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.
Canadian Operating Officer, Canada's Building Trades Unions
Number 1 being that employers “can find them everywhere”, and 5 being “can't find them for love nor money.”
Canadian Operating Officer, Canada's Building Trades Unions
Do you think that's true?
Liberal
Francesco Sorbara Liberal Vaughan—Woodbridge, ON
Yes. In most of the jurisdictions there were more 4s and 5s than 1s and 2s, with a few 3s. I remember reading those reports.
We've put in a number of measures in the last three years for apprenticeships. I met with an organization in Calgary called Women Building Futures, and it's doing some great work attracting—
Canadian Operating Officer, Canada's Building Trades Unions
It's in Edmonton.
Liberal
Francesco Sorbara Liberal Vaughan—Woodbridge, ON
Sorry, it's in Edmonton. It's doing some great work attracting women to the labour force.
What more can we be doing to get those underrepresented groups into the skilled trades?
Canadian Operating Officer, Canada's Building Trades Unions
That is really a $64,000 question.
When you look at the construction industry, at the skilled trades essentially, not necessarily just construction, for years if a bright, young woman who was captain of the debate team, captain of the volleyball team, and won the school spirit award told her guidance counsellor that she wanted to be a millwright, the shock treatments would start before her parents were contacted There is a bias against people who work with their hands. The theory is that if you can't cut it in university, then you go into the trades.
We don't need those people. We need bright, young people. The money that you're going to give to female apprentices to help them get through is a start. We need to have programs that will allow indigenous young people who are going along the path of a utility.... Go pipelines! We need to have a way to get them apprenticeship-ready and get them into lifelong careers.
If you want to lift people out of poverty, give them a job that leads to a career, which leads to employment almost anywhere in the country. Our apprenticeship system can do that. There are a number of people you can partner with to do it.
Conservative
Tom Kmiec Conservative Calgary Shepard, AB
Thank you, Mr. Chair.
Mr. Ball, in going through your PowerPoint presentation, on page 9 under “Detailed Assessment of U.S. Federal Tax Reforms Urgently Required”, it shows that 84% totally agree. I guess these are your members, but in the budget, you briefly mention it. In the whole budget, I think there's one line that actually says anything about what the review might be like. It seems to me this requires more than just one line.
What would CPA Canada like to see in terms of a review—how fulsome, how in depth, how much transparency?
Next you have “Findings of Detailed Analysis Should be Made Public Soon After Completion”, and 93% of your membership seems to agree. So, how much information should be made public? What should it look like? What is the ideal situation for you?
Vice-President, Taxation, Chartered Professional Accountants of Canada
There are a number of things there.
It's hard to put a picture around how much detail, but it would have to be enough to make sense of everything. It won't be easy, that's for sure. There are a number of factors, going both ways. They have done a lot of incentives in an economy that's relatively strong—so we'll look at what impact those will have, that sort of thing. I think we just need to make sure—talk to people and find out what they're thinking, and find out what business decision-makers are thinking.
The other thing I will say is that it does appear the momentum around this, in terms of the government, is picking up. I have had discussions with the Department of Finance and they do want to talk to us in more detail to find out our views in terms of CPA Canada and what's important. I think it might have gotten off to a bit of a slow start, with the one-liner in the budget, but it does seem to be picking up some momentum.
Conservative
Tom Kmiec Conservative Calgary Shepard, AB
This whole debate in the United States started, if not years ago, at least as throw-away lines by the President as it made its way through Congress. This past fall it became a really big issue, and this captured the attention of everybody in Washington. We're talking about a drop from 35% to 21% or 22%, depending on the company. That's a significant drop in terms of our competitive advantage. It was pretty big before—just on tax rate purely—not even talking about the specific applications of different rules.
It seems to me this is something the government should have been taken with in September, when they were preparing the budget. Budgets aren't prepared in two-week spans; they are prepared over many months.
You said that there was some indication “they're not taken with the issue.” What does that mean? Are they actively communicating with you now and they weren't before?
Vice-President, Taxation, Chartered Professional Accountants of Canada
Well, initially I don't think we knew exactly what they were going to do, so we're getting a little more detail in terms of the process. I think that's been helpful. I still haven't heard, though, what the final report would look like and that kind of thing. I do think it's important that there's transparency around the results of the review.
