Finance Committee on May 17th, 2022

[Adam Chambers, Conservative, Simcoe North, ON]

Thank you very much, Mr. Chair. I've also got my clock here, and I'll try to remain on time.

Ms. Sarangi, I'd like to continue with you for a bit.

Our committee is also studying inflation. You mentioned, I think, 1.3 million children living below the poverty line. With the inflation we're seeing now, do you have any projections on how that number may shift? If not, what are you seeing in terms of some of the individuals you work with? What's their experience due to the inflation we're seeing?

[Leila Sarangi]

We don't have any current data. We use tax-filer data to generate our numbers, but there is a two-year lag in that data, unfortunately. We anticipate the rate of child poverty would decrease based on receiving CERB, which brought family incomes up. With these repayments and with benefits ending, we believe the numbers for this year will show a significant increase in the rate of child poverty again.

From the stories we're hearing and the qualitative information we get from families from coast to coast to coast, we know they are really struggling. Everything has increased. Groceries are increasing by $500 or $600 a month, along with gas prices, rent prices and clothing for children. We are hearing real stories of people struggling to get by. Rent moratoriums are being lifted.

Children in families that are struggling are very insecure right now. If this continues, we're going to see an increase in the rates of homelessness and homelessness for children. This is such a severe issue for families, right now, and it's a real struggle that needs to be addressed.

[Adam Chambers, Conservative, Simcoe North, ON]

Thank you for that.

Anecdotally, I can tell you from experience in my riding in Simcoe North that most, if not all, of the motel rentals—traditional motel properties—are no longer short-term stays. They are filling a void in the marketplace because there's not only a lack of rental accommodations but also a lack of affordable accommodations. I totally understand where the stories you're hearing across the country are coming from. I'm experiencing it in my own riding.

Sticking on the subject for a moment, the longer inflation goes on, I think the more of a challenge it is for those on fixed income, including those in the older age categories, but also those with families. The Bank of Canada said inflation hurts the lower-income folks the most. I think that's why we need to be very focused on this issue.

I am also sympathetic to this view that the government is going to go after individuals who don't have a capacity to pay and is going to spend a lot of money in trying to do that. I appreciated my colleague, Mr. Blaikie, for uncovering how much money they intend to spend.

I don't want to put you on the spot here, but in a general sense, how does it make you feel, or what's your reaction to hearing how much money the government's going to spend trying to recover this money from low-income individuals?

At the same time, there are examples of the government not recovering money, whether it's through the Panama papers. There were 900 people whose names were provided to this government, but there's not been a criminal conviction. They expect to recover maybe $20 million. They've only completed 200 audits. There's that group of individuals. There are also these large corporations that we just gave billions and billions of dollars to without any kind of restriction, and then they paid dividends to their shareholders. The government seems to have lots of money to subsidize share prices for corporate individuals across the country, yet when it comes to the lowest-income folks, your organization is being told by the government, “Well, we're going to spend $200 million to go after them.” How does that make you feel?

[Leila Sarangi]

My feelings are one thing, and I feel frightened for the people I work with on a day-to-day basis. I feel very saddened, and it's very frustrating to know that we know what to do and that there are mechanisms in place to appropriately deal with it. That we're not doing it is extraordinarily frustrating, personally and professionally.

I want to appreciate your pointing out the hypocrisy between the ways in which people who received individual income benefits during a real crisis are being treated versus, for example, larger corporations that received wage subsidy programs and then seemed to lose their integrity over time. There were CEOs receiving very large bonuses while receiving the wage subsidy who were not paying the kinds of corporate taxes they should be paying or finding loopholes or storing money in offshore tax havens.

Those are the places where the federal government should be investing resources to generate revenue. Close those loopholes, implement an extreme wealth tax and generate revenues that can then be reinvested to support the families.

[Adam Chambers, Conservative, Simcoe North, ON]

Thank you very much. I'm going to get the hook from the chair here.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Chambers. It's all good.

We are moving to the Liberals, and now we have MP Mac-Donald.

