Debates of May 25th, 2015

Finance—Main Estimates 2015-16

[Scott Brison, Liberal, Kings—Hants, NS]

Mr. Chair, is the minister worried about the growth in unpaid internships and the downward pressure that they place on wages?

[Joe Oliver, Conservative, Eglinton—Lawrence, ON]

Mr. Chair, our government is working on regulations that would protect unpaid internships when it is appropriate to do so. An internship is a short-term, workplace-based learning experience, which enables an individual to acquire knowledge or experience. They include co-ops, work placements, and job shadowing. They often are part of an educational program. Therefore, the amendments to the Labour Code will specify that an unpaid internship can be offered under two circumstances: where it is part of a program approved by a recognized secondary or post-secondary education institution, in cases where the internship does not exceed four months and is primarily for the benefit of the intern.

[Scott Brison, Liberal, Kings—Hants, NS]

Mr. Chair, the Bank of Canada says that housing prices in Canada are overvalued by as much as 30%. Has the minister ruled out the possibility of introducing new rules for residential mortgage insurance before October?

[Joe Oliver, Conservative, Eglinton—Lawrence, ON]

Mr. Chair, we, of course, monitor the real estate market carefully, but we are not of the view that there is a need for any major change. We have instituted about four changes in the last number of years.

We agree with the Governor of the Bank of Canada, the OECD, and the IMF that while there may be a soft landing, and we may already be seeing that in parts of Canada, we do not see a bubble, and we do not see the need for any major steps at this time.

[Scott Brison, Liberal, Kings—Hants, NS]

Mr. Chair, the Bank of Canada says there are signs pointing to a housing correction in Alberta, Toronto, and Vancouver markets, and if that correction happened in these markets simultaneously, the bank has said “the spillover effects to the rest of the economy could be significant”.

Is the minister prepared to heed the Bank of Canada's warning and step in to prevent that from happening? That is not a soft landing when the Bank of Canada is saying that the spillover effects to the economy could be “significant”.

[Joe Oliver, Conservative, Eglinton—Lawrence, ON]

Mr. Chair, the housing market overall remains balanced. There are some differences across regional markets, as we know. Housing prices and activity in Toronto and Vancouver remain strong, supported by population growth and land scarcity. Lower oil prices has led to a slowing of housing market activity and lower prices throughout Alberta and Saskatchewan. Conditions in the rest of Canada generally remain moderate.

Looking at the total market picture, which we are monitoring very carefully, we do not believe that major initiatives are required at this time. We are mindful of the fact that affordability has actually increased over the last five to ten years.

[The Deputy Chair, Conservative, Barry Devolin]

Regrettably, the time for the member for Kings—Hants has expired.

Resuming debate, the hon. member for Kelowna—Lake Country

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

Mr. Chair, it is a pleasure to rise this evening to participate in this important meeting of committee of the whole to discuss Canada's prudent economic policies. I would like to focus my comments this evening on our government's steadfast support for Canada's seniors, folks who have helped build a country that is strong, prosperous and secure.

Our government respects Canada's seniors for their efforts, but more than respecting them, we are empowering them to become stronger, more prosperous and more secure, just as they did for Canada. We have a well-established record of achievement in this regard. Among the foremost of our achievements is ensuring that more seniors are not burdened with paying taxes after having already given so much to their country.

As a result of our low-tax plan, about 400,000 seniors have been removed from the tax rolls. Since 2006, our government has increased the age credit amount by $2,000, $1,000 in 2006 and another $1,000 in 2009. We have doubled the maximum amount of income eligible for the pension income credit to $2,000. We have introduced pension income splitting, which is benefiting over two million Canadians every year.

However, sadly to say, the Liberals have stated that they would take away income splitting for nearly two million families. Just like they would take away this tax saving from families, I have heard they would also take this income-splitting plan away from seniors. We regret that both opposition parties plan to raise taxes on middle-class seniors.

By contrast, as a result of actions taken by the government to date, seniors and pensioners are receiving about $3 billion in additional annual targeted tax relief. In 2015, a single senior could earn at least $20,000 and a senior couple at least $40,000 before paying federal income tax.