In terms of competitiveness, you did hit on an important point as well. We had a tax-rate advantage that basically disappeared. That's why we're saying that you have to look at the total competitiveness in Canada now. It depends on where you are in the U.S., but essentially we're on a par right now, rate-wise, in terms of corporations, so a lot of the other things start to become more important, such as just regulation generally and how easy it is to run a business in Canada versus the U.S. and that kind of thing.
Conservative
Tom Kmiec Conservative Calgary Shepard, AB
On slide 8, under “Factors Impacting Company's Business Planning” for upcoming years, you have “Uncertainty surrounding the Canadian economy” at 32%. It's an issue.
We always talk about federal government competitiveness, looking from the federal lens, but how much is it for the provincial side? Provinces levy corporate taxes. Also, some states do, and some do not. There's a really specific distribution of heavy industry versus light industry in the United States. The fastest-growing states are typically those that have very low personal income tax or none at all: they don't levy one. They just levy sales taxes and corporate taxes.
Looking at all those things together, in your estimation, how much time should it take the government to come back with a review?
Vice-President, Taxation, Chartered Professional Accountants of Canada
It's a difficult question to answer in terms of how long it should take, because I don't really know what resources they have. I guess I could flip that around the other way, though. We think they need to come back with an answer fairly quickly, because businesses will only wait so long before they make a final decision. It's important to find out what the end results will be and what the recommendations are from the report at the end of the day and then take action on them. I do think that's important.
To echo one thing he did say, the personal tax part is the overlooked part sometimes, because some provinces have a top personal rate of over 50% now. That is sometimes an issue when you're looking at hiring the brightest and the best and it's Canada versus the U.S.
Liberal
The Chair Liberal Wayne Easter
Ms. Gibson wanted in on the previous question as well.
Go ahead, Ms. Gibson.
Director, Communications and Research, Canadians for Tax Fairness
I wanted to add that when we're talking about competitiveness it's really important to recognize that our health care system provides a massive competitive advantage for businesses, and it's the same with our education and training systems, so it's not just about regulation and rates. It's about the overall economic advantages we can offer, and that really does need to be part of that conversation and that review.
Also, any kind of review needs to scope a look at the future as automation ramps up and we see businesses becoming more capital intensive. The use of corporate taxes as a redistributive mechanism is going to become more critical for redistribution. Those are some of the issues we need to consider and scope.
Conservative
Conservative
Tom Kmiec Conservative Calgary Shepard, AB
You're so generous. Thank you.
To go back for a second to the issue of competitiveness once more, I feel that's the issue. Competitiveness and productivity often get confused, but they're separate.
Ms. Gibson, you brought up capital-intensive industry. There's no more capital-intensive industry in Canada than the energy sector. Looking over the details here, we see oil prices at 21% as area of concern and protectionism in the United States at 23%.
With all of those things taken together, and the state of the U.S. economy as well, if you had one thing apart from corporate taxes to look at, what else should the government be focusing on, aside from the corporate tax competitiveness with the United States?
Vice-President, Taxation, Chartered Professional Accountants of Canada
One thing that was just referred to is the cost of labour. I think that is a good point in terms of our health system versus that of the U.S. I think you have to look at everything, though, so that's a plus for us, but are there other negatives around setting up a business here versus in the U.S.? You have to look at everything, I think, in terms of regulation and all the other issues they face, and you have to talk to people: are there reasons why they're looking at the United States versus Canada right now, and if there are, what are they exactly?
I think we need to know what the decision-makers are thinking. That's really the key part. If they are thinking of expanding in the U.S. and selling to more U.S. customers, we'd like them to do it through businesses set up in Canada, so what will keep them here? I think that's really the key driver. If it goes beyond tax, it's a question for an economist, which I'm not.
NDP
Pierre-Luc Dusseault NDP Sherbrooke, QC
Thank you, Mr. Chair.
I would also like to thank the witnesses for being with us today.
My first question is a bit technical and is for the representatives from the Canadian Labour Congress. It has to do with the changes to the Canada Pension Plan, specifically the allocation of amounts to parents of young children.
You said that there should be a more in-depth study of how the pension benefits are calculated for taxpayers who have looked after their children for a few years and whose incomes were low or zero during this period. The other option the government has is exclusion. In this way, rather than assigning amounts for these years, these amounts would be completely excluded from the calculation. I thought this option was the most advantageous.
You said that it would be desirable to study this question, but could you share your point of view on exclusion? At first glance, do you think this option seems more advantageous?