Evidence of meeting #23 for Finance in the 40th Parliament, 3rd session. (The original version is on Parliament’s site, as are the minutes.) The winning word was bankruptcy.
A recording is available from Parliament.
Bloc
Robert Carrier Bloc Alfred-Pellan, QC
So, these people have been deprived of significant amounts of income since then.
Bloc
Robert Carrier Bloc Alfred-Pellan, QC
They have been deprived of considerable income for years now, but we cannot turn back the clock. That is an additional reason to at least correct the situation for future years on behalf of these people.
Thank you.
Conservative
Mike Wallace Conservative Burlington, ON
Thank you, Mr. Chair.
Thank you, witnesses, for bringing the bill forward.
I just need a couple of clarifications, really. You admit, then, that the word “bankruptcy”, the issue of bankruptcy, is not actually mentioned in the five clauses that actually make up the bill. Is that correct? The word “bankruptcy” is not in there. I've been reading it over and over. I think Mr. McCallum mentioned it. The bill does not mention bankruptcy. Is that correct?
So you cannot honestly tell me—
Bloc
Louis Plamondon Bloc Bas-Richelieu—Nicolet—Bécancour, QC
The word “bankruptcy” does not currently appear in the bill, but it can be added. That was the legislator's intent and when we presented the bill—
Conservative
Mike Wallace Conservative Burlington, ON
Since bankruptcy was not in the bill, and we asked the Parliamentary Budget Officer to look at what the definitions would be and how it would have an effect, is it reasonable that it could be interpreted that it would include companies other than those that are bankrupt because there's no mention of bankruptcy in the bill?
Bloc
André Bellavance Bloc Richmond—Arthabaska, QC
Mr. Wallace, I can only repeat that the legislator's intent—in this case, that is us—truly was to have this apply when a company goes bankrupt. The legislator and the people who draft legislation—I imagine they are the same people who draft government bills—worded it as you now see it.
Conservative
Conservative
Mike Wallace Conservative Burlington, ON
Here's my next question to you. Day after day at committee and in the House we hear from the Bloc Québécois that this is provincial jurisdiction, so keep your nose out of it. We hear that Canada should stay away from this issue and from that issue, that they're a provincial responsibility.
You have said here today, sir, that this is a provincial responsibility. Why would we make an exception in this case? Why are you, as a party, making an exception in this case? First of all, is it not provincial jurisdiction?
Second of all, I think you need to check your facts about the insurance programs that are available from provinces to cover deficits in defined pension plans that don't go well, because that is not the case in every province. In Ontario that plan itself is bankrupt; they don't have enough money to cover it off, so it doesn't really work, to be perfectly frank with you.
I'd be happy to hear how you justify asking the federal government to get involved in provincial jurisdiction.
Bloc
André Bellavance Bloc Richmond—Arthabaska, QC
There is no contradiction whatsoever. Provincial jurisdiction is not affected by this kind of bill. This is comparable to a tax credit provided to young people who settle in a region, for example, to a tax credit for people with a disability and to many other tax credits that are now available, at the federal level, in Quebec or in any other province.
I am aware of no interpretation that would prompt me to conclude that this bill infringes on Quebec's jurisdiction. This simply deals with the people who have been cheated and whom federal lawmakers believe should be compensated for their losses, just as been done with other tax credits. There is no difference.
Bloc
Louis Plamondon Bloc Bas-Richelieu—Nicolet—Bécancour, QC
This amends a federal statute. It does not affect provincial jurisdiction. We are amending a federal statute. How can a federal statute help people who have been treated unfairly? Well, through amendments to the federal Income Tax Act. We came up with this solution in cooperation with researchers, as a way of showing our compassion for these individuals.
Conservative
Mike Wallace Conservative Burlington, ON
It's my understanding this bill needs a royal recommendation for it to become law or for it to even be voted on in the House of Commons at third reading. You can correct me if I'm wrong about that, but I believe it needs a royal recommendation. Were you aware of that when you drafted the bill?
Bloc
André Bellavance Bloc Richmond—Arthabaska, QC
Yes, absolutely. Of course, the government always has the option of doing that for a refundable tax credit. It can require a royal recommendation. However, we were hoping we could convince you to support this bill and grant the royal recommendation. That is still our hope.
Conservative
Conservative
Liberal
John McKay Liberal Scarborough—Guildwood, ON
I'm looking for the triggering event in the bill. The first part of the bill has to do with definitions: the “defined benefit provision”, the “eligible individual”, and the “money purchase provision”. You talk about benefits under the money purchase provision of the plan “if the employer had made the contributions”.
I don't understand why you put what I think should be the triggering event in the definition. There doesn't seem to be any event that actually triggers the claim. You give there how you calculate the money and several other things, but how is Revenue Canada supposed to know there's some basis for this claim? I don't quite follow it.
Bloc
André Bellavance Bloc Richmond—Arthabaska, QC
On their tax return, people will have to show that they have actually suffered a loss of retirement income following the closure or failure of the company that employed them, before they can avail themselves of the tax credit.
Bloc
Louis Plamondon Bloc Bas-Richelieu—Nicolet—Bécancour, QC
That is well known information, because the pension fund is administered. The trust which administers the pension fund could easily provide the exact amount of the losses incurred by every individual during the year.
As to what the 22% represents, I think federal officials can calculate it fairly quickly and ascertain whether that reflects what is being requested.
Liberal
John McKay Liberal Scarborough—Guildwood, ON
Let's say that's true. I've lost $100,000 in my pension plan, for argument's sake, and I get some trustee or someone to say that I've lost $100,000. If that's true and I file that, what is in this bill that says Revenue Canada has to give me a 22% credit? Could you point me to that section?
Bloc
André Bellavance Bloc Richmond—Arthabaska, QC
In the second part of the bill, where it talks about the amount of tax deemed to be paid by subsections 120(2) or (2.2) and following, on page 2, is where it says the Department of Revenue has to—
