Evidence of meeting #123 for Finance in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was cra.
A video is available from Parliament.
Director, Federal Affairs, Government Relations and Public Policy, Diabetes Canada
No, they have not, other than the changes to the folio with respect to the nurse practitioners being now eligible to certify, which we're very thankful for and supportive of. There have been no changes to the regulations that I'm aware of.
November 7th, 2017 / 4:55 p.m.
Liberal
Greg Fergus Liberal Hull—Aylmer, QC
Actually, that was one of the things I was going to ask Mme. Roussel, but I know I have limited time, so I'm just going to ask Ms. Hanson. I'm glad that nurse practitioners are now involved in the process. That will be very helpful, I think, to helping people apply.
Have the applications changed as well, or are the applications the same ones that they've had?
Director, Federal Affairs, Government Relations and Public Policy, Diabetes Canada
I understand that T2201 application form that people have to fill out is constantly being tweaked to make it clearer, or make it easier to fill out. So yes, that's changed, and the questions that are asked in the clarification letters have changed, and the language that's been put in the disallowance letters has changed.
Liberal
Greg Fergus Liberal Hull—Aylmer, QC
That's what I picked up from your testimony in response to some of the questions that were asked. It's the letter that follows, the clarification letter, that has changed. If we were to try to get to a solution to this, rather than using the new language that seems to have caused some consternation, would you be in favour of using the old language that refers to the existing legislation? Would that be the right thing?
Director, Federal Affairs, Government Relations and Public Policy, Diabetes Canada
That's our request as an immediate, and at least interim, solution. If the CRA would just revert to its April practices and interpretations of the current guidelines and apply them the same way they were doing in April, most of this problem would be resolved.
Liberal
Greg Fergus Liberal Hull—Aylmer, QC
If that clarification letter used the same language used back in April, as far as you're concerned, that would be a really big improvement.
Director, Federal Affairs, Government Relations and Public Policy, Diabetes Canada
That would be a major help. There would still be some challenges, some inconsistencies, some inequities, but we would be so much farther down the road, I would be extremely happy if that solution were implemented.
Liberal
The Chair Liberal Wayne Easter
I was kind to you; you're over the time. Go ahead and ask one final question.
Liberal
Greg Fergus Liberal Hull—Aylmer, QC
I'll try to make this a good one. Just explain this to me. I understand that what really goes into the calculation are two elements, right? It's measuring the blood glucose levels as well as administering insulin. Those are really the two activities that go into the determination. Is that correct?
Director, Federal Affairs, Government Relations and Public Policy, Diabetes Canada
Yes, along with logging—
Liberal
Greg Fergus Liberal Hull—Aylmer, QC
And there's logging of that information. Two main activities plus the logging of that information would go into the determination of the 14 hours.
Director, Federal Affairs, Government Relations and Public Policy, Diabetes Canada
That's right.
Liberal
The Chair Liberal Wayne Easter
Thank you all.
Sometimes what happens at this committee is that one issue dominates, so my apologies to the other witnesses who didn't get any questions, but I do want to comment on the CRA issue.
There's no question that we're hearing from the CRA side that there's been no change. Even when we're on the road as a committee, we're hearing from the community side and from those affected that there has been a change. There seems to be an open space in-between.
I'm going to give notice right now to the officials. We have a problem with data. We are meeting the minister and officials on November 23. I'm stating right now as chair that I expect the chief commissioner of the CRA to be here. I expect the chief commissioner to bring with him the data that will show what the applications are as best CRA can, and what the exceptions and rejections are as compared to two or three years back. I would also expect from the chief commissioner the time frames on applications and turnarounds on those applications over the past five-year period on the disability tax credit as it relates to diabetes. That way we can deal with some facts.
With that, we'll suspend until the next panel.
Liberal
The Chair Liberal Wayne Easter
For the record, pursuant to Standing Order 108(2), the committee is studying the subject matter of Bill C-63, a second act to implement certain provisions of the budget tabled in Parliament on March 22, 2017 and other measures.
Panel two, welcome. Thank you for coming.
We will start with Ms. Cooper and Mr. Robinson, who are speaking as individuals. The floor is yours.
We'll start with you, Ms. Cooper.
Karen Cooper Drache Aptowitzer LLP, As an Individual
Thank you.
Good afternoon. My name is Karen Cooper. I'm a lawyer with the law firm of Drache Aptowitzer LLP. My clients are almost exclusively charities and not-for-profits. I also teach tax law and the law of charities and not-for-profits at the University of Ottawa. I chair my local hospital board, and I'm the past chair of an organization called the Canadian Land Trust Alliance. I expect it's in respect of that latter role that I was invited to speak.
The Canadian Land Trust Alliance is an organization that represents land trusts across Canada, and the particular measure of concern to them in Bill C-63 would be the changes related to the ecological gifts program. I was given the understanding that this is what you wanted to hear from me about.
Land trusts are non-profit charitable organizations whose main objectives include the long-term protection and management of ecologically sensitive lands. Sometimes they own those lands outright; they acquire them through donation or purchase. Sometimes they enter into something called a “perpetual” conservation agreement, and sometimes an easement or covenant; in Quebec, they're called “servitudes”, real or personal servitudes. The general objective is to preserve or restore the ecological features of the land.