Not only are we leaving seniors with more money in their pockets, but we are empowering them to make the most of their savings. In the fall of 2014, we partnered with the Minister of Finance, the Minister of State for Finance and as well the hard-working Minister of State for Seniors. Under the guidance of the new Financial Literacy Leader, our government released a strategy to enhance the financial literacy of seniors. Its aim is to help seniors and near-seniors plan for and manage their finances during their later years and ensures they get the fair treatment they deserve. This is a request that I have heard from my constituents. We responded, and we required enhanced disclosure by banks and the costs and benefits of using powers of attorney for joint accounts and more robust bank processes and staff training.

By building on this record of support for seniors, economic action plan 2015 takes us a step further in helping seniors to effectively manage their finances.

As the member of Parliament for Kelowna—Lake Country, I am very proud to represent a high proportion of seniors, including folks like Mr. and Mrs Sawatzky who were on Parliament Hill today and many other of my seniors, who maybe watching the other channel as the Rockets are just a few wins away from winning the Memorial Cup, we hope. Go Rockets, go.

However, what I heard, loud and clear, and have communicated to the finance minister, was a need to relax the rules surrounding registered retirement income funds, known as RRIFs, as seniors are living longer and with healthier lifestyles. We listened and acted. The budget would do exactly this. It would strengthen seniors' retirement options. By permitting more capital preservation, the new factors would help reduce the risk of out-living one's savings, while ensuring that the tax deferral provided on registered retirement savings plans, or RRSPs, and the RRIF savings accounts continue to serve a retirement income purpose.

At the same time, economic action plan 2015 would increase the tax-free savings accounts, otherwise known as TFSAs. The annual contribution limit would go from $5,500 to $10,000. This gives Canadians, including seniors, more room to save money tax free. At the end of 2013, about 46% of individuals who contributed the maximum amount to their tax-free savings account were seniors.

Taken together, these new measures will support the retirement income needs of seniors, providing them with increased flexibility to manage their savings in a tax-efficient manner.

However, that is not all. Economic action plan 2015 also proposes a new home accessibility tax credit for seniors and persons with disabilities. This permanent, non-refundable credit will help with the cost of renovations to allow seniors and persons with disabilities to live independently and safely in their homes.

At the same time, economic action plan will extend compassionate care benefits from the current six weeks to six months to ensure employment insurance benefits are available when Canadians need them most, something on which all of us in the House have heard from our constituents. It is a very welcome addition to budget 2015. Also, it will provide up to $42 million over five years, starting in 2015-16, to help improve seniors' health through innovation by establishing the Canadian centre for aging and brain health innovation, which is another important area of research.

These are all important advancements we are making for the benefit of seniors, and they are building on a solid foundation of support that we continue to strengthen.

I will quickly touch on how we have acted to strengthen Canada's retirement income system to serve the needs of today's and future retirees.

We increased benefits for the guaranteed income supplement, GIS, for Canada's most vulnerable seniors. This investment of roughly $300 million each year improves the well-being of approximately 680,000 seniors across Canada and represents the largest GIS increase for the lowest-income seniors in a quarter century, a caring and compassionate measure I might add. We have also improved the regulations supporting private retirement savings and expanded opportunities through new private savings vehicles, like the pooled registered pension plans. Taken together, these initiatives provide a strong foundation upon which Canadians can achieve their retirement goals with confidence.

The effectiveness of our government's achievements is underscored by expert third-party analysis. Canada's retirement income system is acknowledged to be among the world's best by groups like the OECD in terms of preventing poverty among seniors and ensuring appropriate income retirement.

With all the actions I have outlined today, we are making Canada's seniors stronger, more prosperous and more secure. By doing so, we are giving back to them what they have given to us.

My question for the hon. Minister of State for Finance is this. What are we doing to support the growing number of seniors who choose to remain engaged in the workforce in their communities?

[Kevin Sorenson, Conservative, Minister of State (Finance)]

Mr. Chair, I want to thank the hard-working member for Kelowna—Lake Country.

We know in western Canada that many of our prairie seniors find their way to Kelowna for retirement. The member is from a beautiful constituency, and I know he represents it very well.

