Finance Committee on Sept. 25th, 2023

[The Chair, Liberal, Peter Fonseca]

Welcome to meeting number 101 of the House of Commons Standing Committee on Finance.

Yes, members, I have verified with the clerks that we are the committee with the most meetings on the Hill.

Quickly, I have some housekeeping for everybody.

Following the motion adopted at our previous meeting, please send the clerks your initial lists of witnesses no later than this Thursday, September 28, at noon, and your final prioritized lists no later than Wednesday, October 4, by 4 p.m., for our new study on policy decisions and market forces that have led to increases in the cost of buying or renting a home in Canada.

Now, pursuant to Standing Order 83.1 and the motion adopted by the committee on Thursday, June 8, 2023, the committee is meeting to discuss the pre-budget consultations in advance of the 2024 budget. Today's meeting is taking place in a hybrid format, pursuant to the Standing Orders. Members are attending in person in the room and remotely using the Zoom application.

I would like to make a few comments for the benefit of the witnesses and members. Please wait until I recognize you by name before speaking. For those participating by video conference, click on the microphone icon to activate your mike, and please mute yourself when you are not speaking. In terms of interpretation, for those on Zoom, you have the choice at the bottom of your screen of floor, English or French. For those in the room, you can use the earpiece and select the desired channel.

Although this room is equipped with a powerful audio system, feedback events can occur. These can be extremely harmful to our interpreters and cause serious injuries. The most common cause of sound feedback is an earpiece worn too close to a microphone. We therefore ask all participants to exercise a high degree of caution when handling the earpieces, especially when your microphone or your neighbour's microphone is turned on.

In order to prevent incidents and safeguard the hearing and health of our interpreters, I invite participants to ensure that they speak into the microphone into which their headset is plugged and to avoid manipulating the earbuds by placing them on the table, away from the microphone, when they are not in use.

I remind you that all comments should be addressed through the chair. For members in the room, if you wish to speak, please raise your hand. For members on Zoom, please use the “raise hand” function. The clerk and I will manage the speaking order as best we can. We appreciate your patience and understanding in this regard.

In accordance with the committee’s routine motion concerning connection tests for witnesses, I am informing the committee that all witnesses have been tested and have completed the required connection tests in advance of the meeting.

I would now like to welcome our witnesses with us here today. We have senior adviser from Bennett Jones LLP, Mr. David A. Dodge. Welcome.

From the Coalition for a Better Future, we have the Honourable Anne McLellan, co-chair, as well as the Honourable Lisa Raitt, co-chair.

Members and others, for your knowledge, they will only be appearing as of four o'clock. From four to five is when those witnesses will be with us.

We also have with us Alex Freedman, executive director, Community Radio Fund of Canada; Andrew Van Iterson, manager, Green Budget Coalition; Scott MacDougall, senior adviser, Pembina Institute; Shaughn McArthur, associate director of government relations, Nature United; and Gia Paola, national policy analyst, Ducks Unlimited Canada. From Questrade Financial Group, we have Tanya Woods, head and policy counsel, government and regulatory affairs; and Romit Malhotra, chief strategy officer. From Réseau FADOQ, we have Gisèle Tassé-Goodman, president; and Philippe Poirier-Monette, special adviser in government relations. Welcome.

With that, we are going to hear opening statements from our witnesses. We are going to start with Mr. David Dodge for up to five minutes, please.

[David Dodge, Senior Adviser, Bennett Jones LLP]

Thank you very much, Chair. It's a great pleasure to be at this committee not to defend a budget, as I did many times in earlier years, but to discuss one that is to come.

It's a very difficult one to come because of the difficult times in which we live. We're in a period of rapid and extensive structural change to which we all must adapt and this budget and future budgets have to address.

I think we know the issues. We have demographic change. Life expectancy at age 65 is increasing, and this requires major investment in care facilities and so on. Also, very importantly, there is increased savings on the part of workers, because they have a much longer period after they finish working now to finance.

The second is climate change. Dealing with climate change requires increased investment in adaptation to higher temperatures and more frequent storms, and it requires a huge investment in all forms of low GHG-emitting energy production and consumption in order to try to reduce the GHG level.

