Finance Committee on Nov. 1st, 2011

[Gérard Lalonde]

These were designed to be non-refundable tax credits that would reduce the tax burden on the amounts spent for these activities. If there's no tax burden on the amount spent--you don't have the tax payable to absorb the credit--making them refundable would not serve the purpose of reducing any tax on that amount, because there's no tax payable.

[Hoang Mai, NDP, Brossard—La Prairie, QC]

Thank you.

Regarding tax credits for qualifying environmental trusts, amendments have been made to include the debt of public corporations, investment-grade debt and securities that are listed on a designated stock exchange. Does that not make environmental trusts less secure in terms of protection?

[Ted Cook]

You're referring to the measure on qualifying environmental trusts. The main thrust of that amendment is to allow qualifying environmental trusts to be established with respect to pipelines as well as the existing qualifying environmental trusts, which relate to quarries, mines, and things of that nature.

In the course of developing that proposal, it was requested that our qualifying environmental trusts be allowed to have a slightly broader range of investment. With respect to the extension of the investments that are allowed, they are at the next tranche of publicly listed securities and debts of corporations.

In that sense, it's a slight broadening of the investment abilities of those qualifying environmental trusts. It is not a very large broadening of their investment abilities. It was specifically designed in the sense that these were not supposed to be a list of prudent investments for the trusts, the idea being that these trusts are established provincially as well.

[The Chair, Conservative, James Rajotte]

Thank you.

We'll go to Mr. Adler.

[Mark Adler, Conservative, York Centre, ON]

Thank you, Chair.

I want to focus on the gas tax and the financing of the municipal infrastructure. Why is the funding only being legislated starting in fiscal 2014-15 and not immediately?

[Gérard Lalonde]

We are here in essence to respond to part 1, and I gather we're going through the bill part by part. That particular thing is not in part 1.

[The Chair, Conservative, James Rajotte]

This is on part 1.

[Mark Adler, Conservative, York Centre, ON]

My mistake.

[The Chair, Conservative, James Rajotte]

Ms. McLeod.

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

I briefly mentioned this to the minister, but he didn't have time to respond. There are a number of measures having to do with tuition, RESPs. Could you talk about the measures in that area—what we're doing and where we're going?

[Ted Cook]

With respect to RESPs, the measure you're referring to is the allocation of RESP assets from one RESP to another. This measure relates to RESPs that are set up not by the parents of the siblings but by someone like an aunt or uncle. When an aunt or an uncle sets up an RESP for an individual, she or he cannot set up a family RESP. They're only allowed to set up individual RESPs. Where one sibling is unable to use the RESP amounts, they were essentially trapped in that RESP. This measure will allow the transfer of RESP assets from one RESP to those of the sibling, as long as the sibling's RESP was set up before he was 21 years old.

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

I also note that there are a number of other measures related to education, like the tuition tax credit. You've made some changes there. In view of the diversity of skilled workers that we're going to need in the future, could you talk about what that's actually going to look like and who it's going to benefit?

[Ted Cook]

You're most likely referring to two measures in the act. One is examination fees, which are distinct from a course of study but are necessary in order to carry on a trade or a profession in Canada. These will now be eligible for the tuition tax credit as long as the fees paid are in excess of $100.

In some cases, the final examination fees may be part of the course of study. For other professions, such as veterinarians, the actual examination fees are paid separately and up until now would not qualify for the tuition tax credit. In addition, we have shortened the length of courses that will be eligible for the tuition tax credit—courses undertaken outside Canada. This measure recognizes that in some cases foreign universities may have semesters shorter than the traditional 13 weeks.

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

As I understand, it will also allow for some occupational changes there in terms of the examination fees.

[Ted Cook]

That's exactly right. That's the examination fee. It's broadly written, both professional fees...and the examination fee that's required in order to carry on a trade will also qualify.

[The Chair, Conservative, James Rajotte]

You've got one minute.

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

The last measure that I think is certainly very important for a number of businesses is the extension of the eligibility for accelerated capital cost allowance for clean energy generation and conservation equipment. Could you talk about what the changes are there?

[Ted Cook]

Certainly. The specific amendment you're referring to has to do with energy conservation and clean energy generation equipment in the context of the use of waste heat energy. For example, you may have an industrial process or compressor plant that pushes oil through a pipeline, and waste heat that would otherwise be unused is now used either within the activity or perhaps sold to a power grid. That equipment will now qualify for capital cost allowance under classes 43.1 and 43.2, which are 50% and 30% depreciation rates.

[The Chair, Conservative, James Rajotte]

Thank you.

And thank you, Ms. McLeod.

I'll just make sure I clarify for members. There are 22 parts to the bill, so as the chair, I'm bringing forward officials when it's been indicated to me by members that they want to ask questions on certain parts. Those parts that have been mentioned are 1, 2, 5, 8, 9, 10, 15, 16, and 18. I'll bring the officials forward for each particular part and have questions, rather than keep shuffling people in and out of the witness seats. That's the logic of it.

I hear the bells are going off. As you know, I need unanimous consent to keep going, if members do want to keep going for a few minutes. The vote is down the hall, but I do need that unanimous consent.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Mr. Chair, I think if we went for another 10 minutes, that would be reasonable.

[The Chair, Conservative, James Rajotte]

Can we go for another 10 minutes? Okay. Thank you.

We'll go to Ms. Murray, please.

[Joyce Murray, Liberal, Vancouver Quadra, BC]

Thank you, Chair.

And thank you for being here to help us understand this bill's provisions.

I asked a question of the minister and he didn't have time to get into the detail of my question. It's with respect to the non-refundable tax credits for family caregivers, children's arts, and volunteer firefighters. Do you have estimated dollars of what it will cost over the next three years to provide those tax credits? Do you have an estimate of what it would cost to have those be refundable tax credits instead?

[Gérard Lalonde]

On the second part of your question, we've already responded to that. We don't have that number. The credits are designed to be non-refundable tax credits in order to relieve the tax burden on the amounts expended for the particular activities.

In terms of the cost of those measures, it would have been outlined in the budget.

I see that Mr. Cook has already pulled them up.

[Ted Cook]

As outlined in the budget, the expectation is that the children's arts tax credit would cost approximately $100 million per year for the next three years. The volunteer firefighter tax credit would cost approximately $15 million per year for the next three years. The family caregiver tax credit would be approximately $160 million for the first three years.

[Joyce Murray, Liberal, Vancouver Quadra, BC]

Am I to understand that it was not even analyzed what it would cost to provide this relief to lower-income families? There was not an analysis of that? There was no analysis of how that might help those families have their children in these activities—for example, the arts?