Finance Committee on Feb. 16th, 2016

[The Chair, Liberal, Wayne Easter]

I call this meeting to order.

Pursuant to Standing Order 83(1), this is a meeting on pre-budget consultations for the 2016 budget.

I welcome the witnesses here. I know you had fairly short notice for getting your submissions together, so we really appreciate the fact that you did it on short notice. I will say, given time constraints, our first round of questioning will go to six minutes instead of the regular seven. I'm going to hold the witnesses to five minutes, and we'll have to cut you off at that stage, just so you know ahead of time. I believe that was in the clerk's letter.

Welcome, and I believe the first one up is Mr. Queenan with the Canadian Alliance of Student Associations.

[Erik Queenan, Board Chair, Canadian Alliance of Student Associations]

Good afternoon, Mr. Chair, committee members, fellow witnesses, and members of the gallery.

My name is Erik Queenan, and I'm the chair of the Canadian Alliance of Student Associations and the president of the Students' Association of Mount Royal University in Calgary. I'm pleased to have the opportunity to speak before this committee on behalf of CASA and our 21 member associations representing over 250,000 students across Canada.

CASA has worked closely with this committee in the past by presenting on issues pertaining to post-secondary education. Recent examples include unpaid internships and youth employment. We look forward to continuing this collaborative relationship.

I want to begin by broadly discussing CASA's approach to advocacy, which is rooted in evidence-based research and is driven by the work of our student members. Our organization works on the principle of creating a post-secondary education system that is accessible, affordable, innovative, and of the highest quality. We believe we have a significant role to play in addressing the inequities that exist in our post-secondary system, primarily by ensuring that groups that have been traditionally under-represented are able to gain access to an education. We strongly believe that progressive public policy addresses these imbalances by recognizing that different students have different needs.

CASA is also cognizant of the financial realities of this country and the budgetary constraints that all governments face. Investment in higher education is necessary, but we must prioritize those areas that will have the greatest impact. That is why we strive to provide policy options that are cost effective and deliver the greatest impact upon investment.

Moving into our budget priorities for the year, CASA recommends the government increase the value of the Canada student grant program by 50% and expand eligibility to graduate and doctoral students. This would build on the past success of the CSGP in ensuring that Canadians from more backgrounds can access post-secondary education. Through the CSGP the federal government provided over 320,000 college and undergraduate students with non-repayable, upfront grants. The CSGP, introduced in 2009, offers $250 per month to students from low-income households and $100 per month to students from middle-income households.

Grants continue to be extremely effective in promoting accessibility and reducing debt levels. This program is effective and deserves further support through increased funding and expansion to the one group of students that are still excluded, those studying at the graduate level.

Furthermore, CASA calls on the government to deliver on its promises to indigenous students by promoting the post-secondary student support program, or PSSSP. This means removing the 2% annual cap that has constrained the program from reaching the number of indigenous students who'd otherwise be attending post-secondary education. Closing the education gap for indigenous populations is an important step in reconciliation and must be a national priority for this government. As a country we not only have a legal obligation in addressing these issues, but a moral one as well.

Lastly CASA is calling on the government to increase the Canada student loans program's weekly limit from $210 to $245. Student loans assist more than 470,000 students every year, but this limit has not been updated since 2004, which has left students struggling to afford their education. At the moment it is estimated that nearly 41% of Canadian student loan borrowers have financial needs that exceed the funding available, and that figure is going to continue to grow every year that low limits are not increased.

Faced with this funding shortfall, students must deal with troubling alternatives. Some students turn to private loans where they face high interest rates and little repayment flexibility. Others turn toward their families who must often sacrifice their own financial stability.

In a poll conducted by Abacas Data, CASA found that one-third of Canadian PSE families reported taking funds out of their retirement savings in order to afford their children's education, while another 14% went as far as remortgaging their homes. The cost of education is no longer just a student issue, but an issue for Canada's middle-class families as well.

Our brief, which has been submitted, captures the rest of our priorities, including a reinvestment in research, a call for investment in experiential learning, and an increase to the repayment assistance plan income threshold. These asks have been fully costed, and we believe they can be met within the current fiscal environment.

