Finance Committee on May 21st, 2013

[Prof. Mike Moffatt]

I'd like to think so, yes I am.

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

Just checking.

I agree with some of what you said. I think right now I wake up and use a Chinese toothbrush, a Chinese glass out of a Chinese bed, Chinese clothes, Chinese or Korean cars, and a Korean or Chinese iPod. I would like to see, as I'm sure you would, those products, including the toothbrush and the iPod and cars made by Canadians. I think that would be fair to say.

I'm from Fort McMurray, so you can slam me for that if you like, but I love it there and it's a fantastic place. We all know in this room that the resource sector is keeping Canadians with the great quality of life it has, but that's not forever. We all know it's not forever. So we have to build a manufacturing society—I see you nodding your head in agreement.

[Prof. Mike Moffatt]

I'm from southwestern Ontario, so you'd expect me to agree.

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

I understand and I think we have to use the great economics we have today to give at least our manufacturers a fair playing field with the rest of the world. Wouldn't you agree with that?

[Prof. Mike Moffatt]

Sure. No argument there.

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

That's great because it is about jobs for Canadians and about having an even playing field. So I appreciate your input on that.

I would like to talk to Ms. Cohen. First of all I'd like to say that I was a litigator in Fort McMurray for some period of time. I dealt with many criminals. I had one particular gentleman whom we used to call the “one shot wonder” because he hired me three or four times for assault causing bodily harm as a result of his hitting people. He would hit them once and break their jaw. He was 140 pounds and he would hit them seriously once and they would have a broken jaw and would have to sue him for compensation. They'd have to go through all of these medical tests and other things.

But at the end of the day with him and with many personal injury clients that I had, what would happen is that the insurance company or the individual would be responsible to pay those bills. Is that fair?

[Dr. Karen Cohen]

Yes, absolutely. Either the person pays out-of-pocket or if there is insurance to cover it, that is how it gets paid.

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

Usually house insurance or car insurance.

[Dr. Karen Cohen]

Yes.

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

In 99% of the cases the insurance covers it because that's what it's there for.

[Dr. Karen Cohen]

It's a little bit different whether it's an insured service that you have through employment versus—

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

I understand. But in these cases you're talking about—criminal cases or personal injuries—99% of cases involve somebody going for these non-medical cases and they're being paid by somebody, usually by the individual who caused the incident or somebody else. In this particular case, this one-shot-wonder person, don't you think that they should be responsible for that GST and that medical certificate and that medical assessment? That's what happens. When you have your client assessed by a medical professional—either a psychological assessment or otherwise—it is ultimately paid by the person who caused that harm to them, including the GST, including if they had insurance or whatever. It's still paid by them.

[Dr. Karen Cohen]

Are you talking about the assessment of the person who caused the injury, or who received it—

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

No, I'm talking about the assessment of the victim. I've worked for both sides, the accused and the defendant. So that amount of money after the assessment, including the GST, would be paid by the insurance company and by the person who caused that.

What I'm asking you is for that particular person whom I represented on a continuous basis, who knew he could punch somebody and put them out, shouldn't he pay for that and be on an even playing field, the same as everybody else in the country where they pay tax?

[Dr. Karen Cohen]

There's no doubt there's variability in the cases that come before the courts that involve personal injury, and I wouldn't pretend to be expert in all of them. However—

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

I'm just going on with my line of questioning here because I think you would agree with most of what I'm saying, if not all, that there are also criminal compensation acts in all of the provinces that I'm aware, which will actually help individuals like these. In fact, most lawyers will cover the costs—and I see you agreeing with me—of all of these disbursements, every single one of them upfront, if there's a good case there and a reasonable expectation of winning.

So the person who has to lay out this GST or PST, or whatever it may be, will not have to pay one cent.

[Dr. Karen Cohen]

My understanding from speaking with colleagues who actually do this work, members of our association, is that if the assessment is not approved by the insured, even in cases like you described, then it no longer has a medical purpose.

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

I understand that you may talk to professionals who do that, but a lawyer who is involved will assess the case on a different basis. They're on a contingency fee, and they write up agreements at the start on a contingency fee. They will take all of the costs and disbursements upfront if there's a possibility of winning. When there's not a successful possibility of winning, then it takes care of itself, because nobody is going to cover it. It's fair to say that those are the cases you're talking about, when there is not an expectation of winning.

[Dr. Karen Cohen]

The only thing I would say in response to that is an expectation of winning is different than establishing whether there is a health purpose to someone's complaint.

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

I understand, but it certainly makes it more relevant for taxpayers.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Jean.

Mr. Rankin.

[Murray Rankin, NDP, Victoria, BC]

Thank you, Chair, and my thanks to the witnesses.

I'd like to go back to Professor Moffatt, who is popular.

First of all, I want to say how much I love your blog and your writing in The Globe and Mail. It's very clear and helpful, as you cut through the complexity. You're famous on whether there is or is not an iPod tax in this country. Is it still your view that there is?

[Prof. Mike Moffatt]

As far as I've seen, Sony has actually paid an iPod tax. So either an iPod tax exists or Sony should be granted a refund.

[Murray Rankin, NDP, Victoria, BC]

So it demonstrates the complexity involved, that even Sony isn't entirely sure whether there is or isn't.

[Prof. Mike Moffatt]

Yes, and it all goes to this 9948 issue of whether or not you need end-use certificates. Sony believed that they did not, that end-use certificates were not required. The CBSA saw it differently, and Sony ended up paying back tariffs because of that. A CBSA memo was released, an enforcement memo, saying that it was really not feasible, that they did not expect retailers to be able to collect these end-use certificates. So if these items are being sold at retail, and end-use certificates are required, then there's really no feasible way to get them. Therefore the tariff would apply.