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.
Liberal
Prof. Kathleen Lahey
Okay. I'll just finish the point I was making in relation to the tax-free savings accounts, because in addition to the Statistics Canada data that is available to the Department of Finance, there is, of course, also the data from the tax returns themselves, income statistics from the Canada Revenue Agency.
It's very clear there that with the RRSPs, which have given tax returns or tax refunds to people to motivate them or give them an incentive to put money into tax-supported savings, that women have far less financial capacity to save.
The tax-free savings accounts are going to be out of the reach of most of the lowest-income people in Canada, and there is virtually no benefit to them whatsoever. I would like to actually warn this committee that the claim that the tax-free savings accounts are a special boon to low-income people is a deliberate policy choice on the part of the proponents of this account to draw attention away from the fact that it is probably the very biggest tax benefit that has been produced to benefit high-income taxpayers and mid-high-income taxpayers for a long time.
This introduces the principle of consumption taxation as opposed to income taxation. It's inherently biased in favour of people who are able to save money and who don't have to spend all of their money. Countries all around the world have flirted with the consumption tax as the new base and have repeatedly backed away from it on the basis that it drives the gap between high income and low income further apart than income taxation does.
The TFSA is a vehicle designed to introduce consumption taxation for the benefit of high-income people in Canada. It is not going to benefit women in Canada.
Thank you.
Armine Yalnizyan Senior Economist, Canadian Centre for Policy Alternatives
Thanks, Madam Chair.
I just want to say, listening to the deputy minister and to the questions this committee has posed, what an honour it is to be part of this process. I really think this committee has urged Finance to do things in the last few years that it would not have otherwise done. I think that moves Canada in the right direction. It truly is an honour to be part of this process.
I don't want to actually do an analysis at this moment. I want to ask the committee how we can best be of help at this stage in the work you're doing. I've said in previous submissions what I think you need to do. You need to have a good process, which you are urging. You need to have good measurements for defining progress in achieving, not even better equality, but a reduction in the vulnerability of women, which surely is the acid test of any good public policy. It's not just the vulnerability of women either; it's the vulnerability of people.
The reduction of vulnerability is equivalent to enhancing equality, and I would urge you to consider that. When you're told that the system is more progressive and that these measures are actually helping the poorest the most, I would ask for substantiation of those points. Surely the role of government is not to make things better for those who already have it the best. That's the acid test.
If you are insisting on better processes, insisting on better measures of progress in reducing vulnerability, and insisting on substantiation of the impact of government initiatives, not just for the vulnerable but the entire package, as has been declared--there's about $200 billion in spending and $140 billion in tax reduction measures--please don't focus just on the tax side. How we spend is perhaps more important for women and the vulnerable. It is more difficult to do, guaranteed, but you've just been invoked by the deputy minister to stay on the cutting edge. Use your passion to urge better mechanisms of analysis to stay on the cutting edge of where government action can make a difference.
In light of all that, in light of what I have said previously and what my colleagues have said, I guess I would use my time to ask how we can best be of service to you. What is the most important thing we can do?
Liberal
The Chair Liberal Yasmin Ratansi
Thank you. That will give the committee some time to think about how they can best utilize you.
Nancy, we'll go next to you.
Nancy Peckford Director of Programs, Canadian Feminist Alliance for International Action
I think my comments really echo many of Kathleen's in terms of what I see as a profound disconnect regarding why we do gender-based analysis and the origins for which GBA was initially introduced. I think the finance department, despite its best efforts--and we commend it; we applaud that it's going where it hasn't gone before, and it's doing that with the best of intentions.
From hearing the deputy minister's testimony and from listening to the gender champion's testimony some weeks ago, I have come to the conclusion that I'm not even clear that the finance department is the best equipped to in fact define the performance indicators on which its own GBA should be generated. It's not obvious to me that it actually understands the context for which GBA should be done.
So I'll just take a couple of minutes to give you my quick read, not of this morning's analysis but of how we can, or how you can as a committee, breathe life into gender-based analysis in ways that I think would accomplish the goals.
Gender-based analysis, as I've said before, was introduced during the Beijing Platform for Action. It was the way for Canada to mobilize its equality commitments. It was rooted in the recognition that equality for all women in Canada had not been achieved, that discrimination still existed—if not explicit, implicit—and that it was important to identify not only the intention of policy but its impacts. That's really, I think, what we're trying to get at when we look at the effects of a budget, and I think the GBA the finance department has done hasn't really reflected that. I don't think it has been able to fully recognize the inequalities or the economic realities that most women in Canada continue to confront. That, I think, is presenting a major barrier to the quality and the nature of the analysis that is being done.
