Human Resources Committee on Oct. 25th, 2016

[Wayne Long, Liberal, Saint John—Rothesay, NB]

I know you're a strong proponent of TFSAs. Explain to me how more than doubling the TFSAs, when only 6.7% of Canadians actually maximize their TFSA contributions, helps those living in poverty. How does it help those in shelters? How does it help those on the streets?

[Aaron Wudrick]

I guess the first thing I would say is this. Some people say, well, $10,000; who can afford to put money in there if you don't have a lot to begin with? For really wealthy people, they're not looking at vehicles like the TFSA. That is not something on their radar in terms of investments.

I remember distinctly when this change was.... I got a call from a supporter in the GTA. She and her husband were new Canadians. They had been using the TFSA. She said her household income, with her husband, was around $40,000. She said they had been able to almost max out their TFSA every year. I said, “That's very impressive. I don't think the average person would think you could save that much.” She said it was a key part of their retirement plan, precisely for the reasons Mr. Brain mentioned—namely, in terms of the money you put in there, whatever accumulates is tax-free.

When you ask how we reduce poverty, remember, we're not just talking about people today, we're talking about poverty in the future.

[Wayne Long, Liberal, Saint John—Rothesay, NB]

This is a poverty reduction strategy, and we're trying to come up with innovative ways to help those in need. I just want you to elaborate on how you think the TFSA helps those living in poverty.

[Aaron Wudrick]

Sure, but again, we're not just talking about people in poverty today, we're talking about preventing people being in poverty tomorrow and in the future. If you have individuals who but for the TFSA would find themselves in poverty in 10, 20, or 30 years, I think that's a very important vehicle.

Again, it's not the single policy or the magic bullet that will eliminate poverty, but it is part of the array of tools available to Canadians.

[Wayne Long, Liberal, Saint John—Rothesay, NB]

Why would you advocate for the doubling of it?

[Aaron Wudrick]

We're advocating for a return to the number it was at. Look, I think there are Canadians who are of modest means, and we count some of our supporters among them, who made great use of that tool. They thought it was an excellent tool to complement RRSPs, for example, and they were disappointed to see it go. I understand there's skepticism about how many people make use of this, but from our point of view, and from our own supporters' words, there are those who make use of it.

[Wayne Long, Liberal, Saint John—Rothesay, NB]

What benefits are you seeing so far—it's early, because cheques really started coming out in July—in the Canada child benefit compared with previously?

[Aaron Wudrick]

First of all, we are supportive of the principle that the money is better sent to parents than, for example, to a government-run day care system. We think that principle is a good one, so we supported the introduction of the UCCB, but we also supported the change made by this government. We believe the means-testing reflects an important principle, which is that the money should go to the people who need it. Sending the same amount of money to a family making $20,000 and one making $2 million doesn't make any sense. It makes sense to us that the money is being tilted toward the people who need it more.

[Wayne Long, Liberal, Saint John—Rothesay, NB]

Thank you.

[The Chair, Liberal, Bryan May]

You have a minute and a half left, sir.

[Wayne Long, Liberal, Saint John—Rothesay, NB]

Mr. Brain, thanks again for doing your presentation so early. I didn't realize you were in B.C.

I'm going to give you an opportunity to come up with a couple of innovative ways, from what you see and from your experience, to reduce poverty.

[Brad Brain]

The last question is an intriguing one. How do we help the people who are in desperate need today? Things such as the tax-free savings account don't really do that, but as the last speaker mentioned, what they do is allow people to look after themselves with as much dignity as we can provide.

As I mentioned in my presentation, a person can have what appears to be a substantial amount of money, but if we look at it as something that's going to last their lifetime, that's really not the case. If somebody has $40,000 or $50,000 in a tax-free savings account and that money is going to have to last a decade or two, it's really not that much per year. Giving people the tools that allow them to look after themselves is, to my mind, completely consistent with the objectives of the committee.

One thing that resonates with me is the idea with regard to people with disabilities. When it comes to innovative solutions, one thing I would put on the short list for that is taking a strong, hard look at the registered disability savings plan and making it something that is more accessible. I've been doing this work since long before the RDSP was around—it's a relatively new program—but I have had only one client who has ever been able to utilize it. The reason is that the plan is just not terribly functional right now.

[Wayne Long, Liberal, Saint John—Rothesay, NB]

That's a great suggestion.

[Brad Brain]

Here we have a segment of the population that is in desperate need of assistance. Without a doubt, people who suffer from a severe and prolonged disability are going to go through their money fast. They could have been fairly well off before the disability struck, but they're going to burn through their income.

In order to give people the tools that allow them to take the best care they can of themselves, I think we should really take a strong look at making the RDSP first of all more understandable, but second more accessible.

[The Chair, Liberal, Bryan May]

Exactly—

[Brad Brain]

Perhaps one thing we could do along that line is this. Right now, if a person touches any of the money that has been contributed in the last 10 years, that's a problem. Maybe what we should do is have some sort of graduated system. Maybe you could take 10% out in the first year and another 10% out in the second year—something along those lines, something that would be a little bit more flexible—rather than employ the fairly rigid system we have at the moment.

[Wayne Long, Liberal, Saint John—Rothesay, NB]

Thank you very much.

[The Chair, Liberal, Bryan May]

Thank you, Mr. Brain.

I'm afraid we need to cut it off, ladies and gentlemen. Duty calls; we need to get into the House for votes this morning.

Thank you to all the members of this committee.

Thank you so much to all the witnesses and to all the folks who made today function as well as it did—the translators, the tech folk, and of course the analysts and the clerk. Thank you very much, guys.

We are adjourned.