Finance Committee on March 1st, 2011

[Filipe Dinis]

Having said that--

[The Chair, Conservative, James Rajotte]

I think we should let him--

[Paul Szabo, Liberal, Mississauga South, ON]

No, no, but now I understand. He's.... The word “sensitivity” doesn't translate here, okay, that you were sensitive...I need a synonym. Tell us, what is it about this issue about the parliamentary right to have information that--

[The Chair, Conservative, James Rajotte]

Okay.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Paul Szabo --has to do with you?

[The Chair, Conservative, James Rajotte]

There's a very brief time left, Mr. Dinis. We'll give you time to respond.

[Filipe Dinis]

Okay. It was really the...it was being sensitive and being respectful of the committee.

[The Chair, Conservative, James Rajotte]

Okay. Thank you.

Monsieur Carrier.

[Robert Carrier, Bloc, Alfred-Pellan, QC]

I'm going to share my time with my colleague.

Mr. Dinis, we parliamentarians are facing a virtual absence of answers from the government when we ask questions in the House. I'd like to go back to the harmonization issue. This is another file. We have before us a request for additional funding, which intrigues me. You're our non-political source of information. I understand that you didn't want to talk about the political decision and orientation, but we should at least get some information.

I'd like to know whether the government is interested in harmonization. There was to be additional revenue, not just additional expenditures. We know the additional expenditures; there has been a compensatory subsidy granted to the provinces that have agreed to harmonize. You also have additional operating expenditures.

Are there any revenues for the government when taxes are harmonized? Is that profitable or is it simply an expenditure that is withdrawn from the provinces and transferred to the federal government?

[Filipe Dinis]

I don't have a figure on the additional revenues, but what I'd like to share with the committee and the member is that from a provincial credit return perspective, the amount of processing we're expecting to be undertaken by the agency is expected to grow from $17.4 billion in 2008-09 to approximately $65 billion annually. As a result, there will be some additional compliance activities.

So while I don't have the overall number for you, I would like to provide an example on the credit side, the provincial credit returns, where the number is going to go up significantly.

[Robert Carrier, Bloc, Alfred-Pellan, QC]

You're concluding that additional revenues are anticipated by the government, aren't you?

[Filipe Dinis]

I will have to get back to you on that.

[Robert Carrier, Bloc, Alfred-Pellan, QC]

I'd really like to have some figures because that's the only way we can—

[Filipe Dinis]

I'll commit to getting back to the committee with those figures.

[Robert Carrier, Bloc, Alfred-Pellan, QC]

Without addressing the political aspect, let's talk about the case of Quebec, which wants to retain administration of the harmonized tax. If I understand correctly, rather than resulting in additional expenditures, that may mean reduced expenditures for your agency. That would be the case if all this administration were retained by another province. Have you done the same analysis?

[Filipe Dinis]

Mr. Chairman, can the member repeat his question, please?

[Robert Carrier, Bloc, Alfred-Pellan, QC]

You're showing us that the harmonization of the taxes results in additional expenditures, that you're asking us to approve. If a province with which there is no harmonization agreement wants to retain administration of a harmonized tax, that means that you won't be submitting any additional expenditures to us. The reverse will be the case; you'll be giving us some good news.

[Filipe Dinis]

In that situation, Mr. Chairman, I don't really know whether there would be a reduction or additional costs. We'd have to see. That's the case of the province of Quebec. In that case, there may be adjustments, but as you know, Quebec is currently receiving financial compensation for the administration of the QST. This would have to be viewed in that context.

[Robert Carrier, Bloc, Alfred-Pellan, QC]

I'm going to give my colleague the rest of my time.

[The Chair, Conservative, James Rajotte]

You have 30 seconds.

[Daniel Paillé, Bloc, Hochelaga, QC]

Yes, I'll only use 30 seconds in view of the quality of the answers.

You're the chief financial officer of a company, sir. You are concerned about information. You're here before the shareholders, or before the creditors. You're like a corporate audit committee. If you were the chief financial officer of a publicly traded company, you wouldn't pass the transparency and ethics tests. I'd like to be able to reflect on that.

[The Chair, Conservative, James Rajotte]

Would you like to respond, Mr. Dinis?

[Filipe Dinis]

Mr. Chair, I am committed to providing the responses to the best of my ability. I believe that I've done so today, and I hopefully will continue to do so in future appearances.

[The Chair, Conservative, James Rajotte]

Thank you.

We'll go to Ms. McLeod, and then to Mr. Hiebert.

[Cathy McLeod, Conservative, Kamloops—Thompson—Cariboo, BC]

Thank you. I'll be sharing my time.

First of all, I do want to comment generally. I appreciate that today was focused on the supplementary estimates (C). The other issues are quite complex and I think do require more comprehensive time to prepare.

My quick question goes back to this harmonization issue. So 5% and 7% are now harmonized and it's 13%. We collect it in B.C., in Ontario, and in the case of many provinces, on behalf of the province. If the sales tax in the province is 7%, is it a straight in and out? Or is there any administrative charge taken off the top to do that? In B.C. the sales tax is 7%. Do we collect it for them and they get the full 7% back?