Evidence of meeting #126 for Finance in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was bank.
A video is available from Parliament.
Director General, Office of Energy Efficiency, Department of Natural Resources
It would have to be through a cabinet process, which I think would be led by Treasury Board. There's a process that occurs, and then the directive is a public document.
Conservative
Tom Kmiec Conservative Calgary Shepard, AB
It's a public document, so the public eventually would know if the government chose to stop gazetting regulatory changes. That would be a public document.
Director General, Office of Energy Efficiency, Department of Natural Resources
Sure. There is a very robust process of pre-consultation that we would do with our stakeholders and with provinces and territories anyway. We have very effective relationships. We talk to our stakeholders and we consult Canadians and the provinces and territories when we're making a regulation.
On top of that, there's a requirement before you go to the Gazette, part I, and when you're in the Gazette, part I, there's a certain time period you have to follow. Those changes have to be taken into account and considered, and then that goes back to Treasury Board before it becomes an effective regulation. There's a long-standing process.
Liberal
The Chair Liberal Wayne Easter
Are there any further questions?
On the repeal of the Agreement on Internal Trade Implementation Act, that act is being replaced by the new act. Is that correct?
Liberal
The Chair Liberal Wayne Easter
Also, it seems to me that I read somewhere but I don't remember where: why is the Timber Marking Act being repealed?
Melanie Hill Special Advisor, Strategy and Innovation Policy Sector, Department of Industry
I'll start with your first question with respect to the Agreement on Internal Trade Implementation Act. The Canadian free trade agreement replaces the existing agreement on internal trade from 1995, as that legislation is no longer required. As such, the Canadian free trade agreement implementation act will replace the Agreement on Internal Trade Implementation Act, and that's why that repeal is specified in division 10.
On your second question with respect to timber marking, it is a very outdated act from, I think, 1870. It applies to only three provinces. It required that timber being floated down inland rivers be marked.
Liberal
The Chair Liberal Wayne Easter
Yes, it's a little different now. Thank you.
The other question I had on this, though, is in terms of how the provinces and the Government of Canada came to an agreement on internal trade. What's the process for making changes in the future? We're not exactly at free trade within the country, even with this agreement. What's the process for making improvements or for new negotiations down the road? How is that done? Does it have to be amended by the legislation? What's the process?
Stephen Fertuck Acting Director General, External and Trade Policy Branch, Department of Industry
In relation to changes or amendments to the Canadian free trade agreement, the practices in place would be similar to those that were in place with respect to the agreement on internal trade itself. Interestingly, the AIT over the course of the better part of 20 years in fact had 14 different so-called protocols of amendment. That was the process that was put in place to introduce administrative monetary penalties and to strengthen provisions related to labour mobility requirements, and so on, within the agreement. All provinces and territories and the federal government would get together and agree on a new reform or net liberalization. There's a mechanism within that such that once each jurisdiction has agreed to it, there's an updating of the agreement itself, so you could see an amendment to the Canadian free trade agreement in a subsequent year which would incorporate that new net liberalization.
Liberal
The Chair Liberal Wayne Easter
Are there any further questions from any of the committee members on division 10?
With that, thank you very much.
We will go to clause-by-clause consideration of Bill C-63.
I should mention to committee members before we start that we will have an interruption at about 11:00. Members of the finance committee from Iraq are here, and they wanted to meet with our finance committee. Because we couldn't do that, we have invited them in just to observe how we operate. I know everybody will be on their best behaviour. We'll probably go through a round of introductions as well.
Pursuant to Standing Order 75(1), consideration of clause 1, the short title, is postponed, and we will go to clause 2.
Conservative
Pierre Poilievre Conservative Carleton, ON
On a point of order, Mr. Chair, we want to work as efficiently as possible on clause-by-clause. As you know, these processes can often be arduous. I speak on behalf of the Conservative delegation, and we're open to allowing passage on division. We know the outcome of the votes anyway, but we would like, with respect to the amendments, to have the opportunity to clarify some of the effects of those amendments.
We did receive them on Friday. I know that was the earliest we could get them. There are a few on which we are not 100% sure about what the effect of the amendment would be, and if it would be possible to have brief questions for the officials when they come up, I would appreciate that opportunity.
Liberal
The Chair Liberal Wayne Easter
That's not a problem. The legislative clerk has blocked areas where no amendments are in place and we can move them on division.
Officials from several departments are here. When we get to amendments, we'll take the time and you'll have the opportunity to ask questions however you wish to.
There are no amendments from clause 2 to clause 18.
(Clauses 2 to 18 inclusive agreed to on division)
(On clause 19)
We have amendment PV-1.
Ms. May, the floor is yours.
Green
Elizabeth May Green Saanich—Gulf Islands, BC
Thank you, Mr. Chair.
I will just remind committee members that I'm here because you passed a motion that requires that I be here. If you hadn't passed that motion, I could have presented these amendments, as is my right, at report stage, but this is an end run around changing the rules of legislation through PROC by having each committee pass identical motions. It was originally dreamt up by Mr. Harper's PMO and has been replicated by Mr. Trudeau's PMO.
This is just to state my objections to this process. At 11 o'clock I have a different clause-by-clause, on the arms trade treaty. I hope to be able to present all my amendments here before I have to go through the same exercise at a different committee at the same time.
I have to say that overall, this is a very good bill. I actually voted for sending it to committee. I think I'm the only opposition member who did.
However, there was a commitment made by the previous government. Mr. Harper committed in 2009 at the G20 summit in Pittsburgh to eliminate fossil fuel subsidies. This commitment was carried forward in the Liberal platform, and there is a recommendation at this point from all global financial institutions that every country eliminate its fossil fuel subsidies. It's the recommendation of the World Bank. It's the recommendation of the International Monetary Fund. It's the recommendation of the International Energy Agency.
