Finance Committee on May 18th, 2021

[Andrea Hannen]

I think all provinces have some strengths and some weaknesses. It depends a lot of times on which government is in power at the provincial level. I think the big weakness we see is when any government tries to pick winners and losers. If you try to direct expansion only in the public sector, well, then you invariably lose centres in the independent licensed sector, whether they're commercial or not-for-profit. If you try to expand the not-for-profit sector by favouring that sector with subsidies or grants or things like that, then invariably you see closures in the commercial sector.

It's very important not to pick winners and losers. Really, just from a basic common sense level, parents will always pick the licensed child care providers they feel are best for their children, and will make other kinds of child care arrangements as well, if that's required. We have to trust parents. Parents know better than governments how to raise children.

[The Chair, Liberal, Wayne Easter]

We have to move on to Ms. Koutrakis, followed by Mr. Ste-Marie.

Ms. Koutrakis.

[Annie Koutrakis, Liberal, Vimy, QC]

Thank you, Mr. Chair.

Welcome to all our witnesses and thank you for joining us this morning.

My first question is for Ms. Tassé-Goodman.

Ms. Tassé-Goodman, welcome once more to the Standing Committee on Finance.

Budget 2021 proposes to launch the Aging in Place Challenge Program, which will help community organizations provide support to low-income and more vulnerable seniors so that they can stay in their own homes longer. The program will include a service to prepare and deliver meals, home repair, transportation and other daily tasks that will make seniors' lives easier.

We know that the growth in Canada's aging population will very shortly begin to exert pressure on our care systems, on healthcare, and on existing care facilities. Given that situation, how important is it for us to improve the ability of seniors to live in their own homes longer by means of initiatives of this kind?

[Gisèle Tassé-Goodman]

Thank you for the question.

We know that most seniors choose to live in their own homes, close to their families and their circles of friends. It is a kind of reassurance for them.

An increase of 10% in the old age security pension for seniors aged 75 and over was announced in the 2021 budget. We believe that, to help the people in need, that increase should be given to all seniors eligible for the pension. Not to do so may well create two categories of seniors.

Those aged 65 and over are feeling a huge amount of fear and distress at the moment. They are telling us that they are having difficulty making ends meet. We are therefore asking the federal government to change its approach and, starting in 2021, to increase the old age security pension for everyone aged 65 and older.

[Annie Koutrakis, Liberal, Vimy, QC]

Ms. Tassé-Goodman, have you also received comments on this from those aged 75 and over? Do they feel that the increase would help them?

[Gisèle Tassé-Goodman]

The increase will certainly help them and we cannot be against that.

However, we can see that a number of those aged 65 and over are women, and caregivers at their parents' bedside. They are caregivers, but they are themselves seniors, and becoming poorer because they have to go with their parents to the doctor, to the hospital, for example, and have to pay parking, gas and meals from their own pockets.

Those aged 65 and older are themselves seniors, and in a precarious financial situation. We cannot deny that those aged 75 and older travel less, because, in many cases, they receive services from their children. That is why we believe that the 10% increase must be revisited and made available to all seniors who are eligible for the old age security pension.

[Annie Koutrakis, Liberal, Vimy, QC]

Thank you, Ms. Tassé-Goodman.

My next question is for Mr. Sanger.

With regard to the $304-million investment in the CRA that was announced, your organization compares the revenue projections of the federal government with the estimates presented by the PBO. While the federal government predicts revenues of $810 million over five years, the PBO's analysis suggests that revenues could be much higher, with the federal government receiving five dollars for every dollar it invests in the CRA for tax compliance.

What are your thoughts on the discrepancy between the federal government's revenue estimates and those suggested by PBO analytics? From your perspective, what revenues will be generated from this $304-million investment?

[Toby Sanger]

It's hard to predict how much will be generated. The PBO estimates were for increased resources, particularly in the business programs. They show a strong rate of return, at five dollars for every dollar invested. Estimates from the United States show approximately a 10:1 return.

