Finance Committee on May 30th, 2022

[The Chair, Liberal, Peter Fonseca]

I call this meeting to order.

I see Monsieur Ste-Marie's hand up.

Monsieur Ste-Marie, I will recognize you after my opening remarks.

Welcome to meeting number 52 of the House of Commons Standing Committee on Finance. Pursuant to the order of reference of May 10, 2022, the committee is meeting on Bill C-19, an act to implement certain provisions of the budget tabled in Parliament on April 7, 2022, 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. Per the directive of the Board of Internal Economy on March 10, 2022, all those attending the meeting in person must wear a mask except for members who are in their place during proceedings.

I would like to make a few comments for the benefit of witnesses and members. Please wait until I recognize you by name before speaking. For those participating by video conference, click on the microphone icon to activate your mike, and please mute yourself when you are not speaking. Interpretation for those on Zoom is available for this meeting. You have the choice, at the bottom of your screen, of the floor, English or French. For those in the room, you can use the earpiece and select the desired channel.

This is a reminder that all comments should be addressed through the chair. For members in the room, if you wish to speak, please raise your hand. For members on Zoom, please use the “raise hand” function. The clerk and I will manage the speaking order as best we can. We appreciate your patience and understanding in this regard.

Pursuant to the motion adopted in committee on Monday, May 9, the committee will proceed today with the clause-by-clause consideration of Bill C-19. We have witnesses from various departments here with us who will be able to answer questions as we move through the clauses of the bill.

I'm recognizing Monsieur Ste-Marie, who has his hand up.

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

Thank you, Mr. Chair.

My point of order is twofold.

First, you all received notice of the motion I wanted to propose at the start of today's meeting. The Standing Committee on Human Resources, Skills and Social Development and the Status of Persons with Disabilities unanimously supported the recommendation to examine division 32 of part 5 of Bill C‑19 separately.

After speaking with Mr. Beech, I want to let everyone know that I will be proposing that motion at a later meeting, not today's.

Second, you also received an amendment that would replace Bloc Québécois amendment 4, BQ‑4. When we get to the amendment, which deals with clause 131, I will propose the new BQ‑4, which you all received.

[The Chair, Liberal, Peter Fonseca]

Has everybody received it? Terrific.

Pursuant to Standing Order 75(1), consideration of clause 1, the short title, is postponed.

We will now go to clause 2. Is there any debate?

(Clauses 2 to 5 inclusive agreed to on division)

(On clause 6)

There is an amendment from the Conservatives, CPC-1. You will find it on page 1 of the amendments. If CPC-1 is adopted or defeated, NDP-1 cannot be moved as they are identical.

MP Stewart, please go ahead.

[Jake Stewart, Conservative, Miramichi—Grand Lake, NB]

Yes, this amendment is important. It would basically have individuals with type 1 diabetes automatically qualify for the disability tax credit by removing the 14 hours a week for life-sustaining therapy. This is a no-brainer. This reduces the administrative burden on Canadians and allows their doctors to focus on their treatment, rather than completing confusing and arbitrary forms. This amendment is endorsed by both Diabetes Canada and the Juvenile Diabetes Research Foundation.

Further, the intent for the amendment is based on a recommendation by Canada Revenue Agency's own disability advisory committee, which the government rejected.

By moving this amendment, we ensure fairness not only for Canadians with type 1 diabetes in my province of New Brunswick, but from coast to coast to coast. This is a rare opportunity for us in this committee to immediately improve the lives of 300,000 Canadians on a bipartisan basis.

Colleagues, it is the right thing to do, and I welcome your support.

I also wanted to read something. I had support from the JDRF, as well as Diabetes Canada. I'll quote from Diabetes Canada and Mr. Andrew Jones, executive director, government affairs, policy and advocacy. He said:

We find that the process for eligibility is full of administrative burdens. Patients are required to fill out lengthy, lengthy forms and communicate with their health care professional. Our major concern is around the [14-hour threshold] per week. [That's arbitrary] what counts towards this 14-hour threshold.... As I said in my opening statement, we maintain that individuals who are on insulin therapy—life-saving insulin therapy—ought to just simply qualify for the disability tax credit.

I have another quote here from JDRF Canada. We were fortunate enough to have them appear before the committee on two occasions. Dr. Alanna Weisman, endocrinologist, speaking about those suffering with type 1 diabetes, had this to say:

...If they were to not administer insulin, after a very short period of time they would be at risk of having dangerously high blood sugars, potentially leading to avoidable hospitalizations, coma or even death.

