Evidence of meeting #183 for Finance in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was back.
A video is available from Parliament.
Director General, GST Legislation, Sales Tax Division, Tax Policy Branch, Department of Finance
According to the amendment, the only person who will pay the HST is the purchaser, and they will generally be entitled to an offsetting input tax credit.
Liberal
The Chair Liberal Wayne Easter
Okay, thank you. You gave that answer several times. We've gone down this road.
We will hear back. The environment committee has to report back to us today by 4 p.m. on whether they're going to study this or they're going to leave it totally with us. They then will report back to us after they've looked at it, if they agree to do it, on November 13. We will have time between November 13 and 15 if we have to deal further with this issue.
Mr. McLeod.
Liberal
Michael McLeod Liberal Northwest Territories, NT
Yes, Mr. Chairman, I'm not sure if anybody heard my question while I was asking it because of all the interruptions.
Liberal
The Chair Liberal Wayne Easter
No, we didn't. It was rather noisy in here. I was at fault as much as anybody else. Go ahead.
Liberal
Michael McLeod Liberal Northwest Territories, NT
But we also had a response from the witnesses. I'm satisfied that the question might be better posed under the section with income tax rather than this one. I'll ask that question during clause-by-clause.
Liberal
Brandon—Souris, CPC
This is just a schematics thing, Mr. Chair. You mentioned that we'd get the report back from the other committee on November 13 and have to deal with it by November 15.
Liberal
The Chair Liberal Wayne Easter
Wait just a minute. Are those the right dates? That's for the amendments.
Brandon—Souris, CPC
Yes, so we're in a constituency week that week. I don't know if that makes a difference or not.
Liberal
The Chair Liberal Wayne Easter
That's when they have to report their amendments back to us. We meet the next week for clause-by-clause on November 20.
Are there any further questions, then, for these witnesses?
Thank you, gentlemen.
Sorry. Go ahead, Mr. Boulerice.
NDP
Alexandre Boulerice NDP Rosemont—La Petite-Patrie, QC
Thank you, Mr. Chair.
Thank you, gentlemen.
The purpose of my question is to understand how the measure concerning the excise tax on diesel fuel purchased to generate electricity works.
What impact do you think that measure will have and what are the arguments that validate and explain this amendment?
Director, Sales Tax Division, Tax Policy Branch, Department of Finance
As I previously said, the measure establishes an excise tax refund regime for purchased fuels under which a vendor may apply for a refund where a purchaser will use excise tax-paid diesel fuel to generate electricity.
To date, only licensed distributors and producers could apply for a refund when they sold diesel to a final consumer. Unlicensed vendors did not have access to this mechanism and therefore were required to sell diesel fuel to final consumers with the tax included, even if the diesel was to be used to generate electricity, an activity generally excluded from the taxation regime.
If certain conditions are met, this measure therefore permits unlicensed vendors to apply for their own refunds so the final consumer can have access to diesel fuel without the excise tax being included.
This is a technical measure to ensure a degree of fairness among fuel distributors in Canada.
NDP
NDP
Alexandre Boulerice NDP Rosemont—La Petite-Patrie, QC
All right, thank you.
I'd like an explanation concerning the sale of books to be used to promote literacy. There appears to be a difference in the way the sales tax is applied, depending whether the books are to be used to begin learning or to combat illiteracy. If the sale of books is simply intended for the general public, will the tax apply?
In actual fact, in practical terms, how can you verify, in the real world, with an organization combating illiteracy, to whom the book was sold and for what purpose?
Director General, GST Legislation, Sales Tax Division, Tax Policy Branch, Department of Finance
The refund is an existing one; it's a refund of the GST or of the federal component of the HST. The act lists a number of entities that are entitled to the refund, which is a 100% refund of the federal component of the tax paid in the circumstances described in the act. That refund applies to an entity, such as a school, that purchases books for its own needs, not when it purchases books that it can resell.
The amendment merely further clarifies the fact that, for the refund to be available, ownership of the good must not be transferred to another person for consideration. Consequently, this is not a new refund, but rather an existing refund.
Liberal
The Chair Liberal Wayne Easter
I know the NDP has switched members midstream, but it was answered quite extensively and can be found in the blues. We spent a considerable amount of time when Peter Julian was here on this, but I'll let you ask for clarification if you need it.
NDP
Alexandre Boulerice NDP Rosemont—La Petite-Patrie, QC
Thank you, but I'm satisfied with the answer.
I apologize for repeating the question.
Liberal
The Chair Liberal Wayne Easter
Okay.
Thank you, gentlemen, for parts 2 and 3. We'll ask on part 4, division 1, for Mr. Scott Winter and Diane Kelloway to come up. Welcome.
Northumberland—Peterborough South, Lib.
Mr. Chair, as we only have 10 minutes left is there any intention or suggestion of extending the time because of the vote? I'm not sure 10 minutes will be reasonable.