Evidence of meeting #28 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 budget.
A recording is available from Parliament.
Conservative
Bruce Stanton Conservative Simcoe North, ON
Thank you, Madam Chair.
Welcome this morning. I too apologize for being somewhat late this morning.
As you gathered, this has been a rather rigorous study that the committee has been undertaking. I was quite interested, Mr. Wright, in some of your description of the competing considerations the department has to consider.
As a point of background, how long have you been in this or a similar capacity in Finance or in other departments of the Government of Canada?
Deputy Minister, Department of Finance
I've been in the government for 34 years and I've been of deputy minister rank for 19 years, but I've only been in the department for two years as deputy minister. I was there as a director 20 years ago.
Conservative
Bruce Stanton Conservative Simcoe North, ON
So you've been around for a while and have seen how the process of this decision-making works at the departmental level, and certainly now in Finance.
Can you give us a little bit more of your view of how...? You made reference to the fact that the GBA is one of the tools that is used to help analyze and put this information together, but ultimately ministers have to make some decisions and have to consider those myriad considerations. What does the department do—and I'm talking in general here, not just about our current government, but concerning governments in general—to help ministers navigate those difficult waters?
Deputy Minister, Department of Finance
Stepping back—and although I haven't gone over this in detail, I'm sure my colleagues from the Privy Council Office and Treasury Board would have reinforced the same point—the role of the public service is to support ministers in making decisions. My role as Deputy Minister of Finance is to support the Minister of Finance.
The way to do that is to ensure that the minister is making informed decisions and informed choices. In that sense, the gender-based analysis is integral to the analysis we provide, but it's one part of a very comprehensive assessment. That's why, when we began to pilot with it, we decided to introduce it into the comprehensive budget assessment process. And that's been a key to the substantial progress that I believe we've made.
But clearly our role is to provide advice so that there is informed choice by those elected to make the decisions, and that's a vital part of what it's about. The Department of Finance doesn't have a hidden agenda, although it's occasionally helpful for people to think we do. We have a minister who is leading the department in terms of representing the government's agenda. So it's not even the Minister of Finance's budget; it's the government's budget.
It's not just the department; all departments can help support ministers in making choices and making decisions. The core of being a public servant is to have neutral, non-partisan advice based on the facts. That's what I see in government, and it's what I'm proudest of, in being a public servant. This is one element that I would say fits well into that body of informed advice.
Conservative
Bruce Stanton Conservative Simcoe North, ON
That process essentially happens in all of the departments, as we've learned through the course of this study. Those suggestions come together and ultimately feed into the budget process.
Deputy Minister, Department of Finance
Right, and I think the direction from this committee in 2005 and 2006, and the response from the government.... It wasn't the Department of Finance doing this; it was all of government broadening gender-based analysis. I think the key to making sure there's continued progress by all.... We will do our part--we work with other departments--but in terms of the processes that go through cabinet committee authority, the Privy Council Office has indicated what they do to make sure there's appropriate analysis, and the Treasury Board makes sure there's appropriate analysis. So it's not just the budget authorities; it's any new policy priority that comes up through the policy committee process or the spending authority process.
That's something that may have come up a little before your arrival.
Bloc
Nicole Demers Bloc Laval, QC
Thank you, Madam Chair.
Deputy Minister, ladies, good morning.
Please don't think that what I'm about to say is a personal attack on you, but your statement on the sales tax leaves me very skeptical as well. I have difficulty understanding why someone who purchases a Mercedes would benefit less from the sales tax cut than someone purchasing a bicycle. I find this very hard to understand.
The United Nations' inspector came to Canada, recently, to assess the situation of the homeless. Here too, I have difficulty understanding when you talk about social housing, Ms. Levonian. In Alberta, a very rich province, thousands of people currently live in tents, particularly in Edmonton. We saw this. No one is talking about it. It is a terrible situation. One million children are going hungry in Canada. Yet, we are not investing in social programs.
During the 1950s, in the Scandinavian countries, the situation was as difficult, Mr. Wright. You alluded to this a little earlier as well as to a period of uncertainty. Yet, those countries decided to invest in social programs instead of investing in healthy companies such as the oil and gas companies. Those countries thought that investing in people was more profitable in the long run than investing in something that was already working. Today, they are much more successful than we are. The people there are much more productive and happier. Those countries are wealthier, while we are becoming increasingly poor.
I don't understand how the government operates. I haven't been in the government, in Parliament, for very long, I have only been here for four years. However, since my arrival, I have been asking questions about the government's real role. When there is an agenda, no matter who the champions in the different departments are, no progress whatsoever can be made. They have no influence on decisions. You say so yourselves. Although you provide informed advice to the different ministers in the development of their budgets, your influence is unfortunately quite small.
