International Trade Committee on Dec. 4th, 2007

[The Vice-Chair, Liberal, John Maloney]

I call the meeting to order.

We have before us today Bill S-2, an act to amend the Canada-United States Tax Convention Act, 1984. It passed the Senate in November 2007. It has been referred to us after second reading.

The question is whether we wish to hear witnesses on this or whether we wish to proceed to clause-by-clause.

Mr. Menzies.

[Ted Menzies, Conservative, Macleod, AB]

Thank you.

It's great to be back with my old friends again who I spent so much time with--I won't say too much time--last year.

I had the pleasure of presenting this motion to the Senate committee, and they went immediately to clause-by-clause. They recognized the importance of this motion and went straight to clause-by-clause. I was barely out the door when they finished it. That would probably set a precedent and be a good lead to follow.

I would like to recommend that this committee report to the House without amendment Bill S-2, an act to amend the Canada-United States Tax Convention Act, 1984, and I will put that in the form of a motion.

[The Vice-Chair, Liberal, John Maloney]

I'll come to you, Mr. Julian, but before that we have our legislative clerk with us, Mr. Marc Toupin.

Could you explain some of the process the committee would follow if we have this motion by Mr. Menzies?

[Marc Toupin, Procedural Clerk]

Normally, Mr. Chairman, the committee proceeds to review a bill that's been referred to it by proceeding clause by clause. If there is unanimous consent of the committee to adopt these clauses and adopt a bill without amendment very quickly, provided unanimous consent is granted, I don't see a problem.

[The Vice-Chair, Liberal, John Maloney]

Mr. Julian has his hand up.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Thank you, Mr. Chair.

I have two questions.

First, I have read the briefing book that was submitted, and in no place did I see a clause-by-clause analysis of Bill S-2, so I'm wondering whether the clause-by-clause was prepared. If so, could it be distributed to the committee?

The second question I have is what are the implications particularly around the clause on elimination of withholding tax on cross-border payments of interest? I see no fiscal analysis of that impact.

[The Vice-Chair, Liberal, John Maloney]

Mr. Julian, the Department of Finance prepared the briefing book. That's why there wouldn't be a clause-by-clause analysis of it at this time.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Has there been no preparation of a clause-by-clause analysis?

[The Vice-Chair, Liberal, John Maloney]

I'm not sure if the officials from the department here can respond to that.

Mr. Menzies, can you shed any light on Mr. Julian's question?

[Ted Menzies, Conservative, Macleod, AB]

I honestly couldn't tell you. It was referred to the trade committee, and I'm not sure what was shared with them. Because of the cross-implications, it's a finance and trade piece of legislation. So as far as I know.... I don't have a clause-by-clause analysis, unless there's one left over from the Senate.

[The Vice-Chair, Liberal, John Maloney]

Our clerk is consulting with members from the department, if he can get through.

I would suggest that as we wait we go in camera and deal with the second item on the agenda. We'll come back to that, Mr. Julian, if that's okay with you.

At this time we will go in camera. We'll suspend and allow our recorder to make the necessary changes. Unless you are affiliated with a member sitting around the table, I would ask that you leave the room, and we'll get you back in here as quickly as we can.

[Proceedings continue in camera]

[Public proceedings resume]

[Ted Menzies, Conservative, Macleod, AB]

There was no clause-by-clause drafted because there was no request from either the Senate committee or this committee.

I would recommend that you call the vote.

[The Vice-Chair, Liberal, John Maloney]

Mr. Julian.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Mr. Chair, I realize we're in a little bit of an awkward situation because this is normally a finance bill but it has been given to international trade.

Having read the Senate deliberations, I do not feel.... They may have been convinced by Mr. Menzies' speech, but they didn't do the due diligence on the bill, and I believe that we have to. I'm not sure that it will warrant a lot of committee time, but I do think we need the clause-by-clause analysis, and I do think we need to see the fiscal implications of what's in the bill.

I don't think, given those two things, that taking perhaps an hour of committee time on Thursday would be excessive. I'm sure the clause-by-clause has been prepared. That would be normal practice.

[The Vice-Chair, Liberal, John Maloney]

If we have unanimous consent, we could proceed without clause-by-clause. If there is no unanimous consent, then we will have to do clause-by-clause. Those are the standing orders.

Yes, Mr. Menzies.

[Ted Menzies, Conservative, Macleod, AB]

Perhaps I could speak to that.

It had nothing to do with my eloquence, but the senators recognized the time constraints we're under. This is simply a fifth amendment to an existing protocol that actually helps Canadians. It stops the withholding taxes. It provides a mandatory arbitration process for Canadians who actually do business on a fairer level with the United States.

If we don't get this through by the end of the year, we lose 2008. So for cross-border commuters who can't contribute to their pensions on both sides of the border, we've eliminated that opportunity for them for one more year. There's a necessity to get this finished. We've all looked at it. The senators looked at it, and I beg to differ. I think the Senate committee that was looking at it are all very astute business people who looked at it very seriously and recognized the advantages to getting this done. In fact, many of them said, “Why has this languished so long? Why did we wait so long to get this done?”

It's very important to get this done or it doesn't get enacted for the 2008 year. It's imperative that this get done as soon as possible. There's no ambiguity in this whatsoever. It's very clear cut, very straightforward, and I would recommend that this motion I've put forward be passed and this be reported back to the House.

[The Vice-Chair, Liberal, John Maloney]

I appreciate what you're saying, but I also indicated that we must have unanimous consent. There is some discontent, as we've heard. I appreciate that Mr. Pallister and Mr. Miller are on the speakers list, but is this something that would be prejudicial if we deferred it to our meeting on Thursday?

[Ted Menzies, Conservative, Macleod, AB]

Time is of the essence. It needs royal assent by the end of the year. The Senate recognized that, and that's why they moved it forward as quickly as they could. I would hate to see this committee--

[The Vice-Chair, Liberal, John Maloney]

Mr. Pallister, then Mr. Miller.

[Brian Pallister, Conservative, Portage—Lisgar, MB]

We're clear already that Peter's not giving consent. We don't have unanimous consent. So I guess the next question is what do we need to do to deal with this on Thursday? It seems to me there's a willingness among committee members to deal with it as expeditiously as possible, so let's get some clarification on what we need to do to deal with it and let's get on with it.

[The Vice-Chair, Liberal, John Maloney]

At our next meeting we'll have departmental officials. We can easily deal with it at the beginning of the meeting, and it would be done with.

Mr. Miller is next.

[Larry Miller, Conservative, Bruce—Grey—Owen Sound, ON]

Thanks, Mr. Chairman.

What I was hoping, with some of this discussion, was that maybe Mr. Julian would be convinced to bow out. I wasn't sitting on this committee when previous discussion went through, and obviously in the Senate when they dealt with it.

I think, Peter, we have to sometimes let things takes their course and have a bit of faith. I know that's hard sometimes, even for me.

Do we not already have witnesses pre-booked for Thursday? And would we then, in turn—

[The Vice-Chair, Liberal, John Maloney]

We have departmental officials.

[Larry Miller, Conservative, Bruce—Grey—Owen Sound, ON]

Oh, it's departmental officials, so that's not an obstacle.

I'm not trying to delay it. It's just that we should be getting it done if we can.

[The Vice-Chair, Liberal, John Maloney]

It's on the Korean free trade agreement.

Mr. Cardin, then Mr. Julian, and then Mr. André.