Status of Women Committee on March 11th, 2008

[Louise Levonian]

I said “better off”. I don't think I said “far better off”. I hope not. They're better off because they're getting more money.

[Anita Neville, Liberal, Winnipeg South Centre, MB]

They're getting more money. This is beyond my comprehension, but anecdotally I'm hearing stories of young women having babies so they can get another $100 a month. In the long run, that sure isn't going to create a better-off situation for their families or their children. So I question the whole issue of “better off”.

Do you factor in the allocation to the provinces for child care? I come from Manitoba. I know the huge losses that have affected child care in Manitoba. I know the really dire situation there. So when you talk about it, how do you factor it in?

The other question I want to ask you concerns this government currently using tax credits as a form of social policy. We heard from Kathleen Lahey. When she was here, she said that when you deliver social programs through a tax instrument, women for the most part are disadvantaged, particularly low-income and low-middle-income women.

Do you give that advice to the minister in terms of the tools to use for social policy? My question is not dissimilar to Ms. Mathyssen's. How do we conduct a review of the whole tax system to look at the disadvantaged women in the tax system? My final question, and you're not going to have time for everything, is this. Have you done a gender-based analysis on pension splitting and also income splitting? I'm curious to know and to see that.

[Louise Levonian]

To help answer that question, I think it's important to understand the fundamentals of the tax system. First of all, the tax system's primary purpose is to raise revenues to fund the programs that ministers and the government feel are priorities.

[Anita Neville, Liberal, Winnipeg South Centre, MB]

I understand that.

[Louise Levonian]

It tries to do that in the simplest, fairest, and most efficient way possible, and it takes into account ability to pay. The tax system is a progressive tax system. The more income you earn, the more tax you pay, and there are deductions and credits that take into account personal circumstances within the tax system.

[Anita Neville, Liberal, Winnipeg South Centre, MB]

But that's where we need the analysis: the tax credits and whether they are proportionately advantaging or disadvantaging women.

[Louise Levonian]

With respect to the government's choosing tax to provide social policies, the role of the department and public servants is to do the best possible analysis we can do and put the pros and cons of using different tools before ministers to make those decisions. So based on the principles of the tax system and the pros and cons of different measures within the tax system, we put that before ministers and they choose how they want to proceed.

There are measures that are more conducive to using the tax system, and there are measures that aren't conducive to using the tax system as a tool. For example, if you're going to income-test something, if as a policy objective ministers choose that they're going to provide the Canada child tax benefit but it's only going to be to lower-income individuals, then a natural tool to use in that respect would be the tax system because you're already measuring income automatically. If you've already got the tax system in place and it measures income, you don't want to create an entire new administration or bureaucracy to provide funding to individuals for that, and so you're able to provide, for example, the child tax benefit.

So those are some of the considerations we put before ministers in determining what tools are best to use in providing these kinds of measures. So as for advice on a particular measure, I can't reveal the advice we would provide a minister, but it's our job to analyze what best tool to use. We look at spending and whether that's the best way to approach it, to use a tax. Depending on whether or not it's an environmental objective, we look at regulation. So we put all that on the table, provide the pros and cons, and give that to ministers to decide.

[Anita Neville, Liberal, Winnipeg South Centre, MB]

So would a minister say, “This is my objective,” and then would you provide the advice that says, “You'd be better off through a direct grant or a tax credit or whatever; these are your options”? Or would the decision be made that we're going to do a tax credit and then you do the analysis of that?

[Louise Levonian]

We definitely look at different tools for providing an objective. Sometimes ministers will come to us and say credit, and after we go back and analyze it and look at the pros and cons of the credit, we say that actually doing a spending program might be better, and here's why. We put that on the table, and then ministers decide which way they want to proceed.

[The Chair, Liberal, Yasmin Ratansi]

Thank you.

Just to let you know, on March 13 we are having the economists coming, and they have come before us; therefore, the questions that are being asked of you are legitimate questions. We need very fair answers so that we're not going round in circles hearing about the tax rate and what they do.

Generally the membership is aware, because they have had so much exposure to it, so if you could take that as your starting base point and then explain over that, it would be appreciated.

Ms. Grewal is next, for five minutes.

[Nina Grewal, Conservative, Fleetwood—Port Kells, BC]

Thank you, Madam Chair.

Could you please tell the committee the obstacles or difficulties that are involved in assessing the impact of gender budget measures?

[Louise Levonian]

Generally speaking, the biggest hurdle is data availability. When we're doing measures, we try to reach all different sources. I'm a tax policy person, so we actually have better access to data in that we have the tax returns, and that's divided up by gender. We know filers are male or female. We know what their income is. We have all that available to us.

