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.
Liberal
The Chair Liberal Wayne Easter
Shall clause 99 carry on division?
(Clause 99 agreed to on division)
That completes part 1.
We will go to part 2, which is “GST/HST Measures”.
Are we ready to group clauses 100 to 116 with unanimous consent and carry them on division?
Director General, Sales Tax Division, Tax Policy Branch, Department of Finance
I am going to speak to that clause.
Director General, Sales Tax Division, Tax Policy Branch, Department of Finance
Essentially, clause 100 amends the main definition provision in the GST/HST legislation, so there are a few things in there.
The first amendment is a consequential amendment to the e-commerce measures that are found later in this part.
The second amendment is simply to make the French version of the act correspond to the English version. We don't think it changes anything in the Canada Revenue Agency's interpretation.
The third amendment concerns virtual currencies. The amendment in this bill makes sure that virtual currency is treated as a financial instrument, so the supply of it becomes an exempt financial service. If a person buys Canadian dollars with a virtual currency, they don't have to charge tax on their supply of virtual currency.
Conservative
Tamara Jansen Conservative Cloverdale—Langley City, BC
There was a bit of a break between the English and the French translation, so I just want to understand it. You're saying that you will not charge—
Director General, Sales Tax Division, Tax Policy Branch, Department of Finance
With regard to the second amendment, we try to ensure that the French and the English version of the legislation say the same thing. In this case, there was ambiguity as to whether they were saying exactly the same thing. The interpretation principle says that you have to find a common interpretation between the English and the French, so we did a very small amendment here to ensure that both versions say the same thing. We don't believe this changes anything in how CRA interprets and will interpret that provision.
Bloc
Director General, Sales Tax Division, Tax Policy Branch, Department of Finance
Things of that nature, yes.
Liberal
The Chair Liberal Wayne Easter
Okay.
Shall clause 100 carry on division?
(Clause 100 agreed to on division)
(On clause 101)
Director General, Sales Tax Division, Tax Policy Branch, Department of Finance
Clause 101 is again an amendment that is made to ensure better consistency between the French version and the English version of the legislation, and it's linked to the e-commerce one that is found later in the bill. It's a consequential amendment.
Liberal
The Chair Liberal Wayne Easter
Shall clause 101 carry on division?
(Clause 101 agreed to on division)
(On clause 102)
Director General, Sales Tax Division, Tax Policy Branch, Department of Finance
Clause 102 is a consequential amendment to the e-commerce amendments, and essentially what the rule does is ensure that.... There's a rule right now in the legislation that deems some supplies to be made outside of Canada, and when it's outside Canada, it's usually not taxable. This measure creates an exception so that even if it's a foreign supplier to a consumer in Canada, the supply will not be deemed by this provision to be made outside Canada.
Again, this is only a consequential amendment to ensure that the rule works properly.
Liberal
The Chair Liberal Wayne Easter
Shall clause 102 carry on division?
(Clause 102 agreed to on division)
(On clause 103)
Director General, Sales Tax Division, Tax Policy Branch, Department of Finance
Clause 103 is also a consequential amendment to the e-commerce provision. This is the rule that sets out who is a small supplier with respect to the GST and HST. Usually, it's those with sales of less than $30,000 of taxable supply a year, but since the new e-commerce rule later in this bill basically creates a new type of threshold, this clause ensures that this existing rule doesn't affect the new rules. It's a consequential amendment.
Liberal
The Chair Liberal Wayne Easter
Shall clause 103 carry on division?
(Clause 103 agreed to on division)
(On clause 104)
Director General, Sales Tax Division, Tax Policy Branch, Department of Finance
Clause 104 is, again, a consequential amendment to the e-commerce provision, and it's basically there to ensure that there are no conflicts between some existing rules and the new rules that the bill adds with respect to those e-commerce transactions.
Liberal
The Chair Liberal Wayne Easter
There are no questions, so will clause 104 carry on division?
(Clause 104 agreed to on division)
(On clause 105)
Director General, Sales Tax Division, Tax Policy Branch, Department of Finance
Clause 105 has two aspects.
The first aspect is that it's similar to the clause just above. It's a consequential amendment to the e-commerce amendments, and essentially it's to ensure that an existing rule in the legislation doesn't contradict what is intended to be done in the new provisions of e-commerce that come later in this bill.
The second aspect of it is that it deals with drop shipment rules. Essentially, it's a little bit complex. It deals with non-resident and resident, and it's using a series of transactions. Without going into details about what drop shipments are, I will say that the only amendment being made here is that these will apply mainly to goods. The CRA took the position that fungible goods—essentially, goods that are sold in bulk—may not.... Some businesses may not benefit from those rules because in the series of transactions, it may not be the same pound of ore or mineral that is transferred in the chain, and CRA has the position that it has to be the exact same goods. This is clarifying that fungible goods can benefit from those rules.
Liberal
The Chair Liberal Wayne Easter
There are no questions, so shall clause 105 carry on division?
(Clause 105 agreed to on division)
(On clause 106)
