January 05, 2010

Notes from Midland Pre-Budget Consultation
Tuesday, January 5, 2010
7 p.m. to 9 p.m.
Midland Council Chambers

Meeting Format:

The format of the meeting invites participants to address their comments and concerns about the upcoming Budget 2010.  The meeting begins with opening comments from the M.P. to set the context of the forum.  Speakers are allowed to speak more than once, though preference will be provided to participants who have not yet spoken.   The M.P. will Chair the meeting.  There is no time limit for each speaker per sé, however the Chair will intervene to restrict time so that all interested participants will have an opportunity to bring their comments and questions forward. 

The Chair and his staff representative will keep notes on the verbal presentations.  Written submissions are welcomed individually or in support of oral presentations.

Participants are invited to list their name upon arrival with the staff representative to that they may receive a copy of the report to the Minister of Finance that will be completed once all the town hall consultations are completed.

The Chair may ask questions for clarity, provide answers to questions and make statements of explanation as needed.

Though the meeting is specific to the coming 2010 Budget, participants are welcome to pose other questions not necessarily related to the Budget.

Budget 2010 Context:

• We are half way through a Two-Year economic action plan (EAP)
• The 2010 budget is not expected to be as expansive as 2009
• The economic action plan encompasses three themes:
• Investments in infrastructure, stimulus investments
• Tax relief for Canadians – e.g. Home Renovation Tax Credit
•  Support for unemployed workers, those displaced by the economic down turn
• Budget discussions for 2010 could consider:
•  the current EAP; are there components that could finish earlier than planned; are there parts that should be extended
• The need to look ahead to reducing the budget deficit and return Canada’s budget framework to balance and eventually surplus
• The need to strengthen Canada’s economy into the future

Note from the Member of Parliament, Bruce Stanton:

What follows are the comments and in some cases the consensus of opinion, summarized for clarity and brevity, of the participants at this consultation.  I want to thank them all for their candid and thoughtful explanations and questions.   Here is what I heard at the meeting:

1.Home Renovation Tax Credit (due to end February 2010)

a.Broad agreement to see this plan extended for at least one year.  It was very popular and several speakers spoke to its benefits to local trades and Canadian suppliers of building materials and supplies.
b.The extension of this tax credit will help cushion the gradual roll-back of other government spending such as stimulus through the latter part of 2010.
c.The extension will permit the government to have a full year of results with which to evaluate the program, before perhaps prematurely terminating the program after only one year.

2.Infrastructure and Stimulus Spending

a.Several speakers spoke to the success of last year’s program and they acknowledge the great benefit to municipal tax payers and the future health and competitiveness of their communities as a result.
b.These programs were also keeping people employed – directly and indirectly.
c.Specific mention was made of the value of the Recreational Infrastructure program even though the projects were smaller
d.Speakers were interested to see these programs continue beyond the current EAP
e.Consider an infrastructure fund specifically for municipal investments in energy saving technology.  The up-front costs of these projects/conversions (to alternative energies or energy saving devices/systems) are often excessive and beyond the fiscal ability of local governments.

3.Climate Change

a.One participant introduced the urgency of investments toward mitigating climate change, in line with Canada’s commitments to reduce green house gases (ghg’s) by 20% by the year 2020.

b.Use budget measures to partner with municipalities to help shift attitudes within businesses and residents to adopt energy saving practices and switch to energy alternatives.  One participant said, “The private sector won’t achieve the targets on their own.”  Government policy and budget measures could facilitate this direction working hand-in-hand with local governments.

4.Healthy Lifestyles

a.Consider using budget measures to advance better health outcomes by extending programs like the Recreational Infrastructure Program.

5.Communications

a.It is important that people are aware of what projects the government is supporting.  One participant indicated, “We hear about all this stimulus spending and projects, but we really don’t know what projects locally are being supported under these programs”.

6.Municipal Infrastructure Programs

a.It is recognized that the infrastructure programs – ISF, BCF, SODP, CAF, RInC are very helpful, and supported by all three levels of government, but questions remain about the fairness of the allocation of funds.  Do some larger municipalities get more than their share?  The application-based programs are often over-subscribed and leave applicants in a state of uncertainty while they pursue capital project needs and planning.  It would be preferable to have more dollars flowing to municipalities in a similar fashion to the gas tax rebate that is predictable and stable.

b.Rural Canada should not be overlooked while Cities get their higher “per capita” shares (due to their concentration of population).  Rural communities remain a vibrant part of the economy but do not have the same efficiencies as Cities.  One could reason that rural communities should receive extra attention in the allocation of capital project funding.

