Evidence of meeting #51 for Finance in the 43rd Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was agreed.

A video is available from Parliament.

On the agenda

MPs speaking

Also speaking

Trevor McGowan  Director General, Tax Legislation Division, Tax Policy Branch, Department of Finance
Clerk of the Committee  Mr. Alexandre Roger
Pierre Mercille  Director General, Sales Tax Division, Tax Policy Branch, Department of Finance
Philippe Méla  Legislative Clerk
Dave Beaulne  Senior Director, Legislation, Tax Legislation Division, Tax Policy Branch, Department of Finance
Maude Lavoie  Director General, Business Income Tax Division, Tax Policy Branch, Department of Finance
Maximilian Baylor  Senior Director, Personal Income Tax Division, Tax Policy Branch, Department of Finance
Lesley Taylor  Senior Director, Personal Income Tax Division, Tax Policy Branch, Department of Finance
Dominic DiFruscio  Senior Advisor, Sales Tax Division, Tax Policy Branch, Department of Finance
Phil King  Director General, Sales Tax Division, Tax Policy Branch, Department of Finance
Erin O'Brien  Director General, Financial Services Division, Financial Sector Policy Branch, Department of Finance
Jean-François Girard  Senior Director, Financial Stability and Capital Markets Division, Financial Sector Policy Branch, Department of Finance
Julie Trepanier  Director, Payments Policy, Financial Systems Division, Financial Sector Policy Branch, Department of Finance
Nicolas Moreau  Director General, Funds Management Division, Financial Sector Policy Branch, Department of Finance
Manuel Dussault  Senior Director, Framework Policy, Financial Institutions Division, Financial Sector Policy Branch, Department of Finance
Justin Brown  Acting Director General, Financial Crimes Governance and Operations, Financial Systems Division, Financial Sector Policy Branch, Department of Finance
Neelu Shanker  Deputy Director, Operations, Sanctions Policy and Operations Coordination Division, Department of Foreign Affairs, Trade and Development

6:05 p.m.

Liberal

The Chair Liberal Wayne Easter

I don't see any questions on that.

(Clause 83 agreed to on division)

(On clause 84)

6:05 p.m.

Director General, Tax Legislation Division, Tax Policy Branch, Department of Finance

Trevor McGowan

Currently the tax rules provide for an accelerated deduction in respect of certain zero-emission vehicle properties. These amendments would extend the class of vehicles eligible for the enhanced zero-emission vehicle deduction. It would include things like off-road vehicles and it would extend the capital cost allowance or tax depreciation deduction.

6:05 p.m.

Liberal

The Chair Liberal Wayne Easter

Mr. Falk, you have a question.

6:05 p.m.

Conservative

Ted Falk Conservative Provencher, MB

Thank you.

By off-road vehicles, are you referring to recreational vehicles, heavy equipment, or agriculture vehicles? What would you be referring to there?

6:05 p.m.

Director General, Tax Legislation Division, Tax Policy Branch, Department of Finance

Trevor McGowan

Well, there are requirements that need to be met. One of the existing prohibitions was that they had to be driven on a road. I don't think there are distinctions made between types.

In terms of the specific technologies and types of vehicles, is my colleague, Maude Lavoie, able to join in, or maybe Dave Beaulne, who worked on the file?

6:05 p.m.

Liberal

The Chair Liberal Wayne Easter

Could we have Maude or Dave?

6:05 p.m.

The Clerk

Just a second, sir. I'll let them in.

6:05 p.m.

Liberal

The Chair Liberal Wayne Easter

Good. That's not a problem.

We'll have Mr. Fast after this.

I know there are only 65 folks sitting in the wings there while we go through this process. Thank you all for your patience.

Dave Beaulne, go ahead.

6:05 p.m.

Dave Beaulne Senior Director, Legislation, Tax Legislation Division, Tax Policy Branch, Department of Finance

Hi there. Yes, I'm happy to help out Trevor. It has been a long haul.

On the types of vehicles, we have a few examples that we've given in the clause-by-clause description. I'll just quote from it.

I'm not an expert in this technology, but what we talk about are items that go into class 56 of schedule II of the income tax regulations: “Notable examples would be zero-emission aircraft, watercraft, trolley buses and railway locomotives.” However, I am aware that some of the large equipment used in mining, I guess, would also potentially be fully self-propelled and fully electric.

6:05 p.m.

Conservative

Ted Falk Conservative Provencher, MB

Can I get a follow-up on that?

6:10 p.m.

Liberal

The Chair Liberal Wayne Easter

Sure, Ted. Go ahead.

6:10 p.m.

Conservative

Ted Falk Conservative Provencher, MB

You mentioned that mining would probably qualify. I'm thinking particularly of agriculture.

Would agriculture equipment also qualify? There is more and more energy-efficient agriculture equipment being produced.

6:10 p.m.

Senior Director, Legislation, Tax Legislation Division, Tax Policy Branch, Department of Finance

Dave Beaulne

I see that Maude Lavoie has just shown up. I don't want to steal her thunder. She knows more about this stuff than I do.

6:10 p.m.

Liberal

The Chair Liberal Wayne Easter

Ms. Lavoie, you're on.

6:10 p.m.

Maude Lavoie Director General, Business Income Tax Division, Tax Policy Branch, Department of Finance

Yes, as long as the equipment is fully electric or uses hydrogen, it could be equipment used in agriculture. It could be forklifts, it could be tractors, it could be Zambonis, or it could be golf carts. It could be equipment that meets the requirements in any industry.

What we have heard from more is the mining sector, which seems to have technology available and ready to be used, but any other industrial sectors could also qualify if they use equipment that is fully electric or using hydrogen.

6:10 p.m.

Conservative

Ted Falk Conservative Provencher, MB

Thank you for that explanation.

6:10 p.m.

Liberal

The Chair Liberal Wayne Easter

Thanks, Maude.

Go ahead, Mr. Fast.

6:10 p.m.

Conservative

Ed Fast Conservative Abbotsford, BC

I think most of my questions have actually been answered. That was very helpful.

Just to be very clear, this is a temporary enhanced CCA that allows the capital costs to be written off in the first year. In other words, there's no schedule of writeoff. It's one year, and it's all written off in that year.

Maude, is that correct?

May 27th, 2021 / 6:10 p.m.

Director General, Business Income Tax Division, Tax Policy Branch, Department of Finance

Maude Lavoie

Yes, that's correct. It's for equipment that becomes available for use before 2023, so it is temporary.

6:10 p.m.

Conservative

Ed Fast Conservative Abbotsford, BC

Is it for 2023 or 2028?

6:10 p.m.

Director General, Business Income Tax Division, Tax Policy Branch, Department of Finance

Maude Lavoie

The 100% is until 2023. Then there's a phase-out, so it will be then fully phased out by 2028.

6:10 p.m.

Conservative

Ed Fast Conservative Abbotsford, BC

That wasn't explained in my notes here, so thank you for that clarification. I appreciate it.

6:10 p.m.

Liberal

The Chair Liberal Wayne Easter

Is there anything further on this?

(Clause 84 agreed to on division)

(On clause 85)

Thank you, all three, for your explanations there.

Trevor, we're turning to clause 85.

6:10 p.m.

Director General, Tax Legislation Division, Tax Policy Branch, Department of Finance

Trevor McGowan

Thank you.

I would say, borrowing from my colleague Pierre's grouping, that clauses 85 through 87 are all consequential amendments relating to the measure that we just discussed.

6:10 p.m.

Liberal

The Chair Liberal Wayne Easter

Are we okay to see clauses 85 to 87 on division, folks?