Bill C-40 (Historical)
Sales Tax Amendments Act, 2006
An Act to amend the Excise Tax Act, the Excise Act, 2001 and the Air Travellers Security Charge Act and to make related amendments to other Acts
This bill was last introduced in the 39th Parliament, 1st Session, which ended in October 2007.
Jim Flaherty Conservative
This bill has received Royal Assent and is now law.
This is from the published bill. The Library of Parliament often publishes better independent summaries.
Part 1 of this enactment mainly implements proposed measures relating to the Goods and Services Tax and Harmonized Sales Tax (GST/HST). Part 2 contains measures relating to the Excise Act, 2001 and other Acts with respect to the taxation of tobacco, spirits and wine. Finally, Part 3 contains measures relating to the Air Travellers Security Charge.
The GST/HST measures, contained in Part 1 of this enactment, are principally aimed at improving the operation and fairness of the GST/HST in the affected areas and ensuring that the legislation accords with the policy intent. In some cases, adjustments have been made to the legislation as originally proposed in response to representations from the tax and business communities.
The principal GST/HST measures are as follows:
(1) Health: confirms the GST/HST exemption for speech-language pathology services; exempts health-related services rendered in the practise of the profession of social work; zero-rates sales and importations of a blood substitute known as plasma expander; restores the zero-rated status of a group of drugs, collectively known as Benzodiazepines; broadens the specially equipped vehicle GST/HST rebate so that this rebate applies to motor vehicles that have been used subsequent to being specially equipped for use by individuals with disabilities.
(2) Charities: ensures that the exemption of supplies by charities of real property under short-term leases and licences extends to any goods supplied together with such real property.
(3) Business Arrangements: provides transitional GST/HST relief on the initial asset transfer by a foreign bank that restructures its Canadian subsidiary into a Canadian branch; removes technical impediments that hinder the use of existing group relief provisions under the GST/HST; simplifies compliance by excluding beverage container deposits that are refundable to the consumer from the GST/HST base; permits an agent to claim a GST/HST deduction for bad debts, and to claim adjustments or refunds of tax, in respect of sales made on behalf of a principal where the agent collects and reports tax; extends the existing agent rules under the GST/HST legislation to persons acting only as billing agents for vendors; better accommodates special import arrangements between businesses in certain situations where goods are supplied outside Canada to a Canadian customer; ensures that GST/HST group relief rules cannot be used to exempt from GST/HST otherwise taxable clearing services that are provided by a group member to a closely related financial institution who will then re-supply those services on an exempt basis to a third-party purchaser outside the group; clarifies the treatment of the right to use certain types of amusement or entertainment devices, such as the playing of a game, when it is provided through the operation of a mechanical coin-operated device that can accept only a single coin of twenty-five cents or less as the total consideration for the supply; confirms the policy intent and Canada Revenue Agency’s existing practice that no GST/HST or provincial sales taxes on a passenger vehicle are included in calculating the maximum allowable value for input tax credit purposes.
(4) Governments: ensures that a small supplier division of a municipality is treated in the same manner as a municipality that is a small supplier; exempts a supply of a right to file or retrieve a document or information stored in an electronic official registry.
(5) HST-related Rules: as announced by the Government of Nova Scotia, limits the availability of the current Nova Scotia HST New Housing Rebate to first-time homebuyers and reduces the maximum rebate available to $1,500; includes in the Act the draft Specified Motor Vehicle (GST/HST) Regulations, which prescribe the value of a specified motor vehicle for the purposes of calculating the 8% provincial component of the HST in circumstances where the vehicle is brought into a participating province and prescribe the manner in which that tax is required to be paid.
(6) Administration: adds a discretionary power for the Minister of National Revenue to accept late-filed applications for the GST New Housing Rebate and the Nova Scotia HST New Housing Rebate for owner-built homes, where exceptional circumstances have prevented an applicant from meeting the normal filing deadline; adds a discretionary power for the Minister of National Revenue to accept late-filed elections between closely related financial institutions for adjustments that they are required to make for the provincial component of the HST; permits the Minister of National Revenue to exchange GST/HST information with foreign governments that are signatories to the Convention on Mutual Administrative Assistance in Tax Matters; adds a discretionary power under the Act for the Chief Statistician of Canada to provide statistical information concerning business activities to the provinces similar to an existing provision in the Income Tax Act.
The measures contained in Part 2 of this enactment amend the Excise Act, 2001 to implement minor refinements that will improve the operation of the Act and more accurately reflect current industry and administrative practices. They also implement related and consequential amendments to the Access to Information Act, the Customs Act, the Customs Tariff and the Excise Tax Act.
The principal measures related to the Excise Act, 2001 are as follows:
(1) Tobacco: extends the requirement to identify the origin of tobacco products to all products, including those for sale at duty-free shops or for export, consistent with the Framework Convention on Tobacco Control, an international treaty on tobacco control; clarifies that cigarettes, tobacco sticks, fine-cut tobacco or cigars, but not packaged raw leaf tobacco, may be supplied to the export market or the domestic duty-free market.
(2) Alcohol: authorizes private laboratories, provincial liquor boards and vintners to possess a still or similar equipment and produce spirits for the purpose of analysing substances containing ethyl alcohol without holding a spirits licence; defers the payment of duty by small vintners selling wine on consignment in retail stores operated by an association of vintners until the wine is sold.
(3) Administration: permits the Minister of National Revenue to exchange excise duty information with foreign governments that are signatories to the Convention on Mutual Administrative Assistance in Tax Matters; adds a discretionary power under the Act for the Chief Statistician of Canada to provide statistical information concerning business activities to the provinces similar to an existing provision in the Income Tax Act.
The measures pertaining to the Air Travellers Security Charge (ATSC), contained in Part 3 of this enactment, include previously announced relief provisions, as well as technical changes to the Air Travellers Security Charge Act.
The principal measures related to the ATSC are as follows:
(1) Relief: relieves, in particular circumstances, the ATSC in respect of air travel sold by resellers or donated by air carriers.
(2) Administration: provides authority for the Governor in Council to add, delete or vary by regulation the schedule of listed airports.
Message from the Senate
June 22nd, 2007 / 12:20 p.m.
The Speaker Peter Milliken
I have the honour to inform the House that when the House did attend Her Excellency the Governor General in the Senate chamber Her Excellency was pleased to give, in Her Majesty's name, the royal assent to the following bills:
Bill S-6, An Act to amend the First Nations Land Management Act--Chapter 17;
Bill C-277, An Act to amend the Criminal Code (luring a child)--Chapter 20;
Bill C-18, An Act to amend certain Acts in relation to DNA identification--Chapter 22;
Bill C-14, An Act to amend the Citizenship Act (adoption)--Chapter 24;
Bill C-47, An Act respecting the protection of marks related to the Olympic Games and the Paralympic Games and protection against certain misleading business associations and making a related amendment to the Trade-marks Act--Chapter 25;
Bill C-42, An Act to amend the Quarantine Act--Chapter 27;
It being 12:23 p.m., the House stands adjourned until Monday, September 17, 2007, at 11 a.m., pursuant to Standing Orders 28(2) and 24(1).
The first session of the 39th Parliament was prorogued by royal proclamation on September 14, 2007.
Extension of Sitting Hours
June 11th, 2007 / 4:30 p.m.
Laurie Hawn Edmonton Centre, AB
Mr. Speaker, I listened with interest to the member say that from April 23 to May 4 we did not discuss anything of consequence in the House. I guess that includes the four opposition days, which she must consider inconsequential. I guess that includes Bills C-40, C-43, C-48, C-10, C-22, democratic reform bills, finance bills, Criminal Code bills, two justice bills. I guess in the hon. member's opinion none of these are consequential.
All those things are pretty consequential to the constituents in my riding who care about Senate reform, safe streets and finance bills. They are very important. Does the hon. member truly considers those things inconsequential?
Extension of Sitting Hours
June 11th, 2007 / 3:40 p.m.
Ralph Goodale Wascana, SK
Mr. Speaker, it is unfortunate that the government, in proposing this motion today, has chosen once again to maintain its habitual lack of consultation and reluctance to attempt a collaborative approach to organizing the business of the House.
On more than one occasion, as I think the Chair will remember, I asked directly whether the government intended to make use of Standing Order 27. As other House leaders can confirm, the reply was, “probably not”. I do not think we would be off base in the opposition in expecting that if that were no longer the case, if the government had in fact changed its mind, that it would have decently given us a heads-up that it was going to propose this motion today, at least given us that notice some time earlier than around one o'clock this afternoon.
Frankly, as we saw the government House leader making his travels across the floor of the House, I will not say where he went, the heckling and yelling as he departed the chamber obviously indicates the kind of demeanour of which we have to deal.
I do not see what there is on the order paper at present that this motion will get through the House any more quickly than would have otherwise been the case. I presume, judging by the government House leader's remarks, that the government is principally concerned with Bill C-52, the budget bill.
It has represented to the House and to the public that the government is now extremely concerned the bill will not receive royal assent in time for certain expenditures to be booked in the appropriate fiscal year. Let us be clear. The fiscal year the Conservatives are talking about is 2006-07, and that is the point.
The issue is retroactive fiscal bookings for the last fiscal year, not the future fiscal year, as members would have gathered from the remarks of the government House leader. If there is concern about the lateness of the date, the government really has only itself to blame.
