Evidence of meeting #150 for Finance in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was approach.

A video is available from Parliament.

On the agenda

MPs speaking

Also speaking

Kami Ramcharan  Chief Financial Officer and Assistant Commissioner, Finance and Administration Branch, Canada Revenue Agency
Frank Vermaeten  Assistant Commissioner, Assessment, Benefit, and Service Branch, Canada Revenue Agency
Ted Gallivan  Assistant Commissioner, International, Large Business and Investigations Branch, Canada Revenue Agency
Geoff Trueman  Assistant Commissioner, Legislative Policy and Regulatory Affairs Branch, Canada Revenue Agency
Paul Rochon  Deputy Minister, Department of Finance

5:10 p.m.

Assistant Commissioner, Assessment, Benefit, and Service Branch, Canada Revenue Agency

Frank Vermaeten

We have a large and dedicated staff, and they have an important job to try to make sure that people get the benefits they are entitled to. We do these reviews, and in some cases people will get more and in some cases people will get less. Determining eligibility is really important, particularly when there are life changes.

Our agents try to approach these issues with an increasing amount of sensitivity to the circumstances of the individual, and I think we've worked hard under the direction of the government to try to take special circumstances into account. For example, I am aware of accepting a large variety of documents to prove residency, to prove who is the mother, who lives there, so we're taking a—

5:10 p.m.

Conservative

Dan Albas Conservative Central Okanagan—Similkameen—Nicola, BC

To ask a landlord to say who they share a room with, I think, is very demeaning. Perhaps the agency should review those documents to see whether it is maintaining the dignity of the women who are applying for those benefits. Again, there should be a process in place where they are not considered guilty until they can prove otherwise.

5:10 p.m.

Liberal

The Chair Liberal Wayne Easter

Okay. We're going to have to end it there. I think the point has been made to officials that maybe this should be looked at a little more closely. I've had cases myself, the same, to be honest with you.

Before I go to Ms. Shanahan for the last question, I do have one, and that relates to the excise stamp. We hear some complaints from the tobacco industry, etc., that there may be counterfeits, stolen ones, or whatever. When I started to look into this, I found out that the excise stamp was supposed to expire on March 31, 2018, and it's now been extended to September 30, 2019.

My question really is this. On the excise, going forward, will there be an open request for proposals so that other companies may be able to apply to put in that technology? How soon will that happen? September 30, 2019, is not far away.

Mr. Trueman.

May 3rd, 2018 / 5:10 p.m.

Assistant Commissioner, Legislative Policy and Regulatory Affairs Branch, Canada Revenue Agency

Geoff Trueman

You're correct that the contract has been extended. I believe there are also two six-month extension periods possible with that contract. Following that, there would be a request for proposals. That tobacco excise stamp contract that you referred to will also allow us to produce the cannabis excise stamps as well. It was important to get that in place to be ready for that regime.

5:10 p.m.

Liberal

The Chair Liberal Wayne Easter

With the way technology is rapidly changing, is that going to give enough time? Anyway, I'll not get into it.

Ms. Shanahan.

5:10 p.m.

Liberal

Brenda Shanahan Liberal Châteauguay—Lacolle, QC

Thank you very much, Mr. Chair.

I’m really pleased to be here today. I don’t always get a chance to take part in the meetings of this committee.

Minister, I really appreciate the opportunity to ask you questions. I was also a social worker, but I used to be a banker. I also worked in an accounting office.

From 2002 to 2006, the Canada Revenue Agency gave us a very good service and answered our questions. In Quebec, we are fortunate to be able to compare Revenu Québec and the Canada Revenue Agency. It was always said that the Canada Revenue Agency’s services were excellent and that Revenue Quebec’s services were not as good.

I left that job in 2006 to get training as a social worker. A few years later, my colleagues in the accounting office were wondering what had happened, because the situation had completely reversed. The Canada Revenue Agency couldn’t afford to answer questions from professionals or individuals, while Revenu Québec was improving its services.

My colleagues know that the Auditor General’s reports cover a certain period of time. Between 2012 and 2017, there were reports on the Canada Revenue Agency’s call centres. So I fully agree that there were problems with the call centres. We know that positions were eliminated and I have heard anecdotes about that.

You are now working very hard to replace these people. Employees must still have the expertise to answer taxpayers’ questions over the telephone. Is there a catch-up period?

5:15 p.m.

Liberal

Diane Lebouthillier Liberal Gaspésie—Les-Îles-de-la-Madeleine, QC

I thank my colleague for her question.

