Finance Committee on May 10th, 2016

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

In my riding, the cost of hockey is enormous, and so a lot families don't take advantage of this. They can't afford the program in the first place. This is why I know the government is changing this program. Certainly in my community, it makes a big difference.

In respect of the income-splitting credit, a single mother would have no access to the income-splitting benefit, because there's no income to split. Some couples could benefit from splitting their income, but they can't unless they have a child under the age of 18. So this excludes a lot of people, since the money is being spent to give more to those with children. Am I correct that a single mother couldn't take advantage of the tax reduction that comes from income splitting?

[Trevor McGowan]

Yes, you're correct. A single parent would not be able to use the credit. As you also noted, qualifying for the credit requires a child under the age of 18.

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

Do you know the average age of young Canadians still living at home? My understanding is that young people are living at home longer, so this age of 18 is not necessarily relevant.

[Trevor McGowan]

I have no idea. I'm sorry.

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

That's okay. I'll find out how to answer it.

Thank you, Mr. Chair.

[The Chair, Liberal, Wayne Easter]

Mr. Aboultaif.

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

You mentioned that nine out of 10 families would be better off under the new child tax benefit. That means they'll either get more money or pay less taxes. Will this mean a loss of revenue or an additional expense? Have you calculated what the impact will be on the budget if it's revenue? What's the impact on revenue of having to acquire this? The money has to come from somewhere.

[Pierre LeBlanc]

In the budget, the cost of the Canada child benefit and the gain to the government from eliminating the universal child care benefit are presented net of tax. This takes into account that the government is paying the universal child care benefit, while receiving a certain amount of personal income tax on—

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

What's the difference between the two?

[Pierre LeBlanc]

Roughly $1 billion is being paid in federal personal income tax for the universal child care benefit.

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

So $1 billion on 36 million Canadians, how can you translate that into dollars and cents for a single family?

[Pierre LeBlanc]

Are you looking for an example of a typical family?

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

You're saying $1 billion extra, which means it's going to cost the budget an extra $1 billion as an expense. Now that $1 billion distributed through 36 million Canadians translates to a small amount per family. That doesn't mean we're pulling nine out of 10 families out of poverty, or even that they'll be better off. It can be $100 a year or $800 a year. It would be nice to know that number, because that's also going to average out. Some families will benefit more, and some families will get way less. How can that be such a fair move if the result is only $1 billion extra into that account?

[Pierre LeBlanc]

The nine out of 10 figure takes account of the tax now paid on the universal child care benefit.

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

My colleague asked you if single mothers are eligible for income splitting, implying that income splitting is not fair on that basis. Is the government asking you to review and eliminate seniors' income splitting because senior widows do not qualify? Can you please explain that?

[Pierre LeBlanc]

The government made clear in the budget that pension income splitting wasn't being affected by the proposals to eliminate income splitting for families with children.

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

I'm still not very satisfied with the answer to my first question. You must have done some calculations to get to the bottom of that, especially now with people already filing their income tax. You must have some ideas on those numbers. It's a very large statement to say nine out of 10 families are benefiting. It would be nice to know what that amount is going to be. How can we average this out based on income brackets? Do you have that analysis?

[Pierre LeBlanc]

We have very detailed data on families with children, and on all Canadian taxpayers. We're able to see what they're receiving under the current system and what they would receive under a new system. The nine out of 10 calculation compares the two.

[The Vice-Chair, Conservative, Ron Liepert]

Thank you, we'll move on to Mr. Grewal.

[Raj Grewal, Liberal, Brampton East, ON]

Thank you, Mr. Chair, and thank you to all our witnesses for coming today.

I'm going to take it back to repealing the education tax credit from a student's perspective.

Our government in this budget wanted to ensure that more young Canadians have access to post-secondary education and that the assistance that's going to be provided is more targeted. That's why we're repealing these tax credits that weren't targeted to low- and middle-income families and introducing an increase in the Canada student grant program. Has there been a study done on the impact on an average student from repealing these tax credits and the additional money they will get from the increase in the Canada student grant program?

[Trevor McGowan]

The Department of Finance officials handled the repeal of the education tax credit and textbook tax credit, and I'd happily go through the details on that. As to the comparison with the Canada student grants, that's not in the bill so we're not prepared to speak to that. But I'd happily go through what the repeal of the education and textbook tax credits entails, and that's all we have at our fingertips right now.

[Raj Grewal, Liberal, Brampton East, ON]

Okay, that's fine. I wanted to get more information on the holistic approach, but we can follow up with the Department of Finance on that.

Can you confirm that students who carry forward credits.... I remember when I was claiming these credits, in certain years you didn't need to use all of them because your income was at a certain percentage or it was more lucrative to save them for another year. They will be able to carry these forward, right? There's not going to be a full stop on them?

[Trevor McGowan]

That's correct. Those tax credits would be able to be carried forward and claimed, alongside the tuition tax credit, which is not being affected by Bill C-15.

[Raj Grewal, Liberal, Brampton East, ON]

That's perfect, thank you.

[The Vice-Chair, Conservative, Ron Liepert]

Mr. Caron.