CASA appreciates the opportunity to work alongside this committee in a positive and collaborative manner. We've provided this committee with a broad spectrum of sensible and transformative policy recommendations that will positively impact students across this country and Canada's economy, now and into the future.

Thank you very much and I look forward to your questions.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Mr. Queenan.

We'll turn to Ms. Gray, Canadian Association of Retired Persons.

[Janet Gray, Chapter President, Ottawa Chapter, Canadian Association of Retired Persons]

Good afternoon. Thank you, Mr. Chair, and thank you for the opportunity to present CARP's pre-budget recommendations.

My name is Janet Gray. I am the chair of Ottawa's CARP chapter, one of the 60 chapters across Canada. CARP, for those of you who aren't aware, is a national, non-profit, non-partisan organization with 300,000 members.

Retirement security and health care are the top priorities for our members. However, retirement income insecurity, even poverty, is a reality for many older Canadians, despite working hard and contributing to the country throughout their working lives.

In the past 20 years, the poverty rate among seniors has tripled from 4% to 12%—between 1995 and 2012. This is worse for single seniors, especially single older women. Eighteen percent of single women over 65 live in poverty with incomes under $20,000 per year, and a critical mass lives well below the cut-off. Over 30% of single women between 45 and 64 are also low income, and 70% of them are part-time workers and 66% are minimum wage earners.

The combination of OAS and GIS is a determining factor in keeping older Canadians out of poverty, especially for single seniors, but it does not close the poverty gap entirely. There is a significant gap that needs to be bridged between the low-income measure and the current OAS and GIS benefits, a gap that is unlikely to be filled by savings and private pensions.

Therefore, CARP recommends the government restore the OAS eligibility back to age 65, increase the GIS especially for single, low-income seniors, increase the OAS and GIS to bridge the poverty gap, and introduce the seniors index tied to wage rates. Together these measures will help to prevent poverty in old age for all Canadians.

The retirement landscape has changed. Canadians are faced with financial challenges, disappearing workplace pensions, and uncertain economic times. Two-thirds of working Canadians, 12 million people, do not have workplace pension plans, and Canadians are increasingly unable to save sufficiently for their own retirement. The CPP currently provides Canadians, on average, only $7,000 in benefits annually. It replaces 25% of earnings up to $51,100, but falls short of the 70% of pre-retirement income needed for retirement. The government has an opportunity to help Canadians save better for their retirement.

CARP recommends the government fulfill its promise to work with the provinces to enhance the CPP, but a modest increase to CPP alone will not cover the 70% replacement income needed for retirement. Therefore, CARP also recommends a supplementary universal pension plan that would work like the CPP with mandatory enrolment, independent of government or single employers, using the existing payroll deduction mechanism, employing professional management, and focusing entirely on optimal performance.

Canadians expect the health care system to deliver appropriate care that is comprehensive and responsive to their needs across the full health care spectrum, from acute care to chronic care to end-of-life care. However, the health care system falls short of Canadians' expectations and needs.

One in four Canadians, just over eight million, provide care to a chronically ill or disabled loved one. They face various challenges including loss of income, caregiving and medical expenses, mental and emotional distress, and health decline. Three-quarters of caregivers provide care to a person aged 65 or older. As the population ages, more Canadians will become caregivers.

Home care is fragmented across the country. Often the programs are unavailable and national standards of care and access do not exist, creating wide variances in the amount, quality, and access to care between provinces and sometimes even within a province. On average, a person aged 65 or older uses six prescription drugs that can cost, out of pocket, thousands of dollars annually. Prescription drugs are necessary treatments to prevent deterioration, even death, but at present, they are an insurmountable financial burden for many Canadians.

CARP calls for a system-wide transformation of the health care system in which patient needs are prioritized, national standards of quality care exist, and timely access is available regardless of postal code.

As a first step, we recommend the government make the federal caregiver tax credit refundable to benefit those with modest or no taxable income, invest the promised $3 billion in home care, create national standards of care and access, and establish a national pharmacare plan that ensures accessible and affordable drugs.

The federal government identified retirement security and health care as priorities during the recent election. The 2016 budget is an opportunity for the government to fulfill its promises to Canadians, create a clear pathway to retirement income security, and transform health care for all Canadians.

