Debates of Oct. 3rd, 2017

Canadian Heritage

[Mélanie Joly, Liberal, Minister of Canadian Heritage]

Mr. Speaker, the government is committed to building a more inclusive society, and the National Holocaust Monument commemorates the six million Jews, as well as the five million other victims, who were murdered during the Holocaust. It stands as a reminder of the dangers of hatred, racism, and intolerance, while affirming respect for human rights, dignity, and resilience.

The plaque has been removed and will be replaced with language that reflects the horrors experienced by the Jewish people.

Canada Revenue Agency

[Wayne Stetski, NDP, Kootenay—Columbia, BC]

Mr. Speaker, this week my constituency office had to intervene to prevent a single mother and her three children from being evicted from their home. The cause was that the CRA stopped paying her the Canada child benefit following a routine assessment that ultimately resulted in no changes but delayed her payments for up to four months.

This is becoming a common story. It is Phoenix all over again.

The minister's restructuring of CRA has forgotten people who depend on receiving their legitimate payments on time every month. What will the minister do to fix these problems?

[Diane Lebouthillier, Liberal, Minister of National Revenue]

Mr. Speaker, all families should receive the benefits to which they are entitled. In my mandate letter, I committed to facilitating access to services for the neediest and most vulnerable, seniors, and single-parent families.

We will work hard to resolve the problem.

Seniors

[Fayçal El-Khoury, Liberal, Laval—Les Îles, QC]

Mr. Speaker, Canada's aging population is going to bring about significant social and economic changes over the next few decades. It is important to ensure that our seniors can still contribute to our society, as they did in the past in building our country.

Can the minister responsible for seniors tell us what the government is doing to take advantage of the experience, talent, and knowledge of the older generation of Canadians?

[Jean-Yves Duclos, Liberal, Minister of Families]

Mr. Speaker, I want to thank and congratulate my colleague from Laval—Les Îles for his remarkable work in helping his constituents and for everything he does for our seniors.

Our government is committed to supporting our seniors and ensuring that they have a dignified and secure retirement. I met with my territorial and provincial colleagues a few weeks ago in St. John's, Newfoundland. We agreed to work very hard in the short and long terms to put in place public and development policies that promote greater social and economic inclusion of our seniors today and in the future.

Canadian Heritage

[Alupa Clarke, Conservative, Beauport—Limoilou, QC]

Mr. Speaker, the Minister of Canadian Heritage is patting herself on the back for signing a deal with Netflix. However, her proposals and commitments with regard to protecting the production of French-language content remain totally unclear.

It is for that very reason that Ms. Prégent, the president of the Quebec artists' union, said the Liberal government is sending a mixed message: it sits down for a talk, but then it turns around and takes steps that were never discussed. The CEO of Simons echoed that sentiment, saying the agreement has no long-term vision.

Has the minister forgotten her mandate letter? What firm commitments can she offer towards French-language cultural production?

[Mélanie Joly, Liberal, Minister of Canadian Heritage]

Mr. Speaker, it is a little ironic to see my Conservative colleague rise in defence of culture when the Conservatives were the ones who cut millions of dollars from culture funding over the past 10 years.

That being said, I am happy to see that we have an ally here in the House who will help us make sure that every player benefiting from the system is able to contribute financially to our culture. I look forward to working with him to revamp our system in order to support our artists.

Taxation

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

Mr. Speaker, in its reform, the federal government is raising taxes on corporations' passive income, but not on the income of non-residents.

This means that a foreign billionaire who invests in Canada would be taxed at 25%, but a Quebecker would pay the maximum, 50%. The foreign investor could even avoid paying taxes altogether if his investment earns interest income, zero.

I would like the government to explain why it is penalizing our SMEs and giving foreign investors the advantage.

[Bill Morneau, Liberal, Minister of Finance]

Mr. Speaker, we want a tax system that is fair for all Canadians. That is very important.

