Status of Women Committee on Feb. 28th, 2008

[Prof. Claire Young]

Again, I don't have the stats with me, but that sounds approximately right. There is that gap people are falling through. I think the figure might be slightly higher than that--maybe $23,000 or $24,000, or whatever-- but there's no question there is a gap.

[The Chair, Liberal, Yasmin Ratansi]

And they are poor. That's poor.

[Prof. Claire Young]

Absolutely.

[The Chair, Liberal, Yasmin Ratansi]

Thank you.

We now go to the final round.

Ms. Minna, are you sharing your time with Mr. Pearson or are you going on your own?

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

We're going to try. I have a couple of questions, and if Mr. Pearson has any, then by all means, he can go.

I wanted to make a very quick comment with respect to Dr. Good's comments on the cleaners. There was actually a book for the private sector, written in Toronto by an advocate working really hard. Her name was Yaccato. I've forgotten her first name now. She used the cleaning industry as an example for that. So there are some people out there.

I have one question for both of you. For those of us who are watching what the Minister of Finance or the Treasury Board should be asking--and hopefully afterwards checking whether or not they did--when considering the tax policy changes, specifically what kinds of questions should the Department of Finance or we, as a control mechanism, ask in order to account for the policy impact on women? What specific questions should they be asking?

Maybe Dr. Young can answer that.

[Prof. Claire Young]

Let me give you perhaps an example, which actually responds to Mr. Pearson's point earlier when he asked me about using statistics. I think the kind of question you should be looking at is obviously how the policy will affect women.

I think one way to do that is to take the current statistics and actually apply them. For example, one of the policies that are being posited is income splitting, that we will agree that the government will introduce rules permitting couples to basically pool their income for tax purposes, split it 50-50 between them, and thereby there is a tax saving. If I were looking at that policy, I'd see the politicians arguing for it by making reasoned points and other politicians arguing against it vehemently. I can tell you that in my opinion it's actually got a very negative impact for women.

But the reason I tell you that is that if you take the current tax statistics and figure out if this provision were there today, it will tell me everything about the levels of income of women and so on and so forth. I can actually take those statistics, apply them, and produce for you a grid that will show you who wins and who loses based on gender and income level.

I'd like to see more of that happen so that the analysis is not...if I say rhetoric, that's too unfair a word, but it's not just people saying women lose out here or women win here. It's that actually we take the statistical information that's currently there, apply it to the policies being proposed, and just do the nuts and bolts and take a look.

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

Good stuff.

Mr. Good, did you want a word?

[Dr. David Good]

Yes. That's a very good question. I think the question that has to fundamentally constantly be asked is who wins and who loses. You need to do that both on income and with respect to gender.

You can be assured the Department of Finance looks at winners and losers, and there are provisions under access to information to secure some of this analysis. Recall that in any cabinet document there's an analysis section that is accessible under access to information, not the recommendations to ministers—they are the confidence of the Queen's Privy Council—but the analysis is and can be used.

To ask the next question, under what circumstances might this change, on the question of income splitting? What happens when there's divorce, when there's breakup? Does this just mean that for tax purposes we move things across and all you're doing is giving a higher tax liability to the lower-income spouse? There are unintended consequences that can happen, so these need to be asked.

Then you need to look at the fundamental question of what kind of people we are looking at. Are they rural? Are they urban? Are they immigrants? Are they aboriginals? There's a whole set of further questions that constantly need to be asked to do a proper analysis of these questions.

Then you also need to ask the fundamental question in the end. What are the unintended consequences that are going to result from this? And we're finding, more and more, that there are unintended consequences, things that were not initially thought about, that need to be asked.

These are the questions that need to be asked, and any good minister, I assure you, will ask these questions, and any good public servant will see that, to the best of their ability, the analysis can be undertaken so that these questions can be addressed before the policy is actually decided upon and announced.

[The Chair, Liberal, Yasmin Ratansi]

Mr. Pearson, you have one minute.

[Glen Pearson, Liberal, London North Centre, ON]

Briefly, Dr. Young, you had mentioned about how the tax system might not be the best way of helping people in some instances, and you talked about the reduction of poverty for seniors over the age of 65 as an example. Can you give me some others for women?