Thank you.

[The Chair, Liberal, Wayne Easter]

Thank you very much.

Turning to the Canadian Association of Social Workers, we have Fred Phelps, a Saskatchewan boy at heart.

[Fred Phelps, Executive Director, Canadian Association of Social Workers]

Good afternoon.

On behalf of the board of the Canadian Association of Social Workers and our provincial and territorial federation partners, I would like to thank this committee for choosing to hear the perspective and budget priorities of the social worker profession.

First, CASW is tremendously pleased that this new government has demonstrated a commitment to bringing co-operative federalism back to health and social care in Canada. To this end, CASW was pleased that the federal minister responsible for families, children, and social development has chosen to already meet with his provincial and territorial counterparts, a meeting CASW has called for but which has not taken place since 2006.

Finally, we are deeply encouraged by the commitment of this new government to develop a new health accord, and we sincerely hope we will also address “social” in this health accord. This tectonic shift in leadership comes not a moment too soon if we are going to address the growing inequality gap in Canada.

We have three main recommendations.

First, implement a new social care act for Canada. Currently, we cannot determine how federal dollars for social services are being spent, as there is no accountability or measured ties to the Canada social transfer or other social investments. We should not invest more without knowing how we already spend.

A new social care act for Canada proposes principles similar to that of the Canada Health Act to guide the social transfer and other social investments, making possible a national strategy with shared performance indicators and outcomes. The proposed act would help guide the provinces and territories in developing priorities and policies that best fit their unique needs, while helping the federal government understand where dollars are being spent, receive recognition for those investments, and in turn, know where more target investments might be needed. We can't develop good policy without good information.

Our second recommendation is to consider the potential of basic income. CASW welcomes the recent comments by Minister Duclos in noting the merits of basic income. To this end, CASW recommends that the federal government consider developing a targeted basic income. CASW believes it should be targeted initially to provide support to those who are the most economically vulnerable because of age, labour market status, or differing levels of ability, and could build upon existing negative income tax mechanisms. When you make comprehensive upfront investments, you benefit down the line.

CASW cautions that not all basic income models are created equal. The implementation of a basic income should not be cause to eliminate all other social assistance programs and strategies. A basic income would be foundational to a national poverty reduction strategy when simultaneously paired with policies such as a national affordable housing strategy and child care strategy. Compassionate policy is also cost-effective.

Our third recommendation is to support Canada's evolving needs with targeted strategies. We know that Canada's population is aging rapidly, and senior women, in particular, are increasingly economically vulnerable. Health care costs are soaring and demands on the system have shifted from acute to long-term needs.

CASW, in alliance with the Canadian Medical Association, is calling for a multi-year, multi-faceted national seniors strategy with the “Demand a Plan” initiative. Canada's needs are changing.

Canada also needs to better address Canadians' mental health. National public and private campaigns to end the stigma encourage Canadians to seek help, but this must also be accompanied by an equal increase in services to access care. The Mental Health Commission of Canada suggests that funding for mental health should be increased from 7% to 9% of total public health spending. Currently the federal share of provincial-territorial spending is approximately 22%. We recommend this be increased to 25% of total public health care spending.

As well, CASW supports this government reaffirming the renewal mandate of the Mental Health Commission of Canada. Canadians are making mental health a priority and we need to follow suit. Mental health infrastructure must also be bolstered to support the social determinants of health. Increasing and investing in the social determinants of health is prevention.

CASW looks forward to working with this government to bring compassionate and cost-effective policies to Canada.

Thank you again. I look forward to answering any questions you may have.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Fred.

We now have Mr. Kelly, with the Canadian Federation of Independent Business.

[Daniel Kelly, President and Chief Executive Officer, Canadian Federation of Independent Business]

Good afternoon and congratulations to the new parliamentarians.

For those who don't know us well, we represent 109,000 small and medium-sized businesses across Canada. All of them are independently owned and operated, and we are strictly a non-partisan organization.

I did want to share with you a little bit of data. I've put a deck in front of you today.

As you can see on slide 3, our business barometer shows that small business optimism in the economy is dropping and dropping rather quickly. We really do need to see some messages of reassurance and some policies to reassure Canada's job creators. As you all know, it is small and medium-sized firms who do disproportionately the lion's share of the job creation in the country and are usually the slowest to fire in economic distress. They are under intense pressure right now and need your help.

