Debates of June 21st, 2011

Supporting Vulnerable Seniors and Strengthening Canada's Economy Act

[John Weston, Conservative, West Vancouver—Sunshine Coast—Sea to Sky Country, BC]

Mr. Speaker, I appreciate the question from my neighbour from a very beautiful riding to be sure.

What we have been discussing for the last few days, which is of interest to all Canadians, is the budget, which responds to the priorities of all Canadians. The budget implementation bill is the bridge to get us from where we are to where we will hopefully be next week, which is well on our way to implementing phase two of Canada's economic action plan, knowing that phase one has brought our country to number one in the world in its economic recovery.

[Stephen Woodworth, Conservative, Kitchener Centre, ON]

Mr. Speaker, I thank the constituents of West Vancouver—Sunshine Coast—Sea to Sky Country for sending someone, for whom I have a very high regard, to this House. I cannot think of any better member, more hard-working, more intelligent or more serious.

My colleague gave us a very good description of a lot of the infrastructure investments that were made in phase one and, indeed, those have been made in my riding of Kitchener Centre with aquatic facilities and so on.

In Kitchener Centre, my constituents are very much aware that we now have to put the brakes on. We cannot go on with big spending policies. We need to pay down the deficit. I wonder if my colleague has had similar discussions with the people of his riding.

[John Weston, Conservative, West Vancouver—Sunshine Coast—Sea to Sky Country, BC]

That is an excellent question, Mr. Speaker, because it touches on the philosophical question that we all have to deal with as members of Parliament. We would love to do more for our constituents. We would love it if our budget offered more money but we need to be responsible stewards for our economy and for the environment.

The budget aims to bring the deficit to zero by 2014. That is responsible government. That will keep us in the number one position in the world, which we are so grateful to occupy today.

[Hoang Mai, NDP, Brossard—La Prairie, QC]

Mr. Speaker, I would like to take advantage of the fact that this is the first time I am rising in the House, apart from question period, to say hello and to thank the people of Brossard—La Prairie for giving me the honour and privilege of representing them here in Ottawa as their member of Parliament. I would especially like to thank my family and friends, who have always believed in me and helped me achieve my dream. I would also like to apologize, as head coach of the U10 soccer team in Brossard, for not being present more often, as the players learn to win and lose and, more importantly, to have fun as a team.

I wish to add a few words of thanks to the constituents of my riding of Brossard—La Prairie and to let them know that I will work as hard as I can to ensure their voices are being heard and their concerns are being addressed here in Ottawa.

With part 7 of Bill C-3, the government seeks to take Canadians’ money, money that would normally be used to reduce Canada’s annual budget deficit, and give it to private financial institutions, most of which distribute their profits to American banks. In addition, the government wants to raise Canadians’ liability to $300 billion in order to guarantee the activities of private financial institutions.

In a 2008 Library of Parliament publication, Philippe Bergevin, of the International Affairs, Trade and Finance Division, said clearly that the global financial crisis was triggered by difficulties in the housing market in the United States. Many financial institutions in the United States and elsewhere in the world were hard hit by the mortgage crisis and had to declare bankruptcy or seek government assistance.

Fortunately, Canada made it through better than our neighbours to the south, mainly because its banking system is one of the best regulated and soundest in the world. Unlike American banks, Canadian banks were less active in the securitization of the high-risk loans which were at the centre of the 2002 financial crisis.

By supporting and guaranteeing the activities of American banks, the government is raising Canadians’ liability to $300 billion. The government is not content to give tax cuts to banks that are making billions in profits, it also wants to take Canadians’ money and give it to private financial institutions. That is why we have proposed amendments.

With Bill C-3 and part 7 on mortgage insurance, the government is simply taking money away from Canadians, which could be used to reduce Canada's annual deficit, and is giving it away to foreign private financial institutions, which at the moment are U.S. private mortgage insurance giants that take that money and give it away as profits to their shareholders.

That is not all. It is not enough to take money away from Canadians. The government also wants the Canadian taxpayer to guarantee in case those private financial institutions do not make enough profits and go belly-up. The government wants to increase Canada's liability to $300 billion. The government wants to take money away from the Canadian taxpayer.