[Prof. Claire Young]

Well, as I mentioned briefly, there's a critique of the child tax benefit. The critique is that, again, there's this group with sort of low incomes who are not actually getting quite as much as they should, and so there's this little group that's almost excluded. But I think the point there is for you to think, from a policy perspective, that way back we had the family allowances and that the child tax credit is essentially a form of family allowance.

The family allowance was delivered without using the tax system. It was a cheque that was mailed to every mother with kids. We have now put it into the tax system, which brings with it a whole bunch of other tax rules that are implicated in the child tax credit. For example, income levels for the child tax credit depend upon other tax rules that will affect how you determine the amount of income and so on; so it's much more complicated.

I'm not arguing that we should go back to the family allowance--again, that's for the politicians--but that way you can compare the benefit of a direct subsidy delivered specifically to a group of people by way of a grant as opposed to a measure embedded in the tax system with all the complexities that flow from other rules that impinge upon it.

[Glen Pearson, Liberal, London North Centre, ON]

Thank you, Madam Chair.

[The Chair, Liberal, Yasmin Ratansi]

Thank you.

We now go to Mr. Stanton for five minutes.

[Bruce Stanton, Conservative, Simcoe North, ON]

Thank you, Madam Chair. I appreciate that.

I wanted to ask a quick question to Professor Young.

One of the key points you've delivered here is the notion that social programming really should go beyond what the government is engaging in vis-à-vis its fiscal measures. While I accept that, I wonder if you'd have some thoughts on the notion that generally social programs are the jurisdiction and domain of the provinces, and that constitutionally the Government of Canada, if it wishes to help influence outcomes, really is left primarily with fiscal measures to help advance those kinds of outcomes in society in general, while at the same time giving support to the provinces through things like the CHT and CST so that the provinces can drill down a little further and deliver programs at the provincial level, depending on their needs.

Could you comment on that?

[Prof. Claire Young]

I'd be happy to comment.

Again, the division of powers between the federal government and the provinces is not something on which I'm an expert. Having said that, I think the point made by Dr. Good earlier is relevant here. To some extent this is the federal government's way of actually getting involved in social programs in a rather backdoor way--that is, through the income tax system.

My basic point is that, putting aside federal-provincial jurisdiction and disputes around that issue, I'm all for the federal government having a say with respect to social programs, but I think the mechanism they're using is presenting some serious problems.

There are two ways to deal with it. One is to try to actually redress some of the inequities that I've alluded to in the tax system, and sometimes that can be done using tax rules. I think that should be done, and I can give some examples.

At other times I think it's a political decision for the federal government that actually the tax rule is just not operating in a way that is fair. If that is an end--if the policy we're trying to achieve can only be done through the tax system--then try to make the tax system fairer, but if it can't and it can be done another way, then I would say that would be more important just to get rid of those inequities. You fix up the tax system if you can; if you can't, you have to recognize that you need to start from scratch, or at least move in a different direction.

[Bruce Stanton, Conservative, Simcoe North, ON]

Great.

That's all I had, Madam Chair.

[The Chair, Liberal, Yasmin Ratansi]

I think Madame Boucher had a question.

[Sylvie Boucher, Conservative, Beauport—Limoilou, QC]

Yes, I have a little question.

I find this very interesting and I also have questions as a woman and a member of Parliament. We have various political visions around the table. Whether we are Liberals, Conservatives or New Democrats, we all have our own vision and defend it.

Would it be possible to take an apolitical approach to developing a gender-based budget, at least to have a basis for budgeting that takes women's needs into account? Would an apolitical vision be more complete? Is it up to political people to do that? As the saying goes, what will be will be. We have to live with the consequences. There are different visions on each side of the table and one is not better than the other. This is a constant dilemma.

I am new to gender-based budgeting. On a personal level, as a woman rather than a member of Parliament, this issue goes a long way back with me. I was a single mother. If I had known that one day I would be talking about gender-based budgeting, I would have been overjoyed that this problem was finally getting some attention. Is an apolitical vision a possibility in this case?

[Prof. Claire Young]

I'd like to say yes, but I almost feel like throwing the question back to you and saying that you're the politicians; you have a better feel for the sense of things.

On a serious note, anything to do with money is just so political. We're talking about an allocation of resources through the tax system. Everybody has an opinion that is driven by their political understanding of things, and I think it's impossible to exclude that. But that doesn't mean you couldn't get some consensus on some key issues. I think you could, even across political lines. I don't think the politics would disappear, but I think there is some consensus.