The good news is that we actually saw a little bit of a change in the last month where there are more businesses now predicting to hire than to layoff. That is good news. It is a bit of a departure from the previous month's data. There is an opportunity here to continue to provide some positive messages for the economy in the months ahead. The total tax burden remains our number one priority as an organization. Certainly, our members, through our polls of them, share with us that this is top of their minds.

Just getting into the issues, we've put out seven key priorities for the federal government for the months and years ahead. One is to ensure continued access to the small business corporate tax rate. We congratulate all parties, in fact, all four main national political parties committed to reducing the small business corporate tax rate from 11% to 9%. We also extend our congratulations to the new government for following through on the first tranche of that with a reduction from 11% to 9.5% that went into effect as of January 1.

We are a little bit freaked out with the prospect for some clawing back of access to the small business corporate tax rate. There have been some messages from the new government that it may limit some of the businesses who currently do take advantage of the lower small business corporate tax rate. Some talk about perhaps professionals being disallowed from accessing that rate. That is a bit of a worry and we're hoping to get some messages of reassurance on that front in our meetings in the months ahead.

Our biggest concern right now is the prospect for CPP expansion. I'm often asked what the top thing is that governments can do to make the economy better. My top piece of advice is don't make it worse. I must tell you that Canada pension plan expansion would do that. It would have a huge and immediate negative impact on small firms.

We are pleased to hear some messages today that the Ontario government has decided to put on hold at least the first year of its very disturbing plan to implement the Ontario retirement pension plan. That is good news that it is going to take a bit of a break from that to allow the CPP discussion to take place nationally. We're pleased that the federal government may have had a role in convincing the Ontario government to perhaps put the brakes on that, so compliments there.

I do want to share with you new data that is out today from the Ontario government. It shows that 59% of businesses are expected to freeze or cut wages in response to the ORPP. This isn't CFIB data. It parallels it almost exactly, but this is Ontario government data that shows that businesses will reduce wages in response to the ORPP. We also believe very strongly that there will be fewer jobs for Canadians should the ORPP or CPP expansion go into effect.

Skipping quickly to employment insurance, we're pleased to see that there will be an overall reduction planned for 2017. It is about half of what was promised in previous budgets.

I do want to make note though that for small firms in Canada—and this is something very few people know—because of the small business job credit that's in place for 2015 and 2016, when that comes off next year in 2017, employment insurance rates for the smallest businesses in Canada will go up under the new proposal.

That could be devastating when you're counting on those very same small firms to create jobs to give the economy a boost. It won't be a reduction for them. It will actually be an increase for them unless something happens.

We're urging you to either continue the credit or to implement a permanent lower rate of employment insurance for small businesses, perhaps on, say, the first $500,000 in payroll.

[The Chair, Liberal, Wayne Easter]

I'd ask you to sum up in 30 seconds, please.

[Daniel Kelly]

Very good.

I've also made some recommendations on red tape, on Canada Revenue Agency. We do want to give a special plug here for the Liberal Party's previous bill to allow succession planning, to make that easier for small firms. Emmanuel Dubourg put forward a private member's bill. We're asking you to put that into practice as well as control of government public sector wages, benefits, and pensions.

Thank you very much for your time.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Mr. Kelly.

Mr. Kevin Lee, with the Canadian Home Builders' Association.

[Kevin Lee, Chief Executive Officer, Canadian Home Builders' Association]

Thank you.

The 8,500 member companies of our association across the country are in the business of building new homes and renovating existing ones, working hard to develop the communities we call home. As you know, the residential construction industry has been a major source of stability in Canada's economy over the past decade, through good times and bad, and this needs to continue.

By several measures, residential construction is Canada's top industry, employing over 900,000 workers, providing over $50 billion in wages, and accounting for over $125 billion in economic activity. Residential construction benefits all regions across the country, active in every single community, large and small. It accounts for $35 billion in exports.

