INQUIRY OF MINISTRY DEMANDE DE RENSEIGNEMENT AU GOUVERNEMENT PREPARE IN ENGLISH AND FRENCH MARKING "ORIGINAL TEXT" OR "TRANSLATION" PRÉPARER EN ANGLAIS ET EN FRANÇAIS EN INDIQUANT "TEXTE ORIGINAL" OU "TRADUCTION" QUESTION NO./NO DE LA QUESTION BY 1DE Q-928 Mr. Goodale (Wascana) DATE December 9, 2014 REPL Y BY THE MINISTER OF FINANCE RÉPONSE DU MINISTRE DES FINANCES Signed by Mr. Saxton PRINT NAME OF SIGNATORY INSCRIRE LE NOM DU SIGNATAIRE SIGNATURE MINISTER OR PARLIAMENTARY SECRETARY MINISTRE OU SECRETAIRE PARLEMENTAIRE QUESTION With regard to federal taxes, including tariffs, service charges and fees: since 2005, (a) in which instance was there an increase, a new imposition or the elimination of a credit or benefit, broken dawn by (i) the particular tax, tariff, charge, fee or credit, (ii) the rate or amou nt, (iii) the date it took effect, (iv) the revenue it has generated, (v) the department th at made the change; and (b) wh at is the an nuai total of revenue generated by each of the changes in (a), broken dawn by year? REPLY 1RËPONSE ORIGINAL TEXT TEXTE ORIGINAL TRANSLATION TRADUCTION D The Governmelit has provided significant tax relief for individuals, families and businesses, further contributing to an environ ment where Canadians can succeed and Canadian businesses can grow, create new well-paying jobs and compete internationally. Today, in spite of years of global economie uncertainty, Canada's low-tax plan and sound fiscal management are bearing fruit. The overall federal tax burden is at its lowest level in more than 50 years. The attached table provides the requested list of federal tax changes. The focus of these measures has been to improve the fairness and neutrality of the tax system. Other measures included in the table include amendments tc the Customs Tariffto bring milk protein substances into Canada's supply management system as weil as export charges on softwood lumber products exported from British Columbia, Alberta, Saskatchewan, Manitoba, Ontario and Quebec to the U.S. in accordance with the Canada-U.S. S()ftwood Lumber Agreement. The Government has also introduced measures tc improve the integrity of the tax system (i.e., measures that close loopholes). Since the purpose of these measures is simply to ensure that the outcome is consistent with the original policy intent rather than change the policy, they are not included in the attached table. However, the Government's integrity measures and estimated revenue impacts are listed in Table A2.2 in Economie Action Plan 2014. Q-928 a(i) a(iv) Tax, Tariff, Charge, Fee or Credit 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 (millions of dollars) 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 a(ii) a(iii) Rate or Amou nt of Change Effective Date a(v) Department that Made Change 1 Spending Restraint Measures 2006 (Finance Canada News Release September 25, 2006) Elimination of the GST Visitor Rebate Program 75 3 01-Apr-2007 Finance Certain distributions by publicly-traded flow-through entities sub)ect 01-Jan-2011 to taxat corporate incarne tax rates. Finance Softwood lumber exported from British Columbia, Alberta, 12-0ct-2006 Saskatchewan, Manitoba, Ontario and Quebec to the U.S. are subject to export measures wh en the priee of lumber is below US$355 per thousand board feet (MBF). The measure may take one of two forms: (a) an export charge or (b) an export charge that is lower than the Option A rate combined with a volume restraint (i.e. quota). etermined by the prevailing monthly priee of softwood lumber as follows: Minister of International Trade Program eliminated. 2 Tax Fairness Plan 2006 (Finance Canada News Release - October 31, 2006) Revenue from Publicly-traded FlowEntities 100 400 233 235 throu~h Softwood Lumber Products Export Charge Act, 2006 229 422 210 227 160 528 Prevailing Monthly Priee (US$) per Thousand Board Feet) Over $355 Option (a) 0% Option (b) 0% $336- $355 Option (a) 5% Option (b) 2.5% $316- $335 Option (a) 10% Option (b} 3% $US315 or under Option (a} 15% Option (b) 5% Section 99 of the 5LPECA requires the federal government to distribute revenues collected from export charges to the provinces from which products originate, after deducting costs incurred in the administration of the SLPECA, in the administration of the Softwood Lumber Agreement and in relation to any litigation under the SLPECA or the Softwood Lumber Agreement. Budget 2007 Phase-out of Accelerated Capital Cast Allowance for Oil Sands 4 Green Levy on Fuel-lnefficient Vehicles Removal of Excise Tax Exemption for Renewable Fuels Budget 2008 • Tobacco Taxation 49 32 24 30 22 24 18 40 5 5 Page 1 Additional allowance for tangible assets phased out starting in 2011 01-Jan-2011 and eliminated as of 2015. Finance Rates ranging from $1,000 to $4,000 per vehicle, depending on fuel 20-Mar-2007 efficiency rating. The 4-cent-per-litre excise tax exemptions for ethanol and biodiesel 01-Apr-2008 were eliminated. Finance Changed the way manufactured tobacco was taxed by expressing the duty rate per 50 grams or a fraction thereof, as