Finance Committee on Nov. 20th, 2018

[Pierre Poilievre, Conservative, Carleton, ON]

Again my colleague fails to make the distinction between words and deeds. The role of charity is to do good deeds. This is the fundamental confusion that exists with far-left politicians and groups. They think their political advocacy is an end in and of itself and, therefore, the taxpayers should be forced to subsidize it.

We, on the other hand, believe in delivering good work. That's why during the Harper era, of which you spoke at such great length, we had the biggest drop and the lowest levels of poverty in Canadian history. We actually brought in expanded tax breaks for charities, allowing for example charities to accept the gift of shares and private shares without paying capital gains tax on it, so that we could have more hospital wings and more soup kitchens, more food banks and more youth programs funded by the transfer of wealth from people who are very fortunate to others who are not—a tax break, by the way, I would note that the government took away from charities.

We believe in actually delivering front-line services. You on the far left believe merely having a large bureaucracy of lobbyists and activists is in itself an achievement that should be subsidized by taxpayers. That's why so often the causes for which the far left in both these parties advocate are not about giving money directly to people in need; they're about giving money to a bunch of lobbyists and insiders who themselves are actually quite affluent, wealthy and very sophisticated at getting their hands on other people's money but do very little to actually deliver an end benefit to the people who most deserve it and who are most in need. That is the fundamental distinction we have.

We believe charitable dollars should go towards charitable works rather than towards lobbying. If any organization, person, entity, business, union or charity wants to do political activism, that's great. They don't need a tax credit to do it. What the two far-left parties are doing is creating exactly that tax credit, an advantage for lobbying rather than an advantage for the people most in need. I would go further and say that this change will probably lead to the diversion of funds away from the people in need, because lobbyists will use the tax credit for political activism and lobbying rather than to help those who are most in need, which is exactly what the charitable tax credit was meant to do in the first place.

[The Chair, Liberal, Wayne Easter]

Thank you.

Are we ready for the question? We've had a pretty good debate and discussion.

Do you want a recorded vote on this?

[Pierre Poilievre, Conservative, Carleton, ON]

Yes, we definitely want a recorded vote.

(Amendment negatived: nays 6; yeas 3)

[The Chair, Liberal, Wayne Easter]

Now we'll turn to NDP-1.

Mr. Julian.

[Peter Julian, NDP, New Westminster—Burnaby, BC]

Thanks very much, Mr. Chair.

I'm just following up on Mr. Poilievre's comments on his amendment. The charitable sectors that came forward, and the charitable sectors that have been involved in the discussions around making these changes, are some of the most reputable organizations in the country. I find it a bit perplexing that Mr. Poilievre is denouncing them all as far left. I certainly would have to disagree with him on that. Those organizations would disagree with him as well.

As far as what needs to happen in the legislation though.... We've come through a somewhat sad discussion this morning, where pay equity amendments that were offered in good faith by a wide variety of our witnesses, including the Canadian Labour Congress, CUPE and the coalition for pay equity, were all refused. There were major flaws in the pay equity legislation, as Ms. Malcolmson said earlier. Ultimately, it means that women are going to have to go back to court to achieve their ends. These were major flaws, and they were not addressed.

We now have flaws in terms of the overall structure of the legislation. It basically bans direct or indirect support or opposition to any political party. As members may recall, we had a number of witnesses that were concerned about the term “indirect”, which remains to be defined. The term “indirect” is something that Revenue Canada has not yet defined as well.

Mr. Poilievre and I disagree on many things. We would agree on the idea that any direct support or opposition for any political party should not be part of a charitable tax credit. There's no doubt about that. The fact that the definition of indirect is vague and leads to confusion is something that has to be addressed at this committee.

That's why I'm proposing in NDP-1 that we would put that aside and focus the legislation on direct support for any political party or candidate, leaving the ambiguity around indirect support aside.

[The Chair, Liberal, Wayne Easter]

Keep in mind the officials are here if people want further explanations.

Mr. Fergus.

[Greg Fergus, Liberal, Hull—Aylmer, QC]

Thank you, Mr. Chair.

Thank you for making this proposal, Mr. Julian.

I understand your objectives and your desire to clarify things, but removing the words “or indirect” would create some vagueness that unfortunately would benefit the Conservatives.

It is important to keep the proposed wording, the goal of which is to prevent charitable organizations from using or focusing their activities to support a political party indirectly. That would open the door to too much abuse. That is why I am going to vote against these amendments.

[The Chair, Liberal, Wayne Easter]

We'll have Mr. Fragiskatos, and then Mr. Julian.