For Canadian middle-class families, home ownership is a cornerstone of social and financial well-being. Some 70% of Canadians own their homes. While there has been much made of debt-to-income ratios, we need to look at other statistics as well. Thanks in large part to strong and sound housing markets and Canadians' wise investments in their homes, Canadians' net worth to income ratio is at a record high of 768%. Canadians own outright over $3 trillion in housing assets. It's clear then that home ownership is a source of financial strength for most Canadian families.

Housing market conditions across Canada are decidedly varied. While some parts of the country continue to see strong housing markets, others are weaker. Still, the issue of the housing affordability challenges facing young Canadians is a harsh reality in today's economy. Many factors have contributed to drive up the cost of housing, and there are new fundamentals at play. Many under-recognized factors are driving up demand, while many government policies are limiting supply, directly or indirectly, and driving up house prices in other ways.

The result is affordability problems, especially for young Canadians. Four in five millennials want to own their own home one day, but right now we're in danger of locking them out. Given that owning a home is a key to entering the middle class, Canada needs to take action, and there is plenty that we can do.

CHBA therefore recommends that the federal government focus on three areas with respect to housing: affordability for first-time buyers, climate change, and finally, jobs and innovation.

First, on affordability, the millennial generation faces a challenging job market, stagnant incomes, and high home prices, particularly in our urban centres. Lack of access to home ownership by this group, who should form Canada's middle class in the future, will impair their financial success and have ongoing negative impacts for the economy as a whole.

We therefore recommend the following.

The federal government should adjust mortgage rules by allowing 30-year amortization periods on insured mortgages for well-qualified first-time homebuyers. This is a no-cost means to help prevent young families and new Canadians from being locked out of home ownership.

With respect to taxes, municipal development taxes have skyrocketed in recent years, and hence, so has the GST charged on top of them. We therefore recommend removing the GST portion applied on top of municipal taxes in new residential development.

Related to those development taxes, federal infrastructure investment is critically important. It not only supports development but it can help avoid more local development taxes further deteriorating affordability. Accordingly, the government should reduce the burden on municipalities by increasing the federal share and allowing municipalities to contribute less than the conventional one-third of funding to the projects.

Finally, the government should reform federal tax regimes related to purpose-built rental properties, including infill projects, to encourage more affordable market-based rentals.

On climate change, where housing is actually an underappreciated Canadian success story, despite having 38% more houses in Canada than in 1990, residential emissions overall are down 11%. New houses are 47% more efficient than they were in 1985 and this improvement hasn't been through codes but through ongoing innovation and voluntary improvement—much of it thanks to government and industry collaboration in research and development.

New housing is doing very well and will continue to improve. We therefore do not recommend more stringent codes unless they can be shown to have no impact on costs and affordability. New housing can and will continue to improve its energy performance, voluntarily, with excellent success.

There's a huge opportunity in the energy retrofitting of the existing housing stock. Every dollar invested in the average existing Canadian home will yield four to seven times more GHG reductions than the same dollar spent on a new home. CHBA therefore recommends a permanent refundable home renovation tax credit for energy efficient retrofits using the government's EnerGuide rating system. Improving the energy performance of existing homes offers the greatest and most cost-effective benefits to homeowners, utilities, governments, and society as a whole.

Tax credits that require receipts for the improvements made would also help address the underground cash economy, a key policy area for protecting Canadians, supporting honest businesses, and ensuring taxes collected support government programs.

Finally on jobs and innovation, our sector, which employs 900,000, will see over 118,000 skilled workers retire over the next decade. Support for skilled jobs and research to support innovation and productivity will be key. Specifically we recommend that federal training support be expanded to all of those pursuing careers as skilled workers.

The government should encourage innovation by focusing federal research support, including that for codes and standards on better built houses that cost the same or less. Innovation and responsible regulation can continue to improve Canada's excellent housing, but we need to do this without continually increasing costs and damaging affordability.

I'll leave it there. Thank you very much for your time.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Mr. Lee.

Mr. Marotte.

[Hans Marotte, Lawyer, Mouvement Action-Chômage de Montréal]

Thank you very much for the invitation.

People often say that if you want to know where you are going, you have to remember where you've been. And so I would like to remind you of a commitment made by the House of Commons in 1989. It was a unanimous commitment made by all parties. They voted for the abolition of child poverty by the year 2000. The organization Campaign 2000, which tracks this situation, reports that in fact, child poverty has increased markedly since 1989. We are consequently forced to recognize that as a society and as a government, we have failed.

