Finance Committee on April 10th, 2017

[The Chair, Liberal, Wayne Easter]

Mr. Minister, I think what Ron is referring to is the consultations on cash tickets for grain. I think that's what the question relates to. I don't believe it's in this budget. I think consultations have been announced.

[Bill Morneau, Liberal, Toronto Centre, ON]

I'll let Andrew Marsland respond to that question.

[Andrew Marsland, Senior Assistant Deputy Minister, Tax Policy Branch, Department of Finance]

Thank you, Mr. Chair.

I think the question relates, as the chair notes, to an item in the budget on cash purchase tickets, which is a measure related to deliveries of grain to licensed elevators. The budget announced a consultation on the continued utility of that measure coming out of the review of tax expenditures. It's seeking people's views on that measure and its continued utility.

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

Okay.

Then that was reported wrongly, Mr. Chair.

[The Chair, Liberal, Wayne Easter]

Just so we're all clear—I'm fairly familiar with this issue—farmers cannot always determine when they sell their product. They could, in fact, sell two years of crops in one, with very little income in one year and a high income in the other and not as many expenditures to weigh against it. It is the system they work under.

On what we're talking about here, no decision has been made but a consultation will take place. Is that correct?

[Andrew Marsland]

That's correct, Mr. Chair.

[The Chair, Liberal, Wayne Easter]

Thank you.

We have Mr. Ouellette, Mr. Dusseault, and Mr. Grewal.

We'll go about five minutes over, if we could, Mr. Minister.

Mr. Ouellette.

[Robert-Falcon Ouellette, Liberal, Winnipeg Centre, MB]

Thank you very much, Mr. Chair.

To the Minister of Finance, thank you very much. I really appreciate your coming here, Bill.

In a previous part of this parliamentary session, I spoke on the right-to-die legislation that we eventually passed as a government. In budget 2017 there is an allocation toward home care in health. I'm wondering how much you expect will be put toward palliative care, which is a very important subject. I know that negotiations are still going on, but I'm wondering if you could just discuss that a bit.

[Bill Morneau, Liberal, Toronto Centre, ON]

Thanks for the question.

We've identified in our discussions with the provinces and in our agreements with the provinces around health care the importance of making investments in home care, the importance of making investments in palliative care, and the importance of making investments in mental health care.

We of course are not the level of government that delivers on those specific investments, so that's a conclusion that can only be reached in consultation with the provinces. In fact it's for them to deliver, so I can't actually answer that question. That's one that will be discussed between the Minister of Health and her colleagues at the provincial and territorial health level.

[Robert-Falcon Ouellette, Liberal, Winnipeg Centre, MB]

So it's still ongoing. That's good.

When you've come here in the past, we've also discussed issues surrounding the Canada child benefit. It's a great program. I'm very supportive of it, but we've talked often about families on social assistance and the children who were in the care of the state—in the child welfare system. I've also advocated that children who are in the welfare system should receive this benefit. It shouldn't be taken or clawed back by a province. I've talked about this privately as well, about trying to make sure the province doesn't do that.

Apparently the Province of Manitoba is still clawing back this fund from these kids. Many provinces will take these funds for child welfare children and place the funds in a trust so that when they age out of the system, our most vulnerable citizens will then have the ability to perhaps have something that they can use to become successful.

I was hoping to get your support to talk to Manitoba to make sure that they don't claw this back anymore. I think it perhaps might contravene federal legislation, but it certainly contravenes our moral values about who our most vulnerable citizens are.

[Paul Rochon, Deputy Minister, Department of Finance]

We have a program called the children's special allowances. It's precisely to deal with the issue of children in care. Through that program we provide provinces with funding to provide exactly the same benefit that other children will receive through the Canada child benefit. We're happy to follow up with the appropriate province on any issues related to that.

[Robert-Falcon Ouellette, Liberal, Winnipeg Centre, MB]

Thank you very much.

I very much appreciate that because it's very important to people in Manitoba. We have 11,000 children in care, and that's a large population that certainly needs our support here at the federal level in any way we can provide it.

My final comment and question is this. I was very pleased with the budget. I spoke in the House on the investments for indigenous peoples—a 27% increase in investments over the lifetime of our government. It's incredible, even for aboriginal languages. Could you discuss that and talk about why you decided to go down that route and why it's important?

[Bill Morneau, Liberal, Toronto Centre, ON]

Thank you for that opportunity to comment on a continuing area of focus of our government. We believe that we need to be working to have a much better situation for indigenous people in this country. We know that through nation to nation dialogue we can improve the situation. We know that it can really only be fully improved if we put the funding required to make a difference over the long term. In thinking about the places where we've made funding, and thinking about education, and infrastructure—in the course of this year's budget it's the biggest single issue—and thinking about how we can make sure we can deliver health care to indigenous peoples on reserve, we know that all of these things are critically important to address if we really want to have a better situation for what, after all, is a critically important part of our country. It also is critically important that we have higher graduation rates of indigenous peoples and better workforce attachment by them, and we can only do it with the kind of investment that will have those outcomes as possibilities. That's what we're committed to doing. It's a long-term discussion, and we're going to remain focused on this area.

