Finance Committee on Nov. 5th, 2024

[Adam Chambers, Conservative, Simcoe North, ON]

Thank you very much, Mr. Chair.

To confirm, I have not been promoted, even though I'm a bit closer to you. I'm still usually at the end of the table.

Thank you to all of the witnesses for their testimony. I appreciate their being here.

Mr. Moody, I want to come back to you on a couple of things.

We've heard some testimony today about additional taxes on, say, flipping. I want to bring in a bigger question around this: The government also brought in an underused housing tax which, surprise, surprise, has cost more in administrative costs than it has actually collected through revenue.

I wonder if you want to comment on the general position of the federal government with respect to land-use planning and how it should be taxed. That is normally done by municipal and provincial governments.

[Kim G. C. Moody]

Thank you, Mr. Chambers.

This is something I've written a lot about in my Financial Post columns. I'm not a big fan of the tax system trying to be the answer to solving Canada's housing challenges. There have been a whole bunch of measures. You mentioned one of them, the UHT. There is a witness today who suggested we should introduce a flipping tax. Well, we already have a flipping tax. It was introduced on January 1, 2023. This is very duplicative. We already have a flipping tax in the Income Tax Act. Surprise, surprise, the B.C. provincial government followed the lead of the federal government and introduced a flipping tax, as well.

I find all of these measures to be very silly and dangerous. For example, there's a prohibition of deductions on Airbnbs, where they operate in a municipality that prohibits them. All of these are very interventionist and simply not helpful.

[Adam Chambers, Conservative, Simcoe North, ON]

Thank you for that perspective.

In your view, if there are already taxes imposed on a particular activity, an additional tax doesn't necessarily drive the behavioural response people are expecting—mostly because there is, for example, already a tax in place.

Is that one of the reasons why you're not supportive of it?

[Kim G. C. Moody]

Absolutely. What that drives is complexity. The Income Tax Act is by far the most complex and voluminous statute we have in Canada. What we need is an attempt to simplify the Income Tax Act, as opposed to continuing to add duplicative measures that will do nothing to drive the behaviour.

Are we going to have another flipping tax on top of the flipping tax on top of the tax that was in addition to it? It is, quite frankly, ridiculous.

[Adam Chambers, Conservative, Simcoe North, ON]

On the issue of tax simplification, in your view, do you support a Carter-like commission? Do you think we could do something quicker than that? How much work needs to be done to simplify the tax code?

[Kim G. C. Moody]

There's a tremendous amount of work that needs to be done.

To answer your question on whether I support a Carter commission, of course I would. Do we have the time to do that? Probably not.

I would wholly support a shorter, Carter-like review, which was proposed by your party earlier this year, that focuses on productivity, tax reduction and other measures.

[Adam Chambers, Conservative, Simcoe North, ON]

Thank you very much.

The last time you were at committee, you testified about having an increased number of inquiries from potential clients—individuals—to your firm who are looking at or exploring potentially leaving the country and taking their assets with them.

Is that still the case? Are you still being solicited for your advice in those circumstances?

[Kim G. C. Moody]

I am almost every single day, Mr. Chambers. It's actually quite sad.

I know that numerous of my colleagues across Canada are facing the same kind of challenges and issues.

[Adam Chambers, Conservative, Simcoe North, ON]

Obviously, these are individuals with financial means or a significant amount of assets, who could take those assets or income and move it to a more favourable jurisdiction.

Is that basically the premise of what they're seeking to do?

[Kim G. C. Moody]

The short answer is yes.

In most cases it's the United States. Some might say that the United States is not all that preferential compared with Canada. The short answer is that it is, so a lot of them are going to the United States.

The odd one goes to Europe and to other jurisdictions, but mostly it's to the United States.

[Adam Chambers, Conservative, Simcoe North, ON]

Thank you very much, sir.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Chambers.

Now we'll go to MP Thompson.

MP Thompson, you will be our final questioner with the last five minutes for our witnesses.

[Joanne Thompson, Liberal, St. John's East, NL]

Thank you.

If I could, I'd like to begin with you, Ms. Cobden.

You spoke in your brief about the need to increase our competitiveness while improving our carbon footprint.

Where do you feel Canada is positioned currently in the global race to decarbonize major steel industry production methods?

[Catherine Cobden]

Actually, I know with some degree of certainty that we're doing very well in this race, but I'm worried about the future.

Again, I spoke of the six million tonnes of CO2 emissions. I think that's global leadership in action here in Canada in the steel industry. That's brought, in large part, by the partnership between the industry and the provincial and federal governments.

However, we have further work to do. The significant challenges we face are very significant and we are going to have to work hard to get the next set of investments in the country.

[Joanne Thompson, Liberal, St. John's East, NL]

Thank you.

Actually, to that point, I appreciate the emphasis you put on the steel industry to decarbonize production and work towards net-zero emissions and it's the financial supports.

Could you speak to the ones that currently exist to support the industry to further decarbonize?

What would you like to see as we move into the next couple of years?

[Catherine Cobden]

There's an array of programs and tax credits that support the steel industry. They support the heavy industrial sector for sure, not just the steel sector. Those are certainly helpful.

The challenge we're now facing is the impact of the uncertainty of the carbon pricing regime, which falls off a cliff after 2030. Nobody has any idea what's going to happen to carbon pricing at that point. There's also the increase in carbon pricing year over year at $15 a tonne every year.

Those are remaining barriers. Despite the array of supports for investment, we're now facing a different challenge in terms of attracting investment to the steel sector.

[Joanne Thompson, Liberal, St. John's East, NL]

Thank you.

If I could switch to you, Mr. Mohammad, you referenced in your opening statement the need to do more in public education.

Would you speak to that?

More specifically, across the country, what can we do as a government? How we can begin to engage provinces, territories and municipalities, so there really is a cohesiveness around how we work intentionally to build safer communities and expand our understanding of tolerance?

[Rizwan Mohammad]

Mr. Chair, thank you for this question.

The urgency of combatting Islamophobia in Canada calls for public education and awareness campaigns. To that end, we're asking that any comprehensive national anti-Islamophobia strategy includes public education. We're seeing very little public education campaigning coming from the Government of Canada around Islamophobia in particular.

If we want to look at models that could give us some glimpses of how this could work, we would recommend looking at Toronto for All. We would also consider looking at how London's new anti-hate education pilot was developed in consultation with diverse communities.

[The Chair, Liberal, Peter Fonseca]

MP Thompson, go ahead.

[Joanne Thompson, Liberal, St. John's East, NL]

All right. Thank you.

Mr. Chair, that's it for me.

[The Chair, Liberal, Peter Fonseca]

It is? Okay, thank you, MP Thompson.

We do want to thank our excellent expert witnesses who have come before us to testify for our pre-budget consultation in advance of budget 2025.

I know that it is American election night tonight. Some of you may be wanting to get to your screens to watch that, but we wish you the best for the rest of your evening.

Thank you very much for coming before our finance committee.

We're adjourned.