-add across party lines to help people when they come in. Maybe you guys should check them out because they can be of assistance.
6 p.m.
Vice-President, Partnerships and Government Relations, Business Development Bank of Canada
We have seen growth in areas that have previously not been our main areas, B.C., for instance. One of the more exciting channels of growth for BDC in the last three years has been our online lending. We've gone from doing about 1,000 loans online to 5,000 in the last year. It's a significant channel for us. Assuming there is Internet access, it provides a channel for entrepreneurs in remote areas.
6:05 p.m.
Liberal
Raj Grewal Liberal Brampton East, ON
Thank you.
Mr. Milligan, thanks for joining us all the way from the west coast. You mentioned raising the bar to $30,000 for the working income tax benefit. What would be the corresponding economic activity from that, or would there be any?
6:05 p.m.
Prof. Kevin Milligan
The evidence shows pretty clearly that when you provide this kind of bonus to people who join the labour market, more people will join the labour market. People are pretty responsive to this kind of benefit. If you were to extend the range over which people still receive some of the Canada workers benefit from the currently proposed $24,000 up to $30,000, that would effectively increase the number of modest income workers who would see some benefit from joining the labour market.
The evidence suggests that people's decisions with respect to this kind of benefit can be fairly responsive, and so I think you would see a substantial increase in work among those in that modest income range.
6:05 p.m.
Conservative
Pierre Poilievre Conservative Carleton, ON
Thank you very much, Dr. Milligan, for your long-standing work on issues related to marginal effective tax rates. I enjoy reading and studying your work, and occasionally calling you to plunder your mind, and hopefully we can do that today.
I asked a Finance Canada witness about whether or not the phase-out rate of the Canada workers benefit at the higher end of the range could in any case add to a worker's marginal effective tax rate. He did conclude that yes, it was possible. I'm not arguing that's necessarily a reason not to proceed, but I'm just curious if that is your calculus as well.