Usually federal budgets are delivered in or about the third week of February, which then permits the introduction of a budget implementation bill by the end of that month. If things are properly managed, this would permit the bill to be in committee before the end of March and to be passed at all stages by the end of May or, at the very latest, the beginning of June.
This year the government chose, for its own partisan reasons, to delay the budget until the third week of March. We did not even see it until then. Then it unilaterally interrupted the budget debate. Then having finished that, belatedly, it interrupted, again, the second reading debate on the budget implementation Bill C-52. That interruption lasted for three full weeks, getting the bill to committee only in the middle of May.
As a consequence, the government then bulldozed the bill through the committee, breaking procedural agreements, denying many interested and informed citizens and groups the right to testify on the bill. Let it be clearly understood that any procedural issue on Bill C-52 is a direct result of government breaking the agreement on the process, which had been fully settled by members of the committee.
Nevertheless, the bill is now only in its third day of debate at third reading and there is every indication that the third reading and final stage would come to an end in debate in the House by the end of business tomorrow at the latest.
It is important to underscore what these dates are with respect to the budget. Remember that the House resumed in the final week of January. The budget was not presented to the House until March 19, fully eight weeks into the parliamentary sitting. That was followed by a ways and means motion and the introduction of the budget bill, but that was delayed because the government interrupted its own budget debate on the financial principles of the government.
Its budget was late, the budget debate was unilaterally delayed by itself and then it finally got around to introducing the budget bill on March 29, which was debated at second reading for the first time on March 30. It was then debated in a haphazard, sporadic fashion, brought forward to the floor by the government, until April 23, and then it was hoisted altogether. The House did not see it again until May 14, full three weeks later.
Finally, it went to the committee, not as a result of any filibuster by the opposition or any party in the opposition. The delay was entirely the procedural mismanagement of the government. It was there for less than two weeks and one of those weeks was a break week when Parliament was not even sitting.
It finally passed through the committee, rather expeditiously, thanks to the cooperation of the opposition, and it was brought back to be debated at report stage on June 4. For how long? One day, that is all the report stage took. Now it is at third reading where there have been three days of debate, and probably a conclusion could have been arrived at very easily by the end of the day tomorrow.
This is why I made the point at the beginning of my remarks that there really is nothing on this order paper that could not be dealt with in the ordinary course of business without the measure the government House leader has introduced. Obviously it is a tactic to blame the opposition for the delays that lie entirely within the control of the government.
What is it then? If it is not Bill C-52, what is it that causes the government to move the motion today? Despite frequent requests for the government to outline its realistic legislative priorities before the summer, all we have heard repeatedly from the government House leader and from others on the government's side is a flow of partisan rhetoric. Legislation has in fact been moving along through the House and through committees, despite the government's erratic management of its agenda.
In fact, the most controversial bill on the order paper, and this is what gives me perhaps a little hope here, is probably Bill C-30, the clean air act, as it has been revised by members of Parliament. Significantly, only the government has been stalling it up to now. However, now we will have some extra time, some extra hours of sitting every day beginning on Wednesday.
Can we then conclude that the extra time the government is seeking is to facilitate the work of the House in consideration of Bill C-30? I certainly hope so. It is in this fervent hope that I indicate to the House that my party, the official Liberal opposition, will support the minister's motion for the extension of hours.
In the time available, in addition to Bill C-52, which will probably be done tomorrow, and in addition to Bill C-30, which I hope the government has the courage to recall and put before the House once again, the official opposition also looks forward to making progress on Bill C-11, lowering freight rates for farmers, on Bill C-14, dealing with foreign adoptions, on Bill C-23, dealing with criminal procedure, on Bill C-29, dealing with Air Canada and the use of official languages, on Bill C-35, dealing with bail reform, on Bill C-47, dealing with the Olympic, on Bill S-6 and Bill C-51, dealing with land claims and on Bill C-40, the private member's legislation that would provide free postage for mail from Canada to our troops in Afghanistan.
Then there is an item that was referred to in question period today. This is the bill we are anxiously awaiting to see, the one dealing with wage earner protection. I hope the government will follow through on the commitment given in question period, that it will table the bill in amended form so it can be passed at all stages and brought into law before Parliament adjourns for the summer recess.
Let me mention one other matter, which is outstanding and which should be dealt with by the House, or at least dealt with by the government when the House is sitting. This is the examination undertaken a few weeks ago by Mr. Brown in connection with the matters that have been of great concern to Canadians in respect of the RCMP pension fund.
As we understand it, there is a report due from Mr. Brown on June 15. That was the original undertaking given by the Minister of Public Safety. It would be very important for us to know that the examination is on time, that we will hear from Mr. Brown on time, and that the Minister of Public Safety will take the step that he promised to take and make that report public immediately.
Perhaps the government might also consider, in whatever time that remains before the summer recess, reforming its approach to the mood in the House. The mood could be improved if the government would refrain from certain of its more hostile practices. For example: no more gratuitous attack ads, no more broken agreements on how witnesses will be heard, no more manuals about dirty tricks for disrupting parliamentary business, and no more devious games to misuse Standing Orders of the House. A little good old fashioned good faith could change the mood for the better.
Business of the House
May 17th, 2007 / 3:10 p.m.
Peter Van Loan York—Simcoe, ON
I would not do that.
Tomorrow is an allotted day.
Next week is constituent consultation week, when the House will be adjourned to allow members to return to their ridings and meet with constituents to share with them the activities of Parliament since the last constituency break.
For the interest of members, I will quickly review our plan for the context of our overall legislative agenda.
As he requested, this is currently strengthening the economy week, where a number of financial bills moved forward. The budget bill was sent to committee and, hopefully, it will be reported back tomorrow, or soon, so we can deal with it at third reading when the House returns after the break.
Bill C-40, an act to amend the Excise Tax Act, was read a third time and sent to the Senate. Bill C-53, an act to implement the convention on the settlement of investment disputes, Bill C-33, the sales tax bill and Bill C-47, the Olympics symbol bill were all sent to committee and we all would like to see those back in the House for report stage and third reading.
In an earlier week, Bill C-36, the bill that makes changes to the Canada pension plan and the Old Age Security Act, was made into law after receiving royal assent.
Strengthening accountability through democratic reform week was a success with the consideration of Bill C-43, Senate consultation. We had three new democratic reform bills introduced that week: Bill C-55, to expand voting opportunities; Bill C-56, an act to amend the Constitution Act, democratic representation; and Bill C-54, a bill that would bring accountability with respect to loans. We hope to continue debate on that particular bill later today.
Bill C-16, fixed dates for elections, was given royal assent and is now law, which I think is the cause of the commotion now in all the committees where Liberals are using procedural tactics. Now they feel they can do it with a free hand.
Two other democratic reform bills are in the Senate, Bill C-31, voter integrity, and Bill S-4, Senate tenure. I really would like to have the term limits bill from the Senate for an upcoming democratic reform week if the opposition House leader can persuade his colleagues in the Senate to finally deal with that bill after 352 days. We may get 352 seconds in a filibuster, but they have had 352 days so far. They have been stalling for a year.
During the consultation week, I will be interested in hearing what our constituents think of the plight of Bill S-4 and the irony of those unaccountable senators delaying it.
We dedicated a good deal of our time focusing on making our streets and communities safer by cracking down on crime. Now that we have had the help of the NDP, we restored the meaningful aspects that the Liberals gutted in committee to Bill C-10, the bill to introduce mandatory penalties for violent and gun crimes. We are continuing to debate that bill today at third reading.
Bill C-48, the bill dealing with the United Nations convention on corruption, was adopted at all stages.
Bill C-26, the bill to amend the Criminal Code with respect to interest rates, was given royal assent.
Bill C-22, the age of protection, was given final reading and sent to the Senate, although it did spend close to, if not in excess of, 200 days in committee where the Liberals were obstructing and delaying its passage.
We made progress on Bill C-27, the dangerous offenders legislation. We would like to see that back in the House.
Bill C-9, An Act to amend the Criminal Code (conditional sentence of imprisonment) and a host of other justice bills are working their way through the system.
Members can advise their constituents that when we return, we will be reviving two themes, back by popular demand. Beginning May 28, we will begin again with strengthening accountability through democratic reform with: Bill C-54, political loans; Bill C-55, additional opportunities for voting; and Bill C-56, democratic representation.
Up next is a second go-round on strengthening the economy week with Bill C-52, the budget implementation bill, which will be called as soon as it is reported back from committee.
In the near future, we will have the improvement of aboriginal people quality of life week with Bill C-44. This bill will grant first nations residing on Indian reserves access to the Canadian charter of human rights. They have been denied this right for 30 years. Unfortunately, Bill C-44 is being delayed by the opposition. This is another bill being delayed by the opposition in committee.
After Bill C-44, I intend to debate Bill C-51. The agreement establishes the use and ownership of land and resources and will foster economic development. This bill illustrates Canada's commitment to the North and to settling land claims.
I wish all members a productive constituent consultation week and look forward to more progress on the government's legislative agenda when the House returns on May 28.
Sales Tax Amendments Act, 2006
May 15th, 2007 / 10:30 a.m.
