Finance Committee on April 22nd, 2021

[Ed Fast, Conservative, Abbotsford, BC]

We are talking about a home equity tax of some sort. Is that right?

[Dr. Paul Kershaw]

In this particular moment, you and I are talking about the possibility of reducing taxes on earnings and trying to find revenue elsewhere. The focus of the lab is much broader than that. That's why we're looking at things related to monetary policy, lending policy, a broad category of tax policies, including Brad's observation about whether we could exempt the first $100,000 or so of earnings for people as a way to try to support a younger demographic. It's a broad range of things.

[Ed Fast, Conservative, Abbotsford, BC]

Dr. Kershaw, Generation Squeeze became one of the partners in this lab. Another partner was Watershed.

Watershed is no longer a facilitator. Is that correct?

[Dr. Paul Kershaw]

That's a great question.

When I was working to think through how we would facilitate engagement with people through the solutions lab approach that CMHC has on tap, I wanted to pick up on a working relationship that we'd had with Watershed Partners in the past. I approached Charlie, who I think you had on earlier today, as a colleague who could help with the facilitation.

That's correct.

[Ed Fast, Conservative, Abbotsford, BC]

Is there a reason that in November that relationship was terminated?

[Dr. Paul Kershaw]

Yes. That's also a great question.

One of the strengths of Watershed is to bring a really process-oriented approach to guiding co-construction of ideas. They led us through the first two sessions of our lab, which went well, but then as the participants were pushing us to look at more detailed policy areas, it became clear that we needed more content expertise to be shaping the conversations, so we—

[Ed Fast, Conservative, Abbotsford, BC]

Thank you. That's helpful.

[The Chair, Liberal, Wayne Easter]

Thank you.

Ed, I gave you a little more time because I felt that you were on a good line of questioning.

Ms. Dzerowicz and then Mr. Ste-Marie.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you so much, Mr. Chair; and thanks to all the presenters.

My first questions are for CMHC.

Mr. Tremblay, does the CMHC have any role when it comes to the formulation of tax policy?

[Michel Tremblay]

Mr. Chair, we do not. From time to time we provide advice to the Minister of Finance through the Department of Finance, but the Minister of Finance has the ultimate responsibility for tax policies.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you. I just wanted to make sure that was clear. It has come up a number of times and it did come up last time when Mr. Siddall was before us, so I appreciate your clarity on that.

We're talking a lot about buying homes. As you know, the federal government introduced the first-time home buyer incentive to help qualified first-time home buyers be better able to afford buying a home. Can you talk about how critical this program is in helping young and new Canadians access the housing market? That's the first question.

Second, we know that COVID has made everything more expensive. It feels as if it's even tougher than ever before for young people or first-time home buyers to actually get into the housing market. Can you talk about some other measures we should be thinking about in order to make things more affordable for those who are trying to get into the market?

[Michel Tremblay]

Mr. Chair, the first-time home buyer incentive was introduced to make sure that when first-time home buyers got into the market, they could do so within good risk parameters but also with a lower monthly payment. It's aimed at that.

With respect to other measures, that would be advice that we would give to the Minister of Finance as well. It's not necessarily something we would share here. I'll leave it at that.

[Julie Dzerowicz, Liberal, Davenport, ON]

It's no problem. I don't want to push you on that, so thank you.

My next question is for Mr. Kershaw.

Thank you so much for your presentation. I agree with whoever suggested that we should have you back, just because I think we might have many questions for you.

Our budget 2021 has put in a significant amount of money to support our youth. We want to make sure that, due to COVID, they don't become the lost generation. I wonder whether you can talk a bit about how the investments proposed in our budget 2021 can stop young Canadians from becoming a lost generation.

[Dr. Paul Kershaw]

First, I think you deserve a great deal of credit for putting in place the child care funding that is actually, for the first time in my professional career, really meaningful at the federal level. Fifty years after the recommendation from the Royal Commission on the Status of Women to have a real national child care system, I think that is going to be game changing.

I do think, though, that previous budgets have been stronger on the housing issue. In the material I've shared already today, we really do need the government to say....

In the past, Canadians might have wanted two things from housing: an affordable place to call home and a good return on investment. However, we can't have both of these things any longer, because when something is a good return on investment, it leaves behind local earnings.

At this stage, if we want the national housing strategy to truly succeed, we need the government to come out and actually say it's going to hone its public policies going forward to try to ensure home prices don't continue to rise. That's a top goal.

[The Chair, Liberal, Wayne Easter]

This is your last question, Julie.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thanks very much.

The Federation of Canadian Municipalities would say to us that one issue is it seems like everyone has different levers at different levels of government. The federal government has certain things it could do and the province has certain things it could do. For us to really deal with this housing issue, we need to bring the two levels together—maybe all three levels—to actually put all the tools on the table for us to really get at some solutions.