According to yesterday's report by Karen Kinsley, president and chief executive officer of Canada Mortgage and Housing Corporation, or CMHC, it is in the business of providing mortgage loan insurance. It operates its mortgage insurance business on a commercial basis at no cost to taxpayers. All income generated by CMHC's mortgage insurance activity goes directly to the Government of Canada and serves to reduce the government's annual deficit. Over the past decade, CMHC has helped reduce Canada's accumulated deficit by $12.3 billion through paid income taxes and residual net income. The vast majority of that money was the result of CMHC's mortgage insurance loan operations.

There are some fundamental differences between CMHC and private insurers. CMHC has a public mandate to provide mortgage loan insurance to qualified borrowers in all parts of the country and for all forms of housing. CMHC is the only mortgage insurer for large multi-unit rental properties and nursing and retirement homes. As well, a significant percentage of the insured high ratio homeowner loans is in rural areas and smaller communities that are traditionally not as well served by private insurers. Together, these areas made up to close to 44% of CMHC's business in 2010.

Private sector insurers, on the other hand, have the ability to not serve those areas of the country or housing forms they deem less profitable.

The government not only intends to take money away from the Canadian taxpayer and give it to private mortgage insurers, but it wants to guarantee financial institutions that were involved in the sub-prime debacle and the global financial crisis.

Our point is that there is no need to involve private insurers, and there are significant risks in doing so. Why would we put the delivery of such important social goods at risk needlessly?

CMHC will be in competition with private insurers, which means more money spent on promotion and advertising of services by all players, money that should be going to house more Canadians.

[Shelly Glover, Conservative, Parliamentary Secretary to the Minister of Finance]

Mr. Speaker, I congratulate my colleague on his first speech in the House of Commons. It was well done. However, I do take issue with a couple of things that were said and I would ask for his opinion.

When we were in committee yesterday, it came to light that this section within the BIA would allow more transparency. There are provisions that would require information to be kept and shared, not only with the minister but also with OSFI.

Based on the fact that the NDP members perpetuate that they believe in transparency, that the public ought to know the things that are going on in government, how does the member justify voting against this provision when it would make the present system more transparent? It would not hide private contracts as it presently does. It would make them open to the public's eye. I would ask him to explain that contradiction.

[Hoang Mai, NDP, Brossard—La Prairie, QC]

Mr. Speaker, we want to amend the provisions to ensure that money is not being taken away from Canadians and that it would actually help CMHC and help pay off the annual deficit.

What is being provided right now would not help Canadians. It would actually make it more competitive and more difficult. It would also take away money that could be used to reimburse the deficit.

[Dennis Bevington, NDP, Western Arctic, NT]

Mr. Speaker, I congratulate my colleague on an excellent presentation. The depth of knowledge that he has demonstrated on this particular issue is really quite profound.

As an old municipal politician, though, I always like to go to budgetary revenues. I have often heard the Conservatives say that this is a low-tax plan, yet when we take a look at the plan in its entirety up to 2016, we see that with regard to personal income tax the government is expecting to take out of the system an extra 50%. It raised $100 billion last year in personal income tax and in 2016 it is looking at $151 billion, an increase of 50% over five or six years.

I know the rate of GDP and the rate of growth in the workforce. How does this translate into low taxes when we see the $50 billion increase that is being projected over six years?

[Hoang Mai, NDP, Brossard—La Prairie, QC]

Mr. Speaker, we are taking money away from Canadians, money that should be used for paying down the deficit. The government right now is not helping. It is spending a tremendous amount of money on projects that we do not currently need. What we should try to do is use the money to pay back Canadians instead of giving it away to foreign companies.

[Cathy McLeod, Conservative, Parliamentary Secretary to the Minister of National Revenue]

Mr. Speaker, I would also like to congratulate my colleague on his first speech in the House. I look forward to working with him on the finance committee in the months and years to come.

We heard very clearly from officials that people who want a mortgage and do not have more than 20% as a down payment, they have to have insurance on their mortgage. Therefore, if we want people to have the ability to buy houses in this country, there has to be insurance to backstop them. In this case, the Canadian government is actually making money from that process.

We have had a system in place with both private insurers and CMHC working to fill that need in the marketplace. I would like the member to address why that is actually a really good system and why it would be very difficult if we were not able to do that to enable people to buy homes.

