Finance Committee on May 28th, 2013

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Adler.

Go ahead, Monsieur Caron, s'il vous plaît.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

First of all, the provision that Quebec has recently abolished was different from the one that the federal government is now presenting. I feel that the government is on the wrong track by treating credit unions and caisses populaires simply as small businesses. They operate in the financial sector and they presently compete with private institutions like the banks. The officials and the witnesses we heard from spoke very eloquently about the role of credit unions and caisses populaires, especially in small municipalities.

I represent a constituency that is largely rural; credit unions are to be found in many of its small municipalities, but no other financial institutions. In those communities, credit unions play a role that no bank can play in terms of regional investment and community involvement. The number one task for a bank is to make a profit, which is quite legitimate. Credit unions and caisses populaires play a very different role, one that involves extra costs.

This supplementary credit reflects the unique role of credit unions, and the measures that the government has proposed for caisses populaires and credit unions runs counter to that role. The measures will get in the way of that role, a role that cannot be played by private financial institutions. They will automatically make caisses populaires and credit unions much less competitive; the two will not be playing on a level playing field or by the same rules.

For that reason, we urge this committee to set aside these proposals and, if appropriate, to evaluate the role of taxation for caisses populaires and credit unions. It needs to be done in a much more comprehensive, much more complete way, so that we are able to see how the roles of these institutions differ.

[The Chair, Conservative, James Rajotte]

Okay, thank you.

(Clause 12 agreed to)

(Clauses 13 and 14 agreed to)

(On clause 15)

I have three amendments.

First, I have Monsieur Plamondon, and then Ms. May, and then Mr. Brison.

Mr. Plamondon, please present your second amendment.

[Louis Plamondon, Bloc, Bas-Richelieu—Nicolet—Bécancour, QC]

Thank you, Mr. Chair.

We would like to restore the balance of Bill C-60 to what it was before. I feel that it worked very well.

Earlier, the NDP member reflected my own thoughts very well when he spoke about how important credit unions are in small communities. There are 51 municipalities in my riding, and at least 35 of them have no financial institution except the credit union. So we are not talking about competing with other financial companies.

This bill will have an effect on the dividends that go back to their members. By members, I include small businesses taking out loans. For example, a loan of $150,000 or $175,000 can result in a rebate to a business of $2,200 to $2,500 at year end. That is a significant amount for an SME. If they can no longer count on the dividends, economic development will be hurt.

I do not want this deduction to be progressively eliminated; I want it to be maintained as it is at the moment.

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Plamondon.

As the chair, I have a ruling on this amendment.

Bill C-60 amends the Income Tax Act to phase out a tax deduction for credit unions. This amendment proposes to revert back to the original wording of the act, thus allowing the tax deduction to remain in place. As House of Commons Procedure and Practice, second edition, states, on page 766:

An amendment to a bill that was referred to a committee after second reading is out of order if it is beyond the scope and principle of the bill.

In the opinion of the chair, the deletion of a key element is contrary to the principle of Bill C-60 and is therefore inadmissible. Therefore, this amendment is inadmissible.

Thank you.

We have Ms. May, who has her first amendment.

Ms. May, very briefly for one minute, please.

[Elizabeth May, Green, Saanich—Gulf Islands, BC]

How come I have one minute and Mr. Plamondon had two minutes?

[The Chair, Conservative, James Rajotte]

Well, you have more amendments than Mr. Plamondon. If I could just ask you to be very brief, I'll be as generous with time as I can be.

[Elizabeth May, Green, Saanich—Gulf Islands, BC]

Okay. I need to say something by way of introduction. I'll be as brief as I can. I'm here at the invitation of the finance committee. I did not ask for this opportunity. I support the statement made by Ms. Nash that this is not proper parliamentary procedure and that I've been invited to submit amendments and will not have an equal opportunity to present them, not even equal to my colleague from the Bloc Québécois. I underscore that my participation at this moment is without prejudice to my rights as a member of Parliament to submit amendments at report stage.

This amendment is based on testimony to committee in relation to credit unions. They are deeply concerned that the changes in Bill C-60 will eliminate their ability to provide the very essential financial services that they provide—as Mr. Brison said—particularly across rural Canada. What I've attempted to do with this amendment, Mr. Chair, is to reduce the tax benefits they now receive, the preferential tax treatment, but not eliminate it all together, so that under my amendment being proposed at this moment, which I hope is consistent with the purpose of the act, it would reduce the credit unions' preferential tax rate from where it is now to 75% after 2016.

[The Chair, Conservative, James Rajotte]

Thank you, Ms. May.