As I mentioned, the Auditor General’s report didn’t surprise me at all. We made a major change at the Canada Revenue Agency to improve services and ensure that employees develop skills in much more specific areas. In 2016, we implemented what we called service renewal. Changes were made at the Canada Revenue Agency. More specialized services have been centralized in various offices. Instead of dealing with generalist staff spread across the country, people will be able to use these specialized services and get much better information.

Agency employees work very hard. I really want to congratulate them on everything they’ve done in terms of service renewal. The agency’s 40,000 employees contributed to this effort. Phenomenal work has been done since 2016.

Mr. Vermaeten may want to add to that.

5:15 p.m.

Assistant Commissioner, Assessment, Benefit, and Service Branch, Canada Revenue Agency

Frank Vermaeten

Perhaps I can add to that. I think the investments the government has made in the telephone system have really allowed significant improvement; that was in budget 2016, which I think stabilized the funding, and in budget 2018. When you look at what's in the OAG report, you see a reflection of some difficult times. As we move here, more call agents have been hired. There's additional training now, which we call “nesting and gating”, that allows additional support after the initial training. There are investments now being made in new technology.

When you put all that together, I think you'll see a rapid improvement in the call centres. We're seeing that right now. When you look at the filing season we just had, our accessibility has never been higher. For the individual lines, it has gone up significantly compared with 2014-15 and 2015-16. Gradually, every year, we've had improvements. You really see that coming through right now.

5:15 p.m.

Liberal

The Chair Liberal Wayne Easter

We have to end it there, folks.

Thank you, Minister and officials, for coming before the committee and answering our questions.

With that, I see the Minister of Finance and deputy in the wings.

We will suspend for a minute and change up the deck, I guess.

5:20 p.m.

Liberal

The Chair Liberal Wayne Easter

The meeting will reconvene.

With us is the Minister of Finance, Mr. Morneau, and the Deputy Minister, Mr. Rochon.

I will say at the start that I know we have a hard stop at 6:15 p.m. We do have to be done this round at 6:15 p.m. sharp.

Mr. Minister, the floor is yours.

5:20 p.m.

Toronto Centre Ontario

Liberal

Bill Morneau LiberalMinister of Finance

Thank you, Mr. Chair.

Before I address passage of Bill C-74, An Act to implement certain provisions of the budget tabled in Parliament on February 27, 2018 and other measures, I would like to thank the members of the Standing Committee on Finance for their hard work and diligence.

I’m pleased to be here today to talk about our government’s most recent budget and to answer any questions committee members may have.

When I introduced budget 2018 in the House of Commons back at the end of February, it reflected a record of achievement for Canadians. Since November 2015, more than 600,000 new jobs have been created for Canadians, most of them full time. The unemployment rate is at the lowest level we've seen in more than 40 years in this country.

If you compare Canada with its economic peers, the other G7 nations, we're leading the pack when it comes to economic growth since 2016. With budget 2018, we're building on a plan that respects the choice that Canadians made a little over two years ago—a confident and ambitious approach to growing our economy.

Right now, the strength of our economy’s fundamentals allows us to invest in what will help keep our economy strong and growing now and in the long term. I’m talking about areas like infrastructure, science and research, as well as skills and training.

However, we have an obligation to take a serious look at the deeper problems that continue to slow down our people and our economy.

That's where this year's budget comes in.

The measures in budget 2018 reflect our government's continuing commitment to strengthening and growing the middle class, and doing so in a fiscally responsible way. There are important measures from budget 2018 contained in the BIA, and I'd like to take a few minutes to describe a few of them.

The first is the new Canada workers benefit. We know that the future success of Canadians and, indeed, the future success of our economy as a whole rests on giving more people more opportunities to work and to earn a good living from that work. As a strengthened, more accessible, and more generous replacement for the working income tax benefit, the Canada workers benefit will allow low-income workers to take home more money while they work, encouraging more people to join and stay in the workforce, and offering real help to more than two million Canadians who are working hard to join the middle class.

I'll give you a sense of what this will mean for Canadians. A low-income worker earning $15,000 could receive nearly $500 more from the Canada workers benefit in 2019 than he or she would have under the previous working income tax benefit.

Our government will also make it easier for workers to get the allowance to which they are entitled. We are proposing amendments to allow the Canada Revenue Agency to automatically determine whether these tax filers are eligible for the new allowance.

By making this benefit more generous and automatically paying it to all eligible individuals, we will be helping about 70,000 Canadians lift themselves out of poverty by 2020.

In total, our government will be investing almost $1 billion in new annual funding, starting in 2019, to help low-income workers get ahead and stay ahead.

