Debates of May 30th, 2016

Finance — Main Estimates 2016-17

[Bill Morneau, Liberal, Toronto Centre, ON]

Mr. Chair, it is very important to us to improve things for the middle class and those who aspire to join it. That is why we started with a tax cut for the middle class and people who are going through tough times.

We started with the tax cut, and what I can say is that nine million Canadians now have more money in their pockets every time their company or organization pays them. These tax cuts really mean a lot to Canadians.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Mr. Chair, in fact, since there are about 28 million taxpayers, this means that 19 million Canadians will not get a dime from those tax cuts.

The problem lies with the definition of “middle class”. If the average income in the country is about $40,000, according to Statistics Canada, and the median income is $31,000, we can all agree that a large portion of the middle class will not get one red cent.

My question is very simple. Given these definitions from Statistics Canada, what is the minister's definition of the middle class?

[Bill Morneau, Liberal, Toronto Centre, ON]

Mr. Chair, I am pleased to respond to that question. When looking at what we are doing, in order to really help people in the middle class, in order to really help those who are striving to get into the middle class, one must look at the measures we are taking on tax reductions, which are so important because they would help nine million Canadians, and also the other measures in our budget that would make a real difference. By putting in the Canada child benefit, we would help an enormous number of Canadian families. We would help nine out of 10 Canadian families with children have a much better situation. It would make an enormous difference for them and help them at the time in their life when they are facing real challenges. That is at a time in their life when they are raising children.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Mr. Chair, can the minister tell the House how much someone making between $100,000 and $200,000 would get from this tax cut?

[Bill Morneau, Liberal, Toronto Centre, ON]

Mr. Chair, I am pleased to say that our tax cut would help a large number of Canadians. As I have said, it would help nine million Canadians. It would help all Canadians earning over $45,000, and it would decline once people get into the highest tax brackets in such a way that by the time they hit $200,016 in income they would have no advantage from that tax cut.

What we have focused on really, though, is how we can help those who are struggling to get into the middle class, people who are at the lowest end of the income scale. The Canada child benefit would put benefits where people really need them, for people who are challenged to do well for their families.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Mr. Chair, someone earning between $100,000 and $200,000, which is most of the members of the House, would actually get $679 in tax cuts, which is about three times more than somebody earning $60,000.

Has the department conducted an analysis on how much revenue the government loses on tax evasion using tax havens every year? If so, how much?

[François-Philippe Champagne, Liberal, Parliamentary Secretary to the Minister of Finance]

Mr. Chair, I am pleased to say that our government is the one that is fighting tax evasion. We have made a record investment of $444 million to give the Canada Revenue Agency the teams and technologies needed to combat tax evasion.

I can also say, as my colleague knows, that the Minister of National Revenue has indicated to the Standing Committee on Finance that she will be conducting a study to analyze the issue of the tax gap in Canada.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Mr. Chair, before assessing the quality of the solution, we need to find out what the problem is.

I will ask my question again. Has the government conducted a study to determine how much revenue the government is missing out on because of tax havens? If such a study has been done, how much are we talking about?

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

Mr. Chair, as I said, when the Minister of National Revenue appeared before the Standing Committee on Finance, she indicated that Canada would begin that study. My colleague is well aware of the response given by the minister.

The hon. member has to understand that we are going to take steps to start this study and we will come back to the House with precise figures on the tax gap in Canada.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Mr. Chair, will the tax treaties that Canada has with certain tax havens be evaluated, and if so, when?

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

Mr. Chair, when the Minister of National Revenue appeared before the Standing Committee on Finance, she was clear. She struck a committee to review all of Canada's tax treaties.

When the minister has concluded that work with her special committee, which was created in order to propose measures to deal with international tax evasion, I think she will be able to come back to the House with some recommendations.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Mr. Chair, on a different topic, what does the department estimate is the annual cost of the deduction for stock options for employees?

[Bill Morneau, Liberal, Toronto Centre, ON]

Mr. Chair, I am pleased to say that we are focused on innovation. We are focused on how we can help our economy grow through innovation. We see stock options as a legitimate form of compensation for innovative companies. We recognize that in order to encourage companies to invest and to grow they can use this form of compensation to help their companies. We have decided that is going to continue to be a measure that they can utilize.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Mr. Chair, the question was about how much was actually lost by the government in tax expenditures on the employee stock option adoption. That is about $800 million.

I would note that this is a different discourse than what the government was saying during the campaign. The government promised to phase out tax measures that primarily benefit the wealthy and that is the case for this specific measure which goes primarily to the most well off.

I would like to know why the government broke its promise that was made during the election to close this tax loophole that subsidizes largely wealthy CEOs.