I would remind the committee that when the Beijing Platform for Action was adopted globally and the federal plan for gender equality was introduced in 1995, it was asked of all departments to conduct a gender-based analysis. It actually wasn't until 10 years later that the Department of Finance was held to account on GBA, and it was as a consequence of the many activities at this committee and some work by some of the people you see here that in fact the minister of the time committed to begin a process of GBA. So we had a very flawed GBA framework from the beginning because certain departments entirely opted out for many years.
But to go back to the Beijing Platform for Action, Canada's federal plan for gender equality recognized systemic discrimination. It recognized Canada's legal framework for equality, which included the Charter of Rights and Freedoms and the UN Convention on the Elimination of All Forms of Discrimination Against Women as two key tenets by which we understood our obligations to women and women's equality. And in some ways, I think it's sadly the writing-out of women's equality that has made many GBA processes—and not only in the finance department—very challenging, because I think policy analysts, departments, ministers, and deputy ministers are coming to the table with very different understandings of our obligations to address women's inequality. I think that's part of the flaw in terms of GBA.
I agree with Kathleen. I don't think they're doing good GBA, and I think if you measured it against the global standard it would not pass, and that's despite their best efforts. I have great confidence that they can improve those efforts, but I have to tell you that I think a couple of things would have to happen, given what I understand about GBA at the finance department.
It has insisted it's only doing GBA on structural versus macroeconomic policies. I would invite this committee to think about whether or not that's the best choice it can make and whether or not it's possible to do GBA on macroeconomic as well as structural policies. There's an emerging expertise out there that's trying to grasp the larger macroeconomic picture in terms of what it means for women, and I think the finance department could avail itself of that.
Further, as I understand it, its gender champion is located in the tax policy unit. She insisted on that when she was here before you. As a consequence, I cannot understand how she could be well equipped to implement a comprehensive plan across the department for GBA if she's located in the tax policy unit and her expertise is largely grounded there. When she was here, she told you she couldn't answer very basic questions on other aspects of the finance department's activities.
So I would suggest to you that their gender champion, at this point, is mislocated. I think we need a different kind of gender champion at the finance department, one who can understand and has purview over the entire department's operations.
The other thing the finance department said to you was that they have decided to equip the policy officers who do the development for policy initiatives of the budget with the GBA tools. I would suggest that such a conflation is not helpful, that having people who have been working in the finance department for many years on very narrow and complex constructs around tax and expenditure are not your best people to be doing GBA. That's how the finance department has structured its GBA, according to the testimony they're giving you.
I actually believe that the finance department needs a GBA unit. The GBA unit needs to be accountable to the deputy minister. You can't have finance department bureaucrats doing this GBA, because I think it's outside of how they understand their own job and how they understand their own expertise. I don't think the training that's being provided by SWC or internally allows you to bridge that gap sufficiently.
I think what we know is that successful GBA leverages pre-existing expertise that often is not the purview of particular policy bureaucrats, administrators, or what have you.
Finally, what I'll say, so that you do have time to ask some questions, is that I think the GBA currently done lacks context and it lacks clear objectives. I have not heard that there are clear performance indicators by which the finance department's GBA is being done. I would suggest to this committee--and I think I've changed my mind a little bit--that I don't think the finance department has the capacity to define its own performance indicators in this instance. I think the budget is such an integral policy tool that those indicators have to be set outside of that department. They can be set outside the department with your assistance as parliamentarians, with the assistance of Treasury Board, with the assistance of Privy Council Office, but I do not think the finance department currently has the expertise. If they set up a GBA unit, then maybe we could proceed differently, but I think at this juncture the finance department is very ill equipped to do that.
I'll leave it there. I want to say that I really respect the work you are doing. It's incredible work. You are going where many people--parliamentarians, civil society groups or others--have not gone to date, and we really appreciate the very comprehensive approach you're taking.
Liberal
The Chair Liberal Yasmin Ratansi
Thank you very much.
I'd like to say goodbye to the German delegation.
Have a wonderful trip, and I hope you enjoyed this. Thank you.
I'm going to keep it to three to four minutes so that you have some time around the table.
Mr. Pearson.
Liberal
Glen Pearson Liberal London North Centre, ON
I'll be brief. I'll express my frustration again at the whole process. I sometimes think it's different languages. We've heard this morning from the Department of Finance that actually the gender gap is narrowing the wage gap, and you said it was actually expanding, especially among professional women who are university educated.
It's just my sense--and I'm trying to be as brief as I can--that we need to build a better model. I've said that before. To me the model is flawed. I think everybody means well in this committee, in the civil service, and among the civil society groups that are coming in and speaking to us, but we're speaking the wrong language.
I would like to ask, if we were to do a good robust GBA analysis, who would you suggest, Ms. Yalnizyan, would be the ones we'd bring together to build that model, to make it work? The present one is not functioning, in my opinion, from what I can see, despite all best efforts.
