Finance Committee on Jan. 26th, 2026

[The Chair, Liberal, Karina Gould]

I call this meeting to order.

Welcome, colleagues, to meeting number 19 of the House of Commons Standing Committee on Finance. It is our first meeting of 2026. It is great to see everybody. I hope everybody had a good break and is ready for the study of the budget implementation act.

Pursuant to the order of reference of Wednesday, December 10, 2025, and the motion adopted on Wednesday, December 10, 2025, the committee will commence consideration of Bill C-15, an act to implement certain provisions of the budget tabled in Parliament on November 4, 2025.

Given the number of officials who are appearing before the committee, the meeting is divided into two panels. The first hour will focus on tax-related measures, parts 1 to 4. The second hour will focus on non-tax measures, part 5, divisions 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 22, 26, 37, 38 and 45.

With that, I would like to welcome our witnesses.

Normally, I would introduce everybody, but there are a lot of you. In the interest of time, committee members have received a list of the witnesses. I will encourage you to look at that and to choose who you direct your questions to.

There are no opening statements, so we will proceed to the first round of questions.

I have Mr. Kelly opening for six minutes.

[Pat Kelly, Conservative, Calgary Crowfoot, AB]

Thank you, Chair.

Among the witnesses, I'm not certain who is best, so amongst yourselves perhaps select who can answer questions about the Infrastructure Bank.

Under division 4, there is to be a $10-billion increase to its funding envelope.

My first question is on whether the Infrastructure Bank is on track to reach its target of disbursing $35 billion by 2027-28.

We have a lot of officials here. We're here to do parts 1 to 4. Do we have someone who can speak about the Infrastructure Bank?

[Pierre Leblanc, Director General, Personal Income Tax Division, Tax Policy Branch, Department of Finance]

Thank you for the question.

Is that in part 4 or part 5 of the bill?

[Pat Kelly, Conservative, Calgary Crowfoot, AB]

I think it's in part 4, but it could be—

[The Chair, Liberal, Karina Gould]

Is there anyone who's able to respond on the Infrastructure Bank?

[Pat Kelly, Conservative, Calgary Crowfoot, AB]

Either way—

[The Chair, Liberal, Karina Gould]

I'm sorry, Mr. Kelly. It's actually in part 5. There will be officials for the second hour who can do part 5.

[Pat Kelly, Conservative, Calgary Crowfoot, AB]

All right.

If we're going to discuss parts 1 to 4 then.... In annex 2 of the budget—this is about the capital framework presented in annex 2—there is a change to how the Department of Finance is going to determine which different categories expenditures fall into.

Does the Department of Finance have a rubric or a chart for deciding which of the new spending categories different items will fall into?

[Pierre Leblanc]

That's a good question.

We're quite a few officials, but we're here to talk about parts 1 to 4 of the bill. We just want to be able to give good answers to questions. That's what we're in a position to do: to give good answers to questions on those parts of the bill.

[The Chair, Liberal, Karina Gould]

Is there anyone who can discuss annex 2?

[Pat Kelly, Conservative, Calgary Crowfoot, AB]

This is in the budget itself, which this act implements. We're here talking about the implementation of the budget.

One of the important, notable items in the budget is the reclassification of expenditures. I wonder if an official can give us some insight into how categories will be determined in the budget.

[Pierre Leblanc]

The best we can do is bring it back to our colleagues to provide you with a good answer, or perhaps it could be posed at a future meeting.

[Pat Kelly, Conservative, Calgary Crowfoot, AB]

Parts 1 through 4 contain some tax reductions and some tax eliminations, such as with regard to the digital services tax and the underused housing tax. Can an official discuss how these tax eliminations will address the productivity crisis in Canada and how we might get to a more productive economy and a more effective taxation system that will stimulate investment, as has been described by the government?

No...? What about the removal of the digital services tax? Can somebody even talk about that, then?

[Maximilian Baylor, Director General, Business Income Tax Division, Department of Finance]

You mentioned two measures. I can respond to certain tax measures aimed at encouraging productivity and growth. There are probably three. A number of the measures are in the bill.

