Finance Committee on May 3rd, 2018

[The Chair, Liberal, Wayne Easter]

Mr. Minister, you're saying it's revenue neutral?

[Bill Morneau, Liberal, Toronto Centre, ON]

As I've said, it will be revenue neutral.

[Pierre Poilievre, Conservative, Carleton, ON]

So that means the average family won't pay anything.

[The Chair, Liberal, Wayne Easter]

Mr. Poilievre, your time is up.

Mr. Dusseault.

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

Thank you, Mr. Chairman.

Minister, thank you and your team for being here.

My first question is about expectations. In your budget statement and in a speech in the House, you announced pay equity legislation. Even today, you referred to wage gap between men and women in Canada.

Furthermore, everyone expects to see in C-74, which the committee is studying today, pay equity measures. However, this 500-page bill makes no mention of pay equity.

Can you explain why you again decided to delay implementation of pay equity legislation ?

[Bill Morneau, Liberal, Toronto Centre, ON]

As you know, we have two bills that implement our measures in the budget. In the second bill, there will be a tax fairness act. We think it’s very important, and that’s why it’s in our budget. That will be part of our legislation this year. So it will be there.

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

Thank you for your firm commitment to include this in the next budget implementation bill. That said, most people were extremely disappointed, considering the importance you place on it, that it’s not in the first bill. This was the first opportunity to implement such legislation.

My second question relates to a study of our committee on money laundering and the proceeds of crime. In Canada, we are increasingly talking about snow washing. International bodies such as the G-20 are even aware that Canada ranks last in the world in terms of business information.

I’d like your opinion on a national public registry of beneficial owners of Canadian businesses. Your opinion can guide the committee’s work.

[Bill Morneau, Liberal, Toronto Centre, ON]

For our government, it is very important that Canada’s tax system work for those who are here, in Canada, but also for companies and people doing business in other parts of the world. I think that’s very important. We have been working with the provinces to find ways to introduce beneficial ownership, which is very important.

As you know, more than 90% of Canadian companies are registered in the provinces. So we have to work with them to find a solution that works. Every time I’ve had meetings with my provincial counterparts, we’ve had discussions about how to do that. We’ve found an approach and reached an agreement on how we can improve the situation. We’re going to continue to look at that, because we think it’s very important. We’ve also taken other measures to ensure that the tax system works well in Canada. As far as companies are concerned, these measures help us ensure that they don’t circumvent the laws to improve their international tax situation.

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

Thank you.

I’d like to briefly touch on another topic.

[The Chair, Liberal, Wayne Easter]

Be very quick.

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

Our committee has received many letters about medical cannabis and the imposition of sales and excise taxes on medical cannabis.

What is your opinion on the subject? What do you say to all the citizens who have written to us asking that we not impose sales and excise taxes on medical cannabis?

[Bill Morneau, Liberal, Toronto Centre, ON]

We think it’s important to have a tax system that supports our project when it comes to taxing cannabis. This means ensuring that children will not have access to cannabis and that criminals will disappear from the market.

We think full market access is necessary, but we know there will likely be situations in the future where cannabis will be prescribed by a physician. So if we have the identification number of the drug, we won’t tax medical cannabis.

In our opinion, this will be the appropriate approach for people with an illness and for the rest of the Canadian population.

[The Chair, Liberal, Wayne Easter]

Thank you both. We're a little over time.

Mr. McLeod.

[Michael McLeod, Liberal, Northwest Territories, NT]

Thank you, Mr. Chair, and thank you, Minister, for joining us once again.

My staff shared a document with me this morning that made me quite happy. It's the GDP report from Stats Canada, and it showed that there was an increase in every province and territory for the year 2017. That's the best since 2011, which is really exciting to see. It was really good to see that Alberta had increased by 4.9%. The information that was better, though, was that the Northwest Territories increased by 5.2% and Nunavut by 13%, so things are moving in the right direction for us. We're doing a lot of things that are helping us move forward.

I didn't expect that. I raised it with you several times. I expected that we needed to see the land claims and self-government issues resolved before we would see the economy grow. We also needed to see more transportation infrastructure in the north in order to attract industry there, where it's very expensive to do business.

Since our government has come into power, we have 10 sets of negotiations—10 sets of discussions with indigenous governments going on at this point. We didn't have any going on three years ago, which is really positive.

On the infrastructure side, we're playing catch-up. We have a huge deficit. Whether it's municipal or transportation or any part of infrastructure, we need investment. We have a number of things that are causing us some concern. The main one is the cost-sharing component of our investment from the federal government, and the requirement for the municipality or the territorial government, in our case the Government of the Northwest Territories, to put in a share. This is fine, except we are starting to hit our borrowing limit.

I'm not sure if that's the case with the provinces. Is there a difference between the provinces and the territories when it comes to borrowing limits?

[Bill Morneau, Liberal, Toronto Centre, ON]

First let me say that I started out my day this morning with a meeting with the three premiers from the territories, and it feels like I'm ending my day with a similar line of questioning.

It's of course really important that we think about the different challenges that face different parts of the country, starting with the good news, of course, that we are experiencing strong growth in the three territories, and that all three territories have a solid budgetary situation.

Obviously in each case they have significant revenue that comes through the federal government. We also realize that there's always more that can be done, and infrastructure, as was pointed out to me by the three premiers, is a particular challenge. Yes, their borrowing situation is obviously different from other places in the country. I don't believe they issue their own bonds, do they?

[Paul Rochon, Deputy Minister, Department of Finance]

I think they do.

[Bill Morneau, Liberal, Toronto Centre, ON]

The capacity for borrowing is clearly less, though, given the size of the economies. We heard that request from the premiers this morning, to have different potential cost-sharing on infrastructure. It's always important that we look at how the programs we put in place impact different parts of the country, because they certainly have a varied impact.

I don't have any conclusions for you right now but I know that point has been brought up. It was brought up later in the day, as well, with Infrastructure Minister Sohi, and he's working to understand the implications of the current approach on the ability for the territories to actually make good use of the money. What I heard from the premiers was that at least in a couple of cases, there's a concern that they might not be able to fully utilize the infrastructure opportunity because of the cost-sharing required. That's something we need to understand and are working to understand more.

[The Chair, Liberal, Wayne Easter]

Sorry, Michael, a long question and a long answer.

Mr. Poilievre.

[Pierre Poilievre, Conservative, Carleton, ON]

Back to the roughly 200 pages in your budget bill that are dedicated to the federal carbon tax that you will impose in provinces that don't have their own, will that federal carbon tax cost more than $500 for the average Canadian household?

[Bill Morneau, Liberal, Toronto Centre, ON]

Again, I want to step back to the methodology here. What we're aiming to do is have a pan-Canadian approach to the pricing of carbon. We know that, over the long term, this is positive for our economy. We're seeing climate events that are obviously causing important economic challenges.

[Pierre Poilievre, Conservative, Carleton, ON]

Will it cost more than $500, though, just out of curiosity? That was really the question. It was very straightforward.

[Bill Morneau, Liberal, Toronto Centre, ON]

Unfortunately, in coming to an evaluation of something, you do need to consider what the issue is that you're trying to solve. We're trying to solve for long—

[Pierre Poilievre, Conservative, Carleton, ON]

Will it cost more than $1,000 for a household, an average household?

[The Chair, Liberal, Wayne Easter]

Mr. Poilievre, you can't ask the same question 20 times.

[Pierre Poilievre, Conservative, Carleton, ON]

That was a different question.