Finance Committee on May 30th, 2024

[Don Davies, NDP, Vancouver Kingsway, BC]

Thank you.

Now, on the Food and Drugs Act, in division 31, under section 30, it is proposed to make three changes to give the Minister of Health quite sweeping powers to make changes to therapeutic products that are used off label in one case, and in the second, that may be intended to be used for animals but are being used for human beings, and to provide an exemption from the act as well.

Could you give us a concrete example of what these proposed sections are targeting?

[The Chair, Liberal, Peter Fonseca]

I will need some very quick, short answers. Should you want to elaborate further, then do so in writing, please, to the member.

[Dr. Celia Lourenco, Associate Assistant Deputy Minister, Health Products and Food Branch, Department of Health]

Thank you very much for the question. I am Celia Lourenco, with the health products and food branch of Health Canada.

We're aiming to introduce three new authorities at the level of the act, starting with what we call the “supplementary rules of authority”, which will allow us to have a ministerial order put in place to address situations in which products are being intentionally misused. An example would be the nicotine replacement therapies—the nicotine pouches—that are being used by youth. We want to be able to put in place rules around place of sale and around labelling, packaging, flavours and other aspects that would be appealing to youth. That's one objective.

That particular authority does not at all intend to limit or restrict off-label users or the use of health products in the context of the health care system. It's really for situations in which there's intentional misuse or diversion of a product for use completely outside of health.

The second rule is around exemption: being able to exempt products from the Food and Drugs Act and regulations. A particular example there is that over the last two years we've unfortunately had a shortage of infant formula. Currently, we don't have in our framework the ability to exempt foreign products and foreign formulas that are nutritious but may not completely meet our regulatory requirements around labelling, for example.

We want to be able to bring in those products in order to meet that unmet need but to do that quickly through a ministerial order that would have rules in place around those products.

[The Chair, Liberal, Peter Fonseca]

Thank you for that, but we're well over the time.

Thank you very much. Again, if you'd like to, reply in writing, please, to the member and the committee.

Now we are going to MP Lawrence for five minutes.

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

Thank you, Mr. Chair.

If I could, I'll just throw out two topics for questions. Maybe you can organize yourselves as to who would be best to speak.

One topic I'm going to cover is the carbon tax rebate, and the other will be forecasting from Finance, so perhaps that's for an economist from Finance or otherwise. If those two folks could take their seats at the front of the room, that would be great.

[The Chair, Liberal, Peter Fonseca]

Why don't you start, MP Lawrence? We'll see if somebody feels that they should come to the table, or we may have Ms. Gwyer or Mr. Baylor.

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

I want to follow up on my colleague Ms. Dzerowicz's line with respect to the carbon tax rebate. I understand that it will be primarily an automated process.

The taxpayer will check a series of various boxes or the metaphorical equivalent of that, and then the CRA will spit out a cheque going forward. Have I got that right, first of all?

[Maximilian Baylor]

That's generally accurate, yes.

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

Okay. My question is on my understanding that to administer the carbon tax rebate, the government has asked for $180 million. Is that correct?

[Maximilian Baylor]

That's correct. At this point, that's the amount CRA has been allocated to put in place the systems to essentially go through and select these businesses and then send them those.

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

Thanks very much for that. Let's unpack that a little if we can, if you're able to, because $180 million is a very large amount of money.

What's involved in that $180 million? How many full-time equivalents are being hired? What's being spent on software? What's the breakdown of that $180 million?

[Maximilian Baylor]

As you're aware, I work for the Department of Finance. Those questions would be best addressed to the Canada Revenue Agency with respect to exactly how they will allocate it, but as I indicated, it's to implement a system that's able to calculate the payments for the administrative system that matches the payroll with the corporate income tax information, and that then gets to that result.

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

Okay.

[Maximilian Baylor]

They're large amounts, of course, given the volume.

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

No disrespect intended, but we have 76 government officials here, and no one can break down the $180 million that's being spent? That's fine. I'll move on.

I'm going to ask you questions with respect to forecasting and financial impact. I actually want to read a quote from the latest convert to the Milton Friedman school of economics. This individual said, “Can you send us more benefits or an extra $1,000 a month?”

Well, as soon as you do that, inflation goes up by exactly the same amount. That recent convert to the Milton Friedman school of economics is none other than Prime Minister Justin Trudeau.

My question is for the Finance officials. Would you build the additional $40 billion of net new spending into your forecast, as the Prime Minister has clearly said that it is inflationary?

[Lindsay Gwyer]

We have people here to talk about the specific measures in the bill. I don't think there's anyone from our fiscal policy branch who does the kind of forecasting that was in the budget and that is taken into consideration.

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

Okay. I'll move on then.

Pillar 2, of course, is designed to reduce the amount of tax avoidance through the transference of profits to lower tax jurisdictions.

Before we start building new structures, I think it's important that we stop the leakage in other areas. The Panama Papers have to be more than a decade old now. We have 75 government officials. Could one of you please tell me about the convictions we've obtained and the dollars we've obtained from individuals who highlighted stealing from Canadian taxpayers?

[Lindsay Gwyer]

There's no one here from the Canada Revenue Agency. They would need to provide that information. I think they may have, at the previous meeting, said they would follow up with that information. We can see what we can do.

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

They haven't followed up—and I would encourage them to—but I can tell you what the number is. It's zero convictions and it's zero dollars. A lot of commentators and experts have said—and I say this with respect, to bring this back to your departments as you pass legislation—that in Canada the real issue is enforcement. That comes back to the civil service and making that happen. We have the wealthiest individuals in Canada utilizing tax havens to get money, and we continue to pile more legislation, more red tape, on middle-class Canadians while allowing the wealthiest in our society to take advantage of those loopholes.

Thank you very much. I believe that's about my time.

[The Chair, Liberal, Peter Fonseca]

It is. Thank you, MP Lawrence.

Now we go to MP Sorbara, the newest member of our committee.

Welcome back, I should say.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

Thank you, Chair.

Good morning to everyone, and good morning to all the officials.

I'd like to speak to the CMB program—the Canada mortgage bonds program—and the alternative minimum tax. Perhaps the various officials can come up, or if they're already seated, that's great.

[The Chair, Liberal, Peter Fonseca]

Can you introduce yourselves?

Thank you.

[Stefania Bartucci, Director, Strategic Projects, Personal Income Tax Division, Department of Finance]

Hi, I'm Stefania Bartucci from the personal income tax division of the tax policy branch at the Department of Finance.

[Alexander Bonnyman]

I'm Alexander Bonnyman, debt management, Department of Finance.

[Matthew Boldt, Acting Senior Director, Housing Finance, Department of Finance]

I'm Matthew Boldt, housing finance, Department of Finance.