The third issue we have is a big change in the global trade order and adaptation to a more fragmented global economy. This implies additional domestic investment to improve security of supply.

Finally, it is a period of major technological change. AI and digitalization offer great hope for future productivity increases, but in the short term, they require a very significant increase in investment in intellectual property; in digital systems, including our antiquated payment system; and in R and D.

That's what's going, and adaptation to all four of these changes is not costless. It requires that businesses, households and governments devote a larger share of their revenues to investment than they were before COVID. While in principle some of this investment might be financed by borrowing, here in Canada, and indeed in almost all advanced economies, debt levels are high and savings levels are weak, so attempting to finance all these investments by borrowing is resulting in an increase in prices and in interest rates, and it will continue to do so at least over the next decade.

Faced with this reality, to increase investment businesses will need to have a smaller share of their retained earnings, which they distribute to shareholders; households will have smaller shares of their incomes to devote to their current consumption; and governments will have smaller shares of their revenues to devote to the provision of current services for their citizens.

This is not a pleasant prospect. Devoting a higher share of revenues to investment is never easy but can be managed more easily if incomes are growing fast and borrowing costs are low. Unfortunately, real incomes are not growing so quickly. Indeed, on a per capita basis, they have been falling. The cost of servicing debt has risen, and while it may come down a little from the current levels after 2024, it will remain well above pre-COVID levels. Therefore, Canadian households are curtailing, and will have to continue to curtail, some current consumption in order adapt to these structural changes.

People will look to governments for help, but governments face precisely the same issues as do households. Investment requires a greater share of revenues to facilitate adaptation to the four major structural changes I mentioned. At the same time, charges for public debt incurred in the past can eat up larger shares of revenues as interest rates rise. New borrowing to finance additional services for households or supports for business investment will simply raise further the fraction of revenues that must be devoted to interest charges and will further curtail government capacity to provide services in the future.

Governments cannot borrow their way out of these difficult choices involved in the reallocation of resources in order to manage these four big structural changes. Politically difficult as it may be, over the next few years budgets are going to need to be roughly balanced. To allow for additional public investment and support for private investment, the growth of government-provided current services or transfers needs to be somewhat curtailed or, alternatively, taxes on private consumption increased. However unfathomable such curtailment may be, failure to invest in adaptation will condemn Canadians to a much more unpleasant future.

Thank you, Mr. Chairman.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Dodge.

Now we're going to be hearing from the Coalition for a Better Future.

I said that the Honourable Anne McLellan and the Honourable Lisa Raitt would be coming on a little later, but they are with us now. Just bear with us, everybody. We do need to do a quick test with our interpreters.

We're going to suspend for a bit while we get this done.

[The Chair, Liberal, Peter Fonseca]

With that, I'm going to look to the two of you. I'm not sure if you're sharing your five-minute opening statement. If you could start, that would be great.

[Anne McLellan, Co-Chair, Coalition for a Better Future]

Thank you, Chair, for inviting the Coalition for a Better Future to participate in the committee's pre-budget consultations. I'm here virtually, as you've heard, with my co-chair, the Honourable Lisa Raitt.

The Coalition for a Better Future represents a diverse and growing group of Canadian organizations across business, labour and civil society, working together to advocate for inclusive, sustainable economic growth. Each of our 142 members brings to the table a unique perspective, but we are united in our belief that economic growth is a necessary precondition for job creation, rising incomes, a cleaner environment and a better quality of life.

We have three key areas of focus. How can Canada win globally and grow sustainably, and how can Canadians live better? We have a scorecard of 21 internationally recognized metrics that track Canada's progress in these areas, with an aspirational target for 2030. We believe that we must meet the scorecard's ambitious targets if we are to generate the right kind of economic growth to see ongoing improvement in Canadians' lives.

Our first report was released in March to show how Canada is doing on our 21 key indicators, such as GDP per capita and business investment in R and D. We are now tracking those numbers in preparation for our next update, which will be in Ottawa in early 2024, to which you will all be invited.

Lisa, it's over to you for some of our key metrics.

[Lisa Raitt, Co-Chair, Coalition for a Better Future]

Thank you, Anne.