[Dr. Paul Kershaw]

I think that's true, although I do see solid efforts of governments working together. Municipalities can do zoning issues. That's really critical. Then senior levels of government need to come in and think about how they're shaping both the injection of new supply—we need more co-ops in particular and green, purpose-built rentals—and also how we have modified the demand.

As I mentioned, we have done the low-hanging fruit. Now is the time that we need to tackle some of the more challenging cultural issues. When you measure your GDP, you take pride in the fact that our housing system is growing GDP, but what it's really doing is growing the major cost of living out of reach for what locals earn. That does make people like me wealthier, but it's crushing the housing dreams of those who follow in my footsteps.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you.

[The Chair, Liberal, Wayne Easter]

Thank you, all.

We'll go to Mr. Ste-Marie.

You have four minutes, Gabriel.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Thank you, Mr. Chair.

Good evening. Thank you to the witnesses for their presentations. I want to apologize for your having to sit through a meeting that was interrupted by a vote.

Since I don't have much time, I will direct my first question to Mr. Prud'homme, from the Réseau FADOQ, and the next one to Mr. Céré, from the National Council of Unemployed Workers.

I want to bring your attention to an article that was written the day before yesterday by business reporter Gérald Fillion. In it, he talks about the support measures for seniors included in the budget, mentioning the $500 payment that will be made to seniors 75-plus in August—presumably, an election will be called shortly thereafter—as well as the 10% increase in the OAS pension that will not come into effect until 2022.

Here is a snippet of what Mr. Fillion says, loosely translated:

Two questions come to mind. First, why not make the 10% increase to old age security effective this year? Second, why do the measures apply only to those 75 and over? Why not seniors 65 and over?

I would like to hear what you have to say about that, Mr. Prud'homme.

[Danis Prud'homme, Director General, Provincial Secretariat, Réseau FADOQ]

Thank you for your question.

You raise an interesting point. As our president mentioned in her opening statement, the increase should have happened in March 2020 because the additional OAS income would have brought people a lot of relief.

First of all, age is being used in a discriminatory way. Consequently, the measure discriminates on the basis of age, not income. The measures are supposed to help people with lower incomes, but people with incomes up to $70,000-plus can draw on old age security, so the increase will also apply to people who don't need it.

Second, if the government is going to increase OAS, the measure should apply to all those eligible for OAS, in other words, those 65 and over, not on a discriminatory basis, as is currently the case. The argument is that seniors 75 and over need more money and more care, and we don't dispute that. However, those between the ages of 65 and 74 are also very much in need financially. The GIS provides financial support to the poorest seniors, not those with a $70,000 income who don't need the help.

The money needs to go to the right place to really help those who need it. Since there isn't a lot of money to go around, the government should focus on those who need it.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Thank you.

Mr. Céré, thank you for your opening statement. We will have an opportunity later to discuss the importance of overhauling EI so that it covers seasonal, vulnerable and self-employed workers.

I know the budget only just came out, so you haven't had long to review it and analyze the contents, but do you have any thoughts on the measures to extend the EI special benefits and the CRB?

What struck you in the budget?

[Pierre Céré]

You brought up two aspects. The CRB is basically for those who are not eligible for EI, in other words, self-employed workers, who make up 15% of the workforce—three million people in Canada.

Those who have been out of work since the beginning of the pandemic are counting on that support. Initially, the CRB was available for 26 weeks, but the period was extended to 38 weeks and now 50 weeks, the same as EI. The program is slated to end in September, with nothing more in the offing.

The government says it wants to look into broadening EI coverage to self-employed workers, but there is still no such coverage. That leaves self-employed workers facing a lot of insecurity, with September fast approaching.

As far as the EI measures go, the government had time to study the program, which collapsed last year for all to see. The government had time to rethink the system; it introduced more flexible EI measures back in September. Not only were the measures certainly welcome, but they were also quite smart. The benefit period was extended up to 50 weeks in that case as well. The support is ending in September.

The government has held extensive consultations, really extensive. The minister has a mandate to conduct an in-depth review of the program and modernize it for the 21st century. Monday, when we read over the budget for the first time, we misjudged, because we were expecting the government to make permanent changes, for example, to the eligibility criteria. We quickly came to the realization that it had not, that the measures were still temporary. I think everyone is fed up with temporary measures, pilot projects and the patchwork approach.

The EI program was broken in the 1990s, and that's why it did not do what it was supposed to last year. It's time to reform the program. As I said earlier, no stone has been left unturned; all the solutions have been thought of and costed. It's time to make permanent changes to the EI system.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Thank you.

[The Chair, Liberal, Wayne Easter]

Thanks, both of you.

We're turning to Mr. Julian, who will followed by Mr. Fast, and we will close with Mr. Fraser.

Go ahead, Mr. Julian.