Finance Committee on Nov. 2nd, 2022

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

Thank you, Mr. Chair. I will begin by reiterating my full confidence in the way you are managing this committee.

In the first hour of debate, our esteemed colleague Sophie Chatel raised a number of concerns about this bill. As I said earlier, our goal here, all of us together, is to improve the bill and to make sure that it fulfils its objectives. I wanted to check with you to see if you had any comments on that.

Among the points raised, our colleague said that if Bill C‑241 were to be passed, there would be a double deduction, given that Bill C‑19 has already been passed. We know this and we need to find a solution to this problem.

She also said that a worker could claim expenses for travel to the United States if they go there to work. I would like to hear your comments on this. If we wanted to limit this type of expense in the event that a person went to work abroad, how could we proceed? Again, if you don't have an answer immediately, you can provide one in writing to the committee.

Also, the Income Tax Act states that if a supervisor gives an allowance for a worker's travel, they cannot claim those travel expenses. However, what if it is not an allowance, but some other form of expense payment? Do you think this could open the door to some abuse? If so, how could the bill be improved to avoid such abuses?

[Lindsay Gwyer]

I'll start with the point on double deductions. Both deductions would, as I mentioned earlier, apply in very similar circumstances. There are restrictions on both with respect to what can be deducted and with respect to what has been deducted under other provisions of the Income Tax Act, so the same expense would not be able to be deducted under both of the deductions.

In terms of being able to go and travel abroad, as I mentioned there's no restriction in Bill C-241 as to where the workplace needs to be located. Bill C-19, the existing law, does require that the work location be in Canada. That's there to address the issue of someone going to work in another country and claiming the deduction.

Then on the last point, the existing law sets out specifically what travel expenses would be acceptable: the travel expenses relating to one round trip, so costs of a flight or of gas or of whatever means by which the commuting is done; the cost of meals incurred on that round trip; and then, potentially, temporary lodging if the person maintains their existing lodging in their ordinary place of residence.

Those are the ways those concerns are addressed through the deduction that was passed in Bill C-19.

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

Thank you very much.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Ste-Marie.

Now for our final questioner, we're back to NDP MP Daniel Blaikie.

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

Thank you very much.

I just want to continue on down the table here.

When we talk about the distance calculation under the two laws, there are some additional conditions for what's currently in the statute, including relocation to a temporary work location, being away from your ordinary residence for at least 36 hours and residence at a temporary lodging.

Again, I'm thinking about somebody who's working on a project in Portage la Prairie, say, who is commuting daily out of Winnipeg. They're travelling over 120 or even over 150 kilometres from their home in order to do to a job. The Roquette pea plant was a big job in the Portage la Prairie area for a while. I know a number of guys who were working on that job for a couple of years. Under Bill C-241, they would have been allowed to deduct those expenses to travel to that site, but under the current statute they would not because they would not be away from their home for 36 hours and they're not residing in temporary lodging? Is that a fair characterization of the difference between the two proposals?

[Mark Maxson]

That's right. The existing deduction does not allow daily commuting expenses on the basis that those are considered a personal expense for all employees regardless of their industry.

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

Another characteristic in the table here is the nature of the eligible expenses. Under the current provision, eligible temporary relocation expenses include—I think these were mentioned—transportation expenses of one round trip, meals during the round trip and temporary lodging, and under Bill C-241 it is expenses incurred for travelling to and from the job site.

Again, what would be the practical difference? Is it that under Bill C-241 you could have a job that's relatively far from home but still within commuting range and you could deduct some of those expenses?

[Mark Maxson]

That's one difference. There's a question in my mind. It would again be up to CRA to interpret what travel expenses to and from the work site means. It's not entirely clear to me whether that would include lodging if they did choose to stay overnight. That would be something CRA would have to provide guidance on, I think.

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

Okay.

If I was self-employed, it was my own business and I was travelling to a job in Portage, would I be able to claim gas, mileage and meals even if I'm returning to my principal residence at the end of the day?

[Mark Maxson]

If it was daily commuting, it would not be deductible. If it was just a one-off job you were doing for the day....

Maybe Lindsay can jump in. She's more familiar with the business side—

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

If it's my company, and I'm hired to do a job out in Portage la Prairie, and the job is going to last for two months, say, is there a threshold in the current income tax law at which point that becomes a regular commute as opposed to a temporary job? Every job in construction is temporary. You're always working yourself out of a job. There is no permanent construction job. That's a maintenance job. As long as you're doing construction, it's a temporary job.

[Lindsay Gwyer]

The general rule is that, if it's a personal expense, it's not deductible, even if you're carrying on a business. That's interpreted to mean that, if you're commuting to and from work, then any of those expenses are not deductible. If you're working at different places every couple of months, I don't know exactly where the CRA draws that line, but the general rule is that travel between work and home is not deductible for business purposes as well as employment purposes.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Blaikie.

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

Thank you, Mr. Chair.

[The Chair, Liberal, Peter Fonseca]

I want to thank the witnesses—

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

Mr. Chair, I have a point of order before you excuse the witnesses.

You put in committee business at the end without giving us notice. I believe you need unanimous consent to do that. I think these witnesses are doing a fantastic job, so I would like the remainder—

[The Chair, Liberal, Peter Fonseca]

It is not necessary, MP Lawrence.

To the witnesses, thank you for your testimony and thank you for the many technical questions you answered today. I think members asked about definitions. If you could bring that and some of the other information members require back to our committee, that would be terrific.

We will now allow our witnesses to exit. Again, we thank them very much.

Members, we are going to have a quick discussion—I see that MP Beech's hand is up—but I first want to inform you that we have worked with the Governor of the Bank of Canada on scheduling. I'm happy to let everybody know that the governor will be available to come before us on November 23 for a meeting here.

As I said, we will now carve out a little bit of time here for future business.

MP Beech, your hand is hand up.

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

Thank you, Mr. Chair.

I have a motion that I gave to the clerk, who should feel free to distribute it. I have also provided this motion to all parties. We've had discussions over the last 24 hours. I'll read it now—

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

Mr. Chair, I don't believe we had two days' notice, as required, so that's out of order.

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

I think we're in committee business.

[The Chair, Liberal, Peter Fonseca]

MP Lawrence, you are right about the two days, but we are in committee business and we can discuss committee business. MP Beech can—

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

I'm sorry. On a point of order, Mr. Chair, at any point the Liberal chair can call committee business and put in any motion he wants. That doesn't sound correct. I don't think that's consistent with Bosc and Gagnon.

[The Chair, Liberal, Peter Fonseca]

MP Lawrence, it can be any chair, and any member may bring forward any motion and any business that they would like.

At this time, MP Beech has the floor.

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

Thank you, Mr. Chair.

I'll read that motion, as follows:

That the Chair schedule meetings to initiate a pre-study on the Act to implement certain provisions of the fall Economic Statement and that the first meeting take place on Monday, November 14, 2022, should legislation be presented in the House by that time and, that the Deputy Prime Minister and Minister of Finance be invited to appear with her officials on the bill; and that all evidence gathered as part of the pre-study be considered as evidence in the committee's full study of the bill.

Mr. Chair, this motion is very similar to what we did with the budget. It's just to make sure we can get to the important business of the fall economic statement when it lands.

There have been discussions. I think we're all aware of where those discussions are. I think we can all agree that very shortly we're going to see where this is heading. If it's getting to a point where the Conservatives have to hold the floor, I'm more than willing to suspend in committee business and try to resolve this amicably over the next couple of days.

With that, I'll cede the floor.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Beech.

I have MP Lawrence and then MP Morantz.