The scorecard is an important tool for governments and for people in general to see where the country is going on important policy areas and basically where we need to go as well.

Where are we today? The pandemic created new challenges. It disproportionately impacted lower-income Canadians. Inflation is rising. Economic challenges are also growing and, as David Dodge pointed out, we have an aging population, weak business investment and poor productivity.

Our scorecard does show that we are moving in the right direction on some fronts, but we're not doing it fast enough. As the metrics are analyzed, we remain concerned about persistent weakness, which is threatening to undermine our future prosperity.

The two most important measures of living standards are output per capita—labour productivity—and equality, and we're going in the wrong direction. For example, on a per capita basis, our economy is not only stalled; it's actually contracting. Real GDP per capita has fallen for four straight quarters, and we are producing less per person today than we did in 2018.

On labour productivity—that's the amount of output generated per hour—it looks even worse. It has fallen in 11 of the last 12 quarters, and the productivity numbers in the first half of the year are below what they were in the final six months of 2014. If things don't change, we'll soon be talking about a lost decade of productivity. The scorecard also shows business spending on research and development continuing to stagnate and lag behind our peers.

However, here is some good news: We see that businesses are slowly stepping up for the first half of the year. Non-residential business investment was up and annualized at 8%, which is pretty solid growth and is much stronger than the economy as a whole. There are also signs of rebounds in the construction of new factories, though we're still well short of prepandemic levels. We really have to double down on our collective efforts to figure out ways to continue to support an upward trend in investment.

It's back to you, Anne.

[Anne McLellan]

For Canada to succeed, the conversation about business investment must include transitioning to a net-zero economy. Achieving net zero by 2050 is one of the core beliefs of each of our coalition members, even though members will choose different tools by which to reach this goal. We welcomed the series of tax measures in this year's budget to incentivize green investment, but the tough part is still to come.

For one, the Canadian government has yet to release its legislative framework for carbon capture or its plan to provide certainty for industry around carbon pricing. Both are still in progress and are due this year. The government's pledge to streamline its regulatory approval procedures, a necessary condition to hit the climate targets, is still being developed, and we're watching closely how the government navigates the transition for our energy sector. These measures are necessary and urgently needed for businesses to have certainty to prioritize and to plan.

We do need a long-term economic vision as we look at ways to enhance the economy. We at the coalition have also taken special time to think about what youth, young people, are thinking about their futures in Canada. Lisa and I had the opportunity to do a university tour over this past year. What's interesting, ladies and gentlemen, is that young Canadians think that Canada is doing well in terms of being an equitable society and sharing economic opportunities. They think we're moving way too slowly when it relates to meeting the climate change challenges. Unfortunately, they are not particularly positive about their own long-term economic prospects. This is based on work that the coalition had done for it by Nik Nanos a few months ago.

It's important, and I'm sure all committee members would agree that the thoughts, the thinking and the aspirations of our young people are very important to our future.

Lisa, over to you.

[Lisa Raitt]

In conclusion, Mr. Chair—and thank you for your time—it's important to understand how indigenous Canadians' lives are impacted as well. Policies and projects are being put into place, and we need to make sure that indigenous communities are part of the equation. I know there's a lot of discussion in the government right now with respect to loan guarantees for indigenous people in these large resource projects. I would encourage and urge people to move more quickly so that we can get to the point where the projects can go ahead and economic indigenous reconciliation can be a real thing.

We hear from all of our members that they would like to see party lines set aside to work together and make real progress on the issues facing our country.

With that, we're happy to answer any questions that you may have at the appropriate time.

[The Chair, Liberal, Peter Fonseca]

Thank you to both of you. You're a great tag team. I'm sure that there are going to be many questions from the members.

We are going to hear now from the Green Budget Coalition. I believe the manager, Andrew Van Iterson, will be speaking on behalf of the group.

[Andrew Van Iterson, Manager, Green Budget Coalition]

Mr. Chairman and committee members, thank you for inviting the Green Budget Coalition to speak to you today.

The Green Budget Coalition, active since 1999, is unique in bringing together 22 of Canada’s leading environmental organizations, collectively having over one million members, volunteers and supporters. The Green Budget Coalition’s mission is to present an analysis of the most pressing issues regarding environmental sustainability in Canada and, annually, to present a consolidated set of recommendations to the federal government regarding strategic fiscal and budgetary opportunities.

