Okay.
Evidence of meeting #7 for Finance in the 39th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was gst.
Evidence of meeting #7 for Finance in the 39th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was gst.
4:45 p.m.
General Director, Tax Policy Branch, Department of Finance
So there are two ways. Basically here I'm giving you two types of breakdowns between a billion. One is between the GST and the personal tax and the other one, on page 202, is a much finer breakdown between the GST and all the personal tax measures.
4:45 p.m.
Liberal
Massimo Pacetti Liberal Saint-Léonard—Saint-Michel, QC
Okay, another question.... The minister just stated that 655,000 people are going to be removed from the tax rolls, but I think with the Liberal reduction there were more than 800,000, or just a little under a million. Is that correct, or are we just making up numbers as we go along?
4:45 p.m.
General Director, Tax Policy Branch, Department of Finance
No, actually the budget plan removed an additional 200,000 people from the tax rolls, compared to the plan presented in the fiscal economic update.
4:45 p.m.
Liberal
4:45 p.m.
General Director, Tax Policy Branch, Department of Finance
A big part is because of the new Canadian employment credit, which removes many people from the tax rolls, and also the doubling of the pension income credits.
4:45 p.m.
Liberal
Massimo Pacetti Liberal Saint-Léonard—Saint-Michel, QC
But when we say we're removing somebody from the tax roll, that doesn't mean they stop filing their tax returns, because you still have to file--
4:45 p.m.
General Director, Tax Policy Branch, Department of Finance
That's right. They will file their tax returns, but they won't pay any income tax.
4:45 p.m.
Liberal
Massimo Pacetti Liberal Saint-Léonard—Saint-Michel, QC
Okay, because they still have to file their tax return to get the employment tax credit and the pension tax credit.
4:45 p.m.
General Director, Tax Policy Branch, Department of Finance
That's right, yes, but they won't pay any income tax.
4:45 p.m.
Liberal
Massimo Pacetti Liberal Saint-Léonard—Saint-Michel, QC
I asked this the last time the Finance officials were here. What is it going to cost to implement this type of budget? Because with the new measures regarding the book fee credit, or whatever you want to call it, the employment tax credit, the implementation of the GST, the $80-a-month transit.... How are we going to manage all this? Normally we just look at reducing tax rates. It's easy; it's a change on a tax form and that's it. Now we're going to be implementing all these fancy new tax measures that add up to practically nothing. But it has to cost money somewhere, whether it be to the consumer, to businesses, to the department. There have to be more costs involved with implementing a budget like this than....
4:45 p.m.
General Director, Tax Policy Branch, Department of Finance
In terms of implementing the GST rate reduction?
4:45 p.m.
Liberal
Massimo Pacetti Liberal Saint-Léonard—Saint-Michel, QC
Yes, the GST reduction. And how are we going to track these student book tax credits? Revenue Canada is going to ask for receipts to be sent. There are the transit passes. We're trying to move taxpayers to e-file, but now we're asking them to submit tax receipts, bus passes, book receipts, sporting tax credits, ballet receipts, hockey camp receipts. I'm not sure where we're going with this. This has to cost money for somebody somewhere down the line.
How do you know there's going to be a registered hockey camp that's going to be eligible as opposed to a hockey school that's not going to be? Is ballet going to be okay? Are your student books going to be deductible that you purchase at a bookstore, versus books bought at a student bookstore or a library bookstore that is not affiliated with the university, or that is subsidized or not subsidized? Are books purchased part of a curriculum or are they not? Is it adult education, or just full-time students, part-time students...? This has to cost money.
4:50 p.m.
General Director, Tax Policy Branch, Department of Finance
In terms of the physical fitness credit, the budget announced that a small group of experts would be mandated to design the parameters of what activities would be eligible, what types of organizations would be eligible, what the objectives of the programs would be that would qualify for the credit. So in terms of the textbook--you were using the textbook credits as an example--that's another instance of the administrative details being worked out at this time.
In terms of your more fundamental question, there will be additional administrative costs. All new tax measures have administrative costs attached to them. That was taken into account at the time the budget was put in place, and the view was that the benefits were greater than the cost, of course.
4:50 p.m.
Liberal
4:50 p.m.
General Director, Tax Policy Branch, Department of Finance
I don't have them with me. But CRA at one point--
4:50 p.m.
Liberal
Massimo Pacetti Liberal Saint-Léonard—Saint-Michel, QC
CRA has nothing. When they were here they had nothing. They didn't have a clue as to what was going on. But that's my opinion.
Since we're on that, we had a discussion on the excise tax, and I think somebody here, one of the panellists.... When we were looking at the issue for the excise tax, we were trying to look at reducing the excise tax from I think it was 10% down to zero. One of the issues, or one of the remarks the finance department indicated, was administratively it made sense to keep it at 8% and then to reduce it, and that was the logic. Now we're reversing the logic. We're going from 10% to zero. I'm not sure exactly what the rate is. What's the logic there? What happened?
4:50 p.m.
General Director, Tax Policy Branch, Department of Finance
You're talking about the jewellery tax?
4:50 p.m.
Liberal
4:50 p.m.
General Director, Tax Policy Branch, Department of Finance
One of my colleagues, Mr. Carlos Achadinha, will be able to answer your question.
4:50 p.m.
Carlos Achadinha Chief, Alcohol, Tobacco and Excise Legislation, Department of Finance
Your question is regarding the excise tax on jewellery. The decision last year was that it would be gradually phased out over a five-year period; there was a cost involved so it would be phased out. The decision this year was to eliminate it--the decision to advance the repeal.
4:50 p.m.
Liberal
Massimo Pacetti Liberal Saint-Léonard—Saint-Michel, QC
We had a battle over this. You guys were so adamant that we shouldn't repeal it all at once, and now all of a sudden you have a change of heart. There were cost issues and all kinds of issues, and now all of a sudden they've disappeared.
4:50 p.m.
Bloc
Yvan Loubier Bloc Saint-Hyacinthe—Bagot, QC
Mr. Chairman, I would like to ask our witnesses a question. Regarding the $1,200 payment for each child under the age of six, we had suggested to the Minister of Finance, before the budget was drawn up, that this $1,200 amount be transformed into a refundable tax credit. At that time, we pointed out that this measure would resolve three things. First of all, it would resolve any overlap between jurisdictions, since family policy is a provincial matter and an issue that comes under the jurisdiction of the Government of Quebec. Secondly, it would prevent provincial governments from using part of the money paid to families. Thirdly, we would really be able to target low and middle-income families, and even high-income families, who would benefit from a refundable tax credit higher than the $1,200 amount. By the way, this $1,200 amount also applies to families with very high incomes. If one of the two parents does not work, the money will still be paid, even for families with a family income greater than $250,000. Generally speaking, this measure would not be anymore costly than the $1,200 tax credit for children under the age of six.
So why choose cash payments rather than refundable tax credits which, in many respects, are more beneficial to the parents?
