Evidence of meeting #41 for Finance in the 43rd Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was budget.

A video is available from Parliament.

On the agenda

MPs speaking

Also speaking

Clerk of the Committee  Mr. Alexandre Roger
Nicholas Leswick  Assistant Deputy Minister, Economic and Fiscal Policy Branch, Department of Finance
Andrew Marsland  Senior Assistant Deputy Minister, Tax Policy Branch, Department of Finance
Evelyn Dancey  Associate Assistant Deputy Minister, Economic Development and Corporate Finance Branch, Department of Finance
Leah Anderson  Assistant Deputy Minister, Financial Sector Policy Branch, Department of Finance
Galen Countryman  Associate Assistant Deputy Minister, Federal-Provincial Relations and Social Policy Branch, Department of Finance

5:30 p.m.

Galen Countryman Associate Assistant Deputy Minister, Federal-Provincial Relations and Social Policy Branch, Department of Finance

It would be me, Mr. Chair.

5:30 p.m.

Liberal

The Chair Liberal Wayne Easter

Mr. Countryman, welcome.

5:30 p.m.

Associate Assistant Deputy Minister, Federal-Provincial Relations and Social Policy Branch, Department of Finance

Galen Countryman

Thank you for the question.

I'm afraid I don't have on hand the estimates of the projected number of people who we think would qualify for the CRB in the coming weeks. Obviously, there's a great deal of uncertainty on that. I could take that back to see what, if anything, we can provide you.

5:30 p.m.

NDP

Peter Julian NDP New Westminster—Burnaby, BC

Thank you.

I'm looking at the analysis of the range. We're in the midst of a third wave. It's growing in parts of the country, as we know. The CRB is not something that should be slashed without having given it a great deal of thought. The analysis done by the finance ministry would be very helpful.

My second question, then, is on the wage subsidy. I wrote to the minister on January 5, and we're still awaiting a reply. When will the actual figures for the wage subsidy provided to companies be released? When will the public actually know? It's the public's right to know, of course.

What is the finance ministry and the CRA doing in the case we've already seen through the The Globe and Mail, the National Post and a number of other intrepid reporters for CBC, CTV and Global? They've already identified companies that have laid off their employees while getting the wage subsidy and providing dividends. They are doing stock buybacks and providing massive executive bonuses.

What procedure is the finance ministry or the CRA taking on that, when there is clear evidence of a misuse of the wage subsidy funds? What steps will the finance ministry be taking?

When are you releasing the figures and what steps are you taking, when, clearly, abuse has been identified?

5:30 p.m.

Senior Assistant Deputy Minister, Tax Policy Branch, Department of Finance

Andrew Marsland

With respect to the first question, the wage subsidy, as I think the committee is aware, is delivered through the Income Tax Act. That act has provisions precluding the release of information. There is an exception with respect to the wage subsidy. With respect to the names of recipients, those names are available on the CRA website. That is, in essence, my response to the first question.

With respect to the second question, I think the minister responded to this, to a large extent. As the committee is aware, the objective of the wage subsidy is to support the retention and rehiring of workers by firms affected by the pandemic. The way it does that is by a month-over-month comparison of revenue drop. These are the requirements to qualify for a wage subsidy, and that wage subsidy is created by the level of revenue decline in any given month.

5:35 p.m.

NDP

Peter Julian NDP New Westminster—Burnaby, BC

Mr. Marsland, does that mean there will be no action taken against companies already identified by intrepid journalists as having clearly violated the conditions around the wage subsidy?

5:35 p.m.

Senior Assistant Deputy Minister, Tax Policy Branch, Department of Finance

Andrew Marsland

My response to that, Mr. Chair, would be that the CRA, of course, administers the Canada emergency wage subsidy. The CRA has programs in place to ensure that the provisions and the requirements, by law, to obtain the wage subsidy are respected in the making of claims, so the CRA will be doing that.

5:35 p.m.

NDP

Peter Julian NDP New Westminster—Burnaby, BC

Thank you.

5:35 p.m.

Liberal

The Chair Liberal Wayne Easter

You have time for one last question.

5:35 p.m.

NDP

Peter Julian NDP New Westminster—Burnaby, BC

It's a doubleheader.