We also have to ask ourselves why we failed. Campaign 2000 identified two major issues. The organization pointed out that the Government of Canada stopped investing in social housing. That is one of the reasons why child poverty worsened. It also pointed out that there had been some deep cuts to employment insurance over the past 25 years.

I don't want to put salt in the wound, but one has only to think of 1990, when the Conservative government stopped contributing to the employment insurance fund. In 1993, the Conservative government managed to completely exclude from employment insurance anyone who voluntary left a job or was dismissed for cause. In 1996, the Liberal government doubled, if not tripled, the eligibility requirements for benefits. One has only to think of the Harper government EI reform in 2012. All of these measures impact families, children and workers.

The Mouvement action-chômage de Montréal, which has been in existence for 45 years, defends and represents people who have problems with employment insurance. These are people who are simply between two jobs. That is what being unemployed is: it is being between jobs. Currently, if there were 100 unemployed persons in this room, fewer than 40 of them would be entitled to benefits. We think that is a problem.

In the context of this pre-budget consultation, we propose that you change things to make the employment insurance program truly accessible. The program should do the work it was created to do. In the final analysis, there will be repercussions at the budgetary level.

When someone in Red Deer, Montreal or Gaspé loses his or her job, he loses an income. If we can give him employment insurance benefits, he will not use them to purchase luxury goods or put them in a tax shelter. He will spend the money in his community. This money will have a direct impact on his life and on the life of his community. We feel that making the program accessible is really very important.

There is another very important thing. I invite you to read the “Employment and Insurance Monitoring and Assessment Report”, a guide the department publishes each year, in which it assesses the effectiveness of the employment insurance program and the means by which the program manages to pay benefits to the men and women who are entitled to them. Each year, there is a decrease in that effectiveness. Currently, the program is not managing to pay the benefits within the prescribed time. The employment insurance program, that administrative machine, is supposed to pay benefits within 28 days. Unfortunately, that objective is attained in only about 7% of cases. This has repercussions on communities and on individuals. Year after year, the “Employment Insurance Monitoring and Assessment Report” informs us that there are fewer resources in the machine. Accessing the program has become more complex, and people receive their benefits later.

I hope you will also look at the Social Security Tribunal of Canada. When people apply for benefits and their claim is denied, they have the right to appeal the decision.

In my opinion, in 2012 and in the years previous to that, the Canadian program was one of the best justice systems in the country. You could obtain an appeal hearing in 30 days or less, and a decision was handed down two or three days later. It was a model of efficiency, it did not cost much, and people had access to justice.

I plead before the Social Security Tribunal of Canada. Currently, hearings take place within three, four, five or six months. I don't know about you, but personally, I could not live without a salary for four, five, six or seven months.

In light of this, we implore you to improve the functioning of the Social Security Tribunal of Canada. The current situation impacts people and communities, but it also has budgetary consequences. And yet, it would not cost much to improve it. In fact, the previous system did not cost any more and it was extremely effective.

I can answer your questions in more detail, if you need any clarifications.

Thank you very much.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Mr. Marotte. I think some of us around here have had the same experience before the tribunal. I know I have.

In any event, going to questions, we are doing six minutes instead of seven, and we will start with Ms. Dzerowicz.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you, Mr. Chair.

With your permission I'm going to ask two separate groups two questions and then have people respond.

First, I want to say thanks to all the panellists. You did an absolutely wonderful job. I've learned a lot, and thank you so much for making the time to come here today.

My first question is for the Canadian Association of Retired Persons, Ms. Gray. I live in a downtown west riding. I represent Davenport. We have a lot of seniors there. They are desperate to try to continue to afford to live in an area in which they spent most of their adult lives. They deal with a lot of issues around affordability and around senior isolation, so a lot of what you spoke to resonates with me.

I'd love for you to respond to two things, and I have two quick questions. One is about how our government has committed to lowering the retirement age from 67 to 65. How will that benefit seniors and the overall Canadian economy? That's the first part of my question for you.

