Finance Committee on Nov. 7th, 2017

[Kimberley Hanson]

We have, and we did receive a face-to-face meeting with the director general of the relevant part of the CRA on October 25, near to the time of the initial press conference, and we had one follow-up by telephone yesterday.

[The Chair, Liberal, Wayne Easter]

Where is that discussion going at the moment? Do you know?

[Kimberley Hanson]

As mentioned, we are currently looking at setting up a teleconference for the last week of November, where we will have some endocrinologists, some nurse practitioners, and some general practitioners available to discuss the application process, the eligibility criteria, and the clarification questions that the DTC normally asks, and attempt to engage in a process to educate the CRA employees about what goes into managing type 1.

We are currently still at the stage of establishing an agenda and agreeing upon who might be party to that conversation.

[The Chair, Liberal, Wayne Easter]

Thank you. That's good information.

Mr. Dusseault, go ahead.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Thank you, Mr. Chair.

I apologize to the witnesses, but I would like to take a minute to table a notice of motion. Right after, I will ask my questions.

Mr. Chair, I would like you to reserve time during Thursday's meeting so we can discuss this matter, so that there is no interruption during our time with the witnesses. It will allow me to debate the motion and hear the opinions of my colleagues.

The motion is as follows:

That, given ongoing media revelations that could implicate some Canadians in aggressive tax avoidance or tax evasion, the Committee invite Stephen Bronfman, Revenue Chair for the Liberal Party of Canada; and Leo Kolber, former Senator and former chief fundraiser for the Liberal Party of Canada, to appear before the Standing Committee on Finance before November 30, 2017, to answer questions relating to their offshore assets in jurisdictions that are considered to be tax havens.

I'll wait until Thursday to provide more detailed comments to motivate the motion. Today, I just want to mention that this study is important to understand why these two people say they have acted in a completely legal way. This could enlighten the committee on ways to correct the situation, so that these immoral actions become illegal.

So that's my introduction to the topic we could discuss on Thursday.

[The Chair, Liberal, Wayne Easter]

Okay. Notice is given. We'll try to schedule it in on Thursday.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Thank you, Mr. Chair.

I would like to quickly come back to the issue of people who have diabetes in Canada.

According to the minister, nothing has changed; the interpretation hasn't changed. We have heard this many times. Now, you're saying the opposite. Since it's coming from someone who's independent, from civil society, perhaps the government will realize that something is happening and that there is a problem. For our part, although we have repeated it 100 times in the House of Commons and in committee, the government does whatever it wants and keeps telling us the same old story.

Do you really think that the Canada Revenue Agency has the medical skills and abilities to decide that the 14-hour condition hasn't been met?

[Kimberley Hanson]

This is really one of our biggest concerns.

What we're saying is that we don't understand why CRA agents are overturning the certifications of expert doctors and nurse practitioners who are attesting that a patient is requiring the 14 hours. As I mentioned at the outset of my remarks, I don't pretend to say that every single type 1 case always takes 14 hours a week, but many do. Who could possibly be in a better position to comment on that than the doctor or nurse who's managing that person's care? When those doctors and nurses are putting their licences to practise on the line by saying that their patients meet the criteria, frankly I find it stunning that analysts in tax centres would feel they know better and would overturn those attestations.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

I would like to add a comment on this topic. We also hear that technologies have changed. I believe it was in the same letter that my colleague Mr. Poilievre mentioned. It is said that, among other things, it is due to your organization's investment in research to alleviate the effects of diabetes on daily life, technologies are now making treatment time less than 14 hours possible.

What are your thoughts on this comment? Is there a way to address this situation? If the technology has changed, maybe the criteria are no longer adequate.

[Kimberley Hanson]

That's an excellent question.

There's no question that technology has improved vastly in the area of management of diabetes in recent years. It's even stunning for me to think about what's happened in the last 20 years, to say nothing of what's happened since insulin was discovered in 1921 by a Canadian doctor. That technology and the improvements and advancements in it have made it very possible for people with diabetes to manage their diabetes much better than they used to. Countless studies have shown that it has strengthened our ability to minimize the risk of complications and death. It minimizes the costs to the health care system in terms of the amount of emergency health care required by people with diabetes, and so on. However, there is absolutely no reason to assume that it takes less time or that it makes the management of type 1 diabetes quicker or easier.

In fact, the reverse is often true. I'll expand on that slightly. In my grandfather's day, he took his blood sugar by a urine strip once a day, took a fixed amount of insulin by injection a certain number of times a day, and then just basically ate the same kinds of things day after day after day. That was how you managed it.

