Finance Committee on Nov. 6th, 2018

[Pierre Poilievre, Conservative, Carleton, ON]

Right.

[Bill Morneau, Liberal, Toronto Centre, ON]

Really, what we're trying to do is make sure that preferential small business tax rate is available for businesses to reinvest in their businesses. Should they require leaving money in their business, up to $1 million that money can be left in at the small business preferential tax rate—

[Pierre Poilievre, Conservative, Carleton, ON]

Again, sorry, Chair—

[Bill Morneau, Liberal, Toronto Centre, ON]

—and above that amount—

[The Chair, Liberal, Wayne Easter]

Let him finish his answer.

[Bill Morneau, Liberal, Toronto Centre, ON]

—up to roughly the $3-million amount, there will be a movement from the small business tax rate to the large business tax rate, an approach that we think allows people to continue to invest at a very low tax rate—of course, the small business tax rate is the lowest among G7 countries—

[Pierre Poilievre, Conservative, Carleton, ON]

It's a simple question, Minister.

[Bill Morneau, Liberal, Toronto Centre, ON]

—and continue to invest as a larger business at a preferential tax rate.

[Pierre Poilievre, Conservative, Carleton, ON]

It's a simple question. Are existing savings and the income from those savings excluded from the changes that you brought in to the small business tax rate, yes or no?

[Bill Morneau, Liberal, Toronto Centre, ON]

Again, I think it's important to remind ourselves that we have in Canada a highly preferential small business tax rate. We've done this for a good reason, so that small businesses can reinvest in their business. We've enabled people to continue to park money in those companies in case they need to make those investments in the future, or in the case of people who might need to take time off, whether for maternity leave or other reasons—

[Pierre Poilievre, Conservative, Carleton, ON]

I asked a very short question.

Mr. Chair, if I could go back, I'll ask it differently. The minister's department posted these words on its website. They remain there.

All I'm asking—

[The Chair, Liberal, Wayne Easter]

I'm going to let the minister finish his answer. He is a little over time, but I don't think we need to interrupt when we have a lot of time. Then you can go to your other question. If you're over your seven minutes, we'll allow it.

Go ahead, Minister.

[Bill Morneau, Liberal, Toronto Centre, ON]

Again, Mr. Chair, just really for all of us, reminding ourselves that we have a tax system that provides a very favourable situation for small business owners in this country, with the lowest small business rates among G7 countries, significantly lower than other countries.... And we do allow for businesses not to have to immediately reinvest all of their profits but to leave some profits in the business for potential future investments or other reasons. That's why the approach we've taken gives people—

[Pierre Poilievre, Conservative, Carleton, ON]

I have a point of order, Mr. Chair—

[Bill Morneau, Liberal, Toronto Centre, ON]

—that $1 million—

[The Chair, Liberal, Wayne Easter]

Sorry, Minister, there is a point of order.

[Pierre Poilievre, Conservative, Carleton, ON]

I asked a very short question. I think it was less than 10 seconds. You've now given him a minute of my time.

[The Chair, Liberal, Wayne Easter]

Go ahead.

[Pierre Poilievre, Conservative, Carleton, ON]

I ask that that time be given back to me.

I'm going to read a quote here: “All past investments and the income earned from those investments will be protected”. That's what the finance department website says right now. People have to make decisions and file their taxes based on these rules. That's what your website says.

I quoted earlier what you said to the Chartered Professional Accountants of Canada, who actually have to prepare the taxes. They would expect you to actually know what your own policy is.

This is actually a yes or no question. Either savings that were accumulated before the changes came into effect are grandfathered, and therefore have no impact on the business's access to the small business tax deduction, or they're not. It is a yes or a no. You promised that savings that were previously existing, before your changes came into effect, would be grandfathered. Were they, yes or no?

[The Chair, Liberal, Wayne Easter]

We're well over time. I said I'd give you ample time, and I'll give the minister ample time to answer the question as he sees fit. Then we'll move to Mr. Julian.

Minister, go ahead.

[Bill Morneau, Liberal, Toronto Centre, ON]

Again, I'm pleased to describe the approach we've taken. Really, we see the importance for businesses to have the ability to maintain income in their corporations—

[Pierre Poilievre, Conservative, Carleton, ON]

It's a yes or no question.

[The Chair, Liberal, Wayne Easter]

Mr. Poilievre, it'll be—

[Pierre Poilievre, Conservative, Carleton, ON]

It's a yes or no question.

[The Chair, Liberal, Wayne Easter]

The question will be answered—