Senior Economist, Canadian Centre for Policy Alternatives
That's an awesome question. I would go back to my original point, which is that you need to know what it is you want to achieve. You need to have a process in place. Then you pick the people you think are going to help you get there. I think you're working on all three of those things at the same time. But I don't think this committee is there yet.
In my very first submission to you I said to pick three priorities. As a committee you work extremely well. As a committee, pick three priorities you want to see some progress on. Just pick three. Make them doable, and make progress on how you would advance those three things that you believe are good indicators of advancing gender equality or of reducing the vulnerability of women. Pick the way you want to look at them. These would be three elements of an action plan that you would like to see progress on.
By starting with knowing where you want to go, you can actually guess about the process to get there. In the abstract, I think a GBA, a gender budget analysis, could be anything. You could fill that envelope with anything.
So use your remarkable ability to work together to say that this would be important, that if we made a difference here, we could actually say that government made a difference for the first time in 10 years. Pick your target, name your process, and then start filling in the blanks on how you get there.
As I have said to you before, taxes are one side of it. I couldn't agree more with the analysis that has happened at this end of the table on repeated occasions. Insist on making sure that whatever tax analysis is done includes all Canadians: men and women, taxpayers and non-taxpayers. You have to see what the incidence of benefits is for every measure.
But taxes are not all of it, and the benefit side is very challenging. To assess the impact.... For example, on affordable housing, you heard about three or four programs, which were marshalled in front of you. Who benefited? Where did they benefit? Are people actually more housed today than they were 10 years ago? These are important, substantive questions. The evidence is there or it's not there, and if the evidence is not there, then you can't say you've made progress. You can't just say....
You know, there was a statement made by the deputy minister that the changes that have taken place in the tax system--I presume he meant in the last two years, because he was referring to this government's period--have made the tax system more progressive.
We know the OECD believes that the progressivity of the tax system on the personal income tax side has declined. So there's a disconnect there, and not just between you and Finance.
Their job, he said over and over again, is to support the finance minister. I respect that, and I understand that, but your job, as parliamentarians, is to make sure that the evidence is marshalled to substantiate those fairly strong statements, which I don't think can be supported.
Prof. Kathleen Lahey
Yes, I'd like to just add a couple of points.
First of all, I know this has ended up being an exercise very heavily focused on taxes, not spending. I'm not too sure how that happened, but I would like to just emphasize that as somebody who compulsively monitors what everybody else is doing on gender analysis of tax law, Canada has now, with the work of this committee, sort of burst into the forefront internationally--because that is usually the last thing to get looked at. Part of what has happened here in Canada is that so much of what this government and the government before it had been doing was sort of tied into or interwoven with the tax system that it has played I think a very important role.
So the work this committee has done in bringing this to the surface is absolutely stunning. I would say that this committee can, because of its structure and because it has continuity from year to year, pick as perhaps one of its three priorities--taking Armine's suggestion--producing its own gender analysis or its own gender budget, after the fact, unfortunately, at this point. Publish it as a document. Put it out there. Make it available. It will, I believe, become a touchstone for departments in future governments and for civil society groups that wish to address one or more points. There is a wealth of information now in the minutes of these hearings and in the various submissions you have gotten from an absolutely stunning array of experts from so many different facets of this very complex process.
With the material that is available, I think it is now possible, as a concrete, achievable goal, for you to produce some degree of gender budget or gender analysis of, let's say, the 2006, 2007, and 2008 budgets. Then maybe commit as a committee to keep updating it each year. If the committee can't quickly train the Department of Finance or induce them to develop the contextualized, purpose-driven gender analysis that is required, then this committee now has the capacity to do it.
Bloc
Johanne Deschamps Bloc Laurentides—Labelle, QC
I don't have a question to ask, Madam Chair, but I want to thank the three witnesses who have come here today.
We have called you before the committee on numerous occasions. You have clarified things for me a great deal. With regard to what you said earlier, Ms. Peckford, would it be possible to get this in writing since you defined it so well? It's important for the committee to take note of this. Based on that, we will have an even better vision of what gender-based analysis can do.
It is somewhat of a contrast to meet with you after meeting with the deputy minister of finance. We heard testimony about what's happening inside the box, but thanks to the vision that you have brought, we have a broader picture of what society is currently experiencing.
Based on the testimony by the deputy minister and your testimony, I see that we are very dependent on the government's priorities. That's what the deputy minister told us.
Ms. Peckford, would you like to add something to this?
Director of Programs, Canadian Feminist Alliance for International Action
I understand the degree to which the ultimate policy decisions are being made by government. I think we all get that.
The challenge here is that the analysis is not elaborate enough to even identify the potholes, the gaps. So it's fair enough. I think we all understand the parliamentary system. We get that the government of the day creates the budget. But you do not have sufficient supporting analysis.
When they say they want to provide the informed analysis so that their ministers can make the best decisions based upon their priorities, we get it. But I'm telling you, the depth of the analysis is not there, nor is a reflection of Canada's internal and external obligations to remedying women's inequality. That's the first point.
