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

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

12:50 p.m.

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

Peter Weissman

As I said earlier, I think some of the proposals are in line with the government's policy intent and with the platform they ran on, and I think those are workable. I think there's overkill in the proposals the way they are. They're just unwieldy. Unfortunately, the most dangerous pieces of these proposals are buried. No one understands them except the tax practitioners, and no one is talking about them.

12:50 p.m.

Liberal

Francesco Sorbara Liberal Vaughan—Woodbridge, ON

Mr. Soloman, would you answer the same question, please.

12:50 p.m.

Partner, Tax Services, MRSB Group

Terry Soloman

I would agree as well. I believe there are aspects of the proposals that have merit. I mentioned before that some of the proposed changes to section 84.1, for example, I could support. But in many of these situations, it's fact specific as to whether each individual proposal is having too much collateral damage to deal with an issue that's trying to be dealt with. The proposals end up capturing things that were not intended, or in my view they weren't intended.

12:50 p.m.

Liberal

Francesco Sorbara Liberal Vaughan—Woodbridge, ON

Thank you.

I'm finished, Mr. Chair.

12:50 p.m.

Liberal

The Chair Liberal Wayne Easter

You were really fast.

Mr. Albas.

12:50 p.m.

Conservative

Dan Albas Conservative Central Okanagan—Similkameen—Nicola, BC

Thank you to all of our witnesses for your testimony today. It's very helpful.

Further to Mr. Fergus's line of questioning earlier about whether there are certain advantages and whether or not the system is fair, I would make sure it's on the record, Mr. Chair, that it's very much akin to our highway or public transport system. Some people choose to use a car because it fits their needs. Some people choose a van or a larger truck. They have different features. Obviously we require trucks to stop over and put on chains in certain areas and to comply with certain documentation, because of how they are used and there should be more checks and balances. This is not a matter of whether something is advantageous or not. This is a question of what feature they're operating under.

Concerning TOSI, the tax on split income, I want to talk to Mr. Weissman.

Mr. Weissman, these rules are well established. The government's own document just says it's not winning at court enough. That's why it's putting on these reasonableness tests. There's no definition of what is reasonable. It's going to end up being ultimately the court that decides what is reasonable, given the law.

Do you feel that CRA has the capacity to handle this increased scrutiny of tax on split income?

September 26th, 2017 / 12:55 p.m.

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

Peter Weissman

Given CRA's resources now, I do not think they will be able to handle this. CRA is having difficulty handling tax matters as they are now.

I feel badly for the CRA employees, but there's an influx of audit work going on. Those audits are not resolved satisfactorily because of subjective issues. They go to appeals. The appeals division has a finite number of people to manage the appeals. We're waiting six to nine months to even be assigned to an appeals officer these days.

12:55 p.m.

Conservative

Dan Albas Conservative Central Okanagan—Similkameen—Nicola, BC

Okay. Some $250 million is what the government thinks it will get from these new rules. Do you think they will get that, based on the increased cost of seeing more of these things going to court?

12:55 p.m.

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

Peter Weissman

In fairness, it's not a question I can absolutely answer. My gut feeling is that it will cost more than it will benefit.

12:55 p.m.

Conservative

Dan Albas Conservative Central Okanagan—Similkameen—Nicola, BC

Thank you.

Dr. Dutt, thanks for your testimony.

I've spoken to a number of people in my riding. First of all, whenever I'm in Keremeos, Cawston, Princeton, Logan Lake, or Merritt, the first thing mentioned is doctor recruitment and doctor retention. I've spoken to doctors in the Princeton area who have said that these current rules will incentivize them to no longer work in a clinical setting, but instead go to places.... One doctor in Summerland said they'll stop working in the clinical setting and go to emergency or work for Medeo, which is like a Skype service for medicine.

Will that affect the way patients interact with their doctors, and is that good?

12:55 p.m.

Family Physician, As an Individual

Dr. Monika Dutt

I want to comment on your analogy, which I thought was interesting, because the people who tend to use public transit are often lower income and often unable—

12:55 p.m.

Conservative

Dan Albas Conservative Central Okanagan—Similkameen—Nicola, BC

—and often are subsidized. Could we focus on my question, because I'm asking you specifically as a doctor?

12:55 p.m.

Family Physician, As an Individual

Dr. Monika Dutt

But it's relevant to this issue, because it speaks to who can access what types of benefits. I just want to point that out.

To respond to your question, I think it has been a good conversation concerning the best way to pay physicians. Initially physicians didn't want to be salaried, when medicare was first created; they fought very hard against that. What seems to be coming up now is that physicians want to be paid in various types of models, because our current way of paying many physicians isn't working.

12:55 p.m.

Conservative

Dan Albas Conservative Central Okanagan—Similkameen—Nicola, BC

I'm not talking about how they're being paid, ma'am. I'm asking whether—

12:55 p.m.

Liberal

The Chair Liberal Wayne Easter

I'm sorry, Dan.

12:55 p.m.

Conservative

Dan Albas Conservative Central Okanagan—Similkameen—Nicola, BC

—this will have a marked effect on clinical operations between—

12:55 p.m.

Liberal

The Chair Liberal Wayne Easter

Order. Dan, order.

Mr. Paquet wanted to give a quick answer, and you're over time.

12:55 p.m.

Conservative

Dan Albas Conservative Central Okanagan—Similkameen—Nicola, BC

No, I would like to find out out what effect it will have on clinical experience, Mr. Chair.

12:55 p.m.

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

Dr. Alain Paquet

Thank you. I would like to add quickly, Mr. Chair, concerning doctors who have had experience in Quebec, in which we gave [Inaudible—Editor] and it doesn't increase the number of doctors practising. We had to take other measures to do that.

On the contrary, I don't think the change would decrease the availability of doctors. I think the experience of Quebec speaks for itself in that regard.

12:55 p.m.

Liberal

The Chair Liberal Wayne Easter

Your point...?

12:55 p.m.

Conservative

Dan Albas Conservative Central Okanagan—Similkameen—Nicola, BC

Mr. Chair, I was simply asking her to see whether or not this will affect the way people interact with their physician in a clinical setting. Will there be positive or negative impacts?

12:55 p.m.

Liberal

The Chair Liberal Wayne Easter

Could we have a quick answer on that, Ms. Dutt?

Then we're going to Mr. McLeod.

12:55 p.m.

Family Physician, As an Individual

Dr. Monika Dutt

I would say it will affect the way physicians are able to engage with our provincial organizations and federal government to create a better environment for both doctors and patients.

12:55 p.m.

Liberal

The Chair Liberal Wayne Easter

Dan, we're done.

Mr. McLeod.

12:55 p.m.

Liberal

Michael McLeod Liberal Northwest Territories, NT

Thank you, Mr. Chair.

Thank you to the presenters today. It's a very interesting discussion. Of note, of course, is that we're at the consultation stage, with no registration written yet. Of course, we all recognize that the tax system is very complex and many, many pages long. I've heard many concerns over the last while about how the system needs to be fair, and it needs to be balanced. I think we all agree that it needs to allow for growth, and it needs to allow for retirement. Some people have raised concerns that the proposed amendments don't go far enough. I heard the points being made about how tax credits that I would think were designed to encourage growth for the company were being viewed as the way to plan for strategy for families' retirement. Now, I would think that the mechanisms that are in place, such as RPPs and RRSPs, would be something that would be used as they are by everybody else, but I'm hearing different things on that.

Maybe I could ask you to explain how you see that.