Bernard Bigras Rosemont—La Petite-Patrie, QC
Mr. Speaker, I would like to thank my colleague from Saint-Maurice—Champlain for his question and comments. This is a good example of the kind of social democracy we want to have in Quebec. We are a progressive political party. We on this side of the House do not think that essential services should be taxable. It is fine to tax luxury goods, but things as essential as speech language pathology services are currently subject to tax and this is contrary to the equal opportunity principles that the Government of Canada is supposed to stand for. This is why Bill C-40 is helping to shed light on the situation. I was surprised to learn a few years ago—and am still surprised—that diapers for babies are taxable.
Why must we tax essential goods and thereby impose an additional burden on the poorest people in society? Some industrial sectors—and I would point again to the oil, gas and hydrocarbon industry in Canada—are making fabulous profits and still get tax breaks. We pass bills here in the House to reduce the fees and taxes paid by corporations that rake in $250 million a year.
It is time to exempt essential services for our children and for everyone. If we can expand the range of exempted services, that is all to the good. We will have made progress towards equal opportunity.
Sales Tax Amendments Act, 2006
May 15th, 2007 / 10:30 a.m.
Jean-Yves Laforest Saint-Maurice—Champlain, QC
Mr. Speaker, first I would like to congratulate my colleague for his excellent speech on Bill C-40.
At the very beginning of his address, he mentioned the tax relief for speech language pathology services in order to help our young people and seniors, for example.
He drew the quite obvious connection between increasing poverty in certain areas and the use of various services, especially social services, speech language pathology services, and certain other ones. He also said that Bill C-40 would correct certain deficiencies in these regards because the poorest people often cannot pay for these services. That is what I understood him to say, and I would appreciate it if he could explain a bit more for us. What would he think of exempting even more services or professions?
Sales Tax Amendments Act, 2006
May 15th, 2007 / 10:10 a.m.
Bernard Bigras Rosemont—La Petite-Patrie, QC
Mr. Speaker, today it gives me great pleasure to speak to Bill C-40, An Act to amend the Excise Tax Act, the Excise Act, 2001 and the Air Travellers Security Charge Act and to make related amendments to other Acts.
First, I would like to say that the Bloc Québécois and I will support Bill C-40, which amends various acts and breathes a little life into a number of industrial sectors and charitable organizations and lends a hand to some of society's more vulnerable members, including children and seniors.
Bill C-40 includes three parts that amend three or four important acts. It will make a number of products and services tax exempt for some people and some industrial sectors, such as Quebec's wine industry, which is growing fast. This bill will offer some administrative and tax relief to these sectors.
The first part of Bill C-40 concerns measures relating to the GST. The second proposes amendments to legislation in order to lift the tax on certain goods and services. Third, Bill C-40 sets out various measures pertaining to the excise tax on wine, beer and other spirits. Lastly, the bill contains amendments to the air travellers security charge rules.
The measures in the first part of Bill C-40 that relate to the GST fall into five main categories, the first being the exemption of certain health services. The second category consists of exemptions of certain services for charities, which I will talk about a bit later. The third category comprises measures pertaining to business arrangements, including arrangements for banking institutions and foreign banks that want to invest to restructure their Canadian branches or subsidiaries. The fourth category includes governmental and administrative amendments. Lastly, the process of applying the GST would not change a great deal, but significant changes would be made so as to streamline the administration of our taxation system, which is often a barrier to expansion and growth of some sectors.
The first area that is affected is health. The bill proposes to lift the tax on speech-pathology services.
My colleague from Saint-Maurice—Champlain touched on this yesterday, sharing his expertise in child psychiatry with the House of Commons. He explained that some children and groups in our society are more vulnerable than others. I am thinking about children who have serious language disorders and whose parents cannot use public services. To address their child's essential needs, they must use services other than public services. Often, GST is charged on these services, but we believe that they should be tax exempt. Such services are often expensive for needy families, but they are services the parents expect to receive. Consequently, this bill will lift the tax on speech-pathology services, which are essential to children's development.
Second, services for seniors with cardiovascular disease will be tax exempt. We know that cardiovascular disease is on the rise in Quebec, contrary to what we might have expected, because consumption of products that contribute to cardiovascular disease has decreased considerably. I am referring to smoking and drug use, among other things.
Nonetheless, we feel something needs to be done to alleviate the burden on seniors who are in precarious financial situations. Removing the tax from such services is as important as what is being presented in Bill C-40.
Another exemption in Bill C-40 has to do with social work services. Currently tax is applied directly to social work services. These services are particularly essential in areas of growing poverty.
In Montreal, there are so-called high-risk neighbourhoods that need essential resources and services. Unfortunately, for people in need of direct assistance—as it was called—and social support, believe it or not, these services are still being taxed. This bill proposes an exemption for these social services.
Nonetheless, the government could have gone further. Why stop at these exemptions? Why apply tax exemption only to speech therapy services, social work services, health services for our seniors who are experiencing cardiovascular problems? Why not extend this measure to other equally essential services? I am referring to services provided by certain health practitioners such as psychologists. If a child needs to consult a psychologist, his or her parents should not have to be taxed to use such a service.
We know that in our school boards there is currently a serious shortage of professionals. I am not talking about teachers, but professionals who are essential to the development of our children in our ever changing society. We must ensure that our children and youth in our schools can get the support they need. Unfortunately, limited financial resources often prevent these children from getting these services and force parents to use external services to meet essential needs. In my opinion, these services should also be tax exempt.
Another aspect has to do with the tax free status of certain products, specifically, the sale and imports of a product that can replace blood. Lastly, certain anti-anxiety drugs such as Valium and Ativan are also being given tax free status.
Basically, this bill makes certain essential services exempt from the GST, specifically in health care. However, the government could have made an even bolder move by expanding the types of services covered by Bill C-40.
Bill C-40 also covers another aspect, namely, the GST rebate for motor vehicles that are specially equipped for use by individuals with disabilities. In my view, in our so-called just society that aims to give everyone equal opportunity—and Quebec society has already asserted this equal opportunity approach—people with disabilities must be given everything they need to fully integrate into Quebec society, into our society.
This mobility is crucial for people who are losing their functional independence and people with disabilities, so they may access public services. Some Canadians are confined to their homes—for all kinds of reasons, including disabilities—which limits their integration into our society. We therefore welcome this GST rebate for motor vehicles that are specially equipped for use by individuals with disabilities.
Bill C-40 covers another aspect, namely, another GST measure, this time concerning charitable organizations. As we all know, these organizations are in precarious financial situations and are often forced to organize fundraising initiatives to survive or just to maintain administrative services. This is a common problem. Lack of funding is clearly a problem for charitable organizations. Yet, they provide a great deal of support to groups that, once again, are often very vulnerable. We see these well-established charities at work in our ridings, as they solicit us every year for a little help. Unfortunately, we have no programs or financial means available to be able to help them.
Examining a bill like Bill C-40 is a perfect opportunity for us to say yes, we can help them when it comes to taxes. We will support a bill that will exempt goods supplied with a property under short-term leases. What does that mean? It means that if a charity decides to acquire a good supplied by a property lessor in a short-term lease, this product would be exempt from GST.
To repeat, this helps out these charities and lightens their financial load. At the end of the day, we are not only helping charities, but also the individuals and groups who benefit from the services offered by the non-profit organizations. We commend the measure in Bill C-40 which aims to make goods supplied with a property for non-profit organizations GST-exempt.
The second GST measure is the transitional GST relief for a foreign bank that decides to restructure its Canadian subsidiary into a Canadian branch. We must have a better harmonized tax system. There is currently competition, which must be harmonized, particularly in terms of existing taxation in the United States. Transitional GST reliefs for the foreign banks that decide to restructure and set up shop here, in Canada, will only strengthen our financial market, our banking system, and the economies of Quebec and Canada.
The third measure is the exclusion from the GST/HST base of beverage container deposits that are refundable to the consumer. This is an interesting measure because our society has decided that sustainable development will serve as the cornerstone for its development. Such a society must encourage recycling initiatives. This is an unequivocal fact. However, although Quebeckers and Canadians have clearly affirmed their desire to focus on and accelerate the implementation of a beverage container recycling system—particularly in Quebec—there are still tax irritants, elements that prevent us from doing more in the areas of deposit-refund systems and recycling.
We must therefore make it easier to manage recycling and to exclude beverage container deposits from GST/HST. I believe that is a step in the right direction. Naturally it is not a panacea. It not enough to ensure that there will be a Quebec or Canada-wide recycling system based on a deposit refund system. However, it does remove a tax constraint and lessens the administrative burden on the application of a deposit refund system and recycling. In this regard, it is definitely a step in the right direction. It certainly will help organizations such as Recyc-Québec, which has carried out several studies and promoted this vital debate about the importance of implementing a deposit refund system.
There are other measures pertaining to the excise tax. I am thinking of, among others, part 2 of the bill, which amends the Excise Tax Act, 2001. Two significant changes are made by Bill C-40. First, the bill seeks to improve the operation of the excise tax and then to adjust administrative practices in order to develop and promote the growth of a certain number of industries, particularly measures pertaining to alcohol and specifically wine.
The objective of Bill C-40 is to encourage the growth of the wine industry in Canada. It is not a measure that benefits only the rest of Canada; it is a measure that will also benefit Quebec. We know that there are currently 42 vineyards in Quebec. More than 1,000 hectares of vines are now under development and 300,000 bottles of wine are produced each year. That shows that there is a vibrant wine sector at work in Quebec.
