Thank you, Madam Chairperson and honourable members.
I'm extremely happy to be here and have the opportunity to give you information that will hopefully assist you in deciding where you want to go with this study.
The first point I would like to make is that discussion of the implementation of gender budgeting in a highly formal and cabinet-based fashion could not be any more urgent in Canada. Since the late 1990s, Canada has lost its renowned spot as number one in both the human development index and the gender development index in the UN human development reports. It has been falling every year since then in its ratings, particularly in relation to women. It has most recently fallen down to number seven in the world from number one in just a few short years.
A new set of indicators that puts more emphasis on the economic functioning of the different indicators ranked Canada, in terms of the gender gap between women and men in 2006, at number 14, and in 2007, at number 18. So things are moving backwards for women in Canada in hard dollars and cents.
It is my own view and the view of quite a few people that a gender budget will enable everyone to look with much more realism at the status of women to date. I have distributed a handout marked annex A, which is a page taken from a report I did for Status of Women Canada on these kinds of issues. It used micro-simulation software to profile the relative income levels of women and men for 2004.
This profile shows that the discrepancy between average male incomes and average female incomes earned, from the time people reached the ages of 16 and 17 to the very end of life in their nineties, is huge and intractable. I've been running this profile for 20 years now, and the figures go up a little bit, but the shape has not changed. The size of the gender gap has changed somewhat, but 20 years ago I projected, based on the rate at which the gap was closing, that it would have closed by 2008. Sitting here in 2007, I now say it's going to revert to pre-1986 levels, probably by 2015. It's that serious.
Professor Philipps is absolutely right when she draws attention to the role of the tax system, which has been notorious as the vehicle for delivering a lot of fiscal outcomes for women that are very hard to see, hard to identify, hard to measure, and hard to track.
A gender budget could be put into place, preferably built on the existing and nearly 20-year-old tax expenditure budget published every year by the Department of Finance that accounts for hundreds if not thousands of specific line items in the various taxes that are imposed by the federal government. Then it would be possible to bring the various tax factors that are driving women's and men's average incomes apart from each other and pinpoint precisely which specific tax measures and spending measures are most responsible for the growing disparity in the male and female incomes. Further than that, it would be possible to devise with a great deal of accuracy exactly what kinds of tax and spending measures with the least cost would be most effective in beginning to reverse the ever-widening gap between male and female incomes.
To give you a bottom line, the most recent UN report on total incomes for men and women in Canada says that women's incomes are still only 64% on a global basis of the total of men's incomes. So you may hear that the wage gap is small and shrinking and so on, but when you look at the total amount of money that comes into the hands of women, they have yet to receive even two-thirds as much as men receive every year.
As Professor Philipps said, out of that reduced income, women not only have heavier responsibilities--something like 81% of all single parents are women, and you don't get to be a single parent unless you have at least one child in the house--but women are also responsible for much heavier shares of unpaid work that has to be done.
A 2004 survey by the Law Society of Upper Canada on the unpaid work of women lawyers, who worked the same work weeks as men, showed the average man did 13 hours of unpaid work per week and the average female lawyer did 35 hours of unpaid work on top of having to bill at a level that keeps them viable as practising lawyers. So the bottom line is that women in Canada are extremely heavily burdened by low incomes, heavy workloads, and heavier responsibility for children, and at the same time, the tax system has been pushing them further down.
Next I would like to address what I think are the specific causes in the overall tax system that are most responsible for maintaining the status quo. The first point I would like to address is the combined effect of consumption and commodity taxes combined with the existing rate structure under the Income Tax Act.
If you think in terms of how income at the lowest income levels is allocated, and if you look at annex A, you will see that women's average incomes never get much better than about $30,000 a year, which is not a lot to start with. At the present time, out of that comes 7% for provincial sales tax in Ontario, plus the GST portion, which, if I'm keeping track of things correctly, is somewhere around 6%, maybe going down to 5%. Who knows? Together, that comes to about 13% right there out of every dollar a woman spends, because any consumption items will be potentially taxed at that rate.
If you look at income tax, you see changes were introduced in 1987; that's 20 years ago. The lowest rate of income tax federally used to be 6%--I don't know if anybody here remembers that--which was 9% when the provincial layer of tax was added. When that tax was raised to 17% from 6% as a result of the 1987 changes to the Income Tax Act, that really escalated the amount of tax payable by the very poorest people in Canada. The exemption right now under the Income Tax Act is only around $9,000.
So the bottom line on that point is that a heavy and crushing burden looks gender neutral but impacts women disparately by virtue of the cumulative effect of the GST, PST, federal income tax, plus provincial income tax, and that is something women cannot avoid because most of their income is earned in the form of employment income from which few deductions are available.
Added to that are the growing number of joint tax provisions, which I have discussed in detail in the Status of Women study that you have excerpts from. I would like to reinforce the points that Professor Philipps has made in relation to income splitting specifically. If you take a look at the distribution of this tax benefit, the median retirement age income for couples is around $40,000 right now, $42,000. It is absolutely true that people who have $40,000 worth of income or less will get no benefit from income splitting. The higher the income goes, the larger the benefit, up to as much as $11,000 per couple. Seventy-seven percent of Canadians think that income splitting is good for people, but it's not good for even half of all Canadians. We need more light shed on taxation.