Finance Committee on Feb. 28th, 2022

[The Chair, Liberal, Peter Fonseca]

Thank you.

Would other officials like to add anything?

[Pierre Mercille, Director General, Sales Tax Legislation, Sales Tax Division, Tax Policy Branch, Department of Finance]

I won't talk about the international agreement—I work in legislation—but I want to point out that this amendment applies only to individuals. It doesn't apply to corporations.

I also want to point out that it's a prohibition, but usually a prohibition comes with a consequence. There's no consequence here. The effectiveness of the amendment as drafted is not clear.

Thank you.

[The Chair, Liberal, Peter Fonseca]

Thank you.

Any other officials...?

Seeing none, I still have a speaking order. I have MP Chatel and MP Fast.

[Ed Fast, Conservative, Abbotsford, BC]

I'll wait.

[The Chair, Liberal, Peter Fonseca]

Okay.

Go ahead, MP Chatel.

[Sophie Chatel, Liberal, Pontiac, QC]

Thank you, Mr. Chair.

I thank the officials for confirming that such a ban would not necessarily lead to results and that it could be circumvented in other ways.

On the other hand, we would send our trade partners a message that their citizens and residents are banned from purchasing residential homes. Once our trade partners decide to take reciprocal action, two things will happen. First, it is not certain this will be limited to two years. Second, it is not certain that it will be limited to underused housing. This could go much further.

I am very concerned about the message we will send them, especially if we have not considered all the aspects of international agreements and non-discrimination agreements Canada has with the United States and with Europe.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Chatel.

Go ahead, MP Fast.

[Ed Fast, Conservative, Abbotsford, BC]

Mr. Chair, I'm sensing that there is this general agreement that the idea of implementing a temporary prohibition is a good thing. My colleague Mr. Albas has noted that this is a two-year prohibition. Quite frankly, if one of our trade partners were to challenge, it would take well over two years to actually complete a challenge, and it's unlikely that a provision like this, which is intended to provide a temporary respite from foreign buyers, would actually be challenged.

I think I'm probably the only one around this table who has any trade experience. I'm not claiming to be an expert, but having an understanding of challenges at the World Trade Organization, I think I can safely say that the scope of this amendment is so narrow and so circumscribed that it would not generate any challenges. I think it would send just that clear message that we are placing Canadian buyers of residential real estate first. They come first. Anybody else who wants to join can come later, but right now we have to focus on Canadians themselves.

I would encourage you, colleagues, to support this. I note that this would go back at report stage. The government can actually take this from committee and review this with officials to make sure it passes muster and will do what it claims to do. If an amendment is required or if the government wants to take this out, it can do so at report stage with the Speaker's consent.

There is a mechanism for us to move this forward and then have the House address it. I would encourage you to allow that to happen.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Fast.

I have MP Chambers next.

[Adam Chambers, Conservative, Simcoe North, ON]

Thank you, Mr. Chair.

Thank you for the discussion and for your willingness to debate this amendment. I appreciate it very much.

For my Bloc colleague Mr. Ste-Marie, I did hear one of the officials indicate that this did not apply to corporations. I suspect that in the example you provided, there may be some planning opportunities for individuals if they're looking to provide or transfer housing to their children. I would stress once again the importance of the facts that this measure is temporary, that it is time limited, that it does sunset and that two years is, in many cases, a fairly short time frame to give us a little bit more time.

With respect to some of the concerns about international trade, I certainly appreciate those concerns. I'm wondering why we're more worried about the international trade effects on a temporary measure as opposed to some of the concerns we had raised about a permanent tax with the original clause of the bill. Given that it is temporary and that we have not seen reciprocal arrangements from some of our other trading partners, including New Zealand as my colleague mentioned, I do think two years is a reasonable time, and it certainly is not permanent.

Thank you very much.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Chambers.

I see no further hands on the amendment. Shall amendment CPC-1 carry?

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Could we have a recorded vote?

(Amendment negatived: nays 6; yeas 5)

[The Chair, Liberal, Peter Fonseca]

Shall clause 41 carry?

(Clause 41 agreed to on division)

Shall clause 42 carry?

(Clause 42 agreed to on division)

Shall clause 43 carry?

(Clause 43 agreed to on division)

Shall clause 44 carry?

(Clause 44 agreed to on division)

(On clause 45)

On clause 45, we have amendment NDP-1.

MP Blaikie, would you like to move this amendment?

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Thank you very much. I will so move, Mr. Chair.

The point of this amendment is that there are some large spending authorities in this bill. We have heard from the Parliamentary Budget Officer that the government has been late in tabling it to public accounts. I think it is reasonable for Canadians to expect some kind of regular reporting on how the money is being spent as it goes out the door rather than having to wait up to 18 months to see that recorded in the public accounts. So this is just a simple amendment to require the government to report quarterly on how that money is being spent over the course of the next year.

[The Chair, Liberal, Peter Fonseca]

I do see some hands up.

MP Beech.

