Finance Committee on May 30th, 2007

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

Good point. Agreed.

[The Chair, Conservative, Brian Pallister]

Before we proceed with any discussion, John, I said L-18 in error. I believe L-19 is the amendment you would want to withdraw.

[John McCallum, Liberal, Markham—Unionville, ON]

I thought it was L-18.

[The Chair, Conservative, Brian Pallister]

No, it was L-19.

[John McCallum, Liberal, Markham—Unionville, ON]

Okay.

[The Chair, Conservative, Brian Pallister]

Any further discussion?

Mr. McKay.

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

I want to ask the officials whether the concern by the member from Scarborough—Rouge River is in fact well founded.

Did you, on December 16, in effect create a tax?

[Gérard Lalonde]

Did we create a tax on December 16? Is that your question?

[The Chair, Conservative, Brian Pallister]

Excuse me.

You have a point of order, Madam Ablonczy.

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

I believe this same issue was raised in the House of Commons and was ruled on by the Speaker. I don't think it's appropriate that we ask for a quasi-ruling by officials on this. It has been dealt with in Parliament.

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

All I meant was whether they did it.

Have you in fact effectively set a tax rate by press release?

[Gérard Lalonde]

Not at all. There's nothing in here that refers to the rate. There was a press release on October 31 by our minister that indicated that an earlier coming into force of the provision would apply where the growth in the trust exceeded normal growth. There was a great demand for clarification as to what normal growth was. The government put the guidelines out on December 15, I think it was. That provided information as to what the perception of normal growth was.

As I read this particular amendment, it would preclude the ability of the department to provide relieving amendments to accommodate unforeseen situations that might require additions to what normal growth would be. As I read this, the prescribed growth and merger guidelines would have to be substantially in accordance with the normal growth guidelines issued by the Department of Finance on December 15, 2006. Thus, we would be precluded from going beyond those.

[The Chair, Conservative, Brian Pallister]

Madam Ablonczy.

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

Well, I made the point, but it seems to have been lost. This whole question was raised by the Liberals in the House. The Speaker found that the interpretation the Liberals placed on this course of communications was not justified. I don't think hashing it over here with an official is an appropriate course of action. I think we should move on.

[The Chair, Conservative, Brian Pallister]

That's fine. It's not a point of order, but it is a point.

Mr. McCallum.

[John McCallum, Liberal, Markham—Unionville, ON]

I think we're just trying to figure out what's going on here. As I understand it, the press release says the Department of Finance has the ability to change the new rules from time to time through a press release. Those rules could govern whether a trust of any particular kind is forced to convert to a corporation or not, which would then affect the tax paid by that trust. In effect, through a press release, the Department of Finance has the ability to change the rules of the game and to capture new trusts as corporations, or other actions of this kind. Is that not the case?

[The Chair, Conservative, Brian Pallister]

Mr. Lalonde, you've responded to an identical question already. So look, if we have to—

[John McCallum, Liberal, Markham—Unionville, ON]

No. He talked about rate. I'm asking about changing the rules of the game.

What you said is that the rate could not be changed. I'm asking whether the rules could be changed. That's the question.

[Gérard Lalonde]

I'll leave it to the chair as to whether I should respond.

[John McCallum, Liberal, Markham—Unionville, ON]

Perhaps you could just say yes or no, and then we could move on.

[The Chair, Conservative, Brian Pallister]

I'm trying to give broader parameters to the discussion, but we're stretching credibility on this one, I think.

If there is no further discussion, all in favour of this amendment so indicate?

(Amendment negatived [See Minutes of Proceedings])

(Clause 13 as amended agreed to on division)

(Clauses 14 to 18 inclusive agreed to on division)

(On clause 19)

[The Chair, Conservative, Brian Pallister]

We have amendment G-2 on clause 19.

Madam Ablonczy.

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

Mr. Chairman, this is again another technical amendment to ensure that pensioners who receive RRIF withdrawals on a monthly basis, as opposed to a yearly basis, have a level playing field, and also that the changes do not inadvertently increase non-resident withholding taxes or trigger spousal income attribution.

Those are just clarifying words there, Mr. Speaker--or Mr. Chairman.

[The Chair, Conservative, Brian Pallister]

Thank you for that promotion.

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

But I would vote for you for Speaker.