House of Commons photoWon his last election, in 2015, with 35% of the vote.
Canada Business Corporations Act December 9th, 2016
Mr. Speaker, we have talked a fair bit about inequality between men and women in the workplace and on corporate boards, but I wonder if my colleague from Rimouski-Neigette—Témiscouata—Les Basques could also speak a bit about another aspect of Bill C-25, which is inequality between CEOs and their employees. What type of negative consequences does that growing inequality have for our society and what kinds of policies could the government implement to address it?
Canada Business Corporations Act December 9th, 2016
Mr. Speaker, as I mentioned in my speech, the average of these top 100 CEOs makes $9 million a year, which is vastly more than the average player for the Saskatchewan Roughriders or in the Canadian Football League generally, so I do not necessarily accept the premise of the question, but I believe that there is a very similar problem with high pay for professional athletes. Part of the solution certainly is to increase the top personal income tax rate as the government has done.
The problem derives from the fact that people are being paid so much they do not really benefit from the additional money, it is all about relative position. We have to pay a hockey player a lot because other hockey players earn a lot, and certainly there are more equitable ways of distributing that money in our society.
Canada Business Corporations Act December 9th, 2016
Mr. Speaker, I thank my colleague from Joliette for his excellent question.
It is true that inequality is a major problem in our society and it spills over into health and crime. Many social problems stem from inequality.
He also mentioned a problem with our tax system, where, unlike other sources of income, only half of capital gains are taxed. This problem is more apparent when we look at how corporate executives are compensated. Often their capital gains are not really investments, but compensation. That money should be taxed in the same way that their employment income is taxed.
Canada Business Corporations Act December 9th, 2016
Mr. Speaker, I thank my colleague for his excellent question.
He is right: we make a big deal out of tax freedom day, a day mid-year by which, according to the Fraser Institute, the average Canadian has paid all of his or her taxes. There are a lot of problems with the way this indicator is calculated.
It is important to consider the value of another method, one developed by the Canadian Centre for Policy Alternatives, which looks at how long it takes corporate executives to earn more than the average worker. It happens very early in the year, around noon on January 3, 2017.
Canada Business Corporations Act December 9th, 2016
Mr. Speaker, we are nearing the end of 2016. New Year's Day 2017 falls on a Sunday. The first payday of the new year will be January 2. By around noon on January 3, Canada's top 100 CEOs will, on average, have made as much money as the average full-time employee will earn over the entire year. In 2013, and again in 2014, Canada's top CEOs made an average of $9 million each. That means that the top CEOs made 184 times as much as the average Canadian worker.
This inequality is not only large, but it is growing. Figures on the top 100 CEOs only go back to 2008 on a comparable basis, but if we look at the top 50 CEOs, an even more elite group, in 1995 they made only 85 times as much as the average worker, so there has been an explosion of executive compensation over the past two decades.
Why should we care if private companies choose to pay their CEOs a lot of money? If we take the 100 top CEOs, each making an average of $9 million, that is nearly $1 billion that is not being used to hire other employees, not being invested in machinery and equipment, and not being used for needed research and development. Corporate Canada as a whole would be better off if it could pay CEOs less. However, individual corporate boards feel pressure to keep up with what CEOs of other companies are paid. This leads to a circular logic that justifies ever higher executive compensation.
Even the CEOs themselves do not really benefit from this trend. An extra million dollars does not make a material difference in their standard of living. Really, they are concerned about their relative position compared to other CEOs, so if a CEO gets paid more it increases his or her position on the league tables only by reducing the position of other CEOs. Our economy would be stronger, and even corporate Canada itself would be better off with government regulation to limit CEO compensation.
Bill C-25 includes some minor improvements to corporate governance, but what is missing is the mandatory and binding say on pay provisions that we find in other advanced economies. Currently, Canadian companies can consult shareholders on executive compensation, but they are not bound by the results of those votes. The NDP is going to propose amendments to Bill C-25 to include mandatory and binding say on pay provisions to limit executive compensation.
