Can we suspend for a moment?
Evidence of meeting #8 for Finance in the 45th Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was cut.
A recording is available from Parliament.
Evidence of meeting #8 for Finance in the 45th Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was cut.
A recording is available from Parliament.
Liberal
The Chair Liberal Karina Gould
We are resuming the meeting.
Do we have unanimous consent to withdraw the amendment?
Conservative
Pat Kelly Conservative Calgary Crowfoot, AB
With the amendment withdrawn, we're no longer debating that. I trust we will immediately move to the next amendment.
Liberal
The Chair Liberal Karina Gould
We're at clause 2, Mr. Kelly. There are no more amendments on that clause.
The vote is on the unamended clause 2.
(Clause 2 agreed to on division)
Liberal
The Chair Liberal Karina Gould
We're on new clause 2.1. NDP-2 is deemed moved.
Mr. Davies is not here. Ms. Kwan, would you like to speak briefly to it?
Jenny Kwan NDP Vancouver East, BC
Thank you very much, Madam Chair.
Hallelujah to progress being made on the bill.
NDP-2 requires the Minister of Finance to report to Parliament and the public on how reducing the lowest federal personal income tax rate affects the value of non-refundable tax credits, which are calculated using that same tax rate. This is a critical measure, because lowering the personal income tax rate not only reduces the amount of tax owed; it also diminishes the value of tax credits such as the disability tax credit, the age credit and the caregiver credit. These are important supports, particularly for lower-income Canadians, seniors and people with disabilities. For individuals who claim these tax credits, the net benefit of the government's proposed tax cut will be significantly reduced.
The National Disability Network, March of Dimes Canada and Inclusion Canada have also raised these concerns that some claimants may be worse off overall, as the drop in credit value could outweigh the savings from the lower tax rate.
Recent testimony before this committee from the finance minister, François-Philippe Champagne, and senior finance official Stefania Bartucci confirms that the government is aware of the unintended consequences of the reduction in the lowest personal income tax rate on non-refundable tax credits. On October 6, 2025, the finance minister, François-Philippe Champagne, told this committee, “we heard concerns regarding unintended consequences of the tax cuts on some disability tax credit recipients. I can assure you, Madam Chair, that we are working on resolving them.”
By mandating a transparent, timely report to Parliament and the public, this amendment ensures that the full impact of the tax change is understood and that vulnerable groups are not unintentionally disadvantaged. This amendment also holds the minister accountable to his commitment to addressing these impacts and ensures that Parliament can monitor progress on mitigating harm to vulnerable Canadians.
Madam Chair, I hope committee members will support this amendment.
Liberal
Bloc
Jean-Denis Garon Bloc Mirabel, QC
Madam Chair, I'll try to speak for as long as Mr. Leitão did. However, even with my experience, I don't think I'll ever be able to acquire that talent, which I greatly admire.
We support this amendment. As you know, we were the first to share with the committee our concern about the decline in the value of the disability tax credit.
When everyone was talking earlier about amendment CPC‑1, which some people discussed for almost an hour and a half and which was ultimately withdrawn, Mr. Turnbull asked the officials to provide him with a list of the tax credits and payments that the amendment would affect.
It's about transparency. I completely agree with my colleague Ms. Kwan that the minister has committed to finding solutions, and amendment NDP‑2 makes it possible to put a price on all that. Mr. Leitão said earlier that some people believed the debt had spiralled out of control. He'll be happy to know, then, that this measure doesn't cost anything, and I expect him to vote in favour of this amendment as well. It should be fairly consensual.
Liberal
Ryan Turnbull Liberal Whitby, ON
Thanks for this. I appreciate Ms. Kwan motivating this amendment and speaking to it. It's certainly an interesting one. It was deemed admissible, so it's good that we can have a bit of debate and talk about this.
I have a few questions for the officials.
Are these types of reporting mechanisms common for legislation that has fiscal impacts? That's my first question. Is an analysis typically done when government legislation has a fiscal impact?
Director General, Personal Income Tax Division, Tax Policy Branch, Department of Finance
It's not common, but I think there are some instances of when it has been done, thinking of recent years.
Liberal
Ryan Turnbull Liberal Whitby, ON
Do you have any examples in mind of where there's been a prestudy or a study done on the analysis of even the interaction? In this case, I think what Ms. Kwan is pointing to is what we've heard from some stakeholders, that there are interactions between some of the non-refundable tax credits and the income tax cut.
I'm just wondering whether there's an analysis done internally on a fairly regular basis when there's such interplay or when there will be an impact on people. How do you assess that?
Director General, Personal Income Tax Division, Tax Policy Branch, Department of Finance
When we study any tax change like this one, we're using the tax filer data at our disposition to consider, in a comprehensive manner, the net impact of such changes. We're using it to build that into the advice we provide the minister, so that the minister and the government can take their decisions.
I should just clarify that when I was talking about examples, certainly not many, where certain studies had been carried out, I wasn't referring specifically to the impact of reducing the lowest rate and non-refundable tax credits. To be clear, I was thinking more generally across the range of measures.
Liberal
Ryan Turnbull Liberal Whitby, ON
In this case, if this amendment were to pass, what would the timelines look like in order to produce this type of report ahead of, as I think it's implied in the wording here, these income tax measures? Maybe I should clarify that. This is included in the wording: “10 days after the day on which the report is tabled in both Houses of Parliament.” When would the process have to start? That's what I'm interested in. How long would it take?
Director General, Personal Income Tax Division, Tax Policy Branch, Department of Finance
It's a good question.
It would take some time. We'd want to make sure we provide something that's not only comprehensive but also easily digestible for parliamentarians, because you'd be the ones asking for this information. In terms of what you have before you, if timelines are set out and agreed to by Parliament, those would be the timelines that we would meet. We would do our very best to provide the information required in the timeline that you as parliamentarians have set for us.
Liberal
Ryan Turnbull Liberal Whitby, ON
Great. Thank you for that.
In terms of the data you would use for this report, is there a cost at all to collecting that, or is it data that you already have at your disposal?
Director, Strategic Projects, Personal Income Tax Division, Department of Finance
There is no particular cost to obtaining the data. The one thing I would say is that given the timelines in the amendment, we would not be able to use actual tax filer data for the year in which the change comes into force, which is 2025. That won't be available to us for another couple of years, so we would be relying on historical data and estimates.
Liberal