Finance Committee on Jan. 17th, 2007

[Pierre Paquette, Bloc, Joliette, QC]

Exactly. The House passed the notice of ways and means. That is a fact. It is also a fact that a majority of committee members agree with the principle. This guarantees that at the end of the process, the principles contained in the notice of ways and means will appear in the legislation, possibly with amendments as a result of the suggestions made by the experts Mr. Flaherty will have consulted, and of those made by the members of this committee.

[The Chair, Conservative, Brian Pallister]

I think we've had sufficient questioning on this. I call for a vote on Mr. Paquette's amendment now.

(Amendment agreed to)

[The Chair, Conservative, Brian Pallister]

Now we will return to debate on the amended motion, and that would involve hearing briefly from Mr. Dykstra.

[Rick Dykstra, Conservative, St. Catharines, ON]

Thank you, Mr. Chair.

I have a couple of things with respect to a couple of issues.

Specifically dealing with Mr. Szabo's comments, in fact the people or the companies who are interested and impacted by this decision have had, for the last number of days or weeks, the opportunity to comment on the impacts this legislation will have or changes they would like to see. In fact they will continue to have that with the Ministry of Finance until January 31.

Getting to the premise upon which we are to move forward with this meeting, I still haven't heard a compelling reason as to why we need to. Based on what the parliamentary secretary has said with respect to when the legislation is brought forward, we will be discussing and debating the issue. What is the relevance or what is the need at this point for calling witnesses or moving this process forward in a less than timely manner in terms of process? By that I mean legislation is going to be introduced and a majority of this committee supports that legislation and will be endorsing that legislation in the House. What is the purpose of calling witnesses early to be able to deal with this, when in fact those very witnesses are at the present time, both prior to today and leading up to January 31, in fact putting those positions and issues forward with the Minister of Finance and with the ministry itself?

As the parliamentary process was described by Ms. Wasylycia-Leis, we have it in place already. We've heard that the legislation is going to be put forward prior to the budget being implemented. If we're talking about how much time we need for folks to actually come, for witnesses to present, I suspect they will get that opportunity; they will have that opportunity and will be able to debate. The only thing we probably should be debating at that time is the amount of time that is necessary to hear those witnesses.

The other point that I think is important to note is if we're talking about making amendments or changes or potential alterations to the legislation, I find it ironic that we actually have folks who have sold companies, individuals who have got out of the income trust business and sold their shares after October 31. If in fact we are going to make changes, how are we then helping? How are we assisting? In fact we're going to be hurting the very people Mr. McCallum claims he's here today to defend. If we move forward.... We have legislation, and we have the majority of this committee in favour of moving forward. What you're doing is actually telling those folks and those companies and those individuals who sold after October 31 that the decision they made with respect to their finances was an incorrect one. From my perspective, you can't have it both ways.

I want to note Mr. Paquette's comments, because I think it's important to understand that on November 23 we had the finance minister here speaking and presenting for close to an hour and a half. I recall a pretty heated exchange between Mr. McCallum and Minister Flaherty on that specific issue of income trusts. We certainly have had discussion at this table in the past number of weeks about the income trust issue. Certainly Mr. Paquette had the opportunity at that time to open the door with respect to income trusts, and he did so, as did a number of folks sitting around this table.

There is an amendment I would like to put, and I know it's not going to get support from my colleagues from the Liberal Party. If in fact we are going to go down the road of having witnesses and talking about the truth, talking about trusts, talking about where income trusts have gone over the last number of months, then in fact an amendment I want to make sure we are able to do--and I'll move this amendment--is that if we are going to hear from individuals and from companies as witnesses here, we open the door and have the opportunity to have witnesses called forward who were under the previous Liberal government's mishandling of the income trust issue, leading into the investigation by the RCMP.

If you really want to talk about the truth, justice, and the facts, then let's go back to 2005, to the two RCMP investigations, and ensure that those witnesses, including folks like Mr. Brison, along with his e-mails and those issues, come forward to be witnesses before this committee. That way we would all certainly have the opportunity for a thorough investigation of exactly what the income trust issues are, where they have gone, where they came from, and where they are going to go. I would move that as an amendment.

