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
No. What I said was that we should try to stick to the discussion on the amendment.
Conservative
Ed Fast Conservative Abbotsford, BC
Okay. I think what you're saying is that it's about relevancies.
Conservative
Ed Fast Conservative Abbotsford, BC
There, I might be able to agree with you.
I just want to say that I hope my colleagues Monsieur Ste-Marie and Mr. Julian aren't casting aspersions on anyone at this committee. I'm not aware that anyone on this committee released confidential information to anyone out there in the private sector, but I'm telling you that I have received calls from business organizations—not companies, not C-suite executives, but organizations that represent businesses in Canada—that for some reason have been made aware that there is a possibility that retroactivity will be imposed in cases when it was not the business's own fault but was actually the government's own fault.
I think it's fair for us, Mr. Chair, to share that information with our committee colleagues so that we have all of that information and know the concerns that are out there.
NDP
Peter Julian NDP New Westminster—Burnaby, BC
Thank you very much, Mr. Chair.
I want it to be very clear that from all of the data.... The government has not released this information. I wrote to the finance minister on January 5. I still have not received a response. From the publicly available data that both the National Post and The Globe and Mail have analyzed, we see that in 95% of cases, the money was used for its intended purpose. I do not agree with those who say that this is going to be a catastrophe, not when 95% of businesses stuck strictly to the intent and the spirit of the wage subsidy. The other 5% is the problem.
As a result of that, there needs to be.... I think Canadians would expect that those bad apples, as a result of that behaviour, would have to pay back money that they took for one intended purpose and used for another. That's very simple. Most Canadians would agree.
I would just mention jurisprudence. I'll give a very quick glance at retroactive legislation, including tax legislation. We have the rule 14 declaration, and rule 21, in the Procter & Gamble case. These are all cases in which the courts have upheld retroactive decisions.
Let's not have red herrings. Let's deal with this issue of whether or not a big Canadian company that has made profits and not used the wage subsidy for its intended purpose has to pay that money back. I would expect that the vast majority of Canadians would agree that if you're part of that small percentage of companies that abused the wage subsidy, you should pay the money back.
Liberal
The Chair Liberal Wayne Easter
Okay. We have had a discussion on both BQ-2 and NDP-8.
We will go to BQ-2. Is anybody calling for a vote? Do you want a recorded vote, or do you just want...?
Mr. Clerk, we will have to go a recorded vote on BQ-2.
(Amendment negatived: nays 9; yeas 2 [See Minutes of Proceedings])
Liberal
The Chair Liberal Wayne Easter
We will turn to NDP-8, which we already had a discussion on. Do you want to vote?
NDP
Liberal
The Chair Liberal Wayne Easter
Okay. Then NDP-8 is defeated.
(Amendment negatived [See Minutes of Proceedings])
We will go to NDP-9.
Go ahead, Mr. Julian.
NDP
Peter Julian NDP New Westminster—Burnaby, BC
Mr. Chair, NDP-9 was tied to the extension of the wage subsidy. We have already agreed not to extend the wage subsidy, tragically, so I think I will withdraw NDP-9.
Bloc
Gabriel Ste-Marie Bloc Joliette, QC
Thank you, Mr. Chair.
We know that Bill C‑30 provides for a gradual decrease in the percentage of the wage subsidy. We also know that the Minister has the power to make regulations to change the percentage and to maintain it at a higher level if necessary. A number of the witnesses who came to the committee to testify on Bill C‑30 told us that it is really important for their industry and their economic sector to keep the percentage of the subsidy up.
Amendment BQ‑3 gives the Minister the power to increase the rate, not for the economy as a whole, but for certain sectors of the economy that she could identify, including the particularly vulnerable ones, where a decrease in the rates in the fall would have catastrophic consequences. It would allow the Minister to be able to target those sectors and increase the percentage of the wage subsidy to correspond to the one currently in effect.
Bloc
Gabriel Ste-Marie Bloc Joliette, QC
I'm sorry, the amendment also includes the percentage of the rent subsidy.
Liberal
Julie Dzerowicz Liberal Davenport, ON
Thank you so much, Mr. Chair, and I want to than Mr. Ste-Marie for this amendment. I just want to understand this a little bit. I believe that we already have the authority under the current legislation to be able to do this, and I wonder if the officials would be able to weigh in.
Director General, Tax Legislation Division, Tax Policy Branch, Department of Finance
Thank you. I would be happy to speak to that. I'll start with the wage subsidy, but the considerations for the rent subsidy are exactly the same, I think.
Paragraph 24(9)(k) of the base percentage definition, towards the bottom of page 30 of the bill, at line 27 or 28, sets the nil base rate that we discussed earlier for the wage subsidy for the last two qualifying periods, and it allows for the flexibility—should the government decide to effectively extend the wage subsidy into those two periods, as circumstances may require—to set new rates by regulation.
The specific wording in paragraph (k) says that a percentage can be determined by regulation in respect of the eligible entity. There's a lot built into those words, but the idea is that if you have an eligible entity that is basically an applicant for the wage subsidy, you can determine by regulation the appropriate rate that applies in respect of that eligible entity. It allows for determination by regulation and the idea that different rates can apply in respect of different eligible entities; it's not just one rate that applies across the board. The idea was that the ability to determine different rates in respect of different eligible entities would provide for that kind of flexibility.
Liberal
Julie Dzerowicz Liberal Davenport, ON
To continue with that, Mr. Chair, if we wanted to provide some more supports, more targeted supports, to specific sectors, we'd be able to do so using this clause. It would allow that.
Is that true, Mr. McGowan?
Director General, Tax Legislation Division, Tax Policy Branch, Department of Finance
Yes, that was the intent behind the wording I just discussed. It was that different rates could apply for different taxpayers, and the determination of the rates that would apply in different circumstances could be provided through regulations.
Liberal
The Chair Liberal Wayne Easter
Just to be clear here, Ms. Dzerowicz, you used the statement “using this clause”. Do you mean the clause that's already in the bill—
Liberal
The Chair Liberal Wayne Easter
—or the clause that Mr. Ste-Marie is adding? You're saying it's already in the bill, so you don't need the clause. Is that what I hear you say?