Report of the committee
Tuesday, June 21, 2022
The Standing Senate Committee on National Finance has the honour to present its
Your committee, to which was referred Bill C-19, An Act to implement certain provisions of the budget tabled in Parliament on April 7, 2022 and other measures, has, in obedience to the order of reference of June 14, 2022, examined the said bill and now reports the same without amendment but with observations, which are appended to this report.
Observations to the sixth report of the Standing Senate Committee on National Finance (Bill C-19)
Disability Tax Credit
Our committee welcomes the expansion of eligibility for the disability tax credit. We believe that the disability tax credit, in its current form, is inadequate in the amount of benefits it provides and the number of people it covers, especially with rapidly rising living costs. Specifically, as the disability tax credit is currently a non-refundable tax credit, many Canadians with disabilities cannot benefit from it as they have little to no taxable income. Therefore, to provide immediate relief, our committee strongly recommends that the government consider making the disability tax credit a refundable tax credit.
Provisions Related to Charities
Our committee heard that the charitable sector is supportive of the qualifying disbursement provisions proposed in Bill C-19 and the amendments passed in the House of Commons. However, we heard concerns from stakeholders about the amendment aiming to prevent directed giving and its potential impact on the common practice of pooled funding. Our committee urges the government to engage with the charitable sector during the development of guidance on directed giving to ensure that the new rules are applied appropriately.
Select Luxury Items Tax
After hearing from groups, notably the Aerospace Industries Association of Canada and the National Marine Manufacturers Association, our committee was surprised to learn that the government has not studied the economic impacts of the proposed tax, including on business activity and employment in these sectors.
Our committee therefore recommends that, prior to implementing this tax, the Department of Finance conduct such a study and that it inform our committee of the results, including its consultations with the impacted sectors.
In addition, should this tax be found to have a negative impact on business activity and/or employment in these sectors, we would urge the government to react quickly and take mitigating measures including, if necessary, doing away with the tax altogether.
Income Tax Act
Our committee notes with concern that Bill C-19 includes a large number of highly technical amendments to the Income Tax Act, further complicating the entirety of the Act, and making it seriously difficult for Canadians, including tax experts, to understand how it affects them. The committee is further concerned about the lack of a comprehensive review of the entire Income Tax Act as recommended by this committee in the 42nd Parliament, the Senate Prosperity Action Group, the House of Commons Standing Committee on Finance, and many other groups, such as the Chartered Professional Accountants of Canada.
Reports From Other Senate Committees
Our committee would like to bring to the government’s attention the reports released by six other Senate committees on the subject matter of Bill C-19 and we urge the government to consider the observations made by these committees:
•The Standing Senate Committee on Foreign Affairs and International Trade;
•The Standing Senate Committee on Banking, Trade and Commerce;
•The Standing Senate Committee on National Security and Defence;
•The Standing Senate Committee on Legal and Constitutional Affairs;
• The Standing Senate Committee on Social Affairs, Science and Technology; and
•The Standing Senate Committee on Aboriginal Peoples.
Finally, guided by the principles of transparency, accountability, predictability and reliability in fulfilling its mandate, our committee provided these observations. We encourage the government to give careful consideration and provide responses to our observations at the earliest opportunity.