As a complement to a strong retirement system, we are also supporting the growing number of seniors who choose to remain in the workforce. Many senior Canadians are now making this choice in order to stay connected with our social network or to add to their financial resources. These employment opportunities not only help these individuals in meeting their personal goals, but they also provide access to experienced talent that is often sought by other employers.

To support labour force participation by seniors, our government renewed the targeted initiative for older worker program in 2014. It was renewed for a three-year period, which helps the unemployed workers aged 55 to 64 living in small economically-vulnerable communities to improve their employability and reintegrate into the labour market.

Since its launch in 2007, our total investment in this initiative will be an estimated $345 million by March 31, 2017. To date, more than 35,000 unemployed older workers have been targeted to participate in the initiative.

We similarly invested $6 million over three years in economic action plan 2012 to extend and expand the third quarter project, an initiative that has helped approximately 1,200 experienced workers who are all over 50 years old. It helps them find a job that matches their skill set.

In addition to working, a large number of seniors also want to give back to their communities through volunteerism. The new horizon for seniors program helps seniors both benefit and contribute to the quality of life in their community through social participation and active living.

Since 2006, new horizons has funded over 13,000 projects, including those helping seniors and community members, to recognize elder abuse in all its forms and to improve the quality of life, safety and security of seniors.

I am proud to say that even in my riding of Crowfoot, I have had the opportunity to meet with senior organizations that have applied for and received funding through this new horizon program. I am also pleased that, through economic action plan 2014, we invested an additional $5 million per year for new horizons to support projects that have enabled seniors to share their knowledge, skills and experiences with others, bringing total funding for the program to $50 million annually.

New horizons is yet another example of how we are making Canada's seniors stronger, more prosperous and more secure. I am very proud of the work we have accomplished with our seniors.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

Mr. Chair, I thank the Minister of State for Finance for his hard work in representing his constituents in Alberta so well. The fact is that seniors from all across Canada, many of whom come from the Prairies, retire in British Columbia. Whatever part of Canada they choose to retire in, they appreciate that the government's low-tax plan keeps them financially safe.

However, the other aspect is from a security perspective. Would the Minister of State for Finance please expand on the government's actions to date to help keep seniors safe in their communities?

[Kevin Sorenson, Conservative, Crowfoot, AB]

Mr. Chair, again, I would like to thank the member for Kelowna—Lake Country for his steadfast support for seniors and, also, for his strong advocacy, even in our caucus, for supporting the seniors. I know his riding of Kelowna—Lake Country has a large number of them. I know many of them benefit from numerous measures that have been introduced by our government. Not only are we helping to support a comfortable retirement for Canadians, but we are also supporting a safe retirement for Canadians.

There are a number of initiatives we have taken to do that. To protect seniors from mistreatment, in January 2013 we put into force the Protecting Canada's Seniors Act. This legislation rightly amended the Criminal Code of Canada so that age would be considered an aggravating factor for criminal sentencing purposes.

As members know, Canadian seniors can trust our government to take appropriate action to help prevent crime and to be tough on crime. Our government continues to focus on increasing awareness of the signs of elder abuse and providing essential information on available resources and supports. We have taken action to combat social isolation of seniors. We know that seniors are better off with this Conservative government.

One of the things we recognized, as far as the security of seniors in their financial well-being, was the importance of our financial literacy program. Our Minister of State for Seniors, the member for Richmond, has done amazing work with our seniors and helping with financial literacy. We recognized the importance of financial literacy to the degree that our government was the first one to bring forward a financial literacy leader for Canada. She will work with a task force to bring in a national strategy.

One large component of that strategy in financial literacy was to help seniors. We understand that when they have the skills and the knowledge, when they understand the financial terminology, and not just the markets, such as what an annuity or a RRIF is, the regulation changes around RRIFs, when they have the confidence, they feel more secure. That is what we want to accomplish. We want to ensure those seniors can move forward with confidence. Therefore, we are helping them enhance their skill set that way, as we are with all Canadians, certainly, newcomers, first nations and our youth.

