Evidence of meeting #9 for Finance in the 45th Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was clause.
A video is available from Parliament.
Bloc
Bloc
Jean-Denis Garon Bloc Mirabel, QC
As I understand it, since BQ‑1 was adopted, NDP‑3 becomes moot given the dates it mentions. Is that correct?
Liberal
The Chair Liberal Karina Gould
I would ask for a second.
After checking, BQ‑1 concerns another provision of the bill, so there is no conflict with NDP‑3.
Ms. Kwan, you may continue.
NDP
Jenny Kwan NDP Vancouver East, BC
Thank you very much, Madam Chair.
The issue that has been brought to my attention by some Canadians is that more and more Canadians are concerned about affordability. This would apply to those who are entering the housing market for the first time and are relying on the exemption to make home ownership more affordable. For the vast majority of the transactions in Canada, the goods and services tax, the GST, is applied at the point when a good or service is actually purchased or delivered. In the real estate sense, that moment occurs on the closing date when the legal title transfers to the buyer and when payment is complete. GST is assessed and then paid at that time, the closing date.
For preconstruction or delayed closings, buyers often sign agreements months or years before taking ownership, but the GST is not applied until the closing date. This highlights why it is only logical and consistent to apply any GST exemptions at that point as well.
Basing the exemption on the purchase agreement date creates, I believe, several unfair outcomes. It will penalize first-time homebuyers for circumstances beyond their control, such as construction delays or market conditions. It contradicts the general tax principle that GST applies at the time of final sale, and it introduces confusion and inequity into a policy designed to provide relief. By tying the exemption to the closing date, the government would align with how GST is typically administered, increase policy transparency and ensure that first-time homebuyers who are taking legal ownership after the exemption policy is in effect receive the support that they were promised.
This is simply a change that would make a meaningful difference to many Canadians who are trying to secure their first home in a very challenging housing market.
Liberal
The Chair Liberal Karina Gould
Thank you, Ms. Kwan.
For the same reasons that I deemed amendment BQ‑1 inadmissible, I believe this amendment requires a royal recommendation, so I will also be deeming this inadmissible.
We will move on to amendment BQ‑2.
Mr. Garon, would you like to introduce this?
Bloc
Jean-Denis Garon Bloc Mirabel, QC
The rationale for amendment BQ‑2 is identical to that of amendment BQ‑1. I moved amendment BQ‑2 because different types of properties are covered by different sections of the bill. Therefore, consider everything I said before, including admissibility, as repeated.
Liberal
Liberal
The Chair Liberal Karina Gould
Okay, we will have a vote.
Shall the ruling of the chair be sustained?
(Ruling of the chair overturned: nays 5; yeas 4)
Liberal
The Chair Liberal Karina Gould
Is there debate on amendment BQ-2?
Seeing none, we'll put the question.
(Amendment agreed to: yeas 5; nays 4 [See Minutes of Proceedings])
(Clause 4 as amended agreed to on division)
(On clause 5)
Conservative
Liberal
The Chair Liberal Karina Gould
Amendment CPC-4 is withdrawn.
We are now on amendment NDP-4.
Ms. Kwan.
NDP
Jenny Kwan NDP Vancouver East, BC
Madam Chair, the same principle applies with NDP-4, NDP-5 and NDP-6, under different categories. I will make the same argument as I previously did about the GST exemption date.
I hope committee members will reconsider this, because a lot of the people who, for example, enter into pre-sales would not qualify for this at a time when affordability is absolutely critical. This is not just about facilitating a process; it's also about creating housing that's affordable so people can get into the market.
GST is often applied at the time of closing. Let's say I buy a cellphone. At the time of purchase, when I go to pay the cashier, I pay the GST and then I take the phone home. That should apply for housing as well.
Regarding the notion that it will somehow be a cost to the treasury, it will be a minimal cost, if that. The concept of the application, whether it applies at the time of signing or at the time of purchase, is essentially the same.
In any case, if the Conservative, Bloc and Liberal members want to ensure affordability for homebuyers, applying the GST exemption at the time of closing will make a difference to the homebuyers.
Liberal
The Chair Liberal Karina Gould
Thank you, Ms. Kwan.
For the reasons I outlined earlier, the chair continues to state that the amendment is inadmissible.
We are moving on to amendment BQ-3.
Mr. Garon, would you like to introduce BQ-3?
Bloc
Jean-Denis Garon Bloc Mirabel, QC
Thank you very much, Madam Chair.
The rationale for amendment BQ‑3 is identical to that of amendments BQ‑2 and BQ‑1, which you very much appreciated. Since different types of housing are covered by different provisions in the bill, a number of amendments need to be moved. Consider everything I said as repeated, including my response to Mr. Turnbull, and consider that I object to your ruling.
Liberal
The Chair Liberal Karina Gould
Okay, thank you for letting me know. I'm going to continue to rule this amendment out of order.
Liberal
The Chair Liberal Karina Gould
Okay. I'm going to call the question.
Shall the ruling of the chair be sustained?
(Ruling of the chair overturned: nays 5; yeas 4)
Liberal
The Chair Liberal Karina Gould
Is there debate on amendment BQ-3?
No.
We'll do a recorded vote.
(Amendment agreed to: yeas 5; nays 4 [See Minutes of Proceedings])
Liberal
The Chair Liberal Karina Gould
We'll do a recorded vote.
(Clause 5 as amended agreed to: yeas 9; nays 0)
(On clause 6)
Liberal