We have about 200,000 individual members and donors and 20,000 volunteers. Collectively, they've protected over seven million acres. That's seven million acres of privately protected land, and this protection contributes to our network of diverse natural landscapes. They play a really important role in delivering on the government's species at risk, biodiversity, and climate change goals.
One of the reminders I like to provide folks is to say that when we're dealing with the ecological gifts program, we're dealing with an incentive in the Income Tax Act that in fact relates more to environmental policy than philanthropic objectives, necessarily. It's a measure that's designed to serve both needs, not just to support philanthropic giving.
Most land trusts are eligible recipients under Environment and Climate Change Canada's ecological gifts program, and there's a whole series of amendments in Bill C-63 that are related to that program. To the end of October 2016, there were 1,260 ecological gifts made, valued at over $807 million. It's a tiny program with an environmental focus, but the dollar values tend to be fairly large because they relate to fairly significant pieces of land.
Most of these ecological gifts contain areas designated as being of national or provincial significance, and many are home to Canada's species at risk. To participate in the ecogifts program, donors must have the ecological value of the land certified in advance, and then also the monetary value of the land certified in advance. Normally, these transactions don't close until the government or an independent panel has in fact certified that this is land that's important to protect and that there is no further disagreement with respect to the valuation.
In addition, for land trusts to participate in the program, the land trusts have to adhere to and implement Canadian land trust standards and practices. These practices promote integrity, perpetual sustainability, fiscal diligence, and good governance. There's an adherence to these standards and practices because generally land trusts recognize that actions of an individual land trust reflect upon the trust community at large.
As I said, Bill C-63 proposes a number of measures to better protect these gifts of ecologically sensitive land. I actually have no specific comments. I was invited to speak and, I believe, take your questions about these provisions given my expertise in the area. I'm more than thankful for that, and I welcome that opportunity.
Liberal
Michael Robinson Q.C., As an Individual
My name is Michael Robinson. I'm just an old lawyer, but I did have a letter to the editor printed that said I was a former board member of Transparency International Canada, an organization you may have heard of and know about. It's an anti-corruption organization. I suspect that I was therefore invited to speak on the inclusion in Bill C-63 of measures to allow Canada to become a member of the Asian Infrastructure Investment Bank. There are implications for corruption prevention that would arise in that context. I think that's why I'm here.
First, one should understand the great power and influence of the world's major international development banks, or IDBs. This sixth one, as of 2015, is this new one, the Asian Infrastructure Investment Bank, which commenced business in 2016.
Infrastructure projects in the developing and lesser-developed world are and will continue to be created significantly through public-private partnerships, or P3s, involving the private sector bidding for the financing of these projects to these banks. The banks are absolutely critical to anybody getting a contract for a piece of infrastructure, because they are the touchstone of respectability and financial credibility for the project when there's a private sector involved. The original five international development banks have the skills and finances to advise upon and become significant financiers, and even equity investors, as many of them are, in these projects in those countries.
Next, one should be aware that the construction industry, which performs these projects, is one of the most corrupt industry groups in the world. I don't think there's anything to debate about that. We've all seen what happened in the province of Quebec when the construction industry was investigated.
The World Bank is clearly the leader in the development of corruption controls and sanctions on the corrupt when so found by the bank, respecting infrastructure and other projects which it finances or in which it invests. The World Bank embarked on its corruption prevention and sanctions regime development in the early 1990s, under the direction of then president Wolfensohn. They've done a terrific job.
In April 2010, the other four established international development banks entered into an agreement for a mutual enforcement of debarment decisions with the World Bank group. The leader of the anti-corruption motion, which really was only effective from the 1990s forward, encouraged the other four banks to join. They are the African Development Bank, the Asian Development Bank, the European Bank for Reconstruction and Development, and the Inter-American Development Bank group. This is a very potent agreement in controlling international corruption, because all five banks mutually debar the corrupt participant from participating in any other projects in which any of the banks are a financier.
On March 7 of this year, the Asian Infrastructure Investment Bank issued a statement in which it recited its progress in creating comprehensive corruption controls and sanctions. It noted that it had, quote, “voluntarily and unilaterally” adopted the list of sanctioned entities and individuals under the aforementioned agreement made by the Big Five, the one that I mentioned, the so-called AMEDD—there are too many acronyms here, I'm afraid—and this was a welcome development.
Now I will skip forward in my notes to leave more time for questions.
Based on the fact that the World Bank's regime represents the gold standard for corruption controls and sanctions, and the fact that it has a wealth of experience in developing that regime, I recommend that Canada condition its membership in the Asian Infrastructure Investment Bank on the AIIB's going the next step and becoming a member of this corruption and debarment recognition agreement, the AMEDD.
It's encouraging to notice that the AIIB stated in its March 7, 2017 public statement that it is actively engaging with these banks in an effort to join them as a signatory to the AMEDD. Once they have become a full signatory, they would be a full formal participant in the efforts of what would then be the big six international development banks to fight together the scourge of corruption.
