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.
3:55 p.m.
Liberal
The Chair Liberal Wayne Easter
Okay. We're not going to limit the debate. I'm just saying there is a bit of urgency here. That's fine. Your points are heard, Mr. Fast.
Go ahead, Mrs. Jansen.
May 27th, 2021 / 3:55 p.m.
Conservative
Tamara Jansen Conservative Cloverdale—Langley City, BC
I want to say that I was really looking forward to having the officials here, because the last time they were here, they were very good at giving us fantastic explanations so that we could dig in and understand each of the different issues.
For Mr. Fragiskatos to suggest that I'm trying to make this take too long is absolutely outrageous. If I go to my accountant, I can ask questions, and I can't ask questions of the officials who are here? They've come. They did a great job last time. I would love to be able to ask the same questions again.
This is billions of dollars, and there is suddenly an idea that I cannot ask questions because you have a timeline? This is Canadian taxpayers' money. We need to be very, very conscientious.
Honestly, how can we think that we can do this that fast and then pretend that the officials are here to help us? Are they here to help us here or not? I cannot follow it as fast as it's going.
If you look at the document, you can see why it's not that easy. As Mr. Easter mentioned, we're dealing with all sorts of different levels of documents at once.
Please give us the time to actually ask questions and for the officials to give us a bit of an overview of what it is we're looking at, and in which clause. Right now, the way we're doing it, we don't have a single chance to do that.
3:55 p.m.
Liberal
The Chair Liberal Wayne Easter
I'm trying to pull up the bill on the computer here so I could do that, if I can get it.
Okay. Before we get into that discussion, we're on clause 18, and that clause was carried on division, I believe.
3:55 p.m.
Conservative
Tamara Jansen Conservative Cloverdale—Langley City, BC
Hold on a second. I had something on clause 18. My goodness, I want to make sure I'm on the right one.
Can we get an official to tell us exactly which one is clause 18?
3:55 p.m.
Liberal
The Chair Liberal Wayne Easter
I see Mr. McGowan there. Are you prepared to answer that one, Mr. McGowan?
3:55 p.m.
Trevor McGowan Director General, Tax Legislation Division, Tax Policy Branch, Department of Finance
Thank you. I'd be happy to speak to clause 18.
3:55 p.m.
Director General, Tax Legislation Division, Tax Policy Branch, Department of Finance
Clause 18 of the bill amends section 117.1 of the Income Tax Act. The act contains a number of amounts that are indexed to inflation, and section 117.1 provides the indexation of various amounts listed in that provision.
What the amendment does is that first it reorganizes subsection 117.1(1), because it used to be a bit hard to read, and it sets out all the different things in the act that are indexed to inflation and what their starting indexation value was.
The actual amendment is consequential on the adjustments to the Canada workers benefit. In particular, certain amounts under the Canada workers benefit are indexed to inflation. What this would do is provide indexation of those amounts—for example, the new $14,000 threshold for spouses.
3:55 p.m.
Conservative
Tamara Jansen Conservative Cloverdale—Langley City, BC
Thank you so much. I very much appreciate that.
3:55 p.m.
Liberal
The Chair Liberal Wayne Easter
Okay, we will move on.
(Clause 18 agreed to on division)
(On clause 19)
3:55 p.m.
Conservative
Tamara Jansen Conservative Cloverdale—Langley City, BC
Would it be possible to get one official to give us a quick rundown of that?
3:55 p.m.
Liberal
The Chair Liberal Wayne Easter
All these sections in part 1 relate to the area that Mr. McGowan is responsible for.
On clause 19, do you want to give us a short and dirty, if you could, Trevor?
3:55 p.m.
Director General, Tax Legislation Division, Tax Policy Branch, Department of Finance
Thank you. I'd be happy to.
I'd point out that many of these clauses will actually touch on several different measures proposed under the bill. This is one of them. Clause 19 amends section 118 of the act, which provides calculations for a lot of personal tax credits.
In clause 19, you'll find the amendments to the basic personal amount. You'll see in subclause 19(3), for example, that the increase is an additional increase to the basic personal amount, which is the amount that each individual gets essentially tax free. The increased amount is [Technical difficulty—Editor] down for higher-income earners.
It also includes an amendment relating to spouses and who qualifies as wholly dependent. This can be relevant for the purposes of the Canada child benefit. When a child is.... Whether or not there's a shared custody parenting situation, it provides that this will be the case if the custody is between 60% and 40%.
Third, it has consequential amendments on the introduction of the new provisions for advanced life deferred annuities, or ALDAs. The main rules are provided later on in the bill, but the ALDAs would allow for these annuities to be held in certain tax-deferred plans that would provide greater flexibility for saving for retirement.
4 p.m.
Conservative
Ed Fast Conservative Abbotsford, BC
Thank you for that explanation. I really do appreciate the officials giving us answers, unlike last night, which was a disaster.
You mentioned that with these personal tax credits, the basic amount is means-tested. It's clawed back at the higher income levels. Is that right?
4 p.m.
Director General, Tax Legislation Division, Tax Policy Branch, Department of Finance
That's right. It's fully available for individuals who have income up to the bottom of the second-highest tax bracket. Over the course of the second-highest tax bracket, it's gradually reduced. The additional amount is unavailable for individuals with income in the top marginal rates.
4 p.m.
Conservative
Ed Fast Conservative Abbotsford, BC
The basic personal amount is effectively means-tested based on.... Am I incorrectly understanding that?
4 p.m.
Director General, Tax Legislation Division, Tax Policy Branch, Department of Finance
I apologize. It's the additional amount.
There's the base basic personal amount that is not means-tested. Everybody gets it; it hasn't changed. It's just the additional amount that was announced that is means-tested, so there are now two components in the basic personal amount. There is the amount that existed prior to this measure, which is not means-tested. It continues to be there and is indexed to inflation. Then there is the additional amount, which is means-tested.
4 p.m.
Conservative
Ted Falk Conservative Provencher, MB
I think my question was actually similar to Mr. Fast's.
Mr. McGowan, you used the wording that for higher-income individuals, the basic personal exemption is ground down. Is this the first year we're applying that measure?
4 p.m.
Director General, Tax Legislation Division, Tax Policy Branch, Department of Finance
It applies as of the 2020 taxation year.
People just filing will have done it, but it applies as of 2020.