Finance Committee on June 3rd, 2024

[The Chair, Liberal, Peter Fonseca]

Thank you, Ms. Kothawala.

Now we go to Ronald McDonald House Charities of Canada.

Go ahead, Ms. Horton, please.

[Kate Horton, Chief Executive Officer, Ronald McDonald House Charities Canada]

Good afternoon, Mr. Chair and members of the committee.

My name is Kate Horton. I'm the president and CEO of Ronald McDonald House Charities Canada.

Mr. Chair, when a child becomes sick, the whole family hurts, and we know that when families stay together, sick children get stronger. This is where Ronald McDonald House Charities across Canada comes in.

RMHC operates an essential mission in Canada today. We are the only national organization enabling access to Canada's 16 children's hospitals. RMHC provides essential services that remove barriers, strengthen families and promote healing when children need health care.

As of today, RMHC operates 16 houses and 18 family rooms across Canada, supporting over 18,000 families in 2023 from over 2,400 different communities across Canada. Families count on RMHC to support their mental health and well-being through a warm meal, a built-in empathetic community of support and a place where parents and siblings can be together during a most challenging and unexpected time.

We provide not just accommodation but meals, education, schooling, peer support and mental health programming—truly so much more. These services provide a sense of community and relief from social isolation so that families don't have to navigate their treatment journey alone.

The reality is that out-of-pocket expenses for families who must travel to receive medical care for their sick child can be up to $20,000 in the first month alone. The good news is that an independent financial analysis conducted by RBC showed that last year alone RMHC saved Canadian families over $57 million in out-of-pocket expenses related to their child's illness. These costs include accommodation, food and gasoline, as a few examples.

Despite the political differences that may exist around the table, we are heartened by the amount of cross-party support that we have received over the years. As an example, just last month, on May 8 our entire organization and the families we support were so pleased to see such a warm welcome for RMHC during McHappy Day in the House of Commons, with cross-party participation and member statements in support of our mission. Days like McHappy Day on May 8 truly demonstrate both Parliament and Canada at their best.

However, Mr. Chair, the challenge, as you may know, is that there is always a need to do more. In budget 2024, we were pleased to see that GICB, the green and inclusive community buildings program, was recapitalized with an additional $500 million over five years. The GICB program has helped make our Ottawa house expansion possible and, as announced just yesterday, our Halifax house expansion as well. This funding has been critical to ensure these houses can open on time and expand their service to even more families.

Despite this, RMHC is looking for a more durable and permanent capital funding solution, not only for us and the thousands of families who currently do not make it off an RMHC wait-list, but for all organizations like ours that are providing temporary housing and helping vulnerable populations. We believe that this is a critical gap in Canada's infrastructure landscape.

Through our engagements with government over the last few years, we understand that there is broad support across all departments and political parties to review capital funding options for temporary housing. The reality is that organizations like RMHC and others are a square peg in a round hole. We don't fit in any specific ministry, despite having met with many different ministries and Crown corporations over the years. We believe that Infrastructure Canada is ideally positioned to include temporary housing in its national infrastructure assessment and to help work with us to develop new funding programs.

Addressing these needs proactively will make a significant impact on the demand for temporary housing, and our reality is that, with escalating demand, RMHC needs to expand across Canada to grow our current number of bedrooms. To serve more Canadians, RMHC alone is projecting over $450 million in capital costs over the next 10 years.

Mr. Chair and members of the committee, we need your support to fill this critical gap in Canada's infrastructure landscape by creating a specialized capital funding program for temporary housing initiatives. By investing in these essential and critical services, together we can ensure that all Canadian families, especially the most vulnerable, receive the support they need during their most challenging days.

Thank you for your time, and I look forward to your questions.

[The Chair, Liberal, Peter Fonseca]

Thank you, Ms. Horton, for your opening remarks, and thank you to RMHC for the services that you provide in many of our communities.

With that, we'll go to members' questions. Each party will have up to six minutes to ask questions. We'll start with MP Chambers for the first six minutes.

[Adam Chambers, Conservative, Simcoe North, ON]

Thank you, Mr. Chair.

Ms. Hawara, welcome back.

I want to ask a couple of questions about the luxury tax. It's referenced in the budget bill.

I'm looking at form B500, which is required for those who submit payments for the luxury tax. That form quite clearly breaks out the number of units and the payments for each class of vehicle, whether it's a vessel, an aircraft or an automobile.

