Finance Committee on May 22nd, 2018

[The Chair, Liberal, Wayne Easter]

Ms. O'Connell.

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

Mr. Chair, my comments will be very similar to those in the last round. At the end of the day, if these cannabis products go through the process of testing and get a DIN, then they would be exempt from the excise tax, similar to other pharmaceutical or prescription drugs. I think it's not too much to ask that if you would like this exemption, then that work, that testing, needs to be put in place.

Again, I think it's important that there is a path toward this. I don't deny that there is a significant use and purpose for medical cannabis, but I think it has to go through that process just like any other prescription drug does.

(Amendment negatived)

(Clause 69 agreed to on division)

(Clauses 70 to 72 inclusive agreed to on division)

(On clause 73)

[The Chair, Liberal, Wayne Easter]

NDP-4 has been set aside due to the defeat of NDP-3.

We'll go to NDP-5.

Mr. Dusseault.

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

The idea is somewhat similar.

These are two amendments to clause 73, on pages 60 and 61 of the bill.

The first part of the amendment refers to the new section entitled “Imposition and Payment of Duty on Cannabis”. The wording reads as follows: “Duty is imposed on cannabis products produced in Canada...[...]”. The purpose of the amendment is to specify once again that that duty applies to products “other than prescription cannabis drugs”. In fact, this refers to the bill's original definition, which has just been adopted by the members of the committee. The amended wording would thus read: “Duty is imposed on cannabis products produced in Canada, other than prescription cannabis drugs, at the time they are packaged in the [...]”.

The other part of the amendment aims to introduce a similar change, by replacing line 27 on page 61, in the part entitled “Duty on imported cannabis”. The amendment would add “other than prescription cannabis drugs”, regarding the imposition of duty on cannabis.

So this is similar to what was discussed earlier. The purpose is to exempt prescription cannabis from duty imposed on cannabis.

[The Chair, Liberal, Wayne Easter]

Ms. O'Connell.

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

Mr. Chair, I don't know if it's a translation issue, but based on what the amendment says, it's not about all medical cannabis; it's specifically about prescription cannabis. A duty imposed on a prescription cannabis drug would not be payable under proposed subparagraph 158.3(a)(vii) of the amended Excise Act, 2001. Therefore, these amendments are not needed.

With all due respect to the chair, if your proposed amendment is meant to be all about medical cannabis, that's not how the amendment is drafted, based on the reading. As has been explained in the previous amendments, if it were by prescription, it would have a DIN and would not be subject to the duty. I'm not going to support this amendment because it's redundant, and I think it does not really represent what was meant to be drafted. As it's written, it seems redundant, because it would be covered already. That's my understanding, anyway.

[The Chair, Liberal, Wayne Easter]

Mr. Kmiec.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Mr. Chair, I want to hear from the officials. Could they comment on the impact of this amendment? With respect to the point being made on the government caucus side, is this redundant?

[Gervais Coulombe, Director, Sales Tax Division, Tax Policy Branch, Department of Finance]

I will answer simply, as did member of Parliament Ms. O'Connell. Indeed, the duty imposed on cannabis does not apply to prescription cannabis products, pursuant to subparagraph 158.3(a)(vii) which is to be found in the legislative provisions before you. The amendments requested are thus not necessary to achieve that purpose.

[The Chair, Liberal, Wayne Easter]

You got your comment in, Mr. Coulombe.

We'll vote on amendment NDP-5.

(Amendment negatived [See Minutes of Proceedings])

(Clause 73 agreed to on division)

(Clauses 74 to 94 inclusive agreed to on division)

(On clause 95)

We're on amendment NDP-6.

Mr. Dusseault.

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

Thank you, Mr. Chair.

So we are at this time discussing the Excise Tax Act. We mentioned the GST. It is somewhat different from excise taxes, as I was saying earlier. This amendment intends to broaden the definition or to ensure that prescription cannabis will not be subject to the GST or other sales taxes in Canada.

What was particularly denounced by the groups that came to testify before the committee was the fact that sales taxes currently apply to cannabis. Although the bill is attempting to solve that issue, it repeats the definition that is found in the Excise Tax Act, 2001, which is too restrictive, according to witnesses, and to me as well.

According to the wording of the bill, the only type of cannabis that will be exempted from the GST and other sales taxes will be prescription cannabis, that is to say cannabis for which a drug identification number has been obtained. Medication is not taxed in Canada, of course. However, some people who are currently using cannabis for medical purposes would see sales taxes added to the cost of the product. If we adopt the bill in its current form, the cost of medical cannabis would be higher than it is now.

That is why I am submitting this amendment to clause 95 of the bill at line 13 on page 78. I hope my colleagues will support me.

[The Chair, Liberal, Wayne Easter]

Ms. O'Connell.

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

Mr. Chair, again, to Mr. Dusseault, I think this is going to be similar to my earlier comments on the previous amendment. I think the wording around “prescription cannabis” in the amendment makes this redundant, because if cannabis is prescribed, it would have a number, a DIN, and would then be exempt. Under the current GST/HST rules, prescription drugs would be exempt from excise tax and the GST/HST.

