Finance Committee on April 30th, 2024

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

All right, thank you.

This amendment is very important for professionals who offer therapeutic counselling services. Various professional orders have approached us and come to explain the situation to the committee. As drafted, the bill poses a problem: People who offer therapeutic counselling services in Quebec would not be able to benefit from the tax exemption.

I had put the question to officials and they told me there was no problem. Subsequently, the representatives of these professionals told me that they had consulted the Canada Revenue Agency and Revenu Québec and had been told that, according to the original wording of the bill, they would not be able to benefit from the tax exemption. It's a question of how the laws fit together. The only way one of these professionals could qualify for the tax exemption, according to the original wording, would be if they obtained an attestation from another province, such as New Brunswick, allowing them to practise in that province, even if they had no intention of doing so, and then returned to practise in Quebec. There has been a lot of discussion with the Canada Revenue Agency and Revenu Québec, and it seems that this is the only way to qualify for tax exemption. That's the problem with the original text of the bill.

I'm using New Brunswick as an example, because it's the only province that offers services in French for the recognition of these professional orders. However, this province really doesn't have the resources for every Quebec professional to go there to obtain this recognition.

I know that the government and officials say that these Quebec professionals will be covered and that there won't be a problem. However, because of my extensive experience on the Standing Committee on Finance, I know very well that once a budget implementation bill is passed, there is no follow-up, people are left to fend for themselves and they are not entitled to the measure to which they should be entitled according to the spirit of the bill.

This amendment therefore clarifies matters to ensure that Quebec professionals will be entitled to the tax exemption, like everywhere else in Canada. If this amendment is not adopted, the concern will persist, the administrative maze and the negotiations between Revenu Québec and the Canada Revenue Agency will continue, and there is a very high risk that Quebec professionals will be excluded from the measure, since this is the Canada Revenue Agency's and Revenu Québec's interpretation of the original text of the bill. I repeat: The only way for a Quebec professional to qualify would be to obtain recognition from New Brunswick, allowing them to practise there, and then return to practise in Quebec. But that would create a monstrous bureaucratic burden for New Brunswick.

I invite each of my colleagues to support this amendment.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Ste‑Marie.

I also have Mr. Turnbull to speak about this.

[Ryan Turnbull, Liberal, Whitby, ON]

Thanks, Chair, and thanks to Mr. Ste-Marie for providing this and putting this forward.

I am very empathetic to the attempt here—wanting to ensure psychoeducators in Quebec are included. I understand that the desire is to make a specific reference to them. However, we have a couple of concerns related to this.

One, we feel strongly that the terms of the bill refer to a “practitioner”. Those practitioners, in fact, would include psychoeducators and other professions in counselling therapy. The bill itself should already include Quebec's psychoeducators. That's the first point.

Maybe I can go to the officials to clarify whether in fact this is the case, because I don't want Mr. Ste-Marie to just take my word for it.

[Gregory Smart, Expert Advisor, Sales Tax Division, Tax Policy Branch, Department of Finance]

I'm Gregory Smart, an expert adviser at the Department of Finance.

This goes back to the definition of “practitioner” in the act.

First of all, a practitioner has to be licensed or otherwise certified to practise their profession in the province where the service is supplied. If the person is not required to be licensed or certified to practise that profession in that province, they'll have the qualifications equivalent to those necessary to be so licensed or otherwise certified in another province.

I understand that, in this case, the services we're talking about are licensed in the maritime provinces but not in Quebec—at least, not under the title “psychoeducator” or some of these other professions that exist in Quebec. In that case, I would think they would fall under paragraph (c). They would be required to have the qualifications equivalent to those that are necessary to be licensed in a province, such as New Brunswick, where they are so licensed.

That's all I can say.

[Ryan Turnbull, Liberal, Whitby, ON]

Okay. Thank you for that.

In a way, though, you're saying the conclusion is that psychoeducators would be included as practitioners. This is what we've been told in consultation with the CRA.

Would you agree with that interpretation?

I know you've given us a more complex explanation. I understand what you said, which is that psychoeducators, no matter where they're qualified and whether they are licensed or not.... As long as they have the standard set of qualifications, they would count as practitioners.

Is that what I heard?

[Gregory Smart]

Yes. That's correct. That's the intention.

[Ryan Turnbull, Liberal, Whitby, ON]

Okay. Thank you for that.

Hopefully, that sets Mr. Ste-Marie's mind at ease a bit.

I would also like to raise one more concern with regard to the particular wording of this amendment.