That's my recommendation. I'm not criticizing the new bank at all. I think we must be aware that it is dominated, in terms of its share ownership and location, and the power to elect its board of directors, by China. China is not exactly at the top of the list that Transparency International maintains for lack of corruption. However, they are progressing, as they stated in March of this year, and that's why I'm making the recommendation I am.
As an addendum, for any of the committee members who might be concerned about risks that Canada is taking on by investing significant sums in the shares of AIIB, as well as creating its own infrastructure bank, it's worth noting that the AIIB stated that it had received in July of this year the highest rating from the Standard and Poor's global rating agency, namely AAA/A-1+, with an outlook of “stable”. Also, the world banking regulator in Basel has given a zero risk to the securities of the AIIB for purposes of investment in securities by regulated financial institutions like banks.
Those are my comments, Mr. Chair.
Liberal
The Chair Liberal Wayne Easter
Thank you, Mr. Robinson.
If you care to look, we spent probably an hour and 20 minutes yesterday on the Asian Infrastructure Investment Bank, with what I thought was a very good exchange of information and questions. If you want to refer to yesterday's minutes when they're out, I think there is a lot of information provided there. I don't know about the AMEDD, or I can't think of it off the top of my head.
Turning to Amalgamated Dairies Limited, we have Mr. Bradley, president.
Go ahead, James.
James Bradley Chief Executive Officer, Amalgamated Dairies Limited
Thank you, Mr. Chair.
Thank you for the opportunity to speak today to the Standing Committee on Finance. I'm here today representing Amalgamated Dairies, or ADL, which is a dairy co-operative located on Prince Edward Island. We currently we have 165 farmer-owners and employ over 300 Islanders.
ADL was established in 1953 and has grown and expanded to now have 100% of P.E.I. dairy farmers as owners. We are recognized nationally as a leader in cheese processing. We export our products across all of Canada and to other international markets.
The dairy industry is very important to the local economy, accounting for over $100 million of farm gate cash receipts and a total of over 3,000 industry jobs generating a payroll value in excess of $100 million.
Our co-operative is a source of great pride for our members, who are highly engaged and rely on their united voice to promote the dairy farmer and the dairy processor voice.
My remarks today will be focused on budget Bill C-63 and the subsection 125(7) amendment that would ensure that the rules preventing the multiplication of the small business deduction do not inappropriately deny access to small business deductions for Canadian-controlled private corporations owned by farmers or fishers selling farming products or fishing catches to an agricultural or fisheries co-operative.
I will admit that, as a dairy co-operative, the original budget bill was a major concern for our industry. As a dairy co-operative that relies on farmer-owners to supply 100% of our milk, we heard loud and clear from our farmers that the proposed changes to the tax system would be detrimental to their operations and their future.
Co-operatives are very important economic drivers, particularly on Prince Edward Island. At ADL, our annual sales of over $200 million are an important foundational piece of our province's great tradition of food production. Dairy farming is an important part of the fabric of our rural communities and a critical part of their continued viability. The original budget bill changes would have had a significant negative impact on family-owned farms, rural businesses, and co-operatives throughout the country.
Access to the small business deduction, which was threatened by the proposed budget provision, provides a significant tax incentive to incorporated farm and fishing business enterprises. Many farmers have incorporated their operations to take advantage of the reduced level of corporate income tax. In P.E.I., the difference in the combined federal/provincial tax rate is 15%, compared to 31% for income deemed ineligible for the small business deduction.
Many farm operations today involve multiple farm families, and many farm operations and rural businesses provide goods and services to corporations that they or family members have an interest in, such as agricultural co-operatives. I'd like to commend the Government of Canada for listening to our lobbying efforts and introducing an amendment to ensure that qualifying farmers and fishers selling to agricultural and fishing co-operatives are eligible for the small business deduction in respect of income from those sales.
Co-operatives have a long history of providing a model of fairness and success. They have proven very successful in the dairy industry by providing farmers the opportunity to be directly involved in the decision-making process and governance of an important part of their industry.
At ADL, it is very clear from our board of directors that they want to remain a strong and vibrant independent co-operative. They are eager to continue to make investments both in their farms and at the dairy processing facility to grow their communities and the economy. In a global marketplace with frequent turbulence, co-operatives provide an important vehicle for this investment, and a method to ensure a fair return for producers, with direct input to governance.
Lastly, we have a comment about future policy changes or initiatives. I would like to take this opportunity to invite the Government of Canada to work with our industry and other co-operatives to determine ways to work together on policies and programs that will see co-operatives grow and expand. The decisions that are made all across government have an impact on our industry and our future. A commitment to collaboration, consultation, and discussion would ensure that policies and programs benefit co-operatives and do not inadvertently cause harm.
I'd like to thank the finance committee once again for the invitation to speak here today on this important budget bill amendment, and I look forward to answering any questions you may have.
Thank you, Mr. Chair.
Liberal
The Chair Liberal Wayne Easter
Thank you, Jim.
I believe I saw somewhere in a tweet today that you have just won an award for cheese at the Royal Winter Fair. I know that members will be asking for a sample, but you probably don't have any in your back pocket.