Evidence of meeting #129 for Government Operations and Estimates in the 44th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was different.
A video is available from Parliament.
Conservative
Stephanie Kusie Conservative Calgary Midnapore, AB
In your opinion, will this impact only Canada's most wealthy, or will this impact middle-class Canadians as well?
Senior Director, Manufacturing and Value Chains, Canadian Chamber of Commerce
In our conversations with members, we have a number of small businesses that have been affected by this. It's not just the wealthiest of Canadians. It is affecting small businesses who are trying to look at new investments in Canada and are not part of the wealthy 1%.
Conservative
Liberal
Irek Kusmierczyk Liberal Windsor—Tecumseh, ON
Thank you, Chair.
I wanted to talk about the red tape reduction study, but I'm going to bite on this conversation that we're having here.
The average pay of the top 100 CEOs in Canada is about $14.9 million. It is 246 times the average worker salary in Canada. We heard a lot about fairness today. We also heard about inequality.
Explain to me how I can explain to a nurse or a teacher or an electrician or a carpenter in my riding why 100% of their salary, their employment income, is subject to tax, whereas for a top CEO earning $14.9 million, who has investments in stocks they're selling or real estate or cottages, those capital gains are subject to being taxed at only 50%. Help me explain to my residents how it's fair that for a worker—a nurse, a teacher, a carpenter, a welder—100% of their employment income is subject to tax, whereas for a CEO who's earning $14.9 million, 246 times the average salary of an average worker in Canada, for their investments, whether stocks or real estate, only 50% of that profit is subject to tax.
How is that fair, sir?
Senior Director, Manufacturing and Value Chains, Canadian Chamber of Commerce
I think you have to look at overall generational fairness. I don't look at picking and choosing. It's about what this means for everyone and about what we look at in the future. I know a number of small business owners who are not part of the wealthiest Canadians and have made investments and are caught up in this.
At the end of the day, though, I think we have to get away from these carve-outs. I think we have to look at what's fair for all Canadians. That's where it goes back to what I said earlier. It's about comprehensive tax reform that we have desperately needed, something that our organization has called for to help all Canadians and all businesses for communities. It's not about one group or the other.
Liberal
Irek Kusmierczyk Liberal Windsor—Tecumseh, ON
Sir, we had a much more fair capital gains system under Conservative Prime Minister Brian Mulroney, when the capital gains inclusion rate was 75%, the highest in history. It was mentioned to you today that neither productivity nor innovation suffered. In fact, Canada experienced the highest productivity and innovation at that time, with the tech boom of the 1990s.
Tell me, how do I square that?
Senior Director, Manufacturing and Value Chains, Canadian Chamber of Commerce
A simple, fair and principled tax system that works in the best interests of Canadians is the way to go. It's why I think we need a non-partisan effort by all political parties to commit to a comprehensive and independent review of Canada's tax system. It cannot be politicized. It has to be all parties coming together to work in the best interests of Canadians to make this happen.
Liberal
Irek Kusmierczyk Liberal Windsor—Tecumseh, ON
Mr. Greco, answer me this question. Why does Galen Weston have a lower marginal effective tax rate than a plumber, a teacher, a nurse or a welder in my community, and how is that fair?
Senior Director, Manufacturing and Value Chains, Canadian Chamber of Commerce
Again, at the end of the day, we have to look at generational fairness. We have to consider the actions that we want today.
Do we want future prosperity? Do we want economic opportunity for the benefit of Canadians?
If we don't have jobs, prosperity or investment in Canada, it affects all Canadians. It affects the ability of Canadians to get what they need at the end of the day.
Liberal
Irek Kusmierczyk Liberal Windsor—Tecumseh, ON
Mr. Greco, is it a good thing? I'm going to ask you some questions.
Is it a good thing that we introduced the child care plan, which is saving moms and dads, who are employees working for the companies you represent, $10,000 a year on average? Is that a good thing?
Because of that child care, they're able to take that job or go to school and improve their skills. Is that child care plan a good thing for your organizations and the companies you represent?
