Tag Archives: CRA

QP: Discounts and French villas

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Hours after the mandatory Monday morning Liberal caucus meeting and the presser by Justin Trudeau, Bill Morneau, and Bardish Chagger on small business tax cuts, QP got underway, with the opposition smelling blood in the water. Andrew Scheer led off, mini-lectern on desk, and read a demand in French for clarity on employee discounts as tax benefits. Diane Lebouthillier stood up to say that the document from CRA did not reflect the government’s position, and they would be reviewed. Scheer asked again in English, making a bigger issue out of this being a tax grab, and a Lebouthillier repeated her response in English — a rarity for her (which she has been working on). When Scheer asked yet again, Lebouthillier reiterated her response for a third time, but back again in French. Alain Rayes took another stab at the very same question in French, got the same answer, and then when Rayes tried to insinuate that she didn’t know what was going on in her department, Lebouthillier stuck to her points. Guy Caron was up next for the NDP, and he raised the non-stories of Bill Morneau’s villa in France, and his company shares not being put into a blind trust (never mind that he followed the Ethics Commissioner’s instructions on the ethics screen instead). François-Philippe Champagne stood up to praise the small business tax cuts instead, and on a second question of the same, Champagne reminded him that he followed the guidance of the Ethics Commissioner. Nathan Cullen was up next, and wondered rhetorically about Liberal promise-keeping as damage control. Champagne praised the small business tax cuts instead, given that there wasn’t really a question there. Cullen raised the villa and the lack of blind trust, and Champagne reiterated that Morneau followed the Commissioner’s guidelines.

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Roundup: A failure to communicate

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The state of the “debate” around this latest round of tax nonsense in Canada has me despairing for the state of discourse in this country. From the CRA’s opaque memo, to the Conservatives’ disingenuous and frankly incendiary characterization, followed up by terrible government communications and attempts at damage control (Scott Brison doing the rounds on the political shows last night was painful to watch), and throughout it all, shoddy and inadequate reporting on the whole thing has me ready to cast a pox on all of their houses. If anything was more embarrassing than Brison’s inability to explain the issue while reciting well-worn talking points on the middle class, it was David Cochrane quoting the Canadian Taxpayers Federation and asking if MPs need to reconsider their own benefits in light of this.

Hermes wept.

It also wasn’t until yesterday that CTV came up with an actual good fact-check on the issue, what it actually relates to (including how it relates to a 2011 Tax Court decision), and how it’s not targeting the bulk of the retail sector. But that took days to get, during which time we’ve been assaulted by all manner of noise. News stories in the interim that interviewed MPs and the Retail Council of Canada were distinctly unhelpful because they did nothing to dissect the actual proposals, which were technical and difficult to parse, so instead of being informed about the issues, we got rhetoric, which just inflames things. And I get that it’s tough to get tax experts over a long weekend, but Lyndsay Tedds tweeted a bunch of things on it that should have pointed people in the right direction, rather than just being a stenographer for the Conservative hysteria/government “nothing to see here, yay Middle class!” talking points.

Here’s a look at how the government scrambled to get a better message out around the Canada Infrastructure Bank, in order to combat those same media narratives. Because apparently neither side is learning any lessons here.

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Roundup: A reminder of why debate matters

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While I haven’t been following the trial in Sudbury around those non-criminal bribery charges related to the provincial by-election, aside from Chris Selley’s columns on the topic, it was something that he tweeted from the courtroom yesterday that piqued my interest because it’s something I deal with a fair amount in writing both about law and politics. Part of the issue raised is that these sections of the law that the trial is proceeding under have never been tested before.

We see these kinds of bills passed not infrequently federally that are passed at all stages with no debate. This is usually where the Senate picks up the slack and does the actual heavy lifting, but not always. Sure, there are a few bills that are relatively non-contentious, related to national parks and such (to think of an example or two off the top of my head), but some that matter – like the changes to royal succession in Canadian law – got no debate in the Commons despite it being a fairly fundamental problem that the law as passed effectively reduced Canada’s status to that of a colony once again.

