Debates of Feb. 5th, 1997

Petitions

[Bill Blaikie, NDP, Winnipeg—Transcona, MB]

Mr. Speaker, the second petition calls on Parliament to cancel the planned sale of Candu reactors to China and to immediately withdraw from all arrangements concerning financial and technical assistance to China for nuclear reactor technology.

[Bill Blaikie, NDP, Winnipeg—Transcona, MB]

Mr. Speaker, the third petition calls on Parliament to urge the federal government to join with provincial governments to make a national highway system upgrading possible.

[Bill Blaikie, NDP, Winnipeg—Transcona, MB]

Mr. Speaker, the fourth petition calls on Parliament to enact Bill C-205, introduced by the hon. member for Scarborough West at the earliest opportunity and to provide in Canadian law that no criminal profits from committing a crime.

Questions On The Order Paper

[Paul Zed, Liberal, Parliamentary Secretary to Leader of the Government in the House of Commons]

Mr. Speaker, the following questions will be of particular interest to my colleague from Trois-Rivières. Questions No. 87, 88 and 89 will be answered today.

Question no. 87-

[Yves Rocheleau, Bloc, Trois-Rivières, QC]

With respect to family trusts: ( a ) exactly how many family trusts have been recognized by Revenue Canada since 1972; ( b ) how many family trusts have accumulated assets in the following amounts: (i) $100,000 and less, (ii) $100,000 to $500,000, (iii) $500,000 to $1 million, (iv) $1 million to $5 million, (v) $5 million to $25 million, (vi) $25 million to $100 million, (vii) $100 million to $500 million, (viii) $500 million to $1 billion, (ix) the number of family trusts worth $1 billion or more, with an individual description of each and (c) specify what percentage of all the trusts in each category is held in each province?

[Jane Stewart, Liberal, Minister of National Revenue]

In response to (a), the term "family trust" is not a defined term in the Income Tax Act. The term "personnal trust" is, however, a defined term in the act and includes: (i) testamentary trusts, established upon the death of the individual; and (ii) inter vivos trusts, established while the settlor of the trust is alive, for which generally no amount is paid by the beneficiary for the interest in the trust.

The terms "family trust" and "personal trust" are often used interchangeably. Based on 1994 statistics, there were 117,642 returns filed for personal trusts. Revenue Canada did not begin collecting trust data by computer until 1992. However, of the personal trusts that existed in 1994, 15,832 were created prior to 1972.

In response to (b), just as individuals are not required to file a balance sheet which indicates assets owned with their personal income tax returns, neither are trusts. This is so because individuals and trusts are subject to tax on annual income generated by assets and not on the basis of assets themselves. Therefore, Revenue Canada does not have information with respect ot the dollar amount of assets held by trusts.

In response to (c), as explained in the answer to (b) above, Revenue Canada does not have information with respect to the dollar amount of assets held by trusts.

The number of returns filed by personal trusts in 1994 was 117,642. The breakdown by province is as follows:

NF 400 PE 329 NS 2,823 NB 1,141 QC 16,705 ONT 56,339 MN 6,294 SK 4,035 AB 10,517 BC 18,635 NT 294 YK 130 177,642

Question No. 88-

[Yves Rocheleau, Bloc, Trois-Rivières, QC]

What is the impact on the Canadian tax system of the shortfall since 1972, per year, from the establishment of family trusts?

[Jane Stewart, Liberal, Minister of National Revenue]

Trusts are subject to tax on their annual income except to the extent the income is allocated to beneficiaries, in which case the income is subject to tax in the hands of the beneficiaries. Therefore, all income is subject to tax.

Questions concerning the shortfall of tax revenues arising from the establishment of family trusts were raised in 1994 by the Standing Committee of Finance during the committee's study on the taxation of family trusts undertaken pursuant to Standing Order 108(2).

