Evidence of meeting #23 for Status of Women in the 39th Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was cuts.
A recording is available from Parliament.
Liberal
Glen Pearson Liberal London North Centre, ON
I just want to say I think the idea of “reconsider” is better, Mr. Stanton, because I think we're all trying to reflect on this and trying to get others to do it. So I think it's good.
Liberal
Irene Mathyssen NDP London—Fanshawe, ON
I was getting to that point, Madam Chair.
I think this is a very good motion. I would also like to say that based on what we know about the impact of Bill C-484 on women and their right to choose, and how similar bills have been used against women in 37 states in the United States, it's incumbent upon all of us to become fully informed—and there's lots of information out there—and make sure our caucus colleagues have this information. It would seem to me that decisions made in ignorance are very faulty decisions, no matter how private and personal.
Conservative
Sylvie Boucher Conservative Beauport—Limoilou, QC
I really like the way this is presented. In my opinion, the word “dramatic” is problematic, because all women are aware of the consequences. So, I would remove the word “dramatic”, so that people would be encouraged to look at all the aspects of this issue, and not only those that are dramatic. There are also physical and psychological aspects to this, in addition to the general consequences. I am just imagining showing this to my daughters. I am not sure they would find the word “dramatic”… We know what the consequences are, so I would prefer to say “all the consequences”.
Do you understand what I mean?
Bloc
Nicole Demers Bloc Laval, QC
Madam Chair, I fully understand Ms. Boucher's concerns, but I cannot agree to remove the word “dramatic”, because we all know that the consequences of this kind of legislation would be dramatic.
Johanne and I are currently preparing a paper which lays out all the different ways in which this bill could affect the lives of women, and their right to free choice, as determined in 1988. We are currently preparing a paper which we will be tabling soon, and you will be able to use it in your discussions with colleagues. It presents both sides of the issue. It talks about the positive and negative aspects. So, you will be better equipped to discuss this. However, I really cannot agree to remove the word « dramatic ».
Liberal
Glen Pearson Liberal London North Centre, ON
In light of what Madame Boucher has said, would Madame Demers be willing to consider the word “serious” instead? Would that be suitable?
Liberal
The Chair Liberal Yasmin Ratansi
Is there any more discussion before I call the question?
Yes, Mr. Stanton.
Conservative
Liberal
The Chair Liberal Yasmin Ratansi
Does anybody want any further discussion before I call the question?
I think Ms. Davidson's analysis of “dramatic” could be good or bad. It could go either way. It's a word that anybody can live with. Nobody is saying it has an evil consequence. Now, if the word “evil” were there it would make a difference, right?
So I am going to call the amended motion. Does anybody want it reread for any purposes?
Yes, Ms. Minna. For your benefit we're going to reread the motion.
Liberal
Maria Minna Liberal Beaches—East York, ON
I have to apologize. I was so busy talking I didn't realize you'd started. I really didn't, because Madame Demers and I had talked last week that we had agreed on a wording.
Liberal
The Chair Liberal Yasmin Ratansi
This is the final one I'm reading, and then we'll take the vote.
The motion reads:
That all members of the Standing Committee on the Status of Women request the support of their respective Caucus, to reconsider the bill C-484 and the dramatic consequences which it could have on the women of Quebec and Canada.
Liberal
The Chair Liberal Yasmin Ratansi
We have had the discussion on the word “dramatic”. With no further discussion, I'll call the vote.
Bloc
Liberal
The Chair Liberal Yasmin Ratansi
We shall have a recorded vote on the motion.
(Motion agreed to: yeas 10; nays 0)
Liberal
The Chair Liberal Yasmin Ratansi
Thank you.
We can now call our witnesses to come and join us.
We have with us Dr. Kathleen Lahey, who is a professor at the Department of Women's Studies, Queen's University; Armine Yalnizyan, who is the director of research for the Community Social Planning Council of Toronto; and Nancy Peckford, director of programs, Canadian Feminist Alliance for International Action.
I'm sure you had a busy week last week. At least I was able to listen to Dr. Lahey, and I met with Nancy at the IDRC.
Each one of you has probably a ten-minute presentation. We will listen to your presentation and then we'll go straight into Q and A.
Shall we start with you, Dr. Lahey?