The latest competitions held in Quebec and in Canada have demonstrated the strength of this sector. Last month, from April 20 to 22, an important competition known as the Coupe des Nations was held as part of the Festival de la gastronomie de Québec. Believe it or not, Quebec was one of the standouts. The Quebec vineyards really stood out. They won 34 new medals for Quebec wines. Quebec vineyards won almost 35% of the medals awarded during this festival, at which many vineyards were represented. What does that prove? It proves that there is energy at work that we must maintain and that we must strengthen in the future to ensure that these vineyards can benefit from tax breaks.
What is there in Bill C-40 that will provide major benefits to this industry? It provides for deferral of tax by small vintners selling wine on consignment. They will not have to pay the GST until the product is sold. That is significant because it means that the vintners, who are very often small businesses—not even medium-sized businesses, except in very rare cases—with very limited resources at their disposal, will be able to put off an expense until the product has been sold.
Small producers will make their tax payments once the product has been sold. This will provide much more breathing room to the small vintners. In addition, our homegrown products in all regions of Quebec will certainly benefit from such a measure.
I will close by saying that we are in favour of Bill C-40, because it gives hope to the people who are most vulnerable in our society, it ensures increased growth in some essential sectors of Quebec economic activity, and it lightens the tax burden on certain groups in our society. All of this promotes a more sustainable society that favours fairness and economic growth.
The House resumed from May 14 consideration of the motion that Bill C-40, An Act to amend the Excise Tax Act, the Excise Act, 2001 and the Air Travellers Security Charge Act and to make related amendments to other Acts, be read the third time and passed.
Sales Tax Amendments Act, 2006
May 14th, 2007 / 6:15 p.m.
Jean-Yves Laforest Saint-Maurice—Champlain, QC
Mr. Speaker, I am extremely pleased to present today the results of my consideration and analysis of Bill C-40, which I have studied closely.
This bill is divided into three parts. The first part aims to institute corrective steps to improve and specify certain measures having to do with the collection of the GST. The second part amends the act in order to zero-rate particular products and services. It then turns to the excise tax, laying out certain measures related to the taxation of wine, beer and spirits. The third part amends the rules on the air travellers security charge collected at various airports.
Let us take a closer look at each of these three parts. First of all, the measures concerning the GST and the HST, which applies in some provinces, are divided into five distinct categories. Also—and I find this quite interesting—this bill modifies rules that apply to health services, charities, business arrangements, governments and the process by which the GST is administered.
With respect to health, this bill amends the act to confirm—and this is very important to me—the exemption for speech-language pathology services. This important amendment confirms the tax-exempt status of these services and makes it easier for young people struggling with language difficulties to access them. As I said, this is a personal issue for me. I spent many years working in health care, specifically, in child psychiatry. I know that this measure will be very beneficial to children struggling with this difficulty and to their parents, because they are the ones who pay for therapy. Parents of children with such difficulties really appreciate this kind of tax relief. They need support, both financial and moral.
I am sure that this tax exemption will relieve parents who have to seek this kind of care of an enormous burden. During my years in child psychiatry, I saw countless parents struggle helplessly with the cost of these services. People were torn. Sometimes, they said they did not have enough money to ensure proper treatment for their children. I think that this bill will really lend a hand. This is an important part of this bill. It will give hope to these parents who need a lot of support as they try to provide their children with the services they need to develop normally. Now they will have the resources to ensure their children's optimal development. In addition to helping children, this measure will also help seniors access these services.
With the rising incidence of heart disease and stroke, many older people need speech-language pathology services. Often, older people have limited financial resources.
I think this measure will help children struggling with language difficulties, their parents, and various seniors who have unfortunately had accidents and need these services.
The bill also exempts health-related services rendered in the practise of the profession of social work. Earlier I heard one of my colleagues ask whether we should extend this to other professions, in particular psychologists, and potentially remedial teachers. It should really be considered, because these kinds of services most often target people with severe difficulties, and the government could provide additional assistance to these people.
Such measures are important because, among other things, they facilitate access to private social work services. So the people who really need it have quick access to these services without constantly wondering if they can really afford them. This measure in the new bill is very important.
We know that when the legislation takes effect, the government will be able remove taxes from sales and imports of a product that can, in some instances, replace blood, a very important alternative for saving the live of a seriously injured patient.
This bill will also restore the zero-rated status of a group of drugs, with very scientific names, known as benzodiazepines. This is extremely important because they are medicinal derivatives used by individuals suffering from anxiety. We are talking about such drugs as Valium, Ativan and others that relieve the anxiety of those suffering from more or less serious mental illnesses. They are also used to help with drug or alcohol withdrawal. This measure will once again relieve the financial burden for those individuals who require these types of medications. Quite often, the individuals who need these services or medications find themselves in more difficult circumstances. Therefore, we must support any measure that can help reduce expenses for these individuals and that also seeks to improve access to better and more significant health care. That is what we are going to do.
Finally, still in the health care sector, the bill will provide for the reimbursement of the GST for those who use specially equipped motor vehicles. I am thinking mainly of those with severe physical handicaps. When these individuals resell or have to adapt their vehicles, they need the government's help, once again, to make it easier to access services and, at the same time, improve their quality of life. Their everyday life changes considerably when governments provide more readily accessible financial assistance.
Charities will be affected by different measures in this bill. One amendment exempting supplies by charities of real property under short-term leases and licences will be extended to any goods supplied with such property. Hence, the range of services provided by charities is expanded without the rate of taxation necessarily being too high.
This measure represents savings for such organizations, which can improve their service to a clientele that, once again, often consists of the most disadvantaged in our society. This gives them some room to manoeuvre, which is quite often required to maintain their activities. They need government support and that is provided by this bill.
As far as business arrangements are concerned, the bill amends the GST Act. It provides transitional relief on the initial asset transfer by a foreign bank that restructures its Canadian subsidiary into a Canadian branch. This measure will act as an incentive to foreign banks in Canada to restructure their subsidiaries as Canadian branches, which will promote more competition in the Canadian banking sector.
The bill also removes technical impediments that hinder the use of existing group relief provisions under the GST/HST. This amendment simply clarifies the rules for the application of legislation already in effect.
In addition, the bill simplifies compliance by excluding beverage container deposits that are refundable to the consumer from the GST/HST base. This will make it easier for businesses to manage collection and will lighten the regulatory burden associated with deposits, with a view to promoting more recycling and environmental protection. The importance of it all becomes more obvious to me in the light of all the debates that are held on the various measures dealing with the protection of the environment here in the House and elsewhere. I think we should support any measure that can help save the planet. This might not be an impressive measure, but it is by making small adjustments that we will succeed and achieve results.
The fourth category applies to the government. If the bill is passed, it will exempt a supply of a right to file or retrieve a document or information stored in an electronic official registry. This provision will allow municipalities and other government agencies to provide information to individuals at a lesser cost than before. With such a measure, the individual comes out a winner since access to information will be easier.
The bill also ensures that a small supplier division of a municipality is treated in the same manner as a municipality that is a small supplier. Thus, fair treatment will be respected.
Finally, it is important to note that this is a significant change that must be taken into account in the application of the legislation. The bill adds a discretionary power—which is interesting— for the Minister of National Revenue to accept late-filed applications for the GST New Housing Rebate and the Nova Scotia HST New Housing Rebate for owner-built homes, where exceptional circumstances have prevented the applicant from meeting the normal filing deadline.
These are measures that support the ordinary citizen, who is often overwhelmed by all the paperwork involved in applying for an exemption or a rebate. Sometimes people are denied their right because they did not manage to fill out the entire form on time. In that situation, we are helping them in a very tangible way.
The bill adds a discretionary power for the Minister of National Revenue to accept late-filed elections between closely related financial institutions for adjustments that they are required to make for the provincial component of the GST and the provincial sales tax.
As far as exchanging information is concerned, it permits the Minister of National Revenue to exchange GST and QST information in Quebec with foreign governments that are signatories to the Convention on Mutual Administrative Assistance in Tax Matters. The government will thereby be in a better position to deal with tax evasion. How much money is lost through the entire tax evasion scheme? How many people do not pay taxes when they should? If, through measures that will allow for a better exchange of information, we can limit tax evasion, that is a major bonus for the government.
Finally, the bill gives the Chief Statistician of Canada the discretionary power to provide statistical information concerning business activities to the provinces, similar to an existing provision in the Income Tax Act. This new power will give the provinces better access to income statistics, which will allow them to better focus their public policies.
I would now like to discuss some of the measures that propose an amendment to the excise tax. These measures deal with tobacco and seek to give greater precision to certain provisions contained in the Excise Tax Act in order to better defend against the smuggling of tobacco products and facilitate collection of taxes on tobacco. The bill includes measures to extend the requirement to identify the origin of tobacco products to all products, including those sold at duty-free shops or for export.
It clarifies that cigarettes, tobacco sticks, fine-cut tobacco or cigars, but not packaged raw leaf tobacco, may be supplied to the export market or the domestic duty-free market.
As for alcohol, the bill has two main objectives. First, it allows provincial liquor boards and vintners to possess an equipment similar to a still for the purpose of analyzing substances containing ethyl alcohol without having to hold a spirits licence. I believe that, for the security of citizens, vintners must be better able to ensure the safety of their operations and products.
This measure will help liquor boards, especially in Quebec, and vintners reduce the huge paper burden as well as major costs for these licences. Moreover, to promote the growth of the wine industry, the government, by passing this bill, will allow for the deferring of the payment of duty by small vintners selling wine on consignment in retail stores operated by an association of vintners.