At that time, the committee attempted to ascertain the applicable tax revenues that might have been assessed on deemed taxable capital gains had the extension to the 21-year rule not been enacted by the previous government. Such a determination required knowledge of both the cost base and the current value of assets held by those trusts. However, as trusts are not required to file annual balance sheets, information regarding the assets held by trusts was impossible to obtain.

Hence, attempts to speculate on the value of assets held in trusts and the anticipated shortfall in tax revenues as a result of the extension of the 21-year rule were not successful.

Question no. 89-

[Yves Rocheleau, Bloc, Trois-Rivières, QC]

With respect to family trusts: ( a ) to date, how many family trusts have taken advantage of the ruling Revenue Canada issued on December 23, 1991 enabling them to transfer their assets abroad tax free and ( b ) what is the value of the assets and the province of origin of each of the family trusts that have been transferred abroad?

[Jane Stewart, Liberal, Minister of National Revenue]

In response to (a), no trust has requested a ruling similar to the December 23, 1991 ruling and to date Revenue Canada has no knowledge that any trust has proceeded with a similar transaction.

In response to (b), as explained in the response to (a), Revenue Canada has no knowledge that any trust transferred assets abroad in circumstances similar to the 1991 ruling.

[Paul Zed, Liberal, Fundy Royal, NB]

I ask, Mr. Speaker, that the remaining questions be allowed to stand.

[The Deputy Speaker]

Is that agreed?

[Some hon. members]

Agreed.

Motions For Papers

[Paul Zed, Liberal, Parliamentary Secretary to Leader of the Government in the House of Commons]

Mr. Speaker, I ask that all Notices of Motions for the Production of Papers be allowed to stand.

[The Deputy Speaker]

Is that agreed?

[Some hon. members]

Agreed.

Points Of Order

[Bill Blaikie, NDP, Winnipeg—Transcona, MB]

Mr. Speaker, I have just a small point of order arising out of the tributes.

Unless my memory serves me incorrectly, the custom of this House has been on the occasion of a tribute for the first tribute to any particular former member of this House, or a member of this House that has died, is to come usually from the representative of the party for which the member sat, or in some instances the sitting member for the riding for which the former member sat.

I noticed today that in the case of the former member for Nickel Belt it was a sitting member that was recognized. I fully expected that the next member recognized would be a member from the New Democratic Party and that was not the case.

I would like to register my objection to this departure from what I consider to be the tradition in this House, a tradition of which the Chair should be well aware, having sat in this House as long as I have.

[The Deputy Speaker]

I thank the hon. member for his point. The Chair fully agrees with it. I regret that I did not go to the hon. member after or before the member who sits for the seat at the moment. I thank the hon. member for drawing that to the attention of the Chair.

The House proceeded to the consideration of Bill C-70, an act to amend the Excise Tax Act, the Federal-Provincial Fiscal Arrangements Act, the Income Tax Act, the Debt Servicing and Reduction Account Act and related acts, as reported (with amendments) from the committee.

Excise Tax

[The Deputy Speaker]

I have a ruling with respect to the groups at the report stage of Bill C-70.

There are 125 motions in amendment standing on the Notice Paper for the report stage of Bill C-70. Motions will be grouped for debate as follows:

Group No. 1: Motions Nos. 1 and 2.

Group No. 2: Motions Nos. 3 to 117.

Group No. 3: Motions Nos. 118 to 124.

Group No. 4: Motion No. 125.

The voting patterns for the motions within each group are available at the table. The Chair will remind the House of each pattern at the time of voting. The Chair will now propose Motions Nos. 1 and 2 to the House.

[Barry Campbell, Liberal, Parliamentary Secretary to Minister of Finance]

Mr. Speaker, a point of order. You might find unanimous consent for all motions on the Order Paper today to be deemed to have been read and seconded and a recorded division requested and automatically deferred on each according to your ruling.

[The Deputy Speaker]

Is there unanimous consent for the motion just proposed?

[Some hon. members]

Agreed.

[Some hon. members]

No.

[The Deputy Speaker]

There is obviously not unanimous consent. Members are going to have to listen to all of them being read.