Finance Committee on Oct. 3rd, 2016

[Raj Grewal, Liberal, Brampton East, ON]

Thank you, Mr. Chair.

Mr. Friesen, you recommend taking away the refugee loan because we're one of the few countries in the world that has this interest-bearing refugee loan. What's the default rate on that?

[Chris Friesen]

For the default rate, I think the latest evaluation that the government did on the loan program showed that about 68% repaid it.

[Raj Grewal, Liberal, Brampton East, ON]

That's 68% who repaid it and 32% did not.

Thank you.

[Chris Friesen]

Just to add a point there, the Syrian government-assisted refugees of course didn't have the loans, but every other government-assisted refugee has a loan.

[Raj Grewal, Liberal, Brampton East, ON]

Yes, and that caused some problems between Syrian refugees who came before that announcement and those who came after.

[The Chair, Liberal, Wayne Easter]

Thanks very much to all of you for your presentations and also for the briefs you've forwarded.

We will suspend and go to the open mike session in about 10 minutes. I think there are three people. We'll give people three minutes or thereabouts. There are no questions, but they can get their points on the record so they can be considered in the final report of the committee.

Thanks to all of you. We much appreciate your efforts in getting here.

[The Chair, Liberal, Wayne Easter]

Can we come to order?

We'll go to the open-mike session. I think people were told that they would have a couple of minutes, but we'll give them three. As I indicated before, it's for them to get their comments on the record.

To the people making presentations, perhaps you could hang around afterward. We're not in a big rush getting out of here, and members might want to talk to you on the side.

Ms. Dugas, the floor is yours.

[Gail A. Dugas, As an Individual]

Thank you very much.

Thank you for opening the committee to public input. It's really important and very refreshing.

We have submitted a brief to the committee. We hope to have a place at the table later on as you continue with your hearings. Today, however, I want to draw your attention to the unlevel playing field that is our tax system and how it impacts some of the issues you heard about today.

The media has been going wild this week with stories about Donald Trump not paying taxes. There are other stories about KPMG, Google, and Apple and all the offshoring that's happening. We want to tell you that it's not just Google and it's not just KPMG and it's not just Donald Trump. Tax avoidance by multinationals and very wealthy Canadians happens in Canada every single day. It is enabled by tax lawyers and by the financial industry. The current rules are too vague. Even those organizations admit to that and are asking for changes. That small group of individuals, though, has funnelled $270 billion of untaxed Canadian money offshore. They too are sending a message that it's smart to avoid taxes. Even when Canada has the second-lowest corporate tax rate in the G7, it's still happening, and it's getting worse every year.

It makes sense to Canadians that profits made in Canada should be taxed in Canada. Small and medium-sized businesses, as you've heard today, are doing that for the most part, but that policy should also apply to Canadian multinationals and some of the big digital companies that make money here but do not pay tax here because of the regulations. So right now that's not happening.

One of the things we're concerned about is that the economy is changing, and digital companies like Google and Netflix are using those regulations because we haven't caught up. Those tax rules haven't caught up, and the tax-dodging industry knows it.

We're really happy that we have this opportunity to remind you of that situation and to tell you that there are three ways that we think the government could raise additional revenue: close those tax loopholes, stop that corporate offshore tax-dodging, and change the rules so that online companies pay corporate tax and GST on Canadian profits. Canada is one of the largest users of online products in the world. We're crazy for the Internet, and yet a lot of the money that's being made here is not being taxed here.

Those options, if we fully implement them, could raise an additional $20 billion annually. That should help answer some of your concerns about balancing the budget. This morning you heard from some very hard-working and very innovative and creative British Columbians. We hope you advise the finance minister of our recommendations so that the tax system works for all of them.

Thank you.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Gail.

Ms. Marshall, you are next.

[Teresa Marshall, As an Individual]

Thank you very much.

Greetings to the Chair and esteemed finance committee members. Welcome to the sunny Okanagan; I hope you get a chance to enjoy a little bit of it before you have to go on to your next stop.

My name is Teresa Marshall. I address you today as an independent Canadian citizen, a resident of Kelowna, and a mother.

I believe the issue that this government needs to address in the upcoming budget is the issue of economic inequality. I believe the solution lies in tax justice. On the way here this morning, and every day in Kelowna, I pass numerous homeless people. There's no reason for homelessness to be here in one of the most well-off cities, in one of the richest provinces and richest countries in the world. Through improved tax policies, I believe this government will be able to fund and deliver on its human rights obligations to Canadian citizens in the form of affordable public housing, health care, education, child care, transportation, clean water, and sanitation.

I want to congratulate this government for making efforts to deal with wealthy individuals in the issue of tax avoidance, but much more needs to be done about corporations that represent up to two-thirds of the tax avoidance problem we see today.

Currently, ordinary Canadian taxpayers and small and medium-sized business enterprises are paying a much higher effective tax rate than the very rich and corporations. This is a long-term change in the ratio of tax burden between individual citizens and business in Canada, and that's not fair. It's estimated that Canada is losing $7.8 billion a year to tax havens. That alone would fund a universal national public child care program.

I want to make a note about the issue of child care, as a mother. It's my understanding that in Quebec, which is the only province which has an affordable, accessible child care program, in the time that that has been in place the government recouped 40% of its initial investment in the first year, which is an incredible return rate—I don't know many other investments that return that—and within 10 years the number of women in the workforce was the highest in Canada, after that child care program was put in place. And most remarkably, Quebec reduced its poverty rate by half. That is truly an investment in generations for generations.

If we make sure that multinational corporations and the very rich pay their share, we will have that kind of funding for child care, for example, because for now, parents like myself are looking at paying for child care. The cost for one child in B.C. can be upwards of $1,500 month, the same amount as for rent or a mortgage. We are paying more to have our kids in child care than it will cost to put them into university, and that doesn't seem fair.

I also think that if we apply some of these progressive tax policies, we could end fossil fuel subsidies rather than subsidize LNG plants, for example, that can endanger the Skeena River, one of the largest salmon rivers left in the world, or massive hydro dams, like the Site C dam that will flood some of the most productive agricultural land in B.C., and we could invest in truly clean and sustainable energy alternatives.

Thank you.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Teresa.

The last presentation will be from Mr. Warner.

[Cael Warner, As an Individual]

Good morning.

My name is Cael Warner. I am a student member of the UBC Okanagan chapter of Engineers Without Borders.

Engineers Without Borders is a non-government organization that invests in people and ventures creating a thriving sustainable world. Our community includes four university and professional chapters with 2,500 active members. We provide seed funding, talent, and mentorship to social enterprises throughout sub-Saharan Africa.

I'm speaking to you today because the Government of Canada is committed to restoring and renewing international assistance to focus on the poorest and most vulnerable people. Canada has taken steps to re-engage the world stage. While these announcements are welcomed, Canada's recent development assistance is the lowest of any modern Canadian government, in comparison to our G7 counterparts, impairing Canada's ability to implement the 2030 agenda for sustainable development goals.

In budget 2017, I ask that Canada commits to predictable increases to the international assistance envelope of 10% annually to the end of the 42nd Parliament, with a publicly available timetable for doubling the envelope by 2023. This would benefit Canada in implementing the 2030 sustainable development agenda.

Strong official development assistance commitments align with this ministerial mandate and are a decisive stepping stone toward early progress in the sustainable goals.

Thank you so much for your time.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Mr. Warner.

That concludes our session in Kelowna.

The meeting is adjourned.