The second point, in response to Glen--I was mulling over your question--is that I do think, and you're all exploring this, you need an accountability mechanism outside of the finance department--outside of all departments, but in this instance we're talking about Finance.
Again, given that you've had the Auditor General here, you're exploring a couple of options around an independent commissioner, an equality commissioner within the AG's office. I think it's incumbent upon you to pursue one of those, and you're well positioned to do that.
Conservative
Nina Grewal Conservative Fleetwood—Port Kells, BC
Thank you, Madam Chair.
Thank you very much for once again appearing before our committee.
Ms. Peckford, would it be possible for you to describe to the committee how the process of gender-based analysis is conducted in the Department of Finance?
Director of Programs, Canadian Feminist Alliance for International Action
No, because I don't believe we actually understand it well or that they have outlined their process. What I've tried to remind the committee of is that Status of Women Canada, in its GBA training, has outlined a process, which helps encourage departments to declare ways forward based upon fairly focused goals. Sadly, at this point, I don't think the finance department has done that or has received the appropriate direction in order to do that well.
I don't believe there is a process. And I had a hard time believing it was terribly comprehensive when they were describing it as such. Maybe it's because they see GBA occupying a different kind of space than what we might.
Conservative
Nina Grewal Conservative Fleetwood—Port Kells, BC
The rest of my time is for Mr. Stanton.
Thank you.
Conservative
Bruce Stanton Conservative Simcoe North, ON
I concur with other committee members, by the way, that you've made a very substantive contribution to our study on this. I think there is a tremendous volume of information that has to be.... But it is a way forward. The culmination of all that is extremely helpful.
There's one consideration that I can't get my head away from right now, and that is this notion that while we admit that any government has to consider multiple layers when they look at budget considerations and policy considerations, addressing gender equality is one of those considerations. When you fit that into the mix.... And there are other things. For example, the deputy minister mentioned that you have world economic pressures that come to bear--housing and geographic issues that come up. So they're faced with all of that, and they have to fit gender equality into the mix.
Insofar as the budget is designed to try to address bits and pieces of all of that, aren't we kind of setting ourselves up for the likelihood that when it's all said and done, we're not going to get as far as we would have liked to in terms of addressing gender equality?
Senior Economist, Canadian Centre for Policy Alternatives
I think you've actually put your finger on what makes it difficult to mainstream this, which has been the language used for why you do GBA.
But I want you to think about gender budget analysis not as a special interest group but as a way that you examine the distribution of incomes, purchasing power, and the ability to participate.
You've mentioned world economic pressures. You alluded to the decline in manufacturing. And there's the credit crunch that we're all dealing with too. These are large-scale hydraulics that will affect the macroeconomy. In every instance, the role of women is at the bottom of the income spectrum. In every instance, a good GBA analysis will illuminate our understanding of how the distribution of incomes is changing and how government policy impacts that distribution.
What we know from external evidence is that the really big hydraulic of the story is that government policy has actually redistributed incomes increasingly in favour of those who are already affluent. The market has done a very fine job of that on its own. Governments used to counteract that, but they have not been doing so in the last 10 years, because of two forces, one being the cutting back of spending, which really does support low-income households. By this I refer to home care, to affordable housing, and to the fact that child care has not expanded. And there's public transit and infrastructure. I can go through the list, and you know the list. But spending has not kept up with the needs of communities, of individuals, of households, and of women.
On the taxation side, there's been a redistribution of the gains of tax policy towards those at the top end—seen only if you pay attention to distribution as a part of your GBA and if you don't do your GBA analysis as Finance has done theirs, asking how many women and men have gained. Instead, you would actually ask, how many women and how many men in what income brackets have gained? Do the people who are of such low incomes that they don't pay personal income tax get any benefit from it? Then you start lifting the veil here on what's going on.
Given that every economy in the advanced industrialized world needs consumer spending to motor along, the strength of consumer spending in our economy has allowed it to sail through three events that could have been recession-producing. The lower your income, the more your marginal propensity to consume. If you let affordable housing issues continue the way they are, without intervening, people's budgets will become even more chewed up by housing costs, leaving their disposable cash smaller and smaller over time. If you want people to spend in order to save the economy from sliding into a downturn, you need to pay attention to what's happening in the bottom half of the income distribution—and more women are there than men.
So don't think of GBA as something that you're doing for women because you're nice, because you want women to be equal to men. It's a huge macroeconomic and distributional question. That's why I have said over and over again here that gender budget analysis without distributional analysis of the impact on income is useless. Don't bother going there. If you're not going to do that, don't do it at all, because the analysis is telling you something about the distribution of opportunity economically and in terms of income, and it's going to tell you something about how sustainable economic growth will be in the next five to ten years. So it's a big macro picture.