Evidence of meeting #8 for Finance in the 39th Parliament, 2nd session. (The original version is on Parliament’s site, as are the minutes.) The winning word was carbon.
A recording is available from Parliament.
Conservative
Rick Dykstra Conservative St. Catharines, ON
Mr. Turner made an accusation that is actually not the case. I asked a question. He is inferring that I made a comment. Thank you.
Conservative
The Chair Conservative Rob Merrifield
Mr. Turner, I believe you were being interrupted.
Amy, if you would answer the question, that would be fine.
Program Director, Pembina Institute
It's fair to say that I'm somewhat familiar with the carbon budget proposal that you refer to.
Liberal
Garth Turner Liberal Halton, ON
There's so much riff-raff going on here.
Can you repeat that, please, Amy Taylor? I didn't hear that.
Program Director, Pembina Institute
Okay. I am familiar with it. I don't know it in a high degree of detail.
Liberal
Garth Turner Liberal Halton, ON
We've got two expert witnesses here who don't know about a plan that was published six months ago. I'm disappointed in that because it goes to the heart of the issue. That is too bad.
I'm going to turn to Jamie Golombek. It's nice to see you again, and thank you for being here.
You've made a few recommendations that you made last year. They were great last year and they're great again this year. I think we should adopt them all.
In terms of the capital gains tax rollover that the Conservatives proposed and then they broke that election promise, do you know why that would have happened?
Chair, Taxation Working Group, Investment Funds Institute of Canada
What we're hearing again is that it's something that seems to be delayed and delayed. I think there were two concerns that we heard about when we consulted with the government. One was, of course, the cost. What would it cost? The original wording of the proposal in the pre-budget platform was a complete elimination of capital tax on any reinvestment within six months on anything, including cottages. I think they looked at that and said it could be billions and billions of dollars that we may not have.
The other problem I think is just a very practical issue. How in the world are you going to monitor that? That's why we and other members of industry have come up with a number of proposals, things like the C.D. Howe's capital gains deferral account, reintroducing the tax prepaid savings plan--which I think was around a few years ago in terms of being discussed--and then maybe reintroducing a lifetime gains exemption.
Liberal
Garth Turner Liberal Halton, ON
Have you been consulted by the Department of Finance at all in the implementation of this?
Chair, Taxation Working Group, Investment Funds Institute of Canada
We did have an opportunity to have a meeting at one point with Ms. Ablonczy at the time, who I think was somehow involved with the minister. We did meet with her and discuss ways whereby we could achieve this.
Liberal
Garth Turner Liberal Halton, ON
I want to ask you about pension splitting. How many Canadians right now, in your estimation, actually benefit from pension splitting the way it was introduced? Do you have a percentage of retired Canadians it benefits?
Chair, Taxation Working Group, Investment Funds Institute of Canada
We actually don't have those statistics.
Liberal
Chair, Taxation Working Group, Investment Funds Institute of Canada
I don't have the number in front of me, no.
Liberal
Garth Turner Liberal Halton, ON
Do you know how many Canadians who are retired were affected by the income trust decision?
Chair, Taxation Working Group, Investment Funds Institute of Canada
Again, I don't have the number in front of me.
Liberal
Garth Turner Liberal Halton, ON
How many people actually can benefit from income splitting? It's a fairly narrow window, isn't it? In order to take advantage of the government's proposal right now you have to have a registered pension, regardless of age, or if you're over 65, only in that instance can you split RRSP or RRIF income, correct?
Chair, Taxation Working Group, Investment Funds Institute of Canada
Correct.
The number I quoted earlier, which was the only hard number I have in front of me, was that most Canadians do not have a defined benefit plan. About 60% do not.
Liberal
Chair, Taxation Working Group, Investment Funds Institute of Canada
As it's currently proposed, pension splitting would not benefit as many as it would, let's say, at age 55. I think if pension splitting were reintroduced to broadly define both RRSPs in addition to the defined benefit plans, a lot more people would benefit starting at an earlier age. I think that was our main point.
Conservative
The Chair Conservative Rob Merrifield
Thank you, Mr. Turner.
We'll now move to Mr. Crête. You have five minutes.
Bloc
Paul Crête Bloc Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
Thank you, Mr. Chair.
My question is for Mr. Larson.
At the start of your presentation, you thanked the Standing Committee on Industry, Science and Technology and the Standing Committee on Finance for having adopted the motions calling on the government to implement the tax measures set out in the unanimous report by the Standing Committee on Industry, Science and Technology. It is always nice to receive thanks.
Yesterday, we had a debate on the issue, and the Conservatives abstained from voting—they did not vote against the motion—for a single reason: the English version contained the word “promptly”, whereas the French version stated le plus rapidement possible.
I would like you to tell us why it is urgent to announce such measures in order to help the manufacturing industry, in all sectors including your own, keep up with the competition.
President, Canadian Fertilizer Institute, Business Tax Reform Coalition
As an example of the need for acting on our recommendations on extending the accelerated capital cost allowance, and to do so very soon, one of my member companies is currently contemplating an investment of--not to give too much disclosure--between $500 million and $800 million, and they laid out the timeline for me. From the company's proposal, from the executive who's generating the proposal within his company to his corporate board approval is one to two years. To book the capital equipment he is now looking at 2010 as the first date the manufacturers of the capital equipment are able to commit--and that's not January 1, 2010--plus six to eight months for delivery. So you're now at 30 to 36 months, plus the corporate planning time period and construction of six to 12 months. You're looking at a total minimum timeline for this kind of investment of four to five years.
Right now, our industry is in a very strong economic position globally. Fortunately, our companies are benefiting from the strong agricultural economy globally. Our companies are making money and they're looking at making investments. If we don't make these investment now in Canada, we expect other companies and other sectors will be making these investments in the Arab gulf, in the former Soviet Union, in other parts of the world, and once those investments are committed we've lost our opportunity to grow our economy in Canada.