Finance Committee on Feb. 8th, 2007

[Baxter Williams]

That's correct. If you don't mind, in terms of--

[Dan McTeague, Liberal, Pickering—Scarborough East, ON]

On a point of order, Mr. Chair, the amount of withdrawal is $4,000.

I'm sorry, Mr. Williams, you may want to have a look at this again. The maximum you can contribute is up to $18,000 a year. The amount you can withdraw is up to $4,000, from the beneficiary.

[The Chair, Conservative, Brian Pallister]

I don't believe so, no. There's no maximum on the withdrawal, to my knowledge. The $4,000 might be the creditable amount that the government will contribute a portion on.

There's confusion on this bill.

[Baxter Williams]

I'm sorry. I'm talking about the current limits in place, currently $4,000. I guess the bill would propose removing those.

[Mike Wallace, Conservative, Burlington, ON]

Removing the $4,000. So I am correct when I read that the bill removes that limit?

[Baxter Williams]

That's correct. But it doesn't remove the lifetime limit of $42,000.

[Mike Wallace, Conservative, Burlington, ON]

So based on the bill, could you do all $42,000 in one year?

[Baxter Williams]

You could do up to $18,000 in one year.

[Mike Wallace, Conservative, Burlington, ON]

So over a couple of years you could get to it, over three or four years, whatever that is.

Okay, thank you.

[The Chair, Conservative, Brian Pallister]

Committee members, I'm going to need a little guidance here, as is the custom.

We have a couple of bills before us. We have a shorter deadline on Mr. Fitzpatrick's. I'm going to propose that we deal with Mr. Fitzpatrick's on clause-by-clause. I do not know and I cannot predict how long that will take. We have only 25 minutes remaining. I don't wish to keep Mr. McTeague unnecessarily. Would it be all right with the committee if we deferred clause-by-clause on Mr. McTeague's until the next available opportunity to allow him and his staff to go about their business?

Thank you, Mr. McTeague. Then we'll do that. I see your Liberal colleagues would like your attendance to be mandatory and to continue, but I'll dismiss you now. We'll take 30 seconds, the cameras will be off, and we'll deal then with clause-by-clause on Mr. Fitzpatrick's bill right now.

[The Chair, Conservative, Brian Pallister]

Before Finance officials leave, I understand we may need some answers to some questions during clause-by-clause. I'd encourage you to stay for a few minutes, anyway. I would appreciate it if Finance officials would hang around just for 20 minutes, just in case there are some questions pertinent to the issue.

All right, we're into clause-by-clause consideration now of Bill C-294.

(On clause 1)

You have in front of you an amendment. I would emphasize to committee members, for the maximum effective use of time, that the cameras are off.

It's Diane's amendment, isn't it? Would you like to speak to that?

[Diane Ablonczy, Conservative, Calgary Nose Hill, AB]

Mr. Chairman, I would be happy to do that.

The amendment is in front of all members. Is there anyone who does not have a copy of this amendment to Bill C-294? The amendment is that the bill, in clause 1—there is only clause—be amended by replacing lines 7 to 24 on page 1 with the following.

I would ask my good friend Mr. Del Mastro to read the rest of it. I am a little incapacitated at the moment.

[The Chair, Conservative, Brian Pallister]

The dulcet tones of Mr. Del Mastro now on record, proceed.

[Dean Del Mastro, Conservative, Peterborough, ON]

Thank you, Mr. Chair.

It reads as follows:

(v.1) allowances for board and lodging of the taxpayer, to a maximum total of $300 for each month of the year, if: (A) the taxpayer is, in that month, a registered participant with, or member of, a sports team or recreation program of the employer in respect of which membership or participation is restricted to persons under 21 years of age,

[John McKay, Liberal, Scarborough—Guildwood, ON]

On a point of order, Mr. Chair, as charming as Mr. Del Mastro's tones are, I can read, as can most other members. I'm just wondering if someone could cut to the chase and give us an explanatory note on the explanatory note. There's an explanatory note attached, and I'm not quite sure I necessarily appreciate the significance of the changes that Ms. Ablonczy is making.

[The Chair, Conservative, Brian Pallister]

There is no point of order, of course, but there is a point. Would you like to just move to the explanatory—

[John McKay, Liberal, Scarborough—Guildwood, ON]

No, it's a point of order.

[The Chair, Conservative, Brian Pallister]

Are you challenging the chair's ruling? Are we going to have to get into that?

On the explanatory note, Dean, if you wouldn't mind, I think that probably covers off the changes you're proposing here. Let's deal with that.

[Dean Del Mastro, Conservative, Peterborough, ON]

Certainly.

Bill C-294 amends the Income Tax Act to exclude certain allowances from the computation of a taxpayer’s income from an office or employment if those allowances are paid to the taxpayer by a not-for-profit organization in connection with its operation of a sports team or a sports or recreation program for persons under 21 years of age of which the taxpayer is a member or participant. This motion: • provides that the exemption applies only in respect of board and lodging of the taxpayer; • reduces the monthly maximum exemption to $300 and clarifies that it applies only during the months in which the taxpayer is registered with, or participates in activities of, the organization; • utilizes the appropriate legislative references for non-profit organizations and inflation indexing; • clarifies that the exemption applies in respect of the participation or membership of a taxpayer (e.g. of an athlete or performer), and not to amounts received by a taxpayer as a coach, trainer, etc. in respect of their services; and • provides that the Bill comes into force for taxation years that end after the Bill is assented to. The maximum allowance is constrained to $300 in recognition that allowances for food and lodging are generally considered taxable benefits in other employment categories.

The intent of the amendment, Mr. Chair, is to tighten the bill up and to restrict the scope of the bill to its intended purpose.

[The Chair, Conservative, Brian Pallister]

Very good. This is putting some fence around the ranch.

Mr. Fitzpatrick, do you want to quickly comment? I know you had asked for retroactivity in there.

[Brian Fitzpatrick, Conservative, Prince Albert, SK]

Yes. I'm in agreement. I accept this as a friendly amendment. I think it's a worthwhile process that we're going through.

I've talked to Mr. Short about unintended consequences. I know Mr. McKay's concern about unintended consequences. I'm quite happy—and I think Mr. Short is—that these amendments will close off those possibilities 99.9%. I'm happy with the changes.

[The Chair, Conservative, Brian Pallister]

Thank you, Mr. Fitzpatrick.

First Mr. McKay, then Mr. Pacetti.

[John McKay, Liberal, Scarborough—Guildwood, ON]

On the second bullet point in the explanatory note, it's pretty obvious that you go from $350 down to $300. It says “that it applies only during the months in which the taxpayer is registered with, or participates in the activities of, the organization”. A junior hockey season is generally eight or nine months, so the credit would apply for only those eight or nine months. Is that the way I'm supposed to understand that?

[Brian Fitzpatrick, Conservative, Prince Albert, SK]

That's the way I understand it.

[John McKay, Liberal, Scarborough—Guildwood, ON]

Thank you.