I think there's a bit of a concern that, when you reference one specific province in federal legislation, you're essentially embedding in the law itself an exemption with specific reference to one province but to the exclusion of others. I don't think that's appropriate for federal legislation, even though I understand Mr. Ste-Marie has some legitimate concerns about whether psychoeducators are included. I think we've heard testimony to say that they are in fact included. I hope we can move on from this.

For the reasons I mentioned, we will not be supporting this one.

Thank you.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Turnbull.

I have Mr. Davies. Then it's back to Mr. Ste-Marie.

[Don Davies, NDP, Vancouver Kingsway, BC]

Thank you, Mr. Chair.

I'm not sure I completely understand the nature of the amendment. I'll just verbalize what I think it says, and if someone else could correct me, that would be helpful.

This is the clause that would remove the GST on counselling services. I understand that in many provinces in the country, there are counselling services that are legitimate counselling services but are not regulated. We want to make sure those services benefit from the reduction of the GST.

When I read this clause, it seems to me to be saying that if someone is supplying these services in a province that does not regulate the provision of counselling therapy, or if the services are rendered by a person whose qualifications are equivalent to those licensed in Quebec, they would be deemed as qualifying for the GST reduction.

If I understand that correctly, it seems to me that it is delegating to a province—in this case, Quebec—the ability to set the national standard. Now, however much I may admire Quebec's leadership in that area, if my understanding is correct, I don't think it's appropriate to determine the application or not of a federal tax reduction to what one particular province may or may not do.

Is my understanding of what this amendment would do correct?

Should I restate it in simpler terms, or do you understand what I'm saying?

[Gregory Smart]

It's a question of interpretation, and I have a bit of a difficulty understanding it myself. I believe that's correct, and I believe that's what Mr. Ste-Marie said earlier.

[Don Davies, NDP, Vancouver Kingsway, BC]

It seems very helpful. I appreciate my colleague's amendment. I think what he's trying to do is make sure that everybody who provides these services across the country benefits from the GST exemption. However, the means of doing it don't feel right to me, because what it's doing is using one province's regulatory decisions as the national benchmark. It might be good in Quebec now, but a future government may change that. That's why I struggle with this amendment.

Thanks.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Davies.

I have MP Ste-Marie now.

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

Thank you, Mr. Chair.

I thank Mr. Turnbull, Mr. Davies and the official for their participation in the exchanges.

I would like to remind you that Quebec is the only province that manages the GST. In the case of the other provinces, the Canada Revenue Agency collects this tax. Because Quebec is a nation, because it has Revenu Québec and because it has its own ways of doing things, for decades there has been an agreement between the federal government and Quebec whereby it is Quebec, through Revenu Québec, that administers the collection of the GST in this province.

Quebec's professional orders have had discussions with Revenu Québec and the Canada Revenue Agency over the past few months. We've had the text of the bill for some time now. These professional orders are calling us because they have been told that, according to the current wording of the bill, they would not be entitled to the GST exemption.

The senior official, whose name I forget, and I apologize, has just confirmed to us the intent of the bill. I can understand that. When I read the bill, that is also what I take from it. That's the first thing I said to the representatives of Quebec's professional orders; I told them what the intent of the bill was. I then put the question to officials during the first session on the bill. They confirmed that this was indeed the intention of the bill. I went back to the representatives of the professional orders to tell them that this was indeed the case.

Despite testimony confirming that this is indeed the intent of the bill, the Canada Revenue Agency and Revenu Québec believe that given the way the bill is currently drafted, there would be no GST exemption for these Quebec professionals.

It's possible that my colleagues don't like the fact that the text of the amendment talks specifically about Quebec, but that's because its situation is different. It's Revenu Québec that collects the GST in Quebec. That explains the wording. I'm sorry about that. We worked with the legal experts, as that is the way we do things here, to ensure fairness. Fairness doesn't always mean that things are equal for everyone, but that we adapt for everyone.

The official said he thought these professionals would be exempt from GST. Now, other officials had told us the same thing previously, but upon checking, we were told that these professionals would not be entitled to this exemption.

Mr. Chair, before we continue talking about this amendment, I would like to know if there is a representative in the room from the Canada Revenue Agency who could talk to us about this amendment and the current situation.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Ste‑Marie.

I do not believe that we have anybody from the CRA here. No.

I don't know if Mr. Smart can help with what was asked or if anybody else has some information to provide MP Ste-Marie.

[Gregory Smart]

I'm sorry. I don't have anything further to add apart from what the intention is. I don't know how the CRA or Revenue Québec is interpreting this particular provision.

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

Please allow me to continue, Mr. Chair.

