Finance Committee on Nov. 22nd, 2016

[Angella MacEwen]

Right. It is my understanding that before 2012, after a period that they deemed a reasonable amount of time, if you can't find work at your old level, you would have to accept work at a lower level.

It was also my understanding that this was not evenly applied throughout the country. It was almost at the discretion of the staff who were hearing the case, so there wasn't a single standard, which is unfortunate. Changing that now going back I think is going to create a lot of problems, especially with the Social Security Tribunal, which is very problematic as well.

[The Chair, Liberal, Wayne Easter]

Thank you very much.

Mr. Sorbara.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

Thank you, Mr. Chair

Welcome, everybody, and thank you for your testimony.

I'm going to start with the Canadian Centre for Elder Law.

On the question of elder care or our greying population, obviously our government has done a number of things to help these individuals out. We increased the guaranteed income supplement by almost $1,000. We reversed the old age security and GIS eligibility after the Conservatives had put it to 67, and we reversed it to 65. We still have the seniors benefit index we're working on that was in our platform. We've done a number of things to help seniors out. I would love for you to comment on that one.

One of the things I would like to see maybe in the future—because we've also enhanced the CPP, which is going to be a great thing for future generations—is the potential for changing, in the next go-around on the CPP discussions, the 60% to 100% level, which would allow, if your spouse passes away, your benefits to go from 60% to 100% of the other spouse, but still maintain the cap. That has been talked a lot about as a very effective measure in the future to reduce poverty for seniors.

Can you comment on that?

[Laura Tamblyn Watts]

Thank you. I'll take the last piece first.

The Canadian Centre for Elder Law is a research and law reform institute, so we don't do advocacy. Having said that, the last comment is certainly one that we've looked at. It would be a significant benefit to older people, and particularly older women, because older women do still outlive older men. The predominant number is that 26% of older women in Canada live exclusively on CPP and OAS, as opposed to about 17% of older men, so it's a significant increase.

Having said that, with great respect, this is the only government that's not appointed a federal minister responsible for seniors. It is a great concern to, I think, the Canadian population at large, as well as folks who work in the field responsible for aging, that there is no place to go for issues concerning seniors. I know that would be of great interest to the elderly community and their supports to ensure that there is a minister responsible for seniors, as past governments have done.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

Thank you for your commentary.

This question is for the CMA. After hearing your presentation and the presentation before by the radiologists, I've been grappling with this issue, so I want to ask it in this context.

The current structure for group structures.... I belonged to the CICA's accounting standards board. I sat on it for a number of years, although, obviously, I don't do that now. I'm looking at this from a tax treatment perspective. It is advantageous for the group structure to be in place for specialists, like doctors, radiologists, and so forth. I get that.

If this structure is no longer allowed to be utilized, so the eligibility is no longer there, thereby having a detrimental impact on health care.... I want to hear your opinion on the tax consequences versus the health care. If you can tie it in, that's great. If you can't, I just want to hear some more colour around that, please.

[Prof. Richard Davies]

I can speak to that.

In academic centres, in order to get, if you like, your top tier of health care, we encourage our doctors to specialize in often very narrow fields. I mentioned the doctor who takes care of patients who need cardiac assist devices and heart transplants. This is unlike what I'll call a community cardiologist, who tends to do a broader range of activities. If you have an individual practising in the community, he'll do some things that are highly remunerative, some that he loses money on, and on the average, things work out okay.

In order to deliver that absolutely top tier of health care, what we have to do is encourage people to spend all of their time doing activities that they become very excellent at. This is how you can get the truly top tier of care. Without academic groups and the ability to function in academic groups, we can't do that because, essentially, there are some activities in which nobody could ever be able to make a decent living, so we need to support them. If the truth be told, there are some people who are in very highly remunerative activities and they are willing to support their equally well-trained colleagues because they realize that essentially the provincial billing often got it wrong. If they got the billing right, or possibly not....

However, what we've done to function over the years, in order to make sure that we can maintain this level of excellence, is that we've maintained groups like this. You'll lose that level of excellence if we lose the ability to form these academic partnerships.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

My concern is this. A number of years ago, I purchased a home from a thoracic surgeon, who was trained in Canada and who had worked in Canada for a bit, but he had received two job offers: one to remain in Canada and one to move to Massachusetts. He has now been in Massachusetts for many years. He took it for many reasons and taxation wasn't one of them, but I think it was a little bit about lifestyle and also the opportunity for advancement. I understand people are mobile and capital is mobile, so I want to look at the impact on health care to discover if there is one or if there will be one.

[John Feeley]

It goes back to the survey that we did of our members. I think one of the disturbing findings that we didn't anticipate in the survey was the response from medical residents that, if they did not see an opportunity within group structures, they would leave. It would have a steering influence, if you will, on their decision where to practise. It might be in the community, but it's also a global market for research and clinical service provisions.