There are also measures to help vintners. My colleague talked about Quebec wine producers earlier. In 2006, there were 42 vineyards in many regions of Quebec, including Lanaudière, the Eastern Townships, Montérégie and the Lower Laurentians. Every year, over 100 hectares of vines are cultivated in Quebec, and the sector has experienced steady growth over the past few years. This measure will help wine producers and will diversify and increase wine production in Quebec. The main products are excellent: white wine, ice wine and fortified wine. This measure will promote the development of this industry, improve marketing of products made in Quebec and support the province's agro-tourism opportunities, which are becoming more and more popular. I am thinking of Quebec's Wine Route and its network of small producers who will appreciate this support for the development of their industry.
The third and final part of the bill includes previously announced relief provisions with respect to the air travellers security charge. It also addresses the Air Travellers Security Charge Act. Basically, the bill relieves, in particular circumstances, the air travellers security charge in respect of air travel sold by resellers or donated by air carriers.
The bill provides authority for the Governor in Council to add, delete or vary by regulation the schedule of listed airports. For example, the bill will immediately change the status of three Quebec airports to ensure that standards are appropriate for the market and market demands.
The bill removes La Grande-3 and La Grande-4 from the list of airports subject to the surcharge under the Air Travellers Security Charge Act. This measure reflects the special nature of these airports where security is not as big an issue as it is in larger airports that have different goals. This corrects a situation that these airports found challenging.
However, the amazing increase in air traffic at the Mont-Tremblant airport, which is somewhat the opposite, has meant that the minister has decided to include it in the list of airports now subject to the air travellers security charge. This is a good thing because there is a lot of international traffic at this airport.
Consequently, it is clear that all these measures, changes and improvements mean that Bill C-40 is evidently in the best interest of Quebeckers. We are convinced that the people as a whole will support us. The Bloc Quebecois will then vote in favour of this bill.
I would like to end by saying that Bill C-40 is designed to correct the technical shortcomings I mentioned earlier pertaining to the GST and the excise tax. The tax would be removed from certain medical services so as to facilitate access to them and lighten the tax burden for charitable organizations. The bill contains measures that will benefit small wine producers. It tightens the rules governing the production and sale of tobacco products in order to fight smuggling and it adapts the air travellers security charge to the present situation in Quebec.
The Bloc Quebecois is in favour of this bill and will support it.
Sales Tax Amendments Act, 2006
May 14th, 2007 / 5:45 p.m.
Paul Szabo Mississauga South, ON
Mr. Speaker, I want to congratulate a number of the members who took the time to review some of the provisions of Bill C-40 as they relate to their regions or matters which are of particular interest to them or their constituents.
In the question I asked of the previous speaker, I was not being facetious. I looked at the bill and took the opportunity to review its various provisions. Being the co-chair of the scrutiny of regulations committee, it made me wonder why so many of these provisions which appear to be clarifying or directed at operational efficiency are not necessarily changing the legislation with respect to the exigency of a tax.
One member described this as an omnibus bill. That is exactly what it is. It touches a number of acts. It does not read as a story from beginning to end where everything builds on everything else. In fact, one has to have in hand the related legislation and the specific sections to which those changes may relate and then they must be looked at in context. I suspect that if we were to take all of the related documents that tie into this to help us understand what it really meant, it would probably take days and days simply to peruse everything.
Having said that, it certainly makes a good case for those who craft the legislation to consider the use of regulations more fully in terms of providing the tools to those responsible for accountability of the legislation to be able to make the kinds of changes where fairness or operational efficiency, et cetera, may be the object. Any regulations appended to a piece of legislation must be authorized by the legislation itself. We cannot make law through regulations, but we can certainly provide the detail.
As a chartered accountant I have spent many years playing around with provisions within the income tax system. That document is very unwieldy and cumbersome, but in some respects it takes into account some of the other tools that are available to modify legislation or at least the application of legislation by the use of regulations. There is a variety of other documents, whether they be interpretation bulletins or information circulars, which also help Canadians.
I wanted to raise that point simply because it happens a lot in this place. It is very difficult for members of the finance committee who have the opportunity after second reading to have witnesses from the department come forward to provide explanations. Everyone is not a tax expert. What is needed is the lay language, what we lay out for other parliamentarians.
The way this place operates, very often parliamentarians have seconded the responsibility to do the due diligence on legislation to their colleagues at committee. They accept that the work has been done in a proper fashion and that the key elements of concern have been raised with officials and other witnesses, who may be stakeholders and have come before the committee to deal with it. It makes it very awkward to ask what the relevance is of the third reading debate if we cannot really get into some of the detail.
There is a lot of detail here. I am not sure whether or not there will be many answers forthcoming from the House. It would be a very interesting process to try to explain some of these measures. For instance, there is a page and a half which deals with the definition of what a returnable container is and a returnable container charge. The amendment in one aspect takes about a half a page to insert the words “the returnable container in a province”. That is the change. I am not sure whether or not there is anything more to that, other than there has to have been a dispute at some point in time where someone challenged the legislation on a clarity issue and this was simply a matter of trying to resolve that and put that issue to bed.
A number of members talked very well with regard to the changes as they affect charitable groups and organizations. I certainly concur with the direction of the changes that have taken place, particularly since most members of Parliament have been extensively involved with charitable groups. Those groups have had very good representation on the Hill. A number of the points they have raised, whether it be directly with members or through related committees, have been very helpful.
Scanning down the list of issues, some who may be watching will probably wonder why we are talking about the GST and HST. That came up in the 35th Parliament when there was legislation to provide for the replacement of the GST with a revenue equivalent, which was taken up by certain provinces. The HST, which stands for harmonized sales tax, rather than goods and services tax, combines both the federal and the provincial taxes into a one line item.
In this bill the principal measures that were taken with regard to the goods and services tax, or where applicable the harmonized sales tax in certain provinces, have to do with a couple of key areas, certainly in the area of health. With regard to health, Bill C-40 confirms the GST-HST exemption for speech language pathology services. It also exempts health related services rendered in the practise of professional social work, zero rates sales and the importation of a blood substitute known as plasma expander. It restores the zero rated status of a group of drugs collectively known as benzodiazepines. It broadens the specially equipped vehicle GST- HST rebate so that the rebate applies to motor vehicles that have been used subsequent to being specially equipped for use by individuals with disabilities.
I looked at those specifically. I cannot say that I have looked at much more in the bill simply because there was not sufficient time to do it properly. The one area where I thought the bill opened up some interesting horizons has to do with the exempt status of health related services rendered in the practise of the profession of social work.
If we look at the related legislation and look at the practise of social work, I have a feeling that the discussion of this and maybe the change that has been made here may open up a broader range of requests for the same exempt status with regard to social work as defined. I am not sure that is a bad thing either, but it does point out that the tax system is never static.
When certain changes are made, others in the same or similar activity want to examine the rationalization for a change in the Excise Tax Act or the Income Tax Act. They want to more fully understand whether or not we are talking about providing benefits to certain groups that may have a stronger lobby or that may have come up with certain other challenges or interpretations to the application of existing rules, to changes in regulations or to changes in the laws in other jurisdictions. We often want to look at those to ensure we are keeping up with the trends with an international filter on what we do.
I thought that was interesting and I certainly support it conceptually. I do not know what might come up, but every time we touch something, others see a relation to their work somehow.
On Friday I had an opportunity to work in my constituency office. I had a visit from a gentleman who has a business which provides home care for seniors. It is an expansive home care service, and includes such things as bathing, medication, shopping, almost whatever service the senior might need. The gentleman asked whether there was any way he could get some breaks. It is an important job and he has to pay people, which is his biggest expense. He would like some sort of subsidy or assistance because, like most social work, it is generally some of the lowest paid work on a per hour basis of most professions. There are a lot of people who are paid very, very poorly in the provision of social related work.
I am not sure how we get from here to there, but this is part of that whole argument about the prosperity gap, about the difference between the rich and the poor. That gap is widening. There are only certain amounts of money. For people who require social assistance, as related to the social work definition, there is only so much that can be afforded and only so much that can be taken out of the customer to provide the services. I flag that issue. This may open up some interesting horizons for a number of businesses that qualify under the current definition of the profession of social work.
There is the discussion also related to charities. As I said, I certainly agree with the exemption of supplies by charities of real property under short term leases and licences.
There is a section on business arrangements. I do not think I can add any more to the debate on that.
There was some discussion about tobacco and alcohol. I thought it was interesting. This morning my private member's bill related to alcohol warning labels was before the House. I looked very carefully at the provisions in Bill C-40 to see if there was a tie-in. I suppose the only tie-in is that they both relate to alcohol, but not with regard to the tax.
In any event, with regard to tobacco, this bill extends the requirement to identify the origin of tobacco products to all products, including those for sale at duty free shops or for export, consistent with the Framework Convention on Tobacco Control, which is an international treaty on tobacco control. It also clarifies that cigarettes, tobacco sticks, fine cut tobacco and cigars, but not packaged raw leaf tobacco, may be supplied to the export market or the domestic duty free market. These changes were made, I am sure, from the interventions of the duty free industry and certainly those who are involved in the export market. We have had a number of discussions over the years about how we operate vis-à-vis other countries with which we have trade relations.
