Evidence of meeting #19 for Finance in the 45th Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was billion.
A video is available from Parliament.
Director, International Inbound Investment, Tax Legislation Division, Department of Finance
Madam Chair, I'm not sure this is a technical question relating to the repeal of the DST.
Liberal
Conservative
Éric Lefebvre Conservative Richmond—Arthabaska, QC
In that case, I'm going to ask you another question—and I say this for the record, it's not about the content. It's about the form.
Today, we saw $3 billion in expenditures added to the budget. That was unanticipated. How does the Department of Finance see this being managed on a piecemeal, day‑to‑day basis? It's been three months since the budget was drawn up and tabled. Now we have $3 billion in unexpected new expenditures on top of that.
As a manager, how can you deal with that if you're getting these kinds of requests day to day, not knowing if there are going to be further expenditures of $3 billion, $5 billion or $10 billion next week? How can you govern at the Department of Finance?
Director General, Personal Income Tax Division, Tax Policy Branch, Department of Finance
These are choices made by the government.
In budget 2025, the government established its fiscal framework for measures announced up to that date, including those included in the budget.
Our first budget was presented in the fall. We will have a spring economic statement. The government is going to establish a new fiscal framework. The framework will include all measures announced since budget 2025 was tabled and those announced in the economic statement. It's—
Liberal
The Chair Liberal Karina Gould
Thank you, Mr. Leblanc. I have to cut you off.
Thank you, Mr. Lefebvre.
We will continue with Mr. Sawatzky for five minutes, please.
Liberal
Jake Sawatzky Liberal New Westminster—Burnaby—Maillardville, BC
Thank you, Madam Chair.
Thank you to the witnesses for coming here today.
I think the broader context is that a lot of the feedback we get from day to day is with regard to affordability. A lot of Canadians are struggling to pay their bills and to pay their rent, and they've asked the government for further supports to help them with that. One of those supports is the announcement that was made today of the Canada groceries and essentials benefit. I think it will be a very welcome introduction.
Another thing that was in the budget.... A lot of low-income Canadians currently miss out on essential supports such as the GST/HST credit, the Canada workers benefit, the Canada child benefit and others they are entitled to, and this is because they just don't file taxes. Budget 2025's automatic federal benefits initiative is expected to reach up to 5.5 million low-income Canadians by 2028.
I want to ask one of you this: How will this automatic, prefilled tax return system improve benefit uptake and help ensure that Canadians, especially people who are unaware of their eligibility, receive the financial supports they're entitled to?
Stefania Bartucci Director, Strategic Projects, Personal Income Tax Division, Department of Finance
You're right. Budget 2025 announced a couple of measures on automatic federal benefits, the predominant one being that the CRA will start to offer prefilled returns for the 2026 tax year—in spring 2027—to one million lower-income Canadians. This will scale up to five million lower-income Canadians for the 2028 tax year—in spring 2029. Basically, an individual will be able to go into their CRA My Account, and the CRA will present them with a simplified version of their tax return that includes the information the CRA has on file for them. The individual will be able to modify certain fields as necessary and then submit the return directly to the CRA. In that way, it'll be a quick assessment, hopefully. The CRA will determine benefit entitlements upon that filing.
Liberal
Jake Sawatzky Liberal New Westminster—Burnaby—Maillardville, BC
Thank you very much. This is fantastic. I'm sure a lot of people will really be looking forward to this. I know that filing taxes causes a lot of headaches sometimes, and I think this will be a very welcome change.
On the same note of affordability, people in my riding of New Westminster—Burnaby—Maillardville have also reached out to me, inquiring about the Canada disability benefit, which increases the financial well-being of low-income working-age persons with disabilities. To ensure that other federal supports are not reduced because of the receipt of the Canada disability benefit, how would the exemption of the benefit from the computation of income tax help?
Director General, Personal Income Tax Division, Tax Policy Branch, Department of Finance
Thank you for the question.
You've described the Canada disability benefit as an important measure for persons with disabilities. As for what's in this bill.... Under current law, Canada disability benefits would be treated in the same way as social assistance. The way that social assistance is treated for tax purposes is that it's in and then it's out. It's in for the purposes of calculating income-tested benefits, such as the Canada child benefit, but then it's taken out before tax. People don't pay tax on social assistance or on amounts that are considered social assistance, but it does affect the calculation of their income-tested benefits.
On what this measure is doing, it's in the spirit of making sure that those receiving the Canada disability benefit can benefit from the full amount. It will exempt the amounts completely, so they won't be included at all. They won't be in and out. It just means that in the first place, they won't be in, meaning they won't affect the calculation of entitlement to income-tested benefits, such as the Canada child benefit and several others.
Liberal
Jake Sawatzky Liberal New Westminster—Burnaby—Maillardville, BC
Thank you.
That's another great change. I know there was a lot of feedback from having people to committee to advocate for the importance of the Canada disability benefit. I think it's just a testament to how important the committee is and how this dialogue is very constructive.
Switching topics, another thing this government is very focused on is productivity and increasing investments into the country, as well as encouraging businesses to invest in themselves, so to speak. Can you explain how allowing businesses to immediately expense the cost of new machinery, technology and equipment—
Liberal
The Chair Liberal Karina Gould
I apologize, Mr. Sawatzky. That's your time.
We've concluded the speakers list for this section, but we have another couple of minutes. I'm wondering if it's the will of the committee to give two more minutes to each party—
Liberal
The Chair Liberal Karina Gould
—or if you want to wrap this up and start on the next one.
Do we have agreement there?
Liberal
Conservative
Jasraj Singh Hallan Conservative Calgary East, AB
Thanks to the officials for being here.
The Canadian Energy Marketers Association brought forward concerns regarding the carbon tax rebate. Their gas station and wholesale fuel provider members purchased fuel with the consumer carbon tax, but after April 1, 2025, they couldn't charge customers for the same carbon tax.
The association is asking for the carbon tax rebate for their members who paid the carbon tax up front but were subsequently forbidden from collecting it. Will gas stations and wholesale fuel providers receive a carbon tax rebate?
Gervais Coulombe Director General, Legislation, Sales Tax Division, Department of Finance
Madam Chair, the legislative repeal of the federal fuel charge is currently at the Senate in Bill C-4. I think Bill C-4 received the approval of the House shortly before the break, so the matters the member is raising here are not part of Bill C-15. They were part of Bill C-4, and I'm not aware of any such rebate that either has been announced by the government in the budget or included in Bill C-15 before us.
Thank you.
Conservative
Jasraj Singh Hallan Conservative Calgary East, AB
Quickly, Mr. Baylor, in response to Mr. Kelly, you said that the productivity superdeduction measure would generate $9 billion of economic activity. Is that correct?
Director General, Business Income Tax Division, Department of Finance
Yes. I'm just quoting from the budget. They did simulations. I can read it for you so it's precise, but—
Conservative
Director General, Business Income Tax Division, Department of Finance
It's $9 billion annually over the next 10 years in terms of economic output.
Liberal
The Chair Liberal Karina Gould
Thank you, Mr. Baylor.
Thank you, Mr. Hallan.
Mr. Garon, do you want the floor for two minutes?
Bloc
Jean-Denis Garon Bloc Mirabel, QC
Of course. No one can say no to that, Madam Chair.
I would like to know whether small modular nuclear reactors, whose uses include heating water to produce more oil from the oil sands, will be eligible for the clean electricity tax credit.