Finance committee  I'm going to be succinct. If we look at Canadians, the estimate from Canada Revenue Agency data is that 20% of Canadians that are in TFSAs are hitting their maximum contribution limit. If we look at it by income distribution, for people at the high end of the income scale, about 32% of high-income earners are hitting the maximum.

Finance committee  To be clear, the cut in the middle income tax rate will provide tax relief. Based on the personal savings rate, which is in the low single digits, the bulk of that money is likely to end up in consumption. A small portion of it will end up in savings. My point is that the savings aren't going to add to economic growth.

Finance committee  When I did some work looking at the ability of the income tax system to affect income inequality, what I found was that incremental changes to our tax system are not going to have large-scale effects. If you want to change income inequality more through the tax system, it would be taking the revenues generated at the high end and focusing that more on low-income Canadians versus middle-income Canadians.

Finance committee  The C.D. Howe Institute will be having a report out in the next month or two on the bail-in provisions for the banking system. The central issue is around the transfer of the liability. Is it the taxpayers who ultimately are backing the banking system, or should it be equity holders?

Finance committee  I think, from a national point of view, consolidated debt is what we should be focusing on. Although the federal government finances look very good, the debt-to-GDP ratio is quite low and is projected to remain stable, I am concerned about the implications when you add on the provincial debt-to-GDP ratios, which really does change the comparisons.

Finance committee  The changes to the middle income tax bracket come in at incomes above $45,000. By definition, any Canadians who are below that amount are not going to benefit from the income tax cuts. If you think about this from a mixed point of view, there are measures in the budget that do support Canadian families with incomes below the $45,000.

Finance committee  I'm afraid I don't have an expert opinion on how long it takes for the process to occur. I haven't done any studies of past tax reforms to see how long it takes from the start of a review to the end of a review. Having said that, I think there still is merit in constantly looking at the tax system and trying to evaluate efficiency, simplicity, economic impact, and whether it's achieving the goals that the government has.

Finance committee  There is a large body of academic research that has been done on tax efficiency internationally, an awful lot of it looking at OECD countries and comparing the various tax systems and the effects. One lesson from the review of that literature is that consumption taxes are the least economically distortionary taxes to the economy.

Finance committee  I will be very brief. Second, the earnings also reflect risk-taking, and as a consequence, while the government wants to promote increased productivity and innovation, we need to be sensitive to the fact that higher taxes on high-income earners are basically a tax on success and are also a deterrent to taking additional risk.

Finance committee  Thank you, Mr. Chair. No apology is required. The business of government precedes the business of witnesses. Thank you very much for the opportunity to speak to you today about the proposed amendments to the Income Tax Act. I can look at each of the measures in terms of the pros and cons, but I also would like to provide a couple of comments about the efficiency of the items in terms of fostering inclusive economic growth in the years ahead.