Finance Committee on May 1st, 2018

[The Chair, Liberal, Wayne Easter]

I call the meeting to order, as we continue our hearings on Bill C-74, the budget implementation act for the February 27, 2018, budget.

With us this morning, from the Department of the Environment, we have the Associate Assistant Deputy Minister, Mr. Moffet; as well as Mr. Philippe Giguère, Manager, Legislative Policy. From the Department of Finance, we have Mr. Pierre Mercille, Sales Tax Division; Mr. David Turner, Tax Policy Analyst; and Mr. Gervais Coulombe, Director, Sales Tax Division.

I think we've had the remarks previously. Does anybody want to add anything before we start the questions?

On the greenhouse gas pollution pricing act, part 5 of the budget implementation act, are there no opening statements? All right, going to questions.... Do I see none?

Mr. Dusseault.

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

Thank you, Mr. Chair.

My first question is for Mr. Coulombe perhaps. That said, I don't want to decide for the witnesses.

My question is about excise duty on cannabis, HST and PST, excise tax or sales tax. I'd like to know how the exemption mechanism would work in the case of medical marijuana. I'm talking about medical use, with a prescription.

[The Chair, Liberal, Wayne Easter]

We're dealing with the greenhouse gas pollution pricing act now. We'll stick to part 5, the greenhouse gas pollution pricing act.

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

Oh, that's first.

[The Chair, Liberal, Wayne Easter]

We'll go back and forth on these questions in any event, so hold that question until we can get somebody to speak on the cannabis section of the bill.

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

Right.

[The Chair, Liberal, Wayne Easter]

We'll go to Mr. Poilievre and then Mr. McLeod next.

[Pierre Poilievre, Conservative, Carleton, ON]

Has the government calculated how much this tax, when fully implemented, will cost the median-income Canadian family?

[John Moffet, Associate Assistant Deputy Minister, Environmental Protection Branch, Department of the Environment]

Yesterday, as you all likely know, the government released a study titled “Estimated Results of the Federal Carbon Pricing System”. That study explains that it's actually not possible to do precisely the calculation you just asked about, because first, the final impact on Canadian households will depend on what choices provinces and territories make about the system they design; and second, the way they use their revenues in those decisions has not yet been made.

The study that was released yesterday provided one scenario in which the federal carbon pricing system was applied in all nine jurisdictions that currently don't have a pricing system, but we know that will not be the case. Many provinces have already indicated that they intend to develop their own pricing system, and until we know the details of their systems, we will not be able to estimate the impacts of those systems.

[The Chair, Liberal, Wayne Easter]

I haven't seen that study. What is the name of the study and can you make it available to the clerk?

[John Moffet]

Yes, absolutely. The study is entitled “Estimated Results of the Federal Carbon Pricing System”. Minister McKenna released it yesterday, and it's available online, but I'll certainly send a link to the clerk.

[The Chair, Liberal, Wayne Easter]

Mr. Poilievre.

[Pierre Poilievre, Conservative, Carleton, ON]

We're debating the budget implementation act, which would implement a federal carbon tax in provincial jurisdictions that don't have their own. Where that federal carbon tax is implemented based on the $50 a tonne rate it will reach in 2022, how much will that cost the average Canadian household?

[John Moffet]

Again, what we do know is what the cost impacts will be for various commodities. For example, a $10-a-tonne levy translates to about 2¢ a litre of gas.

[Pierre Poilievre, Conservative, Carleton, ON]

Sorry, I don't mean to interrupt, but the question relates to the cost per household. We have already gone through the fact that gas prices will go up by roughly 11¢ once this tax is fully implemented. We also know that household home heating bills will go up by about $200.

The question—and you do have the answer—is how much will it cost the average Canadian household to pay the total tax on all goods?

[John Moffet]

We currently don't have that estimate. I think, again, the impact on households will depend on how that jurisdiction decides—

[Pierre Poilievre, Conservative, Carleton, ON]

No, the specific question was—

[The Chair, Liberal, Wayne Easter]

Mr. Poilievre, let Mr. Moffet answer. You'll have ample time.

[John Moffet]

I was just going to repeat that the impact will depend on how that jurisdiction uses the revenues.

[Pierre Poilievre, Conservative, Carleton, ON]

I'm talking about the federal jurisdiction, which is your domain.

[John Moffet]

Yes.

[Pierre Poilievre, Conservative, Carleton, ON]

In the federal jurisdiction, which is the exclusive focus of my questioning, how much will it cost the average Canadian household to pay this carbon tax?

[John Moffet]

Again, that depends on how the jurisdiction uses the revenues, which the federal government is obliged, under this law, to return to the jurisdiction of origin.

[Pierre Poilievre, Conservative, Carleton, ON]

But you also have, under this act, the ability to return it directly to the people—in other words, to administer the full carbon tax and expend its proceeds. I know you keep trying to shift it back to other jurisdictions in order to externalize responsibility for the question, but I am exclusively asking about the federal government. This bill empowers the federal government to collect a $50-a-tonne carbon tax.

You do know what that would cost the average Canadian household. Can you please tell Canadians now?

[John Moffet]

I'm going to repeat the answer that it depends on how the revenues are used. The government has not decided how it will use the revenues, and it is authorized to return the revenues entirely to the government—