Evidence of meeting #147 for Finance in the 44th Parliament, 1st Session. (The original version is on Parliament’s site.) The winning word was clauses.
A recording is available from Parliament.
1:10 p.m.
Liberal
The Chair Liberal Peter Fonseca
We are on clause 113 now, members. This is CPC-6.
Would one of the Conservative members like to move this?
1:10 p.m.
Conservative
Philip Lawrence Conservative Northumberland—Peterborough South, ON
I'll move that and motivate it, if that's acceptable to the chair.
Of course, Conservatives have been outspoken opponents of the escalator tax. We believe in the very basic principle of no taxation without representation. The automatic tax increase without the consent of the public is an offence to taxpayers, to all Canadians and to all voters at large as they have not consented to this tax increase.
Thank you.
1:10 p.m.
Bloc
Gabriel Ste-Marie Bloc Joliette, QC
Thank you, Mr. Chair.
My comments concern amendments CPC-6 to CPC-18, which would cancel the increases in excise taxes on alcohol and even cut the excise tax on certain items in half. We've debated this topic several times, both last fall, if I'm not mistaken, and in previous years.
Since the excise tax is levied in dollars per hectolitre, it isn't indexed to the rate of inflation, unlike HST and other taxes that are collected on a percentage basis. We've criticized this situation because inflation is running high. We managed to work with the government to limit the percentage tax increase to a figure below the rate of inflation, that is to 2%, and now we're wondering whether we should stop raising the excise tax or even lower it. Unfortunately, we didn't have a substantive debate during our study of Bill C-69 or bring in witnesses to discuss the matter, with the exception of the Quebec microdistilleries.
I'm going to speak briefly to the amendments that I'll soon be moving. The Bloc Québécois is in favour of having a substantive discussion on the excise tax, its rate and how it should be indexed. The subject should be studied since we didn't debate it enough to enable us to change the situation as radically as was suggested in the various proposed amendments.
However, the Bloc Québécois is in favour of providing some support to small artisanal producers like the microbreweries. Our party is proposing an escalating excise tax that would provide support to small producers, small local artisans, to assist help them compete with the major distilleries, which don't need as much help.
The purpose of the two Bloc Québécois amendments that I will move is to encourage small artisanal producers and to introduce an escalating tax system for microdistilleries that would be similar to the present system for microbreweries. The idea is to help and encourage small emerging players, the local artisans who operate all across the regions.
For now, apart from the amendments that I'll be moving, I will stand by the compromise we've reached to limit the excise tax rate to 2%, in other words, below the rate of inflation. I would also be open to the idea of the committee, in the course of future business, taking a serious look at the excise tax issue and inviting all the witnesses and experts we need to conduct a substantive debate and, if appropriate, bringing forward proposed amendments CPC-6 to CPC-18. For the moment, however, I will be voting against those amendments.
Thank you, Mr. Chair.
1:10 p.m.
Liberal
The Chair Liberal Peter Fonseca
Thank you, Mr. Ste‑Marie.
I have PS Turnbull and MP Sorbara to speak to this.
1:10 p.m.
Liberal
Ryan Turnbull Liberal Whitby, ON
I know we have limited time today. I will speak a little bit to the whole package of Conservative amendments related to the excise tax rate. Many of these, as I understand, are identical to ones that were proposed in a previous BIA and were ultimately voted down.
Our government is proud of our support for brewers, and specifically craft brewers. We have capped the excise escalator and made cuts to the excise tax rate for craft brewers, which will provide typical craft brewers with up to $86,952 in additional tax relief in 2024-25.
I think some of the Conservative amendments being proposed today include ones that would result in refunds on the excise tax rate paid since April 21, 2024, to those who are unlikely to pass those refunds on to consumers, so for these reasons we will be voting against the whole package of CPC amendments today.
Thanks.
1:15 p.m.
Liberal
June 4th, 2024 / 1:15 p.m.
Liberal
Francesco Sorbara Liberal Vaughan—Woodbridge, ON
Thank you, Chair, for the opportunity to speak.
With regard to the excise tax and the legislative adjustments that were done in the first session, from 2015-19, which I was a part of, and also in chairing the wine caucus, which has many members from the opposite side, and also being part of the beer caucus, if I can use that terminology in a serious sense, we worked with industry. We worked with the wine, spirits and beer industries to land at a spot where an announcement was made, supported by these very critical sectors of economy, which employ a lot of middle-class Canadians.
I wish to applaud the Deputy Prime Minister and the team for working so collaboratively and getting to a point at which the industry, the workers and the unions are happy. We capped the excise indexation rate at 2%. We also provided a good-sized tax cut to craft brewers of a certain size and also provided the wine sector with the wine sector support program for the next three years, which will see the sectors receiving a good flow of funding for growth, while driving tourism and jobs.
Mr. Chair, I'll leave it at that. I'll limit my interventions today, but I wanted to intervene on this one.
1:15 p.m.
NDP
Don Davies NDP Vancouver Kingsway, BC
I won't have much to say, but in addition to the comments of my colleagues from the Bloc and the Liberal Party, I think the policy we have in place now is eminently reasonable. It follows the CPI and is capped at 2%, so it's not really an additional cost for the industry. It keeps up with inflation, and the price of their products usually goes up.