Professor Kathleen Lahey Institute of Women's Studies, Queen's University
With respect, Dr. Yalnizyan and I had agreed that she would speak first, because she has an economist's overview. Is that all right?
Liberal
The Chair Liberal Yasmin Ratansi
That's fine. We usually just go according to how you're seated at the table.
Armine Yalnizyan Senior Economist, Canadian Centre for Policy Alternatives
Thank you very much, Madam Chair. It is a great pleasure to be here.
I have two corrections for the record. I am actually now senior economist with the Canadian Centre for Policy Alternatives and I'm not a doctor.
This committee has an opportunity to engage Canadians and to lead them in focusing on what matters: quality of life. It is indisputable that the equality of women is essential to our quality of life.
Women are half of the nation’s electorate and we make up almost half of the nation’s taxpayers, up from just 30% a generation ago. At last count, we paid $42 billion in personal income taxes alone, and that amount keeps rising. We are a big constituency and we deserve a respected and equal place in every budget that every government in this nation prepares. Regrettably, women appear as an afterthought in this budget.
I read Budget 2008, as you requested, with a view to seeing what was in it for women. I have written a full report on this, which I have submitted to the clerk of the committee, but let me just cut to the chase.
Women are mentioned a total of six times in this budget—twice as fisherwomen and once as women veterans of war. But the pay dirt comes in the other three mentions. In a passage of 52 words in a 416-page document, we are told that the big budget news for women is a promise, a promise to come up with an action plan for women.
The thing is, there already is an action plan crafted as the follow-through on Canada’s signing the Beijing Platform for Action in 1995. I guess the finance minister didn't get the memo. A decade-old action plan that nobody has acted on is clearly an inaction plan, but that is not because it didn’t have the right elements.
Your commitment to come up with a new action plan does not need to reinvent the wheel. It just needs to focus on what will get that wheel finally turning. It is up to committees like yours to decide how government should act, to make planned improvements turn into lived realities for women, and you can act. In fact, it’s long overdue that you do act.
We know what needs to happen to make progress on equality for women and improvements in Canada's quality of life. The Canadian Centre for Policy Alternatives hosts a coalition project called the Alternative Federal Budget. It has costed out many of these objectives that you'll be discussing in the coming months. Along with actions on climate change, rebuilding community infrastructure, pharmacare, and addressing the needs of our first nations, this whole package comes to a total of $17 billion this year.
You may roll your eyes and say, “$17 billion, where are you going to get the money from?” This Budget 2008, which was crafted in the light of an economic downturn with little room to move, actually has $43 billion in spending over a three-year horizon. That's more than $17 billion a year. Doing something that would benefit not just Canadian women but would address climate change and rebuild our cities is totally affordable. But in order to do this, the federal government has to do two fundamental things: one, it has to open up some fiscal room so that money is available for focused new programs; and two, make sure that in the design of these programs women benefit. This is a massive change in direction, but after almost 20 years of trying to get government out of the way, it is a necessary and an overdue change.
The first objective of the 1995 plan was to integrate gender analysis in every policy initiative of government. Let me tell you why gender analysis in this and every budget is crucial. Gender budgeting is not just about the number of times women are mentioned or focusing on measures that just affect women. Gender analysis of a budget lifts the veil on what governments are doing and for whom. It reveals the high cost of a political agenda that has focused for over a decade now on tax cuts.
For years women have asked for supports in the form of child care, affordable housing, affordable post-secondary education, better integration of immigrants and their skills, and access to legal aid. In the 1990s we were told to wait because of deficits. The deficit has long since been slayed, but years of budget surpluses have come and gone and none of it has been allocated to those programs women have been waiting for because of tax cuts.
Elected in January 2006, this minority government has, in 25 very short months, taken the federal purse from sustained multi-billion-dollar surpluses, the likes of which are not experienced in any other industrialized nation, to razor-thin balances. They did that by siphoning off the surplus for tax cuts and debt reduction. In fact, Budget 2008 sets a new bar for this approach: it offers Canadians $7 in tax cuts and debt reduction for every single dollar spent on new programs.
Budget 2008 goes on to trumpet that since elected, this minority government has scheduled almost $200 billion in tax cuts and at least $50 billion in debt reduction by 2012-13. Now it's early in the morning, but I want to pause for a moment, folks, because we are talking about $250 billion that is not available for tackling the big issues of our day: struggling cities, climate change, and the toxic growth of income inequality.
