LIBERAL DISSENTING OPINION
A minority Parliament presents challenges for each of the parties involved, as well as individual Members of Parliament. While the report presented by the Finance Committee does represent the completed work of the Committee, we, the Liberal Members of the Standing Committee on Finance feel that it is important to have a clear, Liberal position on the record.
The Government should be commended for the significant action that has been taken since the Parliament began. The successful conclusion of two federal-provincial agreements — one on Healthcare and one on Equalization — must be viewed as significant progress made on issues of great importance to Canadians.
But the task is far from complete. It is time to take the Canadian economy to the next level. To do so requires the acknowledgement that a balanced approach is needed, and that the strength of our economy is inextricably linked with the overall health of our nation. Therefore, the proper balance must be struck between the need for encouraging sustainable development, strengthening our social foundations, recognizing the unique challenges faced by women, and ensuring a competitive yet equitable tax system, all while addressing the need to continue reducing the debt.
With this in mind, we wish to highlight the following as attractive ideas that merit serious consideration by the Minister of Finance in his budget preparation.
Sustainable Development:
Today, it is well established that our economic prosperity cannot be accurately measured without giving proper regard to how our policies and practices affect the environment in which we live. We must therefore take steps to promote economic activity through the prism of sustainable development. Towards this end, the Liberal Members of the Standing Committee on Finance believe that in the next Budget, it is essential that the Minister of Finance reflect the environmental concerns expressed to us by the witnesses and Canadians. In particular, we recommend the following:
| a) | Allowing full deductibility of Brownfield remediation expenses for income tax purposes to level the playing field with Greenfield sites. |
| b) | Reviewing the Capital Cost Allowance system immediately with a view to having the system reflect the useful life of an asset. In particular, the Minister should accelerate the schedule for equipment that produces energy and/or expand the class of assets eligible for accelerated depreciation. Those technologies which show demonstrable environmental attractiveness should receive priority |
| c) | Providing the proper incentives to help achieve our Kyoto goals and encourage cleaner engines by: |
| | v | Aggressively bringing Capital Cost Allowances for transportation equipment in line with comparable U.S. rates |
| | v | Creating some form of incentive in the form of a credit, a deduction, or GST relief /rebate for the purchase of hybrid motor vehicles |
| d) | Committing adequate annual funding to a Strong Ocean’s Strategy |
| e) | Instituting enhancements to the Wind Power Production Incentive (WPPI) |
| f) | Creating a Green Power Production Incentive (GPPI), by extending support to all green power technologies (small hydro, biomass, ocean energy facilities) at the same level as WPPI, i.e. (1 cent per kWh) |
| g) | Renewing and enhancing the FCM Green Municipal Fund and Green Municipal Investment Fund |
Social Foundations:
It is important that the Government take steps to ensure that all Canadian residents have the tools necessary to be contributing members of society. The Liberal Members of the Standing Committee on Finance therefore recommend the following:
| a) | Announcing at the earliest opportunity, along with interested provincial/territorial governments, initiatives to reduce child poverty. These initiatives should include a national, accessible, affordable, high-quality, publicly regulated, not-for-profit child care system |
| b) | Increasing the CCTB, provided that no province be permitted to claw back the relief |
| c) | Ensuring a fair and equitable Immigration system by: |
| | v | Increasing the resources of the Department of Citizenship and Immigration |
| | v | Improving programs for settlement and integration |
| | v | Establishing a clear process for assessing immigrants’ skills soon after their arrival in Canada. Any additional course or language training needed to meet Canadian standards or qualify for employment should be provided immediately |
| | v | Implementing a program to help facilitate access to employment and break down possible systemic barriers |
| | v | Providing sensitization programs for employers |
| d) | Combating the problem of obesity in children and adults due to bad diet and inactivity by: |
| | v | Creating a 10 year preventative health plan that would include: bold warnings (like those on cigarette packages) on food that is bad for you, encouraging active transportation (walking) and active living |
Women
Too many women in Canada still face the problems of lower pay, poverty and violence. Also, homelessness and under housing is more severe for women than men. Women who are visible minorities face even more problems due to lower income or unemployment related to racism. The Liberal Members of the Standing Committee on Finance call on the Government to undertake the following:
| a) | Implementing government-wide, gender-based analysis in policy development, starting with Budget 2005 |
| b) | Increasing funding for emergency shelters for women and their children who have experienced domestic violence |
| c) | Re-establishing the Advisory Council on the Status of Women Canada, and appointing a Deputy Minister for the Department |
| d) | Enhancing the National Crime Prevention Program in order to help prevent domestic violence |
| e) | Addressing the shortage of affordable housing in partnership with the provinces and territories. The goal to be achieved is that housing costs should represent no more than 30% of net income |
| f) | Developing programs to assist women in need with skills training, education and employment |
Tax Fairness:
A tax system that: takes into account the various needs of individuals and businesses, does not unfairly burden the less unfortunate in society, and encourages investment, is essential to a vibrant economy. The Liberal Members of the Standing Committee on Finance therefore recommend that the Minister of Finance address many of the inequities in the taxation system by undertaking the following:
| a) | Increasing the GST tax credit for those with modest incomes |
| b) | Increasing each bracket by a declining amount as the brackets increase |
| c) | Instituting a deduction or credit for up to $500 for employment-related expenses |
| d) | Amending the Income Tax Act to ensure that paramedics are considered to be public safety workers for purposes of unreduced early retirement benefits |
| e) | Implementing a system of deductions or credits for those families that incur adoption expenses above a threshold of $5,000 providing that fees paid to professionals and others not comprise more than 25% of the claim |
| f) | Increasing the medical expense tax credit from $5,000 to $10,000 |
| g) | Implementing the section of the Report of the Standing Committee on Finance Committee on Small Business Tax Measures dealing with Excise Tax on jewellery. |
| h) | Considering the elimination of the tax on scholarships up to the sum of $10,000 per year |
Miscellaneous:
Finally, there were a few other issues that the Liberal Members of the Finance Committee believed were important to bring to the Minister of Finance’s attention. We recommend the following:
| a) | Immediately raising the RRSP and CPP foreign content limits |
| b) | Accelerating RRSP limits |
| c) | Amending the Employment Insurance Act to introduce a Yearly Basic Exemption in the amount of $3,000 |
| d) | Encouraging entrepreneurs to turn successful research into successful businesses through the creation of an Office of Commercialization, as well as enhancing investment in research and development, while also creating more coordination across government programs and, most importantly, coherence between programs and the work being done by the federal granting councils and arms-length foundations. |
| e) | Implementing changes to the current Port regulations: |
| | v | Reviewing the current charge on gross revenues of Canada Port Authorities with a view to decreasing it or stipulating that the stipend be used for future development of the National Ports System |
| | v | Reviewing section 25 of the Act for a possible amendment to allow CPA’s access to federal funding for infrastructure |
All of which is respectfully submitted.
Liberal Members of the Standing Committee on Finance