Finance Committee on May 28th, 2013

[The Chair, Conservative, James Rajotte]

Thank you, Ms. Glover.

Mr. Caron, you have the floor.

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

Yes, I would like to ask the witness a question.

Are you aware of amendments NDP-7 and NDP-8 that we are studying at the moment?

[Patrick Halley]

I am sorry, I did not hear the question.

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

Are you aware of the amendments that are presently being discussed?

[Patrick Halley]

Yes.

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

What impacts would those amendments have, do you think?

[Patrick Halley]

There would have to be some technical corrections, but, in general, we can see that these two tariff systems are much wider in scope and that they include a certain number of products like karaoke systems and other similar systems. So, the scope of the systems is much wider.

For iPods or MP3s, nothing in the legislation has changed in terms of preferential tariff treatment. So products with tariff number 9948.00.00 can get a tariff exemption and that will continue to be the case.

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

To get the tariff number 9948.00.00, they need an end-user certificate. Is that correct?

[Patrick Halley]

Products with tariff number 9948.00.00 will get a tariff exemption. Nothing there has changed.

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

What I mean is that, to get the exemption, an item needs a certificate from the merchant or even from the customer buying it. As we understand it, that is not really being used generally and comprehensively. Am I mistaken?

[Patrick Halley]

Under chapter 99 of the Customs Tariff, some general conditions apply for tariff exemptions in general. But nothing will change in this case, because products with tariff number 9948.00.00 are admitted tariff free.

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

Okay.

Let's go back to the amendments we are now dealing with. Are iPods exempt or not? You say that they still are. But some economists who have looked into the matter of customs tariffs in depth have come to the conclusion that the government's statements on the matter, and the analysis from officials, were in fact in error. The analysis those economists did is very convincing.

What is your basis for saying that the exemption exists at the moment? Researchers who have looked into this specific matter have come to a conclusion that is completely opposed to yours and they cannot be criticized for being partisan, whatever the party.

[Patrick Halley]

Because the Canadian Border Services Agency administers the tariff, so they are in the best position to decide which products are included or not.

In this case, we have been told that nothing has changed for products that were previously admitted with tariff number 9488.00.00. So those products will get the tariff exemption despite the changes to the bill.

[The Chair, Conservative, James Rajotte]

Okay.

Ms. Nash on this point please.

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

I would just like to correct the record. Ms. Glover said there's no change here, and that it's only the NDP who is looking for an iPod registry. I just want to remind the public that it was Sony and other firms that are covered under section 9948.00.00 that came out and criticized the CBSA for telling them they wouldn't need certificates, even while they know they're planning on collecting this tariff. So we've had the private sector, the businesses involved in this sector, who have raised concerns about this, and they have said, yes, they will be subject to, in essence, an iPod tax.

I just want to get that on the record.

[The Chair, Conservative, James Rajotte]

Thank you.

(Amendments negatived [See Minutes of Proceedings])

[The Chair, Conservative, James Rajotte]

As it was a new clause, there's no need to vote on 78.1; therefore, I'll move to clause 79.

(Clauses 79 to 81 inclusive agreed to)

Colleagues, I don't have any amendments from 82 to 101. Do members want to stop me at a clause? Can I deal with all of these clauses? Okay.

(Clauses 82 to 101 inclusive agreed to)

[The Chair, Conservative, James Rajotte]

We have clauses 102 to 121.

Mr. Brison, on which clause...?

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

I'll speak to clauses 104 to 109.

[The Chair, Conservative, James Rajotte]

Let me deal with clauses 102 and 103.

(Clauses 102 and 103 agreed to)

Mr. Brison, for discussion on clauses 104 to 109.

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

These clauses broadly apply to the residency requirement for financial institutions. Bill C-60 reduces the Canadian residency requirement for committees of directors of financial institutions. These are smaller groups who deal with particular decisions within a board of directors, and they would report to the full board of the directors. However, a significant amount of business is conducted by board subcommittees, in the same way that there are subcommittees of cabinet that deal with issues and then report back to cabinet. It's the same with corporate boards.

A lot of very important work is done by subcommittees. There are, for instance, audit committees, human resource compensation committees.

There's a concern that this provision is actually much more significant in terms of its impact on decision-making in corporate boards of financial institutions than the government would indicate. I mean, it could create a very significant loophole, if you will, and a significant change in terms of who ultimately would be making very important and significant decisions on the future of our financial institutions.

I would like to ask if Ms. Hardy could explain to Canadians what types of business typically would be delegated to committees of directors and what types of business would not be, or could not be, delegated

[The Chair, Conservative, James Rajotte]

Okay, Ms. Hardy.

[Annie Hardy, Chief, Financial Institutions Division, Structural Issues, Financial Sector Policy Branch, Department of Finance]

First, the board is accountable for all the decisions made at committees. The Office of the Superintendent of Financial Institutions supervises financial institutions and ensures that all the important decisions are made at the board and that the board is accountable for all those decisions.

The legislation has rules on what can be delegated. I don't have it in front of me right now, but, for instance, there are two committees of the board that are mentioned in the legislation. There is the audit committee and another committee.

All the decisions have to go back. Financial statements have to be approved by the board, as do the major decisions. The superintendent also issues guidelines to financial institutions to ensure that the board is accountable for the decisions. The residency requirement will remain at the board level.

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

Ms. Hardy, you said you don't have the information with you on what can be delegated to a committee of directors. You don't have that with you now? When would you be able to provide it to the committee?

[Annie Hardy]

I'll be able to provide it today.