Evidence of meeting #3 for Finance in the 39th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was budget.
3:35 p.m.
Liberal
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?
3:35 p.m.
General Director, Analysis, Tax Policy Branch, Department of Finance
That's correct.
3:35 p.m.
Liberal
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?
3:35 p.m.
General Director, Analysis, Tax Policy Branch, Department of Finance
It's going down compared with the legislative track.
3:35 p.m.
Liberal
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?
3:40 p.m.
General Director, Analysis, Tax Policy Branch, Department of Finance
Well, this is a permanent tax reduction compared with the legislated track. That's—
3:40 p.m.
Liberal
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?
3:40 p.m.
General Director, Analysis, Tax Policy Branch, Department of Finance
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.
3:40 p.m.
Liberal
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.
3:40 p.m.
General Director, Analysis, Tax Policy Branch, Department of Finance
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.
3:40 p.m.
Liberal
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?
3:40 p.m.
General Director, Analysis, Tax Policy Branch, Department of Finance
It's based on a 15.25% tax rate in 2005.
3:40 p.m.
Liberal
John McCallum Liberal Markham—Unionville, ON
But in terms of impact, it's based on coming down to that, rather than up to that.
3:40 p.m.
General Director, Analysis, Tax Policy Branch, Department of Finance
The basis is budget 2005, you're right.
3:40 p.m.
Liberal
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?
May 10th, 2006 / 3:40 p.m.
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.
3:40 p.m.
Liberal
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.
3:40 p.m.
Assistant Deputy Minister, Economic and Fiscal Policy Branch, Department of Finance
Well, as I said, we have those in the tables. I can point out to you later on where they are.
3:40 p.m.
Bloc
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.
3:40 p.m.
Assistant Deputy Minister, Economic and Fiscal Policy Branch, Department of Finance
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.
3:40 p.m.
Bloc
Yvan Loubier Bloc Saint-Hyacinthe—Bagot, QC
The heading of the news item said that the Department of Finance had lost $5 billion.
3:40 p.m.
Assistant Deputy Minister, Economic and Fiscal Policy Branch, Department of Finance
It is not the Department of Finance.
3:40 p.m.
Bloc
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.