The goal of our measures is to create a fair system that does not encourage the wealthy to simply incorporate in order to pay less in taxes. We will continue to move forward with our measures, taking into account everything we heard during our consultations. At the same time, we will think about how our system can be better for all businesses in Canada for the future. That is also very important.

Canadian Coast Guard

[Michel Boudrias, Bloc, Terrebonne, QC]

Mr. Speaker, last winter, because there were not enough icebreakers on the St. Lawrence River, a Rio Tinto ship became stuck in the ice.

Winter is coming, and this must not happen again. An immediate solution is needed, and it turns out that Project Resolute at the Davie shipyard is ready. The Davie shipyard can bring home four icebreakers, refit them up to standard, and lease them to the government to ensure that Quebec businesses will not have to suffer financial losses and once again face any risks in terms of marine safety.

Will the government finally wake up and say yes to the Davie shipyard?

[Terry Beech, Liberal, Parliamentary Secretary to the Minister of Fisheries]

Mr. Speaker, our government is dedicated to making sure that the men and women of the Canadian Coast Guard have the tools they need to do their jobs, whether that be ice-breaking capacity in Quebec or towing capacity. The Coast Guard expertly maintains its fleet. Also, in the interim, we have opened up an RFI to see if there are other ways we can complement our force.

Our government will always make sure that the tools are available, so the job gets done and it gets done right.

[John Oliver, Liberal, Oakville, ON]

Mr. Speaker, I rise on a point of order.

During question period, the member for Milton made a statement. For the record, I spoke directly with the CEO of Hatch several weeks ago, and I have a meeting already set up with a second group of Hatch employees to hear their concerns directly--

[The Speaker, Liberal, Geoff Regan]

Sounds like debate. Sometimes questions sound like they are attacks on members. I thank the hon. member for his point.

The House resumed consideration of the motion.

Opposition Motion--Consultations on proposed tax changes

[Cathy McLeod, Conservative, Kamloops—Thompson—Cariboo, BC]

Mr. Speaker, before we were interrupted for question period, I was talking about the process. I was suggesting that perhaps the Liberals, instead of reading the talking points generated by their leadership, should be listening to some experts. I have three experts I was talking about.

I am going to go back to the quote from the B.C. Chamber of Commerce. This is a group that prides itself on trying to be non-partisan, but in this case, it had to talk policy. We are talking about the process. It said:

The federal government has engaged in rhetoric that divides the country, directly stating that small business owners do not “contribute” to the wellbeing of the country and implying poor character on their part if they employ tax planning strategies that were established many years ago, to encourage the growth and sustainability of innovation and entrepreneurship and to compensate small business owners for the higher level of risk they undertake in their venture, compared to that of an employee.

That is a very important group in Canada that represents business owners.

The next person I want to quote is a tax accountant, a very experienced person who works with small businesses. He was at a round table in the riding. Regarding the process, he said that there are consultation papers released all the time. They tend to be very mundane and very boring but are important to people like him. He said that the language in this release was very political. It said that the wealthy need to pay their fair share. The finance minister even tweeted that if people do not support changes then they oppose tax fairness.

The accountant said that this was supposed to be an open consultation, when the initial consultation paper and tweets from the finance minister indicated that it would be anything but. He went on to say that most of the organizations that will be impacted are not wealthy. They are mom-and-pop businesses, and they will be deeply affected. He said that the statement by the finance minister that it would not affect the middle class is absolutely false. It is not closing loopholes. These are policies that were developed for very purposeful reasons. As the chamber indicated, these are policies that were developed to support organizations, not loopholes. Even before the famous video by the member for Carleton about the pizza shop, he said that there is a pizza shop in the riding of Kamloops—Thompson—Cariboo that will also be impacted.

His next concern was the layers of bureaucracy for monitoring compliance. It will take a new horde of CRA auditors to monitor and watch that very nebulous language. This is an accountant who has very important knowledge and does this work all the time.

