Debates of May 30th, 2016

Ethics

[Michel Picard, Liberal, Parliamentary Secretary to the Minister of Public Safety and Emergency Preparedness]

Mr. Speaker, I thank the hon. member for the question and for coming back to the matter.

Our government is committed to preserving the integrity of the tax system and ensuring compliance. Like my hon. colleague, we are concerned about the allegations that owners made false statements on their status to both U.S. and Canadian customs with the intention of avoiding paying taxes.

My colleague might know more or less how many federal laws and regulations apply to the purchase, export, or import of a private vessel, a responsibility that falls under a number of different departments and agencies.

If a private vessel is being purchased in Canada for export, that is for personal use outside of Canadian waters, the Canadian owner may not be obligated to pay Canadian sales tax or customs duties. In this type of scenario, these vessels, which are considered exported from Canada, are only permitted to be imported back into Canada temporarily for storage and repair free from Canadian taxes and duties as long as they adhere to the prescribed rules governing time frames and use. However, a vessel purchased for export may not be imported back into Canada by the owner for personal use on Canadian waters, nor is it eligible for entry into our country as a good that originated in Canada, unless all taxes and/or duties owed under the Customs Act have been paid to the crown. Non-compliance may result in enforcement measures, including the collection of duty and taxes.

As I have mentioned, multiple pieces of federal legislation and regulation govern the importation and exportation of these vessels. For example, as noted by the Minister of Public Safety in the House of Commons on March 22, taxation policies and rules are within the purview of the Minister of National Revenue. Accordingly, the collection of any outstanding debts owing to the crown, such as duties, fees, taxes, or any other amount under the Customs Act, customs tariffs, Excise Tax Act, and related regulations, would fall within the mandate of the Canada Revenue Agency, which may take legal action to collect the outstanding debt in the absence of an acceptable payment arrangement.

Additionally, the licensing and registration of pleasure craft vessels in Canada is the responsibility of Transport Canada under the Canada Shipping Act. Transport Canada uses administrative monetary penalties to enforce compliance, and any pleasure craft owner found to be operating a vessel in Canada without a licence or registration may be issued a fine.

Finally, any duties owed are calculated according to the relevant tariff classification, which is defined by the Department of Finance. As part of its mandate, the Canada Border Services Agency, which falls under the purview of Public Safety Canada, assists other federal departments in enforcing their acts. With respect to this issue, the agency is required to verify that vessels that have been exported from Canada are not being used in Canadian waters. In cases where violations are discovered, the agency pursues any applicable enforcement, including collection of duties and taxes. As part of its responsibilities, the agency makes information available to raise awareness about Canadian laws and to encourage compliance.

The Canada Border Services Agency functions 24 hours a day and 365 days a year, at approximately 1,200 points of service, including marine ports. Last year, the agency processed approximately 97.5 million travellers, and collected about $29 billion in duties and taxes, accounting for 10% of the Government of Canada's revenues.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Mr. Speaker, I thank my colleague for his answer. Unfortunately, he did not address the fundamental question about ethics, which is the topic of the adjournment debate I proposed this evening.

The ethics question has to do with the deputy minister's direct involvement in a situation. He is one of the most senior officials at the Department of Public Safety and Emergency Preparedness.

I want to remind the House of what happened after Ms. Gosselin, from Marina Gosselin, sent an email.

At 6:24 a.m., she sent an email to the deputy minister; she had his personal email address, since she sent him an email directly. At 8:50 a.m., the deputy minister forwarded the email directly to the president of the Canada Border Services Agency. At 10:26 a.m., the president forwarded the email to three subordinates, talking about Mr. Guimont's request. That same day, the request made its way through the organization in five new messages identified as a priority.

A conference call was set up, and 24 people became involved in fixing Marina Gosselin's problem.

[Michel Picard, Liberal, Montarville, QC]

Mr. Speaker, naturally, we expect Canadians to comply with the law regarding the purchase, exportation, and importation of vessels. The Canada Border Services Agency has a mandate to enforce the act.

Whether a vessel arrives in Canada by water or by land, every person who temporarily or permanently imports a foreign boat must declare it to the Canada Border Services Agency.

If owners wish to use their foreign vessels for recreational purposes in Canadian waters, they must permanently import the vessel and pay the applicable Canadian taxes and duties. Non-compliance may result in enforcement measures, including the collection of duty and taxes.

The government will continue to work with the Canada Border Services Agency and to ensure that these boat owners and marinas know their responsibilities and that they meet them.

[The Assistant Deputy Speaker, Liberal, Anthony Rota]

Pursuant to Standing Order 81(4), the motion to adjourn the House is now deemed to have been withdrawn, and the House will now resolve itself into committee of the whole for the purpose of considering all votes under Finance in the main estimates for the fiscal year ending March 31, 2017.