I want to add only two things. The so-called “sin taxes” have always been a unique part of public policy when it comes to taxation, and that's a recognition that, while these products have a number of benefits, they also come with some harms. One harm that I think should be put on the record is that there are a number of studies now that have absolutely established a link between alcohol and cancer. I think there's a public policy rationale in making sure there's a taxation regime that makes it clear that, for the products being marketed and sold, there's also a taxation component that comes back from that to help pay for the other burdens that are placed on the public system, including the health care system.
One thing about alcohol is that it is a discretionary product. It's something people can choose either to purchase or not, and they can adjust their volumes or not as well. There's something to be said about that too.
I'll be voting against the whole suite of amendments to reduce taxes on the alcohol industry.
1:15 p.m.
Liberal
The Chair Liberal Peter Fonseca
Thank you, MP Davies.
I think that's it for people who want to speak on this.
Shall CPC-6 carry?
1:15 p.m.
Conservative
Philip Lawrence Conservative Northumberland—Peterborough South, ON
We'd like to do a recorded vote on this one.
1:15 p.m.
Liberal
The Chair Liberal Peter Fonseca
It's a recorded vote.
(Amendment negatived: nays 7; yeas 4 [See Minutes of Proceedings])
(Clause 113 agreed to on division)
We are now at new clause 113.1.
This is CPC-7. Would one of the members like to move that?
1:20 p.m.
Conservative
Philip Lawrence Conservative Northumberland—Peterborough South, ON
Yes, I will move that, and I'll make my comments brief.
As in the earlier discussion, Conservatives are alone, I guess, in our belief that Canadians are already burdened enough by high taxation on a number of products—income tax, sales tax, property tax, carbon tax, various other taxes and levies—and we just want to give Canadians a break. That's why we are moving the whole suite of measures to reduce the excise tax and to let Canadians enjoy a beer in peace.
1:20 p.m.
Liberal
The Chair Liberal Peter Fonseca
Thank you, MP Lawrence.
Shall CPC-7 carry?
(Amendment negatived on division [See Minutes of Proceedings])
1:20 p.m.
Liberal
The Chair Liberal Peter Fonseca
Now, members, we are on to BQ-0.1. I will first look to see what MP Ste-Marie would like to do.
1:20 p.m.
Bloc
Gabriel Ste-Marie Bloc Joliette, QC
Thank you, Mr. Chair.
Amendment BQ‑1 is a very important amendment to the government's bill. Allow me to provide some context.
A few years ago, Australia brought a dispute case against Canada before the World Trade Organization—
1:20 p.m.
Liberal
1:20 p.m.
Liberal
1:20 p.m.
Bloc
Gabriel Ste-Marie Bloc Joliette, QC
Yes, just a minute.
Yesterday, the committee clerk, Mr. Roger, sent committee members a new amendment replacing amendment BQ‑2. However, that amendment has been amended again. The legislative drafters went to work to come up with a new form for the amendment, which was sent to the clerk this morning. I would ask the clerk to distribute it. Its reference number will be 13152717 , if I'm not mistaken.
With your permission, Mr. Chair, I can discuss it.
1:20 p.m.
Bloc
Gabriel Ste-Marie Bloc Joliette, QC
Good.
This amendment replaces amendment BQ‑2, which had some drafting issues. The amendment I'm moving would introduce an escalating excise tax for microdistilleries, that is, spirit producers. The object of this amendment is to introduce for microdistilleries what already exists for microbreweries and what's in place in the United States. Our goal is to enable microdistilleries, the small players and local artisans, to pay a lower excise tax rate than that paid by the major industry players to help them develop.
The association that represents microdistilleries testified on this matter before the committee. Microdistilleries are established all across Canada, in every province and virtually every region, and they are popular businesses operated by passionate artisans who put their heart into their products. Given the excise tax rate for these minor actors, which operate with very high fixed costs, it's virtually impossible for them to compete with the major players. The witness who appeared before the committee reminded us that, for every bottle sold for $40, he earned $12 and paid $4 in excise tax.
This amendment would provide some support for microdistilleries. I therefore encourage my colleagues to support it.
1:25 p.m.
Liberal
The Chair Liberal Peter Fonseca
Thank you, Mr. Ste‑Marie.
Is there any further debate on this?
There is a ruling. I will give you my ruling right now.
Bill C-69 amends several acts, including the Excise Act. The amendment seeks to amend section 1 of part 1 of the schedule of the act by adding new rates of duties for absolute ethyl alcohol contained in spirits depending on its production level.
Since paragraph (1) of the said schedule provides for a uniform rate of duties to absolute ethyl alcohol regardless of the quantity produced, the adoption of the amendment would create an incapability in the act, which renders the amendment inadmissible.
As House of Commons Procedure and Practice, third edition, states on pages 772 and 773:
Last, an amendment which would render a clause unintelligible or ungrammatical is also out of order.
In the opinion of the chair, the amendment is incompatible paragraph 1(1) of the schedule, and I therefore rule the amendment inadmissible.