Finance Committee on May 18th, 2021

[Toby Sanger]

That's why I went into a bit more detail in my statement. There are some really important negotiations taking place this year through the OECD and G20 on a fundamental reform of international corporate tax rules. The majority of the revenues lost are on the corporate side, and most of them go to larger corporations and foreign corporations.

If we're talking about increasing competitiveness and the strength of the Canadian economy and businesses, we really need to address this problem. It's not just the lost revenues. Canada, actually, has a very good system of allocating taxable income between provinces, according to real economic factors.

If we implemented some of those rules that are under discussion at the international level, and if Canada were a champion of that, then we could largely do away with the problem of losses through tax havens and international tax dodging in different ways, so that—

[The Chair, Liberal, Wayne Easter]

We are going to have to end it there, Mr. Sanger.

We will now go to a five-minute round.

Mr. Falk and Ms. Jansen are going to split the first period, and then we will go to Ms. Dzerowicz.

Go ahead, Mr. Falk.

[Ted Falk, Conservative, Provencher, MB]

Thank you, Mr. Chair. Actually, Ms. Jansen is going to take the next round, so I'll take the full five minutes.

Thank you to all the witnesses this morning. Your testimony has been very interesting and has provided our committee study with some very valuable information.

Ms. Hannen, in your earlier comments you talked about the choice for parents and how important it is that we leave Canadian parents with a choice. In your press release, following the government's announcement of a Canada-wide early learning and child care system, you said that this approach could see many families winding up with fewer child care choices.

I'm wondering if you could explain how a one-size-fits-all approach would limit the choice of parents. What would you recommend instead of that?

[Andrea Hannen]

First of all, we've seen parental choice limited in Ontario through the full-day kindergarten program, so we have some experience with this. Prior to the introduction of the full-day kindergarten program in the schools, a lot of the full-day kindergarten programming was provided by independent licensed child care centres.

When the government rolled out its full-day kindergarten program, it said that it would be free, except it wasn't. It also wasn't the same program, when it was in independent licensed child care centres. When it was in independent licensed child care centres, it was fully regulated under the Day Nurseries Act at that time, which is now the Child Care and Early Years Act, so it went from being a very regulated type of environment with very strict quality standards to being a much more basic kind of program. It also wasn't free.

The little bit of care that you need at the beginning and end of the day, what we call “wraparound care”, that mirrors parental work hours....Suddenly, parents had to pay for that, so it meant that the public sector system, or its preferred contractors operating in schools, was sometimes then charging parents as much for the little bit of wraparound care at the beginning and end of the day as parents were previously paying at independent licensed centres.

All of that was—

[Ted Falk, Conservative, Provencher, MB]

Regarding independent licensed centres, I note in your press release that you also said that many of these small businesses were owned and operated by women, and that if the government actually proceeded with its nationalized day care plan, there would be a risk to many of these female-owned businesses.

What would you say about that? Do you actually anticipate their being able to keep their doors open and be competitive?

[Andrea Hannen]

No. Depending on the approach the federal government took, many of those small businesses would close.

I guess what is really disturbing from the parental standpoint is that not only would their existing child care arrangements be disrupted, those options will be gone forever. Those centres aren't going to reopen. It's not like you can just substitute a new public system for the existing system that exists in many provinces.

Independent licensed child care centres may find they can't stay open as a national public sector-oriented system is rolling out, so you could conceivably have small independent licensed centres closing all over the place two and three years before these new public centres are even built.

[Ted Falk, Conservative, Provencher, MB]

The other point I would like you to wade into—though I think I'm just about out of time—is that the government is prescribing how parents should raise their children with this program. There are going to be many parents who make the choice and the sacrifice to have one parent stay home and raise their children at home, because they want to make sure they pass on the values and ideology that's important to them.

Can you talk about how this system that is being proposed could be better if parents were given the choice, and talk about how it's actually discriminatory to people and parents who choose to raise their children with one parent staying at home?

[Andrea Hannen]

Yes—

[The Chair, Liberal, Wayne Easter]

Respond fairly quickly, if you could, Andrea.

[Andrea Hannen]

Yes, absolutely. I think it's really important that parents be in the driver's seat when it comes to child care choices.

Not every parent is going to need a full-time, licensed child care space that runs during the regular work day, 9 to 5 or 8:30 to 4:30 during the week. Lots of parents have more flexible employment than that. Sometimes one parent is at home part of the time.

We shouldn't have systems that require families to mold themselves to the system. The system should evolve to allow families to be in the driver's seat.

[Ted Falk, Conservative, Provencher, MB]

Thank you.

[The Chair, Liberal, Wayne Easter]

Thank you. I believe Ms. Dzerowicz is turning her time over to Mr. Fraser.

Mr. Fraser, you're on, for five minutes.

[Sean Fraser, Liberal, Central Nova, NS]

Certainly. Let me begin with Mr. Jelley.

