Finance Committee on May 1st, 2019

[The Chair, Liberal, Wayne Easter]

Is it not right to say that what would matter is the decisions and—

[Pierre Poilievre, Conservative, Carleton, ON]

No. Thank you for your helping the minister out here.

The question is this: Did he discuss taxing health and dental benefits, yes or no? I think the answer he's implying is yes, he did.

I'll move on to another one. Did he ever discuss the idea of cancelling the small business tax deduction as part of that review?

[Bill Morneau, Liberal, Toronto Centre, ON]

To be clear, I'm not implying anything. I'm stating what—

[Pierre Poilievre, Conservative, Carleton, ON]

Then, just answer.

[Bill Morneau, Liberal, Toronto Centre, ON]

I'm stating what Canadians would expect a responsible government to do and that would be to constantly review our tax code to make sure it's working effectively, and we'll continue to do that.

[Pierre Poilievre, Conservative, Carleton, ON]

I think what Canadians would expect is a clear answer. If you have considered taxing their health and dental benefits, they would probably want to know about it. I'm simply asking for a yes or no answer. Did you discuss that idea with your officials, in person or in writing, yes or no?

[Bill Morneau, Liberal, Toronto Centre, ON]

What we will continue to do is to be responsible in our administration of taxes and what you can see, through the conclusions of those discussions and reviews is the outcome that we've put forward, that those benefits you're referring to continue to be non-taxable. That's the most important demonstration of our decision.

[Pierre Poilievre, Conservative, Carleton, ON]

Right, so I think the question is whether you plan to tax them in the future. If you've considered taxing them and you've worked with your officials on taxing them, then Canadians have legitimate reason to believe you would try to do that again, given the chance. Your non-answer today should make a lot of people very nervous. You did not answer the question about whether or not you would cancel the small business tax deduction.

This reminds Canadians, of course, that the Prime Minister, then Liberal leader, refused to tell Canadians whether he'd cancel their children's fitness tax credit. He did so after the election when he no longer needed people's votes but still needed their money.

I will go on to my next question. Did you ever discuss with your officials the possibility of raising income tax rates above the level they have been at since 2016?

[Bill Morneau, Liberal, Toronto Centre, ON]

The responsibility of—

[Pierre Poilievre, Conservative, Carleton, ON]

It's just a yes or no.

[Bill Morneau, Liberal, Toronto Centre, ON]

It's not appropriate to answer yes or no to a rhetorical question. What I will tell you is that, on an ongoing basis, we will responsibly administer our tax system.

[Pierre Poilievre, Conservative, Carleton, ON]

It's not rhetorical to ask you if you've considered—

[The Chair, Liberal, Wayne Easter]

Mr. Poilievre—

[Pierre Poilievre, Conservative, Carleton, ON]

He had finished his answer, and it is not a rhetorical question if I ask if you have potential plans to raise people's taxes. That is a financial question. You are the finance minister. Your job is to answer these questions, and—

[The Chair, Liberal, Wayne Easter]

That is your last question this round.

[Pierre Poilievre, Conservative, Carleton, ON]

—you have refused to do so up until now, which confirms what your plans are. If you get the chance, you will raise taxes on Canadians, just like you did last time.

[Bill Morneau, Liberal, Toronto Centre, ON]

I would like to respond to say that this line of questioning is fundamentally absurd.

We have been clear on what we seek to achieve in our budget in 2019, as we were in 2018, 2017 and 2016. All of our plans are encapsulated in our budget. We are putting forward that budget for your consideration and the consideration of Parliament, because we want to try to continue with the positive economic results we've seen for Canadians and for our economy.

[The Chair, Liberal, Wayne Easter]

Mr. McLeod, you have five minutes.

[Michael McLeod, Liberal, Northwest Territories, NT]

Thank you, Mr. Chair.

Thank you, Minister, for coming to answer some of our questions.

I also want to talk about tax credits, but before I do that, I want to thank you for clearly highlighting the north in this budget. Over the last few years, we have seen some significant investments, and this coming fall, we're going to see a number of infrastructure projects starting off.

