Finance Committee on May 2nd, 2019

[Judy Meltzer]

Yes, I'm aware of it.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

The PBO report did indicate that more monies or funds would be returned to Canadians in the four provinces where that would be collected by the government. Is that not correct?

[Judy Meltzer]

That's correct. That was my understanding of the report.

[The Chair, Liberal, Wayne Easter]

Mr. Sorbara, we're going to stick to the legislation if we could and not get into the parameters around it.

We will go to Mr. Dusseault and then come back.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Thank you, Mr. Chair.

Thank you for being here.

My biggest question pertains to how the calculation will work to estimate what is laid out in the bill. You're going to estimate the charges to be levied, and that's what the transfers will be based on—the payments you'll be making to the provinces that, in the federal government's view, are not sufficiently taxing carbon pollution. What is the formula, and how are you going to arrive at the estimates on which the transfers will be based?

[Samuel Millar]

Thank you for the question.

The estimates are not yet complete. The bill provides authorization to estimate the exact amounts. According to the formula in the bill, estimates for a specified period will be adjusted going forward using specific filters, to make sure the maximum amount will never exceed the reality.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

You're preparing estimates for the first year, but it should be easier for subsequent years.

[Samuel Millar]

Precisely.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

If you realize at the end of the year that the estimates weren't accurate, you are going to adjust the amounts.

[Samuel Millar]

That's precisely what subclause 129(4) says, in part 4, division 4, under element E.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Is the estimate determined in partnership with the province in question, or is it done independently by the federal government, in which case, the province then has to accept the calculation?

[Samuel Millar]

The provincial governments—and I already listed the four provinces currently mentioned in the bill—are not directly involved in these measures.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Is there no mechanism available that would allow them to object and refute the accuracy of the amount?

[Samuel Millar]

I don't believe so.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Do you think such a mechanism is necessary? Don't you think it would be useful?

[Samuel Millar]

Well….

[The Chair, Liberal, Wayne Easter]

That's more up to the government to decide.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

We are considering maybe amending this bill.

[The Chair, Liberal, Wayne Easter]

As I understand the answer, it's not done. There's not an independent calculation other than the federal government's. The province is not involved. If you want to make an amendment along those lines, that's your choice, but I don't know how the officials can answer that question. It's not there at the moment.

Is there anything else, Mr. Dusseault?

Mr. Poilievre.

[Pierre Poilievre, Conservative, Carleton, ON]

I will pass. I think Mr. Kmiec wants to speak.

[The Chair, Liberal, Wayne Easter]

Okay.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Just on the formula, the B portion of it is “[(E-F)-G]-H”. Tell me if I'm wrong, but my interpretation of this is, under G, because it's deducting from that, if the Minister of Finance approves another minister to requisition money out of this amount for something else, a portion of it, that would be deducted from the totals that may be distributed to residents of that province. Is that what G is?

[Samuel Millar]

I agree.n It is somewhat complicated to read it in real time. In simple terms, for B, which comprises that somewhat complicated formula that you pointed to, of which G is a portion, the best way of thinking of it, I think, is as a true-up. There's an estimate in one year of the amount of the proceeds that will be collected from the fuel charge and that estimate is revised, based on the subsequent year's actual amounts.

Just to speak to G for a moment, it is the amount that has been paid out of the consolidated revenue fund, pursuant to the authority.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Algebra was never a strong point of mine. I was told that carbon tax was simple and easy, and now I see algebra. I'm good at balance sheets.

Tell me if I'm wrong on this scenario. The Minister of Finance could define two ministers—say, the Minister of the Environment and Climate Change, and the Minister of Infrastructure—who may dip into the fund, if they want to use this money for projects. They could set out a bunch of criteria for it. Then those ministers could come to the fund and say, “We have a project or program that we want to do in a specified province.” They could requisition money and that would be the “-G”, so that the carbon rebate that would be going to residents would be diminished in the following income tax year.

Am I reading that correctly? The Minister of Finance could determine rules for taking out this money, which should be rebated to residents, so that instead it would go to government spending.

I'm worried about this.

[Samuel Millar]

Maybe I could just walk through the whole formula. That might be the best way.