For example, the tax-free savings account does absolutely nothing for those who have no money and is very profitable for people who are already rich who will put money into a savings account without having to pay taxes. We won't have access to that money for social programs.
Enlighten me, please. I am confused. I don't understand this at all. Hog producers have just been given another $50 million. I'm happy for the hog producers, but that makes a total of $100 million. They are getting $225 a head, which is four times the market price. At the very least, those hogs, that are going to the slaughterhouse, could have been given to children who are starving. But no, those hogs will be slaughtered and will feed other hogs. I fail to understand this. Enlighten me, please.
Pardon me, I get angry when I see things like this. I get very upset to see that children are being left to live in poverty, left to suffer, and entire families are being left on the streets. It's not just indigents or alcoholics in the streets; entire families with children also live in the streets. These people are working but they don't earn enough to pay rent.
Bloc
Nicole Demers Bloc Laval, QC
No matter, Madam Chair, I said what I thought. Thank you, Madam Chair.
Excuse me.
Deputy Minister, Department of Finance
It's always important to see what progress we've made and to remain aware of the important issues. I want to thank you for your speech and your passion.
I think you're in a position where passion makes a difference. As a Canadian, I'm really proud of the progress we've made over the last 10 years, from one government to the other--as Canadians. We've made tremendous progress: the national child benefit, the huge progress on child poverty.... But there's more work to be done; I recognize that. What I'm talking about now in terms of the gender-based analysis is that I think it will inform choices that are made.
I think as well, though, it's important to look at the overall progress that's been made in the economy for the last 10 or 15 years. Why are we preoccupied with the overall investment climate and growth in employment? It's because it has benefited.... More and more Canadians are getting into the workforce. On the GST, there's the fact that we've maintained the GST credit. It's worth $1.1 billion a year.
I know there's more we can do, and I guess it's your role and this committee's role to help identify that, and it's our role to make sure it's administered as effectively as possible. I would just urge you to apply the passion to the cutting edge, but remember that at the broad base, we have made progress—very important progress.
Right now, what we're preoccupied with is safeguarding the overall climate for those who are now engaged in the economy.
Whitby as well is a very interesting case study for you to examine, because again it helps more people be part....
We have a very interesting change in our demographics in this country that's going to create more opportunities over the years ahead, and we want to prepare all Canadians for that process.
Thank you.
Liberal
The Chair Liberal Yasmin Ratansi
Thank you very much.
As you can see, there are lots of questions we want to ask, and we will send those as written submissions to your department. We hope you will be able to answer those.
I know you have to run to a cabinet meeting, so you might as well rush. Thank you so much for being here. Take care.
The meeting will be suspended for one minute while we change witnesses.
Liberal
The Chair Liberal Yasmin Ratansi
The meeting is resuming.
Ms. Minna, you asked to make a statement. Go ahead and make a statement.
Liberal
Maria Minna Liberal Beaches—East York, ON
I just want to say, Madam Chair, that given the enormity of this topic we are trying to address, I was disappointed that we only had one hour with the Deputy Minister of Finance this morning. I understand he has a busy schedule, but I know they can also accommodate if they choose to.
I wanted to say that because I didn't have a chance to come back. There were a few things I wanted to challenge. I know Mr. Pearson didn't get to ask a question at all, like some other members around the table, and given the topic and the amount of time we've spent on this issue, I would have appreciated the deputy minister's giving us the proper two-hour time.
Liberal
The Chair Liberal Yasmin Ratansi
And that's exactly what I told the clerks, that two hours would have been perfect. But deputy ministers have to go to cabinet meetings, and that's why we accommodated him, for 8:30.
I think collectively, as a committee, we know what we want to say in the report. We have come to a point where we have enough material, and we will hear from our witnesses now. We have told the deputy minister that we'll give him written questions for which we want answers, so if there are any questions that are really frustrating you, and if, after we have heard from our witnesses here, there are things that are still up in the air, we can ask for specific answers.
With that, I welcome Professor Lahey, Armine Yalnizyan, and Nancy Peckford back to our committee.
I'm sure you're going to have many interesting things to say to us. You have been given the 2008 analysis just now—or was it submitted to you earlier?
Who would like to go first?
Professor Lahey.
Professor Kathleen Lahey Institute of Women's Studies, Queen's University
Thank you. I would like to congratulate you on the tremendous amount of information that is now on the record, compared to, let's say, a year ago. What is happening in this committee is truly historic.
I would like to make some brief comments. Obviously there are so many issues now on the table that it would take the report to canvass all of them in detail.
