Finance Committee on May 30th, 2013

[The Chair, Conservative, James Rajotte]

I call to order meeting number 126 of the Standing Committee on Finance. The orders of the day, pursuant to the order of reference of Wednesday March 6, 2013, are for clause-by-clause consideration of Bill C-462, An Act restricting the fees charged by promoters of the disability tax credit and making consequential amendments to the Tax Court of Canada Act.

Colleagues, I know that you're all well refreshed from your three hours of sleep last night.

I want to welcome our two officials here. I think they're both from the CRA, Mr. Brian McCauley and Mr. Michael Honcoop. Welcome to the committee. Thank you so much for being with us.

I understand there's a motion, and I think it's probably best to deal with it prior to delving into clause-by-clause consideration.

I'll ask Mr. Hsu to move his motion, please.

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

Thank you, Mr. Chair.

I'd like to move that the committee delay our clause-by-clause consideration of Bill C-462 until after the committee has spent at least half an hour questioning witnesses who are independent of the government on the subject of this bill. The reason for that—and I believe that all the committee members will have received the letter from Hon. Scott Brison, for whom I'm substituting today—is that we'd like to get this request on the record because I believe that only five minutes have been devoted to that so far. Only 45 minutes has been spent on Bill C-462 so far, and only five minutes of that was for asking questions of witnesses independent of the government.

I'm told that a lot of people who work with the disabled, who need the disability tax credit, have learned about this legislation only recently and want to make presentations to this committee. The issue is the maximum price set for a consultant to help with the application for the disability tax credit. That price level will affect the economics of the whole service of helping people access the disability tax credit, and it's left unsettled by this legislation. It probably should be considered, or at least some testimony put on the record, here at this committee.

So we'd like to just have 25 more minutes of testimony from witnesses independent of the government.

[The Chair, Conservative, James Rajotte]

Thank you for that.

I'll go to Ms. McLeod, and then Mr. Rankin.

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

Thank you, Mr. Chair.

I think there are a few comments I would like to make.

Although we talked about the hearings that we've had, I think it's also important to acknowledge all the briefs that have been submitted, which I think everyone has done their due diligence around.

As I look at the concerns of the people who are the disability tax promoters or the people who support people in these applications, I see that these concern the price and the maximum that will be payable. I think it's important for them to understand that the way the legislation is written, there's going to be a very extensive consultation process by the CRA. We recognize, certainly, that there are legitimate people out there who are providing an important support.

That is why this legislation was designed, to ensure that protection, and the CRA is going to make sure that those consultations are held. Certainly, they are taking good note of the people who will want to be part of the conversation as this piece of legislation moves forward.

[The Chair, Conservative, James Rajotte]

Thank you.

Mr. Rankin, please.

[Murray Rankin, NDP, Victoria, BC]

That's fine. I don't need to address this.

[The Chair, Conservative, James Rajotte]

Is there further debate?

Yes, Mr. Hsu.

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

Thank you, Mr. Chair.

I'd just like a chance to make a brief clarification. Because I'm substituting on the committee, I'll just assume that a lot of briefs have been submitted. So there is information in those briefs, and I think we should have some time to ask questions to better understand them.

[The Chair, Conservative, James Rajotte]

Thank you.

On this, Ms. Glover.

[Shelly Glover, Conservative, Saint Boniface, MB]

I just want to add that I had a wonderful conversation with someone who submitted a brief, because, of course, I phoned people to make sure that I was well informed of their concerns. I was very pleased to speak with a very kind man by the name of Darren Earn, the president of Grants International Inc. I know that all members of the committee got his brief, and I suggested strongly that he be included in this consultation process. So I'm thrilled that these people are going to be consulted by the CRA.

As Ms. McLeod said, there has been plenty of time for us to ask questions. Cheryl Gallant did a fantastic job of reaching out to many of these people as she was designing this bill. So I have all the confidence in the world that we've done our due diligence here and should move forward, so that we can actually get the CRA working on the consultation process to set those fees with the input of all of these folks who have indicated they would like to be consulted.

[The Chair, Conservative, James Rajotte]

Thank you.

I will go to the vote then on the motion.

(Motion negatived)

We will move to clause-by-clause consideration of the bill.

Pursuant to Standing Order 75.1, consideration of clause 1, the short title, is postponed.

(On Clause 2—Definitions)

For clause 2, I have amendment G-1 in the name of Ms. McLeod.

Ms. McLeod, please, on G-1.

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

Thank you, Chair.

G-1 is looking to import the definition of “person” from the Income Tax Act to ensure that the bill captures all types of promoters, such as individuals, corporations, or other legal entities.

[The Chair, Conservative, James Rajotte]

Thank you.

Is there any discussion?

Mr. Rankin.

[Murray Rankin, NDP, Victoria, BC]

Chair, by way of introduction, the official opposition will be supporting this bill and, indeed, the amendments that are proposed by the government this morning. We agree that it's necessary to establish limits on the maximum fees charged by promoters of the disability tax credit.

However, we believe that the biggest issue related to this is the inability of Canadians to access this service. It's not transparent, and people with disabilities are having trouble obtaining these services. We think the problems have arisen because of the failure of the CRA to do outreach, which has given rise to the lack of services. The cuts, which have had impacts on Canadians, have been dramatic. This is simply an illustration of the needs that have been created.

We won't oppose this bill. We think the bill is understandable in the context of the cuts that the government has created and the failure to do its job for Canadians.

[The Chair, Conservative, James Rajotte]

Thank you.

We'll then move to the vote on G-1.

(Amendment agreed to)

I believe that's unanimous.

Shall clause 2 carry?

(Clause 2 as amended agreed to)

(On Clause 3—Prohibition)

On clause 3, we have amendment G-2.

Again, Ms. McLeod, it's in your name.

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

Thank you.

Amendment G-2 is to improve the penalty structure to ensure that the penalty to which a promoter exposes themself is not limited simply to the profits that they would otherwise have received.

[The Chair, Conservative, James Rajotte]

Thank you.

Is there any discussion?

Mr. Rankin.

[Murray Rankin, NDP, Victoria, BC]

I will ask Ms. McLeod to expand on that.

Why was it necessary to make this amendment from the first version of the bill?

[The Chair, Conservative, James Rajotte]

Ms. McLeod, you can respond, or we can have officials offer their thoughts as well.

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

I'll let the officials go first, and then I can summarize.

[The Chair, Conservative, James Rajotte]

Mr. McCauley, please.

[Brian McCauley, Assistant Commissioner, Legislative Policy and Regulatory Affairs Branch, Canada Revenue Agency]

Thank you, Mr. Chair.

Actually, it's fairly straightforward. If the original wording of the bill had remained, it would have meant there were no consequences for the firm. Let's say a fee was established at $5,000 and they charged $5,500. The $500 would have been the penalty, but there's really nothing at risk for them, in as much as they would have paid that back. There would be no consequence beyond that for them. It really wouldn't have been a penalty.

I think the amendment simply adds $1,000 to that, so there is some real consequence. Otherwise, it would be a very small risk to the business.

[The Chair, Conservative, James Rajotte]

Is there any follow-up on that?

Mr. Hsu, please.

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

It's not exactly a follow-up, but I have some more general questions for the officials, and I'm wondering if—

[The Chair, Conservative, James Rajotte]

On G-2?