Why did we give away that opportunity to act? It was for the sake of tax cuts. Let us be very clear here: the tax cut agenda is not a neutral agenda; it favours the most affluent and it favours men.
Budget 2008 told us that $3 billion a year in personal income tax cuts will go to individuals in the lowest tax bracket. The implication is that it's a lot of money—and it is—and that it goes to low-income Canadians.
Take a look at the tax statistics. In fact, 58% of taxable Canadians do not get past that first bracket, which ends at $37,884. About 68% of women fall into this category and 50% of men. That means the $3 billion a year goes to the majority of taxable Canadian men and women. But wait, the budget says there's almost $200 billion in tax cuts. That means for every dollar in tax cuts that goes to the majority—which is mostly women—$12 flows to the minority with higher incomes and to corporations.
Some Canadians’ incomes are so low as to not be taxable. Three-quarters of all Canadian men benefit from the tax cut agenda, but almost four in 10 women will get nothing out of income tax at all. Why? It's because they don’t earn enough money to pay taxes in the first place. Tax cuts are meaningless to four out of 10 women.
This addiction to tax cuts by successive governments has changed the landscape of how government revenues are collected and from whom. In the last 15 years, the richest 1% of taxpayers have actually seen their tax rate drop by four percentage points, but the poorest 20% of taxpayers are now paying between three and five percentage points more. And here’s the kicker: a middle-income family now pays about six percentage points more in tax rate than a family in the richest 1%.
When you analyze the tax cut agenda through this lens, it gets harder and harder to defend every single year.
You know, $200 billion in tax cuts is a lot of money. Here’s what that money did not buy and what the women’s agenda has long sought: liveable cities, supports for families, pathways of opportunity, reduction of poverty, freedom from violence, and access to basic justice. That is not just good for women, ladies and gentlemen, that is good for us all. Budget 2008 and the previous two federal budgets do not speak to any of these concerns. They are budgets for the rich, not the rest of us.
Tax cuts cost a lot of money. They limit our resources. They constrain our ability to act. They take for granted the investments our parents' generation made and underinvest in the legacy we are going to pass on to the next generation.
It does not take leadership to promise tax cuts; tax cuts are easy. Leadership—responsible leadership—is the thing you do when you hold a position of power and you make sure you use it to lift up the most vulnerable in our midst. Leadership uses its power to build cities that are healthy and vibrant for everyone, cities that offer everyone the chance of getting ahead, of getting an education, of managing the twin demands of work and family life.
These are the concerns of the women of Canada. These are concerns that for too long have been neglected in the budgeting process of our federal government. I urge you today to think long and hard: what kind of a budget would you write if you had the well-being of women, children, and families foremost in your mind?
This government has promised the opportunity to craft just such a plan. We know what we need to do. We just need the room to do it. That will require some serious rethinking about what governments are for and what taxes are for.
The very next steps you can take are easy ones. Here are four things this committee can start acting on tomorrow.
One, commit to gender budget analysis as a stock-in-trade for your committee's work. Ask the Department of Finance for a gender analysis of major budgetary initiatives on both the tax and spend sides. Ask for an incidence study about who benefits. Ask them to tell you about the big picture, too, the macroeconomic implications, the costs and the benefits, of an agenda primarily focused on tax cuts, debt reduction, or new spending on the types of programs women are asking for.
Two, choose exactly what income classes you are going to prioritize as beneficiaries of your plan. My strong suggestion to you is that you target people in the bottom tax bracket, those with taxable incomes of less than $38,000. Why? Because that accounts for two-thirds of women and half of men.
Three, this year pick three priorities for action and pick three action plans in each of these areas and discuss them as a committee. Pick three more next year, and discuss as a committee what you're going to do. My suggestions for this year? Start with affordable housing for the 68% of women who are in the bottom income bracket. Start with child care for the 74% of women who are in the workforce with young children. Start with post-secondary education for the 57% of female graduates saddled with unprecedented levels of student debt. There are lots of ideas out there on how to make meaningful change in each one of these areas. I recommend to you that you look at one of those options, this year's Alternative Federal Budget, for costing on these and other objectives. I've left a copy with the clerk of the committee.