Just by way of underscoring, there is still a real disconnect in the kind of terminology that's being used in the conversation that is going back and forth between the Department of Finance and this committee.
I think the committee is, unfortunately, being expected to bear the burden of finding a terminology that will work for both sides. I want to use the comments that were made just a few minutes ago by the deputy minister in relation to the impact of the GST cut and the credit, to clarify how this disconnect is being perpetrated.
The GST cut obviously reduced the tax burden on spending, differentially, for people with different incomes, and it is true that in terms of actual dollars, people with high and mid-high incomes are the greatest beneficiaries of this cut.
What the Department of Finance is now submitting is that there's a hidden bonus for low-income taxpayers in the form of the government deciding to not cut the amount of the GST credit to reflect the now new 5% rate of the GST, because the government is saying that it could have reduced the amount of the GST credit by two-sevenths, essentially, to take it down closer to $200 per year per person, if it had wanted to, but it didn't. Therefore, it has inferentially created a new tax benefit for people in the form of this aggregate $1.1 billion, which it is saying has now left new money with low-income people.
I'd like to just unpack that a little bit and show how the disconnect is working here. The current GST tax credit is, I believe, $247 for a single individual. If you think it through, at the current 5% GST rate, what that means is that a person who has a very low income does not pay any GST on their first $4,750 worth of spending. It's a tax shelter for that GST. They get it in the form of a cheque every quarter, so they've then pre-paid that GST that they will have to pay out at the rate of 5%.
What the Department of Finance analysis is saying is that they could have reduced that, because that $247 used to shelter the amount of spending that could be done with the 7% and then the 6% GST tax.
Now, my perception of that is that this is no tax benefit; it's just the status quo. Nothing new has gone to low-income people. It represents a very tiny, if you like, de facto increase in the amount of GST taxable spending that an individual can do. But the important message is that because the Mercedes versus bicycle contrast is still so dramatic, it's not enough.
A gender-based analysis would ask what a person has to spend to subsist, to just exist in this culture. The answer is I don't know anyone who can exist on $4,750 a year. It takes more money. The GST credit should have been increased to reflect the realities of the impact of that tax on low spending.
So that just illustrates how they're saying, “We've given a lot”, and a gender-based analysis would say, “You've given nothing more, and you're still not addressing the real problem.” That's an example.
I'd like to make one more comment, which is that there is a pervasive pattern of differences in the approach to the gender-based analysis being used by the Department of Finance versus the approach that is universally understood by international agencies such as the UN, by other countries, by many of the countries in the EU, and all around the globe, which understand what appropriate gender-based analysis should be.
What the Department of Finance is doing is not consistent with what has been accepted. There are five or six consistent themes that run through what they are doing. For example, in the most recent gender analysis of Budget 2008, they are not looking at the impact of the RESP and the RDSP accounts on adult taxpayers at all. They're speculating into the future and saying we think the beneficiaries will probably be equally boys and girls, young women and young men, and that therefore it's gender equal. So they're not looking at the correct taxpayers, if you like, in some situations.
There is a consistent ignoring of the fact that now 40.4% of all women in Canada are so poor, according to the most recent information out of the Department of Finance, that they do not have any tax liability at all. This factor is not being taken into consideration in the tax analysis of the items they're reporting on. There is a real lack of transparency.
The description was given of the tax-free savings account--in the testimony that was given, I believe, last week--as tending to benefit the bottom range of tax filers, etc., with three-quarters of the benefits going to those in the bottom two tax brackets. This is not a sustainable submission, simply because Statistics Canada itself has documented repeatedly the fact that the bottom two or three quintiles of family income in Canada are in a net debt position year after year. They have no capacity to save whatsoever.
Liberal
The Chair Liberal Yasmin Ratansi
Ms. Lahey, I'll stop you for a minute. Mr. Stanton has a point of order.
Conservative
Bruce Stanton Conservative Simcoe North, ON
Pardon me. I don't want to interrupt. It's just a question, Madam Chair.
We have about 30 minutes, and I wonder if the presentation times will be 10 minutes each or if we will be afforded time for some questions.
Liberal
The Chair Liberal Yasmin Ratansi
According to the schedule we have been given, I thought they were only doing presentations, but if you want Q and A, then I'll ask Ms. Lahey to wrap up. Then we'll give five minutes to each of you. That's fair enough. You will--
Conservative
Bruce Stanton Conservative Simcoe North, ON
I might have missed that point in the agenda. My apologies, Madam Chair, and to--
Liberal
The Chair Liberal Yasmin Ratansi
It's on the agenda. But if you want Q and A--I thought they were only doing presentations. That's what we had asked them--