[Hoang Mai, NDP, Brossard—La Prairie, QC]

Mr. Speaker, again the idea is to have CMHC, which is doing a fine job in providing insurance so people can buy houses. We do not need additional players, especially foreign players that the government is supporting. We do not need that. What we have currently is sufficient.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

Mr. Speaker, the first time I rose I was delivering an SO 31. It entailed all of the minute that I had before me so I did not get the opportunity to thank the people of Chatham-Kent—Essex, the wonderful riding that I represent, for putting their trust in me these past five and a half years and returning me back to this honourable position. I want to also thank all those who worked so hard to get me re-elected. I want to take this time, too, to thank my family and especially my beautiful wife, Faye, for her love and support these past 36 years. We just celebrated 36 years of marriage and it just keeps getting better with eight beautiful children and those twenty-three beautiful grandchildren that our children have given us as well.

I say with respect as well that the reason I feel I am here is to serve the people of Chatham-Kent—Essex but also, to ensure our children and our grandchildren can still share the bounty and the blessings that this wonderful land has given us.

That is why I am here and I am pleased to rise and speak to the budget. On June 6, our Conservative government introduced budget 2011, the next phase of Canada's economic action plan, a low-tax plan for jobs and growth, in the House of Commons. While Canada has out-performed, and continues to out-perform most other G7 countries economically, there is still a great deal of uncertainty within the global economy in the fragile global recovery.

As we all know, Canada is not an island. We will be impacted by global economic storms. That is why we need to remain focused, singularly, on the economy and jobs and building on Canada's economic action plan.

To date, our plan and tax-cutting agenda introduced in 2009, have proven extremely invaluable in helping protect and grow Canada's economy. Indeed, Canada has seen over 560,000 net new jobs since July 2009. Even better, Canada has also seen seven straight positive quarters of economic growth. Canada's economic record in recent years has also attracted a fair amount of attention, praise and even a little envy from outside our borders. Only last week, an op-ed in The Washington Times declared:

It’s hard to find good economic news anywhere in the West...Yet there is one country where the unemployment rate actually fell last month: Canada. Its 7.4 percent unemployment rate reflects huge private-sector job gains consolidated over the past year...Today, despite the global downturn, Canada has an economy that is creating jobs, with a government that is not crowding out private investment as it borrows to finance its own spending, and a social security system that is fully solvent. The lesson is clear...Tax cuts work. They can make the economy grow, they can create jobs...It’s time to try something that has actually worked.

Listen to the last line: “It's time for America to be more like Canada”.

However, our Conservative government understands that Canada cannot afford to be complacent. We cannot rest on our laurels. Indeed, with still too many Canadians looking for work and the global economic recovery still fragile, we cannot afford to be focused on anything else but the economy. That is why we need to stay the course, remain focused on the economy and implement the next phase of Canada's economic action plan. We are doing just that with the Supporting Vulnerable Seniors and Strengthening Canada's Economy Act. This act would implement many key and positive provisions of budget 2011.

I would like to mention some examples now. To begin with, to help seniors, the bill would enhance the guaranteed income supplement, GIS, for seniors who may be at risk of experiencing financial difficulties. This measure will provide a new top-up benefit to more than 680,000 seniors across Canada. This means up to $600 per year for single seniors and $840 per year for couples.

Another measure within today's bill assists many provinces during the fragile economic recovery by extending the temporary total transfer protection to 2011-12, representing nearly $1 billion in support to affected provinces like Quebec, Nova Scotia, New Brunswick and Manitoba. This would support provincial front line delivery of health care and social programs that families depend on.

We also recognize the importance of entrepreneurship and our youth across this great country as within the act is a measure to encourage young entrepreneurs by providing $20 million to help the Canadian Youth Business Foundation.

Sticking to the theme of helping our youth and supporting Canadians, I will also mention another measure in the act that sets out to enhance federal assistance for part-time students. This is accomplished by making education more accessible by reducing the in-study interest rate for part-time students to zero, bringing them in line with full-time students.

I have mentioned how we are helping Canada's most vulnerable seniors. We are supporting provinces during the fragile economic recovery. We are supporting entrepreneurship in our youth. I would also mention how we are assisting students. These measures alone are enough good reasons to support this bill. Despite all of the outstanding measures raised above that will undoubtedly have positive effects on Canadians facing real life issues, there is more.

