Finance Committee on Nov. 26th, 2014

[The Chair, Conservative, James Rajotte]

I call this meeting to order. This is meeting number 62 of the Standing Committee on Finance.

For our orders of the day, pursuant to the order of reference of Monday, November 3, 2014, we are doing clause-by-clause consideration of Bill C-43, a second act to implement certain provisions of the budget tabled in Parliament on February 11, 2014 and other measures.

Colleagues, we have with us here today witnesses from the finance department and from other relevant departments, depending on which clause we are dealing with.

I'll give a brief statement at the outset. Many of you know how I will proceed in this matter.

I will follow the motion that was adopted by this committee with respect to time allotments, but as you know, it says that “the Chair may limit debate on each clause to a maximum of five minutes per party, per clause”. As we've done in the past, parties have been very good at indicating which clauses they wish to spend a little more time on and which ones we can proceed with more quickly. Obviously, we'll be spending more time on the ones we have amendments for.

That is my intention as to how we will proceed here. We do have some amendments from Ms. Elizabeth May as well. As was agreed to, she will be allotted one minute to speak to each of her clauses as well.

We will move to clause-by-clause consideration.

Pursuant to Standing Order 75(1), consideration of clause 1, the short title, is postponed. Therefore, the chair will call clause 2.

I will go to Mr. Cullen, please.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Chair, thank you for the introduction.

Thank you to the many government officials who have joined us again. It's almost becoming familiar in dealing with this and other omnibus bills.

I know that we may have some interruptions for votes at some point in our timing as well, but just as a general preface, and more to the government officials, it looks like there are amendments that have been moved by all the parties. We've looked over this legislation carefully in the last number of weeks, and we've moved a number of amendments in places where we've heard challenges coming from the witnesses.

We've seen just about 2,000 pages of omnibus legislation in the last little while from the government, and in all of those 2,000 pages, one amendment from the opposition has been accepted. Now, that would lead some on the government benches to conclude that their omnibus bills are perfect, yet in this omnibus bill we have corrections to the last omnibus bill, which itself had in it corrections to the last omnibus bill. So while I understand that there's always a political and partisan context that we operate in here, we are also endeavouring to make good legislation that's correct and is things like constitutional.

We have a number of amendments. We hope the government takes them seriously for consideration.

I appreciate the chair's direction in terms of how we approach the amendments and how we approach the clauses. The opposition, the New Democrats, are not looking to extend this process artificially. We're looking to get through the things that have agreement or that we don't have a great deal of comment on. But as the chair has outlined, obviously the places where we have amendments will be places where we'll seek to make comment and hopefully engage either the government officials or our government colleagues across the way to clarify.

But after almost 2,200 pages of omnibus legislation, you would think that we'd bat a little higher than one change to those many pages of law. We've worked hard on these, and our staff has worked hard.

Thank you to the chair for permission to open this up in this way.

[The Chair, Conservative, James Rajotte]

Thank you very much, Mr. Cullen, for those comments.

Colleagues, I will proceed, then, and please indicate if there's a clause you wish to address.

We do not have amendments here. We are going to do part 1 on amendments to the Income Tax and a related text. This deals with clauses 2 to 91.

We have officials at the table if there are any questions or comments that we need addressed. We welcome them to the committee.

I do not have any amendments as of yet for clauses to 2 to 70. Can I carry a number of those clauses? How many clauses can I deal with?

Mr. Caron, you have the floor.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Mr. Chair, I will probably have a question about clause 23.

[The Chair, Conservative, James Rajotte]

Okay.

Shall clauses 2 to 22 carry?

[Scott Brison, Liberal, Kings—Hants, NS]

On clause 18, no.

[The Chair, Conservative, James Rajotte]

Okay. Then let's do clauses 2 to 17. Shall clauses 2 to 17 carry?

(Clauses 2 to 17 inclusive agreed to)

(Clause 18 agreed to on division)

(Clauses 19 to 22 inclusive agreed to)

(On clause 23)

[The Chair, Conservative, James Rajotte]

Those clauses carry and we move to clause 23.

Mr. Caron, you have the floor.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

I have a question about clause 23.

It pertains to the immigrant investor program. Quebec has its own program. Will clause 23 have an impact on Quebec's immigrant investor program?

[The Chair, Conservative, James Rajotte]

Okay.

Is the question clear?

[Alexandra MacLean, Director, Tax Legislation, Tax Policy Branch, Department of Finance]

If I understand correctly, it's: will the measure will have an impact on the program for immigrant investors?

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Quebec has its own program, which does, after all, depend on decisions made by the federal government.Will the amendments being made in clause 23 have repercussions on Quebec's program?

[Alexandra MacLean]

The measure will eliminate a special exception for the tax treatment of offshore trusts for new Canadians who have been in Canada for less than 60 months. I could not say specifically whether that would affect particular immigrants under particular programs. Any new Canadian who brings their assets to Canada would not be affected by the measure.

[The Chair, Conservative, James Rajotte]

Thank you.

Shall clause 23 carry?

(Clause 23 agreed to on division)

(Clauses 24 and 25 agreed to)

(Clause 26 agreed to on division)

(Clauses 27 to 31 inclusive agreed to)

(On clause 32)

I will move to clause 32. Do you have a question, Mr. Cullen?

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Thank you, Mr. Chair.

I have a question for the officials. I'm not sure if we heard this in testimony from the government. There's been analysis done before on government programs around the eco-retrofit program, both residential and business, in trying to understand what is called the “free rider” effect on programs; that is, the lack of impact on decision-making.

Has the finance department done a similar type of analysis with respect to the child fitness tax credit? If there's a better or more commonly used term for the effect that I'm looking for, you can of course use that.

[Miodrag Jovanovic, Director, Personal Income Tax, Tax Policy Branch, Department of Finance]

I think that first I would like to clarify that the objective of this measure is twofold, to encourage greater physical activity and also to recognize the cost of these activities. With respect to really being able to analyze the marginal effect, we haven't done this, primarily because it's difficult at this point to do that analysis. Also, as I've said, there are multiple objectives behind this measure, and it's still a bit early to be able to do a proper analysis with the data we have.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Thank you. I have just one more follow-up question. You call that the “marginal effect”. Is that a more common term for...?

[Miodrag Jovanovic]

Yes.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Essentially what I'm looking to understand is whether the department has done a review of behaviour that would have happened otherwise, regardless of the tax measure, which has been done before within the finance department.

[Miodrag Jovanovic]

Well, as I've said, and as you can imagine, these studies would have to take into account a vast number of variables and factors—

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Sure, of course.

[Miodrag Jovanovic]

—and you need some time to have proper data.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Then let me ask my second question.

I'll end with this, Chair.

Is it the plan for the finance department to conduct a marginal effect study such as this on what the impact would or would not be based on this tax credit, and specifically on the amount? I know that sometimes with these tax measures the amount can be the triggering point, not just the tax measure itself.

[Miodrag Jovanovic]

I can't give you a precise estimate as to when we will do that. We review tax expenditure measures on an ongoing basis when we find that we have sufficient data, and there are also, potentially, other reasons why we want to analyze more particularly these certain measures. We do that on an ongoing basis.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

I said it was my last question, but this one is truly the last. In analysis that has been done to this point, has there been any attempt to analyze—or will there be in the future—what the profile is of Canadian families that are accessing and using this particular tax credit? Because this may be easier for finance to understand as to who is taking up the program. Does the finance department know that now? If it doesn't, does it plan to understand that in the future?