Finance Committee on Feb. 23rd, 2016

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

Thank you very much, Minister.

Is the Department of Finance still in favour of eliminating oil industry subsidies, in accordance with a commitment made at the G20 under the former Harper government? Are we still bound by this commitment?

[Bill Morneau, Liberal, Toronto Centre, ON]

I think what you've seen from us is a real commitment to a greener economy. We've said to Canadians that we want to move forward on dealing with carbon in our world.

We have moved forward quickly on it. We have a first ministers meeting next week with the environmental ministers, and the Prime Minister will be there as well to begin those discussions. We think this is a critically important first step in dealing with what we believe is a real challenge to make our world more economically sustainable. We are working now on initiatives that we can think about both in our budget and over the long term.

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

Does that mean we're still continuing with the liquefied natural gas subsidy of $2 billion on capital costs, which will only create about 800 permanent jobs?

[Bill Morneau, Liberal, Toronto Centre, ON]

What I can tell you is that, as I mentioned yesterday, we're moving forward with our budget on March 22. I'm not yet at the place at which we have written every aspect of that budget, and there are certain details that won't be available until then.

I can tell you that as a broad theme, we believe it's critically important to move forward on having a greener, cleaner environment.

[The Chair, Liberal, Wayne Easter]

I will have to cut it there.

Mr. Minister, we certainly thank you for your presentation. I think there's been a good exchange of information on both sides. I think your information will be helpful to our pre-budget work.

We will get back to you on the submissions you have on a magic stick or whatever it is, to see whether we can find a way to handle them to meet the requirements of the committee for both official languages.

The last point I'd make, Minister, is that this committee has heard from 92 substantive witnesses, either before committee in person or by video conference. A lot of good information has been provided and we have somewhere around 250 submissions that have come in to the committee within the time frame. Our analysts are working on the report as advice to you and your department on pre-budget hearings, and we hope to table it in the House. I'm hopeful that people from the Department of Finance were paying attention to some of those presentations, because we know the time frame is tight.

Thank you again for appearing today. We wish you the best.

[Bill Morneau, Liberal, Toronto Centre, ON]

I thank all of the members of the committee.

As noted at the outset, this is my first time at this committee, and I believe it's critically important that we have dialogues like this so that we can have the opportunity to understand perspectives and get feedback from Canadians across the country.

I'm very appreciative of the work you're doing and the submissions that we'll get. We are working hard to consider all the submissions that we're getting. It is a big job because of the number of submissions, but I just want to say that the Department of Finance is doing an excellent job, and we're looking forward to bringing forward a budget on March 22 that will reflect the concerns of Canadians, but most importantly, that will reflect our willingness to invest in growth in this country for the future.

[The Chair, Liberal, Wayne Easter]

Thank you, Minister. Thank you, Deputy.

We'll suspend for a few minutes while departmental officials come to the table.

[The Chair, Liberal, Wayne Easter]

We'll come to order.

This round is for five minutes. Who wants to start?

Mr. Ouellette.

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

Mr. Chair, I just have a point of order.

I'm a little concerned. I only got to speak for about 3 minutes and 45 seconds. I know it's not a lot of time, but five minutes is still five minutes. I think that if other members go over, there should be consideration to hold the witnesses here in order to finish up the business of this committee.

It's important that every committee member has the opportunity to voice their questions, because they are here representing their constituents. I think that's the same for all sides.

[The Chair, Liberal, Wayne Easter]

I guess it is a point of order.

Mr. Liepert.

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

I think you could check, but I think I went under my time, which is a fair trade-off to the member who just responded.

[The Chair, Liberal, Wayne Easter]

Okay, point noted, Mr. Ouellette.

Who's first in questioning?

Ms. O'Connell.

[Jennifer O'Connell, Liberal, Pickering—Uxbridge, ON]

Thank you, Mr. Chair.

Thank you all for being here.

During the pre-budget consultations and with the witnesses who we saw last week there were a few themes that came out.

One of the themes was in regard to a review of the income tax system and streamlining the system. This was interesting to me because it wasn't something I had necessarily thought about, but it came from different walks of life, from economists and small business owners. I think the idea behind it was to make it easier for individuals, and also make it easier for businesses. The idea from the economists' side was that we would have more revenue generated based on compliance and not having to spend so much money on the preparation of tax returns, for example.

Is this something which the department has looked at in terms of the costs for this sort of review, or is this a procedural item that's ongoing or which the department has been looking at in terms of modernizing, as well, in terms of online resources, etc.?

