Evidence of meeting #70 for Finance in the 40th Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was hst.
A recording is available from Parliament.
7:35 p.m.
Chief, First Nations Taxation Section, Intergovernmental Tax Policy, Evaluation and Research Division, Tax Policy Branch, Department of Finance
Yes. I will respond in French.
The position of the Government of Canada is that court rulings—
7:35 p.m.
Chief, First Nations Taxation Section, Intergovernmental Tax Policy, Evaluation and Research Division, Tax Policy Branch, Department of Finance
The decision in the Benoit case. Individuals who were descendants under Treaty 8 were asking that their tax immunity be recognized as a treaty right. They did not win their case before the courts. Canada won another case as well, where first nations were asking for recognition of a treaty or aboriginal right. Our position is that this has not yet been recognized by the courts. There is no duty to consult or make accommodations under rulings made by the Supreme Court, as you mentioned.
7:35 p.m.
Chief, First Nations Taxation Section, Intergovernmental Tax Policy, Evaluation and Research Division, Tax Policy Branch, Department of Finance
Yes, I trained as a lawyer.
7:35 p.m.
Chief, First Nations Taxation Section, Intergovernmental Tax Policy, Evaluation and Research Division, Tax Policy Branch, Department of Finance
I am a member of the Quebec Bar, but I do not work for the Department of Justice. However, our Justice lawyers argue all these cases.
7:35 p.m.
NDP
Thomas Mulcair NDP Outremont, QC
Perhaps, but I asked Ms. Levonian on what authority she was making such an assertion. The decisions of the Supreme Court are very clear. You cannot simply invent an exemption in order to get around a Supreme Court ruling. Come on now! I have never heard of such a thing. I worked as a manager in the public service for a long time; I was also a minister and elected representative, but I have never heard anyone say straight out that, in spite of the decisions handed down by the Supreme Court, they would ignore existing rights guaranteed in writing. You think that aboriginal rights are not real rights. In my whole life, I have never heard such a thing.
7:35 p.m.
Assistant Deputy Minister, Tax Policy Branch, Department of Finance
Excuse me, Mr. Mulcair. Could I respond? I did not say this is an exemption; I simply said this is Canada's position.
7:35 p.m.
NDP
Thomas Mulcair NDP Outremont, QC
Yes, but it's ridiculous. That runs completely counter to what the Supreme Court of Canada has said. You cannot make such a statement. It is scandalous to hear that kind of thing.
7:35 p.m.
Conservative
The Chair Conservative James Rajotte
Monsieur Mulcair, let's have an....
Does anyone want to respond to that?
7:35 p.m.
Assistant Deputy Minister, Tax Policy Branch, Department of Finance
I think Annie does.
7:35 p.m.
Chief, First Nations Taxation Section, Intergovernmental Tax Policy, Evaluation and Research Division, Tax Policy Branch, Department of Finance
Perhaps I could complete that answer. The Government of Canada respects the decisions handed down in the Haida and Taku cases, where it was found that the aboriginal people have ancestral rights and that the Crown has a duty to consult them and accommodate them when a treaty or ancestral right is at stake. In that regard, Canada's position is that registered Indians' entitlement to a tax exemption is laid out in section 87 of the Indian Act, and that their entitlement to a tax exemption is not a treaty or aboriginal right. That is why we do not believe the duty to consult is engaged here. However, we have met with the first nations and want to continue to meet with them, when they request it, on an informal basis, and not on the basis of a duty similar to what the Supreme Court of Canada has said exists for aboriginal rights.
7:35 p.m.
NDP
Thomas Mulcair NDP Outremont, QC
Mr. Chairman, lots of cases begin exactly the same way: with an assertion that the government has no duty to do this or that. And, every single time, the Supreme Court brings them back into line, orders them to respect those rights and, every time, they start all over again. I don't want to pursue this any longer; they are not elected members of Parliament. They are simply providing the explanation forced on them by their department. I find it inconceivable that officials from a department as important as theirs could come here and say that the decisions of the Supreme Court of Canada do not apply. They have invented a new interpretation. I have never seen that before in my life, Mr. Chairman.
7:40 p.m.
Conservative
The Chair Conservative James Rajotte
I think we're getting into a point of debate.
Ms. Levonian, did you want to respond?
7:40 p.m.
NDP
Thomas Mulcair NDP Outremont, QC
It's not a point of debate. They've invented their own constitution.
7:40 p.m.
Assistant Deputy Minister, Tax Policy Branch, Department of Finance
I just want to set the record straight. I didn't say that we don't listen to the Supreme Court.
7:40 p.m.
NDP
Thomas Mulcair NDP Outremont, QC
That's a fact. You're not listening to the Supreme Court. Those are the facts.
7:40 p.m.
Conservative
The Chair Conservative James Rajotte
Okay, let's not get into a debate about that. Clearly there's a difference of opinion.
We'll go to Mr. McCallum.
7:40 p.m.
Liberal
John McCallum Liberal Markham—Unionville, ON
Thank you.
My question is on a somewhat different line. As I understand it, they effectively want a continuation of the exemption that they used to have prior to the HST. If I understand this correctly, if that exemption were granted, it would be at the cost of provincial revenue, not federal revenue. Is that right?
7:40 p.m.
Assistant Deputy Minister, Tax Policy Branch, Department of Finance
That's correct, if it could be measured accurately. If we could measure what that exemption would be, we would take it out of the revenues that would be provided to the provincial government. But it's a very difficult thing to measure, and therefore it could impact the revenues of other provinces.
7:40 p.m.
Liberal
John McCallum Liberal Markham—Unionville, ON
Why is it difficult to measure when we're really just trying to extend the status quo?
7:40 p.m.
Assistant Deputy Minister, Tax Policy Branch, Department of Finance
Right now the status quo is that it's just within Ontario and it's Ontario revenue that is collected, so it doesn't affect any other province. We collect the revenues and they're not tracked across all the provinces that are harmonized. We take those revenues, we put them into a pot, and we allocate it based on economic data. When a province provides a point-of-sale exemption, we have to be able to accurately measure what that point of sale exemption is to be able to then subtract it from the amount we transfer to the province. If we can't accurately measure that, it affects the rest of the pool.
7:40 p.m.
Liberal
John McCallum Liberal Markham—Unionville, ON
Okay. The basic point, I think you would agree, is that it may be somewhat difficult to measure, but at least in principle, if Ontario agreed to this, it would be at the cost of Ontario revenue principally.
7:40 p.m.
Assistant Deputy Minister, Tax Policy Branch, Department of Finance
I think this is of course a matter for ministers to decide, but from a policy perspective there are issues with expanding section 87 of the Indian Act.