The Whatì road will start construction, with an indigenous government as a partner. We'll see the Mackenzie Valley Highway undergo an environmental assessment. The Great Bear River bridge should be under construction. There are a number of things that are really going to benefit us in the Northwest Territories, including the studies going on for the Slave geological province corridor and the Taltson hydro dam expansion. That is something that will help us with our costs.

For many years now, we've flagged to you that in the north, the mining industry is the backbone of our economy. We've always been talking about ways to lower the costs of the mining industry, and others, to come north. It is significantly more expensive to come to the Northwest Territories and other territories to do exploration and projects there.

I was very happy to see that the mineral exploration tax credit was expanded to a period of five years. Maybe you could tell us a bit about how we finally got to that decision, and about some of the benefits of that.

[Bill Morneau, Liberal, Toronto Centre, ON]

Stepping back, from day one we have seen that the mining and metals industry is an important industry for Canada. Obviously, it's an industry that, even in the time we've been in office, has gone through some challenging periods and is now seeing some more success.

The mining exploration tax credit in particular helps junior exploration companies with their investments. It helps them to raise the capital they need to succeed, which we see as critically important for projects that in many cases are quite risky, without assurance of what the eventual outcome will be. Many good, well-paying jobs are created through this industry, not least in the north, which we recognize.

One of the things that I found in the course of doing this job over the last few years is that each year, as had been the case in previous years, before we got into office, there was a one-year extension of this mining exploration tax credit. From the standpoint of those businesses making these investments, that leaves them with a planning horizon that's not as effective as it could be. It was in that context that we looked at the importance of the sector and the jobs, and realized it would be a more effective tax credit if people had a longer time horizon. That was how we got to the conclusion to make it five years.

[Michael McLeod, Liberal, Northwest Territories, NT]

In the north we recognize that we have an infrastructure deficit, and as I pointed out, I think we're doing quite well on that front. We need investment to help a healthy economy, but we also need to deal with the indigenous concerns. The land tenure issue is still on the table for many indigenous governments. Self-governance, or governance period, is an issue we need to sort out. We've done many good things on that front. I think we've moved forward and had very good discussions. We need to continue with that.

In terms of the cost of negotiations, the negotiation process is very expensive for the indigenous governments but also for our government, and we've seen many cuts during the time of the Conservatives that left us with very few negotiators on the federal side and very little in terms of resources from the indigenous side. I was really happy to see that we've looked at forgiveness and reimbursement for comprehensive land claims. I'm hoping that is going to help many of the indigenous governments move forward. One of my communities that settled self-government took 20 years. It was very expensive and very slow. We need to make that a better, easier process to move forward.

I'd like you to talk a bit about the importance of these measures to our government and how we can build on the progress we've made so far.

[The Chair, Liberal, Wayne Easter]

You'll have to talk pretty rapidly, Mr. Minister. I want to keep people close to their time frames.

[Bill Morneau, Liberal, Toronto Centre, ON]

Then I can say just a few things.

First of all, this is obviously very important. If we're going to negotiate on a nation-to-nation basis with first nations, we need to realize that in many cases the groups we're negotiating with just do not have the resources to be at the table, and they certainly don't have the resources to be at the table for a sustained period of time.

Obviously, loans that have been around for a long time create huge challenges for first nations groups. That was the context. We wanted to deal with the historical challenge, but also enable getting to the process of those continuing negotiations in a way that made sense. Funding those groups that are trying to get to a better place is an important step.

[The Chair, Liberal, Wayne Easter]

Thank you both.

We'll turn to Mr. Poilievre, then back to Mr. Fergus, and then to Mr. Dusseault.

[Pierre Poilievre, Conservative, Carleton, ON]

Yesterday's Parliamentary Budget Officer's report said, “Budget 2019 provisions-$3.8 billion for non-announced measures.” It goes on to say, “The negative amount indicates a...source of funds, which suggests either increased taxes and/or reductions in expenses.”

Where will you find that $3.8 billion?