Finance Committee on June 16th, 2020

[Leah Anderson, Assistant Deputy Minister, Financial Sector Policy Branch, Department of Finance]

I'm happy to take that. I'm with the Department of Finance.

[The Chair, Liberal, Wayne Easter]

Ms. Anderson, go ahead.

[Leah Anderson]

I'll kick that off.

It's a very important issue. Thank you for raising it.

We did extensive consultations early in the year. Actually, we were able to begin and finish them just prior to the onset of the pandemic. We did broad-based consultations across the country, including with the provinces, on beneficial ownership.

We released a consultation paper. We are taking the results of those consultations to assess an appropriate way forward on beneficial ownership and what policies may be required.

[Peter Julian, NDP, New Westminster—Burnaby, BC]

Do you have a timeline for implementation?

[Leah Anderson]

Not at this time. Timelines have shifted given the urgent priorities of COVID-19, but it does remain very much a priority given the issues involved.

[The Chair, Liberal, Wayne Easter]

You have time for a quick question, Peter.

[Peter Julian, NDP, New Westminster—Burnaby, BC]

This is for OSFI.

Thank you very much for providing us with the update on the overall supports to the banking sector. We got this a couple of weeks ago, and $750 billion, three quarters of a trillion dollars, are going to Canada's big banks. We've seen $5 billion in profits so far during this pandemic while people are literally fighting to put food on the table.

Is there an update that OSFI has on the overall figures? The Bank of Canada gave us a support level earlier today of $341 billion, which is $41 billion more than what was projected in the OSFI figures from a couple of weeks ago. Do you have an update to give us about the overall supports for Canada's big banks right now?

[Judy Cameron, Senior Director, Regulatory Affairs and Strategic Policy, Office of the Superintendent of Financial Institutions]

I'll take this question.

[The Chair, Liberal, Wayne Easter]

Ms. Cameron, go ahead.

[Judy Cameron]

Though OSFI does not have an update on the overall supports at this time, what I can say is that OSFI announced in early March the release of $300 billion in lending capacity for Canada's largest banks when we reduced the domestic stability buffer, and no further change to that buffer has been made since then.

[The Chair, Liberal, Wayne Easter]

Okay, we'll have to end that round.

We'll go to Mr. Morantz, followed by Ms. Koutrakis.

Marty.

[Marty Morantz, Conservative, Charleswood—St. James—Assiniboia—Headingley, MB]

Thank you, Mr Chair.

I have to say, as a new MP, I do agree with Mr. Ste-Marie's comments that it's difficult to put their estimates into proper context without a budgetary plan, but I'll do the best I can.

Back in 2018, the Department of Finance put out a backgrounder called “Ensuring Transparency”. In it, it says, “The Government of Canada will not keep any direct proceeds from carbon pollution pricing”.

In the CRA departmental plan—I know they'll be here in about an hour, so we'll have a chance to ask them this as well—they say that there's basically a $3.7-billion transfer to CRA. Of that, roughly $3.4 billion is to fund the climate action incentive, which, they say, returns the majority of the direct proceeds from the fuel charge.

I'm wondering if someone could explain to me why one government department is saying that all of the direct proceeds are returned to Canadians, and another department is saying a majority of the direct proceeds are being returned to Canadians.

[The Chair, Liberal, Wayne Easter]

Andrew Marsland, go ahead.

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

Thank you for the question. Perhaps I'll start, and Ms. Dancey may want to supplement my answer.

The vast majority of the proceeds from the federal carbon charge is returned under the climate action incentive payments through the CRA and paid when individuals in particular provinces file a tax return. The payment is made at that time. That represents, I believe, roughly 90% of the direct proceeds from the fuel charge. The balance is returned to support particular sectors such as SMEs, other essentially public institutions and so on in the provinces through funding programs.

Perhaps I'll let Ms. Dancey describe those programs to you.

[The Chair, Liberal, Wayne Easter]

Ms. Dancey.

[Evelyn Dancey]

I was going to say exactly what my colleague Andrew said in that a portion of the proceeds have been identified for federal programming that has just been named for the MUSH sector and SMEs.

[Marty Morantz, Conservative, Charleswood—St. James—Assiniboia—Headingley, MB]

This “Ensuring Transparency” backgrounder does say, though, that the Government of Canada will return those proceeds directly to the governments of those jurisdictions that choose to adopt the federal system. I guess that 10% is care being taken to make sure that it is going back to the provinces and territories from which it came. That's one question. I have a follow-up, though.

[The Chair, Liberal, Wayne Easter]

Go ahead, Andrew.

[Andrew Marsland]

It is the case that we calculate the amount by province. In those provinces that choose to adopt the federal climate system, those proceeds are returned to the government of that province. We do account for them. Then in the other provinces they're returned—as I say, the vast majority—to the climate action incentive payment, and roughly around 10% in various programs to support small business and the commercial sector.

[Marty Morantz, Conservative, Charleswood—St. James—Assiniboia—Headingley, MB]

This “Ensuring Transparency” backgrounder from 2018 goes on to say that the Government of Canada “will provide an update each year on exactly how those proceeds were used”. This was from 2018. Has such an update ever been provided?

[Andrew Marsland]

The update has not yet been provided. The announcement was in 2018, the first year was 2019, and we'd expect that an update would be provided in the coming months when the account is complete.

[Marty Morantz, Conservative, Charleswood—St. James—Assiniboia—Headingley, MB]

Okay. I look forward to that.

Someone on the panel was talking about the difficulties in preparing an economic forecast. I have a question for that person. I don't recall the name. I apologize.

[The Chair, Liberal, Wayne Easter]

It was Mr. Recker. Go ahead, Marty.

[Marty Morantz, Conservative, Charleswood—St. James—Assiniboia—Headingley, MB]

Just to follow up on some of my colleague's questions, I'm curious. Have you prepared an internal economic outlook?

[Bradley Recker]

Our department continually monitors the situation. We have not prepared any sort of official economic outlook to this date.