[The Chair, Liberal, Wayne Easter]

Thank you both.

Mr. Dusseault, you have time for one question, and then we'll bounce back to Mr. Grewal for the final one.

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

Thank you, Mr. Chair.

I have a question about a fairly complex subject, the Income Tax Act.

The Prime Minister, the previous parliamentary secretary, and you, yourself, Mr. Morneau, have repeatedly called the Income Tax Act overly complex, saying that the rules needed to be simplified to make them easier for Canadians to understand. That is not the case today. It is one of the most complex pieces of legislation out there, and the average Canadian cannot make sense of it. Nevertheless, no one is supposed to flout the law; everyone has to pay taxes even if they have trouble understanding the act.

I repeat, you have frequently said that the act was too complex and in need of simplification. I would therefore like to know where the government's review of the Income Tax Act stands nearly two years into your mandate. When will the government overhaul the Income Tax Act to make it easier for Canadians to understand, as you have recently promised?

[Bill Morneau, Liberal, Toronto Centre, ON]

That is a very important objective for our government. We began by introducing a few measures this year. The caregiver credit is a good example of a measure we have taken to simplify things, but we know that there is still work to do.

Furthermore, we have to find ways to make sure that the system is fair and does what it is supposed to. As I already said, that is why we chose to earmark more than $500 million for the Canada Revenue Agency this year.

I am also working with my G7 and G20 counterparts to make sure that our systems are well-positioned so that people pay taxes in the country they are supposed to. We are taking a number of steps at the same time, working to simplify tax rules and seeking out those who try to avoid paying their fair share. Our goal is to make changes to achieve more tax fairness for Canadians.

[The Chair, Liberal, Wayne Easter]

Thank you both.

Mr. Grewal.

[Raj Grewal, Liberal, Brampton East, ON]

Thank you, Mr. Chair and Minister, for being here.

I am the son of a taxicab driver, so on behalf of the taxi community, thank you so much for the tax fairness initiative, changing the definition of a taxi business so that ride-sharing services will also have pay HST and GST. Though my question is not on that, I thought I'd say thank you for it.

My question is on coding. I get an opportunity to speak at a lot of high schools, and a lot of kids are worried about going on to post-secondary education and about the jobs that will be out there tomorrow, because the landscape is changing so rapidly. Our government's made this investment in coding. Can you speak to the benefits that we hope to realize as a nation by ensuring that kids as young as kindergarten are learning to code?

[Bill Morneau, Liberal, Toronto Centre, ON]

Thank you. I will take the opportunity to say that the decision around taxis was purely one of ensuring that, if people are choosing between two cars sitting there, they both pay the same level of tax. It just seems appropriate.

We recognize that coding for young people or developing the skills required for tomorrow for people in multiple sectors of our economy is going to be increasingly important in what will continue to be a fast-changing economy. We know that the kind of dynamism that an economy displays presents challenges, but it also presents exciting opportunities.

You can only realize those opportunities if you have the base set of skills and the opportunity for training that will allow you to be successful. That's the reason we want to start making sure that people have the base set of skills early on. It's the reason, as I mentioned earlier, we want to make sure that the kind of educational approach that we have during people's years at school will allow them to get work while they're being educated. It's the reason we want to make sure that we have an approach to lifelong learning that gives people the understanding of where they should make their personal investments and gives them the capacity to do that through our agreements with the provinces on training.

It's going to continue to be a challenge as the economy changes rapidly, and we want to prepare Canadians for that challenge and turn it into opportunities for people with exciting jobs.

[Raj Grewal, Liberal, Brampton East, ON]

Thank you, Minister.

[The Chair, Liberal, Wayne Easter]

Thank you, both.

To close, Minister, I have a question, or perhaps more of a comment.

We've had Dominic Barton and some other representatives from the Advisory Committee on Economic Growth before the committee. We really appreciate their work, though we are not expecting that the government will agree with everything they recommend, for sure. However, as one who comes from the farming sector, I can tell you that that sector is very pleased with that committee's emphasis on the agrifood industry's potential.

My concern is that that the potential is there, but when a whole-of-government approach—and this is not a criticism of Finance—is taken to increase economic growth in one area, another department can hamper that economic growth by new regulations or more paperwork, or whatever.

I'll give you an example. It comes to mind because an individual emailed me about it last night. This is a fairly small farming family of four sons and a mom and dad. On the good agriculture practices, which make a whole lot of sense, as we want to ensure that our food is safe, this is what he said:

When GAP started

—meaning good agriculture practice—

Willie

—who is his wife—

and I did it ourselves for years. Then they started demanding more and more, so I just said to my sons, “If you want to farm you have to do this yourselves.” I just could not do it any more. Now my son can't do it alone, so he had to hire someone to help him. It is costing us a fortune. The end result is that we know we can't keep up with all these new rules.

