Thank you.
Evidence of meeting #41 for Finance in the 44th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was officials.
A video is available from Parliament.
Evidence of meeting #41 for Finance in the 44th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was officials.
A video is available from Parliament.
1:05 p.m.
Senior Director, Excise Taxation and Legislation, Sales Tax Division, Tax Policy Branch, Department of Finance
I'm sorry. If I may correct something I said—
1:05 p.m.
Senior Director, Excise Taxation and Legislation, Sales Tax Division, Tax Policy Branch, Department of Finance
I think I referred to January 1, 2023. I meant January 1, 2022. Of course, we don't allow agreements to be entered into in writing currently for official deliveries. It's a grandfather rule with respect to existing agreements entered into in writing.
1:05 p.m.
Conservative
Ed Fast Conservative Abbotsford, BC
That's very different. I understood that the grandfathering had been extended to the end of this year, which would make it January 1, 2023. You are telling me that the grandfathering you are referring to is to the end of 2022—
1:05 p.m.
Senior Director, Excise Taxation and Legislation, Sales Tax Division, Tax Policy Branch, Department of Finance
That's correct.
1:05 p.m.
Conservative
Ed Fast Conservative Abbotsford, BC
—which means that only contracts entered into in 2021 would be grandfathered.
1:05 p.m.
Senior Director, Excise Taxation and Legislation, Sales Tax Division, Tax Policy Branch, Department of Finance
That's correct. The previous rule was grandfathering contracts entered into before budget day 2021. In that sense, it's extended relief.
1:05 p.m.
Liberal
The Chair Liberal Peter Fonseca
Thank you.
We're moving to MP Dzerowicz for the Liberals for five minutes.
1:05 p.m.
Liberal
Julie Dzerowicz Liberal Davenport, ON
Thank you so much, Mr. Chair.
I'd like to ask about the economic growth in the innovation section of the budget. We know that if we're going to continue to be able to afford the generous support programs we have and a national child care program, and if we want to continue to have a good quality of life, we need to ensure that we have strong economic growth moving forward. We also need to ensure that we have productivity and innovation to be able to have strong economic growth.
My question is around the Canadian innovation and investment agency. We know that we have an educated population. We know that Canada and Canadians have no shortage of excellent ideas, but we know that we have to translate those good ideas into new technologies, new product services and growing businesses.
I wonder if one of our officials can talk to us about the idea behind the Canadian innovation and investment agency. What is the idea behind it? How are we hoping to set this up? What is the time frame?
1:05 p.m.
Director General, Legislation, Tax Legislation Division, Tax Policy Branch, Department of Finance
I'm sorry, but I don't think we actually have anyone on the call who can speak about the Canadian innovation. We could speak to some of the measures in part 1 of the bill or in parts 2, 3 or 4 that are intended to allow for innovation and for increased growth in the economy, but I don't think we have anyone here on that particular topic.
1:10 p.m.
Liberal
Julie Dzerowicz Liberal Davenport, ON
Okay. Thank you very much. Then I will continue with a question, an excellent question, that one of my colleagues had asked.
As do many of my colleagues, I also have a large number of union members in my riding. We know that skilled trades workers are essential for Canada's success, and we have to be able to help them get to their job sites no matter where those are. We know that often they have to travel outside of their cities or their provinces. A labour mobility deduction has been set up for tradespeople, and I wonder whether there's someone who can provide a little bit more information about this labour mobility deduction.
What expenses are eligible for it and when would it go into effect?
1:10 p.m.
Mark Maxson Director, Employment and Education, Personal Income Tax Division, Tax Policy Branch, Department of Finance
Thank you for the question. This is Mark Maxson here from the personal income tax division at Finance.
The labour mobility deduction comes out of a context in which the income tax provides recognition for some expenses for mobility, but generally those include cases in which someone moves permanently for a job or perhaps where they're required on a regular basis to travel away from their employer's workplace.
What we heard from the sector was that construction workers often, as I think was mentioned, face periods of downtime in their local market. There may be opportunities elsewhere in the country, so they take temporary jobs. They travel for temporary jobs, and the expenses they incur in relation to those relocations haven't been attracting existing tax relief.