As the chair mentioned, I am pleased to be joined today by three of my expert colleagues to help answer your questions. They are from the Pembina Institute, Ducks Unlimited Canada and Nature United.

We are now in an emergency, and you've already heard reference from previous speakers as to the importance of net zero in dealing with climate change adaptation. Extreme heat, floods, fires, stronger storms, ecological disruption, dramatic loss of wildlife populations and a rapidly warming Arctic are being felt in Canada and around the world, causing widespread harm particularly to low-income and marginalized people. Science indicates that these and other impacts will intensify if climate change and ecosystem destruction remain unchecked. It is critical to take stronger action on the related climate and biodiversity crises to shape a world that is equitable, carbon-neutral and nature-positive and that provides secure, affordable energy for people in Canada and worldwide.

The Green Budget Coalition welcomed the federal government’s multi-billion dollar investments in budget 2023 and at COP15 in Montreal that advanced the coalition’s recommendations, particularly regarding clean electricity and also indigenous-led conservation. However, along with the imperative to use such existing funding effectively, we also need more funding.

In this context, the Green Budget Coalition is featuring five recommendations for budget 2024, compatible with some of the objectives that we've already heard this afternoon. These recommendations will create jobs, enhance affordability and support indigenous leadership and well-being.

The first recommendation is to finance nature protection and recovery in Canada to deliver on Canada’s commitment to halt and reverse biodiversity loss by fully implementing the Kunming-Montreal global biodiversity framework. This includes investing on a scale closer to that of climate change, prioritizing permanent financing to support indigenous-led conservation and acting to eliminate nature-harmful subsidies.

The second recommendation is to have, along with the increased emphasis on housing, a renovation wave for climate-resilient homes and affordable home energy. We are recommending that the federal government expand, complement and coordinate existing investments and programs across all departments; centrally deliver home upgrades to ensure impactful investments that integrate health, affordability and adaptation targets; and accommodate the unique needs of indigenous, northern and remote communities. We're recommending $24 billion over five years.

The third recommendation is to advance a zero-emissions electricity grid based on renewables. These are essential steps towards the major transformational investments required in the transmission, generation and demand side of electricity, including for remote indigenous communities. We are recommending about $26 billion over five years.

The fourth recommendation, which is supportive of that, is to have sustainable jobs for a net-zero Canada to help some of the youth who Anne and Lisa mentioned. We recommend scaling up investment in transition planning, job creation and worker supports to ensure that workers and communities have a smooth transition to a low-carbon economy. We are recommending $12 billion over five years.

The fifth recommendation is to have sustainable agriculture in order to help producers and Canada be leaders in sustainable and innovative agriculture with a resilient and diversified food system. We are recommending $4.5 billion over five years and then $130 million per year, ongoing.

In the coming weeks, we will be sending you our more detailed recommendations for the budget 2024 document, which will look a lot like this. It will provide more updates, more detail and many more recommendations supporting our submission to the committee, including those on climate adaptation, net-zero industrial policy, climate and biodiversity conditions on existing federal spending and environmental justice. Implementing these recommendations would lead to dramatic progress on advancing a healthier future for people in Canada from coast to coast to coast.

I would like to thank you again for inviting the Green Budget Coalition to appear today. We look forward to your questions.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Van Iterson.

Now we're going to go across the table to Mr. Freedman from the Community Radio Fund of Canada.

Go ahead, please, for five minutes.

[Alex Freedman, Executive Director, Community Radio Fund of Canada]

Thank you, Chair.

In Canada, there are more than 235 community, indigenous and campus licensed radio stations. They're all run by a community board. They regularly provide local news and information. In fact, they have to do so by licence. They are all not-for-profit organizations, so every single dollar they receive is reinvested in the communities they serve.

Recently passed amendments to the Broadcasting Act define the critical role they play in these communities by stating that they are uniquely “positioned to serve smaller and remote communities.” They serve “different needs and circumstances of each official language community” and, importantly in this day and age, they “support local journalism” and “strengthen the democratic process”.