I'm wondering why.... When an Order Paper question was asked, the response given was that the CRA doesn't collect that information. I suspect that you do have this information somewhere. Is it just not easily available?

[Cathy Hawara]

Mr. Chair, I'm not sure of the answer to the question from the member, but I am happy to go back and double-check. It's possible that while the information may be on the form, it may simply not be captured in our IT systems. It may not be data that's captured, and that's why we can't report on it. However, I would rather check and provide a formal answer to the committee, if that's acceptable.

[Adam Chambers, Conservative, Simcoe North, ON]

Thank you very much. I would appreciate your looking into it.

When this measure was introduced, the government did not do an economic impact analysis of the measure. The finance department has since done an economic impact analysis, and they've said they'll need to see the impacts of the tax on the economy and on sales activity once it's implemented. The information that CRA provides can be very valuable to members of Parliament in determining the efficacy or the impacts of the tax. My understanding is that you'll take this back—that's wonderful—and if that information is available, you will provide it, broken down by category.

[Cathy Hawara]

If it's available, yes, of course.

[Adam Chambers, Conservative, Simcoe North, ON]

Thank you very much. I appreciate that.

I note also that in this bill, there are measures related to the carbon tax rebate for small businesses. CRA is receiving about $180 million to implement systems related to that. The CRA is also receiving additional monies for the automatic tax filing as well as enhancing call centre operations to the tune of about $570 million, I think, with all three measures added up.

My question is this: Do you have a breakdown—not for today, but maybe as a follow-up—of what is operational funding in the spend for people versus technology? I note that in previous budgets there was some information provided about how many FTEs would be hired, but there was no information provided here. I don't expect that you would have that now, but if you wouldn't mind, could you provide to the committee at a later date what you think that expectation is on the spend for people versus technology?

[Cathy Hawara]

Mr. Chair, I know my colleagues in the agency are working actively on that now. To the extent that the information is available within the time frames in which I will be required to report back, we can certainly do that. Some of this work is ongoing now.

[Adam Chambers, Conservative, Simcoe North, ON]

Thank you very much.

We don't have a timeline that's required, generally. I know some other committees do. It's kind of a best-efforts basis, so a few weeks would be wonderful, if that's possible.

In my remaining two minutes, because we haven't had members from CRA at the committee for a little bit, I'm really interested in the process for the bare trust decision. Setting aside the fact of the challenges that people had, I'm just curious: Whose decision right was it, at the end of the day, to choose to delay or stop the implementation at that moment? Was that a ministerial decision in the Canada Revenue Agency or the Department of Finance, or was it a departmental decision in one of those two areas?

[Cathy Hawara]

The Canada Revenue Agency wanted to take an education-first approach with respect to these new reporting requirements that a bare trust would be subject to. We announced in early December 2023 that the agency would be waiving the late filing penalties for all of 2023, and that was a decision made by departmental officials.

Over the course of the months that followed that decision, we continued to be in contact with our stakeholders, continued to receive a lot of questions and concerns, and ultimately departmental officials did make the decision to waive the filing requirement for the year with respect to bare trusts. That's what was announced at the end of March this year.

[Adam Chambers, Conservative, Simcoe North, ON]

Okay, thank you very much. We learned that over 40,000 tax filers had submitted the paperwork, and at the last minute—frankly, I think it was the day before they were due—they were told they didn't have to do it. That meant that the greatest number of people went through the most amount of trouble to fill out the paperwork, only to find out at the end of the day that they didn't have to do it.

That's been a source of serious concerns and frustrations on behalf of taxpayers, which I know you understand, but I'm hoping that we can find a bit of an easier way forward on this particular issue that takes into consideration the cost of compliance, because it's, on average, about $500 per return. I'm hoping that we can find an easier way for taxpayers.

Thank you, Mr. Chair.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Chambers.

Now we'll move to MP Dzerowicz for six minutes.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you so much, Mr. Chair, and I want to thank all the witnesses for being here today.

My first couple of questions will also be to the CRA.

The CRA is so huge and you cover so many different areas, so I'm not quite sure whether you'll be able to respond, but I'll tell you two of the key things that I think are of great importance to the residents of my riding of Davenport.

One is automatic tax filing. I'm not sure if any one of you can talk about that. I know that we originally introduced the automatic tax filing last year. I wouldn't mind if someone could actually talk about it. If I am asked by someone in my riding about automatic tax filing being expanded this year, what is my answer on how it will be expanded, how that will be beneficial, and who is eligible for it?

