Status of Women Committee on May 15th, 2007

[Alexandra MacLean]

I think the working families tax plan includes WITB, the working income tax benefit. The other elements, I may have to get back to you on. I'm sorry, we had a number of tax measures this budget, only some of which are included in the working families tax plan. So I wouldn't want to—

[Joy Smith, Conservative, Kildonan—St. Paul, MB]

No, that's okay.

[Alexandra MacLean]

I'll come back.

[Joy Smith, Conservative, Kildonan—St. Paul, MB]

If you could come back to that, that would be great.

[The Chair, Liberal, Yasmin Ratansi]

You have 10 seconds now.

[Joy Smith, Conservative, Kildonan—St. Paul, MB]

Well, in 10 seconds I just want to thank you for coming today. There are so many things that we need to cover. It's very gratifying to see these things that are being put in place for low-income Canadians.

[The Chair, Liberal, Yasmin Ratansi]

Thank you.

Ms. Mathyssen, for seven minutes.

[Irene Mathyssen, NDP, London—Fanshawe, ON]

Thank you very much, Madam Chair.

I wanted to go back to the working income tax benefit. I'm not really sure, but my understanding is it's a tax credit. Is that correct?

All right. So you were talking about a variety of figures, and you talked about $12,800. Would that be the maximum income? Could you explain what that means exactly?

[Virginia Poter]

I'll give it a go, but experts here may be able to do it more clearly.

The way the benefit has been constructed is that it is phased in over a period of time. So for every dollar that you earn over $3,000, you would earn an additional, I think, 20 cents on the dollar. So instead of earning $1, you would earn $1.20, until you get up to $5,500 of earned income, at which point you would be earning $500 extra through the WITB. You would earn that maximum amount of the benefit over an income range of $5,500 to $9,500. That would be your plateau.

After that, because it's a targeted income benefit trying to get to lower-income Canadians, it would be phased out as individuals are earning more. It's phased out at a rate of 15%. So for every dollar you earn, your benefit is reduced by 15 cents. Eventually, because it's being phased out at 15%, when you get to $12,800 of earned income, there's no more benefit being received by the recipient.

[Irene Mathyssen, NDP, London—Fanshawe, ON]

Okay. It's a tax credit, though. When is it received by the recipient? If it's a tax credit, is it in April, when you file your taxes?

[Virginia Poter]

I believe it's going to be a monthly payment.

Is that correct?

[Alexandra MacLean]

I'm not sure if it's monthly, but it will be a payment that's more than annual, certainly, beginning in 2008. And there will be a possibility to get an advanced payment to prevent people from having to wait too long, as they normally would with tax relief measures, which are after the end of the year.

[Irene Mathyssen, NDP, London—Fanshawe, ON]

Who benefits most—what income group--and who's left out? I am very concerned that people at the very bottom, who are earning less than $3,000, may be overlooked. Is that correct?

[Barbara Glover]

Just factually, if they don't make that income, they are not included.

[Alexandra MacLean]

That's right. It's intended as a work incentive measure. So there is a phase-in that's related to having earnings from employment. So yes, there is that phase-in range that Ms. Poter mentioned, beginning at $3,000. I would add that this is for a single individual. There's a different phase-in and phase-out regime, again, for families and couples. It again commences at $3,000 of family income, but the phase-out is actually at $21,167 for single parents and couples.

[Irene Mathyssen, NDP, London—Fanshawe, ON]

Is there any consideration given to someone who simply doesn't have the opportunity or ability, someone who is challenged or disadvantaged, who cannot possibly hope to make $3,000? Is there any consideration given to that individual?

[Barbara Glover]

I'm just going to make one comment, which is that the intent of this is to support individuals who are working without a lot of income or who are making the decision to work or not for the various reasons that were put on the table. So the short answer is that it's not intended to serve other purposes.

I just wanted to make one other comment about labour market participation and the encouragement of individuals to join the labour market. There were some calculations done to try to translate the history of what happened in the United States and the U.K. to Canada, and that came up with an estimate of 60,000 people. So the model that was used estimates that 60,000 people would be encouraged to join the labour market who had not previously. That's not a total answer. But it is a partial answer, because some people who are currently earning, through work, zero dollars, would be encouraged to enter the labour market.

[Irene Mathyssen, NDP, London—Fanshawe, ON]

Thank you.

The reason I ask is I have a constituent who is mentally ill. He desperately tries to manage and finds little bits of work. But he can't possibly meet that kind of cut-off, because very often the illness kicks in and he's just sort of left out in the cold. I was asking with him in mind.

[Alexandra MacLean]

Sorry, could I just address that? There is a special consideration given for persons who are eligible for the disability tax credit. Their earnings threshold for this benefit to apply is $1,750 instead of $3,000. Perhaps that might be of assistance.

[Irene Mathyssen, NDP, London—Fanshawe, ON]

Perhaps. Thank you.

We heard from a number of groups in the process of looking at the economic security of women. One of them was the National Association of Women and the Law. They've done a great deal of research, although I suppose that is coming to an end.

They had a number of recommendations in terms of EI and how we could make EI really work for women, particularly with regard to maternity and parental benefits. I'll just give you a sense of the kinds of things they were looking for. And I wonder if any of these recommendations have been considered or might be considered.

They wanted to see the federal government abolish the two-week waiting period, increase the benefit level to 70% of regular earnings, raise the maximum yearly insurable earnings, calculate benefits on the basis of the best 12 weeks of income in the last year—

[The Chair, Liberal, Yasmin Ratansi]

Ms. Mathyssen, your time is up.

[Irene Mathyssen, NDP, London—Fanshawe, ON]

I'll just be very quick.

They also wanted to reduce the eligibility to 360 hours and allow for a three- to five-year reach-back. Are any of those on the radar?

[The Chair, Liberal, Yasmin Ratansi]

We will leave it with them to think through. Don't forget what she has asked, and we'll come back.

Ms. Minna, for five minutes.

[Maria Minna, Liberal, Beaches—East York, ON]

My preamble is a bit long, so I'll try to get to it.

[The Chair, Liberal, Yasmin Ratansi]

Be careful, though, you'll run out at five minutes.