Finance Committee on Sept. 26th, 2017

Evidence of meeting #106 for Finance in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was businesses.

A video is available from Parliament.

On the agenda

Tax Planning Using Private Corporations: Contributions to the Department of Finance’s Consultations

Committee Business

MPs speaking

Also speaking

Ron Bonnett President, Canadian Federation of Agriculture

Scott Ross Director of Business Risk Management and Farm Policy, Canadian Federation of Agriculture

Dennis Howlett Executive Director, Canadians for Tax Fairness

Daniel Kelly President and Chief Executive Officer, Canadian Federation of Independent Business, Coalition for Small Business Tax Fairness

John Wonfor National Tax Office Leader, BDO Canada, Coalition for Small Business Tax Fairness

Jerry Dias President, Unifor

Kevin Milligan Professor of Economics, University of British Columbia, As an Individual

Allan Lanthier Retired Partner of Ernst & Young and Former Chair of Canadian Tax Foundation, As an Individual

Peter Weissman Chartered Professional Accountant, Trust and Estate Practitioner, As an Individual

Denise Workun As an Individual

Terry Soloman Partner, Tax Services, MRSB Group

Monika Dutt Family Physician, As an Individual

Alain Paquet Full Professor, School of Management, Economics Department, Université du Québec à Montréal, As an Individual

1 p.m.

Liberal

The Chair Liberal Wayne Easter

Who wants to answer? Are there any volunteers?

Mr. Soloman and Mr. Weissman.

1 p.m.

Partner, Tax Services, MRSB Group

Terry Soloman

Thank you, Chair.

It's a great question. Certainly business owners can utilize the RRSP system for contributing funds to their RRSP for their retirement. However, when you contribute to an RRSP, you lose flexibility if one of the goals of holding the money inside a corporation is for future expansion or working capital. It's not easy to just take the money back out of the RRSP at that time. Many business owners do make the decision that in lieu of an RRSP, they will do what I would call a corporate investment strategy, which is really multipronged. Part of it is for business growth and part of it is for retirement, but it's primarily a flexibility issue. It works better in some situations.

1 p.m.

Liberal

The Chair Liberal Wayne Easter

Mr. Weissman, you can have one last comment.

1 p.m.

Chartered Professional Accountant, Trust and Estate Practitioner, As an Individual

Peter Weissman

I think that the question you've asked oversimplifies things. Yes, money is retained in companies to fund retirement. It's also retained in capital-intensive companies for expansion, for downturns, etc.

As I said earlier in my opening comments, there are some types of corporations that don't need to accumulate as much reserve. Professional corporations, for example, which I thought were the target of the government's election platform—and many of my colleagues will not be happy with me saying this—do not need the same kind of capital retention that normal family businesses do. There are ways to address that much more simply than through what's been proposed in what we're told is the consultation stage. This is not like any consultation stage I've ever seen in my career.

1 p.m.

Liberal

The Chair Liberal Wayne Easter

Thank you very much. That will end this panel.

I want to thank each and every witness for coming forward and answering questions as directly as they can. I also thank the members.

We will have to suspend for a couple of minutes and then go in camera to deal with a budget for this study or people who come from afar will be shortchanged.

[Proceedings continue in camera]