First of all, as an Atlantic Canadian, who is just across the Northumberland Strait from you, I can tell you that my family very much enjoys our summer visits to the island. I make it an annual habit of popping over to Shining Waters. I was there last year with our family. I was very impressed with the measures that you have put in place to allow for social distancing, despite the fact that you had, for the last summer, a fairly large number of guests visiting. In the outdoor environment that you manage, I never once felt as though I were being put in harm's way. I very much appreciate the steps you put forward.

I want to turn to your testimony about the wage subsidy in particular. Believe me, you're not the only tourism operator who has made this point, but I think you've broken it down in more explicit detail than others have. As I understand it, the transition away from the wage subsidy, as the hiring incentive ramps up, might be very appropriate in your view for businesses that perhaps have had a smaller hit to their revenue, or perhaps don't have the same operating costs that a business in your position does, or perhaps that could even earn their revenue over the course of an entire year.

However, what I'm hearing pretty loud and clear from you now is that for a business with significant operating costs, with a short season to earn your revenue, and one that's been hit extra hard because of the travel restrictions, this ain't going to work.

Can you tell me, in your own words, how we can adapt the program to make sure that we're continuing to support businesses like yours, which I am depending on to help kick-start the recovery. How can we avoid over-spending on businesses that would succeed with the planned transition away from the full subsidy while at the same stage preventing you from having to close your doors?

[Matthew Jelley]

Thank you, Mr. Chair.

Thank you, Mr. Fraser, for the question.

I certainly want to recognize the efforts of my staff in making last season a relative success for us. We couldn't have asked for a better response from them and, ultimately, from our customers.

Look, I think that's a very difficult part of this whole discussion and obviously something that we have to talk about. In terms of the targeting, if we look at businesses that are down more than 50% or more than 70%, perhaps it's sector-specific. It includes things that depend on travel and tourism, and I'm sure there are other highly affected sectors out there. It's really about trying to zero in on them and on the businesses that were viable pre-pandemic, as well to make sure that the reason sales aren't down is that there's been a complete change away from their business model, or whatever if might be.

I think the hiring credit for many comes in a year when we've been navigating so many programs and so many criteria, which have added a further level of complexity and a calculation. You may remember that in my comments, I spoke about the pride I have in the year-round team we built. We will actually be penalized under the hiring credit because we had wages in March, whereas some other seasonal operations wouldn't be. If you run a seasonal restaurant and you had no wages in March, but you have wages in June, July, August and September, that program will work for you, and in fact it might work better than the wage subsidy would. I'm not sure whether that was the intention or not, but it is a reality. I think for us it's a matter of taking the wage subsidy criteria and formula, those percentages, and trying to keep them similar to where they are now—so if you're down roughly 75% or 70%, you're eligible for 75%—and trying to exclude those companies that have a much different situation, whether they are publicly traded or something to that effect. I think it is really about trying to focus on those that are down significantly and to show that there is a road out, and there is a future.

Accounting for seasonal businesses having all of their revenue happening in 80 days while their expenses are spread out over 365 days, I think, is difficult. No one program is going to fit every company, and they're not going to be made completely whole no matter how this program emerges from this committee and from this budget, but we need to keep those rates in place now for the most highly affected businesses and give them a chance to make it through this season.

[The Chair, Liberal, Wayne Easter]

You can ask a fairly quick question, Sean.

[Sean Fraser, Liberal, Central Nova, NS]

I do have a trip booked for August if the Atlantic bubble comes back, so I'll pay you a visit should you open your doors this summer.

I have a quick question for Ms. Hannen on a point of clarity.

I don't believe anyone within the government has ever suggested that our plan is to build a series of federally owned and operated day care centres in every community. I take some exception to the characterization by Mr. Falk. I quite like Ted as a friend and colleague, but I strongly disagree that the issue is really ensuring that parents have the choice to stay home. I think it's giving them the choice to do that, and giving them the choice to work if they do want to.

I'm curious about the following, Ms. Hannen. If the outcome of this program, per our intention, is to create spaces in communities that may not have them and to make it more affordable for families to access day care centres that may already exist, do you not think that giving that choice to a second parent who's currently making the economic decision to stay home, because they can't afford child care if they're going to work, will have the potential to give more choice to parents by expanding access either to facilities that exist now by making them cheaper, or by expanding through partnerships with communities and provinces, facilities and communities that don't have day care today?

[Andrea Hannen]

I think actually that if child care is more affordable for families, more families will be able to access it, certainly. However, the question is how you make child care more affordable for families.

I believe that making child care more affordable for families comes from giving families more money, letting them keep more of the money they earn in their own pockets and supporting their choices. I don't think it's a very good use of taxpayers' money to start building centres here, there and everywhere that will ultimately be taxpayer-dependent when, in fact, if you just gave the money to families, the private sector and not-for-profit sector would look after creating the new spaces that are needed.