Our standard of care is to deliver insulin, as we call it, “intensively”, which means either through multiple injections per day with each of those injections needing to be thought about and calculated, or through an insulin pump, which again is still being delivered on a 24-hour basis, still with multiple calculations and adjustments that need to be made each day. Insulin is absolutely a 24-hour, life-sustaining therapy.

Also note that in type 1 diabetes, there are no other medications approved for treatment. We have one medication, and that is insulin.

I move this amendment in clause-by-clause, and I hope that all members of the committee will support it.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Stewart.

I do have a speaking order here. I have PS Beech, then MP Blaikie and then MP Albas after that.

Go ahead, PS Beech.

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

Thank you, Mr. Chair.

Hello, colleagues. I wanted to wish everybody a happy Monday. Thanks for all the work the members and their teams have done over the weekend after receiving the amendments on Friday. I'm looking forward to a thorough, thoughtful analysis of the BIA by all parties, and I would also like to start my initial remarks on this particular amendment by saying I really appreciated what Jake just had to say.

I would also like to salute the advocacy of Mr. Blaikie on this issue, as well as other opposition members, and especially many of my Liberal caucus colleagues, both on this committee and in caucus generally, who have been passionately supporting this type of amendment on behalf of the diabetes community. I have had meetings over the years with children and their families affected by type 1 diabetes, but we have to make sure that we follow the proper processes and not just good intentions, so I want to ask the legislative clerk and the officials present for clarification on this with regard to a procedural matter.

I understand that the proposed amendment would be to the eligibility criteria for a non-refundable tax credit, but I'm also concerned that it would have the direct effect of automatically increasing spending on certain spending measures that base their eligibility on the criteria established for the disability tax credit. Programs such as the Canada workers benefit disability supplement and Canada disability savings grants and bonds pay into registered disability savings plans, which would create a new draw on the consolidated revenue fund that Parliament has not approved. I believe in light of this, NDP-1 and CPC-1—this amendment—require a royal recommendation.

Could we ask officials to confirm if my understanding is correct? Could they provide their analysis on the admissibility of the amendment as it is currently drafted and presented?

[The Chair, Liberal, Peter Fonseca]

Thank you, PS Beech.

We will hear from officials and then I do have a speaking order. It's MP Blaikie, MP Albas and MP Stewart.

Officials, please go ahead.

[Lesley Taylor, Senior Director, Social Tax Policy, Department of Finance]

I'm uncertain if this would be something for us to speak to.

I see my colleague, Trevor, from the legislative branch is here.

Just to confirm, PS Beech, your understanding is the same as ours, having consulted with counsel. This would require a royal recommendation, given the flow-through effects on direct government spending that would be entailed by a change to the disability tax credit criteria.

Trevor, do you have anything additional you want to say on that?

[Trevor McGowan, Director General, Tax Legislation Division, Tax Policy Branch, Department of Finance]

No, thank you. Actually, that's perfect. It's my understanding as well that the effect of the measure would be to eliminate a requirement currently in the rules, which would naturally tend to increase amounts drawn from the CRF, consolidated revenue fund. That would be tantamount to additional government spending.

Those are the factual underpinnings of the comment that it would require a royal recommendation. Of course, that's not for officials to decide.

[The Chair, Liberal, Peter Fonseca]

Thank you, Ms. Taylor and Mr. McGowan.

We're going to hear from the members. Members may have a number of questions.

We have MP Blaikie up next.

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

I do want to speak to the substance of the amendment, but I'm intrigued a little bit by some of the procedural questions.

Currently, the chair hasn't ruled that this is out of order, so I'm just wondering about the appropriateness of having a debate on the substance of a motion if its validity has been called into question and we don't have a ruling on whether it is, in fact, in order.

I could be wrong, but my understanding is that advice on whether a royal recommendation is required would normally come from House of Commons officials, not departmental officials. Until we hear it from House of Commons officials and there is.... I'm happy to get the opinion of a departmental official on the weather, too, but I don't think that what departmental officials think is really germane to our procedural conversations, as the House of Commons, with all due respect to them. I think they have indicated as much.

