Finance Committee on May 7th, 2024

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

Okay.

I think it's fair to say that this is not the intent. That's fine.

I want to move on from there to talk a little bit about part 2, about the global minimum tax. I know that Mr. Davies asked this, but I didn't quite catch it. What was the total revenue to be gained from part 2?

[David Messier]

The total revenue was $6.6 billion over a three-year period.

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

Merci.

Perhaps I can follow up on that as well. First, just so I understand, what's the estimated number of Canadian companies that will be caught by this who are sheltering profits in jurisdictions that have less than a 15% tax rate? How many Canadian companies do you expect to be caught by this provision?

[David Messier]

The global minimum tax has actually two components. One would target low tax revenues that are reported outside of Canada and another would apply to low tax revenue earned in Canada. It would apply as well to Canadian companies, Canadian multinational companies. As foreign companies that have operations in Canada, this component would apply to the foreign —

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

Thank you for that clarification.

How many Canadian companies will be caught by that and how many other multinationals operating in Canada will be caught by the provision? If you don't have the number, you can table it with the committee as well.

[David Messier]

We don't have the precise number, because the number of companies that would be caught by the rule would depend on the particular situation of every corporation. The rules apply to groups that have more than—

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

I apologize. My time is running out. I can see that the chair is getting ready.

Could you give us your estimates of the Canadian companies that will be caught by that? You can table it with the committee. That's fine.

There's another part that I want to ask about really quickly. We're talking about capturing tax evasion here. That is a laudable effort, but could the CRA please answer how many dollars have been collected from the Panama papers and how many convictions there have been?

[David Messier]

If I can just answer your previous question, we estimate that there are around 200 Canadian multinationals that are above the 750-million euro threshold for being in scope of the global minimum tax.

[Priceela Pursun, Director General, International and Large Business Directorate, Compliance Programs Branch, Canada Revenue Agency]

Thank you for the question. I'm Priceela Pursun, director general of the International and Large Business Directorate at the Canada Revenue Agency. I'm sorry, but the person responsible for the matter you are interested in is absent today.

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

Would you mind tabling that with the committee and sending us a note on that?

[Priceela Pursun]

Certainly.

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

Thank you.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Lawrence. That's the time.

We will now go to PS Turnbull.

[Ryan Turnbull, Liberal, Whitby, ON]

Thanks, Chair.

Thanks to all the witnesses for being here today.

I have a motion to move from the floor. I'm sorry for the slight interruption, but I'm hoping that we can deal with it very swiftly and get back to the testimony that is so important to the pre-study that we're doing.

I'll read it into the record:

As it relates to the committee's future business, it be agreed that:

i. the committee dedicate its meeting on Thursday, May 9th, 2024, to hearing from the Deputy Prime Minister and Minister of Finance, and officials, on the subject matter study of Bill C-69;

ii. the committee dedicate its regular meetings on May 9th, 21st and 23rd, 2024, to consideration of the subject matter study of Bill C-69, barring referral of the bill to committee; and that all evidence gathered as part of the pre-study be considered as evidence in the committee's full study of the bill, once referred to committee;

iii. any amendments to the bill be submitted no later than 5:00 PM EST on Thursday, May 23rd, 2024;

iv. clause-by-clause consideration of the bill start no later than 12:00 PM EST on May 27th, 2024, and that the chair be empowered to set up extended hours and request additional House resources on that day; if the committee has not completed clause-by-clause consideration of the bill by 11:00 AM on May 28th, 2024, all remaining amendments submitted to the committee shall be deemed moved, the chair shall put the question, forthwith and successively, without further debate on all remaining clauses and proposed amendments, as well as each and every question necessary to dispose of clause-by-clause consideration of the bill, as well as all questions necessary to report the bill to the House and to order the chair to report the bill to the House as soon as possible;

v. following the completion of the study of Bill C-69, the committee dedicate no less than two meetings on its study on the financialization of housing, followed by no less than two meetings to consider the draft report on the current state of play on green finance, green investment, transition finance and transparency, standards and taxonomy;

vi. the committee dedicate its regular meetings on the week of June 17th, 2024, on the committee's study on inflation in the current Canadian economy.

