Evidence of meeting #23 for Finance in the 44th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was amendment.

A video is available from Parliament.

On the agenda

MPs speaking

Also speaking

Clerk of the Committee  Mr. Alexandre Roger
Phil King  Director General, Sales Tax Division, Tax Policy Branch, Department of Finance
Pierre Mercille  Director General, Sales Tax Legislation, Sales Tax Division, Tax Policy Branch, Department of Finance
Jacques Maziade  Legislative Clerk

10:05 a.m.

Liberal

The Chair Liberal Peter Fonseca

I call this meeting to order. Welcome to meeting number 23 of the House of Commons Standing Committee on Finance. Pursuant to the House of Commons order of reference adopted on Thursday, February 10, 2022, the committee is meeting on Bill C-8, an act to implement certain provisions of the economic and fiscal update tabled in Parliament on December 14, 2021 and other measures.

Today's meeting is taking place in a hybrid format pursuant to the House order of November 25, 2021. Members are attending in person in the room and remotely using the Zoom application. The proceedings will be made available via the House of Commons website. So you are aware, the webcast will always show the person speaking rather than the entirety of the committee. Today's meeting is also taking place in the webinar format. Webinars are for public committee meetings and are available only to members, their staff, and witnesses. Members enter immediately as active participants. All functionalities for active participants remain the same. Staff will be non-active participants and can therefore only view the meeting in gallery view.

I would like to take this opportunity to remind all participants to this meeting that taking screenshots or photos of your screen is not permitted. Given the ongoing pandemic situation and in light of the recommendations from health authorities as well as the directive of the Board of Internal Economy on October 19, 2021, to remain healthy and safe, all those attending the meeting in person are to maintain two-metre physical distancing and must wear a non-medical mask when circulating in the room. As well, it is highly recommended that the mask be worn at all times, including when you are seated. You must maintain proper hand hygiene by using the hand sanitizer provided at the room entrance.

As the chair, I will be enforcing these measures for the duration of the meeting, and I thank members in advance for their co-operation.

To ensure an orderly meeting, I would like to outline a few rules to follow. Members and witnesses, you may speak in the official language of your choice. Interpretation services are available for this meeting. You have the choice, at the bottom of your screen, of floor, English or French. If interpretation is lost, please inform me immediately, and we will ensure that interpretation is properly restored before resuming the proceedings. The “raise hand” feature at the bottom of the screen can be used at any time if you wish to speak or alert the chair. For members participating in person, proceed as you usually would when the whole committee is meeting in person in the committee room. Keep in mind the Board of Internal Economy guidelines for mask use and health protocols. Before speaking, please wait until I recognize you by name. If you are on the video conference, please click on the microphone icon to unmute yourself. For those of you in the room, your microphone will be controlled as normal by the proceedings and verification officer. When speaking, please speak slowly and clearly. When you are not speaking, your mike should be on mute. I remind everyone that all comments by members and witnesses should be addressed through the chair.

We have so many witnesses, officials and members with us here to assist with this meeting that I'll just name off the departments. We have officials from the Department of Employment and Social Development Canada, the Department of Finance, the Department of Health and the Public Health Agency of Canada.

Thank you, officials, for joining us and being here to assist with questions and any concerns during our clause-by-clause study of the bill. We also have Jacques Maziade and Émilie Thivierge, legislative clerks, who will be here to assist.

With that, members, pursuant to Standing Order 75(1), consideration of clause 1 (short title) is postponed.

The chair calls clause 2. Is there any discussion?

Shall clause 2 carry?

(Clause 2 agreed to on division)

10:10 a.m.

Liberal

The Chair Liberal Peter Fonseca

Shall clause 3 carry?

(Clause 3 agreed to on division)

10:10 a.m.

Liberal

The Chair Liberal Peter Fonseca

Members, shall clause 4 carry?

(Clause 4 agreed to on division)

10:10 a.m.

Liberal

The Chair Liberal Peter Fonseca

Shall clause 5 carry?

(Clause 5 agreed to on division)

10:10 a.m.

Liberal

The Chair Liberal Peter Fonseca

Shall clause 6 carry?

(Clause 6 agreed to on division)

10:10 a.m.

Liberal

The Chair Liberal Peter Fonseca

Shall clause 7 carry?

(Clause 7 agreed to on division)

10:10 a.m.

Liberal

The Chair Liberal Peter Fonseca

Shall clause 8 carry?

(Clause 8 agreed to on division)

10:10 a.m.