Also included in the budget implementation act are changes to better support Canada's seniors because we believe, as we know Canadians do, that every Canadian deserves a secure and dignified retirement. In June 2016, the government reached an historic agreement with provinces to enhance the Canada pension plan, the CPP enhancement. It will begin to be phased in next January, and it will mean more money for Canadians when they retire so that they can worry less about their financial situation and focus more on enjoying their retirement.

With the action taken by Quebec to enhance the Quebec pension plan in a similar fashion, all Canadian workers can now look forward to a safer and more secure retirement.

The budget implementation act includes the additional CPP benefit increases that were agreed to with the provinces last December. A unanimous consensus was reached to further strengthen the CPP in order to provide greater benefits to parents whose income drops after the birth or adoption of their child, to persons with disabilities, to spouses who are widowed at a young age, and to the estates of low-income contributors. These changes we have put in place without raising CPP contribution rates.

This year's budget, and consequently the current BIA, is also heavily focused on helping Canadian women and Canadian families succeed.

As you may know, women's participation in the workforce in Canada is the highest among G7 countries, but it's still nearly 10 percentage points below the rate for Canadian men, even though Canadian women are among the best educated in the world. The gender wage gap is also an issue in Canada, as it is in many other places. In 2017, for every dollar per hour a male worker in Canada earned, a female worker earned 88¢.

Canadians are under-represented in leadership positions and in science, technology, engineering and mathematics. We also know that unpaid work requirements, such as child care or caring for sick or elderly family members, are disproportionately handled by women, making it difficult for them to take advantage of other opportunities, including work opportunities.

Therefore, in Budget 2018, we announced a new shared EI parental benefit, use it or lose it, to encourage both partners in a two-parent family to share child-related work equally.

The employment insurance parental sharing benefit isn't part of the budget implementation bill, but I'd be happy to answer any questions about it that you may have.

We're also taking steps to further help Canadian families through a strengthened Canada child benefit. Compared to the old system of child benefits, the CCB gives low- and middle-income parents more money each month, tax free, to help with the high cost of raising their children. It's simpler, more generous, and better targeted to help more families who need it most. Thanks to the CCB, nine out of 10 Canadian families now have extra help each and every month to pay for things like healthy food, music lessons, kids' activities, or whatever their family wants. In dollar terms, families that receive the CCB will get on average about $6,800 this year. Across the country I've heard, and I'm sure many other people in this room have heard, this income is making a real difference for families. It's making a real difference for children, too.

Since its introduction in 2016, the CCB has helped to lift 300,000 Canadian children out of poverty. The budget implementation bill strengthens the Canada child benefit by indexing its benefits to the cost of living, starting this July. I should note this is fully two years ahead of the previous schedule. It's because our economy is strong and growing, and because of our government's stronger fiscal position that we're able to offer this extra help to families now.

Finally, Mr. Chair, I’d like to say a few words about our government’s commitment to providing greater support to small businesses that create the jobs Canadians depend on.

Small businesses create good jobs and help support communities and families across this country. Small businesses account for about seven out of 10 jobs in the private sector. We know that low and competitive tax rates allow Canada's entrepreneurs to invest in their businesses and create even more good, well-paying jobs. That's why we cut the small business tax rate to 10%, effective this past January, with a plan to lower it again to 9%, effective January 1, 2019. By this time next year the combined federal-provincial-territorial average income tax rate for small business will be 12.2%, the lowest in the G7 countries and the third-lowest among members of the OECD. For the average small business this will mean an extra $1,600 per year to reinvest in new equipment, new products, new jobs.

There is one last thing I'd like to mention because I know it's of great interest to this committee, and that's the terminology used by credit unions. The budget implementation bill would provide prudentially regulated, deposit-taking institutions, such as credit unions, with the ability to use generic bank terms under the Bank Act, subject to disclosure requirements.

Mr. Chair, the measures contained in the budget implementation bill represent the next step in the government's plan to put people first, to deliver the help they need now, while investing in the things that will deliver growth for the long term.

Thank you again for having me here with all of you today. I'll be happy to answer questions from members of the committee either on budget 2018 or on other measures, as you wish.

Thank you.

5:30 p.m.

Liberal

The Chair Liberal Wayne Easter

Thank you very much, Mr. Minister.

I would be remiss, too, if I didn't thank you and the deputy for the number of officials who have been trooping before this committee as we go through the budget implementation bill. I want to thank them for sometimes sitting and waiting while we continue our work.

We have five-minute rounds.

Mr. Fergus.

5:30 p.m.

Liberal

Greg Fergus Liberal Hull—Aylmer, QC

Thank you very much, Mr. Chair.

