Finance Committee on April 10th, 2017

[Bill Morneau, Liberal, Toronto Centre, ON]

Thank you. We are very pleased with the first step in doing a gender analysis in our budget.

I want to step back and set the framework for this. Women are more than 50% of our population. We have lower workforce participation among women than we have among men, especially in the 25-to-54 age group. We continue to have pay for women that is lower than for men in similar jobs with similar experience. We know that as a country we're not making the best use of an incredibly important part of our population.

That's the backdrop for our decision to move forward in this regard. We want to make sure that we're empowering women to get into the workforce and to have the success they should have once they're there. That's the frame of reference in coming forward and saying that we should look at our budget with an analysis of how it impacts women.

We made progress on that this year, but we're not by any stretch of the imagination finished. It's an area where not every department could look at every measure and analyze it to the extent that we'd like to do. We're still building expertise. You can expect that this will be a continued analysis over the course of future budgets. I expect we will find that we have some ideas that, looked at through that lens, might not be appropriate, or that we might be able to do more of in order to have a bigger impact.

Some things very clearly will have an impact this year. One is the $7 billion that we've put in over a decade for early learning and child care. We know that one of the obstacles to women being successful in the workforce is child care, so we know that will have an impact. Second, we looked at the amount of women accessing venture capital funds. We've had a great deal of success with venture capital funds over the past decade, with the VCAP program. We found that there were not as many women entrepreneurs accessing those funds as men, and for that reason dealt with the issue by making a specific measure in that regard.

We'll continue to do this. It's important for us to do this, and it's not only because we want to empower women to be more successful. It's for all Canadians. If we can increase workforce participation and get a higher level of success for women, we'll deal with one of our most fundamental challenges, and that's demographic change. This is the biggest way we can do that.

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

Thank you. I'm glad this will continue.

I filled in for another member at one of the meetings of the human resources committee, which is looking at maternity leave. I don't think our EI system was designed maliciously to impact women negatively, but I have a resident in my community who was laid off right after her maternity leave. EI is calculated based on the last 52 weeks you worked, so she was left out. Her male colleagues, who were also laid off, could access the EI system. The lens on that right shows that it's just such a simple simple issue, which I don't think the system was ever designed for. Adding this lens will look at the differences that women and men face in the workforce.

In terms of infrastructure, you touched on housing as well as transit. I want to say two quick things and get your thoughts and comments on them.

In terms of transit, one of the things I was very pleased to see—I spoke to my municipal colleagues after the budget was announced—was the predictable transit funding that's now based on ridership and population. It's important because municipalities can now increase transit, the routes or fleets and all of that. Just basing it on ridership doesn't actually get you further ahead but somewhat maintains what you already have. I don't know if you have a comment on that.

Finally, in terms of affordable housing and its economic benefits, it's not just the right thing to do but also what it means for the economy when we're getting more people in the workforce and ensuring that people can really reach their full potential.

[The Chair, Liberal, Wayne Easter]

Mr. Minister, please make it a quick answer.

[Bill Morneau, Liberal, Toronto Centre, ON]

Just quickly, the notion that we're going to work together with provinces and municipalities on public transit and to deal with that based on ridership and population has been met with a great deal of success, from my perspective from going across the country.

Clearly our initiative around affordable housing is to deal with the very real challenge we have when people cannot find adequate lodging and to improve the current housing stock. This will make an important long-term difference as we move forward on the funding together with provinces and municipalities.

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

Thank you.

[The Chair, Liberal, Wayne Easter]

Thank you both.

Mr. Albas, you have five minutes.

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

Thank you, Mr. Chair.

Minister, thank you for coming here today. I certainly appreciate your work on behalf of our great country.

I'd just like to start by saying that provinces are obviously in a much different state. You've tabled your second budget. Other provincial finance ministers, such as Finance Minister Ceci in Alberta, have tabled theirs. Alberta also has large deficits with no sign of returning back to balanced budgets. In fact, the return to balance has been kicked further down the road. He has received questions on whether or not the rating agencies are going to continue the AAA credit rating.

Given that you continue to say that it's in the country's interest to go into large deficits without any sign of when we will return to balance in the short, middle, or long terms, have you spoken to any of the credit agencies? Have they questioned you on the fiscal plan and whether or not Canada will still retain its AAA credit rating?

