Finance Committee on May 10th, 2016

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Thank you, Mr. Chair.

First, I would like to thank the officials for being here, as well as the individuals who will appear later.

The briefing was indeed interesting and useful, even with these delays, but it raises other questions. Obviously, I will not ask all of you to comment on what I'm going to say.

Although the government denies that this is an omnibus bill, it is clear to us that this is, indeed, what we have once again.

This bill is 179 pages long, amends 35 acts and affects nine departments. It also contains Bill C-12, which had been tabled by the government. In fact, it was included in Bill C-15, which implements certain provisions of the budget. It also retroactively repeals the Federal Balanced Budget Act. I say “retroactively”, given that the government would have committed an offence under this act as of June 1, 2016. Lastly, the bill amends the act to make it as if it had never existed, even if there was an offence. But it is contrary to law.

Furthermore, it includes other extremely important elements. I will have an opportunity to come back to many issues relating to the recapitalization of banks. A large number of officials are going to speak about many topics.

In fact, when Bill C-12 was tabled, it was clear that it would be studied by the Standing Committee on Veterans Affairs, but in the end it's the Standing Committee on Finance that's looking at it. I think this clearly shows that even if a provision or line is announced in the budget, it shouldn't necessarily be studied in the context of the budget. It should be studied by the appropriate committees. Bill C-12 is a patent case of that.

Having said that, I would like to move a motion. I am fully willing to discuss it at the end of this presentation. I will even do the committee a favour by not reading it, since it is rather long.

I'll simply say that the purpose of this motion is to return to the House of Commons Bill C-15, which implemented certain provisions of the budget, so that clauses relating to the re-establishment and compensation of Canadian Forces members and veterans—from Bill C-12, which was inserted—to bank bail-ins and the bank recapitalization regime, to the Old Age Security Act, and to the Employment Insurance Act. The motion also proposes separate bills so that they can be studied by their respective committee.

I won't read the motion because it takes up a full page. But we will be able to discuss it in committee.

[The Chair, Liberal, Wayne Easter]

Is it on part 1?

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

On part 1, I mentioned that concern in the technical briefing.

Mr. McGowan, I would like to publicly get your opinion on motions that deal with information sharing with the Canada Revenue Agency and the chief actuary. I would like to know whether the privacy commissioner was consulted when these clauses were drafted. The intent is to provide more information to the chief actuary for the purpose of actuarial calculations.

If not, I'd like to know whether this has been discussed since the technical briefing.

[Trevor McGowan]

There are actually two measures in the bill dealing with information sharing. I'll deal with both and try not to confuse them.

There's information dealing with information sharing within the Canada Revenue Agency for the sharing of information to support the collection of non-tax debts. For that measure the Privacy Commissioner was consulted, but we were told that they do not provide advance opinions on whether a particular amendment would contravene the privacy rules. Instead, they agreed to continue to work with the Canada Revenue Agency to ensure that all of the privacy guidelines are followed and that taxpayers' personal information is adequately protected.

In the second case, there is the information sharing with the chief actuary. The Privacy Commissioner's policy in that case is the same: that they would continue to work with the Canada Revenue Agency in ensuring in the administration of the program that taxpayers' privacy rights are protected.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

In other words, you haven't consulted the commissioner, but you have followed guidelines or policies established by the commissioner or the office. Is that right?

[Trevor McGowan]

Do you mean in the administration of the program? The information sharing hasn't passed, of course, and my understanding is that it won't be shared until royal assent is given, and so the guidelines of the Privacy Commissioner in sharing information won't have come into effect because they haven't started yet. However, once the sharing of taxpayer information commences, then the office of the Privacy Commissioner would be working with the Canada Revenue Agency to ensure that the appropriate safeguards are not only in place but are followed.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Can I ask one more question?

[The Chair, Liberal, Wayne Easter]

Yes.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

When we're talking about tax credits for labour-sponsored venture capital corporations, a distinction is made between the funds of a provincial regime—such as the FTQ's Fonds de solidarité and the CSN's Fondaction—and the funds of a federal regime. Why was this distinction created?

In one case, the credit will be restored to 15% and in the other, it will eventually be dropped to zero. I would like to know why we are making this distinction and what the impact will be on individuals concerned by these funds.

[Pierre LeBlanc]

As for the distinction, I'll say that the large labour-sponsored funds come under provincial law, and the provincial government itself gives a tax credit in the case of these funds. About 96% of assets are linked to provincial funding. In the case of tax credits to individuals in 2013, the provincial funding makes up about 99% of all funding.

What I'm saying is that federal regime funds are very modest. There was a labour-sponsored fund in Ontario until 2000, but the Ontario government decided to eliminate it. So there is no longer a provincial regime like this in Ontario. These funds have few assets, but they now belong to a federal regime.

In the case of these funds, the credit will not be restored to 15% beginning in the 2016 fiscal year. This will only be the case for large funds under a provincial regime.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

My question is: why are we making this distinction now when it didn't exist before?

[Pierre LeBlanc]

Provincial regime funds are supported by the provincial governments that give a tax credit. These governments are willing to invest in these programs. That's how it is in Quebec and Saskatchewan. However, there is no provincial tax credit when federal regime funds are involved. So there is no investment. I think that is the main reason we are proposing that the tax credit be restored in the case of provincial regime funds.

[The Chair, Liberal, Wayne Easter]

Thank you, Mr. Caron.

Mr. McKinnon, on part 1.

[Steven MacKinnon, Liberal, Gatineau, QC]

Thank you, Mr. Chair.

I would also like to thank the officials from the Department of Finance for being with us today, for giving us this time and for contributing their expertise.

I would now like to speak to the Canada child benefit. From what I understand, it will be excluded from taxable income at the federal, provincial and territorial levels. Is that right?

[Pierre LeBlanc]

It is. If you mean the calculation of benefits based on income and taxation, it is correct to say that these benefits will be excluded for the purposes of these calculations.

[Steven MacKinnon, Liberal, Gatineau, QC]

In other words, they will be excluded from taxable income.

[Pierre LeBlanc]

Yes, these benefits will not be taxable.

[Steven MacKinnon, Liberal, Gatineau, QC]

They won't be taxable at the provincial level, either.

[Pierre LeBlanc]

Since the federal government determines the tax base of individuals, these benefits will not be taxable for all the other provinces. As I understand it, the same will be true for families in Quebec.

[Steven MacKinnon, Liberal, Gatineau, QC]

That's what you think?

[Pierre LeBlanc]

Yes.

[Steven MacKinnon, Liberal, Gatineau, QC]

So you're not sure.

[Pierre LeBlanc]

These amounts are not taxable. The amounts of the Canada child tax benefit are not taxable. I assume that everyone will be treated the same in every province.

[Steven MacKinnon, Liberal, Gatineau, QC]

You assume?

[Pierre LeBlanc]

We could check but—