What this measure proposes is to introduce a new labour mobility deduction for tradespeople that would recognize certain travel and relocation expenses for tradespeople and apprentices in the construction industry, allowing them to deduct up to $4,000 in a year across eligible relocations, and that would include temporary lodging expenses, round-trip transportation and meals within the course of that round trip. The proposal here is that this would take effect for the 2022 tax year, which is the year in progress, and for subsequent tax years.
1:10 p.m.
Liberal
Julie Dzerowicz Liberal Davenport, ON
I have one final question. Do we have an idea of how much we expect this tax credit to cost, or do we not have information on that yet?
1:10 p.m.
Director, Employment and Education, Personal Income Tax Division, Tax Policy Branch, Department of Finance
Thank you for the question. This is a brand new measure, so we don't know with certainty what the costs will be, but we've estimated a cost of $595 million over the forecast period out through 2026-27.
1:10 p.m.
Liberal
The Chair Liberal Peter Fonseca
Thank you.
Thank you, MP Dzerowicz.
Members, I'm just looking at the time. We're moving to our final round, with about four minutes for each party. We'll start with the Conservatives and MP Albas for four minutes.
1:10 p.m.
Conservative
Dan Albas Conservative Central Okanagan—Similkameen—Nicola, BC
Thank you, Mr. Chair.
Again, thank you to our witnesses for the work you do for Canadians.
I'd like to go to page 106, division 2, the Excise Act, 2001, regarding wine, subclause 130(2),
Subsection (1) comes into force, or is deemed to have come into force, on June 30, 2022, but does not apply to wine packaged before that day.
Has the department done any analysis with regard to the ability of the sector? They're experiencing massive supply issues in terms of bottles and other packaging that would be needed for them to be able to comply with that. Has there been any study whatsoever of the economic impact of this change?
1:10 p.m.
Senior Director, Excise Taxation and Legislation, Sales Tax Division, Tax Policy Branch, Department of Finance
Thank you for the question. It was, I guess, mentioned by the minister that this measure is intended to comply with an agreement that was entered into under the auspices of the WTO, and under that agreement, there is a—
1:10 p.m.
Conservative
Dan Albas Conservative Central Okanagan—Similkameen—Nicola, BC
I'm asking a specific question. I do not need to hear a rephrasing of the minister.
Sir, could you please just answer the question? Was there an economic analysis of what this change would do, especially to the small and medium-sized wineries that have never paid excise tax on wine? Was any kind of analysis done on the sector's ability to deal with the bottling requirement, given their issues with supply chains? This is simple stuff.
1:15 p.m.
Senior Director, Excise Taxation and Legislation, Sales Tax Division, Tax Policy Branch, Department of Finance
The packaging requirement is in line with the rules that were put in place when the exemptions were introduced in 2006. The agreement was made public in July 2020, so the industry was aware, and there have been different discussions with the industry about the fact that the repeal of the exemption will come effective June 30, 2022. Basically, in terms of the technical amendments that are included in the budget implementation act, that's the most I can tell you today.
1:15 p.m.
Conservative
Dan Albas Conservative Central Okanagan—Similkameen—Nicola, BC
I appreciate at least the answer that you did some consultation.
I think you will find—and I am saying this to government members, not to the officials here—that this will be extremely damaging for those small businesses that have not, since their existence.... For many wineries that we all know and love that have started since the original changes in the Harper-Flaherty years, this is what has spurred so much growth in the VQA or 100% Canadian content.
I'd like to talk about the doubling of the allowable qualifying expense limit under the home accessibility tax credit. First of all, we do know that it is widowed seniors, particularly elderly single women seniors who, under our system, usually struggle the most. I'd like to see if this particular policy was subject to gender-based analysis plus.
1:15 p.m.
Senior Director, Social Tax Policy, Department of Finance
Thank you for the question, Mr. Albas.
It is standard practice in the Department of Finance when we're implementing or examining a proposal to conduct a gender-based analysis, so yes, I can answer affirmatively to your question.
1:15 p.m.
Conservative
Dan Albas Conservative Central Okanagan—Similkameen—Nicola, BC
If someone is cohabiting with another individual, they will now be able to get up to $20,000. Is that correct?
1:15 p.m.
Senior Director, Social Tax Policy, Department of Finance
The home accessibility tax credit allows individuals who are seniors or persons eligible for the disability tax credit in the year, if they have receipts for work done on their property to promote accessibility or safety improvements, to claim those specific costs up to the current limit of $10,000 and now $20,000.
1:15 p.m.
Conservative