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.
Liberal
The Chair Liberal Wayne Easter
We would have to have the complete agreement of the committee. Let's see where we end up. The people we've asked to come, I think, are here through to the end of division 5. It would be nice if we could finish that much, but you will have to think about it. I know people have other commitments. We'll check where we're at at 11:45. If it will only take a few more minutes to finish up a division, we might be able to do it.
Larry.
Brandon—Souris, CPC
Mr. Chair, I know from canvassing my colleagues that we all have commitments at noon.
Liberal
The Chair Liberal Wayne Easter
All right. We might be able to go two minutes over, though, if it will finish a division.
Liberal
The Chair Liberal Wayne Easter
On part 4, division 1 and customs tariffs simplification, go ahead, Mr. Winter or Ms. Kelloway.
Scott Winter Director, Trade and Tariff Policy, International Trade Policy Division, Department of Finance
Thank you, Mr. Chair. Recognizing the time constraints, I'll give a brief overview so we can move quickly to questions.
This measure, which is covered in clauses 69 to 126 of the bill, includes several structural simplifications and other technical amendments to the customs tariffs with a view to easing administrative burden and red tape, and reducing compliance costs for both importers and the Canada Border Services Agency, the CBSA.
This measure was announced in budget 2018 and it constitutes the government's response to the Auditor General's recommendation in the spring 2017 audit of customs duties to review and simplify Canada's tariff regime.
There are effectively three primary groupings of amendments contained in the bill, the most substantive of which are contained in clauses 121 to 123 and consist of the elimination of several redundant tariff items in order to facilitate classification and administration for importers and the CBSA. As a result of these amendments, the measure reduces the overall number of tariff items in the schedule by just over 6%, significantly reducing the scope for misclassification by importers or government.
The second category of changes includes several amendments to clarify the policy intent of certain provisions such as tariff descriptions in order to improve administrative predictability.
Finally, the third grouping of amendments is primarily of a housekeeping nature. This would include amendments such as a renumbering of tariff items to reflect past changes, as well as amendments to English and French descriptions to address language discrepancies.
The measure does not affect rates of duty for goods imported into Canada. As a result, it has no fiscal impact or impact on ongoing or future trade negotiations. The measure would take effect on January 1, 2019.
Liberal
Peter Fragiskatos London North Centre, Lib.
Thank you very much.
Could you explain a little further the point about redundant tariff items? What made them redundant and how does the change improve things from an efficiency perspective?
Director, Trade and Tariff Policy, International Trade Policy Division, Department of Finance
At the global level for customs classification, goods are listed at a six-digit subheading level. Individual countries have the ability to further subdivide those into eight-digit items to serve their own economic policy objectives or, for example, as a result of trade negotiations.
Since 2009, successive Canadian governments have undertaken a proactive tariff policy whereby we have been undertaking significant amounts of unilateral tariff elimination, such as elimination of tariffs on imported machinery and equipment, production input and agri-food processing input.
What has happened as a result of those tariff reductions is that the six-digit parent item is duty free. We may have had a variety of eight-digit items with variable duty rates and these have all each become duty free as well, so it's no longer necessary to have that level of specificity in law. What we've done is effectively roll up those items to the six-digit level.
Again, as I said, the benefit of that is for importers. It will reduce the scope for misclassification and the need to file for corrections, and it will also result in less need for enforcement resources by the CBSA.
Liberal
The Chair Liberal Wayne Easter
All done...? Okay.
Thank you very much.
We'll turn to part 4, division 2 and the Canada pension plan, with Ms. Giordano from ESDC.
The floor is yours, Ms. Giordano.
Marianna Giordano Director, Canada Pension Plan Policy and Legislation, Income Security and Social Development Branch, Department of Employment and Social Development
Good day. I'll keep this brief.
Division 2 provides for a minor technical amendment to the Canada pension plan that in certain cases will modify the calculation of the child-rearing drop-in. The child-rearing drop-in was introduced in BIA 1 and will be implemented in January 2019. This provision will increase the enhanced portion of the CPP for parents who stop working or reduce their participation in the workforce to take care of a child under the age of seven.
The proposed technical amendment will allow for the pro-ration of the drop-in amount in rare cases when the drop-in does not apply to a full year. This would be the case when a person's contributory period begins or ends during a year in which the drop-in is applied: for example, where an individual reaches 18 in a year that the drop-in would be applied, or where an individual dies, begins his retirement pension or reaches the age of 70 in a year in which a drop-in applies.
I am happy to answer any questions you may have on this.
Liberal
The Chair Liberal Wayne Easter
Okay.
Think about it for a moment, folks. Are there any questions? It's pretty straightforward.
Go ahead, Mr. Fergus.
Liberal
Greg Fergus Liberal Hull—Aylmer, QC
Ms. Giordano, please, in which clauses of the bill can we find this technical amendment? What clauses does it involve?
Director, Canada Pension Plan Policy and Legislation, Income Security and Social Development Branch, Department of Employment and Social Development
This is clauses 127 to 129.
Brandon—Souris, CPC
I was just looking at it, Mr. Chair, and I'm wondering if there's an explanation with regard to the modified calculation of that amount to be attributed in terms of the first or second additional contributory periods.
You gave an explanation on these years: that you either turn 18, turn 70 or pass away.
Director, Canada Pension Plan Policy and Legislation, Income Security and Social Development Branch, Department of Employment and Social Development
The contributory period for the CPP starts at age 18 and it ends when you pass away, when you reach age 70 or when you start your retirement pension. These are the years. If you have a child under age seven in those years, we need to pro-rate your contributory period and also the amount of the drop-in that we put in, to reflect the period.
Liberal
The Chair Liberal Wayne Easter
Thank you very much, Ms. Giordano.
We can probably do division 4. I know that division 3 is going to take some time because there are several subdivisions to it. It might only take a few minutes to deal with division 4.
Part 4, division 4 folks, please come ahead: Ms. Hemmings, Mr. Beaupré and Ms. Davidson. This will save you folks from having to come back. I think division 3 will take quite a while.
We'll do this one and then adjourn. This is on the Proceeds of Crime (Money Laundering) and Terrorist Financing Act.
Go ahead.
Lynn Hemmings Acting Director General, Financial Systems Division, Financial Sector Policy Branch, Department of Finance
Thank you, Mr. Chair.
The Proceeds of Crime (Money Laundering) and Terrorist Financing Act is administered by the Canada Border Services Agency, CBSA. It requires persons or entities to report to customs authorities, during importation or exportation, currency of a monetary value of $10,000 or more.
The CBSA border agents have the ability to conduct searches when there are reasonable grounds to suspect that a person or entity is carrying unreported currency or when they suspect that there are proceeds of crime or funds for terrorism financing. Those funds may be seized or forfeited by customs authorities.
Clause 174 of Bill C-86 essentially repeals a section in the act that gives persons and entities the ability to withdraw that export or import of the currency. Essentially, under the Customs Act, the right to withdraw does not exist for the declaration of goods, so this provision aligns it with the Customs Act.
Liberal
The Chair Liberal Wayne Easter
All right. Are there any questions on this area? It relates to some of the work that we've been doing on money laundering, for sure.
With that, thank you very much.
Northumberland—Peterborough South, Lib.
Sorry, Mr. Chair. Could we have the clauses that this applies to?