Finance committee  As I said before, it is simply a non-wage benefit, and it's a non-wage benefit that has a cost. It's a cost in the total compensation package of employees. I know I'm repeating myself, but what's happening here is that the average total compensation cost—and that includes non-wage benefits of federal employees—is now totally out of proportion with the average employment cost of a private sector employee with similar qualifications.

Finance committee  Yes.

Finance committee  I'm in favour of it. I think it's a good policy. TFSAs have great benefits for seniors and also for people at lower income levels who would like to save for their retirement—I'm sure there are some—and right now they don't really have the incentives because the benefit they will get in retirement from those savings that are tax deferred will be greatly clawed back, so they basically don't really do it.

Finance committee  It is a fact, as I see it. The financial benefit will clearly be greater for high-income families because the very nature of income splitting makes it so. If the objective is to provide families with support, this may not the best way to go. But if the objective is horizontal fairness, in this case, the changes, the new income splitting measures, are much better than in the original proposal.

Finance committee  I tend to disagree. There's no consensus in economic studies that shows there's a negative impact on the economy from increased inequality in developed economies. I can point you to a number of studies to that effect.

Finance committee  There are already many subsidies to small business in the tax system. I didn't review the part of the bill that you just mentioned. At the C.D. Howe Institute we published a study on the small business tax deduction very recently and came to the conclusion that it was not an impediment to growth, as many economists have been saying, but that nonetheless the small business deduction, which is a tax preference for small businesses, was not providing a marginal benefit that is superior to the marginal cost of the preference.

Finance committee  Child care is one of the costs of having children. There are other costs. I tend to agree that the UCCB is not going to cover the cost of child care for even one kid. It's not enough, but it's a benefit. It helps. Quebec has gone a totally different way, whereby child care is almost totally subsidized by taxpayers, and that has led to some economic benefits.

Finance committee  In the private sector it's rare to have a policy whereby sick leave can accumulate to another year. Even in the public sector it's becoming increasingly rare.

Finance committee  I'm not sure if it's a question of fairness among employees, but it would be a question of fairness for the compensation package that public sector employees receive in comparison with the total compensation package that private employees with similar qualifications receive. If there's too wide a discrepancy, that's a problem.

Finance committee  I think the new powers being acquired will greatly help the negotiations and will help this new long-term disability regime to be put in place, and that's a positive if we lose $1.5 billion from the debt.

Finance committee  Of census families, yes, that wouldn't change, but then you would include all census families. It also includes seniors and whatever.

Finance committee  We've had no recent study on this topic particularly, not that we've published at the C.D. Howe Institute.

Finance committee  It's in our plans, though.

Finance committee  The redesign will not change the proportion of families who benefit or don't benefit.

Finance committee  Thank you, Mr. Chair. I am very pleased to be here with you today. Thank you for the invitation to appear before the committee. Back in 2011, following the federal election, I authored a study with Professor Kesselman of the C.D. Howe Institute on the family tax cut, or what was at the time the income-splitting proposal.