Senior Director, Manufacturing and Value Chains, Canadian Chamber of Commerce
Yes, there have been positive steps taken by government in terms of child care—
Senior Director, Manufacturing and Value Chains, Canadian Chamber of Commerce
May I finish?
Liberal
Irek Kusmierczyk Liberal Windsor—Tecumseh, ON
—the wealthiest in Canada to pay a little more so that we can continue to provide child care and save moms and dads $10,000 a year on the cost of child care?
Is that not fair? Is that not a good thing?
Senior Director, Manufacturing and Value Chains, Canadian Chamber of Commerce
Again, I think you have to look at simplifying the tax system. We can't have a reliance on tax-and-spend politics. It undermines growth; it undermines investment and it undercuts future generations.
When we look at fairness...if we do comprehensive tax reform properly, that will allow us to do it for the benefit of all Canadians.
Conservative
The Chair Conservative Kelly McCauley
Thank you very much.
We will now go to Mrs. Vignola for two and a half minutes, please.
Bloc
Julie Vignola Bloc Beauport—Limoilou, QC
Thank you, Mr. Chair.
My questions are for both witnesses.
Let's go back to the regulations and the amount of red tape.
A few weeks ago, I held a symposium on sustainable tourism. Stakeholders and businesses of all shapes and sizes all told me that there was too much paperwork to fill out to apply for grants or loans, or to access certain tax credits. They added that it was hard to get information about what they were entitled to, particularly in the case of SMEs. Large companies, as well as investors, have access to a wide range of tax credits. It's quite astounding.
What can be done, first, to ensure that information is provided in a timely manner and, second, to reduce the paperwork involved to efficiently support our businesses? Are there examples of this elsewhere in the world?
Senior Director, Manufacturing and Value Chains, Canadian Chamber of Commerce
I'll start.
One example is the scientific research and experimental development program, or the SR and ED program. There are forms, and there's one specific tax form that's very complicated for SMEs to fill out. I think reducing the redundancy, looking at forming check boxes and being able to...that's one aspect of it that works. It's simply a yes or a no, instead of having to fill out a ton of information. I think that's one aspect of it.
I think it's also about helping them have the resources they need. Tool kits are another thing. You look at having.... In the case of the SR and ED program, the Canada Revenue Agency helps deal with compliance and auditing, making it easier for customer service to be established to enable them to be compliant. I think that includes improving compliance training but also getting different compliance officers to meet with manufacturers to understand....
Bloc
Julie Vignola Bloc Beauport—Limoilou, QC
Thank you, Mr. Greco. I want to give Ms. Jones some time to respond.
Chair, External Advisory Committee on Regulatory Competitiveness, Business Council of British Columbia
Thank you.
I think you're pointing out that there are lots of opportunities to simplify without undermining the objectives. Certainly, paperwork forms are something that we heard a lot about at the external advisory committee. Our advice on that was that every department and agency needs to get very focused on what it can do. Leadership is one of the things that are really important. There are lots of priorities in government, but I think this one deserves to be a priority.
The last thing I would say is you don't need to look around the world for good examples. Nova Scotia is doing a great job of this with the example I shared of the doctors. It's also looking at housing and other things.
I think just about any priority of government that you can imagine can be made better by trying to simplify some of the unnecessary burden.
NDP
Taylor Bachrach NDP Skeena—Bulkley Valley, BC
Thank you, Mr. Chair.
Mr. Greco, I was somewhat stunned that you weren't able to address my question about wealth inequality and income inequality, because these are widely held economic concerns. Does the chamber of commerce have a position or a perspective on the impact of widening wealth and income inequality in Canada?
Senior Director, Manufacturing and Value Chains, Canadian Chamber of Commerce
We want equality for all at the end of the day. There has to be equality and fairness for all.
NDP
Taylor Bachrach NDP Skeena—Bulkley Valley, BC
Do any of the policies that you've been advocating today contribute to greater equality when it comes to wealth or income?