The next person who had something to say was an experienced tax lawyer. One of the things I thought was very interesting was that he said that tax changes are very complicated, and he doubts that most of the members in the House actually understand the implications and what the language in the proposed changes means. It is people like the accountant and the lawyer who really understand what is being proposed by the government. His bottom line was that the government has taken a sledgehammer when all it needed was a scalpel.

I suggest that the Liberals listen to these three experts, one who represents business, one who represents accounting organizations, and one who understands tax law. Perhaps they should look at the suggestion that we have an additional bit of a consultation period.

That is about the process. The process obviously has been botched. People are very upset. They are feeling insulted, hurt, and angry.

I want to talk about a couple of specific examples. First, I talked earlier about the ranching families in my riding. We were in a state of emergency until the long weekend in September. They are busy fixing their fences, looking for their cattle, and trying to recover their lives.

How can Liberals actually suggest that there has been adequate time for consultation, when people across British Columbia have been dealing with very difficult circumstances all summer? Tourism businesses have been incredibly impacted by the fire season. People do not have time right now to even consider what the changes are going to mean, much less provide meaningful consultation.

Finally, when we were in Winnipeg, I met with an aboriginal entrepreneur. She said she has never had a grant and has never asked the government for money. She was a single mom and started a business with her sweat and tears and many sleepless nights, like so many entrepreneurs. She grew her business. She is now in a position where she wants to turn her business over to her son, and her accountant has said that it is going to be much more difficult for her. The government talks a lot about consultation. The Liberals should be asking themselves if they have talked to aboriginal entrepreneurs across this country.

There is a reasoned argument to continue this consultation period, at least into January. It is certainly unprecedented to have so many dramatic changes in such a short time, during the dog days of summer and during an emergency situation in British Columbia. I urge all Liberals to vote for the motion.

[Kevin Lamoureux, Liberal, Parliamentary Secretary to the Leader of the Government in the House of Commons]

Madam Speaker, it is worth repeating that the government has made a solid commitment to Canada's middle class. We can talk about the tax break in the first budget, a significant tax break for the middle class, and many other benefits, whether for children or seniors. We can talk about the idea of tax fairness. When we look at tax fairness, the overwhelming majority of constituents I represent want tax fairness, and that is what they see the minister and the Prime Minister trying to accomplish.

Why does she oppose the whole concept of tax fairness?

[Cathy McLeod, Conservative, Kamloops—Thompson—Cariboo, BC]

Madam Speaker, the whole problem is that the Liberals have not listened to a thing we have said during this debate. We are for tax fairness. What the Liberals do not recognize is that they have created a system that is about tax unfairness. It is about tax unfairness for the many people with small and medium-sized businesses who have worked very hard. Rather than speaking the talking points all the time, it is about time they listened to people like the lawyers, accountants, and small business operators and understand the important impact these changes are going to have on their lives and their livelihoods.

[Sheri Benson, NDP, Saskatoon West, SK]

Madam Speaker, I was glad to hear the member's comment about tax fairness. I am wondering if she would agree with me that what we really need is a comprehensive review of the tax code and that we need to focus more on the biggest abusers of the system rather than on small retailers and farmers.

[Cathy McLeod, Conservative, Kamloops—Thompson—Cariboo, BC]

Madam Speaker, we are talking about a pretty simple proposal, which is that the Liberals look at this issue further. The finance committee has had many recommendations, endorsed by many parties over the years that have talked about more comprehensive reviews. Conservatives are talking about putting a halt to the closure of this consultation period. As I indicated, British Columbia just lifted the state of emergency. How could people have paid any attention to what is going on here? It is time to spend a little more time getting the information the government needs to make sure that what it does is done properly.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Madam Speaker, I will ask the member a very simple question. With regard to passive income, 83% of it is used by individuals who make more than $250,000 a year. That is a quarter of a million dollars a year. Why is the member across the way prepared to have tax benefits for them but not for individuals working on factory floors, nurses, teachers, and so forth? Why does she support the double standard?

