Finance Committee on Dec. 13th, 2021

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

There has to be some logic. Earlier, it was determined that we would ask the officials only technical questions, and that would be after the proposal was passed. In other words, as long as the proposal has not yet been adopted, we cannot discuss it. That's what was decided for Mr. Blaikie's amendment.

Now we have an amendment that we are going to vote on. The intent is similar to what was raised earlier. As we said earlier, we need to pass the proposal before we ask the officials questions. We are in the process of asking the officials questions before we pass it.

I don't have a problem with that, but I would like to see some rigour and consistency.

[The Chair, Liberal, Peter Fonseca]

Okay. Thank you, Mr. Ste‑Marie.

Mrs. Chatel, you have the floor.

[Sophie Chatel, Liberal, Pontiac, QC]

When you write proposals on the fly, there's a risk.

I have a lot of questions.

What is “taxable dividend”? Does it include the increase of the paid-up capital or not? I don't know. What's a “holder”? Can you find it in the Income Tax Act? No. Who holds, and how do you hold? What do you mean by “holder”? Who is a holder? I don't know. You will need the definition. What is a subsidiary? Is it wholly owned or partially owned? When do you decide it's a subsidiary?

This is not serious drafting. I see five problems with this particular definition. It doesn't fit in the Income Tax Act. There's a risk. If this committee wants to do some drafting, it has to be more rigorous, because we are creating a problem for taxpayers. Despite what my colleagues want to achieve, it's not rigorous and it is not the way people do drafting in this country.

[The Chair, Liberal, Peter Fonseca]

Mr. Chambers, go ahead.

[Adam Chambers, Conservative, Simcoe North, ON]

Thank you, Mr. Chair.

I actually think that this is a fairly serious attempt, and I thank Ms. D'Souza for working on a very short timeline to give us a workable amendment. I would say that it would only be applied to those taxpayers and situations that CRA determines to apply it to and issue an interpretive bulletin to that effect. I do believe they will have a significant amount of time to clarify any ambiguity or vagueness.

For that reason, I think it's incredibly reasonable. I think it's actually a miracle that we had Ms. D'Souza available at our disposal, and I thank her very much for that work. I look forward to the good work of CRA to clarify this for us upon royal assent.

Thank you.

[The Chair, Liberal, Peter Fonseca]

Thank you.

Mr. Blaikie, go ahead.

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

I would likewise offer my thanks to Ms. D'Souza.

I would suggest again that if we don't do something about this tonight, nothing is going to get done about it. It may be the case that within the finance department and the CRA, people on the government bench are able to come up with a better amendment—and this may be the case, because I see a lot of agreement around this table.

Say the government had an amendment that actually dealt with this in a way that they thought was acceptable. Then they might be able to propose an amendment to the legislation in the House by unanimous consent. It seems to me that there's a lot of goodwill around the table. But if we don't pass an amendment, then it will be a non-issue and the government won't do that work. They won't come to the House with anything.

I'm willing to bet that if it's as much of a problem as people on the government bench say it is, they can develop a solution in a timely way and we can get this done properly, but if we pass up the opportunity to make some progress tonight, then we won't see anything done about it at all. That's why I'm quite happy to support amending this legislation in the modified way that we've come to an agreement on, either with Mr. McLean's original language or with the language of the drafter. I have a higher level of comfort with language vetted by the drafter, so that would be my first pick.

I think we need to create a sense of urgency by showing the legislative intention to do something about this problem in respect of dividends. If there's a better answer out there, the government should be telling its folks to develop a better solution within the next few days and bring it to the House. There's nothing we can't do in the House of Commons by unanimous consent.

[The Chair, Liberal, Peter Fonseca]

Thank you.

Mr. Beech, go ahead.

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

Thank you.

I take the last member's point of what we can and can't do in the House quite seriously.

