Finance Committee on Oct. 27th, 2009

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

Could we get a copy of any of those surveys?

[Jim Flaherty, Conservative, Whitby—Oshawa, ON]

—I gave you....

The volume of home renovation investment increased 2.2% in the second quarter of 2009, 9% on an annual basis. This is in the middle of a recession.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

Did you get those stats somewhere? Could you provide a—

[Jim Flaherty, Conservative, Whitby—Oshawa, ON]

Sure, I can give you the authority for the raw numbers.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Pacetti.

Minister, thank you for being with us here today.

We're going to have a second hour with your officials, which is why we have all these chairs before you. We want to thank you for being with us, and you're certainly welcome back anytime.

We'll suspend for a couple of minutes.

[The Chair, Conservative, James Rajotte]

I'll call the meeting back to order.

We have with us a number of officials, and perhaps we'll have the officials introduce themselves. My understanding is there's no opening statement, but there certainly is an opportunity for one.

Could you please introduce yourselves and tell us what your roles are? Then we will start with questions from members, unless there is an opening statement.

[Patrick Halley, Chief, Tariffs and Market Acess, International Trade and Finance, Department of Finance]

My name is Patrick Halley. I am chief of tariff policy at the Department of Finance.

[Philippe Hall, Senior Economist, International Trade and Finance, Department of Finance]

Good morning. My name is Philippe Hall. I work at the Department of Finance, in the international finance section.

[Colette Downie, Director General, Marketplace Framework Policy Branch, Department of Industry]

Hello. My name is Colette Downie, and I'm the director general of the marketplace framework policy branch at Industry Canada.

[Gérard Lalonde, Director, Tax Legislation Division, Tax Policy Branch, Department of Finance]

My name is Gérard Lalonde, and I'm the director of the tax legislation division at the Department of Finance.

[Tim Wach, Director of Legislative Development, Tax Policy Branch, Department of Finance]

I'm Tim Wach, director of legislative development with the tax policy branch at the Department of Finance.

[Chris Forbes, General Director, Federal-Provincial Relations and Social Policy, Department of Finance]

I am Chris Forbes, general director of federal-provincial relations and social policy at the Department of Finance.

[Dominique La Salle, Acting Senior Assistant Deputy Minister, Income Security and Social Development, Department of Human Resources and Social Development Canada]

I am Dominique La Salle, Acting Senior Assistant Deputy Minister at Human Resources and Skills Development Canada.

[Shane Williamson, Executive Director, Knowledge Infrastructure Program, Department of Industry]

I'm Shane Williamson, executive director of the knowledge infrastructure program at Industry Canada.

[Wayne Foster, Senior Chief, Financial Markets Division, Department of Finance]

I'm Wayne Foster, director of the financial markets division at the Department of Finance.

[The Chair, Conservative, James Rajotte]

Thank you all for being with us here this afternoon.

It has probably been explained to you why you're here, which is to allow for questions involving more detail. If they're more of a technical nature, we can rely on your expertise in your various areas.

We will start with questions from members. We'll start with Mr. McKay, please, for seven minutes.

[John McKay, Liberal, Scarborough—Guildwood, ON]

The home renovation tax credit has a hard date of January 31: either you've done it by January 31 or you're out of luck. As sure as God made little green apples, on February 1 I'm going to get a raft of telephone calls in my constituency office saying something to the effect that “The windows guy said he'd arrive on Friday, but he didn't arrive until Monday, so I'm out of luck”, or “My contractor got held up on another job, and he was going to get it done, but I'm out of luck.”

The question is, how hard is the hard date? Second, have you advertised to people that this is a hard date? Third, is there a way in which it could be structured so that, for instance, a contract entered into prior to January 31 will be honoured even though the work might well be done afterwards?

[Gérard Lalonde]

Thank you for that.

The home renovation tax credit, as the minister mentioned already, is a very important part of this budget, and it is an economic stimulus measure. In order to provide economic stimulus, it was essential that this credit entice people to draw their future investments forward and make their investments now rather than later. The HRTC is available for costs incurred before January 31, 2010. Hence, to the extent that you're buying hard assets and to the extent that those costs are incurred before that date--for example, if all the windows are delivered and you have paid for them--at that point they're incurred. The work has to be performed before January 31. That was an important design feature of the credit in order to, as I said, entice people to bring the credit forward. Otherwise, it doesn't really serve its purpose if you can get the credit now, pay for it, and have the work done any time you want.

[John McKay, Liberal, Scarborough—Guildwood, ON]

If the point is to get the stimulus done prior to January 31, why is that not featured in your advertising campaign?

[Gérard Lalonde]

It's featured quite prominently in the budget documents and in the advertising campaign, where I believe it's quite clear that it says it's for renovations done after the budget and before January 31, 2010.

[John McKay, Liberal, Scarborough—Guildwood, ON]

I suggest that in your future rounds of advertising you make it abundantly clear to Canadians that this is a very significant date if they intend to claim the credit.

The other question I had was whether there is a way in which the interpretation of the legislation can be such that if a contract is not completed prior to December 31, the access to the credit can still be had.

[Gérard Lalonde]

The access, as I say, will be available for costs incurred up to January 31, 2010. To the extent that you had a contract for, let's say, $30,000 worth of work and one-third of it had been completed by the end of January 31, you would have eligibility for that $10,000 worth at that point. It doesn't necessarily mean the whole project has to be done; only that for which you're going to claim the credit has to be done by that date.

[John McKay, Liberal, Scarborough—Guildwood, ON]

So essentially you have to have $10,000 worth of work done, regardless of the size of the contract.

[Gérard Lalonde]

That's right.

[John McKay, Liberal, Scarborough—Guildwood, ON]

Okay.

The second question is also with respect to the home renovation tax credit. Whenever one wishes to reduce a tax, one can do it unilaterally, by order, through the Governor in Council. So the real question is, why is it in a bill?