Finance Committee on May 10th, 2006

[John McCallum, Liberal, Markham—Unionville, ON]

And similarly, the basic personal amount is going down, in terms of actual payments, between 2005 and 2006. Is that correct too?

[Serge Nadeau]

That's correct.

[John McCallum, Liberal, Markham—Unionville, ON]

Okay. Then why on page one of the budget speech does it say the contrary: that the tax rate is going down?

[Serge Nadeau]

It's going down compared with the legislative track.

[John McCallum, Liberal, Markham—Unionville, ON]

But how is that relevant to taxpayers who are actually paying the lower amount and who then in the following year go to a higher amount?

[Serge Nadeau]

Well, this is a permanent tax reduction compared with the legislated track. That's—

[John McCallum, Liberal, Markham—Unionville, ON]

But is that relevant to Canadians, as opposed to what they actually pay? How many Canadians care about a legislative track versus what they actually pay?

[Serge Nadeau]

Well, this is a very.... I don't know how many Canadians care about that. I think many of them should, but one way or the other, here you're right, in the sense that the tax rate they were paying was 15% and now it's going to be 15.25%.

On the other hand, the legislated track is 16%, and now they are going to pay 15.5%. This is factual.

[John McCallum, Liberal, Markham—Unionville, ON]

So all your tax tables showing the impact on families of given incomes are based on this legislative fiction, if one can use that term, that tax rates are coming down, when in fact they're going up.

[Serge Nadeau]

It's compared with budget 2005—the legislated track. Of course our table also includes other measures that were proposed in the budget—for example, the employment credit, and also a number of other tax targeting measures.

[John McCallum, Liberal, Markham—Unionville, ON]

No, but that's not the question.

The tax tables are based on this idea of the tax rate going down instead of up. Is that correct?

[Serge Nadeau]

It's based on a 15.25% tax rate in 2005.

[John McCallum, Liberal, Markham—Unionville, ON]

But in terms of impact, it's based on coming down to that, rather than up to that.

[Serge Nadeau]

The basis is budget 2005, you're right.

[John McCallum, Liberal, Markham—Unionville, ON]

Okay, I have one last question.

Page 54 of the budget states: “Reflecting the Government’s focus on its priorities for this budget, it will not proceed with about $7 billion in spending proposals over five years announced in the...Economic and Fiscal Update.” But nowhere does the budget explain these cuts. Seeing that they have clearly been itemized and calculated, can you please tell us exactly what those $7 billion in cuts were?

[Paul-Henri Lapointe, Assistant Deputy Minister, Economic and Fiscal Policy Branch, Department of Finance]

I would refer you to a number of tables in the follow-up data. I have them here.

If a measure is not included in the budget, it means that it is not proceeding. If you go to the tables in chapter 5 of the follow-up data under “Creating Opportunities for all Canadians”, under innovative economy, and under the global commerce, you will see the list of the initiatives that are not proceeding.

[John McCallum, Liberal, Markham—Unionville, ON]

Well, are you able to provide to the committee those numbers adding up to $7 billion? People in my group were unable to reconcile those numbers.

[Paul-Henri Lapointe]

Well, as I said, we have those in the tables. I can point out to you later on where they are.

[John McCallum, Liberal, Markham—Unionville, ON]

Okay. Well, thank you.

[The Chair, Conservative, Brian Pallister]

Thank you.

Mr. Loubier.

[Yvan Loubier, Bloc, Saint-Hyacinthe—Bagot, QC]

Mr. Chair, I am going to ask one brief question, and then let my colleague speak.

This morning’s newspaper published a piece claiming that the Report of the Auditor General, scheduled for next week, will say that $5 billion has supposedly been mislaid by the Department of Finance.

Could you give us any exclusive information about this sum? Where was it lost? What is being done about it? This is quite astonishing. I can barely wait till next week.

[Paul-Henri Lapointe]

I think that you are referring to tax revenue that the Canada Revenue Agency or the Customs Agency stated it probably could not collect. This question should be put to the Agency.

[Yvan Loubier, Bloc, Saint-Hyacinthe—Bagot, QC]

The heading of the news item said that the Department of Finance had lost $5 billion.

[Paul-Henri Lapointe]

It is not the Department of Finance.

[Yvan Loubier, Bloc, Saint-Hyacinthe—Bagot, QC]

I am going to wait till next week. I am going to go to the in camera meeting of the Auditor General.