The first is referred to as the productivity superdeduction; it is basically a series of accelerated depreciation measures. They accelerate the rate at which firms can claim depreciation, which encourages investment and is broad-based, applied to most investment assets in the economy.

[Pat Kelly, Conservative, Calgary Crowfoot, AB]

Since you're addressing this particular tax, what is the expectation on investment activity as a consequence of it?

[Maximilian Baylor]

I'll make three points on that. First, as for the quantum for the portions that are in the bill in terms of accelerating through the productivity superdeduction, it's about $17 billion in reduction in taxes. Those are accelerated tax reductions. Eventually they unwind, but in terms of the budget horizon, it's about $17 billion. That affects about 500,000 firms throughout the economy.

The budget provided the impact this would have for crowding-in capital investment. The estimate is that it would generate economic output of up to $9 billion annually over the next 10 years. This is for that one.

[Pat Kelly, Conservative, Calgary Crowfoot, AB]

A reduction of $17 billion in taxes received and $9 billion in investment activity to the general economy—

[Maximilian Baylor]

Yes, and this generates $9 billion in output.

[The Chair, Liberal, Karina Gould]

Thank you, Mr. Kelly. That's time for now.

Thank you, Mr. Baylor.

We'll go to Mr. Leitão for six minutes, please.

[Carlos Leitão, Liberal, Marc-Aurèle-Fortin, QC]

Thank you very much, Madam Chair.

Good afternoon, ladies and gentlemen. Thank you for being here. There are many of you as well.

Much like Mr. Kelly, I, too, had some questions that were a bit more general in nature. Before getting to that, I'd like to start by providing a bit of context for the budget as we tabled it in November.

The economy is being hit by a trade war that we did not seek, with our neighbour that we thought was a reliable partner but turned out to be unpredictable. This has hit the Canadian economy hard, particularly when it comes to investment decisions. This is where I'm going to circle back to the conversation we were having before about measures to accelerate investment.

Generally speaking, we have a productivity issue or very slow productivity growth in Canada. This is nothing new; it's been the case for a long time.

In the context of a trade war and very real and concrete threats to the Canadian economy, we conceived measures that could both accelerate private investment and help increase productivity.

Could any of you comment on the economic context in which the budget was prepared, or is that something you prefer not to comment on, to put it that way?

[Maximilian Baylor]

I can answer your question by continuing in the same vein as my first answer, but by addressing the taxation aspect, since that's the subject we're covering here.

I think the way you're describing the context is appropriate. That was sort of the general approach when the budget was put in place. The element I would add on the tax side is the One Big Beautiful Bill Act in the United States, which also contained a number of incentives, including accelerated investment ones. We see the measures in the budget in this light and, in large part, in Bill C‑15. I will talk about three of them quickly.

First is the extended accelerated investment incentive and immediate expensing measures, which we talked about earlier.

Second, along the same lines, this bill makes several improvements to the scientific research and experimental development tax incentive program.

Third, I would mention the clean technology investment tax credits, for such things as clean electricity and waste biomass, which are included in this bill, in addition to some enhancements to other tax credits that were announced in the budget.

On the taxation side, I'd say that those were the main measures that sought to address the challenges you raised. As I said, it was also somewhat in response to what we were seeing in the United States.

[Carlos Leitão, Liberal, Marc-Aurèle-Fortin, QC]

Okay, thank you.

Measures similar to what was announced, that is to say measures to accelerate investment and depreciation, have been introduced in the past. A number of governments have done so as well. What's different in the November 2025 budget is that, this time, the measures are really economy‑wide. We're not really targeting specific sectors in terms of accelerated depreciation. What's being added are measures to accelerate scientific research into clean technologies and tax credits for that as well.

This time, are provincial Crown corporations, especially those that generate power, like Hydro‑Québec or others, also eligible for these tax credits?

[The Chair, Liberal, Karina Gould]

I'm sorry, Mr. Leitão, but your time is up.

[Carlos Leitão, Liberal, Marc-Aurèle-Fortin, QC]

Okay. We'll come back to it.

[The Chair, Liberal, Karina Gould]

Perhaps Mr. Garon will pick up where you left off.