Evidence of meeting #7 for International Trade in the 39th Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was withholding.
A recording is available from Parliament.
4:10 p.m.
Liberal
The Vice-Chair Liberal John Maloney
Are there any other speakers on the motion?
(Motion agreed to) [See Minutes of Proceedings]
4:10 p.m.
Liberal
The Vice-Chair Liberal John Maloney
We'll move to clause-by-clause consideration.
Mr. Ernewein, you had your hand up. I couldn't recognize you when we were debating that motion, but if you have further comments, I'm sure the committee would appreciate hearing them.
(On clause 1)
4:10 p.m.
General Director, Tax Legislation Division, Tax Policy Branch, Department of Finance
Thank you, Chair.
I doubted that I had standing during the debate on a motion, but I wanted to make the point that we did provide the numbers. They're part of the 2007 budget plan. I've given them here today.
The honourable member apparently isn't satisfied and would like them to have been for years further out. Those have not been put out as part of the budget plan. But the budget plan from 2007 has the numbers I have provided.
I just wanted to remind the committee of that.
Thank you.
4:10 p.m.
NDP
Peter Julian NDP Burnaby—New Westminster, BC
Clause 1 is the overall amending of the Canada-United States Tax Convention Act. What we saw in the budget was actually a very small part of what the impacts of the overall amendments to the Canada-United States Tax Convention Act are. We found out today that the largest proportion—the withholding tax that is simply abolished or given up—is the non-arm's length, which is implemented in stages over the next three fiscal years. What we saw in budget 2007 was only a very small part of the actual fiscal implications. It's simply not correct to say that we've had full disclosure of figures.
We have not seen, either, from the department on what basis the figures were arrived at for the budget document, and that's extremely important too. We have to do our due diligence to compare past figures and then surmise to what extent the figure of $180 million that was in the budget is accurate and what the full ramifications of this tax treaty are in subsequent years. We're talking about half a billion dollars over three years, and presumably well over a billion dollars over six years.
That is a considerable amount of money, when we have 300,000 people who are homeless in our country, when we have families who are finding it very hard to make ends meet. To say that over six years, if it's a billion.... None of us around this table is very sure, because none of us has seen the actual impact studies. But let's surmise, based on the testimony we've heard, that we're talking about a billion dollars. That is not something you give up in five minutes without any understanding of what the implications are for fiscal policy and what the implications are for the government's ability to take action, hopefully, on some of the crises that exist in the country.
I think it is foolhardy for this committee to push forward on adoption of a tax treaty that has significant ramifications for the taxpayer and for public policy.
4:15 p.m.
Conservative
Brian Pallister Conservative Portage—Lisgar, MB
Well, in reference to Mr. Julian's comments, which are.... I shouldn't be surprised by a representative of the NDP arguing against tax reductions for Canadians; that's an all too frequent position they take. But the arguments he's making, it should be understood, are arguments that would result in reduced competition among financial institutions and therefore a higher burden on Canadians and Americans, frankly. So he's actually arguing for higher assured profits for financial institutions.
That being said, I grow very weary of his comments, because they are dull, repetitive, and erroneous. So I would like to move that we limit comments to one minute on the clause-by-clause debate.
4:15 p.m.
Liberal
The Vice-Chair Liberal John Maloney
Mr. Pallister, thank you for your input, but we can't deal with that motion at this point. We have a motion to deal with clause 1. We must continue with that, and then if you care to make your motion at a future time in this committee's deliberations, we can entertain it.
Is there any more discussion on clause 1?
(Clause 1 agreed to)
4:15 p.m.
Conservative
Brian Pallister Conservative Portage—Lisgar, MB
I think we'll just continue with the discussion and see how it goes.
(On clause 2)
4:15 p.m.
NDP
Peter Julian NDP Burnaby—New Westminster, BC
Mr. Chair, I have a point of clarification, then. If I understand your interpretation of procedure—and I'd like you to clarify this for me—by the adoption of the enacting legislation, we are then moving to adopt the treaty as a whole.
Is that true? Is it true that the procedure you will be following is to deal with the five clauses, and then overall adoption?
4:15 p.m.
NDP
Peter Julian NDP Burnaby—New Westminster, BC
So, Mr. Chair, for the interest of the committee, does that mean any subsequent discussions of treaties the government may choose to bring forward would be interpreted the same way, so that enacting legislation would be the only element brought before this committee?
4:15 p.m.
Liberal
The Vice-Chair Liberal John Maloney
I'm not prepared to comment on that, Mr. Julian.
We're dealing with clause 2. Is this debate on clause 2?
4:15 p.m.
Liberal
The Vice-Chair Liberal John Maloney
Well, you didn't say point of order.
(Clause 2 agreed to)
(On clause 3)
4:15 p.m.
Liberal
4:15 p.m.
NDP
Peter Julian NDP Burnaby—New Westminster, BC
No, it's a comment, Mr. Chair.
The arbitration provisions of the tax treaty are provisions we definitely can support. They're very clear and well written. They're the one aspect of the treaty that's been brought forward, I think, in a fulsome way by the government. So the arbitration provisions are effective. It's the rest of the treaty and the fact that this government just seems hell-bent on throwing away $1 billion without any real analysis of what the implications are, or where the money is going, that I find completely irresponsible. I think for those who have may have voted Conservative in the past, they'll find it quite irresponsible as well.
4:15 p.m.
Bloc
Serge Cardin Bloc Sherbrooke, QC
Yes, Mr. Chair.
Clause 3 states:
3. Schedule 1 to the Act is amended by adding [...]
4:15 p.m.
Conservative
Brian Pallister Conservative Portage—Lisgar, MB
On a point of order, what would be foolhardy, Mr. Chair, would be what the NDP and the Liberals did in a hotel room, which was to guarantee that $4.6 billion would be thrown away in empty promises.
4:15 p.m.
Liberal
4:20 p.m.
Bloc
Serge Cardin Bloc Sherbrooke, QC
Thank you, Mr. Chair.
Here's what clause 3 states:
3. Schedule 1 to the Act is amended by adding at the end of that Schedule the Annexes A and B to the Convention set out in the Schedule 1 to this Act.
4:20 p.m.
Liberal
The Vice-Chair Liberal John Maloney
Let's calm down the conversations on the side. Mr. Cardin has the floor.