Finance Committee on May 31st, 2016

[Raj Grewal, Liberal, Brampton East, ON]

I have a quick point. Employer verification of expenses is essential to the operation of the income tax code. Otherwise it would create a very slippery slope and lead to a very bad precedent for other employment expense claims. It is just to keep everybody honest across the board, to ensure when teachers do submit their supply tax credit that it is verified by their employers. This happens not only in the teaching industry, but in every industry.

The government has done a great thing to ensure that teachers who do make students' lives a bit easier when they are teaching get this tax credit, but to keep everybody honest, it should be verified by the employer.

[The Chair, Liberal, Wayne Easter]

Is there any further discussion?

(Amendment negatived [See Minutes of Proceedings])

(Clause 33 agreed to on division)

(On clause 34)

We have amendment NDP-1.

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

I would like to give the floor to Mr. Johns.

[The Chair, Liberal, Wayne Easter]

Mr. Johns, go ahead.

[Gord Johns, NDP, Courtenay—Alberni, BC]

Mr. Chair, the Liberal broken promise will cost small business $2.2 billion over the next four years and will kill more than 1,200 jobs. We know the government and the Liberals made a clear promise in writing dozens of times on the campaign trail, and small businesses were counting on them to follow through. It's disturbing that they're breaking this promise to Canada's job creators and even more disturbing that they're making this change in an omnibus budget bill. Hard-working small business owners were counting on these tax cuts to expand and grow their businesses.

We urge the government members to stand by the commitment they made during the election and vote in favour of restoring the small business tax cuts.

I'll let Mr. Caron speak to our amendments.

[The Chair, Liberal, Wayne Easter]

I probably should indicate to the committee that if amendment NDP-1 is adopted, NDP-2 cannot be moved, as they amend the same lines. I think that's understood.

Mr. Caron.

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

I would like to explain that the amendment we are proposing would postpone the tax cuts by keeping the tax rate for SMEs at 10.5% for this year. The previous government did not reduce that rate, though it had a schedule that would have reduced it to 9%.

The amendment would keep the tax rate at 10.5% this year. Thereafter, we would go back to the planned schedule that would see it reduced to 9% in 2019, as the three major parties committed to do during the election campaign.

[The Chair, Liberal, Wayne Easter]

Mr. McColeman.

[Phil McColeman, Conservative, Brantford—Brant, ON]

I will speak in support of this amendment for the very reasons that have been articulated. I won't go into them further. I spent quite a bit of time yesterday talking about how business expects consistency. When promises are made, especially to small business people to help them expand their businesses, and then are reneged on, it's not appropriate. We'll be supporting this amendment.

Mr. Chair, I'll add that I'd like to call for a recorded vote on this amendment.

[The Chair, Liberal, Wayne Easter]

Okay.

Mr. Caron.

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

In all my political experience, even going back before my election in 2011, this is one of the rare times when I have seen the three major parties agree on a measure for the entire duration of the very long election campaign. So it is extremely disappointing to see this promise, this commitment, has not been kept.

Before we vote, I would like one of the members of the government party to explain why they are reneging on that commitment. I do not want them to explain the efforts made by the government on behalf of SMEs, but why they are reneging on this specific commitment, given that the Liberal Party had it front and centre during the election campaign.

[The Chair, Liberal, Wayne Easter]

Mr. MacKinnon.

[Steven MacKinnon, Liberal, Gatineau, QC]

I would like to clarify something.

As the minister said very clearly yesterday evening, this is not a broken promise but a decision made in one budget. There are three budgets left in the Liberal Party's mandate, perhaps even more. I find my colleague's remarks a little hasty and premature.

[The Chair, Liberal, Wayne Easter]

Mr. Caron, and then Mr. McColeman.

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

The minister talked about postponing the tax reduction indefinitely, although the timeline that the Liberal Party promised during the election campaign was to reduce the tax rate to 9% by 2019, and to maintain the schedule that set the rate at 10.5%, 10%, 9.5% and 9%. It was written in black and white in the Liberal Party's election platform.

[The Chair, Liberal, Wayne Easter]

Mr. McColeman, and then Mr. Champagne.

[Phil McColeman, Conservative, Brantford—Brant, ON]

Well, I've just been handed the transcript from yesterday. I don't want to correct Mr. MacKinnon on this, because I drove directly at the minister in my questioning about this particular issue as to whether this was deferred for future consideration in budgets.

First of all, it's not costed in any of the five-year plans going forward that the minister had, and he did confirm that this is a cancelled item. He confirmed it. I have the transcript in front of me, which I would be happy to read to you. It's cancelled indefinitely is what the response was from Minister Morneau yesterday. I just want to clarify that it's not—

[Steven MacKinnon, Liberal, Gatineau, QC]

On a point of order, Mr. Chair, he can't say he's quoting the minister and then not quote the minister.

[The Chair, Liberal, Wayne Easter]

I don't think that's a point of order.

Mr. Champagne.

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

Mr. Chair, I would like to respond to my colleague Mr. Caron.

We recognize the critical importance of SMEs to the Canadian economy. In the last budget, we reduced taxes for the middle class. We also established the Canada Child Benefit because we believe fundamentally that, by putting more money into the pockets of Canadian taxpayers, we are going to grow the economy and SMEs will benefit as a result.

I took part in the prebudget consultations that were held across the country, from Moncton to Yellowknife. SMEs told us that it was imperative to grow the Canadian economy and that would be the way for them to succeed. We talked with SME people and we understand how industry is structured in the country. If Canadians have more money in their pockets with which to invest in the Canadian economy, our SMEs will do better. That is why, in the recent federal budget, we established a series of measures designed precisely to help SMEs in Canada.

[The Chair, Liberal, Wayne Easter]

We'll have Mr. Johns first, and then Mr. Liepert.

[Gord Johns, NDP, Courtenay—Alberni, BC]

Mr. Chair, the Liberals made a promise to cut taxes for the middle class, but anyone earning less than $45,000 doesn't get a tax break. These are business owners. Some of them don't have children. They're going to be left behind. They get nothing. The Liberals knocked on their doors and made a promise to these people that they were going to get a tax cut of 2%. What are they saying to those people on those same doorsteps now: that they're not going to get a tax cut for the middle class, that those people don't earn $45,000, and they're not going to get the 2% small business reduction? Those are two failed promises.

I think that the government has an opportunity right now to honour the promise they made to small business people. They deserve it. We've had decades and decades of tax cuts for Canada's largest corporations. This is the first time all parties agreed to cut taxes for small business. This is an opportunity to honour that commitment right now, today.

[The Chair, Liberal, Wayne Easter]

Mr. Liepert.

[Ron Liepert, Conservative, Calgary Signal Hill, AB]

It's also important to put on the record, Mr. Chairman, for the parliamentary secretary, that he was here when the Canadian Federation of Independent Business testified before our committee. They also made it very clear that a number of the small business owners fall in that so-called 1% tax increase. Not only did many of the small business owners not get a tax decrease as promised by the Liberals in the election campaign, but the Liberals have actually increased the personal taxes for many of the small business owners.

For the parliamentary secretary to sit there and talk about a middle-class income tax cut when in fact the Liberal government raised taxes for many small business owners is a bit rich.

[The Chair, Liberal, Wayne Easter]

Ms. Raitt first, and then Mr. Caron. There's only about a minute left in your party's time in this discussion, and it's the same for Mr. Caron.