Finance Committee on Sept. 19th, 2024

[Adam Chambers, Conservative, Simcoe North, ON]

There are very few.

[Heidi Yetman]

Yes.

[Adam Chambers, Conservative, Simcoe North, ON]

Okay.

Would it surprise you to learn that in any given year, individuals who make less than $120,000 actually have a capital gain over $250,000 once in their lifetime?

[Heidi Yetman]

I've heard that. Yes. I know that.

[Adam Chambers, Conservative, Simcoe North, ON]

Since most of your members are likely not in the 0.13% that the government's going after, would you support carving out anyone who makes under $120,000 or $100,000 from paying the increased capital gains tax?

[Heidi Yetman]

No. If somebody is able to have more than $250,000 in capital gains, they're doing okay, so no, I disagree.

[Adam Chambers, Conservative, Simcoe North, ON]

Even if that's just a once-in-a-lifetime event?

[Heidi Yetman]

Well, good for them. Right on for them that they get that once-in-a-lifetime capital gain.

[Adam Chambers, Conservative, Simcoe North, ON]

Your members who inherit family property or something, a once-in-a-lifetime event, you think should pay more just once, even though they're not the richest of the rich.

[Heidi Yetman]

Right.

[Adam Chambers, Conservative, Simcoe North, ON]

I'm just trying to understand where you're drawing the line.

[Heidi Yetman]

Teachers understand the common good.

[Adam Chambers, Conservative, Simcoe North, ON]

Okay.

[Heidi Yetman]

I'm going to say that too because they all work for the government. They understand the common good.

[Adam Chambers, Conservative, Simcoe North, ON]

Thank you, Ms. Yetman.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Chambers.

Now we're going to MP Thompson, please.

[Joanne Thompson, Liberal, St. John's East, NL]

Thank you.

I'm going to start with you, Ms. Yetman. Welcome back to committee.

[Heidi Yetman]

Thank you. It's nice to see you.

[Joanne Thompson, Liberal, St. John's East, NL]

I appreciate your opening comment. I do think that the budget was transformational, so thank you for highlighting that. I think that the programs—you referenced housing, dental and pharma—are absolutely critical for so many Canadians. I'm quite proud that we were able to do that work.

You also referenced three other platform programs that were also really significant. The loan forgiveness program really impacts teachers, and I agree that it's disproportionately women, so I think that's a really strong start and support for so many young professionals.

I believe we spoke about mental health supports the last time you were here, and of course the national school food program.

What I'd like you to speak to the committee about is why the equality issue and the equality link with capital gains are so important. I'd like you to speak to the fact that asking a small amount from those who have more in order to allow children to have food in their bellies really speaks to the values that, as Canadians, enable us to work together to ensure that no one is left behind.

[Heidi Yetman]

Well, you said it—that no one would be left behind—and it is about the common good. I don't mind paying taxes because I know that I'm supporting people who need help.

I also mentioned that there's a retention and recruitment problem across this country, and it is a crisis as far as I'm concerned. In a study done in the Toronto District School Board, they put in a food program. What they learned is that it improved overall learning and achievement, yes, but it also reduced overall negative behaviour. I think that's really important here, because retention and recruitment are also linked to working conditions. We are hearing that there's more violence in the schools. There are more children who have needs. Just putting money into the school food program, for example, really brings everybody up. It elevates everybody. It also saves families $129 to $189 per child per month on grocery bills.

We all have to contribute, and the money has to come from somewhere. As I said earlier, I would like to see even more taxes on the very rich, to tell you the truth, because we need to take care of people on the ground. It's about taking care of people and making sure that Canadians are taken care of.

Just on a personal note, I walk on Rideau Street every day. I don't know if any of you in this room get a chance to do that, but it really shouts out that we need to help people on the ground. It is through taxes that we do that, and it's through government programs to help these people.

[Joanne Thompson, Liberal, St. John's East, NL]

Thank you very much.

I'm going to take those comments and move over to Ms. Trottier.

Thank you for your opening comments, and thank you for the work that you do.

I worked for a number of years as ground-level support services for the most marginal, and we did that work based on philanthropy. Thank you for what you do. I can speak very clearly to the impact that it has on people's lives.

With that said, I want to reference some of your opening comments when you spoke to the reality that workers are taxed at 100% of their salary and income, whereas we see, for many C-suite executives, that there is that stock option package, and it does create a marginal rate that is lower than that of their employees.

Would you speak to that inequality, if you wouldn't mind, in more detail, and exactly why these stock options and capital gains have such a tax advantage?

[Dr. Claire Trottier]

Thank you so much for the question.

I think there are many different ways in which wealthy people are continuing to amass even more wealth. We see it with very high salaries for C-suite executives, which keep climbing. Even in situations where companies are actually laying people off, CEOs make massive bonuses in those years. There are different types of mechanisms to compensate C-suite executives. Some of those are done in such a way that it reduces the tax burden on that income because different categories of income are taxed differently.

My understanding is that a pretty significant chunk of those people in the top 1.5% have capital gains of over $250,000 a year. I think some speculate that part of the reason is that a shift is occurring and there's a preference for receiving income as capital gains over salary, for example, because it's taxed at a lower rate. My view is that by making the inclusion rate fairer, hopefully you can address that, at least to some degree.

I'm personally in agreement with Ms. Yetman that we could go even further, actually.

[Joanne Thompson, Liberal, St. John's East, NL]

Thank you.

I think I still have time.

[The Chair, Liberal, Peter Fonseca]

You're out of time right now. Thank you, MP Thompson and our witnesses.

Now we'll go to MP Ste-Marie, please.

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

Thank you, Mr. Chair.

My questions are for Mr. Genest‑Grégoire and Mr. Jacques.

I want to start by thanking each of the witnesses for being here today. This is a very important bill. Obviously, there's the principle of fairer distribution of the tax burden, but it's also a matter of seeing how this will be implemented. For example, in terms of the impact on SMEs, we'll have to see what will be in the final text with respect to the incentive for Canadian entrepreneurs. There's also the higher lifetime threshold and its indexation. I look forward to seeing the final text and assessing whether it addresses all the concerns and aspects raised here.

I want to acknowledge Ms. Trottier's presentation in particular. It's always very impressive to see someone come here and speak for the common good, even though they themselves must take on a bigger share of the tax burden. She gave us some very powerful testimony in that regard.

I would like to come back to Mr. Jacques, who had not finished his presentation. I would like to give him the time he needs to finish it. At the same time, he can answer my first question.

In your opinion, Mr. Jacques, what impact would raising the capital gains inclusion rate have on Quebec and the provinces?

You may take the time to finish your presentation before answering the question.