This amendment I'm putting forward amends what is essentially an improvement on the status quo coming forward in this bill. On page 28 under paragraph 19(1)(b), there is a change to take us from a 100% writeoff for unsuccessful oil and gas drilling, otherwise known as Canadian exploration expenses, to reduce it to about a 30% writeoff. It is a step in the right direction, not fulfilling the promise initially made in 2009 by Mr. Harper and again by Mr. Trudeau in the election, but at least it's moving in the right direction.
It came to our attention that advisers in the oil and gas sector are advising their companies to speed up action, to do more unsuccessful oil and gas drilling before the deadline in this bill. Advice to oil and gas companies suggests that we have until the end of 2018 for oil and gas companies to continue to incur expenses and that if doing so is commercially possible, companies should consider accelerating their drilling.
My amendment is very straightforward. It's to close the transition period, so that unsuccessful oil and gas drilling will not receive a tax benefit at 100% until the end of next year, but that it will end this year. That's the effect of this amendment.
Thank you, Mr. Chair.
Liberal
The Chair Liberal Wayne Easter
Is there any further discussion on Ms. May's amendment PV-1?
Mr. Albas.
Conservative
Dan Albas Conservative Central Okanagan—Similkameen—Nicola, BC
I would just say, Mr. Chair, while I appreciate that the member is wanting to hurry up the process, one of the biggest things that we heard during the pre-budget consultations when we visited right across the country was that many in the business community are feeling a lack of certainty when it comes to the way this government approaches things, including consultations at which it can't meaningfully engage because there are so many different subjects, so for us to suddenly switch something would create less certainty.
I think that right now the business community is really suffering from a lack of that, so I will oppose this amendment.
Liberal
The Chair Liberal Wayne Easter
With that, we will vote on amendment PV-1.
(Amendment negatived [See Minutes of Proceedings])
(Clause 19 agreed to on division)
(On clause 20)
On amendment PV-2, go ahead, Ms. May.
Green
Elizabeth May Green Saanich—Gulf Islands, BC
Thank you, Mr. Chair.
I can now explain that PV-1 does indeed mean Green Party. The committee officials might originally have thought that the letter “G” in “Green” meant that it was a government amendment.
Amendment PV-2 pertains to the same thing as our first amendment, namely, the transition period for the acceleration of oil exploration activities. That is why it is not necessary to repeat all the words in amendment PV-1.
Thank you.
Liberal
The Chair Liberal Wayne Easter
Is there any further discussion?
We'll vote on the amendment.
(Amendment negatived [See Minutes of Proceedings])
(Clause 20 agreed to on division)
(Clauses 21 to 169 inclusive agreed to on division)
(On clause 170)
We have amendment NDP-1.
Mr. Dusseault.
NDP
Pierre-Luc Dusseault NDP Sherbrooke, QC
Thank you, Mr. Chair.
This amendment to clause 170 provides that the Minister of Finance shall not act unilaterally as regards the excise duty on cannabis. This is exactly what the provinces are now demanding from the federal government. The provinces feel betrayed by this government right now.
During preliminary discussions on excise duties on cannabis, the provinces clearly pointed out that most of the responsibilities related to legalization would fall to them and to the municipalities. During our prebudget consultations, we heard that the municipalities are worried about the burden this will place on them and the shortfall in the tax base owing to regulation and the need to ensure that the legalization process goes smoothly. For the federal government, this is not a heavy burden, at least not in terms of taxes. It simply requires that certain provisions be removed from the Criminal Code and that basic rules be established, which the provinces may then modify as they wish. The provinces will bear most of the responsibility.
In the preliminary discussions, the provinces' position was laid out for everyone. The provincial finance ministers indicated that sharing the excise duties on cannabis on an equal basis was not an acceptable formula. Despite this, the government came back two weeks ago with a proposal to share the excise duties equally. The provinces do not agree with this formula; it is another slap in the face. They have to address the matter again and present their position to the Minister of Finance.
That is why this motion provides for consultation in order to establish principles and objectives and conclude an agreement on coordinated taxation of cannabis. This is exactly what the provinces want. Adding clause 8.71 would require the minister to consult the other parties and come to an agreement, which he has thus far refused to do. His approach has been one of confrontation and a lack of respect for what the provinces want.
I urge the government and all members of this committee to support this motion, which would make it possible to reach a consensus, appropriate taxation and, above all, a sharing of the tax revenues that is fair to those who are really responsible for regulating cannabis. I therefore invite my colleagues to support this amendment.
Liberal
The Chair Liberal Wayne Easter
Thank you, Mr. Dusseault.
I know that the official opposition would like to hear from some of the witnesses on this one. We're dealing with part 4, the Federal-Provincial Fiscal Arrangements Act. If we could have some officials come forward, we'll have a discussion.
We have Mr. Coulombe and Mr. Mercille. We're open for discussion.
Mr. Poilievre.
Conservative
Pierre Poilievre Conservative Carleton, ON
The effect of this amendment would be to require a meeting or a discussion among federal and provincial officials on the share of taxation each level of government would receive from the taxation of cannabis. Is that correct?
Liberal
Gervais Coulombe Chief, Excise Policy, Sales Tax Division, Tax Policy Branch, Department of Finance
Yes.
Pierre Mercille Senior Legislative Chief, Sales Tax Division, Tax Policy Branch, Department of Finance
The way I read the amendment, it requires an invitation of the representative from the province. It's not totally clear whether it requires unanimous consent before an agreement is entered into with the willing province. It's a little bit ambiguous in that sense.