On other measures, it can be difficult just to actually get the underlying data as to how many women would benefit from a certain measure. We go to different sources in trying to analyze that. We use StatsCan data quite a bit when the measures deviate from the tax system, etc. But getting good data is one of the hardest aspects.

[Nina Grewal, Conservative, Fleetwood—Port Kells, BC]

Could you also please elaborate on what is involved when Finance conducts its GBA on a particular tax policy? Could you take us through that process?

[Louise Levonian]

In terms of the specifics involved, the first thing we do.... I'll take an example of something that's going to be directed on the personal income tax side. It's easier to do that.

We look at what the measure is trying to accomplish and at what the underlining data would be. For example, on the working income tax benefit, we looked at who would benefit, what income groups would benefit, whether there are any other impacts we wouldn't have taken into consideration in what we're trying to achieve, and whether other side effects happen as a result of it.

The gender-based analysis that we've undertaken tells us to go deeper and not just stop at the preliminary analysis. Could this have a greater impact on aboriginal women? Could it have a bigger impact on immigrant women, etc.? We try not to stop at the first layer of analysis, but that's where we get into even more difficulty with the data, because it doesn't get split out by aboriginal women or immigrant women, etc. Still, we try to go down levels in analyzing it.

As Department of Finance officials, we apply rigour in our analysis in all respects. Whether it's an environmental impact or a gender-based analysis impact, we question the data; we question the analysis in all respects.

[Nina Grewal, Conservative, Fleetwood—Port Kells, BC]

Could you please also tell us how many organizations the finance department typically includes in the pre-budget consultations? How many of these organizations could be identified as women's organizations? Do you feel that this is an adequate number, and why, or why not?

[Louise Levonian]

We can get that information for you. I have it here, but I just want to make sure I tell you the right information.

It's going to be hard to be comprehensive. We can tell you, for example, the groups that the minister met with. We could even tell you the groups that the finance committee met with, because we monitor those hearings to make sure we know the recommendations coming out of it--the submissions, etc.

Different branches of the department as a whole meet different individuals at different times. We don't keep exact track of how many, who, or when or where a meeting is taking place. We'll try to give you as much information as possible as to who has been....

[The Chair, Liberal, Yasmin Ratansi]

Thank you, Ms. Grewal.

We'll go now to Madame Demers.

[Nicole Demers, Bloc, Laval, QC]

Thank you, Madam Chair.

Thank you both for being here.

Ms. Levonian, I'm having a little trouble understanding your power to make recommendations and your power within the department. In your presentation, you said that a sentence was included in the income tax policy to ensure consideration was given to GBA: “Regardless of their objective, proposed policies are reviewed for gender and environmental impacts.”

In light of that, how were you able to justify elimination of the Court Challenges Program, cutbacks and changes at Status of Women Canada and the reduction of the GST, given that we know that low-income women will never be able to spend enough to benefit from this measure? Women who earn less than $20,000 a year will save less than $10 in GST. There is no doubt about that.

What is your role exactly? How can you ensure that the impact of policies such as the ones I have mentioned will be minimized? These policies result in significant, dramatic consequences for women. The focus should rather be on protecting women.

[Louise Levonian]

Our role is to pass on to the minister all the facts so that he can make his decisions based on complete information. As the GBA champion, I want to ensure that the analysis is done and that it is done properly. This information is passed on to the minister so that he has all the information he needs before making any decisions.

[Nicole Demers, Bloc, Laval, QC]

What power do you have if the minister decides not to take your recommendations into account?

[Louise Levonian]

We have no power. Our job is not to tell him that he must not introduce a particular policy, but rather to provide him with all the information. I do not know how to say it in French, just how it goes in English:

Public servants have almost a motto: fearless advice, loyal implementation.

We provide our advice, but the minister decides what to do. Our role, once again, is to provide him with the tools he needs.

[Nicole Demers, Bloc, Laval, QC]

So you really have no control over the decisions made by the minister. All that is very valid for purposes of analysis, but as far as implementing policy, we must continue to hope that something will change, because we have not seen any improvement. As a woman, I'm sure you've made some recommendations. But when we see the measures that have been introduced, we realize that your recommendations were disregarded.

[Louise Levonian]

I do not know. Our job is really to provide fearless advice and loyal implementation. That is the role of the public servant.

[Nicole Demers, Bloc, Laval, QC]

So it is just window dressing. Don't you find that unfortunate?

[Louise Levonian]

I would like to add something about the GST. Even though the government reduced the GST, it decided to keep the GST/HST credit for low-income people. This means that even though people spend less, the credit remains the same. As a result, there's $1.1 billion for low-income individuals.