I do now leave the chair for the House to resolve itself into committee of the whole.

(House in committee of the whole for consideration of all votes under Finance in the Main Estimates, Mr. Bruce Stanton in the chair)

Finance — Main Estimates 2016-17

[The Chair, Conservative, Bruce Stanton]

The House is in committee of the whole for the purpose of considering all votes under Finance in the main estimates for the fiscal year ending March 31, 2017.

Tonight's debate is a general one on all of the votes related to finance. The first round will begin with the official opposition, followed by the government and then the New Democratic Party. After that, we will follow the usual rotation for the House.

Each member will be allocated 15 minutes at a time, which may be used for both debate and opposing questions. Should members wish to use this time to make a speech, it can last a maximum of 10 minutes, leaving at least 5 minutes for questions to the minister.

When a member is recognized, he or she should indicate to the Chair how the 15-minute period will be used. Members should also note that they will need the unanimous consent of the committee if they wish to split their time with another member.

When the time is to be used for questions and comments, the Chair will expect that the minister's response will reflect approximately the time taken by the question. I also wish to indicate that, in committee of the whole, ministers and members should be referred to by their titles or riding names, and of course, all remarks should be addressed through the Chair. I ask for everyone's co-operation in upholding all established standards of parliamentary language and behaviour.

We will begin tonight's session. As a reminder to all hon. members, they will be recognized at the seat of their choice in the chamber.

The House is in committee of the whole, pursuant to Standing Order 81(4)(a), for consideration of all votes related to finance in the main estimates for the fiscal year ending March 31, 2017.

[Lisa Raitt, Conservative, Milton, ON]

Mr. Chair, as members of the House know, the main estimates represent the government expenditure plan or its overview of spending for 2016-17. Spending, of course, is of great concern and interest to Her Majesty's loyal opposition, because that is exactly where we think the government goes off the path to true prosperity.

I am going to have questions for the minister for the full 15 minutes. I will start with revenues going forward.

In the budget of the government that was tabled in this place in March, the minister indicated that there would be revenues of approximately $291.2 billion. Also, he projected that there would be program expenses of $270.9 billion. That is very similar to what we had predicted in terms of the revenues for budget 2015-16 of $290.3 billion, the big difference, of course, being program expenses.

My question for the minister is this. Can the minister not recognize that the issue is with spending and not with revenues?

[Bill Morneau, Liberal, Minister of Finance]

Mr. Chair, we recognize that the fundamental challenge for Canada at this time, faced with the demographic challenges that we face, is to make investments that will actually grow the size of the economy.

Those investments will in fact enhance the revenue for the government, but that is not the core reason that we are doing them. We are doing them because we are coming out of an era of low growth. The last decade has been an era of low growth. It was a decade in which all of the deficits that were put in place during those years led only to low growth.

Our approach is different. Our approach is to make investments that will allow us to expand the growth rate and improve the revenue to the government.

[Lisa Raitt, Conservative, Milton, ON]

Mr. Chair, does the minister realize that his expenses are up 8.6% over last year, and looking forward, there are extremely higher interims of program expenses?

[Bill Morneau, Liberal, Toronto Centre, ON]

Mr. Chair, I would like to identify, again, that we are faced this year with the challenges that have been left to us by the previous government.

Those challenges include an era that was lower growth. When lower growth comes, we often find we have some challenges with increased program expenditures to deal with challenges faced by the economy. That is the situation we find ourselves in.

[Lisa Raitt, Conservative, Milton, ON]

Mr. Chair, on the topic of economic growth, does the minister not agree with the fact that the entire world economy has experienced low growth in the past 10 years?

[Bill Morneau, Liberal, Toronto Centre, ON]

Mr. Chair, what I can agree with, quite clearly, is the fact that the economy over the last decade, the period in which the previous government was in place, was growing at the lowest rate it has grown for the last eight decades.

We found ourselves in a low-growth era. That is what we are facing right now. That is exactly why we have decided to move forward with investments that can enhance our growth rate.

[Lisa Raitt, Conservative, Milton, ON]

Mr. Chair, the minister is fond of assessing the economy by saying that there has been a disproportionate increase in incomes in this country over the past 10 years.

Can the minister not confirm for me that the OECD has stated that between 2005 and 2011, household income has increased in Canada in the same proportion across the distribution of incomes?

[Bill Morneau, Liberal, Toronto Centre, ON]

Mr. Chair, I would like to say that we are very focused on the notion of inclusive growth.

We realize that middle-class families are facing real anxiety. They are facing the anxiety of raising their children when costs are going up for education, and anxiety when they consider the retirement that is looming large to them.

That is one of the reasons we are focused on investing in order to improve the economy and improving growth from the situation we have found ourselves in.

[Lisa Raitt, Conservative, Milton, ON]

Mr. Chair, let us talk about retirement for a moment.