Now, a person with diabetes often has an insulin pump that needs to be primed, calibrated, programmed, and responded to. They wear continuous glucose monitors that buzz them many times a day to indicate their blood sugar is rising or falling, or they need to take another dose of insulin, or it has low batteries, or what have you. We take our blood sugar with glucometers, as I mentioned, six to 10 times a day. It's a much finer process for managing the disease, but it is not quicker. It's quite the contrary. In fact, the costs of the technology that help us live better and protect our health, and the costs to the health care system, are more reasons why people with type 1 diabetes can ill afford to lose a $1,500 tax credit, let alone their RDSPs.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

I will now turn to the Molson Coors representative.

We are talking about new technologies in health care, but there are also new ways to make beer from concentrates. These are two things that we are trying to fix today.

What is the current tax treatment of beer made from concentrates? Is it considered ordinary beer? Could you enlighten us on that?

[Gavin Thompson]

Yes, absolutely. That was one of the issues we came into this with, which is that it is brewed as beer. Eighty per cent of the water is taken out of it through a process after the brewery, so the excise is applied at the brewery. The full excise is realized there, and then in transport it goes up to a higher alcohol level. We didn't want it to be treated as spirits, because it is still a beer concentrate. When it's reconstituted at the end, the excise is applied there as well, at the consumer level. It is beer throughout the whole process.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

So that would be to prevent excise duties being levied on the total volume of beer, initially, before it is converted into concentrates.

[Gavin Thompson]

Yes. The federal excise comes off right at the brewery point. In a sense, all excise taxes remain whole on this whole process.

[The Chair, Liberal, Wayne Easter]

Thank you, Mr. Dusseault.

We'll turn to Ms. O'Connell.

[Jennifer O'Connell, Liberal, Pickering—Uxbridge, ON]

Thank you, Mr. Chair.

Thank you, all, for being here.

I want to follow up with Ms. Hanson. My questions are not around the qualifications in terms of the amount of time spent. I want to talk about some of your numbers, because I think we need to understand this further. We hear that there has been no change, yet the suggestion is that all of these disallowances show that there has been a change. There seem to be differences in the numbers you provided in your testimony. In your opening remarks, you said that hundreds of people have complained about rejection, and then, when you answered Mr. Sorbara's questions, you said that several hundred clients have contacted you. Then Mr. Poilievre said “thousands”, and then you said there had been 715 disallowances. You also said that you received the 80% number but you don't know if that number is correct.

Which number is it? Diabetes Canada has indicated that it has received 715 disallowances. How many of those 715 had been approved previously?

[Kimberley Hanson]

I don't think there are inconsistencies between those numbers. I have personally seen 715 cases of disallowance. I know, of course, that I have by no means seen every disallowance there has been for people with diabetes in the last six months. I have statistics that are coming from groups that treat or support thousands of patients trying to access the disability tax credit. That's where “thousands” comes from.

For the 715 cases, I'm afraid I can't provide you with a breakdown of exactly what proportion had previously qualified for the disability tax credit. However, based on an online poll of a group that represents 1,500 people who have been seeking the DTC and RDSP for a number of different conditions, I would say that a third to one-half of the people who have been disallowed in the past six months had previously been approved for the disability tax credit. It's clear that it is affecting both new applicants and people who are reapplying.

[Jennifer O'Connell, Liberal, Pickering—Uxbridge, ON]

Where was that online poll? Who conducted it?

[Kimberley Hanson]

It was conducted by the administrator of the Facebook group on the disability tax credit and RDSP.

[Jennifer O'Connell, Liberal, Pickering—Uxbridge, ON]

Oh, it was a Facebook poll. Between a third and one-half in the Facebook poll said they had previously received the credit and now they don't.

[Kimberley Hanson]

A third to one-half of the people who said they have been disallowed since May, for diabetes, had previously applied.

[Jennifer O'Connell, Liberal, Pickering—Uxbridge, ON]

That's out of 1,500 on a Facebook poll.

[Kimberley Hanson]

Not all 1,500 are people with diabetes. They are just people in this forum. What I am trying to say—

[Jennifer O'Connell, Liberal, Pickering—Uxbridge, ON]

It's a forum of 1,500 people. Not all have diabetes, and a third to one-half, we suspect, have identified that they received it once but now don't. It's a third or one-half of less than 1,500 on the Facebook poll.

[Kimberley Hanson]

No. That Facebook group in no way represents every person who has applied for the DTC or RDSP.