[The Assistant Deputy Speaker, NDP, Carol Hughes]

I just want to remind members that they may not like what they hear, but they still have to show respect to those members who do stand up.

[Cathy McLeod, Conservative, Kamloops—Thompson—Cariboo, BC]

Madam Speaker, they might make $250,000 a year, but then they have to take $100,000 or $150,000 off in terms of the expenses of their operation, and the next year they might not make anything.

Again, I will use ranching families as an example. They might have made a good income a few years after the BSE outbreak. They had terrible times before that. They made good income, and left the money in their companies. Now they are having to draw down because they are in crisis. They might make $250,000, but that has to be netted out. We then need to look at the difference over the years.

The fact that the member is using that kind of comparison is absolutely shameful.

[Mark Gerretsen, Liberal, Kingston and the Islands, ON]

Madam Speaker, it is a pleasure to rise today to speak to the opposition motion. I have been in the House pretty much the entire time, listening to the debate. Hearing what has been exchanged, I do have some concerns.

From time to time, we might be straying from the facts a little. I thought I would try to take this opportunity to outline my position on this, where I am coming from, what my constituents have said to me, and where I see the importance as it reflects to those timelines.

For starters, I think we all believe in fairness and the idea that in Canada we live in country where fairness is afforded to everybody, so everybody can have a fair shot. That is why it is so important to make sure that the tax system we implement and adopt is fair, so that we can grow the entire economy, so that the middle class, who contribute to the economy, who genuinely help it grow, can succeed and continue to further the enhancement and the growth of our economy.

Unfortunately, the reality that we have seen over the last 20 years is a growing divide, a matter of inequality between the haves and the have-nots.

We voted in favour of, and introduced, a tax break for the middle class not that long ago. Unfortunately that was not unanimous in this House. There were members, particularly Conservative and NDP members, who voted against lowering the taxes on the middle class and increasing them on the one per cent. That does not contribute to the fairness.

We can talk about social equities, we can talk about the social elevators, and we can have genuine policy debates about how we should implement and bring about different ideas to lift people up. Those are all good. There are genuine and good ideas that come from all parties.

However, when we talk about fairness, there is a concept that everybody needs to have a fair start. Unfortunately, the reality is that it is not the case. We come to the proposed changes. Will they make it totally fair? Absolutely not, but they are a step towards making it fair. Income sprinkling, which we have been talking about, is the concept that, if individuals have a corporation, they should not be able to take money that they are genuinely making for themselves and split it or sprinkle it amongst their spouses and adult children.

I am not coming at this just as a member of Parliament. I am a shareholder in a corporation. I own half of a corporation. I do not understand how it is fair that, as a corporate owner, I can effectively put my kids through school for cheaper than my employee can. It is just not fair.

Let us move on to passive investments. I will say this is probably the part of the debate that this motion really focuses on, because it is really the only part that is in the consultation period now. If we talk about extending the consultation period, we are talking about extending the consultation on passive investments.

I will say that there have been unintended consequences that have come forward as a result of the discussion around passive investments, but that is exactly why there is a consultation period going on now.

What I have been hearing about passive investments quite clearly is that people are worried about money that they put into a corporation and saved in a legitimate way. They are worried about how they can then take that money out later on, and rightly so. I heard from doctors, Craig and Ruth from my community, who have been saving this way for 20 years now, planning for their retirement. They are about to retire. Should the rug be pulled out from underneath them, because they have been using legitimate ways to save? No, I do not think it should.

That is why the parliamentary secretary made it very clear this morning, when he spoke, that we are focusing on this point and moving forward as it relates to the passive investments.

Then, of course, there is the capital gains aspect of this, which probably has had the least amount of focus, and how different mechanisms are used to transfer for succession planning in a corporation. These are legitimate concerns. I share the concerns of succession planning. As I indicated, I have a corporation that one day I plan to pass on to my children, in whole or in part. I am worried about that.