Again, the security of our seniors is so important. We have brought forward measures. Canadian seniors understand that they are better off with this Conservative government.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Mr. Chair, first of all, I would like to know if the minister can tell us how much the employment insurance operating account surplus will be for 2015-16.

[Joe Oliver, Conservative, Minister of Finance]

Mr. Chair, economic action plan 2015 reaffirmed the government's commitment to implementing the seven-year break-even rate-setting mechanism in 2017. This measure should result in a significant reduction in employment insurance premiums. We estimate that savings from this rate reduction will benefit more than 16 million Canadians in 2017, including about 2.6 million who do not pay federal income tax.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Mr. Chair, my question was simple. I was not talking about premiums. I asked the minister if he can tell us what the expected surplus in the employment insurance operating account will be for 2015-16.

[Joe Oliver, Conservative, Eglinton—Lawrence, ON]

Mr. Chair, the employment insurance operating account reached a cumulative deficit of $9.2 billion in 2011 due to the impact of the global recession. Since then, it has been recording annual surpluses that will eventually eliminate the cumulative deficit, consistent with the principle of breaking even over time.

In September 2013, the government took steps to protect businesses from major increases in employment insurance premiums. We froze the rate at $1.88 for three years beginning in 2014.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Mr. Chair, I asked a simple question. I want to know what the projected surplus is for the employment insurance operating account for 2015-16.

[Joe Oliver, Conservative, Eglinton—Lawrence, ON]

Mr. Chair, our budget reaffirmed the government's commitment to implementing the seven-year break-even rate setting mechanism in 2017. Consistent with the principle of breaking even over time, the employment insurance operating account should return to cumulative balance in 2015.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Mr. Chair, that is not an answer. I asked what the projected surplus is. We are asking for a number, and that number is $1.8 billion, according to the budget presented by the federal government.

Now my next question for the Minister of Finance might be a little easier.

Can he tell us what the government's projected budget surplus will be for 2015-16?

[Joe Oliver, Conservative, Eglinton—Lawrence, ON]

Mr. Chair, as the member knows, the projected surplus is $1.4 billion, along with a $2 billion contingency fund.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Mr. Chair, finally, an answer.

Thus, there is a $1.8 billion surplus in the employment insurance fund and a $1.4 billion budget surplus. On December 6, 2013, Jim Flaherty, who was finance minister at the time, said:

We do not take EI funds and use them to balance the budget. That's what the Liberals did.

Why did the Minister of Finance renege on this promise?

[Joe Oliver, Conservative, Eglinton—Lawrence, ON]

Mr. Chair, we have a budget of over $291 billion. The reason we have a surplus is that our revenues are greater than our expenses.

If we want to pick one item that is the most significant, pick the $18.5 billion that flows from our constraining government expenditures.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Mr. Chair, according to my calculations, the $1.8 billion taken from the employment insurance operating account is more than the $1.4 billion surplus. It is obvious that the Conservatives are using the employment insurance fund surplus to fund their balanced budget.

I would like to go back to the issue of the GM shares that were sold by the Conservative government.

Can the minister tell us how much the Government of Canada received from the sale of the 73.4 million GM shares that it owned?

[Joe Oliver, Conservative, Eglinton—Lawrence, ON]

Mr. Chair, thanks to the strong measures taken by the government to support General Motors and Chrysler, we were able to protect 52,000 Canadian jobs. Our investment in GM was always intended to be temporary. In early April, we sold our remaining shares in GM in order to protect taxpayers. We earned a solid return on our shares and we followed the advice of the best experts.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Mr. Chair, the finance minister used to be an investment banker. I am asking a simple question. The government sold 73.4 million shares in GM following its investment. I would like to know how much the government received for the sale of those 73.4 million shares.

[Joe Oliver, Conservative, Eglinton—Lawrence, ON]

Mr. Chair, we sold our shares after every other government did and sold them at a higher price than any government before us, including the Government of Ontario. The shares were sold. Those proceeds of $3.3 billion were received and there was a book value deducted from it. We are very pleased that we were able to sell the full amount at an attractive price, a price higher than that subsequent to it, including today.