[Peter Fragiskatos]

The government committed to allow charities to do their work on behalf of Canadians free from political harassment, including by clarifying the rules governing their political activities. That's precisely what the bill has achieved.

However, it does crucially leave in place a long-standing rule prohibiting charities from using their resources to support directly or indirectly any political party or candidate for public office. The amendments in NDP-1, and indeed in NDP-2.... My concern that I'm expressing here speaks to this amendment and NDP-2, so I will stay quiet when NDP-2 comes up.

Indeed, it undermines the effectiveness of this rule, which I emphasize is long standing, by allowing charities to use their resources to provide indirect support or opposition to any political party or candidate. Therefore, I can't support it.

[The Chair, Liberal, Wayne Easter]

Mr. Julian.

[Peter Julian, NDP, New Westminster—Burnaby, BC]

Thank you very much, Mr. Chair.

I just wanted to respond to the concern Mr. Fergus raised when he said that the vagueness could give rise to an ambiguity that a government could exploit. He mentioned the Conservative Party, but it applies to any political party. In reality, the ambiguity already exists in the bill as worded and therefore allows a government of whatever party to exploit it with actions similar to those that the Harper government engaged in.

I have just read several of the articles published on the issue. In my opinion, the best way to eliminate the ambiguity would be to remove the unclear language. Despite our questions, the idea of an activity providing indirect support is still not clear.

The Elizabeth Fry Society has said that the government should eliminate the administrative obstacles that are currently depriving Canadian children with a homeless or incarcerated parent of some of the benefits and programs to which they have a right. This is about the poorest of children. As an example, is that call from the Elizabeth Fry Society indirect support? We do not know, and therein lies the problem.

That kind of ambiguity, as recognized by our witnesses and by people in the field, should not be kept. Even some of the people who sat at the consultation table proposed that the government eliminate the indirect activity clause. Their argument, which some of the witnesses repeated, was that we have to avoid vague or ambiguous wording that allows any government to attack charitable organizations as the previous government did. That I why I am introducing this amendment.

[The Chair, Liberal, Wayne Easter]

I see no further debate on NDP-1.

Peter, do you want a recorded vote here?

[Peter Julian, NDP, New Westminster—Burnaby, BC]

Yes.

(Amendment negatived: nays 8; yeas 1 [See Minutes of Proceedings])

(Clauses 17 agreed to on division)

(Clauses 18 and 19 agreed to on division)

(On clause 20)

[The Chair, Liberal, Wayne Easter]

On clause 20, the only amendment is NDP-2.

Mr. Julian.

[Peter Julian, NDP, New Westminster—Burnaby, BC]

Given the defeat of NDP-1, I'd just ask the officials whether NDP-2 would still be in order.

[The Chair, Liberal, Wayne Easter]

According to the legislative clerk, yes, it is.

[Peter Julian, NDP, New Westminster—Burnaby, BC]

I gave reasons earlier as to why I feel it's important to heed the call of the witnesses who came forward in the committee. The ambiguity around the current phrasing is something that can be fixed. We have the right as a committee to do so. Therefore, I would move this amendment.

[The Chair, Liberal, Wayne Easter]

Is there any further discussion?

Mr. Fragiskatos, you had mentioned this one before. You're basically going with the same comments? Okay.

(Amendment negatived [See Minutes of Proceedings])

(Clause 20 agreed to on division)

There are no amendments on clauses 21 to 40. Are we okay to see those as one?

[Some hon. members]

Agreed.

[The Chair, Liberal, Wayne Easter]

(Clauses 21 to 40 inclusive agreed to on division)

We'll now start on part 2, amendments to the Excise Tax Act.

I don't know if we have to change officials at the other end.... Thank you, gentlemen.

Part 2 relates to amendments to the Excise Tax Act—the GST/HST measures—and related legislation. There are no amendments on clauses 41 to 60, which are all of part 2.

If anybody has any questions for officials, Mr. Mercille and Mr. Achadinha will come forward. Are there any questions for officials on any of these proposed sections on the excise tax? I see none.

(Clauses 41 to 60 inclusive agreed to on division)

We'll turn now to part 3, amendments to the Excise Tax Act with regard to excise measures, the Air Travellers Security Charge Act, and the Excise Act, 2001.

There are no amendments on clauses 61 and 62. There will be officials here, I expect, for this one as well.

(Clauses 61 and 62 agreed to on division)

(On clause 63)

We'll hear from Mr. Julian on NDP-3.

[Peter Julian, NDP, New Westminster—Burnaby, BC]

Thank you, Mr. Chair.