With today's bill we are also helping the disabled by strong improvements to the registered disability savings plan, or RDSP, by increasing flexibility to assist RDSP assets to beneficiaries with shortened life expectancies and ensuring that individuals can appeal in every case a determination concerning their eligibility for the disability tax credit.

The bill also works to support our brave veterans who have given so much to Canada by providing sales tax relief to the Royal Canadian Legion for their purchases of Remembrance Day poppies and wreaths.

We are also maintaining Canada's leadership in genomics research by providing $65 million for Genome Canada to launch a new competition in the area of human health and sustaining the operating costs to Genome Canada and genome centres.

One last measure I would like to mention is the bill's provision to protect most Canadian housing markets with new measures to reinforce the stability of Canada's housing finance system by strengthening the government's oversight of the mortgage insurance industry. I should note that respected public policy commentator, Finn Poschmann of the C.D. Howe Institute, appeared at the finance committee. He was there along with some of my colleagues the other day to applaud this portion of the bill. He also wrote a lengthy article about it in the Financial Post that I encourage everyone to read, where he labelled it, “a deft move”.

I will quote portions of it:

--even though it does little more than formalize existing arrangements. The legislation says that the private insurers must set aside adequate capital, and to do so as specified by the Superintendent of Financial Institutions. In other words, sound, prudential oversight remains a requirement, and we will have transparency and risk disclosure that is as good as we can manage.

It refers to the act explicitly and says that the finance minister may demand immediate access to any records relevant to CMHC's activities and make them public, something he says is:

--a big step toward transparency and disclosure--and an important one to the Canadian public--

Clearly, this is a positive and important bill, especially for our seniors. Seniors have worked tirelessly to afford us what we have today, a beautiful country to call our own, a country that is recognized around the world as a truly remarkable place to live. Now it is time to give back to Canada's seniors who are in the most vulnerable positions. I am confident that all members in this House will agree.

Canada's most vulnerable seniors are counting on the GIS top-up to come into effect on July 4, as promised. Let us make that happen.

[Peggy Nash, NDP, Parkdale—High Park, ON]

Mr. Speaker, I would like to ask the hon. member about the mortgage insurance section of the bill, given that it is by far the largest section of the budget implementation act.

Why does he think it is good public policy for the Canadian taxpayers to assume the risk, through public dollars to the tune of $300 billion, for the mortgage insurance undertaken by the private sector? Should these companies not just pay premiums and assume their own risk for the mortgages that they insure?

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

Mr. Speaker, the hon. member and I serve on the finance committee and we have talked about this at quite some length.

Although we have a good regulation and a good body that administers this through the Canada Mortgage and Housing Corporation, we, on the government side, and think it was evident with some of the witnesses as well, believe it is important that we also have some competition.

At this stage of the game, we want that to continue and to grow. We believe this is an important part of the direction that we need to go with our country to improve the mortgage situation as we know it today.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, the member made reference to seniors at the beginning of his speech. Earlier this morning I talked to some department officials at the provincial level from the province of Manitoba. I was inquiring about the 55-plus program that supplements seniors. They indicated that in order to meet the threshold to receive that provincial subsidy, a senior would have to receive $9,746, and that would be on an annual basis. That is after we factor in the GIS, the old age pension and so forth.

Does the member not recognize the situation in which seniors are in a very real way? Does he believe his government will go into the next budget where it will continue to increase the support in terms of the GIS going forward?

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

Yes, Mr. Speaker, this government is very serious about our seniors and has demonstrated that in past budgets.

I believe the hon. member is referring to the guaranteed income supplement, or the GIS. The top up we will be providing will benefit 680,000 seniors across Canada. This means, and I repeat what I said in my speech, $600 per year for single seniors and another $840 per year for couples.

[Ted Opitz, Conservative, Etobicoke Centre, ON]

Mr. Speaker, this is also my first opportunity to thank the people of Etobicoke Centre for electing me to this great chamber. I am honoured by their confidence and grateful for the opportunity to serve. I thank my wife Cynthia, my family, my parents, my volunteers, my friends and my regiment, the Lincoln and Welland Regiment, of which I am now the former commander, for their support.

