Finance Committee on May 9th, 2013

[Ted Hsu, Liberal, Kingston and the Islands, ON]

Finally, as a result of Bill C-60, will medical documentation for requirements at school or work now be charged GST/HST? For example, in my riding at Queen's University, the health counselling and disabilities services centre might charge $20 for a sick note or $120 for a pre-employment assessment and certification.

Will there now be GST/HST on these services?

[Carlos Achadinha]

It's difficult to answer your question because, as I outlined to you, there is a real purpose test. Without knowing the purpose of these particular items, it would be difficult to give you a specific answer, yes or no.

[Ted Hsu, Liberal, Kingston and the Islands, ON]

It sounds like if you're asking for a sick note, that doesn't help your health, so it would be subject to GST. Is that what you're telling me?

[Carlos Achadinha]

Well, it would be in relation to...for example, are you ill? Is it something to suggest that it's in relation to your particular illness? Does it describe your illness, your treatment plan?

These notes are very different. It's very difficult. It would be up to that particular person. If there's a question about the health care provider, as to what would be the purpose, whether it's a health care purpose or not, they should be directing that fact situation to CRA. It's difficult to give you an answer without knowing the specific facts and circumstances for which these particular documentation tests are being used. I can give you the general purpose, the outline, and how that provision will work.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Hsu.

We'll go to Mr. Jean.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

Thank you, Mr. Chair.

Thank you for coming today. First of all, the reason it would be more appropriate for Mr. Shipley to ask questions on HST and GST is that I'm from Alberta and we don't have provincial sales tax there. I thought that was more appropriate, and I hope we'll see all the provinces turn that way.

I'm from the oil sands, and I recognize what's going on in this country. Right now, we have a fantastic economy, the best quality of life in the world, in my opinion. It's primarily because of the resource revenues. But that is going to end sometime.

My question is about what was done in relation to the changes in our tariffs. I'm talking about a program that has received some notoriety, the GPT program, to which changes were made to support manufacturing. In particular, there were 80 or 90 countries on the GPT list.

Is that correct?

[The Chair, Conservative, James Rajotte]

This is part 3.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

I'm talking about the customs tariff in part 3.

[Pierre Mercille]

Yes, we're in part 3.

[The Chair, Conservative, James Rajotte]

Sorry, we're still on part 2.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

Oh, I'm sorry. I thought we were on part 3. I apologize, Mr. Chair. It's just going too fast for me.

[Voices]

Oh, oh!

[The Chair, Conservative, James Rajotte]

So are those all the questions for part 2?

Ms. Glover.

[Shelly Glover, Conservative, Saint Boniface, MB]

Thanks.

I apologize. That was probably my error. My wonderful colleagues here are zealous about getting to part 3.

I just have one comment. Mr. Hsu isn't here very often, so I thought in the spirit of collaboration I'd help a little bit. After 19 years of police work, I've dealt with a lot of victims of crime, and I've never had an opportunity or a situation where their original tests for their treatment were not available for court purposes. I've never had to have them do X-rays or other medical tests, because, frankly, the professionals in the health care system do a fantastic job at the onset, and then those become readily available for court purposes.

Of course, victims of crime are well taken care of, thanks to many of the measures this government has put forward, including lowering the GST, which I know Mr. Hsu's party would actually increase. So I'm encouraged by the questioning by Mr. Hsu and hopeful that perhaps they've turned the page and it's maybe led to an agreement on lowering the GST.

Nevertheless, I did want to provide him with some actual experience with regard to this. Hopefully, that helps him.

[The Chair, Conservative, James Rajotte]

Thank you.

Are there any further comments by officials?

[A voice]

Part 3.

[The Chair, Conservative, James Rajotte]

According to the time limit here, I'm being very generous with the Liberal Party time, but I think it's best that we do move on.

I want to thank our officials for being here for part 2 and for responding to our questions very clearly. Merci.

