Finance Committee on May 23rd, 2018

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Could we have a recorded vote?

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

[The Chair, Liberal, Wayne Easter]

We could vote on the section and then break. There are no amendments on clauses 162 to 185, and then we will start part 5.

(Clauses 162 to 185 inclusive agreed to on division)

[The Chair, Liberal, Wayne Easter]

I would suggest that we go vote and come back and start part 5, starting with clause 186 and amendment NDP-9.

The meeting is suspended.

[The Chair, Liberal, Wayne Easter]

We are reconvening our clause-by-clause consideration of Bill C-74.

We are starting where we left off, at clause 186. We're starting to deal with part 5, which is the greenhouse gas pollution pricing act.

We have a number of officials from various departments. I'll go through the names. They are Adam Martin, sales tax division, tax policy branch, Department of Finance; David Turner, tax policy analyst, Department of Finance; Pierre Mercille, director general, sales tax division, tax policy, Department of Finance; Julien Landry, senior policy analyst, Department of the Environment; and John Moffet, who we have had before the committee many times, from the Department of the Environment.

Welcome, all.

Members, if you have any questions as we go through the clauses, the officials are here for that.

(On clause 186)

We're starting with NDP-9.

Mr. Dusseault.

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

Mr. Chair, I am pleased to explain amendment NDP-9.

This amendment is quite simple. Essentially, it proposes that Bill C-74 apply the same plan to fishers as it intends to apply to farmers. You may recall that we had a fairly extensive discussion here about issuing an exemption certificate to farmers so that they would not have to pay fuel charges, which will apply in some provinces after the bill is passed.

The government either forgot, or intended to grant this exemption only to farmers, not fishers. Yet fishing is another extremely important activity, particularly for small communities close to oceans.

The amendment proposes that the regime for farmers also apply to fishers. To this end, it adds some definitions. First, it seeks to define what an “eligible fishing activity” means, in the same way it has been defined for agriculture. It is also important to define an “eligible fishing vessel”, just as the bill defines what type of farm equipment is eligible. We also propose that the definitions for “fishing” and “fisherman” be added, in the same way that the bill defines “agriculture” and “farmer”. Clearly, the amendment defines “qualifying fishing fuel”. Finally, further on in our amendment, we are talking about issuing exemption certificates, such as those that the bill seeks to grant to farmers.

In my view, this is simply a matter of fairness for these two extremely important and key sectors in Canada. Both of them could be affected by this. If the government has seen fit to provide a system of this kind for farmers, I do not see why it should not be the same for fishers, who are just as important in some communities as farmers are in others.

I hope to have the support of all my colleagues for this amendment, which simply seeks to correct a form of inequity created by the bill. This inequity must be corrected, and that is what amendment NDP-9 is doing.

Thank you for your attention and I hope I can count on the support of all of you.

[The Chair, Liberal, Wayne Easter]

As members know, that's on page 162 of the bill.

Mr. Sorbara.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

Mr. Chair, I want to thank my NDP colleague for speaking to his amendment and commenting on the importance of fishermen and fisherwomen and farmers across Canada. We know the work they do day in and day out. It's not about me. When I was growing up, my mother was a cannery worker in Prince Rupert, British Columbia, and my five aunts all worked at canneries. Many of my friends still own seiners, trawlers, or gillnetters. It's very important that we ensure their livelihoods are protected and they can make a good living, whether it's on the east coast or west coast of Canada, and in between in some places, and that we have a regime, a price on carbon that doesn't detrimentally impact either fishermen and fisherwomen or farmers.

Regarding the amendment Mr. Dusseault has put forward, I've read it over and examined it and there is one word in it that I do have an issue with. While you want to treat farmers and fishermen the same, and we look at them in unison, the way the amendment is written they're actually not the same. Farmers are exempted in terms of what's called purple gas, and fishermen would need a different regime to be in place for them to be exempted.

This amendment, from my understanding, does not do that, and because it does not do that, it doesn't bring the fairness that you speak to. I'll have to decline and vote down the amendment.

