Evidence of meeting #62 for Finance in the 41st Parliament, 2nd Session. (The original version is on Parliament’s site.) The winning word was clauses.
A video is available from Parliament.
3:55 p.m.
Conservative
The Chair Conservative James Rajotte
Thank you, Ms. MacLean.
We'll go to Mr. Brison, and then to Mr. Cullen.
3:55 p.m.
Liberal
Scott Brison Liberal Kings—Hants, NS
My understanding is that, in the countries that do include cable laying as part of international shipping, from a competitive perspective, some of the companies that are active in this space are resident in those countries.
Therefore, there would be a disproportionate impact on Canadian jobs in this sector. Have you done an analysis of the competitive environment in terms of the companies resident in those countries in this sector with which Canadian companies would need to compete?
4 p.m.
Senior Chief, International Inbound Investments, Department of Finance
We did an analysis. It's always difficult to tell, in the context of the broader international shipping changes, how many jobs that would attract to Canada, and we couldn't come up with a number. The attraction of shipping companies to Canada was clearly one of the main motivating factors for bringing our international shipping rules up to shape.
In terms of the specific cable-laying change, as I said, in our view that was to maintain the status quo. To that end it would be a continuation of what we had before, so excluding it would not change the legal landscape. I don't think we did an analysis of the jobs associated with that, because it was considered to be a maintenance of the status quo.
4 p.m.
Liberal
Scott Brison Liberal Kings—Hants, NS
Given that material, Mr. Chair, in terms of whether our amendment would effectively help preserve the status quo, until we have more information on what the impact on Canadian jobs would be, and given that we've heard from only one witness who was pretty clear that this would put Canadian jobs at risk, I think it makes sense at this point to effectively remove cable laying from the list of exceptions to international shipping.
4 p.m.
Conservative
4 p.m.
NDP
Nathan Cullen NDP Skeena—Bulkley Valley, BC
I have one quick question. The witness who came forward seemed to be somewhat surprised by this move. What's strange about this particular case is that there is only one company involved. Was there an attempt to do any consultation or prior engagement with this company over a move that seems to affect only them through the change to the tax code?
4 p.m.
Senior Chief, International Inbound Investments, Department of Finance
Of course.
We did consult on this measure. We consulted with Canada Revenue Agency on the development of this measure, and they provided the opinion that under the existing law cable laying does not qualify as international shipping. They would have knowledge of their interactions with the cable-laying company that came before this committee.
As well, we published the rules for public consultation on July 12, 2013. We received extensive comments, as part of the consultation process, from interested stakeholders.
If you look at the version that was published for public consultation and the current draft of the bill, we did take a lot of those comments into consideration, and they really did change the rules. We had initial consultation internally and then a public consultation later at which we did receive and incorporate feedback.
4 p.m.
NDP
Nathan Cullen NDP Skeena—Bulkley Valley, BC
This will be a bit of a challenge, because we also now have some disagreement about what the maintenance of the status quo is. Mr. Brison and I think, this proponent are arguing that this amendment that is moved would keep the status quo on taxation. What I just heard from Ms. MacLean is that the status quo would be maintained by the change.
This is a challenging one for us. We try to do our best. I don't think anyone around this table is an expert on this particular part of the tax code. When we are trying to understand what the implications are going to be, any effort without analysis of the impacts on Canadian jobs is worrisome, at least to us in the opposition.
4 p.m.
Conservative
4 p.m.
Director, Tax Legislation, Tax Policy Branch, Department of Finance
I just want to clarify the government's position on the effect. The CRA's position currently is that cable laying is not included in the concept of international shipping, and therefore amendments to add cable laying to the concept of international shipping would be an expansion. That would be CRA's position.
4 p.m.
NDP
Nathan Cullen NDP Skeena—Bulkley Valley, BC
I'm not going to apologize to committee members. This is not an attempt to delay the process, but it's important to understand this. We had some pretty compelling testimony in front of us. This is based on the CRA's interpretation that the tax is not being properly applied to anyone or to the one company involved in laying cable. Is that correct?
4:05 p.m.
Director, Tax Legislation, Tax Policy Branch, Department of Finance
It sometimes happens that taxpayers do not agree with the position of the Canada Revenue Agency.
4:05 p.m.
NDP
Nathan Cullen NDP Skeena—Bulkley Valley, BC
I've never heard of such a case. I'm going to ask you to withdraw that comment under fear of libel. That has never happened to CRA to my knowledge. I mean, it's a challenging one.
4:05 p.m.
Some hon. members
Oh, oh!
4:05 p.m.
NDP
Nathan Cullen NDP Skeena—Bulkley Valley, BC
Perhaps, Chair, is there a way for us to have just a very brief conversation and then go back to this amendment? Or are you seeking a process that goes through each amendment as it is?
4:05 p.m.
NDP
Nathan Cullen NDP Skeena—Bulkley Valley, BC
I wouldn't mind just 30 seconds to consult with my colleagues on this or to go back to it after our break.
4:05 p.m.
Conservative
The Chair Conservative James Rajotte
Let's suspend for 30 seconds.
Okay. We're back. Can I move to the vote on Liberal-1? As I mentioned, this applies to NDP-1.
All those in favour of Liberal-1?
(Amendment negatived [See Minutes of Proceedings])
NDP-1 is also defeated. Shall clause 71 carry?
(Clause 71 agreed to on division)
(Clauses 72 and 73 agreed to)
(Clause 74 agreed to on division)
(Clauses 75 to 88 inclusive agreed to)
(Clause 89 agreed to on division)
(Clauses 90 to 91 agreed to)
4:05 p.m.
Conservative
The Chair Conservative James Rajotte
I want to thank our officials for part 1. Thank you very much for being with us and providing that information.
We'll then move to part 2, amendments to the Excise Tax Act, GST/HST measures, and a related text.
These deal with clauses 92 to 99.
(Clause 92 agreed to)
(Clauses 93 and 94 agreed to on division)
(Clause 95 agreed to)
(On Clause 96)
4:05 p.m.
Liberal
Scott Brison Liberal Kings—Hants, NS
This clause would add GST or HST to certain non-profit health care facilities on their non-health care operation. An example the government has given us is a seniors' residential complex operated by a non-profit health care facility. Under clause 96, the residential services would be subject to HST or GST.
The government argues that this clause simply matches the existing law, in which case it is redundant and will have no effect.
But if, on the other hand, clause 96 is to have an effect, that effect will be to raise the cost of living or reduce services for seniors who live in these residential complexes. Alternatively, the non-profit health care operator could absorb the GST or HST, which would mean they would have to cut services elsewhere.
We can't support this clause, which at best is redundant and at worst will raise costs or cut services to seniors.
4:10 p.m.
Conservative
4:10 p.m.
NDP
Nathan Cullen NDP Skeena—Bulkley Valley, BC
Mr. Mercille, you heard the concerns about either the potential redundancy in this particular clause or the effect on certain Canadians living in those environments under those living conditions.
Is there any way you can assuage the committee that it won't have that impact, a cost of living increase for those Canadians, as Mr. Brison has talked about?
4:10 p.m.
Pierre Mercille Senior Legislative Chief, Sales Tax Division, Tax Policy Branch, Department of Finance
The intent of the amendment is to ensure that the provision applies as it is intended.
The taxpayers put forward a situation where they wanted a relief to apply where it was not the long-standing policy to apply, in a case where a taxpayer was operating a health care facility but was also operating an apartment building in which there was not the level of service for the residents that is normally received in what is usually called a nursing home.