Standing Senate Committee on National Finance

Report of the committee

Wednesday, October 4, 2017

The Standing Senate Committee on National Finance has the honour to present its

TWENTY-FIRST REPORT

Your committee, which was authorized by the Senate on Tuesday, September 26, 2017, to study the Minister of Finance’s proposed changes to the Income Tax Act respecting the taxation of private corporations and the tax planning strategies involved, respectfully requests funds for the fiscal year ending March 31, 2018, and requests, for the purpose of such study, that it be empowered:

(ato engage the services of such counsel, technical, clerical and other personnel as may be necessary;

(b to adjourn from place to place within Canada; and

(cto travel inside Canada.

Pursuant to Chapter 3:06, section 2(1)(c) of the Senate Administrative Rules, the budget submitted to the Standing Committee on Internal Economy, Budgets and Administration and the report thereon of that committee are appended to this report.

Respectfully submitted,

PERCY MOCKLER

Chair

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STANDING SENATE COMMITTEE ON NATIONAL FINANCE

Study on the Minister of Finance’s proposed changes to the Income Tax Act respecting the taxation of private corporations and the tax planning strategies involved

APPLICATION FOR BUDGET AUTHORIZATION FOR THE FISCAL YEAR ENDING MARCH 31, 2018

Extract from the Journals of the Senate, Tuesday, September 26, 2017:

The Senate resumed debate on the motion of the Honourable Senator Cools, seconded by the Honourable Senator Forest:

That the Standing Senate Committee on National Finance be authorized to examine and report on the Minister of Finance’s proposed changes to the Income Tax Act respecting the taxation of private corporations and the tax planning strategies involved, in particular:

• income sprinkling,

• holding passive investments inside a private corporation, and

• converting income into capital gains;

That the committee take particular note of the impact of the Government’s proposed changes on:

• incorporated small businesses and professionals,

• economic growth and government finances,

• the fairness of the taxation of different types of income, and

• other related matters; and

That the committee submit its final report to the Senate no later than November 30, 2017, and retain all powers necessary to publicize its findings for 180 days after presenting the final report.

The question being put on the motion, it was adopted, on division.

Nicole Proulx

Clerk of the Senate

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SUMMARY OF BUDGET

General Expenses
$500
Activity 1:
Public Hearings in Eastern Canada

$133,725
Activity 2:
Public Hearings in Western Canada

$168,975
TOTAL

$303,200

The above budget was approved by the Standing Senate Committee on National Finance on Wednesday, September 27, 2017.

The undersigned or an alternate will be in attendance on the date that this budget is considered.












Date
Président du Comité sénatorial permanent des finances nationales
PERCY MOCKLER
Chair, Standing Senate Committee on National Finance











Date
Président du Comité permanent de la régie interne, des budgets et de l’administration
LEO HOUSAKOS
Chair, Standing Committee on Internal Economy, Budgets and Administration

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STANDING SENATE COMMITTEE ON NATIONAL FINANCE

Study on the Minister of Finance’s proposed changes to the Income Tax Act respecting the taxation of private corporations and the tax planning strategies involved

EXPLANATION OF BUDGET ITEMS APPLICATION FOR BUDGET AUTHORIZATION FOR THE FISCAL YEAR ENDING MARCH 31, 2018

GENERAL EXPENSES








PROFESSIONAL AND OTHER SERVICES










CONSULTANTS



1.Communications consultant (0303)500




(1 day, $500/day)



Sub-total
$500








Total of General Expenses
$500







ACTIVITY 1: Public Hearings in St. John’s, Halifax and Saint John








25 participants: 15 Senators, 10 staff



(2 clerks, 2 analysts, 1 administrative assistant, 3 interpreters, 1 stenographer, 1 communications officer)










PROFESSIONAL AND OTHER SERVICES










HOSPITALITY



Hospitality - meals (0410)1,000










CONSULTANTS



Communications consultant (0303)2,000




(5 days, $400/day)











OTHER



Reporting/transcribing (0403)13,200




(4 days, $3,300/day)



Transcript editing services (0143)3,000


Sub-total
$19,200








TRANSPORTATION, ACCOMMODATION AND LIVING EXPENSES








1.Transportation - air49,500




15 senators x $2,300 (0224)