[Heath MacDonald, Liberal, Malpeque, PE]

Great. I'm glad you clarified that, Chair, because there is a difference. The story was that when we came ashore, we carried the Mc-Donalds on our shoulders to get them to land.

[Ken McDonald, Liberal, Avalon, NL]

You were a stronger breed, obviously.

[Heath MacDonald, Liberal, Malpeque, PE]

Mrs. Sarangi, kudos to you for the work you've done. One child or one person in poverty is one too many.

When I became involved in politics, it was in 2015, and I was always.... As far as the efficacy of groups like yours goes, even in my home province, they always had an open door and an ear to listen, and there have been some tremendous things done.

The child tax benefit was huge. We'll have child care at $10 a day. I know there are no stats on that, but it's going over very well. There's dental care. The EI reform, again, is something that I think will help, especially where I come from, where we have real seasonality and many temporary foreign workers who will now be able to become permanent residents.

One that always gets forgotten in the conversations is seniors in poverty. Our government raised the GIS by 10%, but can you talk a bit about what the next...? You said there's no silver bullet, but what's your next vision for poverty in Canada? What should the government be looking at?

[Leila Sarangi]

Again, I think we really need to be looking at the Canada social transfer, the CST. There's a lot of money that gets invested into that, but it's been capped. It's been capped for a very long time. The money that's transferred to provinces and territories through the CST is a block transfer that the provinces and territories are able to spend whichever way they like for child care, education and social and disability assistance programs. We want those caps lifted. We need increased investment into those programs and we need accountability mechanisms to ensure that anything funded through the Canada social transfer is advancing our human rights obligations.

Actually, right now, the United Nations is today questioning the Government of Canada on its commitments to the Convention on the Rights of the Child. It's timely that we're having this conversation. I think the Canada social transfer, the income transfer to individuals, is one crucial piece.

We still need available and accessible services, and you mentioned child care. Those services should be tailored to meeting the needs of families who are in the lowest income brackets. When we design services that way, we will bring everybody along.

[Heath MacDonald, Liberal, Malpeque, PE]

Thank you.

I'm going to switch now, Chair, to Mr. Goddard.

I have quite a few small craft breweries in P.E.I. and some in my riding, Mr. Goddard, and I always struggle with.... As we've heard over the past number of years, relevant to a lot of the bigger corporations buying up the small craft breweries....

You talked about the excise tax, which is fine—that's obviously an issue—but the small craft breweries in P.E.I. produce about 3,000 to 4,000 hectolitres a year. The one that is likely the largest in Atlantic Canada, which I consider a small craft brewery, produces around 15,000 hectolitres a year. That's the breakdown on the representation of those breweries.

We talk about breweries building themselves around communities and being local small craft breweries. Where is the division? How do you separate the big guys from the little guys, when we know that the profit margins of some of the bigger breweries are 60% to 70%?

[Brad Goddard]

That's a good question. Getting a frame of reference for how big is big and how small is small is really challenging. There are a lot of different business models. Some people have tap rooms and just plan to trade out their front door. One of Canada's largest multinational craft breweries does 620 million hectolitres. To get it into perspective, we're saying that a million should be big. That's how the Americans have defined craft, so when we look at....

I'll use some of your locals. Mergers and acquisitions are going to be strategic mergers. A brewery on P.E.I. may, to reach another market, make a strategic partnership with a brewery in western Canada. At the moment, you would have to join both your annual worldwide productions together. In those very low excise thresholds, around 2,500 hectolitres to 5,000 hectolitres, your excise rate doubles. I guarantee that brewers of that size are not becoming twice as efficient to be able to absorb a doubling of their excise rate.

[The Chair, Liberal, Peter Fonseca]

Thank you.

[Heath MacDonald, Liberal, Malpeque, PE]

Thank you.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP MacDonald. I was just hearing all that talk about beer.

We're moving to the Bloc with MP Ste-Marie for two and a half minutes.

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

Thank you, Mr. Chair.

Mr. Demers, you alluded to climate change in your presentation.

Could you remind us of what that means for municipalities in terms of infrastructure requirements? What can the federal government do in this area?