With regard to alcohol, the bill authorizes private laboratories, provincial liquor boards and vintners to possess a still or similar equipment to produce spirits for the purpose of analyzing substances containing ethyl alcohol, which is beverage alcohol. Ethanol is another word that is used to describe it. It is a poison, but I will not go there because that is a whole other area of interest, certainly with regard to me, but in any event, with regard to analyzing substances containing ethyl alcohol, it authorizes laboratories, boards and vintners to possess a still or similar equipment without holding a spirits licence.
That is interesting because it seems to me that in our legislation having a licence to do something, to possess things and so on, is a precursor to doing certain activities. In this particular case, I am sure that probably a number of petitioners made argument before the tax authorities that in the case of private laboratories or provincial liquor boards and vintners, where the analyzing of substances takes place, the need for a licence was not necessary. I suspect that we are talking about some other regulatory implications, but in this particular case I suspect that the licensing process may be a problem for some of them.
The other area I simply want to comment on is the GST rebate program for tourists. As we know, this has been a very contentious issue for a number of members of Parliament, particularly with regard to those members who are in border areas.
Tourism is an extraordinarily important part of the Canadian economy. I had the opportunity to chair the outdoor caucus of our caucus in the last Parliament and I got to know quite a bit about the tourism industry. Particularly after SARS, which was I think what spawned that caucus, that group of parliamentarians interested in the tourism impacts, it was amazing to find out how sensitive the industry was to disruptions that in fact really did not affect tourist areas but were more in the urban centres. Yet we found that in a broad range of goods and services, whether it was lodging, rental of boats or fishing equipment or other purchases of equipment, all of those things took a dramatic decline.
There is another aspect. I think those members who are from the Maritimes, and in particular P.E.I., will tell you that tourism is down very substantially now. They believe, whether because of SARS or because of the GST rebate program for tourists, that those who had come here in the past suddenly found that this was enough to make them look for substitutes. They started to look for other options. In fact, many found that the substitutes, which were a better economic deal for them, had the same or similar benefits or enjoyment they had when coming to Canada.
Therefore, I am very pleased to see that this also has been resolved. I think it is important that Canada's tourist industry continue to be well supported. It is unfortunate that some damage has been done. In an economic downturn, and in particular where the dollar has been quite strong, we have to be vigilant about the unintended consequences of certain moves.
I think it behooves all of us to continue to urge those responsible for the accountability of our financial policy to think it through very carefully and to do the consultations that are necessary to ensure that our tax system remains not only operational but fair.
Sales Tax Amendments Act, 2006
May 14th, 2007 / 5:20 p.m.
Paul Crête Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
Mr. Speaker, the intent of Bill C-40, which we are studying today at third reading, is to correct various weaknesses with the GST and the excise tax. First, I would like to talk about some aspects of the excise tax, more precisely the measures on tobacco and alcohol, and some other enforcement aspects.
The measures to make some provisions on tobacco in the Excise Tax Act more precise should help the fight against tobacco smuggling while simplifying the collection of the tobacco tax. The bill will extend the requirement to identify the origin of tobacco products to all products, including those for sale at duty-free shops or for export, consistent with the international Framework Convention on Tobacco Control.
We can see that the whole tobacco smuggling issue is something that comes up on a regular basis. It seems that smugglers, from one generation to the next, are more and more original and innovative in their smuggling methods. We have heard a great deal from those concerned, from grocers among others. A kind of secondary, parallel market has sprouted up across Quebec and Canada.
Now the solution lies in part in the measure contained in this bill. We will probably need to ask for other measures to add to the punishment aspect. In any event, we will have to make sure that we really know where the tobacco comes from and that we also know, when a pack of cigarettes is sold outside a reserve for example, where it comes from and where it was produced. There would be no more ambiguity then and the customer would automatically know where it comes from and could not pretend that he or she did not know anything about the situation. This has a major economic impact on the regular network, the legal sales network, including groceries and all the other businesses that sell cigarettes.
Of course we will keep on with the campaigns to reduce tobacco use and hope that tobacco use will diminish. As far as the legal aspect is concerned, we have to make sure that the current law is properly enforced. There is at least one measure that seems to go in the right direction and this is one of the reasons why we will support this bill.
As far as alcohol is concerned, part of the bill deals with some level of modernization. Provincial liquor boards and vintners would be allowed to possess a still, or similar equipment, to produce spirits for the purpose of analyzing substances containing ethyl alcohol without holding a spirits licence.
As we know, our legislation still includes old provisions dating back to the days when some very strict restrictions were in effect regarding alcohol consumption. Some of these principles are still found in various acts, and even in the basic structure of the Quebec liquor corporation act. We are finding out that, in everyday life, with the changes occurring in consumption habits, it is important to provide local producers with as many tools as possible to allow them to develop good products, because this will often help them secure new markets. Indeed, sometimes they are not able to do so at the international level, because those products that are imported in large volumes are often sold at a much lower cost. This is why it is important to move forward with such measures.
A lot of changes are occurring. In my riding, a few years ago, a wine producer created the Vignoble du Faubourg. This producer was awarded the Grand prix du tourisme in Quebec, and it has achieved promising results. Authorizing the use of this type of tools will definitely allow us to move forward in this area.
There are other things in this bill, including measures pertaining to the air travellers security charge, and some tax relief. Other measures that deal with various areas include: a tax exemption for certain medical services; a lower tax burden for charities; helping small vintners—as I mentioned earlier—and measures relating to tobacco.
So, for all of these reasons, the Bloc Québécois will support this bill. This is a piece of legislation that includes many small provisions. A large number of measures are proposed, such as those in the health sector.
For example, the government is amending the act so that, in the future, speech-language pathology services will be tax exempt. This amendment to the act will confirm the tax exempt status of those services.
The change will facilitate access to services for seniors who suffer strokes. There are many interesting measures. There is one that ensures that the exemption of supplies by charities of real property under short-term leases and licences extends to any goods supplied together with such real property. That will allow charities to fulfill their social mission with fewer financial pressures.
There are also measures concerning business arrangements. The Goods and Services Tax Act will be amended to provide transitional relief on the initial asset transfer by a foreign bank that restructures its Canadian subsidiary into a Canadian branch.
This last measure will give a foreign bank which owns a Canadian subsidiary the tools it needs to restructure it to the benefit of the Canadian economy. That will help foreign banks doing business in Canada to transform their subsidiaries into Canadian branches and will stimulate an increase in competition in the Canadian banking industry. We know that that industry will see more change in the future.
The debate on bank mergers is not over yet. Right now, measures are being introduced to allow Canadian banks access to foreign markets but when foreign banks have subsidiaries here we want to facilitate matters for them, depending on the context and according to the law.
The bill removes technical impediments that hinder the use of existing group relief provisions under the GST. This amendment simply clarifies the rules of application of the legislation already in effect. It is very technical in nature. In addition, the bill simplifies compliance by excluding beverage container deposits that are refundable to the consumer from the GST base. This will make it easier for businesses to manage collection and will lighten the regulatory burden associated with deposits, with a view to promoting more recycling and environmental protection.
The measure also clarifies the treatment of the right to use certain types of amusement or entertainment devices, such as gaming devices, when provided through the operation of a mechanical coin-operated device that can accept only a single coin of twenty-five cents or less as the total consideration for the supply.
This obviously is an omnibus bill that addresses a wide range of specific issues.
During speeches by my colleagues in this House I have often raised the issue of GST for tourists. I wanted to see in this bill or in any decision made by the government, assurances that all the negative effects of the measure announced in the budget would be eliminated.
The government probably realized in good faith that the GST rebate program was costing too much. It decided to eliminate the program, when it could have tried to find another way to manage it. Some countries that have this type of program simply outsource the management of the program. Thus, it is businesses—for example, duty free shops or other types of businesses—that ensure the administration of the tax and simply reimburse the government what it is owed. This eliminates a very costly bureaucratic process.
We should look into these avenues in order to find a way to maintain this program, which provides a significant competitive edge for the tourism industry in Canada and Quebec. Similar programs exist in other countries and some original ideas have been proposed.
What is more, a number of months ago, the Conservative government made systematic cuts in several areas. It was like these cuts were made blindly, without any consideration to their impact. We now have a concrete example that applies to the purpose of this bill before us and that calls for us to move forward to correct the situation.
I think that it is fair to say that this bill, which was introduced quite a while ago, puts forward measures worth recognizing. I would like to come back on those in relation to health, an area where speech therapy is under consideration for becoming zero rated. I do believe this is a very positive step, which would confirm the zero-rated status of speech therapy services and facilitate access to these services for youth with language disorders.
Also, this amendment will facilitate access for seniors who suffered a stroke. This is why I think it is important that these measures be implemented as soon as possible.
The sales and importations of a blood substitute known as plasma expander could also be zero rated. It is a little complicated to explain, but basically a blood substitute can be used in the treatment of people who have suffered massive blood loss, severe burns or an open fracture.
The intention was to ensure that these products would be zero rated. People's health is important, and these kinds of measures have to be put in place.
The government will restore the zero-rated status of a group of drugs collectively known as Benzodiazepines. These include medications such as Valium, Ativan and other similar products used primarily to treat anxiety, for alcohol withdrawal or as a preanesthetic medication. These help and improve people's health.
With respect to charities, the bill will allow the exemption of supplies by charities of real property. I think that is a worthwhile measure.
As a whole, this bill deserves to be passed by this House. It is currently at third reading. It has been considered and amended where necessary. It also announces work that will have to continue in these areas.