The last thing you can do, starting tomorrow, is start preparing submissions that will tell your own caucuses what you want to see in the next budget that will improve the lives of women and their loved ones.
We all know here that much of the real work of government gets done in committee. I sincerely thank you for the opportunity to again present to this committee. I look forward to your recommendations as to what should be in that action plan and how a budget should be approached in next year's budget.
Thank you very much.
Prof. Kathleen Lahey
Thank you.
I'd also like to correct the record. I am not a doctor. I'm a professor in the Faculty of Law at Queen's University, cross-appointed to women's studies.
Madam Chairperson, honourable members, I am very pleased to have this opportunity to talk to you today about this tremendously important topic. I had been hoping there would be some semblance of a gender budget with this year's budget, but we didn't get one, so I'm treating this as an opportunity to go into some of the material that I believe a full-scale gender budget would have provided by way of information for people who are concerned about the gender impact of the functioning of the federal government.
I am addressing three basic aspects of the budgetary process. I'm going to make just a few comments about the spending end of the budget, while most of my remarks will focus on the tax implications of what has been in this budget as well as in the earlier economic statements of the current government. Contained in this budget are structural tax changes in the basic configuration of the tax rates as well as new and very unusual tax expenditures that I believe need to be illuminated as fully as possible.
For my few comments on the spending envelope, I'd like to share with you something that I think represents a response to the budget that we all need to take on.
The morning after the budget, I was sitting in a meeting with a young woman who had just started her university education. Her name is Jessica Notwell, and she is a member of the Canadian Women’s Community Economic Development Council.
When she looked at the allocation that Status of Women Canada was apparently being given—even though it's $4 million less than what they originally had, and they were being given that money to do work that has already been largely done at the departmental level—her initial reaction to the budget was to say that if there are 16.6 million women in Canada, that was $1.21 per woman. She said she didn't understand this budget and she didn't understand this government.
She said, “The government is giving $50 million to hog farmers. I looked it up. There are 14.1 million hogs in Canada; the federal government is spending $3.67 per hog in Canada to help hog farmers adjust to 'the new realities of the hog market', and only $1.21 per woman.”
At the time it was one of those “aha” moments, but in retrospect I'm deeply hurt for all women in Canada who looked to see how they could explain in the content of the budget, which runs to hundreds of pages, the very small allocation being given to women in this context. I would say that addressing the “new realities of women's existence”, however desperate the situation of hog farmers might be due to changes in marketing practices, is far more compelling.
Last November I gave you some figures that showed a snapshot or cross-section of the life-cycle allocation of incomes between women and men, but since I provided that information, more data have been released as to the increasingly dire status of women in Canada.
Let's not forget that Canada is one of the biggest economies on this planet. Canada is one of the leading countries in the OECD, which is a group of 30 of the most industrialized countries. Canada is incredibly rich in every possible way, compared to other countries. In the mid-1990s women had already achieved 72% as much income for full-time work as men, and women with a university degree in the mid-1990s were already earning 75% as much as men.
As the UN indicators, the World Economic Forum indicators, and now the Social Watch indicators all show, Canada has since then plummeted far below its previous number-one ranking in relation to shrinking the gender gap.
Now, in 2005, the most recent comparable figures show us that women who work full time now only make 70.5% as much, on average, as men. The gender gap is growing again, measurably. Women with university educations—with the high student loan debts, etc., that my colleague has just mentioned—are now only earning, on average, 68% as much as men.
The gender gap is even greater for women with university educations. It used to be that we would say a woman needs to get a university degree to earn as much as a man with a grade 12 education; now it looks as though a little graduate work is not going to hurt either.
The situation is dire, and it's getting worse with every year that passes, which is why I'd like to focus not only on the impact of absolutely no spending of direct assistance to women, but also on what is happening with the tax structure. What this government is doing is increasingly positioning this very rich country, this thriving economy, on the brink of falling into deficit again, such that talking about less than even $1 billion to enhance the education envelope would somehow throw Canada into another deficit situation.
I would like to outline, then, how the regime of tax cuts is negatively impacting women specifically. For this purpose, I'd like to make reference to a set of tables that I hope were passed out to you.
The first point I want to talk about is how the structural cuts to the three main sources of revenue the federal government has available to it—the GST, the personal income tax, and the corporate income tax—have all negatively impacted on women.