If you could answer any of those three questions, that would be great.

[Cathy Hawara]

I will do my best. The member of the committee is correct that it does fall under the responsibility of one of my colleagues.

Generally speaking, we have an initiative within the agency called SimpleFile. It's an initiative we've been piloting over a couple of years now, working with specific provinces and looking to reach out to particular individuals who are receiving social assistance from those provinces. The agency proactively reaches out and offers them various ways in which they can easily file their tax return with the agency. The reason that this is important is that by filing our tax returns, we all have access to the benefits we're entitled to, so it is critically important for vulnerable populations that they file their tax returns in order to have access to their benefits.

[Julie Dzerowicz, Liberal, Davenport, ON]

If I could just interrupt for a second, it's right now just available to those who are receiving social assistance. Could you be specific? My riding's in downtown Toronto, so I'm assuming that it's those who are on social assistance in Ontario that the CRA would be supporting and trying to reach out to.

[Cathy Hawara]

Yes, Ontario is one of the provinces with which we're working. Perhaps what I can do is follow up in writing with a little bit more detail. I can tell you that this year we were sending out invitations to 1.5 million people across the country, but we'll provide more information, absolutely.

[Julie Dzerowicz, Liberal, Davenport, ON]

That would be great, and a breakdown of each of the provinces and how many people are getting it in each of the provinces would be appreciated.

The other element of this budget that members of my riding are very excited about is the carbon rebate. Small businesses are very excited about the carbon rebate.

If a small business were to ask when they would be eligible for this carbon rebate, and they've been filing their taxes every single year, what would be your response to them?

[Cathy Hawara]

We're in the process of developing that now. My understanding is that payments should be...actually, I think I'd better check.

To be quite honest, Mr. Chair, I have not been following that particular file closely, but we can provide information. It's one of the files that we're actively working on. I know there is an interest in getting the payments out as quickly as possible; I just don't know whether the agency has been able to commit to an official date just yet, so I'd rather check with my colleagues, if that's okay, and provide a written response.

[Julie Dzerowicz, Liberal, Davenport, ON]

That would be appreciated. I know that people in my riding of Davenport will be very happy as well.

I will come back to you about the global minimum tax, but I think I'm going to go to Ms. Kothawala for a minute.

You were talking about the precision regulation powers. My understanding is that a key reason that the Minister of Health wanted those powers is that there's no mechanism for him to be able to take a contaminated product off the marketplace. I think that was the key reason he decided that this was a necessary measure.

How would you respond to that?

[Anne Kothawala]

I think the fundamental issue, we all agree, is that there's a youth access problem. Our position is that we should deal with that youth access problem by dealing with the proliferation and huge growth of online access rather than, frankly, choosing a convenient—no pun intended...or pun intended—scapegoat.

Basically, the minister is suggesting that convenience stores can't be trusted. Our members really take offence to that.

[Julie Dzerowicz, Liberal, Davenport, ON]

I appreciate you mentioning that and I appreciate the comments you've made today. I will say, though, that it doesn't respond to the fact that the main reason the minister has put in these measures is that right now there's no mechanism for him to actually be able to take a contaminated product off the marketplace.

I think there are definitely questions that you have raised that are important ones around vaping and how we make sure we are discouraging our youth in every way possible from actually using vaping products, but that is a separate question.

I just want the public to know that a key reason behind the precision regulation powers is that he felt there was not an ability for him to get certain types of products off the marketplace and he needed those powers.

Thank you for that.

I'll go back to Ms. Hawara.

We haven't talked about the global minimum tax at the finance committee for a while. Can you remind Canadians why it was important for us to join the global coalition and how Canada will benefit?

[Cathy Hawara]

Thank you for the question.

There have been efforts under way internationally for a number of years now to prevent base erosion and profit shifting and to make sure that large multinationals pay an appropriate level of tax in the various countries in which they operate.

In 2021, the community, through the OECD and the inclusive framework, agreed to the two-pillar solution. Pillar two would see a minimum tax being imposed and set at 15% on the largest multinational organizations that would be in scope, regardless of where they are undertaking their activities. Assuming it's in jurisdictions that are implementing the two-pillar solution, there would be an appropriate level of taxation paid.

Canada has played an important role. The government has indicated in budget 2024 its expected revenue generation as a result of this. The latest numbers indicate that Canada would benefit in the amount of $6.6 billion over three years, starting in 2026-27.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Dzerowicz.

Now we go to MP Ste-Marie, please.