International Trade Committee on June 19th, 2023

[John McKay, Liberal, Scarborough—Guildwood, ON]

If I have a cottage property or something that falls within the census metropolitan area of Niagara Falls, for instance, even though it's a rural property and even though it's been in my family for a hundred years, I'm going to end up having to pay a tax, regardless of how it's been used, except as a recreational property.

[Luisa Rizzo]

Again, if it meets the aspects of the legislation...in terms of that, you'd have to look at all the facts and how it applies to your property, if it meets those facts and how we determine that. You would then have to pay, or at least disclose the property.

[John McKay, Liberal, Scarborough—Guildwood, ON]

Is there any reverse onus on the part of the authorities to you to, in effect, prove the facts of your situation, for instance, if I say it's one use and you say it's not?

How does that work?

[Luisa Rizzo]

I'll defer to Mr. Khan.

[Adnan Khan]

There is a dispute mechanism, Madam Chair, within the legislation that allows individuals who have disagreements with the position taken by the minister to dispute that. We have an objection process. They can certainly go to the Tax Court of Canada if they're not satisfied with the outcome of the objection. That is in case of a difference in opinion, as I understand it.

If a client has already filed a return and determines that the information provided on the return did not accurately reflect their situation, if they want to make that change, they can amend the return that has already been filed.

[John McKay, Liberal, Scarborough—Guildwood, ON]

Thank you.

I'm going to cede the rest of my time, Madam Chair.

[The Chair, Liberal, Judy Sgro]

You have 35 seconds left.

[John McKay, Liberal, Scarborough—Guildwood, ON]

I have all of 35 seconds, and I can give them to Mr. Champoux.

[The Chair, Liberal, Judy Sgro]

This is a great committee.

Thank you for the compliment, Mr. Champoux.

You have six minutes and 20 seconds.

[Martin Champoux, Bloc, Drummond, QC]

It's a welcome gift. I appreciate it.

I thank all the witnesses for being here today.

It's very interesting to listen to this discussion and to talk about this subject.

There are so many confusing things. I imagine that the Canada Revenue Agency staff must be tearing their hair out trying to sort it all out. Let's try to clarify a few things.

Having said that, I will begin with a highly critical comment that all members of the committee received from Ms. Penny Leckie, who is an accountant and a member of the Institute of Chartered Accountants of Alberta.

In her submission, she doubts that CRA officials have any idea how many returns will be filed as a result of this legislation, most of which will not give rise to any tax liability. She describes as wasteful the cost of processing this volume of returns with no associated revenue.

I'd be interested to hear your comments on Ms. Leckie's statement.

[Adnan Khan]

Madam Chair, my area is responsible for administering the program from a processing perspective. The underused housing tax form that you fill out happens to be one of many what we call information returns that are filed with the agency. A number of these forms are collected to allow the agency to gather data to better administrate its programs. They don't necessarily require some financial impact at the end of the filing. That's why they're called information returns.

In the case of the underused housing tax, the estimates were provided by the Department of Finance, and I understand that they had a witness here who presented certain numbers. The projection that was provided to us indicated that close to 10% of the total number of returns filed would result in some sort of financial implications for the individual filing the return.

[Martin Champoux, Bloc, Drummond, QC]

There are a lot of exemptions.

Earlier, I listened to my colleagues' comments on what constitutes a cottage, what is eligible, what is not, what can be exempted. Members of the agricultural sector also called on the committee to point out that, even though they are theoretically exempt from the tax, they still has to file a return.

For any entrepreneur, filing a declaration entails costs and constraints. It's an added responsibility, especially for farmers, who already have their hands full. Some say it costs between $500 and $1,000 to produce. I don't think you'd disagree with those figures.

So why don't we systematically exempt those who are already exempt from the tax? Why don't we also exempt them from filing a return if the entire sector is exempt? It seems to me that this is cumbersome.

[Geoff Trueman]

Thank you for the question.

I understand the concern about the filing of the form.

By design, the nature of the tax return is intended to collect information, as my colleague Adnan referred to. It's one of many information returns that are required.

In this case, there was a policy decision taken by our colleagues at the Department of Finance on the design and structure of the tax. Part of that is the requirement to file.

[Martin Champoux, Bloc, Drummond, QC]

We're talking about exemptions. A number of stakeholders have appeared here. We spoke to the mayor of Fort Erie, Mr. Redekop, who proposed to exclude people who live in their secondary dwelling for at least three months.

Do you see any problem or consequences in implementing this exemption?

[Adnan Khan]

It's a policy question, so go ahead.

[Luisa Rizzo]

It's a question that CRA can't answer. It would have to be redirected to the Department of Finance—whether there would be any changes required to the legislation.

[Martin Champoux, Bloc, Drummond, QC]

Ms. Rizzo, you do indeed refer a lot to the instructions that you receive and to the regulations and legislation.

You must sometimes see things that make no sense or that you find complicated for no reason; or you must listen to certain speeches; and when you come to a committee, such as this one, you have to answer questions from members.

Do you have access to a mechanism that allows you to point out to the minister or the government, for example, that it's really bothersome to have to manage this? Do you have that possibility?

[Luisa Rizzo]

Absolutely.

Any time we receive concerns—if there are any concerns or questions, or if the legislation is not clear—we look at it from the interpretative aspects. If there are concerns, we definitely go back to the Department of Finance. That's our role, as part of the CRA: talking to Finance. We bring forward these concerns and address them. We leave it in their hands to come back to us and determine where we go or what can be done.

That's part of our role at CRA, whether or not it's regarding the underused housing tax.

[Martin Champoux, Bloc, Drummond, QC]

Okay.

In this case, in applying this measure, have you made any recommendations?

[Luisa Rizzo]

When the legislation came out, absolutely. We would have been reviewing the legislation. We would have provided our comments with regard to it.

In terms of any concerns we might have received.... If we felt those were concerns, yes, we would have addressed them. If there were any concerns, I can't speak to those.

[The Chair, Liberal, Judy Sgro]

You have 28 seconds.

[Martin Champoux, Bloc, Drummond, QC]

I'll take my 28 seconds, Madam Chair, and give them back to Mr. Cannings.

I'll pay it forward.

[Voices]

Oh, oh!

[A voice]

Pay it forward. Yes.

[The Chair, Liberal, Judy Sgro]

[Inaudible—Editor] minutes and 16 seconds.