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 change.

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

3:45 p.m.

Director, Personal Income Tax Division, Tax Policy Branch, Department of Finance

Sean Keenan

That's the taxes in his hands as an individual.

3:45 p.m.

NDP

Peggy Nash Parkdale—High Park, ON

Lastly, on the increase in salary for the Governor General, I'm just wondering why the increase of $100,000 for 2013 and subsequent years. What's the rationale for that, when the government is cutting back in many other areas?

3:45 p.m.

Director, Personal Income Tax Division, Tax Policy Branch, Department of Finance

Sean Keenan

The salary for 2013 is set such that his net compensation from the Office of the Governor General remains unchanged. So currently he receives a salary that is not taxed, and then as a result of this bill he would receive a higher salary that would be taxable. And we estimated that because he would pay a certain amount of tax on that income, his salary should be set at the level in the bill, such that his net compensation is unchanged.

3:45 p.m.

NDP

Peggy Nash Parkdale—High Park, ON

So there's no austerity for the Governor General.

Okay, thank you.

3:45 p.m.

Conservative

The Chair James Rajotte

Thank you.

We'll go to Mr. Adler, please.

3:45 p.m.

Conservative

Mark Adler York Centre, ON

Thank you, Chair.

I'm going to pass on my time. I read the budget quite thoroughly and went to the technical briefings, so I have no questions at this time.

3:45 p.m.

Conservative

The Chair James Rajotte

Thank you.

Ms. Glover.

3:45 p.m.

Conservative

Shelly Glover Saint Boniface, MB

I'm fine as well.

3:45 p.m.

Conservative

The Chair James Rajotte

Who is next? I have an NDP slot.

Mr. Mai.

May 16th, 2012 / 3:45 p.m.

NDP

Hoang Mai Brossard—La Prairie, QC

Thank you for more time.

Let us speak about charitable organizations. We asked questions about certain donations during the technical briefing. The definition of a charitable organization has changed. Donations to support political activities will be considered political activities. During the technical briefing, we were told that, when a donation is made and the donor says that the money is not for political purposes, then that is sufficient to prove that the donor did not engage in political activities. I would like your response to be on the record. Is that correct?

3:45 p.m.

Senior Legislative Chief, Tax Legislation Division, Tax Policy Branch, Department of Finance

Ted Cook

In terms of the way this measure works, just to clarify, this measure is with respect to gifts given by a registered charity or an RCAAA to a qualified donee. It doesn't apply in the context of a donation made by an individual or a corporation to a charity in the first instance.

With respect to the purpose, as I believe I indicated to the committee yesterday, it's whether it can reasonably be considered that a purpose of the gift is to support the political activities of the recipient of the gift. So where the charity or RCAAA is genuinely making a gift and genuinely providing a direction that it is not to be used for political activities, then that would largely be sufficient.

There is an objective analysis.... The only reason I hesitate is to preclude someone using it as a shield.

3:50 p.m.

Assistant Commissioner, Legislative Policy and Regulatory Affairs Branch, Canada Revenue Agency

Brian McCauley

I was just going to say that would be very helpful. It would have to be consistent with the facts as well, so the statement would have to be consistent with the facts of what's actually occurring.

3:50 p.m.

NDP

Hoang Mai Brossard—La Prairie, QC

One thing troubles me about this bill and that is the reasonable test. I spoke about it before. Can you tell me who is going to decide what is reasonable? Who is going to make that decision?

3:50 p.m.

Senior Legislative Chief, Tax Legislation Division, Tax Policy Branch, Department of Finance

Ted Cook

I'll let my CRA colleague make some comments.

The consideration of what's reasonable in the circumstances is a test that we often use in the Income Tax Act. Basically, it requires an objective analysis. As I indicated with respect to what is a purpose of the gift itself, the CRA, as administrator of the Income Tax Act, has ultimate responsibility, at least in the first instance, to make a determination based on the facts of the situation as to whether they feel it can reasonably be considered a purpose or not. Where the charitable organization disagrees with that, there is a procedure where ultimately a determination, if it goes that far, could be made by the courts.

3:50 p.m.

NDP

Hoang Mai Brossard—La Prairie, QC

If memory serves me correctly, I also heard a public servant say that information on political activities will be sent to charitable organizations. Is that correct?