During the discussion that has been going on, the themes are continuous and they are the same. No new ideas are really coming up. People love to income sprinkle and want to continue to do it, and that is just a matter of policy or principle amongst different individuals in the House.

With respect to passive investing, the government is only consulting on this now so that it can propose legislation, so we can then debate that legislation.

With respect to capital gains, some people have brought forward real concerns about unintended consequences, which I believe the government will look at and will address in the legislation.

I would also note that corporations are quite different now from 40 years ago, the last time that the tax code was changed. Forty years ago, the majority of corporations were manufacturing enterprises, large corporations. A “corporation” 40 years ago was not an individual person or a couple of people. That has significantly changed. The idea that the tax code should change to reflect that is, at least in my opinion, entirely appropriate.

It has been pointed out on a number of occasions in the House today what is an extremely valid point to continue to put on the table, and that is the fact that Canada has the lowest corporate income tax rate of the G7 countries. That continues to give us a competitive advantage, and that continues to drive the incentive for businesses to grow.

I meant to say at the beginning of my comments that I will be splitting my time with the member for Sudbury. I apologize, and I will put that on the table now.

I did have a town hall meeting. I have had a number of opportunities to engage with people from my constituency. I was invited to a town hall where I heard what people had to say. I met with the Ontario Medical Association and local members from my community. I met with a number of people in my office. I continue to hear the same things over and over again. I have identified their problems and I appreciate what they have to say. There are some genuine concerns there.

However, I am not seeing any new information coming forward. I am not sure how extending the time by another four months would generate new concerns. We have to listen to the concerns that we are hearing and see how they can be reflected in the proposed legislation and the new legislation that will come forward in terms of passive investing.

I would like to take this opportunity to thank the Kingston Advocacy for Small Business. This is a group of tax professionals and accountants who came together on their own without my trying to set them up or feed them any information or anything. They looked at the genuine proposals and they brought their concerns to me. It was not a bashing session about taking shots at the government. This group had genuine concerns that they wanted to bring to my attention, and they helped me deliver them back to the government. A lot of the same concerns have been shared in the House and are starting to come to the surface.

There is opportunity now to take what we have consulted on, to take the draft legislation, to see the new draft legislation that will come forward, so that we can start to have some serious discussions on what that legislation will look like.

I believe in the concept of fairness. As an individual who owns a corporation, I do not think it is fair that I should have advantages over my employees when it comes to saving for my kids' education or saving for retirement. We all need to be on a level playing field. We can talk about the social elevators and how to make things different for particular groups in society, but at the end of the day what is so important is that everybody is on the same playing field. That is not the case when a police officer making $98,000 can effectively pay a higher rate of income tax than somebody making $230,000 and sprinkling that through his or her entire family.

[Pierre Poilievre, Conservative, Carleton, ON]

Madam Speaker, so the member claims he wants everything to be equal and even. He wants a tax code that is something like Switzerland, completely neutral. His government's proposal would impose double taxation on the passive investment of smaller private businesses, raising their effective tax rate to as much as a third higher than is the case for public companies; would tax at a higher rate a small business's investment in another business than it taxes that business's investment in its own operations; and would take away retirement income splitting for small business owners while maintaining it for politicians and others who have a company pension plan.

To narrow it down to one example, if the member wants to take retirement income splitting away from small business people through the so-called income sprinkling proposal, does he believe that the Prime Minister and he, himself, should lose that same ability with respect to their own pensions?

[Mark Gerretsen, Liberal, Kingston and the Islands, ON]

Madam Speaker, what I was not saying was that everything needs to be equal. What I was saying was that we all need to play by the same rules, that there has to be fairness with respect to where I am starting versus where a police officer or a nurse starts. The inequality will naturally come in the fact that people will be able to succeed in degrees that are higher than other individuals, but the basic starting point where we start playing the game needs to be the same. The truth of the matter is that it is not like that right now. When I own a corporation, I can effectively put my kids through school cheaper than my employee can put his children through school.