These stations are the last to serve rural Canada and underserved urban communities. They broadcast content in over 65 languages spoken by Canadians, including dozens of indigenous languages. They are the home of original Canadian music and arts.

They consistently provide accurate and immediate coverage of civic news information to local communities, and as such, they really are the last line of defence against disinformation.

They are critical to Canadians in times of emergency. As we saw wildfires ravaging communities throughout B.C., Nova Scotia, Quebec and the territories all summer long, community radio stations provided critical and immediate local information to Shelburne County in Nova Scotia, to Yellowknife in the Northwest Territories and to Smithers, British Columbia—just to name a few—whose residents benefit from local journalism initiative reporters, with funding distributed by the Community Radio Fund of Canada.

They helped guide evacuations. They provided details on which stores were open and when the power was coming back. Most importantly, they gave people the information they needed to get home. The importance was amplified by Facebook's blocking of local news outlets. These stations were livestreaming and on air the whole time, and in these communities—MP Bachrach, you'll know what I'm talking about—a radio receiver and batteries are part of any emergency kit.

One difference between community broadcasters and commercial and public broadcasters is the funding they receive. As not-for-profits, community broadcasters don't benefit from the tax credits offered to commercial broadcasters, nor do they receive any federal operational funding like the CBC does. However, they continue to play critical roles for Canadians.

Therefore, we propose three critical priorities.

The first is to continue the local journalism initiative. We regularly hear about commercial broadcasters closing stations and about newspapers shutting down. This year, the LJI has allowed us at the CRFC to give salaries to more than 53 stations to hire journalists to produce civic journalism for underserved communities, including more than seven indigenous communities. More than 450 journalists are hired annually by all administrative organizations, but the LJI is slated to end next March. The program must be renewed and enhanced.

Second, we propose the community radio initiative, costing less than $25 million per year. It's not much in the context of a federal budget, but it would represent a paradigm shift for community broadcasters. This would provide key operational supports focused on labour costs and technical upgrades.

The CRTC is currently conducting a review of indigenous broadcasters. In the CRTC's initial report, the single most important element that these broadcasters need is operational support, and this is true of all community radio stations.

The reality of Quebec stations is different, because they receive provincial funding. In Quebec, the use of volunteers is less frequent, and staff are paid a decent salary. The number of stations there is also much higher than in the rest of Canada. This is in part due to support funding and other local initiatives.

In Australia, for example, they provide as much as $21 million to community radio. The result is that, in a country with two-thirds our population, there are nearly twice as many community radio stations. Minimal support makes a maximal difference.

Finally, we're asking the government to give a portion of the advertising that it previously gave to Facebook and other social media giants to Canadian community news outlets. Enough of sending taxpayer dollars to Silicon Valley—we are asking the government to spend 8% of the more than $140-million advertising budget on community media. This will ensure that advertising is heard and seen by Canadians and that the money goes to support our system.

We're pleased to see the government withdraw those funds from Facebook after it initiated an attack on our local media, and now we're asking that this money be redirected to radio stations that continue to put local communities and reliable news first.

Thank you for considering these suggestions. They will make a significant impact on Canadians' access to local news and information.

I'm more than happy to take your questions in either French or English.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Freedman.

We'll now hear from Questrade Financial Group. Ms. Woods is with us via video conference.

You may start your opening statement, please.

[Tanya Woods, Head and Policy Counsel, Government and Regulatory Affairs, Questrade Financial Group]

Thank you, Mr. Chairman and committee members, for inviting us to appear today.

I am Tanya Woods, head, government and regulatory affairs, and policy counsel for Questrade Financial Group.

Appearing with me today is Romit Malhotra, Questrade Financial Group's chief strategy officer. We'll be tag-teaming on the comments.

Romit, over to you.

[Romit Malhotra, Chief Strategy Officer, Questrade Financial Group]

Thank you, Tanya.

Mr. Chair and committee members, Questrade Financial Group is a mission-driven company dedicated to helping Canadians become much more financially successful and secure. As one of Canada's foremost fintechs, we've enabled Canadians to take control of their finances.