I'm looking for a little direction from you, Mr. Chair, as to whether a ruling is pending or if you haven't ruled because you're satisfied it's in order and we can move on to the substantive debate.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Blaikie.

As we go through the process, we're hearing from officials. We did hear from PS Beech. I have been conferring with the legislative clerk.

Before making my ruling, I will hear from all the members. Then I will go back to the legislative clerk, and I will be able to inform the members if it is admissible or not admissible.

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

Thank you.

I might take the opportunity, then, to speak to the substance of the amendment and await your ruling on whether it'll be in order or not.

I do think it's an important amendment that has surfaced in a couple of different ways so far. When I had inquired about a similar intent, the legislative drafters produced an identical amendment. It's something I'm very happy to support here at this table. It's something that I think is worth doing, and I think it is a down payment on some larger reform to the disability tax credit eligibility, which has by no means been a problem for only people with type 1 diabetes. It has been problematic in a number of different ways. As Mr. Beech has highlighted, it matters for all sorts of reasons, including people's eligibility for other programs.

On the question of whether it's in order or not, I think it's important to note that if legislators can't have input on the eligibility criteria for a program, then I really don't know what we can do or what purpose we serve. It seems to me that it makes a lot of sense that legislators would be able to weigh in on the program criteria or the eligibility criteria for something like a disability tax credit.

I also note that, typically, private members are only prevented from being able to have a direct spend or a direct appropriation of funds. I think this is one step removed from something that we wouldn't be able to touch.

Here you have the disability tax credit—its own program. It operates by actually forgoing taxes. As a private member, I can't impose a new tax. I can't try to appropriate specific funding, but I should be able to weigh in on the eligibility for a tax deduction, and that's really what we're talking about.

If other programs choose to tie their eligibility to this eligibility, then that's a decision that's been made either by legislators or by government itself, and is incidental to the subject matter we're dealing with now, which is what you have to do in order to get access to the disability tax credit.

Those other programs have said that whatever the eligibility criteria are, that's what we're hitching our wagon to. I don't think the fact that government has decided elsewhere to proxy in eligibility for the disability tax credit should mean that legislators no longer have any right to weigh in on the eligibility for the disability tax credit. I think that would be a strange and perverse outcome that governments could certainly abuse in order to lock in eligibility criteria for all sorts of things.

There's a private member's motion that has actually been incorporated in this bill to establish a new tax credit for tradespeople who are moving around for work. You could argue in a similar way, as has been argued here today, that it's a government expenditure in the sense that the government will now be forgoing tax revenue, but in fact, those kinds of expenditures—tax expenditures—are something that private members are clearly able to establish. All you have to do is survey the private member bill landscape over the last number of Parliaments to see how many members of Parliament bring forward tax deduction schemes as part of their private member's business.

There isn't usually a ruling that says that those would require a royal recommendation, so the fact of government having tied access to other programs to this, I don't think should stand as an argument for legislators not to be able to weigh in on the eligibility for the program overall.

That's what I have to say on the procedural matter, but on the substance of the matter, I don't think there's any doubt. There has been a lot of good work from members across party lines, and my impression, anyway, is that certainly at some tables.... I believe HUMA had this discussion, and there was support from all parties to try to do this.

I've heard positive expressions of support from members of all parties at various times for this proposal, I believe, at this committee. If I'm misspeaking, anyone can jump in to correct me that this isn't something they support. I've seen what I would call an emerging consensus on this, so I think it would be unfortunate if a procedural ruling, which I'm not sure holds up, were to interfere with a cross-party emerging consensus that this is something that's important to do, that would be, as I say—and members can agree or disagree with this part of it—a down payment on larger DTC reforms that are very much needed in a case where it's very clear that people have a condition that requires time, energy and resources to monitor it. That should, in my view, obviously be part of the disability tax credit universe.

Let's please allow us to proceed with making this change, both on the procedural side and on the substantive side.

Thank you.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Blaikie.

I have MP Albas, MP Stewart and then MP Ste-Marie.

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

Thank you, Mr. Chair.

I'll separate my argument into two fronts, again procedural, and then to the substance of the motion itself that my colleague MP Stewart has put forward.

First of all, on the process, when a member connects with the law clerk, it's been my experience that if there are any conditions about inadmissibility, usually the law clerk flags that to the member. The member then takes the risk of presenting to you, Mr. Chair, through the clerk, but then that is usually ruled inadmissible right off the bat, before there can be any discussion.

