Canada's growing income gap

Monday, November 21, 2021

 House of Commons Debates


Monday, November 21, 2011

Hon. Scott Brison (Kings—Hants, Lib.):  
    Mr. Speaker, I rise today to speak to Bill C-13, the second implementation bill for budget 2011.

    I want to speak to some of the unfair elements of this bill. We think it is wrong that the Conservatives continue to exclude the lowest income Canadians from budget measures that are designed to help Canadians by introducing programs, like the tax credits for family caregivers, volunteer firefighters and children's arts activity, and then only making them available to some Canadians while completely leaving out those who are most in need: low-income Canadians who will not qualify for these measures because these tax credits are non-refundable. We think that is wrong and that it will weaken Canadian society by increasing the already growing gap between the rich and the poor in Canada. It will contribute to a reduction in the equality of opportunity that is so fundamental to Canadians and Canadian values.

    I will speak today to some of the economic challenges facing Canadian society and how measures introduced by the Conservatives will actually serve to reduce economic opportunities for some Canadians who are already disadvantaged during these difficult global economic times. I then will provide some examples of how a Liberal government would do things differently.

    There is a rising income gap under the Conservative government. The gap between the rich and the poor is growing in Canada. A recent study by the Conference Board of Canada shows that income inequality is rising even faster in Canada than in the U.S. The Conference Board's July 2011 study helps to provide some context by discussing why growing income gaps are a problem. It pointed out the following:

—high inequality can diminish economic growth if it means that the country is not fully using the skills and capabilities of all its citizens or if it undermines social cohesion, leading to increased social tensions. Second, high inequality raises a moral question about fairness and social justice.
—high inequality can diminish economic growth if it means that the country is not fully using the skills and capabilities of all its citizens or if it undermines social cohesion, leading to increased social tensions. Second, high inequality raises a moral question about fairness and social justice.

    Again, that quote was from the Conference Board of Canada's July 2011 study.

    Lower incomes can also lead to shorter life expectancies. A 2010 report from McMaster University found that the life expectancy of someone living in the wealthiest neighbourhood in Hamilton, Ontario, is 21 years longer than someone living in the poorest neighbourhoods of Hamilton, as an example. Rising income inequality, in terms of economic output, will increase costs in health care at a time when we already have a demographic bubble, or time bomb as some refer to it, in terms of the aging of our population and the commensurate increases in health care costs that will bring.

    In 2008, in terms of economic output, a group of economists, including Don Drummond, estimated that poverty costs Canada between $72 billion and $86 billion per year in higher costs for health care, the criminal justice system and lost economic productivity.

    One of the largest contributors to growing income gaps in Canada is the persistently high levels of unemployment and underemployment facing low-income Canadians. The reality is that we have almost 600,000 fewer full-time jobs than three years ago in August 2008. There is a significant gap geographically in Canada in terms of how individual economies are doing. If people happen to live in Saskatchewan or Alberta, resource rich provinces, provinces where people had the vision, foresight and wisdom to put oil and gas under the ground and, in some cases, smart enough to put potash under the ground as well, their economic situation is very different from that of places in Ontario, Quebec and the Maritimes.

    We are seeing In this global economic restructuring the type of recovery in Canada that does not benefit all Canadians. In fact, a commodity led recovery, which is driving the Canadian dollar, for all intents and purposes, increasingly an oil and gas or commodity-based dollar, higher and, at the same time, as a result of that higher dollar, crowding out value-added jobs in other regions. While high commodity prices can disproportionately benefit some parts of Canada and some sectors in Canada, it is driving out a lot of manufacturing jobs, value-added jobs.

    We just had an announcement of a permanent closure in my riding of the Fundy Gypsum Company. Part of the reason for that was the higher Canadian dollar in recent years that made its exports to the U.S. less competitive.

     We have seen a lot of manufacturing jobs lost in my riding, food processing jobs, such as at Canard poultry and Larsen, close to my riding. We have seen a lot of losses in jobs in my riding. I latest information if have if that in Kings county, Hants county and Annapolis county, which is my riding and part of the riding next door, have 6,400 fewer jobs than in August 2008. The unemployment figures for Annapolis, Kings and Hants counties reached 7.8% in October 2011 compared to 5% in September 2008. That is almost a 3% increase in unemployment in my riding and half of the next riding, the riding of West Nova.