Colleagues, with respect to part 3, there are a number of divisions that this committee has to deal with, so I'd like you to prioritize very much. First of all, on part 3, division 1, are there any burning questions that deal with customs tariffs?

I see there are. Okay.

I remind colleagues that we have about an hour, and we have fewer than 18 divisions, because some have been referred to other committees, but I'll ask you to be very brief and concise in your questions. We'll get the same brief and concise responses from officials, and hopefully we will get through all 18 divisions, or the ones we have to deal with.

We welcome our two officials from Finance. If you would like to introduce yourselves, we'll start with questions from members.

[Dean Beyea, Director, International Trade Policy Division, Department of Finance]

My name is Dean Beyea, and I am the director of the international trade policy division at the Department of Finance. With me is Patrick Halley, who is the senior chief of tariff and trade policy at the department.

[The Chair, Conservative, James Rajotte]

Thank you very much for being here.

We'll start questions with Mr. Rankin, please.

[Murray Rankin, NDP, Victoria, BC]

Thank you very much, Mr. Chair, and thank you, witnesses, for attending.

This is sort of a threshold question, a process question, before I get into the meat of the matter, as it were, with this part and this division. I have a question for legal counsel that they can get back to us on. Many people, of course, will only read the summary of Bill C-60, and in the summary, addressing this division of part 3, it reads as follows:

Division 1 of Part 3 amends the Customs Tariff to extend for ten years, until December 31, 2024, provisions relating to Canada’s preferential tariff treatments....

But when one looks at page 43 of the actual act, section 36 says:

Sections 33 to 35 cease to have effect on December 31, 2024 or on any earlier date that may be fixed by order of the Governor in Council.

It would appear to me that there's quite a misleading statement in the summary, because of course it could be brought in at any time before 2024, yet one would get the impression in the summary that it doesn't come in until December 31, 2024.

That's a threshold sort of legal question, and I don't necessarily know that there will be an answer from these officials, although I'd welcome one. Perhaps counsel could get back to our committee on what appears to be a discrepancy.

[Dean Beyea]

I think I can speak to that. The programs exist now. The general preferential tariff for both the developing and least-developed countries exist now. They're in the law, and they're set to expire June 30, 2014. They're being extended now through this bill to the date I think you quoted of December 31, 2024.

[Murray Rankin, NDP, Victoria, BC]

Or any date the cabinet may choose to apply, or any earlier date that cabinet may choose to enact it. That's what it says in the bill, but it's not what it says in the summary.

[Patrick Halley, Chief, Tariffs and Market Acess, International Trade and Finance, Department of Finance]

Just to clarify, if you look at section 36 of the Customs Tariff—not the bill, but the Customs Tariff—it says that sections 32 to 35, which are with respect to the general preferential tariff, cease to have effect on June 30, 2014. As Mr. Beyea indicated, this bill would change that date to December 31, 2024, or on such earlier date that may be fixed by order of the Governor in Council. That is already in law.

[Murray Rankin, NDP, Victoria, BC]

But it's not what the summary says. That's all I'm saying. I think it's very misleading to Canadians. That's all.

Could I talk about the substance for the very few minutes we have available?

My first question is on these reduced tariff rates that are brought into effect as a consequence of Bill C-60, which will actually increase the cost to Canadians on a whole variety of items: bicycles, sandals, wigs, grand pianos. Do you have a list available of the number of items that are subject to the tariff changes that are before us? Is there a comprehensive list we could look at?

[Dean Beyea]

The tariff reductions certainly aren't expected to increase prices. I think maybe you're crossing the two elements here. One is a reduction of tariffs on sports and exercise equipment and baby clothes. Those tariffs were eliminated. There are 38 tariff items in all that were eliminated April 1, 2013, as announced in the budget.

I think the other changes you're talking about are the changes to the general preferential tariff, and there are no changes to the tariff levels at all, just to be clear. There are now 175 countries that are eligible for these programs, and come January 1, 2015, 72 of those countries will no longer be eligible.