Our journey began in 1999. Today we have over 2,800 employees and manage over $45 billion in client assets, all of that while maintaining our commitment to affordability, ease of use and cost-effectiveness. We've expanded from an investment brokerage into other financial verticals. We've done so by building customer-centric products and making strategic acquisitions, including that of Community Trust Company, a regulated financial institution; ThinkInsure, a home and auto insurance brokerage; Zolo, an online real estate business; and, more recently, Flexiti, a point-of-sale consumer lender.

Our first recommendation relates to Canada's mortgage ecosystem. Like you, we do not want to see Canadians left behind, struggling to pay their mortgages. However, the health and stability of small and mid-size federally regulated financial institutions must be a priority to ensure a competitive marketplace with diverse service providers for Canadians' lending needs, especially those excluded or marginalized by traditional institutions.

In 2023, with the introduction of various mortgage-related proposals and regulations, we've grown concerned about overlapping and conflicting government efforts. Some of these measures create unintended consequences, including administrative burdens and inefficiencies.

To maintain a competitive and responsive regulated lending ecosystem, we propose the establishment of a permanent round table involving industry, government and regulatory representatives. This round table would conduct semi-annual reviews of Canada's regulated mortgage ecosystem that would consider the impact of new regulations on lenders of all sizes. It should also develop a framework to assess government proposals, ensuring that they address the unique needs of small and mid-size regulated financial institutions and avoid negative consequences.

Tanya.

[Tanya Woods]

Thanks, Romit.

Promoting competition and maintaining stability are key goals for a healthy financial sector. In the digital era, this means that smaller innovation-driven companies have a place from which to succeed within the existing financial services ecosystem. It also means that consumers can access all products and services in the marketplace without artificial barriers, gather important data to make informed decisions and be able to control the uses of their personal data.

To these ends, we recommend that budget 2024 allocate funding to the ministry of housing, infrastructure and communities to study and improve Canada's housing and real estate data ecosystem. Measures to ensure real estate data transparency, open access and the promotion of sector innovation and competition are also needed. These will benefit Canadians and spur related digital ecosystems to develop across Canada to empower Canadians at every stage of their housing journey.

Our third recommendation for budget 2024 is to allocate resources and establish a clear plan for the swift implementation of a comprehensive open finance strategy so that Canada catches up with its global counterparts and delivers savings to Canadians. This strategy should ensure that, by the end of 2025, Canadians can access a modernized, cost-efficient, interoperable, secure and principles-based open financial ecosystem, enhancing their financial futures.

The cornerstones of an open finance ecosystem include implementing open banking, real-time payment rails, consumer data rights and portability, and an unbiased technological framework. As Mr. Dodge observed this past June, Canada is seemingly complacent in bringing key elements of its financial system into the digital age, which is perhaps the “result of a lack of political will, regulatory silos and the incumbent interests entrenched in our evolving economy”, which is not very good. He said, “At a time when budgets are stretched for both consumers and small businesses, these costs are difficult to bear and [remain] inequitable.”

As industry partners, we are committed to working with you—all of you—to fulfill the promises made over the past nine years. The time to act is now.

Romit.

[Romit Malhotra]

We want to acknowledge the government's delivery of the first home savings account. Questrade was the first to market this product. We saw first-hand the unprecedented level of interest from younger Canadians and the desire for our related educational information. In August 2023, a Leger survey found that 95% of Canadians viewed rising rental costs and housing affordability as significant issues, making them fearful about their futures.

Knowledge is power. Our fourth and final recommendation is that budget 2024 allocate adequate resources to the Financial Consumer Agency of Canada, so that FCAC can engage ecosystem stakeholders and codesign, promote and increase their delivery of objective and timely financial literacy programs to all Canadians.

Challenging times call for ongoing efforts to support Canadians. We remain committed to working with the committee to ensure that Canadians benefit from the recommendations we are providing today.

Mr. Chairman and committee members, thank you.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Malhotra and Ms. Woods.

Now to hear from Réseau FADOQ, we have Ms. Gisèle Tassé-Goodman and Mr. Philippe Poirier-Monette.

[Gisèle Tassé-Goodman, President, Provincial Secretariat, Réseau FADOQ]

Thank you, Mr. Chair.

