Evidence of meeting #56 for Finance in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was benefit.
A video is available from Parliament.
4:30 p.m.
President, Saskatchewan Seniors Association Inc.
Yes.
I've been a small business person. I ran a catering business for 43 years; I still do a little bit. I think seniors are quite aware that they worked hard all their lives, and through no fault of their own, many, many of them are at that poverty level. They're very conscious of the fact that the CPP isn't sufficient. Any rise in the old age pension runs up to $3 or $4 per month.
4:30 p.m.
Conservative
Dan Albas Conservative Central Okanagan—Similkameen—Nicola, BC
Would you say, though, that most seniors are aware that the enhancements that are proposed here will not affect them?
4:30 p.m.
Conservative
Dan Albas Conservative Central Okanagan—Similkameen—Nicola, BC
Okay. I just thought I'd ask that.
Mr. Janson, in regard to your membership, obviously with CUPE right across the country, municipalities probably have a great deal of members among your membership. Is that correct?
4:30 p.m.
Senior Pensions Officer, National Office, Canadian Union of Public Employees
Yes, we have lots of municipal members.
4:30 p.m.
Conservative
Dan Albas Conservative Central Okanagan—Similkameen—Nicola, BC
Unlike the federal government, municipalities do have to run balanced budgets. Is that correct?
4:30 p.m.
Senior Pensions Officer, National Office, Canadian Union of Public Employees
I believe so, yes.
4:30 p.m.
Conservative
Dan Albas Conservative Central Okanagan—Similkameen—Nicola, BC
Okay.
I do know from the economic fall update by the finance minister that there will be an additional cost to the federal government and that by the 2021-22 fiscal year it will almost be $1 billion. Do you think there will be an additional charge to municipalities?
4:30 p.m.
Senior Pensions Officer, National Office, Canadian Union of Public Employees
Under the CPP legislation...?
4:30 p.m.
Conservative
Dan Albas Conservative Central Okanagan—Similkameen—Nicola, BC
Yes, which they'll be having to contribute to as employers.
4:30 p.m.
Senior Pensions Officer, National Office, Canadian Union of Public Employees
I would agree with the comments of the CLC on this, that the contribution rate increase is quite modest for most municipal workers. I'd say for the vast majority of municipal workers you're looking at 1% of payroll on the employer's side. That's with the notice period of a couple of years, and then a five-year phase-in period.
4:30 p.m.
Senior Pensions Officer, National Office, Canadian Union of Public Employees
We think that's well within the realm of affordability.
4:30 p.m.
Conservative
Dan Albas Conservative Central Okanagan—Similkameen—Nicola, BC
In British Columbia, I used to be a municipal councillor. We were spending over 42% of our budget just on protective services, with the majority of it being in the emergency services, so you had police and firefighters. Obviously, those are very highly paid positions. Again, I'm worried about the sustainability for municipalities because they don't have the option the federal government does. They can't go into deficit. Inevitably, that will go toward taxation, right? That's the only way to recover it.
4:30 p.m.
Senior Pensions Officer, National Office, Canadian Union of Public Employees
This is just one line item of a very complicated municipal budget. What we expect to hear from employers is that they're going to be increasing their contributions. We're going to hear about that at bargaining tables and that's going to be part of a complicated bargaining structure, as increases in costs always are.
4:30 p.m.
Conservative
Dan Albas Conservative Central Okanagan—Similkameen—Nicola, BC
So these changes may actually cause some compromise in other positions for bargaining for your members.
4:30 p.m.
Senior Pensions Officer, National Office, Canadian Union of Public Employees
No, I'm not saying that. I'm just saying we expect to be hearing that. Our position is going to be that the CPP increases are modest and affordable. We have a seven-year to nine-year period to prepare for them. We can find 1% in a municipal budget to make that happen.
4:30 p.m.
Conservative
Dan Albas Conservative Central Okanagan—Similkameen—Nicola, BC
When you say “we” can find, you mean that the municipal governments will have to ante up that money. Inevitably, it will be coming from groups. For example, Penticton has one of the lower tax rates when it comes to charging small businesses and whatnot. In British Columbia, they range anywhere from 1.66 times, which means that compared with a residential homeowner a business will pay 1.66 more, but in areas of British Columbia they'll pay seven times more.
I'll go over to the CFIB. It's kind of like you're being asked right now to not only ante up for your own employees, or for your member's employees, but you're actually going to be asked to pass on also for the municipal costs, and the federal costs as well, I guess.
Is that correct?
November 15th, 2016 / 4:35 p.m.
Director of National Affairs, Canadian Federation of Independent Business
The cost in terms of...?
4:35 p.m.
Conservative
Dan Albas Conservative Central Okanagan—Similkameen—Nicola, BC
Obviously, taxes are going to need to be paid to pay for these increases, and in many places in British Columbia someone will pay six times what a residential homeowner will pay in taxation. It's a bit of a double hit, is it not?
4:35 p.m.
Director of National Affairs, Canadian Federation of Independent Business
It could be, I suppose, if the federal government had to raise additional taxes to then pay for CPP.
4:35 p.m.
Conservative
Dan Albas Conservative Central Okanagan—Similkameen—Nicola, BC
They have no choice. They're either going to cut services or they're going to have to increase taxes.
4:35 p.m.
Director of National Affairs, Canadian Federation of Independent Business
I won't speak to the municipal level, but federally CPP is funded, as it sits right now. If that changes five years from now, if the economy for some reason doesn't continue to stabilize, at least in growth....
That's why I introduced my presentation with the chart about employment trends. We're in an okay place but not a great place. There's no way of knowing whether five years from now, when these proposed modest increases come in, we will still be in this place. Already business owners are telling us they can't afford it.
4:35 p.m.
Conservative
Dan Albas Conservative Central Okanagan—Similkameen—Nicola, BC
Ms. Trask raised an interesting point when she said that many young people will appreciate this 40 years down the line. Maybe that's true; I guess we'll have to wait and see. Ms. Trask, I hope you're there.
By the same token, many young people are graduating with higher education now, with higher debt, and if there's not a solid job market.... Not everyone can work for government and do the good work that they do, but is there a concern that we're going to see less and less employment by your members?
4:35 p.m.
Director of National Affairs, Canadian Federation of Independent Business
As I showed in my slides, we had some very strange behaviour this past month in the barometer, in which our numbers are crossing. It is unusual. We haven't seen this in a number of years. We're hoping it's a blip. If it's not, we'll know in the end of this month's barometer. Then I think there is cause for concern.