I thank the official for his reply. I completely agree with him: The intention is there and it's drafted that way. However, the directives that the Canada Revenue Agency gives to Revenu Québec, as well as the discussions and negotiations between these two organizations, do not confirm this.

I agree with what Mr. Davies, Mr. Turnbull and the senior official say. I thank them for it and I agree with them, but it's all still in the realm of intention. If we really want to guarantee that the GST exemption will apply to these Quebec professionals, we need to amend the text of the bill. We've been talking about this for months. We've had representatives from all the professional orders come and explain it to us at length, forwards and backwards. Unfortunately, this is what it takes. If the amendment is not adopted, they will probably not have access to it. That's really worrying. So that's why I'm proposing it.

Of course, I wish we could have had representatives from the Canada Revenue Agency with us to clarify the situation once and for all and explain why they're telling Revenu Québec that there can't be a GST exemption in this case.

The professional orders have told us that, following their discussions with the Canada Revenue Agency and Revenu Québec, it seems that, even though the bill talks about professionals who have the same training or competence as those who practise this trade in a province where it is regulated, the only way for a professional belonging to these Quebec orders to qualify for the GST exemption is to obtain recognition from a maritime province allowing them to practise their profession there, even if this is not their intention, and then return to practise their profession in Quebec. Quebec has a population of eight million. This obligation will overflow the systems of New Brunswick or the other maritime provinces, which will have to give this attestation to Quebec professionals. This is a serious problem.

I don't want these people from Quebec to be left behind, as happens so often. That's what I've observed in my experience on this committee: After a budget implementation bill is passed, there's no follow-up from the government and it falls into oblivion. I write to Ms. Freeland, she thanks me and says she'll follow up with me, but nothing happens after that.

Now is the time to get it right. I therefore invite you to vote in favour of this amendment.

Thank you.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Ste‑Marie.

I have MP Davies to speak to this.

[Don Davies, NDP, Vancouver Kingsway, BC]

Well, I see the concern, but I'm not sure I share it.

What I keep thinking to myself is, would this clause be supportable if we replaced “Quebec” with any other province? I wonder if Mr. Ste-Marie would be okay if we replaced Quebec with “Saskatchewan” or “Alberta”. I think when you do that it illustrates to me the fundamental problem with using that as a benchmark, although I understand the problem he's raising.

The way I read the act, the testimony that was given and the section, it's that people who are certified or practise counselling in a provincially regulated way will qualify for the exemption. The concern arises only when you have someone providing the same services in a province that is not regulated. On the issue there, when I read the CRA's notice 335, giving instruction on how to deal with that situation, they say that if you're providing those services in a province that is not regulated and if you have the equivalent qualifications of someone certified in another regulated province, you could qualify for the GST exemption.

To me, it all makes sense. It holds together. It's a bit unwieldy, but in lieu of every province regulating every profession the same way, that strikes me as a workable solution. If Quebec is regulating these counselling provisions, I would think that they would automatically qualify for the GST exemption, because they're practising in Quebec in a regulated profession. That's where I'm not seeing the concern for the Quebec professionals. I think they're covered, because they're regulated.

We're trying to deal with the situation of people who are practising and doing the exact same services in a province that's not regulated. To me, it makes sense just to say that their qualifications are equivalent to any other province that does regulate. That gives more flexibility as well, because the different provinces may have slightly different regulatory standards. A person providing counselling services in an unregulated province can point to one of the various examples—I understand they're Nova Scotia, P.E.I., New Brunswick and Quebec—and then say their qualifications are equivalent to one of them and, therefore, they would qualify for the GST exemption.

For all of those reasons, I don't think the section is wise or warranted, and I do think the Quebec professionals are probably well covered by the act as it's written.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Davies.

I don't see any further debate on this.

Shall amendment BQ-1 carry?

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

Shall we adopt it on division?

[The Chair, Liberal, Peter Fonseca]

I've been asked to do a recorded vote.

(Amendment negatived: nays 7; yeas 3)

Shall clause 137 carry?

(Clause 137 agreed to on division)

Members, we have come to another grouping. There are no amendments I know of to clauses 138 to 216. I'm looking to see if we have unanimous consent to group those.

[Some hon. members]

Agreed.

[The Chair, Liberal, Peter Fonseca]

(Clauses 138 to 216 inclusive agreed to on division)

(On clause 217)

That brings us to amendment NDP-2.

[Don Davies, NDP, Vancouver Kingsway, BC]

Mr. Chair, I will not be moving NDP-2 or NDP-3.

[The Chair, Liberal, Peter Fonseca]

Okay. Shall clause 217 carry?

(Clause 217 agreed to on division)

(On clause 218)

We are now on NDP-4.