Evidence of meeting #39 for Finance in the 41st Parliament, 2nd Session. (The original version is on Parliament’s site.) The winning word was amendment.
A video is available from Parliament.
4:45 p.m.
General Director, Tax Policy Branch, Department of Finance
I apologize for being thick, but I think my colleague can respond to the question.
4:45 p.m.
Senior Legislative Chief, Tax Legislation Division, Tax Policy Branch, Department of Finance
Part XVIII is part of the Income Tax Act and as such it would be subject to administration by the CRA.
Under section 267, part of XVIII, financial institutions required to report under part XVIII are required to retain records so that the CRA can perform in its administration and of course its duties.
4:45 p.m.
NDP
Nathan Cullen NDP Skeena—Bulkley Valley, BC
Is this completely exclusive of FATCA? This is just statutes under Canadian law and the tax act.
4:45 p.m.
Senior Legislative Chief, Tax Legislation Division, Tax Policy Branch, Department of Finance
This is just under Canadian law as a general matter for income tax purposes Canadians need to maintain books and records that the CRA uses to ensure compliance with the Income Tax Act.
Part XVIII does contain specific record-keeping requirements and record retention requirements with respect to financial institutions that are required to report to the CRA. As a result, even on the termination of the agreement, part XVIII, if it stays in place, would require that the records be kept for a period, six years in the case of part XVIII, so that the CRA can undertake its enforcement and administrative duties.
4:45 p.m.
NDP
Nathan Cullen NDP Skeena—Bulkley Valley, BC
Is this trying to prevent the law of unintended consequences? I'm just trying to clarify Mr. Keddy's concern. I'm sure some of this originated in your department.
If this is a redundant amendment, an amendment that suggests that the Americans renege on FATCA and we obviously do the same, so be it and we move on with our relationship. Then again, it's a potentially supportable amendment, and Mr. Keddy raised some concern about a section under part XVIII under our own tax law which I can't imagine this amendment affecting.
4:45 p.m.
Senior Legislative Chief, Tax Legislation Division, Tax Policy Branch, Department of Finance
I'll try to explain again.
Even if the agreement is terminated, taxpayers or their financial institutions are required to retain records. Even if the agreement is terminated, there would be an ongoing requirement for the records that were created during the period of the agreement being enforced to be retained by those financial institutions so that the CRA could undertake its duties with respect to administering and enforcing the Income Tax Act.
4:45 p.m.
NDP
4:50 p.m.
NDP
Nathan Cullen NDP Skeena—Bulkley Valley, BC
Tax law is always clear to me, Chair. It's prose most of the time. It's readable stuff.
4:50 p.m.
NDP
4:50 p.m.
Conservative
The Chair Conservative James Rajotte
You can, but I don't know if Mr. Cook can state the same answer. I'm not sure it's going to help.
4:50 p.m.
NDP
Murray Rankin NDP Victoria, BC
The purpose of this is to provide greater clarity as to what would occur in the event it is repealed by the United States. As to the six years of holding financial records that's in the Income Tax Act and would be a continuing obligation under that act anyway. If I'm understanding your evidence, Mr. Cook, it seems like—
4:50 p.m.
Senior Legislative Chief, Tax Legislation Division, Tax Policy Branch, Department of Finance
That's my point, sir. The motion would repeal part XVIII of the Income Tax Act. That's where the requirement to retain records resides.
4:50 p.m.
Senior Legislative Chief, Tax Legislation Division, Tax Policy Branch, Department of Finance
By repealing that part, you repeal the requirement to retain records.
4:50 p.m.
Senior Legislative Chief, Tax Legislation Division, Tax Policy Branch, Department of Finance
Thus CRA will not be able to undertake its administration and enforcement duties.
4:50 p.m.
NDP
Murray Rankin NDP Victoria, BC
We'll withdraw the proposed amendment as a consequence of that testimony.
4:50 p.m.
Conservative
The Chair Conservative James Rajotte
Okay.
You are withdrawing NDP-8 then. Thank you.
I will now call the vote on clause 99. Will it be a recorded vote?
4:50 p.m.
NDP
Guy Caron NDP Rimouski-Neigette—Témiscouata—Les Basques, QC
Yes, please.
(Clause 99 agreed to: yeas 5; nays 4)
4:50 p.m.
Conservative
The Chair Conservative James Rajotte
We shall go to clause 100.
I don't have any amendments on clause 100. Shall we go to a vote on clause 100, then?
4:50 p.m.
NDP
Nathan Cullen NDP Skeena—Bulkley Valley, BC
I would like a recorded vote.
(Clause 100 agreed to: yeas 5; nays 4)
(On clause 101)
4:50 p.m.
Conservative
The Chair Conservative James Rajotte
We'll now move to clause 101.
Colleagues, as you can see, we have a substantial number of amendments here.
For Green Party amendments, Ms. May, do you prefer to speak to them all together or separately?
4:50 p.m.
Green
Elizabeth May Green Saanich—Gulf Islands, BC
Actually, I think it would be helpful to speak to them all together, Mr. Chair. That's because, as Mr. Cullen said, when you rush through one in 60 seconds, it is very hard to make the argument clear, and they somewhat hang together.