I understand that you are on the fence on this one, but usually those things get flagged first and then, to be fair, members should be able to put forward motions and hear from their colleagues as to whether they are inadmissible or not. It does highlight the issue, and it is something that I would fight for any member of any party, or an independent, to have, because it is our job to be able to present ideas to other members and to have them at least discussed at that point. If they are ruled inadmissible, then, Mr. Chair, it would be ruled out of order, and then someone could challenge the chair if they so chose.

I really hope we don't take that particular option, Mr. Chair, but I would simply say that this subject came up a number of years ago. Mr. McGowan gave a very similar...when it came to CPP pension changes that we had suggested, despite there being no taxpayer money involved. I'm not picking on him. He's an honourable public servant. CPP, as you know, Mr. Chair, is administered at arm's length and comes from contributions from employers and employees. It isn't tax dollars.

This is a bit of a different matter, but quite honestly I wonder why the government would need to have Parliament if parliamentarians can't say, “These are the terms and conditions for being able to apply, the eligibility for a program.” This is the reason we have Parliament.

Sometimes this government believes, somehow, that it is the decision-maker and that we simply approve everything. We are the ones who represent our constituents. We are the ones, as Parliament, together, the government is tethered to and has to continue to maintain the confidence of.

I would strongly suggest that you allow the amendment to come forward. It is clearly admissible. It should be debated. I find it unfortunate that the government seeks $750 million in this budget bill to give to municipalities on transit before the Province of Quebec goes to an election. I think it's kind of shocking that they say, “It's okay for us to give them very little eligibility criteria for who can apply for that,” and now when we're saying, “Help children with type 1 diabetes to be able to get the disability tax credit,” it's.... I'm a bit aghast.

I will leave it to my colleague MP Stewart to get deeper in on the process, because it is his amendment and he is more than prepared to do that. However, on the motion itself, Mr. Chair, I will say something similar to what MP Blaikie suggested.

We've all talked to young people, through Juvenile Diabetes Research Foundation and Diabetes Canada. We've heard from people who are suffering from it, the families, and how they deal with it. I just want people to be mindful that CRA has, in the past, held up the admissibility of eligibility for someone when they receive the disability tax credit as a minor. They turn 18, and suddenly they aren't eligible anymore.

I've heard from my constituents, for example, the Findlater family in West Kelowna. Their daughter has diabetes. It is indicated to me that they want their parliamentarians to work together because, Mr. Chair, across this country.... There are a lot of great things in this country, but different provinces have different programs when it comes to assisting people with diabetes. Some are more generous, and some are, frankly, less than generous.

One of the most frustrating parts is when you see good people from provinces that do not get the same level of support from their provincial government. It appears to be unfair to many of these children who say, “Do you know what? It shouldn't matter.” Wherever someone is, they should be able to receive the same kind of support.

What we're debating here today, Mr. Chair, is to make a program, a federal program, that applies to everyone who is eligible for it and to make that process fair and accessible with some constraints. The 14 hours, it's been pointed out, has some challenges for people. What we're trying to do is make it easier at the federal level. Someone gave me some wise advice. They said, “Dan, you can't always make life easy, but you can always try to make things easier.” This is a small, tangible way.

Lastly, Mr. Chair, I'm going to remind members that the disability tax credit is one thing. As my colleague said, it's a non-refundable tax credit, but what is also so vital about this program is that it is the gateway to a disability retirement savings plan. It allows for children and adults to put money away and to have that money grow tax-free until they grow old. Oftentimes they may not get the same opportunities to work and to save for their own pension, and they can then supplement their income in their old age.

The challenge we have is that many young people with diabetes are eligible for the DTC until they turn 18. Then under this rule the CRA rules them as being inadmissible. The problem with that is that the disability retirement savings plan that was set up in their name now becomes forfeited. They have to close the account, the government takes the moneys that were put into it as grants, and then they have to pay tax on any interest earned on the investment or savings in that.

Mr. Chair, I'm pointing out that this is not just about saving more of people's money. This gives Canadians, especially those young people, the ability to save for their retirement. They are ineligible for that retirement savings plan if they do not have access to the DTC.

To all honourable members, we may not be able to make everything easy for people who have type 1 diabetes, but across this country, with this amendment, we can start to make it a little bit easier and allow people to focus on their health and on saving for their retirement.