[Bill Morneau, Liberal, Toronto Centre, ON]

Thank you.

Let me start by saying that as we make investments in the future of our country, as we work to create good jobs for Canadians, we are absolutely focused on doing that in a responsible way. We have made a commitment to be fiscally responsible, and we know that we've followed through on that commitment by showing a track to a continued net debt-to-GDP situation that is positive. That will continue to be our focus.

We believe that the AAA credit rating we have is due to our very strong fiscal situation. We have the best balance sheet in the G7 countries. That's a positive. When you look at our approach to making investments, you find that we are, considering other countries that are in a similar situation, making fiscal investments that are actually having an outcome that's positive, so it is an approach that we know is consistent with fiscal responsibility.

We do continue to look at what the rating agencies say about Canada. I most recently met with Moody's in New York last week. It had a positive response, in my estimation—you can find it online—to our budget. I will tell you that the meeting was positive. I don't want to put words in its mouth; you can read its report. Its sense was that we are making investments that are having an impact while being fiscally responsible.

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

Thank you for explaining your meeting.

One reason I asked about that is that if we do not retain our AAA credit rating, then obviously we're going to see our debt-servicing costs go up. Most Canadians would be shocked to hear that we spend more on debt servicing right now than we do on things like national defence. I think this will become an important issue, particularly when we see interest rates down south going up. I don't see the same kind of monetary policy here in Canada, which means that at some point our debt may go up whether or not we retain that AAA credit rating.

Are you anticipating further increases in our debt loads?

[Bill Morneau, Liberal, Toronto Centre, ON]

Let me come back to say that the approach we're taking is one that we believe is appropriate for our current situation. It's having a positive impact.

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

Do you see though, Minister, that there could again be cost increases on the debt side? You're financing a lot of your activities, and whether or not I agree with them is not the question. The question was whether you see the interest rates of the United States having an impact on our debt.

We are borrowing money, and obviously to be competitive, we will have to raise it at some point. Do you see that as an issue?

[Bill Morneau, Liberal, Toronto Centre, ON]

I'm not going to opine on Canada's interest rate. That's the domain of the central bank governor.

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

No, I'm asking about our debt rates, though.

[The Chair, Liberal, Wayne Easter]

That's not [Inaudible—Editor] Dan.

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

I've asked about our debt. That's well within his—

[The Chair, Liberal, Wayne Easter]

Let's hear what the minister has to say, and then we'll go from there.

[Bill Morneau, Liberal, Toronto Centre, ON]

What have you asked about our debt?

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

I've asked you, sir, whether you see a rise in interest rates in the United States putting pressure on Canada's being able to attract people who will purchase our debt, to finance the “investments”. I use that with air quotes on purpose. Sir, that has a direct relation to your ministry.

[Bill Morneau, Liberal, Toronto Centre, ON]

Perhaps I can address your question in a couple of ways.

We have a positive credit rating from all of the major credit rating agencies. We have a plan that includes making investments for the long term. That does require that we raise debt. We have had no challenges in raising that debt. Since we are making responsible decisions that are resulting in positive outcomes for our economy, my expectation is that this improving economy will put us in a continuing positive situation.

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

I have one last thing, Minister, very briefly, on capital gains. Obviously there's a lot of uncertainty around it, particularly after the budget, which had no changes in it. Again, you said to the press that it's still on the table.

We have the lowest rates of business investment in this country since 1981. That is obviously correlated with wages and jobs. Are you willing to say at some point...so we can build that certainty on the question of capital gains?

[Bill Morneau, Liberal, Toronto Centre, ON]

I'm sorry. What is the question?

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

The question is, are you going to continue to create uncertainty by not answering on capital gains, or are you going to say to people that you're taking any increase in capital gains off the table in order to attract investment to this country?

[Bill Morneau, Liberal, Toronto Centre, ON]

Am I missing something? There was no change in capital gains in the budget.

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

Again, through your statements in the press, Minister, you have said that you will continue to examine it. Are you going to continue to create that uncertainty or are you going to say that it's off the table?

[The Chair, Liberal, Wayne Easter]

That's it, Dan.