I will speak to that. I've sent it to the clerk, Chair, in both official languages.

We tried to schedule the rest of our meetings in the agenda pre-committee meeting. I note that the chair hasn't been able to report anything back, so we did not achieve consensus. Really, we're hoping to take a very collaborative approach and work with all parties. Unfortunately, we've seen that the Conservatives are not willing to collaborate. Yesterday, we saw the Conservatives in the House move an amendment to delay the second reading of the budget implementation act. I'm bringing this motion forward today because the budget implementation act needs to be the top priority, and I believe that Canadians are truly counting on us.

I believe very strongly that this budget includes many measures that Canadians really need right now. The national school food program is just one of many that I know Mr. Davies and I and many others have worked on for quite a number of years. We're finally seeing the commitment to a billion dollars over five years. Feeding an additional 400,000 kids per year is truly gratifying to see in this year's BIA. We need to get that accomplished. Canadian families certainly are relying on us.

The Conservatives stand up every day in the House and cite increasing food bank lineups. I think it's pretty inconsistent with the position that they seem to be purporting to hold, which is that somehow they care about families who are suffering from food insecurity but are then not supporting a budget that's attempting to feed 400,000 more kids in Canada.

We know that the investment tax credits in this budget, as we've already heard this morning—the clean tech manufacturing ITC and the clean hydrogen ITC—are things that industry is asking for. They have been asking for us to fast-track these ITCs. They need predictable timelines for their implementation. Many of the large projects to decarbonize our economy are relying on those ITCs to move forward.

On research funding, I was in my riding and met with researchers at the Ontario Tech University, which is my local university. The researchers were ecstatic about the $3.5 billion for science and research that is in this budget, the tri-council funding, the research infrastructure, and the additional dollars for grads, post-grads and fellows.

Those are things that Canadian researchers are counting on. They'll prevent brain drain in our economy. These things have been cited for quite some time. Many Conservative members have actually advocated to address brain drain in this country. I hope that we're aligned on wanting to get those budget measures through the committee and back to the House as soon as possible.

With respect to housing, I talked to a senior from my riding yesterday who's concerned about rental construction and our need for more affordable rental housing. There is a significant amount of financing for more rental construction in this budget. There are also infrastructure dollars to help municipalities and provinces that are struggling to fund some of the infrastructure for new housing development.

The budget includes the Canada carbon rebate for small businesses. I will note that the Canadian Federation of Independent Business was very vocal about this and the Conservatives were very vocal about it, yet they're going to stand against a budget that will get those returns back to small businesses across the country. I note that the number is 600,000.

There is a major investment in artificial intelligence of $2.4 billion in this budget. It proposes to increase productivity across Canada, and it will have a significant impact in future years.

I will also just note quickly that the employee ownership trust is another measure that's in here. The incentives are included in this year's BIA. They're essential for ensuring that there's an uptake of that option, that succession model that will allow owners to sell to their employees. It is an exceptional measure for the redistribution of wealth in a way that also protects Canadian businesses.

Last, I also will just say that between our last meeting and this meeting, I ensured that I kept my word to the committee. I have secured the Deputy Prime Minister to come to the committee on Thursday for an hour of testimony. I truly hope that we can dispense with this motion quickly so that we don't jeopardize that appearance and can hear the important testimony from our Minister of Finance, who's ultimately accountable for this budget.

Thank you, Mr. Chair, for indulging me. I look forward to dispensing with this motion quickly.

[The Chair, Liberal, Peter Fonseca]

Thank you, PS Turnbull.

I do have a speaking list. I have MP Lawrence, MP Dzerowicz, MP Ste-Marie and MP Chambers.

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

Thank you.

I'm disappointed that this heavy-handed motion has been brought forward by the Liberals.