What I'm trying to do here is to pierce some of the rhetoric that politicians can get away with when they're speaking in short sound bites to media outlets—rhetoric that committees such as this, in which there are policymakers, need to take on board and look at very critically.
The government says that its tax cut agenda is intended to stimulate the economy, yet it cannot prove that its tax cut agenda has had any such effect.
The government says that all these tax cuts are proportionally larger for people with lower incomes, and gives some statistics on, I believe, page 38 or 90—I can't remember which—of the budget that purport to show that.
What it does is show the total amount of tax cuts as a proportion of current taxes paid by different income levels. It shows the largest proportion or percentage being allocated to the lowest income classes. That's like telling someone who gets $1 a week allowance that you're going to cut their allowance by 25 cents. It is true that it's a 25% cut to that person's allowance. It's bigger as a percentage than cutting, let's say, $100 out of the allowance of somebody who gets $1,000 a week, which would be 10%, but when you take even a little bit away from those who have the least, you're actually leaving the most in the hands of those most privileged.
This is an upside-down concept of the tax benefits of tax cuts, which I believe the first table illuminates a little bit. What I've done here is to use the most recent statistics on spending patterns in Canada, showing how much people in the five basic slices of income in Canada spend on GST-taxable goods and services. What I have demonstrated is that a 1% cut to the GST does give an inferential tax benefit to the poorest people in the country: on an average, it is $140 per year, that being the 1% less that they spend on the GST when they spend the money that is devoted to taxable goods and services.
But go over to the highest quintile—the people who spend, on average, $62,000-plus on current consumption—and you see that same 1% GST tax cut is worth an extra $622 in that person's pocket.
Now double these figures; we had two 1% cuts in a row. The lowest quintile spenders and income earners now have a total tax benefit of $280 per year. The richest people in the country have a total tax benefit of $1,244. What these figures illuminate is that the tax benefit of cutting a tax that applies to everyone will always give the most to those with the most. It's an upside-down benefit. It's the opposite of welfare, where we say we will give the most to those who need it the most and have the least.
Here, in this kind of tax cut universe, we give the biggest financial benefits of tax cuts to those who need it the least. This is the really outmoded notion that if we leave rich people with more money in their pockets, the poor people will eventually get some benefit from some of it trickling down to the bottom.
This is a total tax cut that is costing Canada, according to the government, $12 billion per year, every year from now on. That's more money than was put into the reduction of the deficit. That's just one of the big general tax cuts in this budget.
I'll turn to table 2, which illustrates the same principle in action with respect to the personal income tax. In table 2, what I've done is to show that people—mostly women with less than $10,000 in income—will get zero benefit from cutting the personal income tax by 1%. The full benefit is only available to people with taxable income of over $47,000 per year; they'll get $378 a year. Again, this is not substantially greater for low-income people. This is almost nothing or totally nothing for people with the least income.
The third table I'd like to draw to your attention shows what is going on in relation to corporate income taxation. At the same time that the tax load on the richest and sort of middle-high-income taxpayers in Canada is falling rapidly, corporate income tax rates are also falling rapidly, faster than they have ever fallen in any period in Canada's history. This, by reducing the tax load on highest-income-earner individuals and on corporations, increasingly leaves low-income and low-middle-income people as the core of the taxpaying members of Canadian society.
Table 3 quickly shows you—on the bottom line—the total of all taxes: federal income tax; provincial income tax; GST; PST; employment insurance; and Canada Pension Plan contributions paid by low-income individuals versus low-income corporations. The tax load in 2008 on low-income individuals comes to 38.255%. The tax load for all the same taxes for the low-income corporations—which are technically called small business corporations—is 18.6%. That's less than half for corporations, which are allowed to have this rate for up to $400,000 of income every year. I'll leave that with you as well.
Hopefully in the discussion I'll have an opportunity to make a couple of comments on the extension of the income-splitting principle to the tax-free savings accounts. But in the meantime, those are my submissions.
Liberal
The Chair Liberal Yasmin Ratansi
Thank you very much.
I'm sorry to cut you off. I think there are a lot of questions that will come out, and we can discuss that in the questions.
Nancy, if you could stick to 10 minutes, I would really appreciate it.
Thank you.