I will just inform you as the chair, colleagues, that if PV-1 is adopted, LIB-2 cannot be proceeded with because there's a line conflict with LIB-2. If this amendment is adopted, we will not be able to proceed with LIB-2, just for your information.

Is there any further discussion on this amendment? No.

(Amendment negatived [See Minutes of Proceedings])

We will move to LIB-2.

Mr. Brison, please.

[Scott Brison, Liberal, Kings—Hants, NS]

The intention of my amendment, or the Liberal amendment, is similar to that of Ms. May's, so I expect the outcome, perhaps, will be similar as well. We'd prefer to see the government get rid of this section of Bill C-60 so that the tax credit for credit unions would remain in place as is. It's clear that the government is not willing to do that. What this amendment would do is at least provide credit unions with more time by extending the phase-out of the tax credit, and I think that's a reasonable compromise.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Brison.

Is there any further discussion on this amendment? No.

(Amendment negatived [See Minutes of Proceedings])

(Clause 15 agreed to)

(Clauses 16 to 29 inclusive agreed to)

Can I ask if there are any discussions from clauses 30 to 46? Can members indicate which ones they wish to speak to?

Ms. Nash.

[Peggy Nash, NDP, Parkdale—High Park, ON]

There's no discussion, but we are voting “yes” up until clause 35.

[The Chair, Conservative, James Rajotte]

Okay.

Mr. Brison.

[Scott Brison, Liberal, Kings—Hants, NS]

I want to discuss clause 36. I'm giving some advance notice on this. Using the same rationale, we're tabling clause 7 until we have more information. The same principle would apply to clause 36. I would ask that we table until we're provided with more information from the relevant department.

[The Chair, Conservative, James Rajotte]

Thank you.

(Clauses 30 to 35 inclusive agreed to)

(On clause 36)

Mr. Brison, do you want to indicate what information you're looking for?

[Scott Brison, Liberal, Kings—Hants, NS]

In the case of clause 7, we're waiting for information from the department of defence; the same information is pertinent to clause 36. Based on the same principle and cooperation on behalf of the government that Ms. Glover indicated, I ask that we wait until we have that information later this morning.

[The Chair, Conservative, James Rajotte]

Thank you.

Ms. Glover, please speak to this point.

[Shelly Glover, Conservative, Saint Boniface, MB]

We're fine with tabling it.

[The Chair, Conservative, James Rajotte]

Committee, we're okay with tabling clause 36 until the end?

Thank you.

(Clause 36 allowed to stand)

(Clauses 37 to 41 inclusive agreed to)

(On clause 42)

Mr. Brison, do you wish to speak to clause 42?

[Scott Brison, Liberal, Kings—Hants, NS]

I'd like to use a couple of minutes of my time for each clause by asking the officials to provide an explanation, in layman's terms, of each section in part 2.

Budget bills are the only government bills for which the Library of Parliament does not publish a legislative summary. Canadians who want to know what the bill does should have easy access to a non-partisan, easy to understand explanation of the bill. I think that's why it's important for us to get this information into the committee's transcript. It's unfortunate we have been under significant time constraints. We've been in a rush to get this bill through.

This would only take a few minutes. I think it's important to recognize that the technical briefing provided to parliamentarians was not open to the public and that committee transcripts are an important source of public information that simply can't be replaced by a private discussion and correspondence between MPs, the committee, and the government. I ask that we have the public servants who are with us today provide brief explanations in layman's terms for each section in part 2.

[The Chair, Conservative, James Rajotte]

Can you assist the committee by asking a specific question? They could speak for hours on the sections.

[Scott Brison, Liberal, Kings—Hants, NS]

I'm asking them to give a one- or two-minute overview on each section in part 2. It will only take a few minutes. The committee has not yet provided the public with that explanation in a way that is read into the record. It would not take a long time, but I think it would provide the public and stakeholders with explanations in layman's terms from the government's perspective. We're not asking for a deep, granular explanation, but a couple of minutes I think is reasonable for each section.

[The Chair, Conservative, James Rajotte]

Thank you.

Please speak on this point, Ms. Glover.

[Shelly Glover, Conservative, Saint Boniface, MB]

Thank you, Mr. Chair.

As I said before, during witness testimony and when the officials were here, all the material provided to committee is available online for all members of the public who are interested. A three-page summary at the beginning of part 2 provides the information that Mr. Brison is again asking for. I would suggest that the interested public simply go online and look at the overview.

We have an awful lot to get through today. I hope we are able to do this in an efficient manner. That is why it is available on the public website, as well as having been available at technical briefings and during our witness testimony.

I think that answers Mr. Brison's question, and it will prevent any further delays here today.

[The Chair, Conservative, James Rajotte]

This briefing binder we have I believe is online.