I think in the most recent fall economic statement, while certainly pointing out the flaws, Conservatives were co-operative. In this budget, we moved right through it. I'm sure that if Canadians saw the first couple of rounds of questions, they would have seen very thoughtful questions that were there to help Canadians.

I believe that in most cases, it's best that cooler heads prevail. What I would suggest, with unanimous consent of the committee, is that we adjourn this debate until the end of the meeting so that we can hear from these very hard-working, brilliant and professional members of our civil service.

[The Chair, Liberal, Peter Fonseca]

I heard a no.

I do see hands up.

MP Dzerowicz, is your hand still up? You don't know. I saw you say no.

It's MP Ste-Marie, then.

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

Thank you, Mr. Chair.

I'm really disappointed with this motion. I find that it's disrupting the work that the Standing Committee on Finance must do on Bill C‑69. As Mr. Turnbull said, the Subcommittee on Agenda and Procedure has not been able to come to an agreement. Basically, I think we could try to work on a motion that would focus solely on Bill C‑69. As for what happens next, there would be other discussions.

The number of hours proposed for the study of Bill C‑69 is really insufficient. In fact, if I understand correctly, we're going to have very little time today to ask the senior officials questions on parts 1 to 3 of the bill. Personally, I still have a lot of questions to ask. In my opinion, even if we didn't debate this motion, we could run out of time, which means that we would not have the answers to all our questions.

Only one hour to study part 4 is clearly not enough. We need to take the time to do things right. I would remind my colleagues that part 4 implements an open banking system. This is something new, and we need to take the time to reflect on it. In addition, what the government is proposing goes against the wishes of the Canadian Bankers Association and a number of financial institutions, if I'm not mistaken.

This bill is not aligned with the laws of the various provinces. To my knowledge, no consultations have taken place between the government or the departments and their counterparts in Quebec and the provinces. If they did happen, it was very recently. We have a lot of questions about that. In addition, a number of things need to be improved. Several details seem technical, but they will have major repercussions.

I'll give you an example. There's a bank that doesn't call itself a bank in Alberta, and it's owned by the provincial government, the Alberta government. If that institution wanted to be part of open banking, it would have to come under federal jurisdiction, at least for the part about open banking. We have to wonder why anyone would want to duplicate legal services and legal advice. That's a major concern.

It's the same thing with credit unions. If memory serves, in British Columbia, lawmakers didn't allow credit unions to come under federal jurisdiction. What about that part? Are we creating a two-tiered open banking system, that is to say for banks under federal jurisdiction and for other institutions under provincial jurisdiction? We have a lot of concerns about that. So I'm going to have a lot of questions for the officials on this. In addition, the committee is going to have to call many witnesses.

The committee must proceed with the study of a mammoth 660-page bill that affects a number of acts, makes a lot of amendments and contains a number of elements to be covered. Are we saying that we're going to finish studying the bill this week, hear from witnesses for two two-hour periods and move to clause-by-clause consideration immediately afterwards? In my opinion, that's woefully inadequate.

During the pandemic, the government urged us to pass bills. We did it on the fly, but there were a lot of mistakes. A number of things had to be corrected because the committee didn't have the time it needed to do its work properly.

This bill is 660 pages of jargon that's incomprehensible to the average person. It will take time for all stakeholders in society to read it, to reflect on it and to see whether it meets their expectations or causes problems. Therefore, we have to give all stakeholders a little time so that they can get an idea of the bill and contact us individually to share their concerns with us.

There's not enough time allotted, obviously. Let's take the example of Bill C‑59, Fall Economic Statement Implementation Act, 2023, which wasn't as significant. We spent 20 hours hearing from witnesses. Four hours are being proposed now for Bill C‑69. The officials will have been here for an hour, maybe a little longer, if we can get through this. A single hour to study part 4 is clearly not enough.

I also want to remind you that, recently, the Minister of Finance has spent only one hour at committee when she comes. However, Mr. Morneau very often stayed two hours to answer our questions. There are so many things to deal with in this bill. One hour is not enough time to ask questions.

