Finance Committee on May 31st, 2022

[The Chair, Liberal, Peter Fonseca]

I call the meeting to order. Welcome to meeting number 53 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.

As per the directive of the Board of Internal Economy of March 10, 2022, all those attending the meeting in person must wear a mask, except for members who are at their place during proceedings.

I would like to make a few comments for the benefit of the 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. For interpretation, for those on Zoom, you have the choice at the bottom of your screen of floor, English or French audio. For those in the room, you can use the earpiece and select the desired channel.

I remind everyone 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 well as we can, and we appreciate your patience and understanding in this regard.

Pursuant to the motion adopted in committee on Monday, May 9, the committee will continue 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.

Members, I see a couple of hands up. I see Mr. Albas and then Mr. Ste-Marie.

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

Thank you, Mr. Chair.

I hope Mr. Ste-Marie can forgive me, simply because I know his issue is very important. I've been advised, though, that it would probably behoove all of us to perhaps start with reconsideration of clause 131. It seems the other day we were making good progress. The exception, as was pointed out by officials, was that the amendment I was going to put forward amended the wrong section. I thank all members for responding back later that perhaps there is some willingness today. I guess I'll test it now, Mr. Chair.

Again, to MP Ste-Marie, it's been pointed out to me that we need to look at clause 131 first before proceeding to some of the amendments that he would like to see happen.

For good process, Mr. Chair, let me just start off by asking the committee for unanimous consent to reopen discussion on clause 131.

[Some hon. members]

Agreed.

[The Chair, Liberal, Peter Fonseca]

I'm seeing thumbs up.

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

Thank you, committee members.

I would also like to ask for unanimous consent to be able to amend clause 131 as it was previously amended by Mr. Ste-Marie.

[Some hon. members]

Agreed.

[The Chair, Liberal, Peter Fonseca]

Again, we have unanimous consent.

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

Okay. Mr. Chair, I would like to put forward again our CPC amendment. This was recently sent out by the clerk, I believe. I hope all committee members have had a chance to take a look at it. It just changes the language to say that this would have referred to clause 131.

This amendment to the amendment would simply defer, until January 1, 2023, the application of excise when it comes to beer, wine and spirits—particularly, in this case, wine. I gave much of my rationale yesterday. The rationale still stands. Many of our wineries have had such a hard and difficult time since COVID. The impact to their bottom line has been tremendous. Because of supply chain issues, many are unable to secure the bottles they need in order to bottle by July 1, when the new excise provisions that are contemplated in Bill C-19 would take effect under the current reading. This would essentially give them that extra time.

I also want to be mindful that, for many wineries, especially the small and medium-sized family wineries, many have never paid excise, because they use 100% Canadian-grown content. I'm not going to rehash old debates today about the Australian wine WTO challenge and where it led us to, other than to say that these wineries need our help. The Australians stood up for their wine industry because of what they felt was unfair treatment towards domestic product versus their product due to the escalator only applying to foreign product or product made with less than 100% Canadian content.

Mr. Chair, what I'm asking for here is a deferment. This would give them the time to bottle. I also believe it would dovetail with the government's strategy, because it has not fully unveiled what its replacement program would be. There have been discussions with the industry and commitments made by the government in this budget. Some of the numbers are still under question, but the actual formation of that program—who receives it, and at what amounts—has not been made public to the industry. This would give the industry that extra time. It would also give the government extra time to make sure that everyone knows their obligations under the law. I would just ask for all honourable members to support this important bill.

Again, I recognize that the Canadian government, before COVID, made commitments. The Australian government stood up for its producers. All I'm asking for is a deferment. I don't think the Australians, considering there's a new government there, would look at it as out of hand to say that we are implementing this to keep as many small and medium-sized wineries open so that they can begin to understand their obligations under this new law.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Albas.

Mr. Beech, do you wish to speak to this?

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

Yes.

Good morning, members. It's good to see everybody. I want to take a moment to thank everybody for being very communicative over the last 24 hours, and to thank Mr. Albas for his advocacy for our producers in B.C.

We have some concerns on the implementation. The extension of this date would actually have some impacts in terms of increasing some excise that would be collected from small producers. We will be voting against it.

Thank you, Mr. Chair.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Beech.

I see no other hands up.

Just so that everybody is clear on this, we'll hear from the legislative clerk.

[Jacques Maziade, Legislative Clerk]

Mr. Albas, I just want to make sure I understand your amendment correctly.

BQ-4, which was adopted yesterday, stays the same except for this: “Subsection (1) applies after June 29, 2022” becomes “Subsection (1) comes into force on January 1, 2023.”

Am I correct?

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

You are correct, sir. Thank you.

[The Chair, Liberal, Peter Fonseca]

Members, shall—

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

Mr. Chair, Darren D'Sa wanted to say something. We could do with his insight on this.

[The Chair, Liberal, Peter Fonseca]

I apologize. I didn't see the hand.

Mr. D'Sa, you have the floor.

[Darren D'Sa, Advisor, Tax Policy, Department of Finance]

Hello. I'm sorry. I'm not sure whether this is the time for this question.

Part of our issue as officials is that we don't have the text of either BQ-4 or the modified CPC-5 before us, so we can't fully comment on whether the motions are complete. We don't know whether they're complete in the sense that they're amending all the sections they intend to amend.

[The Chair, Liberal, Peter Fonseca]

Mr. D'Sa, those are never shared; they are confidential.

[Darren D'Sa]

Okay.

The other thing we should mention is that the difference between the version of amendment BQ‑4 that we received on Saturday and at least this version of BQ‑4 is that this version of BQ‑4 presents some WTO concerns in the sense that this would maintain the exemption for domestic cider and meat, but the excise duty would continue to apply to imported cider and meat. This would make us inconsistent with our international obligations under the WTO and under other international trade agreements.

[The Chair, Liberal, Peter Fonseca]

Mr. D'Sa, this was circulated yesterday, the change. There is a new BQ‑4.

[Darren D'Sa]

Okay, so, yes, it is the updated amendment BQ‑4, which we didn't have, that presents that issue, and the modified amendment CPC‑5—

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

Mr. Chair, on a point of order, I appreciate the comments coming from the officials, but, given that there was no request from members and that a lot of conversations have happened over the last 24 hours, I think we should at least check if people are willing to get to the votes and carry on.

[The Chair, Liberal, Peter Fonseca]

Do members agree?

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

I'd like a recorded vote, please.

[The Chair, Liberal, Peter Fonseca]

Shall amendment CPC‑4.1 carry?

(Amendment negatived: nays 6; yeas 5 [See Minutes of Proceedings])