We believe that it will have an impact. We've been told—I just had a call not that long ago from a large group of 150 physicians who are looking at dissolving their partnership. That will have a real impact. They contribute millions of dollars out of their own pockets to support medical research, in addition to teaching and in addition to ensuring a vast array of specialty care services are available. I believe, based on anecdotal evidence, but also survey evidence, that it will have an impact.

[The Vice-Chair, Conservative, Ron Liepert]

I'm sorry, your time's up.

[Prof. Richard Davies]

I have something to add. This provision hurts a key structure within medical schools badly. I can't imagine how, if you hurt your medical schools, that you're not going to hurt health care, both currently and certainly in the future.

[The Vice-Chair, Conservative, Ron Liepert]

Okay, thank you.

Mr. Deltell.

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

Thank you, Mr. Chair.

Ladies and gentlemen, welcome to your House of Commons.

I would like to begin with a few basic thoughts on the tax reductions that are currently being suggested in the budget. I'm talking about the so-called tax reductions.

Mr. Chair, as you know, these amounts that were given to Canadians had to be done at zero cost. Unfortunately, the figures do not match, since it is costing $3.4 billion more than had been expected with the measures adopted in another era. That had to affect a very large number of Canadians. However, it's important to understand that 65% of workers are not affected by the alleged tax cuts because it excludes those earning $45,000 or less.

The biggest beneficiaries of these tax cuts are people earning between $140,000 and $200,000. I immediately confess the conflict of interest in this regard. I am one of the people in that earning bracket, as are all my colleagues here with us. In short, if we say that the middle class benefits the most, I can tell you that, with an income of $145,000, we aren't really part of the middle class anymore.

Earlier, someone mentioned that it was supposed to be the richest people who would pay for it. You can laugh, but one of these days, the richest may get fed up with the situation and decide to leave.

I just want to remind you that there are serious dangers attached to this situation, and I know what I'm talking about. About 40 years ago in Quebec, mass migrations occurred and led to tax increases for businesses and the more affluent. This led to many departures from the province. Perhaps one of the best examples of this is Toronto. Compare Toronto's situation 40 years ago to now, compared with that of Montreal at the same time and today. If you compare the evolution of these two cities, you'll see that one has benefited far more than the other from lower taxes.

It's also important to remember that some people may be strongly tempted to take advantage of taxes that may be better elsewhere than where they are, without necessarily engaging in tax evasion. For seven years, an MP who represented a Montreal riding preferred to pay his taxes in Ontario because he lived there. It was actually to save $6,000 a year in taxes.

In short, people sometimes move to avoid paying taxes they feel are too high. Similarly, supposed tax reductions do not necessarily benefit those who were considered primarily when they are put in place. In that regard, there is a substantial loss of $3.4 billion. We should also not forget that that the people who designed this program forgot one small detail: the indexing that was done five years ago after this model was put in place. Be careful when you laugh a little too quickly about it.

My question is now for the representative from—

Canadian Taxpayers Federation.

Mr. Wudrick, welcome again to your House of Commons. It's always a pleasure to see you.

As you know, there is a huge tax for small businesses with the new Liberal carbon tax, with the new Canada pension plan fees that will increase, and also with the fact that we still have a high tax rate, instead of lowering it as was proposed during the last electoral campaign. For sure, we're talking about business, but when business faces those new realities, it has an impact on working people.

Do you think it is a big issue for taxpayers to see those new taxes, the Canada pension plan with new fees, a Liberal carbon tax, and also the fact that businesses have a high rate to pay for taxation?

[Aaron Wudrick]

Yes. I think this debate will never be fully settled. That's why our group is out here advocating that lower taxes are better for the economy. I think it's important in this case to not just focus on a single tax measure, but on the aggregate of all the measures this government is introducing.

They are talking about a new carbon tax and, as you mentioned, CPP premiums. While people point out that the people who pay them receive some benefit down the road, from the point of view of a business it is a new cost that is introduced and they have to bear it. They were anticipating a cut to the small business rate. They're not receiving it. When you start to add all these things up, it does sort of work against the government's stated objective of boosting the economy. It's hard to see how increasing costs to business is more likely to stimulate more economic activity.

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

My question will be to Madam Tamblyn Watts from the Canadian Centre for Elder Law. Madam, we welcome you to the House of Commons. We talked about the Canada pension plan. This is the real purpose. We're talking about the long term. It will take 40 years before we have the true effect of all of that. How do you think this will affect the people that you represent here?

[Laura Tamblyn Watts]

Thank you for the invitation to appear before the committee.

With the CPP and the OAS, I will put the two together, because they are so inextricably linked in how we do it. We would like to provide a few key issues.

The first piece is that it disproportionately costs people who are poor more than the actuarial amount that they get back from it. There's excellent actuarial science to indicate that for CPP and OAS payments being paid by people who are quite poor, it doesn't balance out on the other end. It is a structural concern of institutionalized poverty, and there are gender concerns around that, as well.