Beyond the scope of Bill C-25, the federal government can and should also address out-of-control executive compensation through the tax system. I believe in giving credit where it is due, so I want to recognize that this government did modestly increase the top personal income tax rate. However, the government failed to close the loophole that allows half of stock options to be exempt from personal income tax. This stock option loophole delivers the largest benefit to highly paid CEOs and corporate executives, so we need to close that loophole to address executive compensation.
Something else that the federal government could do is to limit the amount of executive compensation that a corporation can deduct in calculating its corporate taxes.
The United States currently limits the amount of CEO compensation that can be deducted in calculating corporate taxes to $1 million. Unfortunately, this limit is not very effective in the United States because it does not apply to performance-based compensation, such as stock options. However, we could easily apply a limit to all forms of executive compensation and ensure that they cannot be deducted in calculating corporate income taxes.
In conclusion, out-of-control executive compensation is a significant source of worsening inequality, and is a substantial drain on our economy. The Government of Canada can and should address this problem by strengthening corporate governance through Bill C-25, and also by implementing progressive tax reforms.
Budget Implementation Act, 2016, No. 2 December 6th, 2016
Mr. Speaker, Medicine Hat—Cardston—Warner is a constituency that is near and dear to my heart, because during the last general election campaign the federal NDP candidate in that riding was a woman named Erin Weir. Had two MPs with exactly the same name been elected from the same party, I believe it would have greatly improved Hansard in this assembly.
But the member for Medicine Hat—Cardston—Warner mentioned the large increase in EI use in Medicine Hat, and of course the main reason for that is a deterioration in labour market conditions, which we have also suffered in Saskatchewan. Another reason for it is that the federal budget did provide an extension of EI benefits across Alberta, and in most of Saskatchewan except for the city that I represent.
Could my colleague comment on the federal government's decision to leave laid-off workers in Regina out of the EI extension provided everywhere else in Saskatchewan and across his province?
Budget Implementation Act, 2016, No. 2 December 6th, 2016
Madam Speaker, before a Liberal MP gets up and asks a planted question about how the government has the momentum of a runaway freight train, I do want to repeat the point that our finance critic made, that the government's infrastructure bank scheme is going to turn not only the monorail but a great deal of other infrastructure over to Mr. Burns.
I also want to question the math presented by the member for Mount Royal. He suggested that Homer was making $85,000 per year and that the middle-class tax cut would give him 1.5% on the amount in excess of $45,000. He also suggested that would somehow work out to $1,500. I would submit that 1.5% of that $40,000 is actually more like $600. Again, we see these Liberal promises are much less than they are cracked up to be.
Budget Implementation Act, 2016, No. 2 December 5th, 2016
Madam Speaker, it is ironic that the government is using time allocation to ram through this budget, because the budget itself imposes a far more brutal type of time allocation on unemployed workers in Regina. It is depriving laid-off workers in my city of the additional weeks of employment insurance benefits that the budget provides everywhere else in Saskatchewan and across Alberta.
On Friday, Statistics Canada reported that for the first time since 1989, Saskatchewan did not stay below the national unemployment rate. Last month and the month before were the only two months in the entire history of Statistics Canada's labour force survey, since 1976, that Saskatchewan had a higher unemployment rate than Quebec.
In light of these figures, will the finance minister finally include Regina in the budget's extension of employment insurance?
Business of Supply December 1st, 2016
Mr. Speaker, I really appreciate the member for Sherwood Park—Fort Saskatchewan's effort to defend the Saudi regime, but I want to bring this discussion back to Cuba. I would ask if he acknowledges that one of the reasons for the lack of medical technology and economic opportunity in Cuba is the crippling American economic embargo and whether he sees a role for Canada in trying to normalize relations between the United States and Cuba.
Business of Supply December 1st, 2016
Mr. Speaker, my great-grandfather was the CCF candidate against John Diefenbaker in 1957. However, I will acknowledge that Prime Minister Diefenbaker made a very wise decision not long after that to maintain diplomatic relations with Cuba after the revolution rather than participating in the American embargo that contributed to a siege mentality in Cuba and that worsened repression.
I would like to ask my fellow Saskatchewan MP whether he thinks the Diefenbaker government made the right decision in maintaining diplomatic relations with Fidel Castro's government.