Okay. You're not answering my question.
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.
5 p.m.
Chief, Sales Tax Division / Tax Policy Branch / Legislation Policy, Department of Finance
It's because besides following the price of houses and seeing that the price of a certain development drops before and after July 1, I'm not sure how to answer your question. People should ensure that they can see that the tax is actually at 6%.
Usually you buy a house through a lawyer, and your lawyer should check that the rate is actually 6% and not 7%, if ownership and possession is transferred on or after July 1.
5 p.m.
Conservative
Garth Turner Conservative Halton, ON
Okay, but the price of a new home fluctuates. It's not like buying something for $9.95 that was $9.95 six months ago, right? There are a lot of adjustments going on here.
Do buyers, who are suspicious that they're not getting the full sales tax rebate passed on, have any recourse? Is there anything they can do if they suspect that the builder absorbed the 1% drop?
5 p.m.
Chief, Sales Tax Division / Tax Policy Branch / Legislation Policy, Department of Finance
First, if a builder decides to increase the price of his house because his costs go up, that's what we call a consideration for the supply. But if by mistake a rate of 7% has been charged on a new house, where ownership and possession is transferred on or after July 1, there's always a rebate for tax paid in error. But now they have to prove that the tax was at 7% instead of at 6%.
5 p.m.
Conservative
Garth Turner Conservative Halton, ON
Yes, but that's not what I'm talking about. I'm talking about the builder's mark-up: what normally should have been passed onto the consumer is now being absorbed into an increased mark-up.
5 p.m.
General Director, Tax Policy Branch, Department of Finance
To make sure I understand your question, you're saying that because there's a GST rate reduction of 1%, the builder may decide to increase the price of the house by half a percentage point to benefit from a tax rebate. Is that what you're...?
There's no way of ensuring that—market forces and so on. This can happen for cars, clothes, and for all types of goods. One would expect that a big chunk of the tax reduction will end up in the pockets of consumers. It will also benefit the producers in some instances, but it's impossible to know in advance.
5:05 p.m.
Conservative
Garth Turner Conservative Halton, ON
Okay. Again my question is, do you have any advice? Is there any recourse for a buyer who suspects that the builder is profiting from the margin? Is there any recourse whatsoever—other than writing his or her member of Parliament, who's then going to ask you?
5:05 p.m.
General Director, Tax Policy Branch, Department of Finance
No, there's no recourse at this time. If builders want to increase their prices.... I mean, who knows? They are not going to say we increased the price because there was a GST reduction. The market is hot; I'm increasing the price. There's no way for the government to go and check with them. Prices increase all the time. In Calgary, they increased by 23% last year.
5:05 p.m.
Conservative
Garth Turner Conservative Halton, ON
I'm not talking about price increase; I was talking about.... Okay, never mind.
Next question.
5:05 p.m.
Conservative
The Chair Conservative Brian Pallister
You're out of time, Mr. Turner.
Judy Wasylycia-Leis, it's your turn.
5:05 p.m.
NDP
Judy Wasylycia-Leis NDP Winnipeg North, MB
Thank you, Mr. Chairperson.
First, I would like to ask the department officials where the studies we requested on May 10 are.
5:05 p.m.
General Director, Tax Policy Branch, Department of Finance
The study in the sense—
5:05 p.m.
NDP
Judy Wasylycia-Leis NDP Winnipeg North, MB
I made two requests on May 10, when you were present, and it's now 21 days since that time. One was for a specific breakdown of the GST, an analysis of the 1% reduction. The other was a specific request for a breakdown of the new child allowance by income group and family category.
5:05 p.m.
General Director, Tax Policy Branch, Department of Finance
It must be in the pipeline because I personally signed that yesterday.
5:05 p.m.
NDP
Judy Wasylycia-Leis NDP Winnipeg North, MB
All right. Could I ask that you make sure that we get these studies before tomorrow?
5:05 p.m.
General Director, Tax Policy Branch, Department of Finance
Sure. I'll make sure of that.
5:05 p.m.
NDP
Judy Wasylycia-Leis NDP Winnipeg North, MB
If not, Mr. Chairperson, I will move a motion or something, unless.... I don't know what it is, but I just hope we get...I know bureaucrats bide their time--
5:05 p.m.
General Director, Tax Policy Branch, Department of Finance
Just to make absolutely sure, you said by tomorrow, not before tomorrow.
5:05 p.m.
NDP
Judy Wasylycia-Leis NDP Winnipeg North, MB
By tomorrow, before we start clause-by-clause on Bill C-13. We should have had them by now. Twenty-one days have passed. This material is stuff we should be looking at in terms of making our solid deliberations on the bill. I find it offensive that we have to wait and wait.
5:05 p.m.
General Director, Tax Policy Branch, Department of Finance
The 21 days are not over yet.
5:05 p.m.
General Director, Tax Policy Branch, Department of Finance
What I'm saying is that it's going to be available to you by tomorrow.
5:05 p.m.
NDP
Judy Wasylycia-Leis NDP Winnipeg North, MB
On the 22nd day it will be available. Today is the 31st, right?
Isn't today Wednesday?
5:05 p.m.
General Director, Tax Policy Branch, Department of Finance
It's the 30th. Today is Tuesday.
5:05 p.m.
NDP