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.
Bloc
Thierry St-Cyr Bloc Jeanne-Le Ber, QC
My question concerns page 3 of the Estimates. The second and third votes, Youth Allowance Recovery and Alternative Payments for Standing Programs, have a negative balance. Why are the amounts negative? Are these estimates out of date?
Barbara Anderson Assistant Deputy Minister, Federal-Provincial Relations and Social Policy Branch, Department of Finance
With respect to the payments to the territorial government, we used to pay that through vote 5, and in 2005-06 we moved it into a legislative statutory program. So this is just a negative replacing the positive on the previous page.
Similarly, for the second one, the health reform transfer, when the Canada health transfer was created, this health reform transfer was rolled into it. So this is a negative just to account for the increase that you see on the previous page.
Bloc
Thierry St-Cyr Bloc Jeanne-Le Ber, QC
What are the exact counterparts? You say that the youth allowances are in another vote. Which vote do you mean?
Assistant Deputy Minister, Federal-Provincial Relations and Social Policy Branch, Department of Finance
For the youth allowance, the variance there is a change in one year to the next. The transfers to territorial governments are now found on 9.2, under the Federal-Provincial Fiscal Arrangements Act, and the health reform transfer, as I said, that $3.5 billion, was rolled into the Canada health transfer.
Assistant Deputy Minister, Corporate Services Branch, Department of Finance
The transfers for the territorial governments can be found on the second statutory item on page 9.2.
Conservative
The Chair Conservative Brian Pallister
Are there any further questions? No?
Over to you, Madam Ablonczy.
Conservative
Conservative
Rick Dykstra Conservative St. Catharines, ON
Sure.
My question really stems from this whole issue of trying to identify the 29 tax reductions that are in the current budget. The question I have is whether, one, the increase in the personal exemption rate, and two, the employment tax credit bring the overall tax burden down for all Canadians.
General Director, Analysis, Tax Policy Branch, Department of Finance
That's right. If you compare to budget 2005, it does. It brings the tax burden down. As well, if you compare with the update overall, the tax burden on average is down.
Conservative
Rick Dykstra Conservative St. Catharines, ON
So it is down. That's good to hear.
I was interested to hear my colleague opposite suggest that Canadians don't necessarily care about all the issues we are dealing with on a technical basis, that what they care about is whether their taxes are actually going down. So I would put to you again that if we are to clear away all of the malaise, all of the crowded technical issues on the table, the basic sentiment, the basic objective that the finance department sees from this budget is a personal tax relief for Canadians.
General Director, Analysis, Tax Policy Branch, Department of Finance
That's right. Overall, as it's presented in the budget plan, on average this provides tax reduction for every income class.
Conservative
Rick Dykstra Conservative St. Catharines, ON
The other question that I posed to Revenue Canada when they were here--and I wouldn't mind getting your opinion on this--was the process upon which the previous government's budget of last year was carried in terms of the implementation of the 16% to 15% reduction. Was that carried through a ways and means motion?
General Director, Analysis, Tax Policy Branch, Department of Finance
That's correct.
Conservative
Rick Dykstra Conservative St. Catharines, ON
If I understand what Revenue Canada officials said on Tuesday, in fact the only way we can see that decrease actually enshrined is through legislation being introduced in this budget, because it was done through a ways and means motion last year.
General Director, Analysis, Tax Policy Branch, Department of Finance
That's right. Making it permanent had to be through voting on a bill that allowed the reduction to 15%.
Conservative
Rick Dykstra Conservative St. Catharines, ON
I'm not trying to put you in the position of an elected individual, but if one were to vote in the House on this issue, to support that 16% to 15% reduction, one would in fact have to support the budget that we're going to be voting on at the end of the day.
General Director, Analysis, Tax Policy Branch, Department of Finance
Actually, the bill would be different, because one would be the reduction from 16% to 15% while the other one would be a reduction basically from 16% to 15.25%. So it would be a different bill.
Conservative
Rick Dykstra Conservative St. Catharines, ON
Would it be included in the same bill, the same piece of legislation?
General Director, Analysis, Tax Policy Branch, Department of Finance
No, because these would be contradictory.
Conservative
Rick Dykstra Conservative St. Catharines, ON
So can you clarify for me how the two will actually be passed?
General Director, Analysis, Tax Policy Branch, Department of Finance
Actually, only one bill is going to be tabled, and the bill will propose that the rate be reduced from 16% to 15.5%, starting July 1, 2006. The gross amount would be what the bill will propose.
Conservative
Rick Dykstra Conservative St. Catharines, ON
The 16% to 15% reduction, how is that then going to be carried through?
General Director, Analysis, Tax Policy Branch, Department of Finance
As CRA explained yesterday, in the past it has been customary for CRA to administer a tax rate reduction based on the tabling of a ways and means motion. So it has been administered.
