Finance Committee on May 25th, 2023

[Julie Dzerowicz, Liberal, Davenport, ON]

Mr. Chair, I have no clue what the heck Mr. Lawrence is talking about. This is quite an Olympic effort to try to be in any way on topic, but he is failing miserably.

We have heard from our official, who has explained ad nauseam about this clause. I also want to thank her for her time. She has explained why it is prospective versus retroactive. She has explained that very clearly, and I don't have any understanding of what Mr. Lawrence is talking about in relevance to his Maple Leafs example.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Dzerowicz.

We'll go back to MP Lawrence, and we'll thank Ms. Gwyer for her patience and for answering the many questions.

We would ask that you keep to clause 2, MP Lawrence—and relevance, again.

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

Thank you very much.

If my discussion of retroactive taxation is not as illustrative or as clear as it could be, I would make the suggestion of bringing expert witness testimony so that we could discuss this and so that Ms. Dzerowicz could maybe understand some of the finer points of this if I'm not being clear enough.

I would, once again, thank Ms. Gwyer for her testimony.

Getting back to the automobile standby charge, you said you didn't know the case law or the name of the case that triggered this. Were there multiple cases, or was there just the one case?

[Lindsay Gwyer]

I believe there was one case, but I'm not certain.

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

Every time there is a change made to the Income Tax Act, that change has to then be made in both the private sector and the public sector software, with a cost every year to industry and the government of hundreds of millions of dollars.

Is that not correct, Ms. Gwyer?

[Lindsay Gwyer]

I can't really speak to the cost involved in making those kinds of changes. I'm not sure this is a change that would require.... I don't know whether it would require changes to the software that's currently used.

As I said before, it's addressing a really narrow situation, so I suspect it may be consistent that there may not be changes required to the software, but I can't really speak to that. I'm not sure.

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

Thank you very much for that and for your patience, Ms. Gwyer.

My questions are finished for now.

Thank you.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Lawrence.

Thank you, Ms. Gwyer.

We are at clause 2. Shall clause 2 carry?

(Clause 2 agreed to on division)

[The Chair, Liberal, Peter Fonseca]

Members, I'll ask again just to see if the mood has changed.

We have no amendments between clause 3 and clause 70. Do we have unanimous consent to move those?

I heard a no, so we are going to clause 3.

(On clause 3)

Shall clause 3 carry?

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

Mr. Chair, perhaps the clerk would be kind enough to read clause 3 into the record.

[The Chair, Liberal, Peter Fonseca]

Okay. We will have clause 3 read into the record.

I ask that members have the bill—

[Julie Dzerowicz, Liberal, Davenport, ON]

On a point of order, if we have a copy of the bill, why is it that the clerk has to read every single clause, Mr. Chair?

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Dzerowicz.

I was just about to say that members do have a copy of the bill and have the opportunity to read through the bill in front of them. I will ask our patient legislative clerk, Mr. Méla, to read it.

Go ahead, MP Morantz.

[Marty Morantz, Conservative, Charleswood—St. James—Assiniboia—Headingley, MB]

On a point of order, Mr. Chair, I think we have to be cognizant that there are many people watching this meeting who don't have the bill in front of them.

If the public is going to understand what we're debating here, it's very important that we have the clause read out so they're aware of what we're discussing and it's not just an esoteric discussion from their perspective.

[The Chair, Liberal, Peter Fonseca]

Thank you for that, MP Morantz.

For viewers who are watching at this time, or maybe at a later time, the bill is public and is on the record. It is on our website, and you are able to find that piece of legislation there.

The next point of order comes from MP Blaikie.

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

Actually, it's the same point of order.

I heard you saying that you will continue to ask the clerk to read. I would like to express appreciation for that ruling. While I may not endorse some of the tactics that I think are going on in this meeting, I think it's an important right of members to ask that what we're considering be read into the record, for a number of reasons. I would hate to think that because we may have some legitimate grievances about the tactics of the meeting, we would set a poor precedent for meetings that are being conducted in a professional way.

Thank you for your ruling. Please know that there is support for that around the table.

[The Chair, Liberal, Peter Fonseca]

MP Blaikie, thank you.

Mr. Méla, please go ahead.

[Philippe Méla]

Thank you, Mr. Chair.

Clause 3 reads:

3(1) Subclause B(I) of the description of B in subparagraph 8(1)‍(r)‍(ii) of the Act is replaced by the following:

(I) the amount that is the total of the first dollar amount referred to in paragraph(s) and the amount determined for the taxation year for B in subsection 118(10), and

(2) The portion of paragraph 8(1)‍(s) of the Act before the formula is replaced by the following:

Deduction – tradesperson’s tools

(s) if the taxpayer is employed as a tradesperson at any time in the taxation year, the lesser of $1,000 and the amount determined by the formula

(3) Subsection 8(10) of the Act is replaced by the following:

Certificate of employer

(10) An amount otherwise deductible for a taxation year under paragraph (1)‍(c), (f), (h) or (h.‍1) or subparagraph (1)‍(i)‍(ii) or (iii) by a taxpayer shall not be deducted unless the taxpayer’s employer confirms in prescribed form that the conditions set out in the applicable provision were met in the year in respect of the taxpayer and the form is filed with the taxpayer's return of income for the year.

(4) Subsections (1) and (2) apply to the 2023 and subsequent taxation years.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Méla.

I hope that helped, MP Lawrence.

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

Thank you.

It did. It would be great if we could have officials come and explain to us the current state of the law, how the law has changed and how this interacts with the private member's bill put forward by my friend and colleague Chris Lewis, the member for Essex.

[The Chair, Liberal, Peter Fonseca]

That is our hard-working Ms. Gwyer.

Go ahead, Ms. Gwyer.

[Lindsay Gwyer]

I think the private member's bill you're referring to creates a labour mobility deduction. There's no connection between that and this amendment. This amendment would double the amount of the deduction that's available to employee tradespersons for the cost of tools. Currently they're able to deduct eligible expenses related to the cost of tools up to a maximum of $500. That would be doubled to $1,000.

There's also an amendment in clause 3. Subclause 3 relates to the measure on electronic filing and tax compliance. That amendment in subclause 3 relates to an obligation where employees are generally not allowed to deduct amounts in the course of their employment. They claim expenses, subject to certain specific amounts that are allowed to be deducted under the Income Tax Act. In cases where they are allowed to claim those deductions, the employer has to provide a form that says the employee made that payment in the course of their employment. This is an amendment to that form to eliminate the need for signatures on paper. It is designed to facilitate the ability for that form to be filed without needing a physical signature.

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

Thank you for that.

Without the amendment, the current state is a $500 deduction, and now it would be a $1,000 deduction. Is that correct?

[Lindsay Gwyer]

That's right.

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

There is a form that requires the employer's or employee's signature, but this would be removed.