Concerning the GST and the excise tax, a thorough examination and technical improvements are often needed. Some have been suggested during this debate. It is now time to pass this bill and to ensure that it will really fulfil its role, that it will make some situations more human and that the very concrete work done to allow small wine businesses, for example, to make a name for themselves and to develop, will be made more effective.
This bill is non partisan in nature and does not require an extensive debate. Legislators have to intervene in very contentious areas, but, at times, they must support bills that are the result of in-depth discussions among participants and of recommendations coming from different areas.
Time spent on drafting a bill often impedes a lot with action. It is important to act quickly. In this case, we have already waited too long to implement some of these measures. That is why I want this bill to pass as quickly as possible.
Sales Tax Amendments Act, 2006
May 14th, 2007 / 5:20 p.m.
Paul Crête Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
Mr. Speaker, I found the speech by the hon. member particularly interesting. Of course, the Bloc will support the bill. However, I would like to draw the member's attention to an addition he certainly noticed.
I refer to the problem the government created when it abolished the GST rebate for tourists. We succeeded in getting some changes to the program to protect, for example, outfitters and big meetings and conventions. However, the duty free shop owners and operators are still making representations.
Since the member is an active member of the border caucus, he must undoubtedly be concerned by the issue, all the more so because there is a big duty free shop in his riding, close to the American border.
I would like to know if he thinks that the government should change the unfair situation in its future bills. If it could be done through bill C-40 it must be possible to do it in the future.
Sales Tax Amendments Act, 2006
May 14th, 2007 / 4:55 p.m.
Claude Bachand Saint-Jean, QC
Mr. Speaker, it gives me pleasure to rise today to speak to Bill C-40 on behalf of the Bloc Québécois. With our research staff and those responsible for this issue, we conducted a review of this bill and, all in all, we have found very little to criticize. A lot of people, in Quebec among other places, will be pleased with many of the measures being introduced. I would like to address the first one, which is to make some medical services exempt from tax, thereby facilitating access to such services.
I remember that physiotherapists came to me a few years ago. They told me that it was important to allow these types of services to be exempt from tax. Out of need or because of their insurance, many people who could not afford to wait for public health care wanted to go see a physiotherapist after a car accident or an occupational accident. Systematically, these people had to pay tax on those services.
Then, under a ways and means motion, the previous government considered the possibility of looking at which types of medical services could be made exempt from tax from year to year.
This assessment had to be done every year. So, every year, the government determined whether it had properly identified those services that should be taxed and those that should be exempt from tax. It would ask itself, for example, if it was appropriate not to tax physiotherapy. The following year, around budget time, the word would often go around that physiotherapy would be taxed.
Physiotherapists visited MPs at their offices. I remember fighting with them for their services not to be taxed. Eventually, the government of the day decided not to tax them. It will be much better, however, to have legislation on that. This will avoid having this annual debate about what to tax, what to exempt from tax and what should be kept on the list of health products that should be exempt from tax.
This will take us closer to a standard of services that all recipients can find relatively interesting. It is not an easy thing to do when your health or physical well-being is affected to go see a health professional in an emergency or because you are required to under your insurance plan. In such cases, one has to pay not only the fee for services, but also the GST on that fee. It think it is completely worthwhile to have a list.
This is something we see quite often with speech-language pathology. Bill C-40 refers specifically to speech-language pathology. I would point out that problems with hearing and pronunciation are becoming increasingly common in our society.
I know parents whose children have speech problems, for example. They are having a very hard time accepting the fact that they have to wait two years to consult someone in the public sector. They often have insurance that allows them to turn to private clinics. When these parents go to consult a speech-language pathologist, it is much the same as with physiotherapy, which I mentioned earlier. These people have to pay for the professional services and then pay tax on top of that.
Since speech problems are on the increase, it is important, when people have no choice but to consult the private sector, that they not pay an additional tax.
It is somewhat similar to access to surgery. The taxes can be deducted. There are situations in which waiting is not an option. It should be recognized that waiting may not be an option in the case of physiotherapy and speech-language pathology services, and people should not have to pay taxes on top of the cost of professional services.
Social services are another part of medical services.
Many people these days want to consult social workers to help resolve children's behavioural problems or attention deficit problems.
As the father of a daughter myself, if she had required such services at age six or seven, I would not have wanted her to have to wait two years before meeting with a specialist in the field of social work, while she was having integration problems or any other such problems at school. Thus, I feel it is important to recognize parents' financial efforts and not make them pay additional taxes. I think that would be the right approach.
Furthermore, there is also a tax burden for charities. As a former unionist, I worked closely with charitable organizations. People in these organizations were close to the union movement. We defended a shared cause, that is, a more social approach within our society, a more equitable and fair approach. These people work year round for excellent causes. These causes might involve church groups or any type of organization that is a registered charity. In my view, the bill's new provision will be advantageous for them.
For example, a business owner who rents a shop in downtown Saint-Jean or elsewhere in Canada can deduct both the tax and the rent from his income taxes. If an owner gives space worth $10,000 in one of his buildings to a charity group, he can forego the rent and deduct it from his taxes. I think that really helps people who are supporting an important social cause.
I mentioned churches, but that might not exactly apply because they often own the premises they need to carry out their activities. This would apply more to the many registered charitable organizations that should have the opportunity to use premises for a minimal cost, that is, rent-free with no obligation to pay the rent at the end of the year. Often, the cost of rent can force an organization to cut services.
For example, if charitable organizations are allowed to use space for free, they can provide services to the public. These services are very important; nowadays, many people cannot get by without them.
We also really like the measure that supports small vintners. In fact, this affects me personally. As the member for Saint-Jean, I have to say that in Quebec, wine producers have been having a lot of problems lately. There have been some issues with the Société des alcools du Québec. It made no sense that liquor stores in Quebec were stocked with wines from all over the world, but not wines from Quebec. When I shop at the LCBO, Ontario wines are on every shelf, as are British Columbia wines. In Quebec, there were problems with that. People had to get their wine directly from the producers. Then they were hit with an excise tax, which made them less competitive. Wine production is becoming more and more competitive. Now, even the French acknowledge that they are in a very competitive environment. Wines come from all over. Stores now carry wines from South Africa, all over Europe and around the world.
Since this is a very competitive market, we should give a helping hand to the vintners. We should tell them that they no longer have to pay the excise tax. This would give them the latitude to probably offer more affordable prices. I do not think that the producers would put the entire savings from the excise tax in their pockets. I think they would pass on the savings to consumers, thus making these wines more competitive.
We like some other provisions, such as the ones on tobacco.
There are some clarifications on the provisions of the excise tax to better fight against contraband tobacco products. It is about time. We are not the first to think of this, since even the Romans thought to tax luxury goods. In today's society, we consider taxing unhealthy products, such as cigarettes. This is nothing new. Rome thought of it before us. Given all the harmful effects of tobacco, I think it is important to maintain the level of taxation. Smuggling must also be avoided, and I think that the current provisions will ensure that the origin of the tobacco product must be known.
We will have to deal with the fact that on aboriginal reserves, there are many of these little smoke shacks that sell tobacco products without tax, products whose origins are unclear as well. I regularly drive through part of the reserve at the exit of the Mercier bridge. It goes from one side of the border to the other. Some measures in Bill C-40 will make it possible to better control cigarette smuggling. It is not acceptable that some people can get away with this, while the corner store in downtown Saint-Jean must pay the total price. Conditions are not tough enough; all the corner stores must sell cigarettes with prices and taxes indicated, while elsewhere, such as on the reserve, for example, things are different.
Thus, I believe that this measure will not only get a handle on the problem, but will also allow the government to generate some revenue. This is what I mentioned this morning about Bill C-33. When an illegal trade develops and is almost entirely untaxed, it is the government that loses revenues, because some people will buy their tobacco products there instead of at the corner store.
Therefore, we encourage this measure, because it will try to finally put an end to cigarette smuggling and, if we really succeed, it will put more revenues in the coffers of the government, which will be able to spend some on all kinds of services and will be able to improve health or education services, as I mentioned this morning.
The same goes for alcohol. In the bill, some overtures have been made about the objectives. First, it allows provincial liquor boards and vintners to possess a still . This was previous illegal. Personally, I know someone—I will not tell his name—who would give me a bottle of grappa once in a while. He did not sell it to me; this was totally legal, I tell you right now. However, to produce grappa, you must have a still and a licence.
Before, one had to go through many people and many steps, and there were costs associated with these steps. The bill will save the provincial boards all these steps and costs inherent in the purchase of this equipment used to produce and sell alcohol. This legislation will allow people, whether they be wine producers or not, who wish to make grappa or any other type of wine, to do so legally. They will be able to buy these stills.
Moreover, another type of illegal trade will be eliminated. I was personally happy to be given a bottle of wine by this person, but maybe other producers were illegally selling their production and the government was losing out on these revenues. This will allow such companies to operate legally, to obey the law and to provide the government with some revenue.
I would also like to talk about the security surcharge at some airports.
After the events of 9/11, I remember sitting on the legislative committee where senators and MPs discussed a considerable surcharge—based on the number of passengers—to provide all airports with the necessary equipment to fight terrorism.
Now we learn that this charge will be eliminated at certain airports. In my opinion, this will allow airports to avoid being crushed by the weight of this surtax. We note that the La Grande 3 and La Grande 4 airports will no longer be subject to the charge
However, this is offset by the fact that certain airports that were not on the list—the Mont-Tremblant airport in particular—will now be added. There has been a significant increase in passengers at this airport because this part of Quebec is experiencing tremendous growth. Thus, they will be taxed and the charge will be added.
