Finance Committee on April 30th, 2024

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Chambers.

Mr. Turnbull, go ahead, please.

[Ryan Turnbull, Liberal, Whitby, ON]

Thanks.

I just want to clarify the subamendment that was just introduced by Mr. Ste-Marie. As far as I understand it, amendment CPC-1 introduces a sector-specific exemption to the EIFEL rules for regulated utilities. I think what Mr. Ste-Marie has introduced here is a carve-out to that, such that in essence it would not apply.

Could he maybe just clarify for the committee, if that's permitted, Chair, just so I can make sure I'm understanding that?

[The Chair, Liberal, Peter Fonseca]

Yes, that is permitted.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Yes, that's right.

[Ryan Turnbull, Liberal, Whitby, ON]

That was a very simple clarification. I'm glad I understood.

What would the impact of this be, Ms. Gwyer?

[Lindsay Gwyer]

I think it would make it so that the exception would be limited to the types of energy that are listed in the amendment right now. If I understood correctly, that would then exclude natural gas, and I think there was a second thing that would also be excluded.

[Ryan Turnbull, Liberal, Whitby, ON]

I think it was nuclear, if I'm not mistaken.

For me, we're generally opposed to the entire CPC amendment, so I think this still maintains some of the amendment structure that the CPC had proposed.

I would say that from my perspective, we're likely to be in opposition to that, but I appreciate Mr. Ste-Marie's attempt to subamend something and salvage it. I'm hoping we can move through this fairly quickly.

Thank you.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Turnbull.

I see no one else, so we're looking now at the subamendment. Shall the subamendment carry?

(Subamendment negatived on division)

[The Chair, Liberal, Peter Fonseca]

Now we're going to the amendment.

Mr. Turnbull, please go ahead.

[Ryan Turnbull, Liberal, Whitby, ON]

I wanted to put our rationale for opposing CPC-1 on the record, if that's all right.

In analyzing this, we feel that CPC-1 introduces a sector-specific exemption to the EIFEL rules for regulated utilities, and that is unnecessary because there's already relief provided to all taxpayers in highly leveraged industries such as regulated utilities. The amendment would undermine the policy of preventing the erosion of the Canadian tax base due to excessive interest and financing expenses by large multinationals that are likely to use this debt to finance activities outside of the country.

Finally, the proposed regulated utility exemption is extremely broad. For instance, it would allow regulated utilities to claim excessive financing expenses for borrowings meant to support a utility business outside of Canada and for borrowings that support any part of the regulated utility business. In addition, the change would be vulnerable to inappropriate tax planning, as it allows interest expenses to be claimed on non-arm's length borrowings.

For this reason, we intend to oppose it. I wanted to make that clear on the record.

Thank you.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Turnbull.

Before I go to Mr. Chambers, just so everybody is aware—and I believe you are—because CPC-1 was moved, LIB-1 cannot be moved, as they are identical.

We will go to Mr. Chambers now.

[Adam Chambers, Conservative, Simcoe North, ON]

Thank you, Mr. Chair.

I appreciate the thoughts of our new parliamentary secretary—welcome to the committee—and his reason for voting against this amendment.

Perhaps I'll say why we'll be voting for the amendment and why it was brought forward.

It couldn't have been clearer. The question to the witness was whether energy bills would go up as the result of these rules, and Nova Scotia Power said yes. That is the reason we moved the amendment. You have a taxpayer, a market participant, telling you exactly what is going to happen when this passes, and that is an increase in energy bills. That's okay: If you don't want to vote for lower energy bills, that's fine, but we do.

[The Chair, Liberal, Peter Fonseca]

Thanks, Mr. Chambers.

Mr. Lawrence, please go ahead.

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

Mr. Chambers said it all. We're good.

[The Chair, Liberal, Peter Fonseca]

Okay. This vote is on the amendment. We'll do a recorded vote.

(Amendment negatived: nays 6; yeas 4 [See Minutes of Proceedings])

Shall clause 7 carry? We'll do a recorded vote.

(Clause 7 agreed to: yeas 7; nays 4)

[The Chair, Liberal, Peter Fonseca]

Do you want me to go into clause 8?

[Adam Chambers, Conservative, Simcoe North, ON]

I have one amendment to subclause 8(2). It's very simple.

It says “October 1, 2023” in 8(2)(a). We will change 2023 to “2024”.

How does that sound?

[The Chair, Liberal, Peter Fonseca]

Did we capture that amendment?

[Adam Chambers, Conservative, Simcoe North, ON]

Shall I provide some rationale?

[The Chair, Liberal, Peter Fonseca]

Can you provide that in writing to the committee, Mr. Chambers?

[Adam Chambers, Conservative, Simcoe North, ON]

Change the 3 to a 4.

[The Chair, Liberal, Peter Fonseca]

For the legislative clerk, what page is that on?

[Adam Chambers, Conservative, Simcoe North, ON]

Sure. While I'm doing that, I will provide some rationale.

[The Chair, Liberal, Peter Fonseca]

No, MP Chambers. What page is that on?

[Adam Chambers, Conservative, Simcoe North, ON]

It's on page 66.