Finance Committee on May 27th, 2021

[The Chair, Liberal, Wayne Easter]

Go ahead, Mr. Ste-Marie.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

First of all, I would like to say a huge thank you to the interpreters and the entire technical team who make the committee work. Three and a half hours is a lot.

My thanks also to the senior officials for making themselves available.

Mr. Mercille, if you could send us the list of the OECD countries that have such legislation in place, we would be very grateful to you.

[Pierre Mercille]

Of course.

[The Chair, Liberal, Wayne Easter]

We won't be able to finish clause 107. We'll have to vote on it when we come back.

We all agree with Mr. Ste-Marie's comments on all the officials and the interpreters who have worked so hard. This is pretty technical stuff, so it has to be hard to keep up in the booth.

For members, we will suspend until about 7:33 in Ottawa time. We will have until 9:30 Ottawa time. We managed to negotiate agreement to go until 9:30.

I would suggest to committee members to look through the bill and find a way to speed this up a little bit, so that officials don't have to explain every single clause. Maybe we could move some in groups on division. People can look through the bill and see where their concerns are, because officials have spent two evenings and were before committee already. We don't want to wear them out completely.

With that, we will suspend until 7:34. We'll start on the dot.

The meeting is suspended.

[The Chair, Liberal, Wayne Easter]

We shall reconvene meeting number 51 of the finance committee. We are studying Bill C-30 clause by clause.

We were at clause 107 and had a discussion on that. Are there any further questions?

Ed, your hand is up. Go ahead.

[Ed Fast, Conservative, Abbotsford, BC]

During our break, Mr. Chair, I was going through clause 107. This is a very long clause, but I wanted to get our officials to comment on the way Airbnbs are going to be treated under the e-commerce provisions.

[Pierre Mercille]

I'm not going to talk specifically about Airbnbs, because the application of the legislation to a particular tax situation is the responsibility of the Minister of National Revenue, but I can go through the measure that deals with short-term accommodation.

Essentially that's the third aspect of the e-commerce measure. It deals only with the supply of short-term accommodation in Canada that is facilitated through a digital accommodation platform. The amendments require the GST/HST to be collected and remitted by either the property owner or the accommodation platform operator if the supply is facilitated through a digital accommodation platform.

The property owner would be the one who is going to remit the tax if that person is already registered for the GST/HST, while the obligation to remit would fall under the accommodation platform of the operator if the property owner is not registered.

As I mentioned, there would be a simplified GST/HST registration and remittance framework that also would be available to non-resident accommodation platform operators who are not carrying on business in Canada. Essentially they're not carrying on business in Canada, and beside the fact that they may have customers in Canada, they don't have a physical presence here.

The proposal is for these measures to apply as of July 1.

[Ed Fast, Conservative, Abbotsford, BC]

I have just one last question. It's a very short one.

Is there a revenue threshold below which a short-term accommodation would not be captured, or is all short-term accommodation captured under this legislation?

[Pierre Mercille]

I believe it's all of them, but just to be sure, Dominic DiFruscio is in the waiting room. Maybe he can confirm that.

[The Chair, Liberal, Wayne Easter]

Mr. Clerk, did we find Dominic?

[The Clerk]

Yes, sir. He should be in.

[The Chair, Liberal, Wayne Easter]

Go ahead, Dominic. I hope you heard the question.

[Dominic DiFruscio, Senior Advisor, Sales Tax Division, Tax Policy Branch, Department of Finance]

Yes. Good evening, Mr. Chair.

It seems from a technical perspective from the waiting room that the clerk had disconnected me and then reconnected me into Zoom. I think that's why there was a bit of a delay.

To answer the question, it would apply to all short-term accommodation in Canada.

We have a $30,000 threshold. At present, this $30,000 threshold would apply at the property owner level. With this particular measure, the $30,000 threshold would then apply at the platform level. In effect, you could have a property owner who is making less than $30,000 of supplies. That person would not be required to register under the general GST regime. However, if the grand total of all supplies being made through the platform reaches that $30,000, including perhaps many multiple-property owners who are making less than $30,000, that $30,000 threshold would then apply at the platform level.

In general, this measure would apply to major platforms. In the vast majority of cases, a major platform would be facilitating more than $30,000 of supplies of short-term accommodation. In that case, the platform would be required to register under the simplified regime.

[Ed Fast, Conservative, Abbotsford, BC]

Okay. For clarity, if you have a short-term accommodation facility that maybe has $10,000 to $15,000 worth of revenues but is actually promoting itself on a platform like Airbnb, which is huge, it will be paying GST.

[Dominic DiFruscio]

In a circumstance such as that, it would be the digital platform. The large corporation that would be facilitating those supplies would be required to collect and remit the GST.

[Ed Fast, Conservative, Abbotsford, BC]

Effectively, all short-term accommodation is now going to be taxed.

[Dominic DiFruscio]

Effectively, that's correct. Effectively, yes, all short-term accommodation in Canada that's facilitated through a digital platform would be subject to the GST.

[Ed Fast, Conservative, Abbotsford, BC]

That's very helpful to know. Thank you.

[Dominic DiFruscio]

You're welcome.

[The Chair, Liberal, Wayne Easter]

Shall clause 107 carry on division?

(Clause 107 agreed to on division)

(On clause 108)

[The Chair, Liberal, Wayne Easter]

We're on clause 108. Pierre, you will have to speak to it briefly.

[Pierre Mercille]

Clause 108 is basically a consequential amendment. There are two amendments in there. One is consequential to the e-commerce measure, and the other one is consequential to the old rules that I explained earlier.

The provision being amended is a registration provision. Basically this refers to the consequential amendment to the simplified registration that I mentioned. It allows the registration, in certain cases, of trusts and partnerships that would have an operating company under them and be able to claim ITCs.

[The Chair, Liberal, Wayne Easter]

Thank you, Pierre.

Shall clause 108 carry?

(Clause 108 agreed to on division)

(On clause 109)

[Pierre Mercille]

Clause 109 amends the new housing rebate of the GST, or the federal component of the HST. When a new house is purchased, a condition of the rebate specifies that, if there are two names on the title of ownership, those two people must acquire the property for use as a principal residence.

The amendment relaxes that rule. Basically, it makes things simpler. The amendment is very technical but the result is that, if there are two names on the title of ownership, one of those people must acquire the property in order to use it as a principal residence.

[The Chair, Liberal, Wayne Easter]

Shall clause 109 carry on division?

(Clause 109 agreed to on division)

(On clause 110)

For those who are wondering, we're around page 160. Tamara, you were wondering earlier.