The second piece is that it can disproportionately negatively affect immigrant populations. As many of you would know, you need to have a number of different qualifications in order to get your CPP and OAS. That does have an effect in the long term. You need to pay in for 40 years, or for partial benefits 10 years, and be 59, while living in Canada.

What we know is that over the life course people who are in immigrant populations in Canada are significantly poorer as they age, as a result of that. It's not well indexed to support the fact that Canada is a population that is welcoming its diverse immigrants. We need to rethink that in the longer term. It does not currently reflect a positive outlook for finances for older people who come to Canada.

[The Vice-Chair, Conservative, Ron Liepert]

Ms. O'Connell.

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

Thank you, Mr. Chair. Thank you all for coming.

I wanted to start off with Ms. Tamblyn Watts. For women being most negatively impacted, you said something that I found really interesting. You said that men are aging and women are starving.

I understand that gap, but the fact that women live longer might also mean increasing the impact in the sense that they have to survive with less for longer. Obviously, if you live longer, then your health might not be as good. How do we deal with that? What would you recommend when we're looking at the OAS and these changes outside of this, as my colleague pointed out, to some of the other work that still needs to be done as part of our platform commitment? Through that gender lens, how do you move forward, but still shrink that gap?

[Laura Tamblyn Watts]

Thank you so much for the question.

When we look across the life course, there are a number of different pieces that we need to pull together. One of them does very much deal with the consumer financial protection aspect that we're talking about today, and one of them will also reflect the OAS and CPP piece. The first is that we can charge, and I say charge because that's what you're doing. They're paying into CPP and OAS. You're charging your clients who are the people paying in. You can index it to less. You can look at the actuarial science around the cost paid in and paid out. That hasn't been looked at for many years. There's an opportunity to bring a gender lens for the real cost in and the real cost out.

The second piece could be quite simple. Under certain qualifications, we could give women more money, particularly single women, who are the poorest population in Canada, as a broad group. You can also offset it by looking at caregiving dropout provisions, which are similar to what my colleague was talking about with the child tax benefit. There are tools to reflect the life course caregiving challenges, which are not yet used as revenue tools or concessions to revenue tools.

We certainly can look at ways across the life course, particularly because we know that older women are also caring for other older women, men, and other people across the life course. As they age, caregiving is not concluded. We can look at some of those analogous tools to the child tax benefit and look at those for caregiving provisions.

The last piece I will say—and I was reflecting on this with our colleague from ADR Chambers—is that in the conversations with the Ombudsman for Banking Services and Investments, they've indicated that 50% to 70% of their cases deal with older people. There's a gender piece in that, as well, because proportionately there are more women than men.

Interestingly enough, there are fewer women using the complaint provisions and bringing forward their complaints. I know that it speaks to other research that we have in this area to suggest that women don't necessarily have the same financial literacy opportunities and the same abilities to complain, or the same relationships with financial institutions. I see it as a multi-varied approach. There are really positive things that we can do about it.

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

Thank you. That was helpful.

I am going to move on to the Canadian Medical Association, because I have limited time.

First, I'll say that your approach is very balanced, and I appreciate it. It was well done. I just want to talk about one piece that I didn't get to previously, but you both mentioned it. In terms of the subspecialists—I think you described it as the highest degree of speciality—I'm just wondering if, in your research, you've looked at the costs, because you feel that this will really be impacted, the subspecialized doctors. Programs the provinces are doing....

For example, in Ontario there is something called eConsult, where you are actually delivering those specialties outside of just that business group, and rural communities, for example, can now access that type of subspecialist. Have you modelled in these calculations the fact that not only is there still financial incentive for these types of specialists, but, through technology, you can actually get that out to larger areas than just your business group?

[Prof. Richard Davies]

Yes, I think that's an excellent question. At our institute, we've been working on trying to make e-consults available. We also spend a lot of time doing traditional, if you like, for-free telephone consults. We are the biggest consulting area.

There is no question that our ability to share income across the group makes this possible. In general, e-consults are one of the things we would be encouraging and something that we want to do, for sure, but if you look at the economics of e-consults, including office costs and all of that, you see that, essentially, it would be a money-loser. However, it is valuable, and it's something that we should be doing, so group structures like ours would really encourage things like what you are describing so that we can actually make better health care available.

[The Vice-Chair, Conservative, Ron Liepert]

I think you are out of time.

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

I know. Thank you.

[The Vice-Chair, Conservative, Ron Liepert]

Mr. Albas, go ahead.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

I appreciate everyone's contribution to our discussions on Bill C-29. I'm going to start with the Canadian Medical Association. Thank you for your briefing note.

First, let's talk about Canada. In your briefing note, there is quite an array of different provincial tax rates. Removing the small business preferential rate on the first $500,000 would deeply affect some physicians. You note that, in Nova Scotia, it would be quite a steep increase in taxation. Do you feel that the implementation of this policy may cause a lot of harm to patient care in Nova Scotia, as physicians redetermine where they want to practice based on the return?

[John Feeley]

Yes.