Finance Committee on Jan. 26th, 2026

[Maximilian Baylor]

Yes. The clean electricity tax credit includes all nuclear technologies.

[Jean-Denis Garon, Bloc, Mirabel, QC]

Then, nuclear technologies used to extract more of the dirtiest oil in the world will be granted a tax credit known as the clean electricity tax credit by the federal government. This is my last question: Do you think that the tax credit has been misnamed?

[Maximilian Baylor]

The nuclear technology itself, which generates electricity, is what is clean. That's the idea.

[Jean-Denis Garon, Bloc, Mirabel, QC]

Oh, yes, okay, it's clean.

Thank you, that's all.

[The Chair, Liberal, Karina Gould]

Thank you, Mr. Garon.

Mr. Leitão, you have the floor for two minutes.

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

Thank you, Madam Chair.

I want to go back to the digital services tax. It was terminated, but do you have a view on the likelihood that Canada would have been able to implement such a tax? I think we were the only ones, at least in the G7, trying to do such a thing. We weren't quite sure if it was going to work. Can you address that?

[Ingrid De Freitas]

Thanks for the question.

There are other countries that have digital services taxes in place and are collecting money—for example, France, the U.K. and Spain. I'm not sure I fully understand your question in terms of whether it would be possible to implement.

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

In Europe, in France and the U.K., theirs are much smaller, of course, than what was proposed here, but even there they've had increasingly complex issues with regard to applying those taxes to foreign-owned service providers.

[Ingrid De Freitas]

I don't think we have information on how the administration of the European DSTs is going. They are collecting money with their DSTs.

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

Do I still have some time left? Okay.

With regard to marginal effective tax rates, some interesting charts in the budget indicate that Canada now has, after all the changes made in the budget, one of the lowest METRs in the OECD area. I would like you to confirm this. I guess your group contributed to making the calculation.

[The Chair, Liberal, Karina Gould]

Unfortunately, we will have to get an answer at another time. Thank you, Mr. Leitão.

I hope the committee will join me in thanking the officials for coming and spending this hour with us. I want to note that a number of questions that committee members asked are ones that the department and officials are endeavouring to return to us on. We look forward to getting those responses. The analysts have made note of those questions, so we will follow up on this.

Again, thank you very much for your time and your work and for being here with us today.

We will now suspend while we change over to the next round of officials.

Thank you.

[The Chair, Liberal, Karina Gould]

Welcome back, colleagues. We will resume the meeting.

I'm going to say something slightly different. We just got some very unfortunate news that one of our former colleagues, Kirsty Duncan, has passed away, and I wanted to take a moment to reflect on her service and contribution.

Many of us in this room had the opportunity to serve with her. She was an excellent person. I'm sorry to have to let you know, but there are many people who pass through and whom we get to work with regardless of what side they're on, and we're fortunate to have known them. She served for many years and was a good friend to people on all sides.

With that, here's a reminder that for the second hour, we'll focus on non-tax measures in part 5, divisions 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 22, 26, 37, 38 and 45.

I would like to welcome our witnesses. Again, I'm not going to go through and read the entire list, because there are many of you. Members are invited to direct their questions to someone in particular, but I hope officials can determine which questions they are able to answer. With that, we are not doing opening statements, so we will go straight to the speaking list and begin with Mr. Kelly for six minutes.

[Pat Kelly, Conservative, Calgary Crowfoot, AB]

Thank you.

As the first one with the floor after hearing that bit of sad news about a former colleague, let me extend, on behalf of my caucus, our best wishes and our thoughts for her many friends in your caucus and our deepest condolences to her family in this time of grief. It is very sad news that you had to report to us, but thank you for bringing it to our attention.

Again, I'm having to flip back and forth to get the correct names of the right officials. On division 9—“Consumer-Driven Banking”—this would be a question for Ms. Fraser.