I understand that the Supporting Vulnerable Seniors and Strengthening Canada's Economy Act includes key measures to enhance federal assistance for part-time students. Specifically, it would reduce the in-study interest rate for part-time students to zero, bringing them in line with full-time students. This was one of the many important measures in budget 2011 to help students.

Could the member speak to those measures in budget 2011? What was the reaction of students to those measures?

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

Mr. Speaker, the budget has some exciting measures for students: student loan forgiveness for doctors and nurses working in rural and remote areas; extending tax relief for skills certificate exams; doubling the in-study income exemption from $50 per week to $100 per week, benefiting over 100,000 students; increasing the family income threshold for part-time Canada student loan and Canada student grant recipients; and bringing the eligibility thresholds in line with the thresholds used for full-time students. There is much more. The College Student Alliance says that this shows commitment to supporting post-secondary education.

This budget definitely thinks about our students.

[The Acting Speaker, Conservative, Bruce Stanton]

Before we resume debate, I will let the member for Hamilton East—Stoney Creek know that I will need to interrupt his speech part way through, at 4:35 p.m.

Resuming debate, the hon. member for Hamilton East—Stoney Creek.

[Wayne Marston, NDP, Hamilton East—Stoney Creek, ON]

Mr. Speaker, I appreciate that notice. I will try to adjust my comments appropriately.

I rise today to speak to Bill C-3 and the concerns the NDP has with one particular section. Repeatedly in the House, there has been discussion about the fact that at the finance committee, the NDP the position was to vote for the bill, but what we voted for was to bring it forward as a report from the committee.

We had expressed our concerns yesterday about a particular portion of the bill and today that led our critic to move amendments to the bill. The reason this has been done is we think it should be withdrawn from Bill C-3 to give it the appropriate study.

The section we are talking about would open the door for private mortgage insurance companies to enter the market. In fairness, there have already been two private companies offering mortgage insurance in Canada, under special arrangements. However, this legislation would now codify their position in the Canadian market.

Canada has had a public insurer, CMHC, operating here with liabilities 100% guaranteed by the federal government. The other private insurers have only 90% of their liabilities guaranteed.

According to the C.D. Howe Institute, and I do not quote it very often, the 10% difference represents an appropriate fee with the risk. However, who decides what the risk factor really is?

During the housing meltdown in the United States, insurance was clearly not covered adequately. Therefore, who decided what the fees were for that risk? The American experience has proven private sector risk assessment does not have a very good record at all.

Clearly, mortgage insurance makes housing more accessible by increasing the availability of capital for housing. Obviously, when the money is protected and guaranteed, it makes perfect sense.

The NDP believes there is no good reason to involve more private insurers, and after what took place in the United States, it proves there is a significant risk to Canadians in doing so. Why would Canadians want their government to put the delivery of such an important social good at risk needlessly?

Again, we need to study this further. We need to consider the amendments that are about to be put to the House and for the government to take the responsible position and withdraw the clauses. We should work together, have hearings and really consider the potential impact of this.

Karen Kinsley, CEO of CMHC, stated that competition with private insurance meant more money spent in promotion and advertising of services of all players, and that would now include CMHC. That money should go toward housing Canadians. To have an Americanization, for lack of a better term, of a service that has been provided to Canadians in a very valuable way, in fact, in a way that has produced revenue in terms of $12 billion to the government, we very clearly should pause and take the time to look at this appropriately. Maybe we will reach the same conclusions. I doubt that, but at least we should look at it in a fair-minded way.

There are very good people who helped create the U.S. housing bubble. Their intention was probably was good in the beginning. However, the global financial crash came about because people were provided the option of money they could not afford. It was not appropriate and the risks were just not assessed properly.

[The Acting Speaker, Conservative, Bruce Stanton]

It being 4:35 p.m., pursuant to an order made Wednesday, June 15, 2011, it is my duty to interrupt the proceedings and put forthwith every question necessary to dispose of the bill now before the House.

The question is on Motion No. 1. A vote on this motion also applies to Motions Nos. 2 to 7.

Is it the pleasure of the House to adopt the motion?

[Some hon. members]

Agreed.

No.

[The Acting Speaker, Conservative, Bruce Stanton]

All those in favour of the motion will please say yea.

[Some hon. members]

Yea.

[The Acting Speaker, Conservative, Bruce Stanton]

All those opposed will please say nay.

[Some hon. members]

Nay.