[The Chair, Conservative, Brian Pallister]

Would you mind, Mr. Dykstra, just restating very briefly what your amendment actually consists of? Are you referring to expanding the list of witnesses beyond just expert witnesses including officials of the Department of Finance? Is that correct?

[Rick Dykstra, Conservative, St. Catharines, ON]

Including the previous Liberal government's mishandling of the income trust issue leading to the investigation by the RCMP.

[The Chair, Conservative, Brian Pallister]

I want to be clear on the wording before we have a discussion on the amendment, so we will just get clarification on the wording so we know what we're debating here.

While we have this little interlude, I would remind members of the work ahead of us in this committee. We have several private members' bills, and we have several motions. We also have BillS-5, an act to implement conventions and protocols concluded between Canada and Finland, Mexico and Korea for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income. We also have BillC-37, an act to amend the law governing financial institutions and to review the Bank Act, which is a rather onerous responsibility before the committee.

With that in mind, I want to assure committee members that if we do proceed along these lines as proposed by this amendment, it will be my intention not to till the same field twice. If we are going to call an extensive number of witnesses to debate the income trust issue and we're going to devote the committee's time to this task now, I don't anticipate calling exactly the same people back a second time for any reason.

If committee members would like to make a case for another approach, I invite them to do that at another time, but I assure you that we have too much on our plate to be going through this exercise twice.

Now, I want to hear the wording of the amendment as proposed by Mr. Dykstra. I will let the clerk read that to the committee.

[The Clerk of the Committee, Ms. Elizabeth Kingston]

The amendment reads as follows:

Notwithstanding the Standing Committee on Finance's support for Ways and Means Motion No. 10 adopted by the House of Commons on November 7, 2006, that the finance committee invite expert witnesses to appear, including officials from the Department of Finance, to testify in regard to the decision to tax income trusts

--and the amendment of Mr. Dykstra--

involving all witnesses and individuals under the previous Liberal government's mishandling of the income trust issue, at least six hours to be allocated for these meetings to be held beginning before February 2, 2007.

[The Chair, Conservative, Brian Pallister]

Notwithstanding the grammatical aspects of that, I think the intention is pretty clear. I invite participation in discussion, or we can move straight to a vote on that.

[Judy Wasylycia-Leis, NDP, Winnipeg North, MB]

Mr. Chair, I think it's important to comment, because in fact this committee has just turned into a circus. This is a mess being displayed for all of Canada to see because of the Liberals, who can't seem to make up their minds on the income trust file. I think it begs the question of where they stand. Do they favour income trusts or not?

I would say--

[The Chair, Conservative, Brian Pallister]

Please, Madam Wasylycia-Leis, there's an amendment before us. I am going to invite you to speak to that right now.

[Judy Wasylycia-Leis, NDP, Winnipeg North, MB]

I think my colleague Mr. Dykstra makes an important point. The new motion we have before us, which the Liberals supported, says notwithstanding the ways and means motion. It means notwithstanding everything the Liberals said was important as they tried to articulate their position leading up to today, everything pertaining to the grandparenting, to the actual tax on the income trusts, and to pension splitting is no longer relevant. It's not on the table because this motion says notwithstanding all of that. What we're left with talks about some vague notion of income trusts.

I'm getting to the motion.

[The Chair, Conservative, Brian Pallister]

Just to assist you in perhaps making appropriate comments, for one last time, we're not debating the previous motion, the notwithstanding issue; we are debating now Mr. Dykstra's amendment, which would expand the range of witnesses the committee might choose to call to discuss the issue.

Conclude your comments now, please.

[Judy Wasylycia-Leis, NDP, Winnipeg North, MB]

Mr. Chairperson, I am debating the amendment. I'm saying that with everything else off the table, we are left with some vague notion about income trusts. Therefore, Mr. Dykstra's amendment makes some sense. If everything else is off the table, we are left with debating the history, the sad saga, of this whole income trust file, beginning with the Liberals' mess in 2005, their flip-flopping and whiffle-waffling all over the place. We are left to discuss, again, the tax leakage issue, although the Liberals themselves have the file on that, the documents they sponsored to show the tax leakage. They supported the reports put out by Jack Mintz, C.D. Howe, and a number of other organizations who clearly identified the huge loss of tax revenue as a result of income trusts.