It's hard to predict this exactly, but I think each of these estimates shows that there is a really strong return from reinvesting in the CRA, in enforcement and in auditing. However, this needs to be combined with some political will to go after tax dodgers, as well as stronger legislation in different ways. The CRA has taken some of the larger corporations to court, but in some cases they haven't won. We need stronger legislation in that way and political will at the senior levels of the CRA to pursue some of these cases and prosecute them. Frankly, I don't like to call for more money for lawyers, but we need stronger prosecution in a lot of ways, because people can often be outgunned in court.

[The Chair, Liberal, Wayne Easter]

I'm sorry, Annie, but we'll have to move on.

[Annie Koutrakis, Liberal, Vimy, QC]

Thank you.

[The Chair, Liberal, Wayne Easter]

We'll go to Mr. Ste-Marie, followed by Mr. Julian.

Gabriel.

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

Thank you, Mr. Chair.

My regards to all the witnesses and my thanks for their presentations. They were very interesting.

My questions will go to Ms. Tassé-Goodman and Mr. Poirier-Monette, to whom I also send my regards.

Ms. Tassé-Goodman, your presentation could not have been any clearer. You do not want two categories of seniors. You reminded us clearly that seniors from 65 to 75 also have many financial worries.

One point in your presentation struck me. You said that, even including the increase announced for those aged 75 and over, not for this year, but in more than a year from now, the amount of the old age security pension will still not be enough to raise seniors above the poverty line. They would not even reach the lower level of the poverty line. Is that correct?

[Gisèle Tassé-Goodman]

That is correct.

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

So that is why you are also suggesting an increase of $50 per month to the guaranteed income supplement, which would just reach a survival level. You reminded us that a Poverty Act was passed in 2019.

Do you have any comments on the link between that 2019 act and the bill that is currently under study?

[Gisèle Tassé-Goodman]

For that, I will hand over to Mr. Poirier-Monette.

[Philippe Poirier-Monette, Collective Rights Advisor, Provincial Secretariat, Réseau FADOQ]

Good afternoon.

Thank you for the question, Mr. Ste-Marie.

When a poverty line is established, one expects the government's benefits for the less fortunate to come up to that line at a minimum. That is basically what we are saying. Although we would like everyone to get the 10% increase, it would be desirable to have another increase, specifically to the guaranteed income supplement.

As for the market basket measure, some goods and services are not included, such as dental care, foot care and the purchase of medications. A whole host of goods and services that should be considered in the market basket measure are currently not.

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

Thank you.

I would like to emphasize one point that always strikes me when I am having discussions with seniors. I am told that the Government of Quebec provides hearing-impaired seniors with a low-quality hearing aid, and for one ear only. Even if the necessary increases were provided, we are still dealing with survival level, as Ms. Tassé-Goodman said.

In his reaction to the budget, Gérald Fillion, a Radio-Canada reporter who specializes in the economy, talked about a study analyzing the situation in 50 or so countries. It shows that Canada is one of the worst countries in terms of replacement rates. That means the income that a person earns when retired in comparison to the income they earned when they were working. It's almost half, not even 51%. The average for the countries in the Organisation for Economic Cooperation and Development, the OECD, is seven points higher and the average in the European Union is 63%.

We in the Bloc Québécois are proposing an increase of $110 per month for those aged 65 and older, simply to bring the average closer to that in the OECD.

Ms. Tassé-Goodman or Mr. Poirier-Monette, do you have any comments on those statistics?

[Gisèle Tassé-Goodman]

Mr. Poirier-Monette, do you want to answer that question?

[Philippe Poirier-Monette]

Yes, I will be glad to.

We submitted a brief on that issue to the committee. We specifically address the income replacement rates in Canada compared to the other countries of the OECD. Canada is not the worst, but is not the best. We used an analysis from the D'Amours report. The analysis showed that, in terms of old age security, the replacement rate has been going down over the years while the Québec Pension Plan and the Canada Pension Plan continue to follow salaries. Each year, the maximum eligible earnings increase is commensurate with the average salary, meaning as salaries increase.

