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.