Finance committee  To the best of my knowledge, there's no prohibition as part of the multilaterally agreed pillar two of the global minimum tax framework on subnational jurisdictions that are implementing pillar two.

Finance committee  To the best of my knowledge, there is no prohibition on subnational jurisdictions implementing the pillar two global minimum tax. When I say “no prohibition”, I mean one that's included within pillar two of the multilaterally agreed framework for the global minimum tax. However, if a subnational jurisdiction were to implement its own global minimum tax, I think that could pose problems in terms of coordination with the federal global minimum tax that would be implemented by the proposed global minimum tax act in part 2 of the bill.

Finance committee  I'm Peter Repetto. I'm a director in the tax policy branch at the Department of Finance.

Finance committee  In the proposed global minimum tax act, which is in part 2 of the bill, there are no provisions relating to the allocation of revenues between the federal government and provincial governments. There, I'm speaking of revenues that are projected to result from the application of this new global minimum tax.

Finance committee  Thank you, Chair. I'd like to begin by clarifying my previous response, because I want to make sure that there is no misunderstanding. In budget 2023, the government indicated that it intended to share a portion of the revenues from the two-pillar international tax reform, which consists, again, of not only the pillar two global minimum tax that is in part 2 of this bill, but also pillar one.

Finance committee  Thank you, Chair, and thank you to the member for those questions. The member is correct in stating that the legislation for the new global minimum tax act in part 2 of the bill does not contain a mechanism for sharing the revenues from the pillar two global minimum tax between the federal government and provincial governments.

Finance committee  Hello. I'm Peter Repetto, a senior director in the tax legislation division at the Department of Finance Canada, and I will be speaking about part 2 of the bill. Part 2 is a proposed new act that would implement the global minimum tax, known as “pillar two”, in Canada. By way of background, Canada is one of 139 members of the Organization for Economic Co-operation and Development's G20 inclusive framework on base erosion and profit shifting that joined a two-pillar plan for international tax reform in 2021.