7.HST

a.One speaker questioned the federal government’s role in facilitating the provinces recent decision to harmonize their provincial sales tax with GST.
b.There was a brief discussion on this issue.  It seemed to be understood that the HST was a decision of the Province.

Note from Bruce:  The federal government did pass enabling legislation to facilitate the HST in December 2009.  The Province of Ontario made the request to harmonize their sales tax with the GST earlier this year.  In 1997 the federal government facilitated three provinces’ requests to do the same.  The option of harmonizing has existed since the inception of the GST in 1990.  It rests with the Provinces to initiate this step.

8.Tax Fairness

a.We heard some concerns that some segments of the income tax paying public receive more favourable treatment than others.  In the interests of paying down the deficit in the years ahead, the government might want to review these areas of equitability in the “income” tax system.  Examples of inequities given were: self-employed vs. employed, corporate executive excessive compensation, corporations vs. individuals.

9.Tax Rates

a.On the topic of paying down the deficit in the years ahead, participants considered the different approaches from changing tax rates, to cutting government spending on programs and/or transfers to the provinces and other levels of government.  There seemed to broad agreement on necessity of getting back to balanced budgets as quickly as possible.
b.Participants agree that taxes should not go up – including any increases in GST or income tax rates.
c.Some commented that, “nor should more tax cuts be the order of the day”, because current tax rates at a minimum would be needed to reduce the deficit in the years ahead.
d.General consensus seemed to be that the government hold the line and control expenditures (not reduce them per sé) while economic expansion would produce greater revenues to gradually bring the budget back into balance in the years ahead.
e.It was suggested that the challenge of getting back to a balanced budget should cross partisan lines and that parties should work together to achieve that result.

 
10.EI

a.A general discussion on EI produced several points:
i.There was a sense that the EI program was slow to respond to the immediate effects of the economic slowdown.
ii.Consider measuring unemployment circumstances and adjusting benefits more quickly i.e. make the program more responsive and nimble
iii.There seemed to be broad understanding of the need to have different zones within the country based on the employment rate, with varying benefits and accessibility thresholds, but preference was given to adjusting the “level and length of benefits” for zones experiencing higher or lower unemployment, as opposed to varying the threshold (number of hours worked in the last year) for eligibility.
iv.Acknowledgment of the great help that the Work Share program and the additional funds for transitional training (at Community Colleges and Universities) were in assisting the unemployed to get through this downturn and come out of it in a stronger position.

11.Research

a.Picking up from the discussion about overcoming the high cost of alternative energy or energy saving technology at the front end of the product life cycle, participants would be supportive of measures to get energy saving technologies developed more quickly so that they can be commercialized and be affordable consumer and commercial products.
b.Continued investment in applied research would be a valuable investment, especially in terms of meeting our commitments to reduce CO2 emissions by 20% by 2020.

12.Industrial Strategy

a.Consider developing government policy to shape strategic industries in Canada that would provide a competitive position for the country into the future (in the same way Germany has established itself in the international market for wind turbines and related technologies for example).

13.Community Safety

a.One participant indicated the support for community policing from the federal government has been widely acclaimed, but the funding for approximately 2,500 police officers across the country runs out in four years.  The question was posed, “could the federal government consider making this funding permanent?

14.Knowledge Economy

a.One participant stated her support for investment in the so called “knowledge economy” but admitted that term is not widely understood by herself or the broader public.
b.If investments in universities and colleges is part of that direction, that is certainly agreeable, but the government should also consider supporting education at the other end of the spectrum in such programs as basic literacy and early learning.
Note: Canada’s economic plan – Advantage Canada – speaks to enhancing Canada’s Knowledge Advantage – through measures such as making bursaries tax free, expanding research grants, and providing incentives for research at Canada’s universities.

15.Housing

a.One participant stated support for the development of a National Housing Strategy indicating that Canada did not have an overall plan for housing support.  Housing is the key social support determinant that if properly addressed, would help reduce a multitude of other costly and detrimental society outcomes (crime, family breakdown, homelessness, poor health, substance abuse, domestic violence etc.)
b.The government should consider how it could use its existing investments in housing and in cooperation with the provinces, develop a uniform approach to address homelessness and housing for vulnerable groups of Canadians – low income seniors, low-income immigrants, aboriginal people and people with disabilities or mental illness.

 
I summarized the findings verbally at 8:40.  The meeting adjourned at 8:55 p.m..

Bruce Stanton, M.P.
Simcoe North