Liberal

The Chair Liberal Peter Fonseca

Shall clause 9 carry?

(Clause 9 agreed to on division)

(On clause 10)

10:10 a.m.

Liberal

The Chair Liberal Peter Fonseca

On clause 10, there is an amendment from the Bloc.

MP Ste-Marie, you have your hand up.

10:10 a.m.

Bloc

Gabriel Ste-Marie Bloc Joliette, QC

Thank you, Mr. Chair.

The purpose of the amendment is to add the following clarification to the 1% tax on vacant housing:

(3.1) The tax under subsection (3) may only be applied in a province with the agreement of that province.

Constitutional expert Patrick Taillon came to remind us that there were two possible scenarios.

First, there's reasonable doubt that the courts will see the tax as a regulation. If we look at the records of the debates, we can see that the government is proposing this tax to change behaviour. If the courts view this tax as a regulation, they may very well strike down this section, since regulations fall under provincial jurisdiction.

If this tax weren't seen as a regulation, then it would constitute a problematic practice under co‑operative federalism. The constitutional expert made this point. If we think of it as a tax, even though Ottawa has the power to impose a property tax, it's the last tax field not handled by Ottawa. This tax field is basically handled by the municipalities and school boards, which fall under provincial jurisdiction. As the Parliamentary Budget Officer reminded us, according to the studies conducted, which are updated each year, the funding issue lies with the provinces rather than with Ottawa. This may compound the issue.

Another issue is interference with existing or future taxes. For example, the City of Vancouver and the Government of British Columbia have this type of tax.

Since cities fall under provincial jurisdiction, the amendment simply suggests that the agreement of the province be obtained before proceeding. This will save us a great deal of trouble.

10:10 a.m.

Liberal

The Chair Liberal Peter Fonseca

Thank you, MP Ste-Marie.

Now I will give my ruling.

In the opinion of the chair, submitting the application of the tax to the approval of a province is a new concept that is beyond the scope of the bill and also contrary to the principles of the bill as agreed to at second reading. Therefore, I rule the amendment inadmissible.

10:10 a.m.

Bloc

Gabriel Ste-Marie Bloc Joliette, QC

I disagree with you, Mr. Chair. With all due respect, I take issue with your decision.

10:10 a.m.

Liberal

The Chair Liberal Peter Fonseca

Committee members, as you know, the decision of the chair is not debatable, so I look to the clerk for the vote.

10:15 a.m.

The Clerk of the Committee Mr. Alexandre Roger

Shall the decision of the chair be sustained?

(Ruling of the chair sustained)

10:15 a.m.

Liberal

The Chair Liberal Peter Fonseca

Members, shall clause 10 carry?

10:15 a.m.

Bloc

Gabriel Ste-Marie Bloc Joliette, QC

Mr. Chair, since the Bloc Québécois amendment was ruled inadmissible, I'll request a recorded division for clauses 10 to 40.

I want to apologize to my colleagues.

10:15 a.m.

Liberal

The Chair Liberal Peter Fonseca

Thank you, Mr. Ste‑Marie.

Shall clause 10 carry?

10:15 a.m.

Bloc

Gabriel Ste-Marie Bloc Joliette, QC

Mr. Chair, as I just said, I would like to request a recorded division for each clause up to clause 40.

10:15 a.m.

Liberal

The Chair Liberal Peter Fonseca

A request has been made for a recorded division.

(Clause 10 agreed to: yeas 6; nays 1)

10:15 a.m.

Liberal

The Chair Liberal Peter Fonseca

I have MP Ste-Marie and then MP Beech.

Please go ahead, MP Ste-Marie.

10:15 a.m.

Bloc

Gabriel Ste-Marie Bloc Joliette, QC

We may be raising our hands for the same reason.

Mr. Chair, I believe that you would find unanimous consent to apply the vote on clause 10 to clauses 11 to 39.

10:15 a.m.

Liberal

The Chair Liberal Peter Fonseca

I hear a no.

Shall clause 11 carry?

10:15 a.m.

Bloc

Gabriel Ste-Marie Bloc Joliette, QC

Mr. Chair, I would like to request a recorded division, as I've said twice already.

10:15 a.m.

Liberal

The Chair Liberal Peter Fonseca

Okay.

(Clause 11 agreed to: yeas 6; nays 1)

Shall clause 12 carry?

10:20 a.m.

Bloc

Gabriel Ste-Marie Bloc Joliette, QC

I would like to request a recorded division.