[The Chair, Liberal, Wayne Easter]

Thank you, Jennifer.

I neglected to introduce the people from the department. I'll introduce you one by one so that people are familiar with who you are and your position.

We have Nicholas Leswick, who is the assistant deputy minister, economic and fiscal policy branch; Andrew Marsland, senior assistant deputy minister, tax policy branch. Andrew has been with quite a number of departments over the years. We have Diane Lafleur, assistant deputy minister for federal-provincial relations and social policy branch; and Richard Botham, assistant deputy minister, economic development and corporate finance.

Whoever wants to answer Ms. O'Connell's question, the floor is yours.

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

Perhaps I may, Mr. Chair.

Thank you for the question.

I think the answer lies a little bit in each.

First, I'd say that the department continually reviews, with the Canada Revenue Agency, the tax system looking at ways to improve the efficiency of the tax system from a broader perspective to ensure that tax measures, tax expenditures, and so on work as effectively as possible to identify areas that need to be responded to in response to court decisions. Also, it's to look at ways of simplifying compliance with the system. As you will see in budget after budget there are a series of measures.

There's a period of continual assessment and then review of the tax system. Going forward there have been indications that we may review tax expenditures, and I guess the government will presumably make its position clear on that in the coming weeks.

[Jennifer O'Connell, Liberal, Pickering—Uxbridge, ON]

Thank you.

Following up on that, I ask these questions because I don't want to reinvent the wheel, if this has been looked at; I'm just trying to get the information. I understand that the government and the minister would ultimately decide how to proceed.

Have you ever done consultations with private industry or economists, etc., about what a review would look like and/or how much a review might cost instead of just the incremental year-over-year changes?

[Andrew Marsland]

I'm not sure we have done that kind of assessment in recent years. Periodically, when you go back over time, there have been significant reviews of the tax system, going back to the 1960s and so on. I don't think we've done that kind of assessment in recent years.

[Jennifer O'Connell, Liberal, Pickering—Uxbridge, ON]

Thank you very much.

My next question is a little bit about procedure and what has worked. I'm trying to find out if you've looked at things like this. From my perspective, with my municipal background, one of the issues with infrastructure funding and the flow was the application process and the burdens on that.

Have you looked as a ministry, non-political, at the flow of infrastructure money or the options for providing funding similar to gas taxes? It doesn't have to be an expansion of gas taxes, but the way that the infrastructure money has flowed. Have you looked at opportunities, one, to save money in the administration costs, or two, in response to the feedback from application processes of the past?

[Richard Botham, Assistant Deputy Minister, Economic Development and Corporate Finance, Department of Finance]

I think most of that work is really not done in the Department of Finance. Most of that work would be done in the ministry of infrastructure. Those officials would be most familiar with the existing program architecture as well as the terms and conditions of those programs.

We certainly do hear representations from big-city mayors and from the Federation of Canadian Municipalities. We are aware of issues or concerns that are raised in that respect, but the primary policy work is not undertaken within the Department of Finance.

[Jennifer O'Connell, Liberal, Pickering—Uxbridge, ON]

Thank you. Fair enough.

To follow up on that, if a review like that.... Granted, it would come from a different ministry, but I'm looking at the financial side of the streamlining and the cost savings to the government in the sense of streamlining.

Is this something that, if this were to move forward with a different model, the finance department could comment on in the sense of effectiveness, with basically an overall financial lens just looking at whether or not this is a good model or if there are cost savings or whatnot? Is that something that could be done by the ministry as more of a commentary on the overall cost?

[Richard Botham]

I think the Minister of Finance would certainly look to our department for advice on those issues around the cost of program delivery. That is something we certainly work on with our colleagues at the ministry of infrastructure to understand better.

We would provide advice, if requested. As you say, there is a cost implication, so it likely is a matter that would be of interest to the Minister of Finance.

[Jennifer O'Connell, Liberal, Pickering—Uxbridge, ON]

Great. That information was very helpful.

Thank you, Mr. Chair.

[The Chair, Liberal, Wayne Easter]

Thank you.

Ms. Raitt.

[Lisa Raitt, Conservative, Milton, ON]

Thank you.

Welcome. The minister's mandate letter says very clearly that the platform is guiding the government, and the expectation of the Prime Minister is to deliver on all the commitments. Have you costed the platform promises found in the minister's mandate letter?

[Nicholas Leswick, Assistant Deputy Minister, Economic and Fiscal Policy Branch, Department of Finance]

Have we costed the platform in the minister's mandate letter? I mean, we're—