Evidence of meeting #19 for Finance in the 44th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was chair.
A video is available from Parliament.
Conservative
Philip Lawrence Conservative Northumberland—Peterborough South, ON
Thank you very much.
My questions will focus on part 1(d), which is the carbon tax rebate for farmers. I would be happy if someone could respond to those questions accordingly.
I want to start with this. Are you familiar with Bill C-216 and Bill C-234, private members' bills in the 43rd and 44th Parliaments?
Director General, Sales Tax Division, Tax Policy Branch, Department of Finance
Conservative
Philip Lawrence Conservative Northumberland—Peterborough South, ON
Yes. I meant Bill C-206. My apologies.
Director General, Sales Tax Division, Tax Policy Branch, Department of Finance
Conservative
Philip Lawrence Conservative Northumberland—Peterborough South, ON
They propose an exemption, as opposed to the rebate.
I want to go through a series of questions, Mr. King, and compare an exemption to a deduction.
With respect to the recovery of the carbon tax, an exemption will recover 100% for 100% of farmers. What percentage will this rebate recover for our farmers?
Director General, Sales Tax Division, Tax Policy Branch, Department of Finance
The amount to be returned in the first year is $100 million, and that's estimated to be—
Conservative
Philip Lawrence Conservative Northumberland—Peterborough South, ON
I'm sorry, sir. I meant per farmer.
Director General, Sales Tax Division, Tax Policy Branch, Department of Finance
You want to know the number per farmer?
Conservative
Philip Lawrence Conservative Northumberland—Peterborough South, ON
What percentage of farmers will get 100% recovery?
Director General, Sales Tax Division, Tax Policy Branch, Department of Finance
I don't have the information to answer that question.
Conservative
Philip Lawrence Conservative Northumberland—Peterborough South, ON
We have documents. I kind of suspected that—
Director General, Sales Tax Division, Tax Policy Branch, Department of Finance
I'm not sure. One of my colleagues would have that answer.
Conservative
Philip Lawrence Conservative Northumberland—Peterborough South, ON
Please provide it.
We're going to get documents that show what the average recovery is per farmer and how many farmers will get 100% recovery.
Can you can undertake that?
Director General, Sales Tax Division, Tax Policy Branch, Department of Finance
I'm sorry. I don't understand.
Conservative
Philip Lawrence Conservative Northumberland—Peterborough South, ON
What percentage of farmers will get 100% recovery of the carbon tax?
Director General, Sales Tax Division, Tax Policy Branch, Department of Finance
I'm sorry, Mr. Chair. We're being asked to provide that information. Is that correct?
Director General, Sales Tax Division, Tax Policy Branch, Department of Finance
Okay. That is noted.
Conservative
Philip Lawrence Conservative Northumberland—Peterborough South, ON
We can tell that case studies have already been done. It will be between 30 and 40 cents on the dollar that they will get back. That's what the agriculture community tells us, so we can say that an exemption is far better for farmers when we look at the percentage of recovery.
Next, we look at equity. In my experience, farming is not the same throughout the country. It's not the same throughout the industry. In this, we use a proxy of eligible farming expenses. This is far less inaccurate. Once again, with an exemption, 100% of farmers will get 100% recovery.
What legislation is in there to account for the differences in agriculture expenses between industries and between different regions?
Director General, Sales Tax Division, Tax Policy Branch, Department of Finance
Perhaps I could turn to one of my colleagues from the tax policy branch about how the tax is set up specifically, or how the refund is set up.
Lindsay Gwyer Director General, Legislation, Tax Legislation Division, Tax Policy Branch, Department of Finance
Yes, I can answer that question.
The refund is set up based on a calculation of eligible farming expenses, which is basically expenses that are deductible for tax purposes, with some limited exceptions.
Conservative
Philip Lawrence Conservative Northumberland—Peterborough South, ON
Thank you very much. I don't mean to be rude, but I am aware of the legislation. My question was about what adjustment was made in the legislation for different types of farming and for regional differences.
Director General, Legislation, Tax Legislation Division, Tax Policy Branch, Department of Finance
There are no adjustments in the legislation for different types—
Conservative
Philip Lawrence Conservative Northumberland—Peterborough South, ON
Thank you. This is completely inequitable to many different farmers in many different regions who are in many different types of farming industry, and no adjustment is made for that, whereas an exemption automatically will adjust for the different types of farms and the different types of sectors, perfectly.
What will be the cost to administer this rebate for the CRA? Is no one going to answer my question?
Senior Director, Saving and Investment Section, Business Income Tax Division, Tax Policy Branch, Department of Finance
Yes, I'll jump in for that one, Mr. Chair.
It's in the fall economic statement on page 68. The Canada Revenue Agency administrative costs associated with the measure are provided there. For 2021-22, it's $3 million; for 2022-23, $4 million; and for 2023-24, $2 million.