[Bill Morneau, Liberal, Toronto Centre, ON]

Mr. Chair, I would like to reinforce that we decided to leave this measure in place because it can help us to have innovative companies.

When looking at calculations, we cannot only look at the expense side of the ledger. We also have to look at the revenue side.

Unfortunately the member is not thinking about the potential good news that might come from having more innovative companies in this country, companies that can actually provide growth, that can provide opportunities for Canadians to have jobs. We are focused on that revenue opportunity and think that it will vastly exceed any tax expenditures that are in place.

More importantly, we recognize that this provision in our tax code does not merely benefit one small category of individual but benefits many small businesses that are striving to grow and make a real difference in our economy for the long term, innovative companies that can be the exact companies that we need to have in this country to be successful.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Mr. Chair, the Liberal government also promised major spending on infrastructure, but presented a deficit of roughly $3.4 billion.

More importantly, the budget contained a privatization strategy called “asset recycling”.

Can the minister tell us what infrastructure projects or what assets are being considered for this type of privatization?

[Bill Morneau, Liberal, Toronto Centre, ON]

Mr. Chair, I am pleased to answer the question around infrastructure. We have put forward for Canadians the most significant infrastructure plan in the history of this country. We have said that we want to spend $120 billion over the next decade in making a real difference in infrastructure in this country. We laid out the first phase in our plan, the first amount that we put forward. We have also said that we are going to come forward with bigger plans in the fall.

We have also said that we are going to invest some additional amounts that are important right now. We said we are going to invest $2 billion over the next three years in research at universities and research infrastructure. We have said we are going to invest $3.5 billion over the next three years in federal infrastructure. It is making a significant difference on our growth.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Mr. Chair, I still did not get an answer.

We are talking about asset recycling, which was an item in the budget. I would like to know what is actually under consideration for privatization under this asset recycling scheme that the government included in its budget.

[Bill Morneau, Liberal, Toronto Centre, ON]

Mr. Chair, I am pleased to say, as the member knows, that we did mention in our budget that we would look at the possibility of asset recycling, that we would do so in places where we think it might be in the public interest to do so, such as mature assets that might possibly be able to be recycled, so that we could, in fact, enhance the long-term growth of our country by making sure that the government is using the resources that we have in the most effective and positive way, resources that we know can actually help us to grow the economy over the long term by investing them wisely, investing them in ways that can make a difference for this generation and the next generation.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Mr. Chair, I take it that the minister actually agrees with the fact that asset recycling is a form of privatization of our public assets.

As part of its infrastructure investments, the government also promised that it would create an infrastructure bank, but so far details on that have been scarce.

Could the minister tell us where the funding will come from? Will it be largely public funding? Do we know how much will come from Canadian pension funds and how much will come from the private sector?

[Bill Morneau, Liberal, Toronto Centre, ON]

Mr. Chair, I am pleased to say that, yes, we did talk about developing an infrastructure bank in our campaign. That was an idea that we believed had merit. We believe that thinking about ways that we can maximize the impact of our infrastructure spending is critically important. Canadians expect no less than for us to be creative in the way that we can actually make a real difference in our economy.

We are working diligently on this idea, thinking about how we can maximize our infrastructure investment, about how we can work together with provinces and municipalities and institutional investors, about how we can get the lowest cost of capital in infrastructure investments so that we can, in fact, make a real difference over the long term for Canadians. That is something that the hon. member will hear more about in the coming months and something that, I am sure he will agree, will make a real difference for Canada.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Mr. Chair, budget 2016 did not include any details on the compensation that would be required for dairy producers as a result of the free trade agreement with the European Union.

Could the minister tell us how much he estimates the compensation will be, since this amount was not included in the budget?

[Bill Morneau, Liberal, Toronto Centre, ON]

Mr. Chair, as members in the House may know, the Minister of Agriculture and Agri-Food and the Minister of International Trade have committed to meeting with the dairy industry in the near term to consult on a plan to help the industry adjust to market access concessions under the Canada-Europe trade agreement. We are focused on having that discussion. It is, as we know, an important discussion when we enter into trade agreements.

However, I would like to step back and talk about the benefits of this trade agreement that we see as critically important. We know that opening up a market the size of Europe for Canada, doing it in a way that puts us in advance of other countries doing the same sort of deal, is critically important and will help us in our efforts to grow our economy.

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

Mr. Chair, I will go to the podium, if you do not mind.

[The Chair, Conservative, Bruce Stanton]

Much like we saw when questions were asked to the minister, members of the government may ask questions to the parliamentary secretary during the five-minute period.

Since the parliamentary secretary is addressing the House, during the five-minute period for questions and comments, much like we saw during the minister's time, other members of the government may pose questions to the parliamentary secretary during the five-minute period for questions and comments, or the parliamentary secretary can pose questions to the minister, if he wishes.