But the point I make is that the courts will often turn to Parliament for guidance in what it is they should be interpreting. That means looking to debates and committee transcripts to try to divine just what it is that Parliament intended when they passed the bill so that the judge can rule one way or the other in clarifying the meaning. And if you have no such debates – like in this Ontario statute – well, that’s a real problem. It’s also a reason why I will frequently harp on why the Senate matters so much is because they not only will offer some debate in instances where the Commons offers none, but it’s where committee testimony becomes most crucial, especially when it comes to hearing from witnesses that people object to (as happened with the trans rights bill) – because they want it on the record that they heard and dismissed these concerns should they eventually be litigated.

Parliament is supposed to matter, and MPs (and MPPs in this particular instance) do themselves and the province or country they serve a real disservice when they don’t do the job of putting things on the record. And I’ll say that the issue going on in Ontario right now with the bubble law around abortion clinics is another such issue. The provincial Progressive Conservatives offered to pass the bill at all stages – eager to get it off the agenda so that it minimizes the divisions in their ranks on the issue, and the Liberals refused, wanting instead to hear from those it affects. While the cynical calculation is that this is the Liberals playing politics – and to an extent it really is – it’s also the responsible thing to do, so that we get some debate and testimony on the record, so that when this legislation is inevitably challenged, there is a record for the courts to turn to. And yes, that matters beyond the petty politicking.

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Roundup: The demise of Energy East

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The news that TransCanada decided to cancel their plans for the Energy East pipeline yesterday created a predictable firestorm of reaction, from the gloating of Montreal mayor Denis Coderre, outgoing Saskatchewan premier getting in his last kicks, to the histrionics of the Conservative caucus. The government’s line is market conditions have changed since the project was first proposed – and they’re entirely correct. But that doesn’t stop the rhetoric, either from TransCanada itself, or from the Conservatives, who are peddling some incredulous, mind-boggling lines to vilify the government.

https://twitter.com/robert_hiltz/status/916098405700718592

But seriously, there are plenty of charts and graphs that show how the market conditions have changed beyond just the world price of oil (which is a bit part of it), but that the capacity with the other approved pipelines changes the equation for the hole that Energy East would have filled, and it’s no longer clear that it was a clear-cut decision after all.

Also, it should be mentioned that as much as TransCanada is blaming government regulation, they did balls this up on their own end more than once, and do need to take some of the blame along the way. But why take that blame when you can shake your fist at the government?

https://twitter.com/robert_hiltz/status/915978635307212800

https://twitter.com/robert_hiltz/status/915980506054803456

And this having been said, there is a proud Alberta tradition that is underlying all of this. Because some zombies refuse to die.

Meanwhile, Paul Wells looks at the current record of the government in trying to attract investment, and wonders if we really are a place that will get the big things built, or if it will all collapse in tears and recriminations, driving investors away.

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QP: Energy East and Barbados

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After the Energy East cancellation announcement this morning, you just knew that this would be the fodder for increasingly hysterical denunciations during QP today. Justin Trudeau was present, but Andrew Scheer was not, so it remained to be seen how this would play out.