In my opinion, it will take much longer than what's being proposed to properly study Bill C‑69, improve it and ensure that everything is in order. We had 20 hours to question witnesses on Bill C‑59, but only four hours have been proposed for Bill C‑69. That's unacceptable.

The minister should come for two hours, as Mr. Morneau did most of the time, if I'm not mistaken. We would also have to extend the deadline in order to do our work properly, which would mean holding meetings during constituency week, I believe. No one wants to do that, but if the government is in such a hurry, we will have to do it. We will also need to have additional meetings at least a week later to make sure that all stakeholders in the economy have had time to take note of the 660 highly complex pages of the bill, that everything is in order and that there's no distortion. Then, of course, we will have to withdraw what comes after the study of Bill C‑69 if we pass this motion.

So I have a lot of reservations about this motion. In my opinion, it's completely unacceptable in its current form and I won't be able to support it. In fact, I find it very cavalier to propose such a motion, which I would describe as a gag order, to take up the debate without warning while the senior officials are here to answer our questions. We have to react to it immediately, as we were unable to read it in advance.

Those are my initial comments. I'm sure I will have more.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Ste‑Marie.

I have MPs Chambers, Dzerowicz, Morantz, Lawrence and Davies.

[Adam Chambers, Conservative, Simcoe North, ON]

Thanks very much, Mr. Chair.

I appreciate the spirit of collaboration the parliamentary secretary showed by showing up to committee and not sharing his motion in advance with the members. That's very, very collaborative.

Obviously, we're not going to agree to the motion as it's drafted in its current form. We've been doing this every single year. Wisdom has been chasing this government for a very long time; it just hasn't caught up with it yet. We do this every single year. We're in the same position. If you want MP Rick Perkins to come in to talk about elvers for another 40 hours, he's on deck. That's no problem. We can make that happen.

However, in the interest of trying to get something done, why don't we park the clause-by-clause date? You can bring it back later. If you want to bring it back on Thursday, that's fine. If you strike that from the motion right now, we can continue with our meeting and we can revisit that on Thursday. We can revisit it when we get back. That would be acceptable, at least to me; I won't speak on behalf of my colleagues.

I will just mention getting lectured about people visiting food banks. Stats Canada is going to release their household income survey in probably a week, and I'm not really sure you're going to want to be patting yourselves on the back for the work the government's done, because the survey is going to show that tens of thousands of people are falling below the poverty line. I don't really think lecturing people on food bank lines is a winning strategy for you.

Of course, we also know that one of the requests we've had at this committee is to have Governor Carney show up. He was at a Senate committee last week, so apparently it's okay for him to appear at the Senate committee. If we were to arrange for Governor Carney to come here, I think we would be able to move this motion forward. If that's acceptable to the government, they'll let us know.

In the interest of time and with the nice officials we have here, if we struck the clause-by-clause end date, we could move on. I'm not really sure that's going to be possible, so we'll get Rick Perkins all dialed up and ready to come in to talk about elvers.

Thanks, Mr. Chair.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Chambers.

I have MPs Dzerowicz, Morantz, Lawrence and Davies.

[Julie Dzerowicz, Liberal, Davenport, ON]

Mr. Chair, if you could put me at the end of the list, I would like to hear from my other colleagues first.

Thank you.

[The Chair, Liberal, Peter Fonseca]

Okay. Thank you, MP Dzerowicz.

I have MP Morantz next, and then MPs Lawrence, Davies and Dzerowicz.

[Marty Morantz, Conservative, Charleswood—St. James—Assiniboia—Headingley, MB]

Thank you, Mr. Chair.

Well, I have to say that it's very disappointing to have this motion thrust upon us in the middle of our consideration of Bill C-69. It's an attempt to program the rest of our meetings before the summer break, literally to the end of June, basically.

Really, what I'm concerned about is that we have I don't know how many officials here. For the people watching, Mr. Chair, do you know how many officials are here from the finance department?

Can I ask you, Ms. Gwyer, how many of your officials are here in the room?

[Lindsay Gwyer]

I think there are about eight or so.