Finance Committee on May 9th, 2019

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

In your situation, under the new mechanism being proposed by the Liberal government, you would in fact have been sent back to the United States, since you had already submitted an asylum request to the United States.

Had you been sent back to the United States, do you think you would have been safe there? In addition, once back in the United States, would you have run the risk of being sent back to Ghana, where your life would be in danger?

[Seidu Mohammed]

Yes, I have been denied in the United States. If this law passes and they send me back to the United States it will put me in more danger.

Deporting me back to Ghana will destroy my life. I will be imprisoned or tortured to death. What happened to me I don't want to happen to anybody. We want to come to Canada because this country is a great country and one of the biggest countries in the world. A lot of countries are trying to follow in the footsteps of Canada, of how good it is. We want this to continue for the innocent people who are also trying to come from different countries. I would be happy if it weren't passed because of those coming here to make a better life.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Thank you. That's why you're here, to convince members of this committee and members of Parliament that this part of the bill is not good and needs to be struck down.

[Seidu Mohammed]

Yes.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

I think you're making a good point that if passed.... If you had presented a request to Canada after this bill was passed, your own life would have been put in great danger.

Thanks for that testimony. I hope it will bring some light to members around this table.

I would now like to discuss interest on student loans.

Public servants have confirmed to us that students in Canada pay $700 million in interest yearly and that that amount winds up in the Canadian government treasury.

Mr. Brown, do you think it would have been preferable that our committee simply consider eliminating interest on student loans—and in that way avoid having students put so much money into government coffers—rather than limiting ourselves to giving those students a six-month interest holiday?

[Adam Brown]

Thank you for your question.

We do, in fact, think that eliminating interest on student loans would be preferable. I hope that this bill will allow us to reach that objective.

British Columbia has just eliminated interest on student loans. This presents a lot of advantages for students who just finished their studies. When they begin their career, buy a house or undertake costly projects, they will worry less about the fact that they have to reimburse their loan at the same time as they shoulder other expenses, which eliminates a lot financial stress for them.

So we would like to see the interest on student loans eliminated.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Thank you.

[The Chair, Liberal, Wayne Easter]

You have one minute.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

I thought I was running out of time, but no. I'll ask you another question, Mr. Mohammed.

Given everything you know now, do you also think that this bill will create two classes of refugees or asylum seekers: people who, like you, have the courage to cross the border in an irregular way and in extremely difficult circumstances—which you told us about today—and people who enter Canada in the regular way, at prescribed entry points? Do you think the creation of these two classes of refugees is a good thing, when we know that every refugee needs protection and asks for asylum because his or her life is in danger?

[Seidu Mohammed]

This is trying to eliminate the people who have followed a claim in the United States or anywhere across the country or around the world. This is not a law that should be passed. My understanding is that this bill is about trying to eliminate refugees who make claims in a different country. The ones who come here who did not make a claim in a different country will get a turn to go to a judge to tell their story, but the other ones have to fill out all the applications for immigration to determine whether they will be accepted or not. This bill is trying to eliminate those who have already made a claim. They won't get a chance to make their claim in front of a judge, which is not good. Both sides need to have a fair hearing.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Thank you.

[The Chair, Liberal, Wayne Easter]

Thank you.

We'll go to Mr. Fragiskatos, and then Mr. Richards.

[Peter Fragiskatos, Liberal, London North Centre, ON]

Thank you, Mr. Chair.

Thank you to all witnesses for being here.

Mr. Bourque, I'm particularly interested in your points around increasing the withdrawal limit from $25,000 to $35,000 for first-time homebuyers. This is something I know realtors have been pushing for, as you alluded to in your comments. In fact, I remember that this point came up in one of the first meetings I had with real estate agents in London, before and shortly after being elected. There are a lot of great real estate agents, as you know, in the London-St. Thomas area. I know you were down for their recent AGM. I'm sorry we didn't get a chance to chat there, but I'm glad you're here today.

On this question, though, of increasing the withdrawal limit, one of the criticisms that has been raised—certainly colleagues in the NDP have brought it up, but some others have, too—is that it is a measure that will not create much of a dent because, as the argument goes, who has RRSP at the levels of $25,000, or even $35,000 now, as the new withdrawal limit comes into place? For me, it's a tool in the tool box. It is certainly not a panacea, but it is an option that has always been available, but now it's improved.

Can you comment on the criticism I just cited? It continues to circulate, and I think it's unfair, quite frankly.

