Finance Committee on May 16th, 2012
Evidence of meeting #59 for Finance in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was tax.
A recording is available from Parliament.
On the agenda
MPs speaking
Also speaking
- Ted Cook Senior Legislative Chief, Tax Legislation Division, Tax Policy Branch, Department of Finance
- Sean Keenan Director, Personal Income Tax Division, Tax Policy Branch, Department of Finance
- Brian McCauley Assistant Commissioner, Legislative Policy and Regulatory Affairs Branch, Canada Revenue Agency
- Pierre Mercille Senior Legislative Chief, Sales Tax Division, GST Legislation, Tax Policy Branch, Department of Finance
- Lucia Di Primio Chief, Excise Policy, Sales Tax Division, Excise Act, Tax Policy Branch, Department of Finance
- Gordon Boissonneault Senior Advisor, Economic Analysis and Forecasting Division, Demand and Labour Analysis, Economic and Fiscal Policy Branch, Department of Finance
- Jane Pearse Director, Financial Institutions Division, Financial Sector Policy Branch, Department of Finance
- Annie Hardy Chief, Financial Institutions Division, Structural Issues, Financial Sector Policy Branch, Department of Finance
- Ling Wang Chief, Financial Institutions Division, Housing Finance Review, Financial Sector Policy Branch, Department of Finance
9:20 p.m.
NDP
Peggy Nash Parkdale—High Park, ON
So given the fact that it's not current but they'll still have value, people could still pay in pennies, even after this change takes effect. Is that correct?
9:20 p.m.
Director, Financial Institutions Division, Financial Sector Policy Branch, Department of Finance
As I understand it, the penny will continue to be legal tender and businesses are encouraged to continue to accept the coin as payment.
I would just say there is a backgrounder that is available on the Department of Finance and the Mint websites that provides information to both consumers and businesses about the expectations going into this period.
9:20 p.m.
NDP
9:20 p.m.
Conservative
9:20 p.m.
NDP
Guy Caron Rimouski-Neigette—Témiscouata—Les Basques, QC
I have a couple of questions. Actually we had to stop Pat Martin from coming, as he wanted to talk about the penny so much.
The briefing notes indicate that businesses will adjust their prices. For a difference of one or two cents, the price will be rounded down and for a difference of three or four cents, the price will be rounded up to five cents more. If I am not mistaken, that is how it will be.
There will be no oversight. I imagine we will rely on the good faith and goodwill of the businesses.
9:20 p.m.
Director, Financial Institutions Division, Financial Sector Policy Branch, Department of Finance
The backgrounder is meant to provide guidance or an expectation around the government's intent. It doesn't establish regulations or obligations on either the consumer or the business, as I understand it.
9:20 p.m.
NDP
Guy Caron Rimouski-Neigette—Témiscouata—Les Basques, QC
For example, if an item costs $1.11, there is nothing to force a business to reduce the price to $1.10 instead of increasing it to $1.15. This is just a recommendation.
9:20 p.m.
Director, Financial Institutions Division, Financial Sector Policy Branch, Department of Finance
Exactly.
9:20 p.m.
NDP
Guy Caron Rimouski-Neigette—Témiscouata—Les Basques, QC
Out of curiosity: what is the Royal Canadian Mint going to do with all the pennies it will receive? Is it going to melt them and resell the copper, or will they be used in some other way?
9:20 p.m.
Director, Financial Institutions Division, Financial Sector Policy Branch, Department of Finance
My speaking notes here say for melting and recycling of the metal content.
9:20 p.m.
Conservative
The Chair James Rajotte
There is a minute left in the NDP round. No? Okay.
I have Mr. Wilks, please, for five minutes.
May 16th, 2012 / 9:20 p.m.
Conservative
David Wilks Kootenay—Columbia, BC
Thank you very much, Chair.
It's more of a commentary than anything else, but as a small-business owner since 1999, I have rounded up and down and have not used the penny. I find it completely redundant. The rule of thumb is one and two down, three and four up.
My question to the witnesses is I wonder if there has been any thought or calculation, to relieve the fears of anyone that a small business could round up more than down, to making a calculation or experimenting on any type of business whereby they could check it for a year to see how much it went down with regard to $3.11 versus $3.13 and what the difference would be over a year period, depending on whether you went up or down.
9:20 p.m.
Director, Financial Institutions Division, Financial Sector Policy Branch, Department of Finance
Do you want to know if we have considered monitoring the situation?
9:20 p.m.
Conservative
9:20 p.m.
Director, Financial Institutions Division, Financial Sector Policy Branch, Department of Finance
The experience of other countries suggests that eliminating low-denomination coins will not affect fair rounding practices. I can come back to the committee about whether my colleagues have actually looked at that issue. What we have made explicit in the backgrounder is the government's intentions regarding rounding and treating consumers in a fair and consistent manner.