We point this out, because the old age security already replaces income at a rate that does not vary from person to person. The higher your salary, the less the old age security is going to help you when you retire, on a proportional basis.

We are of the opinion that the way old age security is indexed should be improved, at very least to avoid any impact from increasing salaries, which are going up faster than the consumer price index, the CPI.

[The Chair, Liberal, Wayne Easter]

We will have to move on.

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

Thank you.

[The Chair, Liberal, Wayne Easter]

We will go to Mr. Julian, followed by Mr. Falk and Ms. Jansen on a split.

Go ahead, Peter.

[Peter Julian, NDP, New Westminster—Burnaby, BC]

Thanks very much, Mr. Chair.

Thanks to all of our witnesses for being here today. We hope you and your families continue to be safe and healthy as this third wave crashes on our shores.

Thank you for your important testimony on the many concerns that Canadians have with the lack of a budget addressing real needs in so many ways.

I'd like to start by asking Mr. Sanger a question.

Mr. Sanger, you've been very eloquent about previous crises like the world wars. We had strict laws against profiteering and to ensure that we were all in this together. Today you point out that Canadian billionaires have reaped over $80 billion during this pandemic. There is no wealth tax. Canadian corporations are at record profit levels. There is no tax on excess profits.

At the same time, we see in this budget bill the slashing of COVID benefits while the third wave is crashing on our shores: students being forced to pay their student loans; 60% of seniors excluded from even a modest top-up, which would bring them closer to the poverty line; people with disabilities getting no supports at all; an increase in homelessness; 10 million Canadians who can't pay for their medication, and the government says we can't afford pharmacare.

My question for you is simply this: Is there a cost that we pay as a society, and do Canadians pay a cost, for the fact that we have such an inequitable tax system, with banks and billionaires able to reap the profits and profiteer during a pandemic while so many Canadians struggle?

[Toby Sanger]

Absolutely, there is a cost. We came out with a tax fairness recovery plan before the budget in which we outlined a number of ways the federal government could generate over $70 billion in additional revenues. These could then be used both for paying for the pandemic by helping to fund the recovery and by introducing new programs such as those.

I do want to say that, after hearing the testimony of others, I really do want to commend parliamentarians and the government for bringing in really important programs. I do think that Canada's programs were some of the best in the world, but I do get concerned when some of them are not that well targeted, which then undermines confidence in government programs. Not only does it cost more, but it also undermines confidence in government programs.

The method of moving forward with things like the CEWS program can be problematic in that way. It would be better if it were targeted at those who really need it, and funds then don't go to things like hedge funds or highly profitable businesses, as we have outlined.

Then there are also different ways that the government could recover some of those funds, such as through an excess profit tax or through other things. We have really seen increasing inequality during this pandemic, and I think people are really compassionate and understanding about what's happened.

We do need to move forward, and there are a lot of ways that the government, which has very large deficits, is going to have to pay for these. There are a lot of ways that government can move forward by taxing the highly profitable corporations and the wealthy who have done very well not only over the past decade but over the pandemic as well.

[Peter Julian, NDP, New Westminster—Burnaby, BC]

Thank you for that.

I flagged the government announcement of just a few days ago as well. They don't have the money or the resources to ensure that indigenous communities have safe drinking water—dozens of communities have poisonous water—and the government continues to pretend that it just doesn't have the resources to handle these issues.

I think you've pointed out an important point from the use of the wage subsidy. We've had companies that have used that subsidy for dividends, stock buybacks and big executive bonuses.

The government is saying that it is dealing with overseas tax havens—and I'd like to come back to that—which the PBO estimates cost us over $25 billion every year. CRA officials told this committee just a few months ago that they don't have the legislative framework to even tackle the widespread tax evasion that we're seeing through the use of overseas tax havens.

What could the government be doing to tackle, in a serious way the chronic blight on Canada of $25 billion a year going to overseas tax havens rather than being used to meet the needs of people in our country?