I’d also like to thank you, Mr. Morneau. I must congratulate you for presenting a well-designed budget, which was very well received by the people in my riding of Hull—Aylmer.

A good budget is one that provides measures for the less fortunate. I would like to highlight two measures in particular, the Canada Child Benefit and the Canada Workers Benefit, which replaces the Working Income Tax Benefit. I think these two measures will change things for a number of people who are working very hard to put bread on their tables.

I’d like you to comment on those measures, because it is somewhat unusual for a Minister of Finance to take care of those people.

5:30 p.m.

Liberal

Bill Morneau Liberal Toronto Centre, ON

Thank you, that’s a good question.

I think it’s very important to consider how we can have more impact on the economy, both now and in the long term. However, that’s not really possible without people working and people doing things for themselves and their families, which helps the economy at the same time.

That’s why we believe the Canada Workers Benefit is very important. This measure will help people join the workforce. It’s very important to have more opportunities to do so, and it also generates more benefits for the economy when they find work. So they will have more opportunities and will participate in the economy. That’s going to bring them more while they work and it’s going to go on longer as they earn even more.

As for people who are eligible for the Canada Workers Benefit, an automatic process is necessary. That’s very important. That way, we can have more opportunities to improve the growth of an economy that works with more workers.

We know that the Canada Child Benefit is very important for families. This additional money will allow more women to participate in the workforce and help improve family incomes.

For our economy, it was really important to start with that, because families are really better off when they have more money. In addition, they spend their money to meet their needs and that supports the economy. So we are in a good position. It’s really thanks to workers across the country. The Canada Child Benefit and the Canada Workers Benefit are two important measures to ensure that this good situation persists.

5:35 p.m.

Liberal

The Chair Liberal Wayne Easter

Make it a fairly short question, please, Greg.

5:35 p.m.

Liberal

Greg Fergus Liberal Hull—Aylmer, QC

I think it’s important in terms of the economic framework as well. A number of measures will really benefit small businesses. We know that they are an engine of job creation.

Can you give us some details on the measures in Budget 2018 that, combined with other initiatives included in the previous two budgets to really establish a good framework, will increase the number of jobs in the medium and long term?

5:35 p.m.

Liberal

Bill Morneau Liberal Toronto Centre, ON

The most important thing for a small or medium-sized business is, of course, economic growth. At the outset, this is very important. We are in a good position, much better than we were before.

Moreover, we obviously need to have workers. Measures that help families and workers join the workforce improve the situation for small and medium-sized businesses. If we want them to invest more in the future, having a low tax rate is very good. That measure was important to us.

However, the most important thing for us is to ensure that the measures help small and medium-sized businesses make investments. That’s exactly what we’ve done with changes to the system. So it’s very good for them, of course. With the unemployment rate lower, some small and medium-sized businesses are facing challenges. That’s why we continue to implement measures to improve the workforce and to provide the training and education needed to have the workers we need in the future.

5:35 p.m.

Liberal

The Chair Liberal Wayne Easter

Thanks, both of you.

Mr. Poilievre, you have five minutes.

5:35 p.m.

Conservative

Pierre Poilievre Conservative Carleton, ON

Minister, you're here today to discuss this bill. Two hundred pages of it or almost half of it deals with a federal carbon tax that you seek permission to impose in provinces that do not have their own. When that federal carbon tax is imposed and fully implemented, how much will it cost the average Canadian family?

5:35 p.m.

Liberal

Bill Morneau Liberal Toronto Centre, ON

What's important to know is that we have put forth a backstop. We've actually said that what we want, as you know, is a pan-Canadian approach to carbon pricing that allows each province to take their own approach to putting that measure in place.

Of course, up to now, we've not yet heard from each province on exactly the way they're going to move forward. They have until September 2018 to do that. I imagine that if you were to talk to the provinces right now, they're going through analysis on how they can create the best economic outcomes—

5:35 p.m.

Conservative

Pierre Poilievre Conservative Carleton, ON

Sorry, Minister, we're short on time. I'm asking strictly about the federal carbon tax that you seek permission to impose through this bill.

Once again, how much will your federal carbon tax cost the average family when fully implemented?

5:35 p.m.

Liberal

Bill Morneau Liberal Toronto Centre, ON

To be clear, our approach is to—

5:35 p.m.

Conservative

Pierre Poilievre Conservative Carleton, ON

How much?

5:35 p.m.

Liberal

Bill Morneau Liberal Toronto Centre, ON

—price carbon—

5:35 p.m.

Conservative

Pierre Poilievre Conservative Carleton, ON

How much will it cost, though?