Finance Committee on May 29th, 2017

[The Chair, Liberal, Wayne Easter]

Are there any thoughts from the witnesses on this point? Why were they blocked together?

[Trevor McGowan, Senior Legislative Chief, Legislative Review, Tax Legislation Division, Tax Policy Branch, Department of Finance]

The clauses of the bill are aligned with the provisions of the act they seek to amend, and so, unfortunately, because our Income Tax Act is a somewhat complex statute, you'll see some measures appearing in multiple clauses, and some clauses that touch on multiple measures will have a few different things as you have here.

In this case, the section of the Income Tax Act being amended is section 81. It deals with, effectively, various tax exemptions both relating to veterans and also relating to these allowances in subclause 6(3) of the bill.

All of the amendments in clause 6 amend the same section of the Income Tax Act. That's why they were put together.

[The Chair, Liberal, Wayne Easter]

Okay. Thank you.

We did have a member on this committee previously who wanted to do a review of the Income Tax Act, if I recall correctly.

Mr. Dusseault.

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

I have a quick question, Mr. Chair.

It has been the practice during past clause-by-clause studies to separate the different paragraphs in the same clause. If it's something you considered in the past, would you be willing to consider it now?

[The Chair, Liberal, Wayne Easter]

We can't separate the clause as such. It has to be voted on as is or by way of an amendment, and I'm pretty sure there's no amendment to this particular clause.

Is there any further discussion on clause 6?

(Clause 6 agreed to)

Would we be willing to block from clauses 9 to 22? Do we have consent to block? No? Okay.

No harm in trying, Pierre.

(Clauses 7 to 12 inclusive agreed to on division sequentially)

(On clause 13)

[The Chair, Liberal, Wayne Easter]

Mr. Dusseault.

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

I want to express my disagreement with this clause in the bill.

I completely disagree with this clause, which seeks to eliminate the tax credit for public transit.

The government is arguing that the measure doesn't really promote the use of public transit. However, about 1.5 million Canadians have claimed and benefited from this tax credit. This tax credit put $225 million back into the pockets of Canadians who use public transit. The people who use public transit and who can also obtain this tax credit are members of the middle class, as pointed out by my Conservative colleagues.

It's a shame that the proposal is being made today to eliminate the tax credit for public transit, even though the figures show that the measure is effective and that Canadians are claiming this tax credit.

I simply want to emphasize my outright opposition to clause 13 in particular. I didn't want to discuss the clauses as a group, because I wanted to firmly oppose this clause.

[The Chair, Liberal, Wayne Easter]

That's not a problem; that's your right.

Mr. Fergus.

[Greg Fergus, Liberal, Hull—Aylmer, QC]

Unless I'm happily mistaken, I think I'm the only person here who uses public transit every day. I've been using public transit for 20 years, and I haven't seen an increase in the number of users in my region since the introduction of this tax credit.

I think the idea of the government investing much larger amounts into other measures to attract new public transit users, rather than providing the tax credit, is the best decision. That's why I'll vote in favour of this clause.

[The Chair, Liberal, Wayne Easter]

Mr. Albas, then Mr. Liepert.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

I just want to point out that it's very interesting that someone is using anecdotal experience as evidence for a rationale.

That's all I would say.

[The Chair, Liberal, Wayne Easter]

That's all you had to say? Well, that's interesting.

Mr. Liepert.

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

I would like to support what Mr. Dusseault said, and disagree with this intent. I just want to get that on the record.

[The Chair, Liberal, Wayne Easter]

Mr. Deltell, then Mr. Ouellette.

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

Thank you, Mr. Chair.

On that note, it's absolutely incredible to see that this government, which prides itself on being a green government that cares about taxpayers and the environment, has cancelled a tax credit that helps people take public transit. As a result of this budget, Canadian workers who are public transit users will pay more for their journey. It's completely illogical.

[The Chair, Liberal, Wayne Easter]

Mr. Ouellette, then Mr. Badawey.

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

I liked the comment about the fact that people are using anecdotal evidence to make decisions.

However, we've heard what the witnesses told us. One witness in particular spoke of the cost of the reducing one tonne of carbon dioxide emissions. The cost is huge. This measure costs about $4,000 per new user, and it hasn't even managed to reduce carbon dioxide emissions.

We can better direct our efforts to reduce the greenhouse gas effect. Above all, we can use other ways to reduce the carbon dioxide emissions that enter our atmosphere.

We've even heard this measure didn't significantly increase the number of public transit users. We must find measures that will actually use our resources where they're most likely to improve the situation. That's why the government is proposing major investments in public transit systems to improve the service offering, so that all Canadians can use public transit more easily and can have easier access to it across the country.

[The Chair, Liberal, Wayne Easter]

Mr. Badawey.

[Vance Badawey, Liberal, Niagara Centre, ON]

Mr. Chairman, I have a few questions for the witnesses with respect to this credit.

Currently most if not all the capital that goes into transit services is from the municipal sector. Is that true?

[Jenna Robbins, Chief, Employment and Education Section, Personal Income Tax Division, Tax Policy Branch, Department of Finance]

I can't speak for the spending side of it. We're on the tax side. I would say it's a combination of federal funding from Infrastructure Canada and provincial funding.

[Vance Badawey, Liberal, Niagara Centre, ON]

So a lot of the dollars that would otherwise go into capital at the municipal level for the transit systems, the costs of the same, are borne by the property taxpayers?

[Jenna Robbins]

I think it's....

[Trevor McGowan]

I think specific questions about who bears the cost of transit in terms of direct spending are outside the scope of our expertise here. We're looking at federal taxation, specifically the income tax side of things, and in particular here, the impact of the public transit tax credit. Unfortunately, spending at the provincial and municipal levels is outside our area of expertise.

[Vance Badawey, Liberal, Niagara Centre, ON]

Just to help you out a bit, it is, so a lot of the capital and the costs of operating a transit system are borne by the property taxpayers at the local level, unless, of course, they get federal grants and federal-provincial grants. That being said, with the transit pass tax credit being repealed, what will these dollars now be invested into?

[Jenna Robbins]

The budget included significant funding through the Canada infrastructure bank along with general infrastructure money for transit systems.