Honourable parliamentarians, my name is Gisèle Tassé‑Goodman, and I'm the president of Réseau FADOQ. With me today is Philippe Poirier‑Monette, who is responsible for government relations within our organization.

To begin, I would like to thank the members of the committee for this invitation to present our main budget recommendations.

Réseau FADOQ is a group of people aged 50 and older, with more than 550,000 members. In each of the issues we defend before political bodies, we aim to contribute to improving the quality of life of seniors.

As of today, individuals under 75 years of age receiving only the old age security pension and the guaranteed income supplement will have an annual income of $20,904. A senior in this situation earns an income that does not meet Canada's official poverty line, which is based on the market basket measure.

This index establishes the cost of a market basket measure. It excludes dental care, vision care and prescription drugs, which are major expenses for seniors.

Réseau FADOQ therefore recommends that the government increase the GIS by at least $50 per month for all seniors.

During the 2021 election campaign, the federal government promised to increase this benefit by $500 per year for people aged 65 and over who live alone, and by $750 for people who live with a partner. Two years later, seniors are still waiting.

Réseau FADOQ would also like to point out that the 10% increase in old age security for people aged 75 and over is controversial. People aged 65 to 74 feel left out. Given that financial distress knows no age limit, our organization recommends extending this enhancement to everyone aged 65 and over.

We must also address the shortcomings in the method of indexing old age security. This program is indexed on the basis of the consumer price index, while wages are moving at a faster rate of about one percentage point. As a result, federal benefits will play a gradually diminishing role in the retirement income replacement rate in the future. Our organization is calling on the government to review the method of indexing old age security to account for wage growth.

The labour shortage is a worrying issue. To alleviate this reality, Réseau FADOQ suggests that the federal government encourage experienced workers to extend their careers by introducing a targeted tax credit. This was another promise made during the last election campaign, and it has yet to be put in place.

Another unfulfilled promise concerns caregivers. The government committed to expanding the Canada caregiver credit into a refundable, tax-free benefit. We encourage the government to move forward on this measure. In Canada, 20% of caregivers experience financial insecurity.

Lastly, Réseau FADOQ would like to address the issue of dental care. About one in five Canadians said they do not seek dental care because of the cost. In the last federal budget, our organization welcomed the extension of the dental insurance program to seniors in 2023. Unfortunately, nothing has been announced yet. It is important that the government implement this program quickly and provide details on insured services.

I would like to thank the members of the committee for listening.

Mr. Poirier‑Monette will answer any questions. I reserve the right to contribute.

[The Chair, Liberal, Peter Fonseca]

Thank you, Ms. Tassé‑Goodman.

Members, we have many distinguished guests and witnesses here with us today. I know you're all itching to ask many questions.

In this first round, for all of our witnesses' understanding, each party will have up to six minutes to ask questions.

We are starting with MP Chambers for six minutes.

Go ahead, MP Chambers.

[Adam Chambers, Conservative, Simcoe North, ON]

Thank you, Mr. Chair.

Thank you to all our witnesses.

I would like to go on the record saying that pre-budget consultations that have this many witnesses at committee are very hard, because there are so many great people to ask questions of. I wish every other committee would frankly take it upon themselves to dig deeper within their own remits and provide the government with some recommendations they want to see in the budget.

I want to spend a few minutes with Governor Dodge.

Governor, you mentioned a number of months ago one thing that the government can do. In fact, you said that about all the feds can do to tame inflation is slow their spending. Do I have that about right? That was in an interview you provided.

[David Dodge]

Yes, that's more or less right.

[Adam Chambers, Conservative, Simcoe North, ON]

Okay.

I'm just curious. The government's top-line spending is about 28% above pre-COVID levels. Forget all about the COVID pandemic spending. Annual spending this year is up about 28% versus pre-COVID levels.

Does that represent a slowing of spending in your mind?

[David Dodge]

In real terms, it is up. In real terms, it's actually appropriate that it's up. It's a question of how much and what it is spent on.

[Adam Chambers, Conservative, Simcoe North, ON]

That's fair enough.

If you think the government really has only one lever with respect to inflation, were you surprised when members of the government claimed that the government's plan to bring inflation down was working, when in one month, out of 28, inflation dropped below the 3% target of the Bank of Canada?