The second part is, as was mentioned today in one of the presentations, the Ontario government has introduced a new pension plan and the federal government is committed to working not only with Ontario but indeed at the national level on an enhanced CPP. Can you talk to us about how an enhanced national CPP will benefit your members? Those are my questions for you.

If I can, I'd also like to direct a question to Mr. Kelly of the Canadian Federation of Independent Business. In my riding I also have an extraordinarily vibrant and innovative class of businesses. They are small businesses. They're wonderful. They're energetic. They're breathing huge amounts of life and innovation into the Davenport community. One of the things that has surprised me—and I will confess it's what you list on page 5—is the shortage of qualified labour. I find it interesting that at a time when we have a lot of youth looking for jobs, we have unemployment, we have a lot of programs in place from apprenticeships to trades, I find it remarkable that is one of the top five issues. What federal actions can be taken in this area?

I'd love to hear from you, and that's it, Mr. Chair.

[The Chair, Liberal, Wayne Easter]

Okay, thank you.

Who wants to start on the age 67 to 65? Ms. Gray.

[Janet Gray]

What the difference is between ages 65 and 67 is essentially a two-year gap in income. People who want to retire at age 65, if they have little work experience—and a lot of the older generation may have because they've been stay-at-home parents—find that all of a sudden they are at age 65, they have no CPP, and they have to wait until 67 to be eligible for OAS and GIS. There is that two-year gap. If they are able to get anything at all from CPP, two years later they can supplement that with the OAS and GIS. That was a critical two-year period for a lot of people.

For the ORPP and the CPP, our preference certainly would be for a CPP enhancement. In light of that not happening, we've reached out to the provinces to ask what they can do to overcome this obstacle. Some of them are willing to take that on and some are willing to look at it, but our overall preference is to have a CPP enhancement.

[The Chair, Liberal, Wayne Easter]

On the skills meeting the jobs question...?

[Daniel Kelly]

It's a very interesting question.

There is a lot that can be done, and one of the things we liked best about your party's platform was the EI holiday that was proposed for youth hiring. That is a terrific incentive. It's something that has been done in the past. Previous Liberal governments have implemented that. We've been strong champions of it as well. Your government promised to put in place a three-year holiday for 2016, 2017, and 2018 for youth between 18 and 24 years old. They would still pay premiums themselves but employers would have a holiday to incentivize them to create more jobs oriented towards young people.

You are quite right; there are challenges with youth employment. I have to admit we were fairly strong critics of the previous government with respect to the actions it took on the temporary foreign worker program because there is an ongoing need for workers for jobs that Canadians themselves are not lining up for. I have to say that I sympathize with the young person who has gone to school for four years or eight years and now has $50,000 in student debt. The job that might be available to him or her is at a quick-service restaurant or cleaning rooms in a hotel. I can understand why he or she might choose to sit on the sidelines of the labour market for a bit in that environment, but we have to recognize that all work is noble. If we're not prepared to do the jobs ourselves, if we're not prepared to encourage our kids to take those jobs, we're going to need to bring in somebody who is prepared to do some of those jobs.

We can do a much better job as employers though, by reaching out to some of the underemployed pockets of the labour force. The aboriginal population and seniors have some potential. The youth piece is a difficult nut to crack and I have to confess there are a lot of employers, a lot of our members, who have lamented that the work ethic in Canada is generally declining. That is one of the challenges that they face as well.

Very quickly, on the CPP front, I did want to say that even the strongest proponents of CPP admit that the benefits don't actually kick in fully for forty years, so no seniors today would get a nickel more in Canada Pension Plan contributions and even those five or 10 years out would get almost nothing from CPP expansion, so this really would benefit perhaps kids like my seven-year-old son, but not any time soon.

[The Chair, Liberal, Wayne Easter]

Thank you, Julie.

Turning to Mr. McColeman—

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

Thank you, Chair, and thank you to the witnesses for coming.

First of all, Madam Gray, I just want to clarify the comments you made about retirement being at age 67. What is your understanding of the current OAS program and the changes the previous government made to it? When do they come into effect?

[Janet Gray]

That is 2023, I believe.

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

It's 2023, and they are ultimately graduated until 2030.

[Janet Gray]

Yes, they are phased in after a certain year of birth.