Lisa Raitt led off instead, mini-lectern on desk, blaming the government for killing Energy East with their ideology. Justin Trudeau responded that it was a business decision, that the project was proposed when oil was $90/barrel and it’s now half that, but that his government had already approved three other pipelines. Raitt accused the government of playing to the interests of countries like Saudi Arabia, and Trudeau shrugged off that suggestion. Raitt then accused him of taking Atlantic Canada for granted with this cancellation. Trudeau countered that they had an Atlantic growth strategy and that it was the previous government that ignored them. Gérard Deltell then took over the condemnation of the loss of Energy East in French, and Trudeau reiterated that conditions have changed, also in French. Deltell then said that Trudeau was responsible for conditions changing, as though Trudeau controls the world price of oil, and Trudeau instead responded about the ways that they have been doing what the market has been asking for, including carbon pricing. Guy Caron was up next, pointing to the recent PBO report on fiscal sustainability, and demanded that healthcare be adequately funded for the provinces. Trudeau touted the investments that they made in mental health and home care. In English, Caron demanded a national strategy for seniors, to which Trudeau listed all of the measures that they have taken. Caron then changed topics to the Phoenix pay system, demanding a refund for it. Trudeau noted that they were working with the public service and the unions to fix the situation, and then there was another round of the same in French.

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QP: Morneau’s five new themes

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While the prime minister was off meeting with the premiers and Indigenous leaders, it was also a Supply Day where the Conservatives were demanding an extension of the consultation period for the proposed tax changes. Andrew Scheer led off, mini-lectern on desk, and read his concerns about “local businesses” in French, and how tax changes would doom them. Bill Morneau reminded him that they were listening to Canadians and would ensure that their concerns were being heard. Scheer switched to English to demand that the government vote for their opposition motion on extending the consultation period. Morneau instead listed the five things they’ve heard that they plan to address. After another round of the same from Scheer and Morneau, Gérard Deltell got up to ask in French about the verification of the plans, and Morneau reminded him that they were looking for a fairer system that would encourage investment. Deltell railed that the measures would kill small businesses, but Morneau repeated that they were listening to the consultations. Alexandre Boulerice led for the NDP, railing about Netflix and tax avoidance by big corporations and tax havens, and Diane Lebouthillier reminded him that they were indeed going after tax evaders. Boulerice asked again in English, and Morneau deployed his worn tax fairness talking points. Linda Duncan was up next and raised the concerns laid out in the Environment Commissioner’s reports, and Catherine McKenna listed a number of measures that they were taking. Robert Aubin repeated the question in French, and McKenna reiterated her response in French.

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QP: The Morneau-Shepell conspiracy

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Shortly after a fire alarm emptied out the Centre Block, and MPs made their way back into the building, Question Period got underway. Andrew Scheer led off, reading a stilted question about the Omar Khadr settlement in French. Justin Trudeau took the chance to take a partisan shot, saying that this was because the previous violated his rights — not mentioning that it was also the fault of previous Liberal governments — and reiterated his previous speech about how he was outraged and hopefully that outrage would ensure that future governments would not violate rights again. Scheer called out that the Liberals were at fault too, and Trudeau modified his response that it was about previous governments (plural) but added that this was not about Khadr, but about the government’s action and they should stand up for rights even when it’s not popular. Scheer then pivoted to the tax change issue, got the usual talking points from Trudeau, and when Scheer tried to skewer this as being one more cost to the middle class, and Trudeau reeled out his points about cutting taxes on the middle class. Scheer made a few digs at Trudeau’s own numbered corporation and his speaking fees before he was made party leader, but Trudeau didn’t take the bait. Pierre Nantel was up for the NDP, and railed about the announcements on cultural industries. Trudeau read a statement that assured him that they had unprecedented investment from Netflix, and that they would ensure that Canadian creators would benefit. Rachel Blaney asked in English, decrying that Facebook and Google were not being made to pay, but Trudeau reiterated his assurances that Canadian producers would benefit from these funds. Nantel repeated the question in scripted English, Trudeau reiterated that this was great news for Canadian cultural industries, and Alexandre Boulerice closed the round by railing that other media companies weren’t being taxed. Trudeau repeated that they were looking to support the industry as it transitions.