    We are seeing it in our communities. We are seeing it in the small business community. The owner of a restaurant in Windsor, Nova Scotia told me recently that it had the worst year in 20 years. When people have lost their full-time jobs and have seen them replaced with part-time work, they cannot afford to take their families out for breakfast on a Saturday morning or for supper on a Friday night.

    We have a responsibility in the House of Commons to evaluate how the economy and families are doing across Canada, not just look at the macro numbers, but look across the country and consider the plight of families in some of the regions. One of the realities is that during this technical recovery, this statistical recovery, many Canadians are still facing a deep human recession.

    The other thing to realize is that before the markets tumbled back in August 2008, 17,366,000 Canadians had jobs. In October 2011, and these are the latest figures available from Stats Canada, that number stood at 17,402,300 jobs. However, that includes almost 600,000 net fewer full-time jobs lost in Canada over the last three years.

    This issue has contributed as well to the growth of household debt. We are now at record levels of household debt in Canada, largely because Canadians are trying to replace their lost income from losing their full-time jobs with income from part-time jobs. They are having a lot of challenges making ends meet. They are seeing their costs going up on an ongoing basis and their pay going down as they are replacing full-time work with part-time jobs.

    The reality is the household debt levels in Canada is $1.51 for ever $1 of annual income in Canada right now. That is actually higher than the family indebtedness in the U.S, record highs for Canadian households.

    Canadians are worried about how they will pay the bills next month and they are petrified about what will happen at some point in the future when interest rates start to rise, which they inevitably will.

    Within the context of rising inequality, the Conservatives have gone ahead and introduced a number of tax measures in budget 2011 that will actually worsen the situation by deliberately excluding low-income Canadians. We have repeatedly asked, both at finance committee and in the House of Commons, that the Conservatives make a family caregiver tax credit, the volunteer firefighter tax credit and the children's arts tax credits refundable so all Canadians can qualify, but the Conservatives have steadfastly refused.

    I want to be clear. We support a family caregiver tax credit and a volunteer firefighters tax credit. In reality, it was the Liberal Party that proposed both of those before the Conservative Party. We proposed those tax measures because we felt a lot of families were struggling with aging and ailing loved ones, trying to keep them in their homes, and they needed the help.

    Many communities, including my own communities in places like Summerville and Brooklyn, Hants county and Wolfville and Kentville, have a lot of volunteer firefighters. It is harder and harder to attract volunteer firefighters. Frankly, they are paying a financial cost. They are risking their lives and struggling to keep the fire departments viable.

    We believe very strongly in a family caregiver tax credit and a volunteer firefighters tax credit. In our platform, we had both of those, but we had made them refundable. The reason they need to be, and ought to be, refundable is that by making them non-refundable, as the Conservatives have done, it perversely means that the lowest-income volunteer firefighters and family caregivers will not receive benefit. There is no way we can defend, economically or morally, that the lowest-income volunteer firefighters and family caregivers would not benefit from these measures. It is fundamentally wrong. I see families struggling to take care of loved ones now.

     It is one of the issues I hear from constituents on an increasing basis, as we have an aging population, and the rural communities in the Maritimes are aging disproportionately. We have lost a lot of young people who have gone to other parts of the country for work. Therefore, in many cases, we have fewer young people to help out mom or dad, or granddad or grandmom stay in their homes. The burden on the people who are left behind, the family members and the caregivers, is immense. The VON does an extraordinary job helping a lot of people in my riding in Nova Scotia, but it can only do so much.

    My mom and dad have a home care person who comes in a couple of times a week. She does remarkable work in helping my parents stay in their own home. My dad is 88 and my mom is 82 and she has Alzheimer's. I see how hard the home care workers are working and the difference they are making.

     I see the sacrifice my sister makes. She is, for all intents and purposes, the family caregiver to my parents. There are three sons and then there is my sister. I can tell members that, disproportionately, the burden goes to the daughters in a family when it comes to these situations. That is unfair, but I see it. I know my sister would qualify, based on her income, for the family caregiver tax credit. However, it is not fair that some other person's sister or some other person's daughter, who takes time away from her work to take care of an elderly mother or father, would not benefit. That is fundamentally wrong.