My question is for Mr. Demers or Mr. Boulet.

[Jacques Demers]

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

I'd like to begin by talking to you about the fuel tax, which comes up often. We were told several times that this tax would be used more widely, for things like fire stations and city halls. But it should, at the very least, include dams.

Among the most serious impacts of climate change were the major floods that occurred here in 2017 and 2019, particularly in Quebec. There will be others; it's only a matter of time.

Preventive measures should be taken because some small municipalities don't have the resources to reinforce their dams, nor the right to use funds from the fuel tax program and Quebec's contribution to maintain these dams.

It's true of course that maintenance is needed for roads, municipal buildings and water distribution facilities, but why not provide measures that would allow us to deal with emergencies? It seems logical to me. We're not asking for additional funds. What we're asking for is flexibility in how we use these funds. Otherwise, it would be a matter of asking whether the management of these dams ought not to be a matter for the federal government or a different level of government.

Essentially, we should at least have access to these funds. We are making our culverts bigger, and doing various other sorts of work. We know that we need to be resilient. We are aware of the repercussions of climate change, but we also need to protect our neighbours, particularly those who live downstream from our region. The water flow needs to be managed to prevent the water level from rising too quickly.

There is a lot of investment in our infrastructures, but what's required is funding flexibility.

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

Does that fully answer the question, Mr. Boulet?

[David Boulet]

Yes, it certainly does.

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

Your message has been heard. There are many problems with the dams in my riding's municipalities. We've been asking the government about this for a long time. We now want to get things moving.

I don't have much time left, but I'd like to make a brief comment. I haven't had the opportunity to ask all the witnesses questions, but I want them to know that we are very grateful for their comments. I have taken notes and agree with what they have said.

Ms. Sarangi, Mr. Goddard and Mr. Hayne, I'd like to thank you for your testimony.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Ste-Marie.

MP Blaikie, go ahead, please, for two and a half minutes.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Thank you very much.

Ms. Sarangi, I know we've been having a good conversation today about poverty in Canada and some of the best ways to address it.

It might have been Mr. Chambers who was talking a little bit about how people who are already experiencing poverty are affected by the incredible inflationary pressures in the current market. I know we put on notice a kind of proposal to send some money back to low-income Canadians through the GST rebate this year, to increase the Canada child benefit and to take the GST off home heating as part of a package. It's understood that the New Democrats have been advocating that the surtax that the government announced should also apply to big oil and gas companies and to big box stores that have profited a lot over the course of the pandemic, I think it's fair to say. The numbers bear that out.

I'm wondering if you want to comment a bit on that in the context of trying to figure out what we can do to provide help to Canadian families right now who not only are feeling the pressure but for whom these increases in the cost of food and rent are really the difference between being homeless or not.

[Leila Sarangi]

As I mentioned before, we all know that these inflationary increases are having a real impact on low-income families.

Those benefits that you mentioned—the GST credit and others—will be subject to clawback if we don't have a full-serve amnesty. To be clear, those benefits will be garnisheed from people who are asked to repay the CERB and the CRB to offset any payments that are owed.

I really want to stress the accessibility of benefits for people. People have to file their income tax forms to be able to receive income benefits. We appreciate the measures your party has put forward. We also need to look at those who are not filing income taxes or who are experiencing barriers to accessing some of the benefits.

Very quickly, I'll talk about the Canada child benefit. It's tied to immigration status. A person who is here and waiting for immigration to make a settlement or a ruling on their immigration status may be working, paying their taxes and paying into the system, and sometimes may even have Canadian-born children, but that person is not eligible to receive the benefit because it's arbitrarily tied to their immigration status.

We need to be looking at all of these programs and ensuring that people who experience multiple and systemic marginalization have access. They have to be low-barrier programs. They have to be available for families. When we're reaching those who are the furthest away, we're going to bring everybody along in our programs.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Blaikie.

Moving to the Conservatives, we have MP Fast for five minutes.

[Ed Fast, Conservative, Abbotsford, BC]

Mr. Hayne, you represent the Boating BC Association. Is that correct?