Finance Committee on Nov. 8th, 2017

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

Thank you, Mr. Chair.

Thank you once again, Mr. Minister.

I want to come back to the topic we were talking about earlier, the Income Tax Act, which relates to your responsibilities as a minister, and the reality of new technologies.

When the foundations of our current tax system were established, neither the Internet nor new technologies existed. Many things have happened since. Netflix aside, I was wondering whether you were at least able to make a commitment to review our tax laws in order to adapt them to the digital age, where the situation is radically different. This week, even the Governor of the Bank of Canada said that this new reality needs to be addressed.

Is your department doing this right now?

Traditional trade, which takes place in a physical space, on the high street, has changed. Are you going to look into that?

[Bill Morneau, Liberal, Toronto Centre, ON]

Our economy is constantly changing, no doubt about it. We will continue to study how our system works to make sure that it works well.

Every year, we look at the changes needed in our budget. If there are changes in the economy, we must ensure that the system continues to work.

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

Do you think those changes need to be made right now or do you think that the situation does not require it today?

[Bill Morneau, Liberal, Toronto Centre, ON]

We always need to consider how we can ensure that the system works. We do it every year. Right now, we are considering the current system for Budget 2018.

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

Okay. I'm glad to hear you say that. We will see what happens in Budget 2018.

I would like to take advantage of the time I have left to talk about tax treaties. I'm not sure whether you can talk about the tax treaty between Canada and Barbados. I know that you had interests in that country. I did say “you had”, in the past tense, to reflect what you just said.

I would like to know whether you were familiar with the tax treaty with Barbados and whether you knew it included an agreement to avoid double taxation. Do you think we need to maintain this particular treaty with Barbados?

[Bill Morneau, Liberal, Toronto Centre, ON]

I have nothing special to say about Barbados.

I can tell you that we evaluate our commitments with each country every year to make sure that the commitments are still meaningful.

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

Considering—

[The Chair, Liberal, Wayne Easter]

Please keep your questions to the supplementary estimates.

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

That's clearly part of the government spending. As I said at the outset, we cannot spend without revenue, and we have a problem with our revenue going into foreign jurisdictions. I think it's important.

From reading newspaper articles, the Prime Minister is able to determine in a matter of seconds whether all taxpayers are paying their fair share. In Mr. Bronfman's case, for example, the Prime Minister said today that everything was legal and everything was fine.

Are you able to say the same thing? Can you make a decision about all taxpayers in a few seconds based on newspaper articles?

[Bill Morneau, Liberal, Toronto Centre, ON]

No, I cannot make a decision. We will consider each situation, but it is not up to me to decide.

[The Chair, Liberal, Wayne Easter]

Ms. O'Connell.

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

Thank you, Mr. Chair.

I wanted to ask about the G20 framework working group and the co-chairmanship of this group. I'm curious as to what the anticipated benefits are for Canada in being involved in this group, what the results have been to date, and what some of the areas are. Obviously, if it's a Department of Finance expenditure, I'm assuming that it's talking about the economy, and I'm assuming global initiatives. Can you elaborate on some of the work that will be done there and how this benefits Canadians?

[Bill Morneau, Liberal, Toronto Centre, ON]

Yes. Thank you.

We co-chair the framework working group at the G20 with India and have done so since 2009. What it does is it allows us to be engaged in the work the G20 does in thinking about the objectives of the international work that we do together. As we think about priorities globally, a good example would be the priority in China, which, under their G20 leadership, was around inclusive growth.

Of course, we were able to have really important insight and ability to influence the agenda. Clearly, each president of the year—that year, China—has the overall responsibility, but we're very involved in actually doing the work that gets us to conclude on what we can do together. Our objective, of course, is to encourage other countries to take economic actions that will help in their country but that will also, as a result, help the global economy, which will have a benefit for Canadians.

In thinking about how the global economy works, we do help Canadians directly. Our growth rate, while hugely advantaged because of the kind of work we've done over the last couple of years in helping Canadians to have more money directly in their pockets, is also enabled because the international growth rate has improved. That's part of the work we do together at places like the G20 table. We have Canadian experts who are at that table helping to get to good global conclusions.

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

Thank you.

My next question is in regard to the funding to strengthen Canada's anti-money laundering, anti-terrorism financing regime and FINTRAC overall.

What are these enhancements, or what are we anticipating that will strengthen this? Is it updating with new technologies? Again, how is this a change?

[Bill Morneau, Liberal, Toronto Centre, ON]

This is a very important and continuing initiative. What we're finding is that the bad guys are out there, and they are getting more and more effective at hacking into any systems that exist. Financial systems are certainly no exception.

If you talk to organizations in this country, large and small, you will find a very large number of them have said they have had some concerns around people who have been trying to actually, effectively, steal money from their organization through cyber means.

We need to stay on top of this. We will continue to invest in protecting our financial architecture. This is an area, if anything, of increased vigilance and one we're also focused on internationally because it's critical that we work together with other countries in protecting our financial infrastructure in particular.

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

Thank you. So it's not just the anti-money laundering, anti-terrorist. It's also just protection of our systems as well and enhancing that security.

[Bill Morneau, Liberal, Toronto Centre, ON]

Anti-money laundering and terrorist financing are a critical part of that. Obviously, having a broad-based, secure financial architecture stops the ability of financial means being gotten by people with bad intent.

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

Thank you.

[The Chair, Liberal, Wayne Easter]

Thank you both.

Go ahead, Mr. Albas.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Thank you, Mr. Chair.

Minister, I notice that you have here funding for the financial sector legislative review.

I and, I'm sure, many of us here as well have heard the same concerns regarding an Office of the Superintendent of Financial Institutions decision to restrict credit unions use of terms like “bank”, “banker”, “banking”. I've written a few times to you in regard to this.

Could you enlighten us as to what you have heard through the review in regard to banking terminology?

[Bill Morneau, Liberal, Toronto Centre, ON]

The use of the term “bank” or “banking” was one, of course, that was originally intended around ensuring that consumers could understand what the institution was actually presenting itself as. I think the Office of the Superintendent of Financial Institutions has been charged with enforcing that act, and it identified a concern around the use of that term that was becoming more prevalent.

We have worked with the credit unions of Canada to move forward on an approach to ensure that they can continue to appropriately characterize their business activities using terms that make sense. That's a process going on right now, but I'm assured that both the association and the credit unions are comfortable with the approach we're taking, which will allow us to ensure that they can maintain the appropriate usage of the terms that customers have come to associate with their business.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Okay. In terms of consultations, I think you would be the first to admit that they don't always go the way they are intended.

When will you be announcing the results of the review, Minister?

[Bill Morneau, Liberal, Toronto Centre, ON]

I don't yet have a date for you, but as the consultations are ongoing, we will have a date in the not too distant future.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

In order to make sure there is certainty for credit unions, I have tabled a private member's bill, Bill C-379. I've written to you about it.

Minister, it would allow for credit unions to continue to use the term “bank”, “banker”, and “banking” as they have traditionally used them over the past 100 or so years. Would you be supportive of that bill?

[Bill Morneau, Liberal, Toronto Centre, ON]

As I've said, we're working through these consultations. I'm not sure your private member's bill will be necessary. I'll consider it when I see it.