I'm glad you did.
Evidence of meeting #37 for Finance in the 41st Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was amendment.
A video is available from Parliament.
Evidence of meeting #37 for Finance in the 41st Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was amendment.
A video is available from Parliament.
3:50 p.m.
A voice
I'm glad you did.
3:50 p.m.
Conservative
Gerald Keddy Conservative South Shore—St. Margaret's, NS
Mr. Chairman, since we are taking our time here and everyone is going to have their say, I'll have mine as well.
I agree exactly with what Mr. Adler said. What is interesting here is this is all about tactics. The opposition parties want to vote on single items so they can vote for them at committee and then vote against them later on when the bill comes to Parliament. It's fairly obvious.
If you take that train of thought and those tactics, then you take paragraph (a) in clause 24, which provides that a corporation may not issue shares that are eligible for tax credits on or after the day that it notifies the minister that it intends to revoke its registration, what they are essentially saying is that the corporations that have notified the minister that they are revoking their registration should still be able to get the tax credit. I can't support that. However, somehow they have squared that circle.
3:50 p.m.
Conservative
The Chair Conservative James Rajotte
I sense that neither side is going to convince the other. I'm just putting that out there.
3:50 p.m.
NDP
Nathan Cullen NDP Skeena—Bulkley Valley, BC
Hope springs eternal, Mr. Chair.
I think we almost had Mark.
3:50 p.m.
Conservative
3:50 p.m.
Conservative
The Chair Conservative James Rajotte
I'll give a little hint to members that if they don't want to keep the debate going, don't poke the other side. That's just my sense.
Monsieur Caron.
3:50 p.m.
NDP
Guy Caron NDP Rimouski-Neigette—Témiscouata—Les Basques, QC
I hope to finish with this, but I will first respond to Mr. Adler.
Empirical evidence is lacking. A study was carried out by someone from Calgary on the way the funds work in Quebec, in particular. I understand the Quebec venture capital industry. Representatives of labour-sponsored funds clearly said that, at the time, Mr. Mintz had not understood several parameters and aspects of labour-sponsored funds' implication in venture capital.
A conclusion cannot be made based on a single study, especially since other testimony has confirmed the programs' success. There are reasons why, in some cases, the funds cannot be as high as private venture capital funds. It should also not be forgotten that this is a savings vehicle for Quebeckers and that it helped Quebec—which ranked last in terms of personal savings—become a solid performer in that area. That should not be forgotten.
To respond to Mr. Keddy, I would like to specify that, if the government was open to separating the provisions so that they would be voted on individually, we would vote the same way in the House as here, in committee. That way, we could vote in favour of good provisions—which some of them clearly are—and everyone would be happy.
3:50 p.m.
Conservative
Andrew Saxton Conservative North Vancouver, BC
Chair, I don't expect my colleagues in the opposition to take my word for it, but perhaps they could take the word of the Organisation for Economic Co-operation and Development, the OECD, which says that these LSVCCs are not working to promote economic growth and jobs.
In fact, it went on to say, “The LSVCCs have distorted the market for venture capital, lowering the average quality of deals and limiting the supply of equity to non-traditional industries and newer companies.” As well, it said, “...the governance structure of LSVCCs leads to less-skilled fund managers and poorer fund performance.” Finally, it said, “Overall, the damaging effects of the LSVCC tax credits on the financing of innovation along with their fiscal costs present a clear argument for their elimination.”
That is from the 2006 OECD economic survey.
3:55 p.m.
Conservative
3:55 p.m.
Liberal
Scott Brison Liberal Kings—Hants, NS
Just to follow on Mr. Saxton's evidence from the OECD, he's asking us to consider that evidence. I'm wondering whether he would consider the OECD evidence that the CPP is sustainable without raising the eligibility age of the OAS from 65 to 67.
3:55 p.m.
Conservative
The Chair Conservative James Rajotte
Well, we'll get to that when we debate the CPP.
Mr. Caron, you have the floor.
3:55 p.m.
NDP
Guy Caron NDP Rimouski-Neigette—Témiscouata—Les Basques, QC
As for the OECD study, I want to point out that apples and oranges are being compared. I have seen this study. Once again, the study did not specifically focus on the Quebec reality, which has been a success. Currently, the Quebec labour-sponsored venture capital funds account for 90% of the country's venture capital funds. However, the people who carried out the study did not look at the issue specifically through the lens of the Quebec reality.
In fact, if the tax credit was indeed harmful to private venture capital funds, why did the representatives of Canada's Venture Capital and Equity Association appear before us and talk about the willingness, desire and need to save labour-sponsored funds? The two types of funds are not mutually exclusive. They work together and they are complementary. If the reality on the ground was such as described by the OECD, the association that represents the majority of private venture capital companies would not come here to plead the case of that tax credit intended for labour-sponsored funds.
3:55 p.m.
Conservative
3:55 p.m.
An hon. member
We'd like a recorded vote.
3:55 p.m.
Conservative
The Chair Conservative James Rajotte
(Clause 24 agreed to: yeas 5; nays 4)
Colleagues, I will suspend the meeting at this time. We'll go to the House and vote. Please do come back as quickly as possible.
We will resume with clause 25.
Thank you.
4:35 p.m.
Conservative
The Chair Conservative James Rajotte
I call the meeting back to order. This is meeting number 37 of the Standing Committee on Finance. We are dealing with Bill C-31.
Colleagues, we dealt last with clause 24. We have an amendment on clause 27. Is there any discussion on clauses 25 or 26?
4:35 p.m.
NDP
4:35 p.m.
Conservative
The Chair Conservative James Rajotte
Okay, there will be a recorded vote on clause 25.
(Clause 25 agreed to: yeas 5; nays 3)
(Clause 26 agreed to)
(On clause 27)
We have our first amendment, which is amendment NDP-1.
Who will speak to amendment NDP-1?
Mr. Rankin.
4:35 p.m.
NDP
Murray Rankin NDP Victoria, BC
Chair, the purpose of proposed amendment NDP-1 is to delete reference to new penalties under the FATCA intergovernmental agreement implementation. Clause 27 makes failure to comply with new section 267 an offence punishable by summary conviction. Obviously, we're not in favour, because we don't like the imposition of FATCA, as you'll hear when we get to those provisions.
That's what we're talking about. We're moving to strike the reference to new section 267 from clause 27 so that it is not an offence to not comply with this FATCA implementation measure.
4:35 p.m.
Conservative
4:35 p.m.
Conservative
Andrew Saxton Conservative North Vancouver, BC
Chair, we can't support the NDP's amendment to clause 27. This amendment would prevent an existing provision, which generally makes it an offence not to keep and retain records required for income tax purposes, from applying to financial institutions in respect of new part XVIII of the Income Tax Act.
Part XVIII gives effect to the Canada-U.S. Enhanced Tax Information Exchange Agreement. This offence applies in respect of the general record-keeping requirements in the act, and therefore it should also apply in respect of the record-keeping obligations of financial institutions under part XVIII.