Evidence of meeting #10 for Finance in the 40th Parliament, 3rd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was interest.
A recording is available from Parliament.
12:50 p.m.
NDP
Pat Martin NDP Winnipeg Centre, MB
My only question is very brief too. If the goal is to hit revenue-neutral in five years, is there a sunset clause built into this particular increase in part 2? Does it cease to exist after five years, or will we have to chase it down and try to have it reduced?
12:50 p.m.
Legislative Chief, Sales Tax Division, Public Sector Bodies, Department of Finance
The charge is intended to be an ongoing charge, so the intent is that it will finance the additional expenditures, the enhancements over time.
12:50 p.m.
NDP
Pat Martin NDP Winnipeg Centre, MB
Once the standards are paid for, though, you don't need that money.
12:50 p.m.
Legislative Chief, Sales Tax Division, Public Sector Bodies, Department of Finance
We will continue to review the level of the charge to make sure it's consistent with expenditures. As I said, the charge has been adjusted in a number of previous years, and it's always been in relation to what the expenditures over time are, in order to try to keep them in line. This time, there was a subsequent adjustment in the charge level in order to help finance those additional enhancements and increases in the air travel security system and the additional benefits that will be derived.
12:50 p.m.
NDP
Pat Martin NDP Winnipeg Centre, MB
It's just a tax, isn't it? Taxes seem to go up and stay up. You raise taxes for a specific purpose, and then they never seem to go back down unless we're really vigilant. Did they contemplate a sunset clause, or is there any precedent for increasing taxes for a specific fixed period of time and then having them expire?
12:50 p.m.
Legislative Chief, Sales Tax Division, Public Sector Bodies, Department of Finance
If you look at the charge itself, it was initially introduced at a level of $12.
12:50 p.m.
Legislative Chief, Sales Tax Division, Public Sector Bodies, Department of Finance
I'm just talking about the domestic rates, the one-way rate, which was $12. That was based on trying to fund levels of security at that point in time. It's always based on the expectations for the future of passenger travel. You always try to estimate it based upon a certain level of travel.
12:50 p.m.
NDP
Pat Martin NDP Winnipeg Centre, MB
In general, though, have you ever heard of a case of a tax increase being for a fixed period?
12:50 p.m.
Legislative Chief, Sales Tax Division, Public Sector Bodies, Department of Finance
For a fixed period, off the top of my head, I'm really not familiar with any specific taxes that have been introduced for some level or something.
12:50 p.m.
Conservative
12:50 p.m.
Conservative
12:50 p.m.
Bloc
Daniel Paillé Bloc Hochelaga, QC
We are dealing with the theory but we will not have enough time to look at all that. I would have liked to deal more specifically with clause 1643 but we will obviously not have enough time.
You say that the tax is related to an expenditure. Mr. Wallace is looking into his little blue books but those are not net expenditures. They are expenditures and that is all. It is in the book of votes. There is no offset to revenue. Revenue might be lower, equal or higher, and that would change nothing to the expenditures that Mr. Wallace is looking at with considerable interest.
As Mr. Martin correctly indicated, this is a tax that will go into the Consolidated Revenue Fund. It has been set on the basis of the cost of air transport safety. Of course, there always has to be a basis for setting a tax. It is increased because safety costs more. We are being told that the tax takes the elevator when costs increase but, when they decrease, it does not take even the stairs to go down. I would like to remind you that there have been temporary taxes both in Canada and Quebec. That was in the 70s. I was there. But they became permanent.
I have no other questions, Mr. Chair. Mr. Wallace might cut me off and I do not want that to happen.
12:55 p.m.
Legislative Chief, Sales Tax Division, Public Sector Bodies, Department of Finance
I'll just briefly mention, as I was going to say before, that the charge has been adjusted over time. It has been adjusted downwards previously. It's based on the level of traffic. If traffic substantially increases, then it's a flat-rate charge. If traffic goes up substantially, then the revenues will increase. As I mentioned to you, there's a constant review of expenditures and revenues over time. At certain periods of time--I believe on two occasions--the charge was adjusted downward. There are some fluctuations. That is part of the principle of keeping revenues in line with expenditures.
12:55 p.m.
Conservative
The Chair Conservative James Rajotte
Okay, it looks like we've finished 3 of 24 parts today.
I do want to very much thank the witness for being here.
Colleagues, you may want to hear this. We have 21 parts left of the bill. We have 62 witnesses who have been requested on this bill. There are some time sensitive issues here that need to be done, at least in the government's view, by June. So I want some quick direction from committee members.
Do members want to continue with officials on Tuesday, April 27? The other option is to go to the witnesses, hear from the witnesses starting on Tuesday, April 27, and then bring the officials back after we hear from the witnesses. These are the two options, and I just want some direction from committee members as to which option they would prefer.
Mr. Pacetti.
12:55 p.m.
Liberal
Massimo Pacetti Liberal Saint-Léonard—Saint-Michel, QC
Through experience, Mr. Chair, normally after hearing from the witnesses we'll have more questions for the officials. So I would recommend that we have the officials come at the end.
We will have 62 witnesses, as you just stated, so I would recommend having the officials come afterward.
12:55 p.m.
NDP
Pat Martin NDP Winnipeg Centre, MB
My only observation, on the NDP's part, is that you could always split the bill as a third option. You didn't have to stuff in all of these controversial things that have really nothing to do with the budget, like the environmental assessment review, etc.
Break out the time-sensitive parts of this bill and I think it would pass speedily, and leave the controversial stuff for further analysis later on.
12:55 p.m.
Conservative
The Chair Conservative James Rajotte
I appreciate that, but as you know from reading your O'Brien and Bosc book, a committee has to deal with a bill as sent to it by the House of Commons. So we have no choice as a committee other than to deal with the bill in its present form.
Mr. Wallace, please.
12:55 p.m.
Conservative
Mike Wallace Conservative Burlington, ON
Thank you, Mr. Chairman.
I'm of the opposite opinion of Mr. Pacetti.
Based even on today's meeting of the three sections and the quality of the questions, which I agree were quality questions from all sides, I think it's important for us as members to have an education. Whether we agree with officials or not, that's neither here nor there. But to ask good quality technical questions, have them come first and continue with the officials' piece. Then have witnesses in, to be able to say, well, this is what the officials are saying. I'll be frank with you, witnesses will have an opinion on things. They may not have the technical background, but we would be able to receive that from officials if we went the officials route first and then have witnesses and then go clause by clause.
Thank you.
12:55 p.m.
Liberal
John McCallum Liberal Markham—Unionville, ON
Yes, I agree with Mr. Pacetti, in terms of having the witnesses at the end....
But I also would like to raise for some future meeting, not now, the idea that since we have so many more witnesses than we expected...I don't see why we have to have double meetings every Tuesday and Thursday and three hours every Wednesday. I think the deadline we'd set for completing the bill, May 6, is somewhat artificial. I think we should just have the hearings on the bill extended over a longer period of time.