First, the minister is saying that Netflix is not excluded from the proposed digital services tax. Evidence has shown the contrary. Could the finance ministry provide the information that shows Netflix is not excluded from the proposed tax?

Second, in terms of tax havens, given that CRA officials have said before this committee that they did not have the tools to take action against massive tax evasions that we're seeing, when will the finance ministry be tabling legislation that would actually provide CRA officials with the tools required to take action?

5:35 p.m.

Senior Assistant Deputy Minister, Tax Policy Branch, Department of Finance

Andrew Marsland

With respect to the first question, I think it's important to understand what the proposed digital services tax is about and what it's not about. It's not about taxing consumption in Canada. As you know, Bill C-30 includes measures to require the collection of GST by non-residents who are providing certain services.

What the proposed digital services tax is about in a corporate taxation context is making sure that where value is created in Canada, it's subject to tax. The value that's created—which is novel in the digital environment—is essentially the monetization of user data, meaning the data we all provide when we participate in social media, search engines, and so on. That data is often monetized and that value is created in Canada, and it's appropriate that it be taxed.

That's what it's about. There is no exclusion for any particular enterprise. There is a scope proposed for the tax, and that scope would not normally include the sale per se of goods or services. It may include situations where there is data harvested through that activity. That may be within the scope of the proposed tax.

5:35 p.m.

NDP

Peter Julian NDP New Westminster—Burnaby, BC

So you're saying that Netflix—

5:35 p.m.

Liberal

The Chair Liberal Wayne Easter

I'm sorry, Peter. You're way over the time. These doubleheaders put you over.

5:35 p.m.

NDP

Peter Julian NDP New Westminster—Burnaby, BC

I'm just asking for clarification. Netflix is not included then in that tax.

5:35 p.m.

Senior Assistant Deputy Minister, Tax Policy Branch, Department of Finance

Andrew Marsland

I'm not in a position to discuss particular enterprises. What I was trying to explain was the scope of that tax. Any particular enterprise would be included to the extent that it was involved in the monetization of data and the other requirements of the proposed tax were met.

5:35 p.m.

Liberal

The Chair Liberal Wayne Easter

Okay. We will have to leave it there.

We will go to Mr. Kelly, followed by Ms. Koutrakis and Ms. Dzerowicz on a split.

5:35 p.m.

Conservative

Pat Kelly Conservative Calgary Rocky Ridge, AB

Thank you.

To the officials, is there currently a projected date for a return to a balanced budget?

5:35 p.m.

Liberal

The Chair Liberal Wayne Easter

Mr. Leswick, or Andrew.

5:35 p.m.

Assistant Deputy Minister, Economic and Fiscal Policy Branch, Department of Finance

Nicholas Leswick

There is no return to balance printed in the budget.

5:40 p.m.

Conservative

Pat Kelly Conservative Calgary Rocky Ridge, AB

Outside of the budget, from your own research do you have a date or a year that you're projecting?

5:40 p.m.

Assistant Deputy Minister, Economic and Fiscal Policy Branch, Department of Finance

Nicholas Leswick

We don't do more tangible fiscal projections beyond the forecast horizon 2025-26.

5:40 p.m.

Conservative

Pat Kelly Conservative Calgary Rocky Ridge, AB

So your $30 billion deficit projected in 2026 is as close as anything we have on the horizon?

5:40 p.m.

Assistant Deputy Minister, Economic and Fiscal Policy Branch, Department of Finance

Nicholas Leswick

Correct. We do long-term fiscal sustainability analysis, but it's subject to a fair degree of sensitivity.

5:40 p.m.

Conservative

Pat Kelly Conservative Calgary Rocky Ridge, AB

Thank you.

When the minister appeared at committee to discuss the fall economic statement, she admitted there was nothing in the fall economic statement, or the Speech from the Throne, or any of the previous measures to assist small businesses that opened their doors in, say, late 2019 or the early months of 2020 and do not meet the criteria of the existing support measures.

Is there anything in this budget that would address this problem? This was something that has been widely acknowledged now by the government as a shortcoming in the support measures.

5:40 p.m.

Liberal

The Chair Liberal Wayne Easter

Ms. Dancey.