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QP: Trudeau starts hitting back

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With a storm on the horizon, the House of Commons assembled after caucus meetings, ready for another day of baying at the moon over proposed tax changes. Just before QP, Andrew Scheer have a member’s statement about the emergency debate on the plight of the Rohingya, after which he crossed the floor to have a quick chat with Justin Trudeau. When QP got underway, Scheer led off by noting that he would be at the dedication for the National Holocaust Memorial and invited the PM to discuss why it’s important. Trudeau got up to make a statement on just that, and he read a statement on the horrors of the Holocaust and to offer the statement of “Never again.” Scheer then switched to French and back to his tax change straw men, wanting confirmation that Trudeau’s family fortune would not be affected. Trudeau note the issue of ensuring that the wealthiest Canadians pay their share of taxes. Scheer asked the same again in English, and got the same answer, with Trudeau stressing that this was not about people not following the rules, but that the rules favoured the wealthy. Scheer insisted that the litany of cancelled tax credits amounted to tax hikes as his condemnation of these changes, Trudeau noted that Scheer was trying to re-fight the 2015 election. Scheer insisted that they were the voice of the “millions” that would be hurt by these changes and then kicked at the PM for meeting Chinese Billionaires™, to which Trudeau listed all of the businesses who were looking for access to the Chinese market. Thomas Mulcair was up next, worried about the duties the US placed on Bombardier, and demanded that those jobs be saved. Trudeau noted that Chrystia Freeland raised that with her American counterpart earlier this morning, and that they would fight for those jobs. Mulcair groused about Trudeau’s inability to deal with Trump, and got much the same response. Mulcair then railed that the government was failing on Access to Information, and Trudeau read a list of ways that they were making things more transparent, before they went for another round of the very same in French.

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QP: Snide asides and Harder drama

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Another sweltering day, but all of the party leaders were present today, so it promised to be a better day for exchanges. Andrew Scheer led off, mini-lectern on desk, reading his standard alarmist questions about the proposed tax changes and how they will devastate “local businesses.” Justin Trudeau responded with his usual points about how the system currently incentivises the wealthy to use corporations to avoid taxes. Scheer tried to use the framing device that that this was a revenue generator, but Trudeau didn’t give him a dollar figure. Scheer quipped that the Liberals were so incompetent that they couldn’t even raise taxes properly, and then threw out the straw men about the PM’s family fortunes. Trudeau responded that the report Scheer mentioned and noted that it ignored the introduction of the Canada Child Benefit. Scheer retorted about Trudeau’s nannies, and returned to the point about the changes as revenue generator to deal with his spending problem. Trudeau responded that they raised taxes on the wealthiest and the Conservatives voted against it. Thomas Mulcair was up next, and raised the new ministerial directive that would allow use of information possibly obtained by torture under limited circumstances. Trudeau reminded him that torture is prohibited and abhorrent, and it was why the strengthened ministerial directive made that more clear. Mulcair asked again in English, got the same answer, before he moved onto the delays in appointing new officers of Parliament, insinuating that the government is looking for lapdogs. Trudeau reminded him that they put in a new process that better reflects diversity, and then they went another round of the same in English, Trudeau getting in a few digs about the opposition not opening up their fundraising books along the way.

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Roundup: Closing three loopholes

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As expected, Bill Morneau announced three new measures to crack down on tax avoidance by means of self-incorporation by high earners, many of them doctors and lawyers. While the government goes on a 75-day consultation period (to ensure that there are no unintended consequences) in order that the changes can be legislated in the autumn budget implementation bill, here’s economist Kevin Milligan explaining the problem and changes in detail here, plus his Twitter posts on the topic:

https://twitter.com/kevinmilligan/status/887347823657668608

https://twitter.com/kevinmilligan/status/887348810225143809

https://twitter.com/kevinmilligan/status/887349319413649409

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https://twitter.com/kevinmilligan/status/887350619886895104

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https://twitter.com/kevinmilligan/status/887352251777335296

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Morneau acknowledged that the changes may personally disadvantage him (though two of the three categories didn’t apply to him) – making it clear that he didn’t look into his own situation to ensure that he was being fair and not self-interested in making them.

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