Finance Committee on May 31st, 2022

[The Chair, Liberal, Peter Fonseca]

Members, after conferring with the legislative clerk, I will rule that CPC-6.1 is inadmissible, as it goes against the ways and means motion.

[Adam Chambers, Conservative, Simcoe North, ON]

Like my colleague Mr. Ste-Marie, I'd suggest an amendment to create a floor threshold in normal circumstances. However, knowing the ultimate fate of the amendment, we can continue moving along. I thank the committee for its indulgence in humouring me on this one. I certainly hope that Parliament will reconsider this at a future date, in order to keep it consistent with other legislation.

[The Chair, Liberal, Peter Fonseca]

I see Mr. Albas has his hand up. A chair's ruling is not debatable. I don't know whether this is on my ruling or something else.

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

It's on something else.

[The Chair, Liberal, Peter Fonseca]

Go ahead, Mr. Albas.

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

Thank you, Mr. Chair.

In regard to future thinking, I remember a time when the Liberal party first came in and made changes to the Canada child benefit. Later, upon criticism, they ended up adding an escalator to it. It's a comment about the legislation. They're probably going to have to revisit this. They will then send a thank-you note to Mr. Chambers.

[The Chair, Liberal, Peter Fonseca]

Mr. Albas, thank you.

We'll move on to BQ-9.

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

Thank you, Mr. Chair.

I will give an example to illustrate the amendment.

Say helicopter manufacturer Bell Helicopter makes an aircraft that it sells to a mining company for that company's operational requirements. When the mining company is not using the aircraft, it may very well turn to an air charter company to rent out the aircraft during downtime. If the air charter company rents out the aircraft for personal use for more than 10% of its total use time, Bell Helicopter—not the mining company or the air charter company—has to pay the luxury tax at the time of sale.

How do you measure that at the time of sale? It's impossible, so that's why BQ‑9 excludes “an aircraft rental service in the course of a rental business” from the tax.

When it comes to potential scammers looking to use this as a way to avoid paying the tax, I would remind the committee that the Canada Revenue Agency still has the general anti-avoidance rule. Under the rule, the agency can assess whether or not a transaction is undertaken for bona fide purposes, forcing someone who sets up a shell company to pay the tax.

The purpose of the amendment is to support the industry, as well as ensure a better application of the tax so that it does what it was meant to and does not unduly hurt the industry.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Ste‑Marie.

Is there no debate?

Shall BQ-9 carry?

[Yvan Baker, Liberal, Etobicoke Centre, ON]

I'd like a recorded vote.

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

[The Chair, Liberal, Peter Fonseca]

We'll move on to BQ-10.

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

Thank you, Mr. Chair.

In the legislation, the threshold for personal use of an aircraft is set at 90%. BQ‑10 would reduce that to 75% to provide a bit more flexibility to address all the issues that have been raised.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Ste‑Marie.

Shall BQ-10 carry?

[Yvan Baker, Liberal, Etobicoke Centre, ON]

I'd like a recorded vote.

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

[The Chair, Liberal, Peter Fonseca]

Now we have an amendment from the Conservatives.

On CPC-7, we have Mr. Albas.

[Adam Chambers, Conservative, Simcoe North, ON]

It's Mr. Chambers, Mr. Chair.

[The Chair, Liberal, Peter Fonseca]

Pardon me. We have Mr. Chambers.

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

He's much more capable.

[Adam Chambers, Conservative, Simcoe North, ON]

Thank you, Mr. Chair.

Keeping in line with some of the principles in other industries, the effect of this amendment, we believe, would be that it would apply the luxury tax on the net, or the difference, between a vessel that was traded in or a good that was traded in, and the new purchase, such that the tax would apply on the difference. This, I think, would also help those in the industry maintain parity with what I understand happens in the car industry. I was surprised to learn that this was the case on the GST, as an example, but since it is a benefit provided in the car industry, I think a similar principle would apply here.

I'm happy to go to a vote.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Chambers.

Shall CPC-7 carry?

[Yvan Baker, Liberal, Etobicoke Centre, ON]

I'd ask for a recorded vote.

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

[The Chair, Liberal, Peter Fonseca]

Now we're moving to BQ-11.

We're still on clause 135, members, at amendment BQ-11.

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

BQ‑11 would slightly relax the rules when a manufacturer sells the aircraft to a company. The wording of the requirements at the time of sale is slightly less stringent.

Thank you.

[The Chair, Liberal, Peter Fonseca]

Merci, Mr. Ste-Marie.

Shall BQ-11 carry?

[Yvan Baker, Liberal, Etobicoke Centre, ON]

I'd like a recorded vote.

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