[The Chair, Liberal, Wayne Easter]

Mr. Albas.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Mr. Chair, I think we have to look at this as whom this so-called backstop regime would be foisted upon. This committee actually had the premiers of the Northwest Territories and Nunavut come and explain how difficult the carbon tax is. Many indigenous people derive a fair bit of their income in Nunavut from fishing operations. As we know, the cost of living and the cost of doing business in places like Nunavut are extremely high. I have stated categorically that I believe both Nunavut and the Northwest Territories should be exempt, and that the government should find other ways of helping them and their communities to get off of diesel as a way to contribute to the fight against climate change, and to see those communities get more benefits.

However, it seems to me that the bill as currently written was only written with the idea of Saskatchewan in mind. Obviously, Minister Goodale didn't want to have his phones lighting up from all those farmers, so they exempted them. I think that's patently unfair to the people of Nunavut, particularly those fishers who are seeking to earn a living. These indigenous groups do run very sophisticated operations and do provide local jobs.

Mr. Chair, I support this particular amendment because it, again, keeps the affordability of those operations, keeps them competitive with other jurisdictions, and I do believe we need to start addressing the cost of living, particularly in those remote, rural areas. I will be supporting Mr. Dusseault's exemption, and I would encourage all of us to do the same. I am, again, opposed to the concept of a nationally imposed carbon tax, but I think the government, by instituting this and punishing those fisher operations, especially indigenous ones, is running contrary to its promises of consultation and helping those communities integrate into the full economy. This is one more case where they are not listening. They put forward moratoriums that deeply affect the opportunities of northern communities, and this is another example of throwing it in without consideration.

Thank you.

[The Chair, Liberal, Wayne Easter]

Mr. Poilievre.

[Pierre Poilievre, Conservative, Carleton, ON]

Mr. Chair, this question is for the officials.

What would the cost of the carbon tax backstop be to the average fisher?

[The Chair, Liberal, Wayne Easter]

Mr. Moffet, I don't want to call on you, but you're usually the one who gets called on.

[Pierre Poilievre, Conservative, Carleton, ON]

We've got an answer, they're indicating, let the record show, Mr. Chair.

[The Chair, Liberal, Wayne Easter]

No, no. I think the pages are turning and people are working at that end of the table.

[Pierre Poilievre, Conservative, Carleton, ON]

That's encouraging.

[The Chair, Liberal, Wayne Easter]

That's encouraging.

Whoever wants to answer, folks, can answer. It doesn't have to be Mr. Moffet. I selected him out and probably shouldn't have.

[Pierre Poilievre, Conservative, Carleton, ON]

They have the costs right there in the document.

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

I can have my Finance colleagues follow up on the answer to this, but the main price impact on a fisher—I believe that's the right term—would be in terms of the increase in price in cost of fuel. If we assume that most fishing boats use diesel fuel, then the price impact on diesel fuel is prescribed in the schedule. You'll see in the schedule to the bill that a $20 per tonne of CO2 equivalent carbon price is equivalent to about five cents a litre of diesel.

The impact would have to be translated in terms of the amount of fuel that the particular fishing person uses. We know the fishing community in Mr. Easter's jurisdiction typically doesn't travel far, so for short-distance trips versus those on the west coast that Mr. Sorbara was referring to, which can spend weeks at sea, the impact will be significantly different. I think the easiest answer, then, is translated into a sort of a price per litre of diesel fuel; I think it's called light fuel oil. Then that would have to be translated in terms of the actual kind of average annual consumption that the particular person was using.

[Pierre Poilievre, Conservative, Carleton, ON]

What will be the cost per litre of diesel fuel when the carbon tax reaches $50 a tonne? The number you gave us was for a levy of $20 a tonne.

[Pierre Mercille, Director General (Legislation), Sales Tax Division, Tax Policy Branch, Department of Finance]

That's 13.4¢ a litre.

[Pierre Poilievre, Conservative, Carleton, ON]

Okay. Will the GST apply on that 13.4¢ per litre?

[Pierre Mercille]

The GST applies on the final price when there's a sale that is made. This would be embedded in the price of the fuel.

[Pierre Poilievre, Conservative, Carleton, ON]

So it would apply? The GST would apply.

[Pierre Mercille]

It would apply to the final selling price of the fuel.

[Pierre Poilievre, Conservative, Carleton, ON]

Which includes the tax, the carbon tax?