[The Chair, Liberal, Wayne Easter]

I know there could be an extended debate on that one, but we have to move on to Mr. Ste-Marie, who will be followed by Mr. Julian, and then Ms. Jansen.

Mr. Ste-Marie, go ahead, please, for two and a half minutes.

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

Thank you, Mr. Chair.

Yes, these are passionate debates. If we had more time, we could discuss the Quebec family policy model.

My next question goes to the representatives of FADOQ once more. I'd like your comments on the two categories of seniors, those from 65 to 74, and those aged 75 and older.

Also, what do you think about the increase in the old age security pension being scheduled for the summer of 2022, not for this summer?

The one-time payment of $500 to seniors aged 75 and older, which will be paid in August, gives us an idea of the date on which the government could call an election. Do you have any comments on that?

[Gisèle Tassé-Goodman]

Thank you, Mr. Ste-Marie.

With that announcement, the Prime Minister is clearly being consistent. He actually announced that he would be increasing the old age security benefit by 10% on September 18, 2019, when he was courting seniors. They welcome that. However, why create two categories of seniors? We know that those aged 65 and older are in great financial distress. At the Réseau FADOQ, we wonder why the old age security benefit is not being increased by 10% now, this year, for all seniors, not just for those aged 75 and older.

Furthermore, in a lot of cases, the financial distress is worse among women. Most of the time, the women have stayed at home for years to raise children and look after their education. They were not able to earn income in the workforce during that time. That means that they have not accumulated any pension funds. In addition, a number of those women, even those older than 65, are becoming caregivers to their aging parents. Again, they are the ones who have to deal with the shortfall. Beyond 60 or 65, women are much more likely than men to survive their spouse. In that respect too, women are at an economic disadvantage.

Increases in the cost of living are undeniable. During the pandemic, delivery services had a considerable effect on those aged 65 and older, as did the increase in the cost of a basket of groceries.

We receive thousands of messages and calls from those aged 65 and older. They do not understand why the government has created two categories of seniors by providing the increase only to those aged 75 and older. One senior told me that, when he goes to the supermarket and has to pay for his groceries, he knows full well that he won't be able to make it to the end of the month. He will have a hard time paying for his medications, his rent, the electricity bill, and so on. So you can see precarious financial situations everywhere.

[The Chair, Liberal, Wayne Easter]

Ms. Tassé-Gordon, we'll have to move on to Mr. Julian, who will be followed by Mrs. Jansen.

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

Thank you very much, Mr. Chair.

Ms. Tassé-Goodman, I would like you to keep talking about this. The decision to exclude 60% of seniors from an increase, albeit a minimal one, is irresponsible and makes no sense. As you have so clearly said, those seniors are just under the poverty line.

So let me invite you to continue talking about the consequences of this irresponsible decision that the government seems to want to put into place. Those aged from 65 to 74 are forced to meet their own basic needs through their own means, without the assistance of a minimal increase in old age security.

[Gisèle Tassé-Goodman]

So many seniors are frustrated that we do not keep a count of them anymore. Currently, hundreds, if not thousands of them are protesting on social media, calling us and sending us emails. They do not understand in the least what Mr. Trudeau's government is doing.

Most seniors live in their own homes and close to their circle of friends. They are creatures of habit in their lives. Their shops and their families are close. That is the way they like it.

However, those receiving the old age security pension and the guaranteed income supplement, the GIS, receive $1,500 per month. That means that they have to do without. Dental care, for example. A visit to the dentist becomes a luxury for them. For many of us, it's a regular part of our lives. For them, it is not on their list of priorities.

The same goes for visits to the podiatrist. A number of seniors have problems that require foot care. Some have told us that they have hammer toes and bunions, for example. They have told me that a visit to the podiatrist costs at least $100. People on the old age security pension and the GIS can't afford that kind of expense.

I can add buying glasses. Although the eye exam is free, seniors have told me that there are always additional costs, which can vary from $30 to $60 depending on the reason for their visit. Sometimes, it's an MRI scan, sometimes an X-ray, or eye drops. As for getting prescription glasses—

[The Chair, Liberal, Wayne Easter]

I'm sorry, Ms. Tassé-Goodman. We have to move on to Mrs. Jansen, who will be followed by Mr. McLeod.

We can move into the next panel a little bit, because there are fewer witnesses in the next panel.

Mrs. Jansen, you have five minutes.

[Tamara Jansen, Conservative, Cloverdale—Langley City, BC]

Thank you very much.

I want to first direct my questions toward Ms. Hannen. I was recently talking to a provincial counterpart of mine, and they were saying that universal day care is not universal anywhere. It actually supports the upwardly mobile more; it is shown to be harder to access for those most in need.

We have found out from a pilot project done here in B.C., under the NDP, that in the end, with their attempt to get $10-a-day day care, more people are paying less but there are no new spots.

I wonder if you could maybe talk about that.