The minister said in committee this afternoon that moving the retirement age from 65 to 67 was an arbitrary decision made by the previous government.

I would like to know if the minister believes that 28 out of 34 countries doing the same thing indicates arbitrariness.

[Bill Morneau, Liberal, Toronto Centre, ON]

Mr. Chair, when defining “arbitrary”, what I mean is that when a prime minister leaves their country to go to another country to decide what that country is going to do rather than presenting it to their own countrymen, that presents as an arbitrary decision. That is a decision without any pre-communication to the population. That is an arbitrary decision.

[Lisa Raitt, Conservative, Milton, ON]

Mr. Chair, does the minister realize that his Prime Minister actually announced that it would be moderate deficits to The Wall Street Journal in New York City, which is not in our county either?

[Bill Morneau, Liberal, Toronto Centre, ON]

Mr. Chair, we have been very clear with Canadians that we want to be open and transparent.

In fact, during the entire course of our election campaign, we told Canadians that we wanted to make investments in our economy. We were clear all the way.

Once we got into office, we were clear again. Investments were the path that we were going to be on. Investments are the path, because we know what we are facing is an era that has been low growth. It has been low growth because the previous government did not make those kinds of investments in Canadians.

[Lisa Raitt, Conservative, Milton, ON]

Mr. Chair, does the minister realize that the OECD actually recommended that countries move to 67 years of age for eligibility and indeed said the following?

Bold action is required. Breaking down the barriers that stop older people from working beyond traditional retirement ages will be a necessity to ensure that our children and grand-children can enjoy an adequate pension at the end of their working life. Though these reforms can sometimes be unpopular and painful, at this time of tight public finances and limited scope for fiscal and monetary policy, these reforms can also serve to boost much needed growth in ageing economies.

Why does the minister not agree with the Secretary-General of the OECD?

[Bill Morneau, Liberal, Toronto Centre, ON]

Mr. Chair, we believe that retirement security is a critically important issue. It is an issue on which we are very focused. We also believe that retirement security is not a simple one-size-fits-all solution. We recognize that those people, the most vulnerable in our society, rely on the guaranteed income supplement and the old age security program. That is why we have reformed the guaranteed income supplement, so that we could help some of the most vulnerable in our society. That is why we have moved the old age security system back to age 65, so that those people who are most vulnerable could actually get access to it at a time when they need it.

Together with that, we are moving forward on a plan to enhance the Canada pension plan, so that we can focus on the long-term security of Canadians, ensuring that they save enough for their retirement, so they can retire in dignity.

[Lisa Raitt, Conservative, Milton, ON]

Mr. Chair, perhaps the minister will agree with this quote, which states:

If we were to retire three years later than we do now, any concerns about having adequate retirement income would practically vanish. It would also alleviate any shortages in the workforce due to the aging...population.

Does the minister agree with this quote?

[Bill Morneau, Liberal, Toronto Centre, ON]

Mr. Chair, if the hon. member is saying “we” and including herself and me, I could probably agree with that, because I do think that those people who are most capable of retiring later can indeed do so. I would say that the people in her or my income category absolutely qualify for that quote.

What we are trying to say to Canadians is that one size does not in fact fit all. Those people who have jobs that are the most difficult or those people who are earning lower incomes often find themselves in a situation where they cannot work past the age of 65. Those are the people who we are focused on helping. We know that providing retirement dignity for them is critically important.

[Lisa Raitt, Conservative, Milton, ON]

Good gymnastics, Mr. Chair, but not a 10, because later on in his book, from which this quote came, the minister then went on to say, “Phasing in the eligibility age for OAS and GIS from 65 to 67 is a step in that direction”, “that direction” being a good direction.

Can the minister comment this time on whether or not he thinks that raising the real retirement age from 65 to 67 is an arbitrary decision?

[Bill Morneau, Liberal, Toronto Centre, ON]

Mr. Chair, I am pleased to answer the question. As I have said, there are efforts we should make to deal with the different requirement needs of different cohorts of society. We are very clear that we recognize that middle-class Canadians and those who are struggling to get into the middle class were faced with a very difficult situation when the previous government arbitrarily moved the age to 67 from age 65. The kind of quote that is being presented by the hon. member is actually quite a different idea. It is an idea of phasing something in, and it may be an idea that is vastly more nuanced. The key point here is that different Canadians have different situations.

[Lisa Raitt, Conservative, Milton, ON]

Mr. Chair, that is an admirable effort by the Minister of Finance to distance himself from his previous good ideas, as he tries to pay lip service to the terrible budget he has presented in this House.

I will move on to a different topic of conversation, if we may.

I am very interested in whether or not the Department of Finance has produced any reports for the minister with respect to the effect of the income tax increase on a higher band of earners and what it would do in terms of being able to attract talent to our country.