The key once again is that if medical cannabis is prescribed, these amendments are not needed. It's redundant. That prescription that is required.... In order to get a prescription, the product itself has to have a DIN. Under the current regime, there aren't prescriptions for medical cannabis. They are.... What's the wording? I used it earlier. They are basically exemptions allowed through medical practitioners or doctors under the Criminal Code, but moving forward under this regime, a prescription would then come with the fact that the product itself has a DIN, and then all those tax exemptions kick in.

Again, this amendment is redundant based on the wording of “prescription cannabis”, because it would already be covered under both acts.

[The Chair, Liberal, Wayne Easter]

Mr. Dusseault.

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

I would like to remind my colleague, very respectfully, that I know that medication is not taxed in Canada and that if a cannabis product had a drug identification number, of course, it would be tax-free.

The problem today is that an extremely small number of cannabis products have a drug identification number. This means that when the bill is passed, the current problem will not have been solved at all, that is to say that people who have a physician's prescription and go to obtain cannabis for medical purposes will still pay a sales tax. In light of the very small number of cannabis products that have a drug identification number, the situation will be the same after the bill is passed. The bill does not solve the problem in any way.

That is why we must broaden the definition to include all of the cannabis products consumed for medical reasons.

[The Chair, Liberal, Wayne Easter]

Ms. O'Connell.

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

Just on that point, I can understand, Mr. Chair, if that is the objective of the intention of this amendment, but that's not actually what the amendment says. The amendment says “and cannabis products, other than prescription cannabis”.

You're actually not saying “all cannabis products”. You're saying that prescription cannabis is the item that really should be exempt.

I understand the intention, but that's not the text of the amendment. The amendment is specific to prescription cannabis, and prescriptions are exempt. That's the difference. If the intention is for something else, this amendment does not reflect that intention of “all cannabis products”. I have to go on what's in front of me, and what's in front of me is redundant, because it's only prescription cannabis.

[The Chair, Liberal, Wayne Easter]

Okay, all in and all done?

On amendment NDP-6, do you want a recorded vote?

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

Yes, please.

(Amendment negatived: nays 5; yeas 4 [See Minutes of Proceedings])

(Clause 95 agreed to on division)

(Clause 96 agreed to on division)

(On clause 97)

[The Chair, Liberal, Wayne Easter]

We have amendment NDP-7.

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

The objective is the same. It is only a few lines after the ones targeted by the previous amendment. This concerns Part III of Schedule VI of the Excise Tax Act and the definitions of cannabis products. The objective is the same and I won't belabour the point, but I will say that the cannabis that patients consume for medical purposes should not be taxed.

[The Chair, Liberal, Wayne Easter]

Ms. O'Connell.

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

Mr. Chair, I understand that this has the same intention, but unfortunately, it's written in the same way, which specifies “prescription cannabis”. That again is redundant, because any prescription for cannabis would already be exempt from the GST/HST. Perhaps it's just in the drafting that it doesn't meet the intent, but it's the same language that makes it redundant.

[The Chair, Liberal, Wayne Easter]

We'll have a recorded vote.

(Amendment NDP-7 negatived: nays 5; yeas 4 [See Minutes of Proceedings])

(Clause 97 agreed to on division)

(Clauses 98 to 119 inclusive agreed to on division)

[The Chair, Liberal, Wayne Easter]

Then we set aside clauses 120 to 198, I believe, just to be sure, until tomorrow at 3:30 p.m.

(Clauses 120 to 198 allowed to stand)

We'll start with part 6, division 1, clause 199.

There are no amendments to clauses 199 to 403.

I'm double-checking here to make sure we don't make a mistake, folks. There are no amendments to part 4. I'll just go through them.

To part 4, division 1, there are no amendments.

To part 6, division 1, there are no amendments.

To division 2, the Canada Deposit Insurance Corporation Act, there are no amendments.

To division 3, the Federal-Provincial Fiscal Arrangements Act, there are no amendments.

To division 4, securities issued or guaranteed by foreign governments, there are no amendments.

To division 5, the Exchange Fund Account, there are no amendments.

To division 6, on bank notes, there are no amendments.

To division 7, the Payment Clearing and Settlement Act, there are no amendments.

To division 8, the Canadian International Trade Tribunal Act, there are no amendments.

To division 9, the Canadian High Arctic Research Station and applications of an order in Nunavut, there are no amendments.

To division 10, the Canadian Institutes of Health Research Act, there are no amendments.

To division 11, the Red Tape Reduction Act, there are no amendments.

To division 12, the Communications Security Establishment, there are no amendments.

To division 13, the Department of Employment and Social Development Act, there are no amendments.

To division 14, the Employment Insurance Act, there are no amendments.

To division 15, the Judges Act, there are no amendments.

To division 16, the financial sector legislative renewal, there are no amendments.

To division 17, the Western Economic Diversification Act, there are no amendments.

To division 18, the Parliament of Canada Act, there are no amendments.

To division 19, the Canada Pension Plan, there are no amendments.

That takes us to clause 402.

I will put the question on clauses 199 to 403.

(Clauses 199 to 402 inclusive agreed to on division)

Now we're on part 6, division 20.

I see no amendments to clause 403. Shall clause 403 carry on division?