FINA Committee Report

Report

The pre-budget hearings held across the country showed the real concerns of Canadians, and they are far different than what the Finance Committee hears in the “Ottawa bubble”. Concerns were raised about the lack of affordable housing, the absence of a universal, single-payer Pharmacare plan, and the profound under-funding of critical infrastructure in indigenous communities.

There were also repeated calls for a Royal Commission into the tax system. Local businesses understand that the profoundly unfair structure of the tax system is a major obstacle to Canadian competitiveness. The existing tax structure, rife as we know it with advantages for large, profitable corporations to take their profits off-shore or to use tax loop-holes, does not allow for the “level playing field” that the business community wants to see. In effect, bad behavior is rewarded in our tax system, while good behavior is penalized. This must change.

Repeated concerns were raised in the pre-budget hearings about the free ride that is given to large, foreign-owned web giants. Companies like Facebook and Google don’t pay employee deductions or income taxes in Canada and undercut Canadian businesses. The previous government and the current government have refused to take action. This is unacceptable.

Despite the calls from across the country for real change, the pre-budget report delivered by the majority of Finance Committee is a profound disappointment. The majority of Liberal MP’s on the committee simply refused to prioritize the concerns of Canadians who took the effort to come out and speak to the committee. But in the testimony that emerged from the dozens of groups that testified came real hope and optimism that Canadians understand where the Canadian government should be investing. It’s the compelling testimony of these witnesses that led the NDP to offer nearly 100 recommendations to the Finance Committee report.

Resources exist: the five billions of dollars spending in tax cuts for large corporations in the mini-budget attest to this.

Here’s what the Finance Committee should have been recommending:

In terms of the environment, the recommendations in the report do not go far enough: climate change is an urgent matter that requires major, comprehensive measures to meet this great challenge of the 21st century. Revenues from the federal carbon tax should be used wisely. The Canadian Centre for Policy Alternatives proposed good measures such as creating a new strategic fund to support and diversify the workforce in low-carbon sectors or establishing a $6 billion, three-year sustainable infrastructure transformation fund funded in part by the federal carbon tax would best take advantage of this tax, which is a step in the right direction. On the other hand, and as proposed by Environmental Defence Canada, modernizing waste diversion infrastructure by providing Environment Canada with five-year funding of $35 million a year is another good measure that is unfortunately not included in this report. Finally, tax relief for oil and gas companies should be reduced and the Government of Canada should end subsidies to the oil and gas and pipeline sectors in favour of renewable energy subsidies.

With regard to access to care and its cost, the report should have included more social measures that are good for Canadians, who often face excessive and sometimes unfair bills. The report should advocate increasing mental health funding to a minimum of 9% of public health spending, as the

testimony of the Canadian Alliance on Mental Illness and Mental Health has shown: the Canadian Centre for Policy Alternatives proposes to adopt a new health agreement with a Canada Health Transfer with an annual growth rate of 5.2%. In addition, the government should reverse its decision and end the excise tax on medical cannabis. Finally, many witnesses spoke of the need for the federal government to create a national, universal, single-payer pharmacare plan. Again, despite broad agreement among witnesses on this point, this recommendation is missing from the pre-budget report.

>To address the current huge gaps in the health care system in Canada, both in terms of affordability and cost, the majority of the finance committee is proposing in its report a plan to address these shortcomings, which is not close at all to the single-payer national universal drug plan advocated by the vast majority of witnesses and the NDP. This incomplete proposal resembles what the United States has put in place in their medical system: it has not worked there, it will not work better in Canada for Pharmacare.

The housing crisis is more relevant and urgent than ever and requires vital tax measures to resolve it: the proposed report, again, does not respond to this crisis affecting thousands of Canadians across the country who are struggling to make ends meet and pay their bills. In this sense, the Canadian Centre for Policy Alternatives proposed to allocate an additional $1.5 billion annually to the Canada housing benefit and $1 billion for repairs and retrofits of existing social housing, which would be a sensible response to the affordable housing crisis.

The report contains too few recommendations for significant funding for First Nations, Inuit and Métis communities and infrastructure. In education particularly, funding should be substantial to put an end to massive inequalities in this area that penalize First Nations. The testimony and recommendations of the Assembly of First Nations are proof of this significant lack of funding: $642 million over three years should be allocated to First Nations language training and cultural programs in elementary and secondary schools and $515 million should be devoted to lifelong learning. Finally, $666 million over three years to build an estimated 40 schools in northern communities where the immense lack of infrastructure in the education sector is unacceptable in a country like Canada. Many critical measures to reduce the unequal treatment of First Nations are unfortunately not included in this report, such as working closely with First Nations— many First Nations families do not file tax returns and therefore do not have access to the Canada Child Benefit—to ensure that all children living in Canada have access to this benefit, regardless of their home community. In general, the recommendations in the FINA report do not appreciate the extent of the inequalities suffered by First Nations and do not offer any solutions to redress them.

On tax evasion and tax havens, the report should advocate the establishment of a strong and publicly accessible register of beneficial ownership, as many witnesses proposed during the meetings on the Finance Committee’s report “Confronting Money Laundering and Terrorist Financing.” In addition, as proposed by the Canadian Centre for Policy Alternatives, applying a withholding tax on company assets held in known tax havens would pave the way for concrete financial sanctions against companies holding assets in tax havens. Yet this measure is missing from a government that does not seem to care about tax evasion.

Basically, a whole series of common sense social recommendations from witnesses who were not listened to and the NDP are missing from this report. Extending compassionate care benefits by adding a two-week bereavement period, eliminating tuition fees for post-secondary education, setting the federal minimum wage at $15 per hour: all these measures and more are missing in the pre-budget report delivered by the majority of the Finance Committee.