Mr. Chairman, on that basis, I guess we might as well consider this amendment--

[The Chair, Conservative, Brian Pallister]

Thank you, Madam Wasylycia-Leis, for your comments.

Mr. Szabo, some brief comments, sir.

[Paul Szabo, Liberal, Mississauga South, ON]

With regard to the amendment proposed by Mr. Dykstra, it's my understanding that after the principal motion, which is basically to have hearings and witnesses on the income trust issue, the committee, with regard to future business discussions, will seek proposed witnesses from the members to deal with matters that they believe are germane to the discussion.

I would think the amendment proposed by Mr. Dykstra is acceptable in terms of any witnesses, but it's limiting those additional witnesses or pre-empting someone from having additional witnesses, which we'll discuss later, because it focuses solely on what the previous government did.

I would suggest that the amendment is limiting what we are going to do in the second hour of this meeting. I would suggest that it either be ruled out of order or else we will just vote against it.

[The Chair, Conservative, Brian Pallister]

I'll just address that right now, Mr. Szabo.

It doesn't change in any way, shape, or form the original intent of the motion. It simply adds a new category of witnesses that may be included, so it is not restricted in any way, shape, or form.

Mr. Peterson.

[Jim Peterson, Liberal, Willowdale, ON]

Mr. Chairman, I think the point Mr. Szabo is making is that after we've decided whether we will have hearings, will we not then go to the issue of what witnesses we want to call? That's when Mr. Dykstra's motion would be appropriate.

[The Chair, Conservative, Brian Pallister]

That's not correct. That's not how we operate here, Mr. Peterson.

Mr. Paquette.

[Pierre Paquette, Bloc, Joliette, QC]

I think we are getting into political manoeuvring here, that much is quite clear, because discussions of this type will not be helpful at all. I am not saying that this is not important, but in the context of making a decision—one with which we agree—in order to minimize the impact on small savers, I do not think that studying what the Liberal government did will be helpful to us. If we wanted to do that, I would amend the motion further to find out why the Prime Minister changed his mind, because he had said during the election campaign that he would not change the tax rules. Then, all of a sudden, with no warning whatsoever, it became extremely important to do just that. That issue would interest me more, because the Conservatives are in power at the moment.

So I think that proceeding in this way would simply confuse the issue. I prefer to reject this amendment, and if the committee wishes, we could perhaps look at both the Liberal and Conservative management of the income trust issue. I will have no problem with that. However, in the context of Mr. McCallum's motion, I think this is political manoeuvring designed to muddy the waters.

[The Chair, Conservative, Brian Pallister]

Thank you.

We'll move now to a vote on Mr. Dykstra's amendment.

(Amendment negatived)

[The Chair, Conservative, Brian Pallister]

We'll move to the main motion. The question is on the main motion as amended.

Are you ready for the vote? No.

Mr. Wallace.

[Mike Wallace, Conservative, Burlington, ON]

First I have a question on timing, and then I may have an amendment.

Mr. Chairman, the previous approved amendment was that we start on February 2. Is that not correct?

[The Chair, Conservative, Brian Pallister]

No, it's “by” February 2.

[Mike Wallace, Conservative, Burlington, ON]

Okay.

Can I move an amendment that we change “by February 2” to “within the first 30 sitting days”? I'll give you my reasons for that change.

One, we've heard from us and we've heard from at least two opposition parties that they agree in principle. My assertion is that if the Liberal members of this committee vote for this based on the wording, the “notwithstanding the standing committee” piece, I think they're agreeing in principle on this.

“It was absolutely the right thing, and we had started on this track to protect the tax base, to ensure tax fairness and to work for the productivity of the nation”: I didn't say that; John McCallum said that, on Question Period, November 5, 2006.

All of us seem to agree that based on the way Parliament works, a ways and means motion would come back to us after second reading, because it's going to get passed in principle. All I'm saying is that we heard from the parliamentary secretary that sometime before the budget, before the break, or the second week after the break, we'll be back here, we'll be sitting.

My amendment of 30 sitting days would give the chairman a chance to operate the committee properly and call witnesses properly. We would have it done within the first five weeks of sitting in this session.