Evidence of meeting #9 for Finance in the 39th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was budget.
Senior Chief, Tax Policy Branch, Department of Finance
The Canada Revenue Agency has administered the law on the assumption that the notice of ways and means motion proposed in the fall update would pass, until such point as it became apparent that it would not.
Liberal
John McKay Liberal Scarborough—Guildwood, ON
The only way it will stay at 15% is if this amendment passes.
Liberal
John McKay Liberal Scarborough—Guildwood, ON
There we are. Gentlemen and ladies, if it doesn't pass, you guys raised the rate. There it is.
Liberal
John McCallum Liberal Markham—Unionville, ON
I think my colleague has basically made the point, but I want to confirm one point that was previously acknowledged by a different group of finance officials. The clear and obvious point is that in terms of what Canadians actually pay as the income tax rate, the effect of this budget is to make it go up. Is that correct?
Senior Chief, Tax Policy Branch, Department of Finance
That's correct, although there are other provisions that would mitigate against it, for example, the Canadian employment tax credit.
Liberal
John McCallum Liberal Markham—Unionville, ON
Well, that is true, but I'm only talking about the simple question of the lowest income tax rate. The effect of this budget is to make it go up. Is that correct?
Liberal
John McCallum Liberal Markham—Unionville, ON
The only way we can stop it going up is to bring in this amendment. Is that correct?
Senior Chief, Tax Policy Branch, Department of Finance
Well, the effect of this is to reduce it to 15% for 2005 and up to July 1, 2006, and then to increase it to 15.5% starting July 1, 2006. That's implemented because it's a half-year type of rule. It's implemented at 15.25% for 2006 and 15.5% for 2007.
Liberal
John McCallum Liberal Markham—Unionville, ON
I think you're agreeing with me that the only way we can hold the line at 15% is to pass this amendment; otherwise, it's going to go up. Is that right?
Senior Chief, Tax Policy Branch, Department of Finance
Yes, that's correct.
Conservative
Garth Turner Conservative Halton, ON
Mr. Lalonde, did we not both hear Mr. McCallum say the most important thing Canadians care about is the overall tax burden? I think I heard that. Did you?
Conservative
Garth Turner Conservative Halton, ON
Yes, exactly.
Let's talk about the overall tax burden. Under budget 2006, is the overall income tax burden for Canadians going down or up?
Senior Chief, Tax Policy Branch, Department of Finance
The overall tax burden on Canadians will go down for a combination of reasons, including increases to the basic personal amount, the Canada employment tax credit, and changes to the GST.
Conservative
Garth Turner Conservative Halton, ON
All right.
Mr. Chairman, I'd submit that the concerns of the other side have been completely met and the overall tax burden is decreasing through a combination of factors in this budget.
We're wasting Canadians' time right now. We should move on with it. You're satisfied, and we're satisfied. Our constituents pay less tax. Let's get on with it.
Conservative
The Chair Conservative Brian Pallister
Yes. Mr. Pacetti is next, followed by Mr. Del Mastro and Mr. McCallum.
Liberal
Massimo Pacetti Liberal Saint-Léonard—Saint-Michel, QC
I think there's a bit of a problem here, because there are probably lawyers on the other side and there's an accountant and an economist on this side.
I don't see 16% anywhere in the bill. Again, all we're doing in the bill is increasing the tax rate from 15% to 15.25%, and later on to 15.5%.
My question for the finance officials is this. Where is this proposed employment tax credit? Is it somewhere in the bill?
Senior Chief, Tax Policy Branch, Department of Finance
It's not in this bill. It's one of the measures that's proposed to be included in the second budget implementation bill.
Liberal
Massimo Pacetti Liberal Saint-Léonard—Saint-Michel, QC
But you just said it was in the bill and that was--