There is a different reality on the farm, and farmers do a pretty darned good job of providing safe food. The reality is, whether it's the Canadian Food Inspection Agency or the Canada Revenue Agency, or any other agency in this town, they don't realize the cost and the time that it takes people on the farm to do paperwork. They're farmers. Yes, you can hire accountants or others to fill it in, but that costs money.

I can give you another example. To fill out an application for environmental protection, where you maybe get $25,000, it will take a volunteer 30 hours to fill out that one application—28 pages. It just makes no sense. Why can't we simplify stuff to keep it down to a page or something like that?

It's not a criticism of you, but it's a whole-of-government thing. We somehow have to create efficiencies on some of these rules that are not taking away from the ability of a farmer, or a recreational stream group, or whatever, to do their jobs. It sits on a desk here in Ottawa for a week or two. I often say that Ottawa is a bubble without reality, and I firmly believe that.

Anyway, my point is that I think the cabinet, you as minister, on these good proposals you may have to attain economic growth, we have to ensure that on the other side of the equation, another department or another agency from the federal government or provincial government is not hampering the ability to achieve that economic growth that you, through your programming, are trying to attain.

That's my point.

Okay, thank you all for your questions. Thank you, Minister and Deputy, for your appearance.

We will suspend for a few minutes and then come back with the officials.

The meeting is suspended.

[The Chair, Liberal, Wayne Easter]

We'll reconvene and welcome to the table the departmental officials: Mr. Meyers, chief financial officer; Mr. Jovanovic, general director, tax policy branch; Mr. Purves, general director, federal-provincial and social policy branch; and Mr. Recker, director of the fiscal policy division, economic and fiscal policy branch. Welcome.

I believe, Mr. Meyers, you have a brief statement, and then we'll see who has questions.

Welcome, and thank you.

[Christopher Meyers, Chief Financial Officer, Corporate Services Branch, Department of Finance]

Good afternoon, Mr. Chair.

As the Chief Financial Officer, I am the lead official responsible for preparing the financial reports and presenting the main estimates 2017-18 for the Department of Finance.

Joining me today are officials who will help me provide a more complete picture of the policy supporting the figures in this document. The main estimates 2017-18 list the total budgetary requirements at $90.1 billion for the Department of Finance Canada, meaning $90 billion in projected statutory expenditures and $89.3 million in voted appropriations.

Those statutory items are included in the main estimates for information purposes and they will not be in the appropriation bill.

The 2017-18 main estimates of $90.1 billion are $679.8 million higher compared to the 2016-17 main estimates of $85.9 billion, due to an increase of $681.3 million in statutory items, offset by a $1.5-million decrease in voted amounts.

Within the statutory forecast, the major contributing factors to the $681.3-million increase are as follows: a $1.1-billion increase in the Canada health transfer, reflecting the minimum 3% legislated growth rate for 2017-18; a $400.4-million increase in the Canada social transfer, reflecting the 3% legislated annual increase; a $373.2-million increase in fiscal equalization to reflect the 2.09% gross domestic product-based escalator being applied to the 2016-17 level; a $145.5-million increase in territorial financing as a result of new and updated data used to calculate territorial expenditure requirements and revenue capacities entering the formula; a $528-million decrease in other interest costs due to a decrease in the average Government of Canada long-term bond rate, which is used to calculate interest on the public sector pension obligations pertaining to service pre-April 1, 2000, debt; and a $764-million decrease in interest on unmatured debt to reflect private sector economists' expectations from the 2016 fall economic statement projections.

The decrease of $1.5 million in vote 1, program expenditures, is mainly due to a decrease in funding for time-limited budget 2015 initiatives, totalling $1 million, and budget 2016 reductions to professional services, advertising, and travel, totalling $0.5 million.

This concludes my overview of the main estimates. I would be pleased to address any questions the committee may have.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Mr. Meyers.

Members have before them the document with the points that Mr. Meyers outlined in part II of the main estimates.

We'll try to limit it to five-minute rounds, and we'll start with Mr. Ouellette.

[Robert-Falcon Ouellette, Liberal, Winnipeg Centre, MB]

Thank you very much, Mr. Chair.

I very much appreciate your coming here to speak on such a wide-ranging topic. I'm sure it must be very difficult to be prepared for every eventuality and every different type of question. I'm going to start with one that was suggested.

The Department of Finance “Departmental Plan 2017-18” mentions that “[c]ybersecurity incidents and failures in supporting systems have been identified as risks that could cause serious disruptions and affect the Department’s ability to execute critical government operations”. What amounts, if any, are being requested to address cybersecurity risks within the department, and what policies or measures has the department implemented in order to address cybersecurity incidents or failures in supporting systems?