I would be happy to, yes.
Evidence of meeting #70 for International Trade in the 44th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was uht.
A recording is available from Parliament.
Evidence of meeting #70 for International Trade in the 44th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was uht.
A recording is available from Parliament.
3:55 p.m.
Director, Real Property and Financial Institutions, Sales Tax Division, Tax Policy Branch, Department of Finance
I would be happy to, yes.
3:55 p.m.
Liberal
Arif Virani Liberal Parkdale—High Park, ON
You mentioned the exemption if you or your spouse stay there for 28 days or more, but I also understand there's an exemption if your child is at a Canadian learning institution and is living there. That's also not subject to the tax.
Is that correct?
3:55 p.m.
Director, Real Property and Financial Institutions, Sales Tax Division, Tax Policy Branch, Department of Finance
Do you want to take that, Rob?
3:55 p.m.
Expert Advisor, Sales Tax Division, Tax Policy Branch, Department of Finance
I can handle that.
If a child of the owner or the owner's spouse is there for 180 days in a calendar year and is studying at a designated learning institution, then the property would be exempt.
3:55 p.m.
Liberal
Arif Virani Liberal Parkdale—High Park, ON
For the people who are filing for this tax, are these the individuals' principal residences, or are they vacation homes? I presume it's the latter, because their normal home is somewhere else and they are using this temporarily.
Is that a fair assumption?
3:55 p.m.
Expert Advisor, Sales Tax Division, Tax Policy Branch, Department of Finance
Typically, it would be a secondary residence of those individuals.
4 p.m.
Liberal
Arif Virani Liberal Parkdale—High Park, ON
Have you any sense of the general income status or level of wealth of these individuals who have secondary homes in a foreign jurisdiction such as Canada?
4 p.m.
Expert Advisor, Sales Tax Division, Tax Policy Branch, Department of Finance
I don't think we have that data, but one can assume that if someone owns a secondary property, they're probably more well off.
4 p.m.
Liberal
Arif Virani Liberal Parkdale—High Park, ON
That's certainly the assumption I would draw.
This has come up most recently in terms of the last set of questions you were asked. This is more directed to Mr. Allen. We've actually seen that the U.S.-Canada trading relationship has never been at as high a level as it is right now.
Do you have any evidence that shows the UHT is having an impact on the trading relationship between the two countries? I'm talking about Canada and the United States.
4 p.m.
Mark Allen Executive Director, United States, Department of Foreign Affairs, Trade and Development
No.
4 p.m.
Liberal
Arif Virani Liberal Parkdale—High Park, ON
Do you have any reason to think it may have an impact on the trading relationship?
4 p.m.
Executive Director, United States, Department of Foreign Affairs, Trade and Development
No.
4 p.m.
Liberal
Arif Virani Liberal Parkdale—High Park, ON
In terms of some of the consultations that took place, what efforts did you make to get the word out about the consultations?
You described that in the budget it was telegraphed, but just elaborate on the consultations that took place.
4 p.m.
Expert Advisor, Sales Tax Division, Tax Policy Branch, Department of Finance
The consultation was launched on August 6, as was previously mentioned. Social media was used to amplify the fact that a consultation was ongoing.
There were certain limitations, I guess, as a result of the election that was called on August 16, 2021. There were 36 days during the consultation period that the department was subject to the caretaker convention.
4 p.m.
Liberal
Arif Virani Liberal Parkdale—High Park, ON
Let me put it to you this way. For the exemptions Ms. Riddell mentioned that were carved out based on use, occupancy, how old the building was and the seasonal components, were they elaborated upon and specified as a result of the consultations? Did the consultations feed into how those exemptions were created?
4 p.m.
Expert Advisor, Sales Tax Division, Tax Policy Branch, Department of Finance
The consultation details the vast majority of the exemptions that exist currently.
4 p.m.
Liberal
Arif Virani Liberal Parkdale—High Park, ON
Okay, that's useful to know.
I've nothing further. Thank you.
4 p.m.
Liberal
4 p.m.
Bloc
Simon-Pierre Savard-Tremblay Bloc Saint-Hyacinthe—Bagot, QC
Thank you, Madam Chair.
This is for Mr. Allen, executive director of the United States division of the Department of Foreign Affairs, Trade and Development.
On Monday, the committee met with Mr. Higgins, a U.S. congressman, by video conference. I asked him to describe the extent of the dispute, discomfort or anger around the UHT on the Americans' side. He said that not enough of his colleagues had taken part in the discussions on the matter.
Apart from the letter that was sent to you, can you help us understand the scope of the crisis, or dispute, if I can call it that? First, is there a dispute, and second, how important is this issue to the Americans? To what extent, have they reached out to you about it, and are the two countries talking?
4 p.m.
Executive Director, United States, Department of Foreign Affairs, Trade and Development
Thank you for your question.
As mentioned, the U.S. administration has raised the issue on occasion, but not consistently. Whenever the issue came up, it was to convey the concerns of Mr. Higgins. It wasn't raised as an issue the two countries needed to work on.
The committee has a lot of experience with the various trade issues between Canada and the U.S. I wouldn't say this is something that has reached the same level of importance as other issues.
4 p.m.
Bloc
Simon-Pierre Savard-Tremblay Bloc Saint-Hyacinthe—Bagot, QC
Would it be accurate to call this a relatively minor dispute in the Canada-U.S. relationship?
4 p.m.
Executive Director, United States, Department of Foreign Affairs, Trade and Development
Yes. I would say that it's not even something the U.S. administration has really registered as an issue.
4 p.m.
Bloc
Simon-Pierre Savard-Tremblay Bloc Saint-Hyacinthe—Bagot, QC
Thank you for clarifying that, Mr. Allen.
Now I'm going to turn to the finance officials, Mr. Ives and Ms. Riddell.
Let's be clear. This tax is beneficial because it helps to address speculation in the real estate market. We know that big groups care about profits, not about building housing or ensuring that there is enough housing for the people who need it. They look at housing bubble trends. The tax can also help to prevent artificial market inflation and free up buildings. It's ludicrous that, in the midst of a housing crisis, people are trying to find housing while there are all these empty buildings around them.
The problem, though, is that this is the first time Ottawa is interfering in property taxes. Patrick Taillon, a constitutional expert, actually warned us about that last year.
Did you look into the constitutional aspect of bringing in this new tax field?
4:05 p.m.
Director, Real Property and Financial Institutions, Sales Tax Division, Tax Policy Branch, Department of Finance
We provide advice to the minister on lots of different aspects, so that would include the constitutional risks, the tax risks and all of the policy considerations. Unfortunately we're not at liberty to discuss the advice we would have given the minister on that issue, but yes, it was considered.
4:05 p.m.
Bloc
Simon-Pierre Savard-Tremblay Bloc Saint-Hyacinthe—Bagot, QC
You cannot tell us, now, whether you had the necessary advice to confirm that this new tax field was fully constitutional.
Is that correct?
This is a first by the federal government.