It's important that I preface my remarks by telling the public that we are racing through this massive budget bill. For those who are aware of the flaws in the bill, certainly with pay equity this morning we saw that flaws in the bill were not addressed.

As we adopt these whole clauses, opposition members are striving to make improvements and fix the flaws in the bill, but there is by no means a clear idea of how many errors and omissions exist in the bill, given how this is being rammed through Parliament.

This amendment, NDP-3, is seeking to fix a problem that happened with the last massive budget implementation bill that the Liberals put forward, which had a series of errors in it as well. You'll recall that we raised the point at that time that medical cannabis inadvertently, all of a sudden, became taxed. The prescription medication became taxed and hundreds of thousands of Canadians were impacted because the BIA was rammed through the House without sufficient consideration given to the errors and omissions.

This is indicative of absolutely the wrong way to govern. Canadians pay us to scrutinize legislation, to make sure that it is done effectively and that the flaws are fixed.

With pay equity this morning, this committee has decided to throw on the floor of the House of Commons—which will be surely subject to immediate closure—part of the BIA that will now be subject to court challenge. In this case, with the amendment NDP-3, we're trying to now fix the problems that were caused by the last BIA that was thrown into the House, rammed through with closure and rammed through committee without due consideration.

It is not the way to govern. It's certainly not the way the Prime Minister said he would govern when he came before the public in 2015.

In the last budget implementation act, witnesses were saying that it was a problem that we were now taxing prescription medication. It would increase the cost. It would mean that Canadians would have less access to the cannabis that they have been prescribed for pain or for other symptoms of profound health problems. Despite the fact that hundreds of thousands of Canadians were impacted, this was rammed through the House.

Now we have a second chance to fix the problems from last spring. I have no doubt that we're going to be looking in the spring at fixing the problems of what is being rammed through today. Everything has to be considered by nine o'clock, so we are trying to rush through these clauses.

I've done the best I can with my team to find and indicate the flaws. The NDP has offered far more amendments than the other parties, but I can't say with any assurance at all that we're not going to have other massive problems because of the speed with which this is being bulldozed through Parliament.

Today, if we're not willing to fix this bill in any way—if we're ramming through provisions that will surely be the subject of court action later on by pay equity advocates—at least we can fix the problems that happened the last time this government rammed a bill through Parliament. That is to take off the excise tax on prescription cannabis for the 250,000 Canadians who are prescribed cannabis, who have found the cost of that prescription skyrocket because of the actions of the government in bulldozing through legislation. At least we can fix this. At least let's fix the problems that happened the last time the government rammed this through.

At the end of the day, the government seems intent on ramming this through, despite the problems. We already know this entire bill will be subject to court action because of the government's refusal to consider amendments, but at least let's fix the problems with the last bill that came through.

NDP-3 endeavours to do that. What we would insert in this bill is an amendment that states:

(c) if the cannabis product is a prescription cannabis drug, the consideration is deemed to be zero.

It eliminates the excise tax on medical cannabis that has so detrimentally impacted hundreds of thousands of Canadians. I hope the government will at least see fit to fix its last errors, even if it doesn't see fit to fix the current errors.

[The Chair, Liberal, Wayne Easter]

With that, from the government side, I believe, Ms. Rudd had her hand up.

Ms. Rudd.

[Kim Rudd]

Thank you.

I'm actually thanking the member opposite for bringing this amendment up, because I think clarification is important, and it appears that Mr. Julian doesn't necessarily understand the difference in what prescribed cannabis is.

First of all, there's prescribed cannabis. There's prescribed cannabis with a DIN or a regulation, or approved by Health Canada. The drug identification number that's attached to cannabis in fact does not have an excise tax attached to it. I think that's an important clarification. There are prescriptions that will be obtained from doctors, which people will take to their local pharmacy for cannabis that has a drug identification number approved by Health Canada. That does not have an excise tax. I think we need to be very clear about that.

I did a little bit more research on this, and one of the other things I think we need to be very clear about is the fact that pharmaceutical products derived from cannabis will also be exempt, providing that the cannabis product has a drug identification number and can only be acquired through a prescription.

Because of this, because it is addressed here.... Let's remember the harmonization of this excise duty was part of the recommendation from the 2016 task force. As a government, we believe we've hit all of the right points in terms of ensuring that cannabis is kept out of the hands of children and the profits are out of the hands of organized crime. For those reasons we believe this amendment is not necessary.

[The Chair, Liberal, Wayne Easter]

Mr. Kmiec.

Keep in mind we have officials here. It would be really unusual for Mr. Mercille to come before committee and not get a question.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

I was exactly going there.