In other words, applying a charge to an airport that is already very popular and that is already making a bit of money, is preferable to applying a charge to all airports. Small airports would have trouble because each time a plane lands, a surtax is charged. Thus, this is significant for the budgets of small airports and we truly approve of this measure.
There are a number of provisions in this bill that we truly like.
Given that I have the time, I would like to go back a bit. Earlier I spoke of speech language pathology, but only with regard to young children who have hearing or speaking impairments. However, this measure will also help individuals who are slightly older.
I believe that many seniors may be receiving treatment for speech-language pathology. For instance, I am thinking of my father who suffered a series of strokes. Rehabilitation is a difficult and often lengthy process because of the long wait times for health care.
People with insurance could afford treatment for speech-language pathology. If they can afford it and decide to pay for it themselves, then why tax them? The situation is a little like that of the young children I was talking about earlier, who have problems speaking or hearing. The same is true of seniors who have the same sort of problem. And these clients are not wealthy. We know the statistics about seniors. Any measures that could help them further would be welcome.
We are still waiting for the federal government to look at seniors' tax returns and pay them the guaranteed income supplement immediately if they qualify. We are still calling for that. However, if they need a speech-language pathologist, we agree that this service should be tax exempt, as the bill provides.
The bill contains only good measures. There may be some things we would like to see taken further, but we believe this is a very good start. There are some measures in the bill that we have wanted to see for a long time, such as the duty on wine. Vintners would talk to me about this regularly. They will be very happy to learn that the Bloc Québécois is supporting this bill.
As I mentioned earlier, on the whole, this bill contains attractive measures not only for airports and vintners, but also for people who need health care services.
We can please all these people, and these measures are along the lines of what we want to see happen. That is why the Bloc Québécois will be very happy to support this bill.
Sales Tax Amendments Act, 2006
May 14th, 2007 / 4:55 p.m.
Paul Crête Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
Mr. Speaker, while it is not directly relevant to this bill, I think it would be appropriate to know what the member thinks of the program that was abolished by the Conservative government, the GST rebate for tourists. This has a major impact.
Corrective measures were taken already for outfitters and conventions. Would it not have been appropriate for similar measures to be adopted for duty-free shops, to avoid the problem being experienced now, which creates a major disadvantage for those shops, even if it might have meant adopting a private system as other countries have done?
Would it not be appropriate for the government to act quickly? Why has it not done so in the case of Bill C-40?
Sales Tax Amendments Act, 2006
May 14th, 2007 / 4:40 p.m.
Sukh Dhaliwal Newton—North Delta, BC
Mr. Speaker, thank the member on the other side for St. Catharines for keeping his speech to the point, and I am going do it as well.
I am pleased to rise today to speak to Bill C-40, An Act to amend the Excise Tax Act, the Excise Act, 2001 and the Air Travellers Security Charge Act and to make related amendments to other Acts. Before I do that, I commend the hon. member for Markham—Unionville for his good work on this file.
As the title suggests, the bill is largely housekeeping. Much of the bill has to do with bringing previous legislation in line with the original policy intent of the government. The rest of the bill involves implementing previously proposed legislation that simply required further study before being drafted.
This is generally done in consultation with affected individuals and industries, which, as I understand, was the procedure followed in this instance. The bill has so far moved through second reading and report stage with the support of all parties. I expect it will continue to do so today.
Bill C-40 has three main components, as the hon. member on the other side mentioned. The first includes new measures related to the goods and services tax and the harmonized sales tax. The second part contains amendments to the Excise Act, 2001 and other acts with respect to the taxation of tobacco, spirits and wine. Finally, the bill contains measures that affect the air travellers security charge.
Let me begin with the first part that deals with the goods and services tax.
A good portion of the bill deals with how health-related services are treated by the GST. We on this side of the House know how important our public health care system is to the lives of everyday Canadians. I am proud to be a member of the party that devised our current 10 year program to strengthen health care. We delivered $42 billion to the provinces to improve services, reduce wait times and ensure that Canadians would get the care they needed. Not only should they get the care they need, but every Canadian, irrespective of where they live, should have the same quality of health care.
While Bill C-40 is not the landmark piece of legislation that our health accord was, it does contain a number of health-related provisions, which will be important to Canadians. For instance, the bill would confirm the GST-HST exemption for speech language pathology services. Speech language pathologists can include occupational therapists, physical therapists, therapist assistants, public health nurses, child psychologists and others. Typically they provide services to young children with communication disorders and adults in rehab centres. I am glad to see the draft GST exemption of these services proposed by the previous government would be implemented through this bill.
The bill also confirms that the sale and importation of blood substitutes, known as plasma expanders, will be zero-rated for GST purposes. A plasma expander is a blood substitute product which is used primarily to maintain circulatory blood volume during surgical procedures or trauma care.
Bill C-40 would also broaden the specially equipped vehicle GST-HST rebate so the rebate would apply to motor vehicles that were used subsequent to being specially equipped for use by the individual with disabilities.
The bill would also affect the harmonized sales tax in Nova Scotia, where the government has called for the provincial tax portion of the homebuyer's rebate to be limited to $1,500. This has been done at the request of the government of Nova Scotia, and there is no reason why any of us should oppose it here.
Some of the other GST related measures in the bill include accommodating special import arrangements between businesses in certain situations where goods are supplied outside Canada to a Canadian customer and simplifying GST compliance burdens by excluding beverage container deposits that are refundable from the GST.
It will ensure that when a charity provides a property to a person or a business under a short term lease, the GST is exempt on any goods supplied with that property.
The second section of the bill deals primarily with excise tax measures surrounding the sale and production of tobacco and alcohol.
The 2005 Liberal budget announced new funding over five years to enhance federal tax compliance and enforcement in the tobacco industry. At that time, we set aside new money for enhanced markings of tobacco. I am glad to see the bill would extend the requirement to identify the origin of tobacco products to all products, including those for sale at the duty-free shop or for export.
Tobacco contraband does not only hurt the government's bottom line, it also hurts communities and can be a source of funds for organized crime. That is why the Liberals allocated $8 million to fight tobacco contraband two years ago.
As a side note, I was very disappointed to see that the government's new budget had absolutely no money to help tobacco farmers transition toward other crops, but that debate is for another time.
Moving on, the bill contains measures that would authorize laboratories to produce alcohol and spirits for the purpose of studying ethanol alcohol without them having to hold a spirits licence.
The third and final part of the bill focuses on the air travellers security charge. It will ensure that air travel seats donated to charities through air carriers are not subject to the air travellers security charge.
I will take a brief moment to revisit the reason that we have the air travellers security charge in Canada.
In the months following 9/11, the previous Liberal government jumped into action with a series of measures to improve public safety, secure our borders and ensure that the lives of Canadians and Canadian businesses could go on with as little disruption to their daily lives as possible. As a result, we strengthened Canada's borders dramatically. We increased security at Canadian airports with as little disruption to passengers as possible. The air travellers security charge was levied to help pay for these upgrades.
While no one particularly enjoys a new tax, I think most Canadians would agree that in February 2002 we did the right thing by instituting the air travellers security charge to help protect Canadians.
As a side note, the current government, which at the time was comprised mostly of the Canadian Alliance Party, voted against the security charge and, in fact, against the creation of the Canadian Air Transport Security Authority. The Liberals, however, did believe that Canadians would be willing to pay a little more to ensure that the air travel in Canada was as safe as possible. As a result, I am proud to say they are in fact safer.
Furthermore, as airports across Canada purchased and installed new technology and as new security procedures were implemented, the start up costs began to go down. Accordingly the Liberals used their last three budgets to lower the air travellers security charge three times so Canadians would only need to pay what was necessary to ensure their safety on board flights.
As for this particular measure of Bill C-40, reducing barriers and disincentives to charitable giving, such as the travellers security charge on donated seats, is an excellent way to ensure that businesses such as airlines can help charities carry out their good work. I am happy to support this initiative.
In Canada there are currently over 80,000 registered charities, the vast majority of which are honest and hard-working organizations that provide valuable services for Canadians. While I am proud that Canadians give so much of their time and money to charities to make this country and the world a better place, I was dismayed when the current government chose to eliminate the charities advisory committee this past fall.
The committee was comprised of members of the charitable community as well as Canada Revenue Agency employees. Together they worked to ensure that charities were aware of their obligations under the Income Tax Act. They worked to ensure that Canadians could be confident that when they donate their hard-earned money to a charitable cause the bulk of that donation actually goes toward that cause.
More importantly, it was the responsibility of the committee to propose legislative changes to the Department of Finance and Canada Revenue Agency, changes that would make life easier for Canadian charities. The irony here is that it was this committee's job to come up with new ideas such as eliminating the air travellers security charge on airline seats donated to charities, a measure we are now debating in this bill.
What did the government save by eliminating this volunteer-led committee? Essentially, it saved only the cost of travel and hotel accommodation for when the committee members met three or four times a year. It may have been $100,000. I certainly believe the committee's advice was worth that much. I certainly hope that the government will consider reinstating the charities advisory committee.
As I said at the beginning of my remarks, this is a very large and very complex bill. Its contents are largely non-controversial and in some instances are the result of years of consultations. Accordingly, I am happy to support this bill.