10 staff x $1,500 (0227)



2.Hotel accommodation20,000




15 senators, $200/night, 4 nights (0222)





10 staff, $200/night, 4 nights (0226)



3.Per diem12,375




15 senators, $99/day, 5 days (0221)





10 staff, $99/day, 5 days (0225)



4.Working meals (travel) (0231)4,000


5.Taxis7,500




15 senators x $300 (0223)





10 staff x $300 (0232)



6.Charter bus (0228)3,500




(2 days, $1,750/day)



Sub-total
$96,875








ALL OTHER EXPENDITURES










OTHER



1.Miscellaneous costs associated with travel (0229)500










COURIER



2.Courier Charges (0261)150










RENTALS



3.Rental office space (meeting rooms) (0540)5,000




(5 days, $1,000/day)



4.Rental - interpretation equipment (0504)12,000




(4 days, $3,000/day)



Sub-total
$17,650








Total of Activity 1
$133,725







ACTIVITY 2: Public Hearings in Saskatoon, Calgary and Vancouver







25 participants: 15 Senators, 10 staff



(2 clerks, 2 analysts, 1 administrative assistant, 3 interpreters, 1 stenographer, 1 communications officer)










PROFESSIONAL AND OTHER SERVICES










OTHER



1.Reporting/transcribing (0403)13,200




(4 days, $3,300/day)



2.Transcript editing services (0143)3,000


Sub-total
$16,200








TRANSPORTATION, ACCOMMODATION AND LIVING EXPENSES








1.Transportation - air91,250




15 senators x $4,650 (0224)





10 staff x $2,150 (0227)



2.Hotel accommodation20,000




15 senators, $200/night, 4 nights (0222)





10 staff, $200/night, 4 nights (0226)



3.Per diem12,375




15 senators, $99/day, 5 days (0221)





10 staff, $99/day, 5 days (0225)



4.Working meals (travel) (0231)4,000


5.Taxis7,500




15 senators x $300 (0223)





10 staff x $300 (0232)



Sub-total
$135,125








ALL OTHER EXPENDITURES










OTHER



1.Miscellaneous costs associated with travel (0229)500










COURIER



2.Courier Charges (0261)150










RENTALS



3.Rental office space (meeting rooms) (0540)5,000




(5 days, $1,000/day)



4.Rental - interpretation equipment (0504)12,000




(4 days, $3,000/day)



Sub-total
$17,650








Total of Activity 2
$168,975





















Grand Total

$ 303,200

The Senate Administration has reviewed this budget application.












Date
Blair Armitage, Principal Clerk,
Committees Directorate











Date
Nathalie Charpentier, Comptroller,
Finance and Procurement Directorate

APPENDIX (B) TO THE REPORT

Tuesday, October 3, 2017

The Standing Committee on Internal Economy, Budgets and Administration has examined the budget presented to it by the Standing Senate Committee on National Finance for the proposed expenditures of the said committee for the fiscal year ending March 31, 2018, for the purpose of its special study on the Minister of Finance’s proposed changes to the Income Tax Act respecting the taxation of private corporations and the tax planning strategies involved, as authorized by the Senate on Tuesday, September 26, 2017. The approved budget is as follows:

General Expenses
$
Activity 1:
Public Hearings in Eastern Canada

$131,725
Activity 2:
Public Hearings in Western Canada

$168,975
TOTAL

$300,700

(includes funds for public hearings; includes funds for 15 senators to travel)

If charter air travel is used, the total cost of the charter should not exceed the amount budgeted per traveller for commercial airfare.

The budgets approved by the Senate for each travel activity are the maximum amount that can be spent for that activity;

Budgets normally include funds for the full membership of the committee to travel;

In general, a reduced delegation actually travels and efforts are made to find additional savings;

Therefore, actual expenditures are expected to be considerably below the approved budget, and they will be reported to the Senate;

Any surplus funds remaining at the conclusion of a travel activity will be clawed-back and can be made available for allocation to committees for other activities.

Respectfully submitted,

LEO HOUSAKOS

Chair