[Terry Beech, Liberal, Burnaby North—Seymour, BC]

Speaking specifically to this amendment, I want to step back and take a second to thank MP Blaikie for his package of amendments. I thought they were quite good and I'm looking forward to discussing them all.

With regard to this, in general, we are entirely in favour of more transparency and openness in reporting. There are some operational challenges that we're concerned about with regard to actually getting this data from the provinces and the strain it would put on their standard reporting systems. We do have a commitment to do this annually, but at this time, we have some challenges with the strain this would put on individual provinces and territories.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Beech.

I have MP Ste-Marie next.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Thank you, Mr. Chair.

My comments will be along the same lines. According to the amendment, the provinces would report to the department, which would then report to us.

First, the provinces have been chronically underfunded in health. Second, in the Bloc Québécois' view, the provinces should not be reporting to the federal government on health expenditures. For those reasons, I will vote against the amendment.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Ste‑Marie.

I see MP Blaikie's hand up.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Thank you very much, Mr. Chair.

I don't think the idea here is for the provinces and territories to report to the federal government, but rather for the federal government to report to Parliament. Parliament gives the government permission to spend money on specific things. In that context, it is reasonable for the federal government to guarantee to the House that money authorized for specific purposes has been spent on what it was allocated for.

As Mr. Ste‑Marie knows very well, the NDP and I support increasing transfers to the provinces, with no strings attached. However, in this case, money was proposed for specific purposes, which is one reason why the NDP and I are supportive. So I think it makes sense for a report to guarantee to us that the money has been used for what is prescribed in the legislation.

I am open to the idea of changing the wording a little bit, if that can help. We could rather say:

“a report setting out how the provinces and territories intend to spend the money”.

I recognize that there are reporting processes at the provincial level and that, until those are completed, it may be difficult for the federal government to report with authority on how the money was spent. Presumably, though, the federal government is going to have a conversation with the provinces before this money flows. Presumably, in that conversation, they're going to say that this money is for the specific purpose of either purchasing COVID tests or whatever the other purpose happens to be under this legislation for the spending authorities. The federal government is going to release those funds, satisfied that it has at least some basic understanding of how that money is going to be used for the purposes for which Parliament authorized it.

That's the tree I'm barking up. I'm happy to modify the language a bit, but it's unthinkable to me that the federal government would release money to the province that is approved for a very specific purpose without any conversation at all about what the province largely intends to do with it. It also flies in the face of some more informal reporting that the government has been doing on its own website about how this money has been flowing, so this is a way of formalizing it. That's something that I believe is important.

It's important for at least two reasons. One is that it recognizes the appropriate role of Parliament and the accountability of the government to Parliament with respect to spending. The second reason is that it also formalizes and adds that reporting to the official record. While it's all well and good for the government to offer additional reporting on its website—that has, from time to time, been invoked by government members for various things having to do with financial reporting over the years that I've been here—the fact of the matter is, what is voluntarily reported can be taken down, and we have seen this in certain cases. It can be taken down overnight.

We saw this on reporting about the wage subsidy, for instance. The government, at one time, provided the names of publicly traded entities that were receiving wage subsidy funds. There was quite a good report on that done by The Globe and Mail. Lo and behold, either in the middle of that investigative process or shortly after the publication of that article, all of that information came down from the Internet.

I really do believe in this reporting and, therefore, believe it shouldn't be voluntary. It's something the government should be required to do and it should be recorded in a place like the official record of the House of Commons so that they are not numbers and that it is not information that can simply disappear at the will of the government.

That's why it's important to record these things. I'm not saying this because I think that any member of this committee feels otherwise; I'm just explaining my own reasons why it's important.

To Monsieur Ste-Marie's point, I don't think this is the place to raise unconditional transfers to the provinces. I think that needs to happen, and I think it needs to happen at the appropriate tables. Here, we're talking about money that is spent for very specific purposes having to do with the pandemic. I think the federal government at the very least should be reporting back to the House of Commons on whether it thinks it has accomplished those objectives or not. That's what's at stake in this amendment.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Blaikie.

We have further debate. I see that MP Albas has his hand up.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Thank you, Mr. Chair.

I would like to thank Mr. Blaikie for his intervention. His arguments around accountability I think are very strong.

I just want to raise the point that we have been seeing bill after bill now in this Parliament where the government is bypassing the usual estimates process and instead is using legislation to make these payments. I don't think that's necessarily a good process. If the government is going to move outside of the typical supply process, where they are putting it in the main estimates or putting it into the supplementaries, we should be asking for more accountability from the government.

It does seem to me that either they didn't anticipate this spending—and that starts to raise questions about whether or not they have a firm plan in place as to where this will go—or they are doing this for political reasons.

I think Mr. Blaikie has raised a number of arguments, and I'm willing to support him on this.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Albas.

In scanning the room and looking at the screen, I don't see any hands up.

Shall NDP-1 carry?

[An hon. member]

Yes.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

I request a recorded division.