Take this committee as an example. Certainly the questions I've heard today have been, to me, just fantastic and really interesting. If you asked me to say, as a result of your questions, who belongs to which political party, I actually wouldn't be able to give you an answer. Well, I could, because I actually checked you all out beforehand, but just listening as an independent observer to the questions you're all asking, you're all coming from a very similar space--no disrespect meant at all, obviously, to your political allegiances.

So I do think you can't eliminate the politics, but there's certainly an opportunity for people who care deeply about issues and who may have different opinions to still reach some consensus.

[The Chair, Liberal, Yasmin Ratansi]

Thank you.

Madame Deschamps, the final question.

[Johanne Deschamps, Bloc, Laurentides—Labelle, QC]

Thank you, Madam Chair.

My question is for Ms. Young.

You talked a little earlier about the federal government and provincial jurisdiction. I will give you my opinion on this. I represent a Quebec riding. In Quebec, we have been very progressive with our social policies and tax measures. Over the past few years, the federal government has been encroaching more and more on areas of provincial jurisdiction. The result has been a duplication of effort and economic difficulties for the provinces, which lack the resources they need. Because of their jurisdictional responsibilities, provincial governments are closer to people's concerns.

I think that instead of duplicating provincial action and interfering in their jurisdiction, the government should restore the transfers that the provinces were entitled to and received between 1990 and 1994. Those transfers provided support for health, education and social programs. The federal government cut back on those envelopes, its surpluses have been accumulating, and the provinces are hamstrung in their ability to provide services to their citizens. I do not see that as a power struggle, but the federal government does have control that limits the provinces' ability to meet needs and offer the services expected by the people they represent.

[Prof. Claire Young]

I'm not a constitutional lawyer, so.... But I'm not trying to avoid your point. If I may, I'll use Quebec as an example to illustrate a point I'd made earlier.

With child care, Quebec has chosen a different route: $5 a day and so on and so forth. This goes back to my earlier point that, personally, I think Quebec has recognized that there are some issues around using the tax system to deliver that particular social program or that subsidy. There are other examples through the Quebec tax system where measures that federally in other provinces are driven or delivered from the tax system are actually done more directly.

So without commenting on the division of powers and the resource issue, I see Quebec as an example of a province that actually has thought very carefully about some of the social programs that do have an impact on women. I think the child care example is one of them.

[Dr. David Good]

If I could make a comment on the question, let's remember that of all the federations in the world, Canada is the most decentralized. When you look at the revenue-raising capacity, the fiscal capacity, and the programming capacity of subnational levels of government, i.e. the provinces and territories, it's significant in terms of their own capacities to undertake programs.

Secondly, there are significant provisions for various opting-out arrangements between the federal and provincial governments, which I think are very important to the provinces. It allows them to receive cash from the federal government to undertake their programs in lieu of opting in to a national program. I think that's a very significant factor.

Thirdly, let's never forget--and I think this was mentioned by Dr. Young--the ability within the federation to do things differently in provinces, whether it is a carbon tax in B.C. or a carbon tax in Quebec. These are agendas that can be moved forward at the provincial level even when we don't necessarily want to, or are not quite sure how to, move at the federal level.

I think there are some great advantages to the federation, particularly with regard to undertaking social policy experimentation and social policy change.

[The Chair, Liberal, Yasmin Ratansi]

Thank you both for being here and for your very thorough input and analysis.

I have a question for Dr. Young from the analyst.

Are there any specific examples you can provide that would correct an inequitable tax measure?

[Prof. Claire Young]

Quickly, if you take my example of registered retirement savings plans--and I don't want to get too technical here--currently the tax break is in two forms. One is a tax deduction for contributions to the plan; the second form of the tax break, which is actually worth far more, is the accumulation of income in the plans on a tax-free basis. I should add that pension plans in Canada are these huge pools of capital that own every shopping mall you'll ever set foot in.

I'm sorry, that's a little editorial comment.

My point is that if we're dealing with the upside-down deduction problem, you could convert it to a tax credit. That would mean that the value of the tax break would be the same to all taxpayers. You might say, what about those people who don't pay tax? A further move could be to make a refundable tax credit, and that's what we do with the GST tax credit. That's one example where basically, even though you do not pay tax, you will still get the value of the credit. You could, for example, tinker with some of the rules in that way.

I've actually gone into more detail on some of those proposals in my little tome there.