I had prepared, before we moved to the 9:30 hold and then the drafting, a series of issues with the original NDP-4. A number of those revolved around dividends. Members around the table raised the issue of preferred shares, assumably taxable but treated more as a debt instrument than as a dividend payout. There were issues that would arise within a group of companies if dividends were put out by one company within that group but the wage subsidy was collected by another.

My greatest concern, which has already been raised by one of my colleagues, is that if we put forward legislation like this—which is drafted with incredible implications on the fly—we may not get the results we want, although there are other methods to get the results we want that may not be resolved in the next nine minutes.

Earlier this evening, we had an amendment presented to address a concern that I think was raised by Mr. McLean, and the intent of the motion was clarified by Mr. Poilievre. With regard to an extension of a time limit, the intention of the amendment was to not make funds available or to not allow the government to extend further benefits without having to come back to the House of Commons. At least, that was the concern, as I understood it, that was raised by our Conservative friends around the table. The effect was to stop the post-verification of the program, which is something that all of us, over the course of the last week, have discussed the importance of. So—

[Greg McLean, Conservative, Calgary Centre, AB]

I have a point of order, Mr. Chair.

Mr. Beech is prattling on about something extraneous that we've already yielded to. It is decided. Can we get to the point on the motion at hand?

[The Chair, Liberal, Peter Fonseca]

That is not a point of order.

Go ahead, Mr. Beech.

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

To my friend Mr. McLean, I was actually just concluding. I'm happy to yield the floor, having made my point.

Thank you, Mr. Chair.

[The Chair, Liberal, Peter Fonseca]

I see no further discussion.

We are looking at the amendment to NDP-3.

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

May I ask a quick question?

[The Chair, Liberal, Peter Fonseca]

Go ahead, Mr. Blaikie.

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

This is a question for Mr. McLean. We have his original suggestion, which is the wording in the subamendments that have been moved, and then we have the wording that's been proposed by the drafter. I'm wondering how we're going to proceed. If Mr. McLean would rather we vote on the language from the drafter, I'm happy to do that. If he'd rather have a vote on his original language, that's fine too.

I want to know from you, Mr. Chair, how we're going to proceed, but first I'd like to hear if Mr. McLean has some reflections on that. I would appreciate hearing them.

[Greg McLean, Conservative, Calgary Centre, AB]

Thank you.

I think that the legislative drafter is more experienced at this than I am, and it is a friendly amendment to your motion, Mr. Blaikie. If you are more comfortable with that draft, I think you should move that and it should be part of your amendment.

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

Sure. I would happily substitute the language of the drafter for Mr. McLean's language in the subamendments for NDP-3 and NDP-4, if we can do that all at once. If we need to do that on NDP-3 and then have that brought to the committee in the next five minutes for NDP-4, so be it.

[The Chair, Liberal, Peter Fonseca]

Go ahead, Philippe.

[Philippe Méla]

Mr. Blaikie, we won't be able to do NDP-3 and NDP-4 at the same time, because the language may be different in NDP-4. What the drafters wanted was to adopt the language. Once the language is adopted, they can draft it for NDP-4, because the paragraph is not the same.

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

Okay, in order to have two votes that are going to be consistent with each other by virtue of the clock, we need to vote on Mr. McLean's original language anyway.

In that case, I think consistency would be better than inconsistency, and we should probably go ahead with a vote on Mr. McLean's language.

What we are told is that we could vote on amendment NDP‑3 as written, but that the wording of amendment NDP‑4 would be different. So if we were to pass NDP‑3, that would be problematic, because NDP‑4 would be worded differently from NDP‑3.

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

We could simply write “dividends taxable to an individual who is the shareholder.”

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

My own point of view, Mr. Chair, is that what the drafter has done is similar in form to what Mr. McLean was doing, in that she has pretty much replaced “dividends” with a term. If it's possible to just swap out those terms, then we may be able to do this ourselves.

[The Chair, Liberal, Peter Fonseca]

What are you proposing? Is this Mr. McLean's draft, or is this Ms. D'Souza's draft?

[Sophie Chatel, Liberal, Pontiac, QC]

Mr. Chair—