How will this piece speed up the establishment of a proper consumer-driven banking industry? The lack of competition in Canada's finance sector is a productivity drag. This is something that Conservatives have brought to the attention of the government over the years. There was a Conservative private member's bill to establish consumer-driven banking, and there has been much delay in getting us where we need to go. I will give you a few minutes to talk about what this will do technically so that we can be assured commitments that were long made can be fulfilled on consumer-driven banking.

[Kïrsten Fraser, Director, Financial Services Innovation, Department of Finance]

Thank you very much for the question.

The legislative pieces in the bill include the ones that will get the framework going and off the ground. They are accreditation, which is the path to entry for entities that need to participate in the system, and the common rules governing privacy, liability, security and privacy, including consent.

As you mentioned, the government introduced the first part of this bill in 2024, including the scope. This sets out the types of accounts and types of data included in the scope of the framework, as well as the technical standards elements, which are effectively the instructions for how entities will communicate with each other.

The pieces included in the bill are really the active elements of the framework. These are the path to entry and the rules under which entities will be required to comply to participate in the framework.

[Pat Kelly, Conservative, Calgary Crowfoot, AB]

My former colleague Ryan Williams, even before 2024, introduced legislation to try to establish this in Canada.

I'd like to move to division 13 and the equity threshold related to the capitalization of financial services companies and the minimum ceiling moving from $2 billion to $4 billion. I would like some...expectation of what firms will be affected by this. Is it believed that a number of firms will be captured by this that previously were not? How will this help increase competition in the financial services sector?

[Khusro Saeedi, Senior Director, Strategic Initiatives, Department of Finance]

Thank you for the question. I'm happy to respond.

[Pat Kelly, Conservative, Calgary Crowfoot, AB]

Go ahead.

[Khusro Saeedi]

The financial institutions sector has a size-based ownership framework in which companies—financial institutions, banks and insurers—as they grow larger, are subject to different ownership rules to reflect the level of risk and their level of importance in the economy. Those thresholds are periodically updated to reflect the growth of the economy, inflation and the relative size of institutions in the sector.

In this piece of legislation, the medium-sized threshold—the threshold for firms that are growing through and would be required to float 35% of their voting shares on a stock exchange—is being moved from $2 billion to $4 billion. This means that the number of smaller institutions that are currently wholly owned by a single shareholder would have, if they were approaching the $2-billion threshold, greater flexibility in their ownership structure until they hit $4 billion, at which point they would be required to float 35% of their shares.

[Pat Kelly, Conservative, Calgary Crowfoot, AB]

Okay, that's understood.

How many of these kinds of firms exist? Is the old threshold preventing, making more difficult or disincentivizing growth and innovation in the finance industry? If so, what is the expected outcome for this change?

[Khusro Saeedi]

There are a number of banks and insurers that fall around or below the $2-billion threshold. It is difficult to say how quickly they would grow because this depends on their business strategies. However, they are below the $2-billion threshold and could potentially be affected.

[Pat Kelly, Conservative, Calgary Crowfoot, AB]

I only have a few minutes left.

Why $4 billion? Why not $10 billion?

We have a separate problem, although related, of the concentration of ownership within the sector—or at least a concentration of the number of players in the sector.

[Khusro Saeedi]

The threshold is updated to reflect the growth in the economy and inflation. The threshold was last updated in 2006. That was a number of years ago. The move from $2 billion to $4 billion would roughly reflect the growth in the economy and inflation.

I think you asked how many institutions would be affected, and it's in the order of five to 10. It depends on how quickly they grow and what their strategies are.

[Pat Kelly, Conservative, Calgary Crowfoot, AB]

It's five to 10 companies that would not be forced to divest when, currently, the shareholders would be forced to divest.

[Khusro Saeedi]

They would fall below the $2-billion threshold and could potentially be going over the threshold depending on their own strategies, yes.

[The Chair, Liberal, Karina Gould]

That's great. Thank you, Mr. Kelly.

Mr. Fragiskatos, you have six minutes please.