Thank you.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Albas.

Members, we've heard some great discussion here. What I'm going to do is suspend for a couple of minutes to confer with the legislative clerk, and then I'll come back to members.

[The Chair, Liberal, Peter Fonseca]

Members, I have conferred with the clerk. I still had some others on the speaking list. I had MP Stewart and MP Ste-Marie.

Just before I bring my ruling, we have MP Stewart.

[Jake Stewart, Conservative, Miramichi—Grand Lake, NB]

Thank you, Mr. Chair.

Obviously this is a very important amendment to a lot of Canadian citizens that have type 1 diabetes. As parliamentarians we come here and a lot of the time we debate finances and money. This is actually something we can do that's really good and will help a large group of people across the nation. I think that goes without saying, and this is the type of amendment that should have all-party support.

I want to talk a little bit about the fact that I submitted this 12 days ago. Constitutional lawyers were sought in the preparation for it. As national revenue shadow critic, I had to get support from my party. I achieved that as well as the members of the committee—

[A voice]

I don't have anything to say on the policy side of things, I just wanted—

[Jake Stewart, Conservative, Miramichi—Grand Lake, NB]

What is this?

[A voice]

He doesn't know he is on. It was an accident.

[Jake Stewart, Conservative, Miramichi—Grand Lake, NB]

Mr. Chair, I'm going to read to you a couple of really important facts about the fact that this went in 12 days ago. It went through the shadow ministers' channels, the opposition channels—with my party, of course—with the members of the finance committee, with the clerk's office, with the lawyers who are already on hand and, as I mentioned earlier, constitutional lawyers who were acquired to draft this. Now I'm going to read you some very important points that will cover all of the questions we've been hearing.

Number one, the disability tax credit is a non-refundable tax credit. It does not require either a royal recommendation under section 54 of the Constitution Act, 1867, which authorizes new spending. That's a very important fact right there.

Number two, because the disability tax credit lowers taxes payable to persons with disabilities, it does not infringe on a financial initiative of the Crown and does not require a ways and means motion to authorize the imposition of new taxes.

Number three, although there may be certain programs that use the disability tax credit for their eligibility, this is a separate matter that is covered by a different royal recommendation.

If this amendment were even remotely inadmissible or somehow out of order, with all of the expertise we have in the House of Commons and with the members of the committee and everyone that's employed on this Hill, it would not take 12 days to tell me that. Believe me. We have a lot of highly intelligent people around here, and we want to keep that good name for the people of this country who are watching at home and expect the business of government to run in a proficient and intellectual manner.

We know that I've answered every question that was asked beforehand. We need to support this to help people with type 1 diabetes.

Thank you.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Stewart, and thank you for your passion, your hard work and what you've done to bring us here.

I'm just going to go to MP Ste-Marie before I give my ruling, because he's had his hand up for quite a while.

MP Ste-Marie.

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

Thank you, Mr. Chair.

I was convinced of the importance of Mr. Stewart's amendment when we heard from the witnesses on the matter. I was particularly moved by the stories we heard, so I will be voting for the amendment.

I also want to tip my hat to Mr. Stewart for all his hard work before putting forward this amendment. It's the sort of measure we must propose, as members of the Standing Committee on Finance, in order to improve budget implementation bills.

I also want to recognize Mr. Blaikie, who put forward the same amendment, so this is not just Mr. Stewart's amendment, but also Mr. Blaikie's.

I will be supporting the amendment, and I really can't see any reason why you would consider it inadmissible, Mr. Chair. I am appealing to your good judgment.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Ste-Marie.

Again, we also want to thank MP Blaikie, MP Stewart and really all MPs that have come before this committee to speak to this very important measure and how the disease affects so many people, especially our young people with type 1 diabetes.

Members, after my discussions with the legislative clerk, I'm ready to give my ruling on the procedural admissibility of amendment CPC‑1. As House of Commons Procedure and Practice, third edition, states on page 772:

Since an amendment may not infringe upon the financial initiative of the Crown, it is inadmissible if it imposes a charge on the public treasury, or if it extends the objects or purposes or relaxes the conditions and qualifications specified in the royal recommendation.

Based on the information provided by the officials, the chair is of the opinion that the amendment could impose a change on the public treasury. Therefore, I rule the amendment inadmissible.

Amendment NDP-1 is also inadmissible since it is identical.