     I would like to see other family caregivers benefit from this measure, particularly, low-income caregivers. In my sister's case, she has taken time off work so she can help mom and dad in their home, so she is seeing a decrease in her income. That is happening to a lot of families across Nova Scotia and Canada. It is wrong that the caregivers in those lowest-income families would not benefit from this program designed to help caregivers and to help seniors and people who face long-term illness stay in their own homes longer.

    Frankly, it would take a lot of burden off the provincial health care system if we could help people stay in their own homes. In most cases, the cost of putting people in nursing homes or long-term care families is a lot more than keeping them at home. Therefore, from the perspective of long-term fiscal policy, it is important for both federal and provincial governments to do everything they can to help people stay in their own homes.

    I focused a lot on the disparity and unfairness of making these tax credits unavailable to low-income caregivers and volunteer firefighters. It is unfair, but it is also nonsensical from an economic perspective. It makes no sense socially, economically or morally.

    Susan Eng, vice president of CARP, the Canadian Association of Retired Persons, has said:

    We...encourage (the government) to put forward a refundable tax credit, particularly for the more narrow segments of caregivers who perform 24/7 care. Those are the people who have had to quit their look after families. They are not going to be in a position to benefit from a non-refundable tax credit.
We...encourage (the government) to put forward a refundable tax credit, particularly for the more narrow segments of caregivers who perform 24/7 care. Those are the people who have had to quit their look after families. They are not going to be in a position to benefit from a non-refundable tax credit.

    That is from one of the largest organizations representing senior citizens in Canada.

    Nadine Henningsen, president of the Canadian Caregiver Coalition, told the finance committee:

—convert the non-refundable credits to refundable credits, so that all Canadians with caregiver-related costs, regardless of income, will benefit from these tax measures.
—convert the non-refundable credits to refundable credits, so that all Canadians with caregiver-related costs, regardless of income, will benefit from these tax measures.

    Again, there is broad-based support for making these credits refundable from the people who understand caregiving the most, the Canadian Caregiver Coalition, and from the biggest organization representing Canadian seniors, the Canadian Association of Retired Persons.

    At some level the Conservatives must recognize that there is a moral imperative to make these tax credits refundable so they are available to all deserving Canadians.

    In their last election platform the Conservatives promised to make the Canadian fitness tax credit refundable so that low income Canadians could also qualify. However, they have only promised to include low income Canadians once the budget is balanced.

     We know from the minister's latest oops moment, kind of like Governor Perry, with his budget number that it is going to be 2015 or 2016 by the time the budget is balanced. That is based on their latest numbers, but the minister has missed every target he has set. In fact, he inherited a $13 billion surplus and spent Canada into a deficit even before the downturn. He increased spending by 18%, three times the rate of inflation, and put Canada into a deficit even before the 2008 crash. He promised a balanced budget in the fall of 2008 and a few months later delivered a record high $56 billion deficit.

     Therefore, it is hard for us to count on the minister's projections, but for low-income Canadians who are being promised some tax relief once the budget has been balanced, it is very hard for them to count on or wait for that inevitable balancing.

    I also want to speak on the EI payroll tax increase of January. The minister confirmed that EI premiums would be increased by $600 million in January. With stubbornly high unemployment in many parts of the country, it makes no sense for the government to be increasing payroll taxes at this time. That is why we called for a payroll tax freeze and EI premium freeze at this time. It does not make sense to increase what is effectively a job-killing payroll tax at a time of high unemployment.

    We also believe that we have to take a serious look at the Conservatives' plan that they introduced to force the EI system to self-balance over a short period of time. What that means is that it perversely actually increases EI premiums at times of high unemployment. It makes no sense to increase job killing payroll taxes at exactly the time when we need to either freeze them or potentially even decrease them. We need to have a longer horizon for self-balancing.

    I also spoke with Jack Mintz, who spoke to a group of us recently. Jack Mintz says that we need a focus on overall tax reform in Canada. We need to simplify and streamline the Canadian tax code. My leader, the hon. member for Toronto Centre, has called for the same. We need to have a long-term focus on building a fairer and more competitive Canadian tax system, streamlining and simplifying the tax system, not making it more complex with boutique tax credits that do not benefit the lowest income Canadians.


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