[Michael Bourque]

This is a program that we've long advocated for. The reason is that people do save in their RRSP. I would encourage the committee to invite representatives from the banking industry to find out the rates of saving. In the reports that I have seen, it's higher than you'd think. In the use of RRSP for the homebuyers plan, it is a quarter of all users using the maximum. The increase that we requested and that is in this budget is really just reflective of inflation, so it was overdue.

The other part of it is that I don't think the impact has been well understood with regard to the extension for these life circumstances. In those cases, I think you'll find very significantly high rates where people have RRSPs and the ability to access those funds will mean that people will be able to stay in their home and keep their kids in their home through a marital breakup. That's pretty significant. The numbers are there, sadly, because there are a lot of divorces in Canada; that's why were estimating that 25,000 people are accessing this measure per year.

First of all, on the regular use of a homebuyers plan, it has a good take-up. People are saving. Young people are saving. I have two millennial sons, and they both have RRSPs. They are pretty disciplined about it. It's something they learned the value of early on, and not just from me. It's a measure that will help people access home ownership and at the same time reduce debt. There has been great concern from the policy-makers, in particular the Governor of the Bank of Canada, about personal debt. This is a measure that helps people acquire a home with less debt.

[Peter Fragiskatos, Liberal, London North Centre, ON]

I'm glad you raised the example of millennials. I know you're talking about your own sons, but I think it goes to a larger point. There needs to be some myth busting about the habits of millennials. Millennials save, and furthermore, they also want to buy homes.

You might recall a few years ago there were theories being put forward by academics like Richard Florida. This is not to disparage his work, because I think he and others who have talked about the creative class are on to something, and it is serious academic work that they've carried out. But one of the arguments they brought forward was that millennials didn't want to buy homes. They didn't want to drive cars. Specifically with relation to home ownership, the idea was that they were very happy to rent a loft or something along those lines. As long as they were downtown with transit nearby and good access to arts and culture, they would be happy.

As it turns out, and as you've made clear today, millennials want to buy homes. They wish to save. Therefore, increasing the RRSP withdrawal limit is a prudent measure. I mean, you don't have to confirm that; you've made that clear today.

[Michael Bourque]

The only point I would add is that millennials are up to 38 years old now.

[Peter Fragiskatos, Liberal, London North Centre, ON]

Yes.

[Michael Bourque]

A lot of them have been saving with RRSPs. If you're employed, that's usually how you.... People don't have defined pension plans anymore. They save through RRSP vehicles. If they can borrow from themselves first to access a new home, that's of benefit to them. You're right that myth busting is required. That's why we undertook studies to look at millennial populations to see what it was they were interested in. We did a study last year—Mr. Sorbara was kind enough to invite us to his housing caucus—and we repeated that research early this year. The findings are equally strong, and also equally strong with new Canadians.

[Peter Fragiskatos, Liberal, London North Centre, ON]

Thank you very much. I just turned 38 a few days ago, so you made me feel young. Forty is two years away, though, so reality sets in.

Mr. Milligan, I know the focus of your testimony this morning is the GIS. If I have time I will ask you a question about the GIS, but I do want to ask you a question before that on general principles here with respect to budgets and balanced budgets. You've been quite open on focusing on this issue, talking about debt-to-GDP ratio and things along those lines. Specifically, I want to ask you a general, but important question.

There are two currents of thought, roughly speaking, in Canada. One would advocate that we continue to invest in people by investing in infrastructure, our indigenous people, students, science and research, and certainly the GIS fits into that as an important social policy. While we would carry a deficit, investing in people is the way to really make sure that we have good, strong economic, and quite frankly, social health in the body politic. The other current of thought is that we should balance the budget at all costs, and do so immediately.

What would be the consequences, the economic consequences since you're an economist, but also the social consequences of balancing the budget immediately? For example, if in 2019 we carried a balanced budget at all costs, what would be the result of that?

[Mike Lake, Conservative, Edmonton—Wetaskiwin, AB]

I have a point of order.

[Prof. Kevin Milligan]

I will preface my remarks by saying—

[The Chair, Liberal, Wayne Easter]

Mr. Milligan, just—

[Prof. Kevin Milligan]

—on both fronts that you suggest, both the financial impact and the social impact—

[The Chair, Liberal, Wayne Easter]

Mr. Milligan, can I get your attention for a minute?

[Prof. Kevin Milligan]

Sorry.