opposed to calculating the duty in proportion to its total weight. Finance 27-Feb-2008 Finance ' Q-928 a(i) Tax, Tariff, Charge, Fee or Credit a(iv) 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 a(ii) a(iii) Rate or Amou nt of Change Effective Date a(v) Department that Made Change 1 Milk protein substances tariff-rate quota (Notice of Ways and Means Motion- June 12, 2008, and Bill c10, Budget Implementation Act, 2009) -5 -5 (millions of dollars) -4 -5 -4 Amendments to the Customs Tarif! to bring milk protein substances 08-Sep-2008 into the supply management system. This measure responded to a request from the Dairy Farmers of Canada and was preceded by the rengotiation of Canada's World Trade Organization tariff commitments, which included compensatory tariff liberalization for imports from key suppliers. The measure involved the creation of a tariff-rate quota (TRQ) for milk protein substances with a duty-free ovlume of 10,000 tonnes, as weil as the reduction of Most-Favoured Nation (MFN) tariff for certain ether dairy products. The MFN within access duty rate for the TRQ (tariff item 3504.00.11} was reduced from 6.5% to 0% (covering trade from key suppliers}, alongside the creation of an over access duty rate of 270% for volumes in excess of 10,000 tonnes (tariff item 3504.00.12}. The MFN duty rai:e for certain ether dairy products (tariff item 0404.90.10} was reduced from 6.5% to 3%. Finance lncreased as follows: domestic (one-way}, from $4.90 to $7.48; domestic (round trip}, from $9.80 to $14.96; transborder, from Finance Note: tariff revenue impact calculated on a calendar year basis for 2009-2013 (fiscal year and partial year tariff revenue data not availablel Budget 2009 No measures Government of Canada Enhances Air Travellers Security (Transport Canada News Release- February 25, 2010} Air Travellers Security Charge $8.34 to $12.71; other international, from $17.00 to $25.91. 01-Apr-2010 5 Budget 2010 No measures Budget 2011 Intangible Capital Expenses in Oil Sands Projects Budget2012 Group Sickness or Accident Insu rance Plans 15 30 40 60 75 20 85 95 100 Page 2 105 (1} Cost of acquiring oil sands leases/other resource property (1} 22-Mar-2011 deductible at 10% per year on declining balance basis (reduced from (2) 01-Jan-2013 (2} Development expenses for bringing oil sands mine 30%}. into production deductible at 30% per year on declining balance basis (reduced from full deduction in year incurred}; phased in between 2013 and 2016. Finance Amou nt of an employer's contributions to a group sickness or 29-Mar-2012 accident insu rance plan included in an employee's income for the year in which the contributions are made to the extent that the contributions are not in respect of a wage-loss replacement benefit payable on a oeriodic basis. Finance Q,928 a(i) Tax, Tariff, Charge, Fee or Credit a(iv) 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 (millions of dollars) Corporate Mineral Exploration and Development Tax Credit 2013-14 2014-15 2015-16 2016-17 10 25 25 30 15 35 85 190 285 295 15 40 40 2017-18 2018-19 2019-20 a(ii) a(iii) Rate or Amount of Change Effective Date a(v) Department that Made Change 1 Atlantic lnvestment Tax Credit- Oil and Gas and Mining Activities (1) Corporate tax credit for pre-production exploration expenses reduced from 10% before 2013 to 5% in 2013 and zero as of 2014. (2) Corporate tax credit for pre-production development expenses reduced from 10% before 2014 to 7% in 2014, 4% in 2015 and zero as of 2016. AITC for cil and gas and mining activities reduced from 10% for assets acquired before 2014 to 5% for assets acquired in 2014 or 2015 and zero for assets acquired after 2015. (1) 01-Jan-2013 (2) 01-Jan-2014 Finance 01-Jan-2014 Finance General 5R&ED investmerit tax credit rate reduced to 15 percent from 20 per cent. Taxation years ending after 2013 Finance Expenditures of capital nature excluded from base of expenditures eligible for the SR&ED deduction and investment tax credit. 01-Jan-2014 Finance Scientific Research and Experimental Development Tax lncentive Program 6 - Tax Credit Rate -Capital Expenditures - Overhead Expenditures 10 55 95 100 For taxpayers using simplified proxy method for overhead 01-Jan-2013 expenditures (percentage of eligible wages/salaries), percentage reduced from 65% before 2013 to 60% in 2013 and 55% after 2013. Finance - Contract Payments 25 55 60 65 Finance Overseas Employment Tax Credit 10 35 65 95 Profit element of arm's length contract payments excluded from 01-Jan-2013 base for SR&ED investment tax credits. Phases out a tax relief measure that eliminated 80% of federal 01-Jan-2013 income taxon the first $100,000 of an individual's employment income earned from Canadian firms. Phase-out will be complete for the 2016 taxation vear. 5 30 40 40 40 40 15 65 115 160 160 5 15 25 Budget 2013 * Deduction for Safety Deposit Boxes Labour-Sponsored Venture Capital Corporations Tax Credit Mining Expenses- Pre-Production Mine Development Expenses Additional Deduction for Credit Unions Excise Duty Rate on Manufactured Tobacco Budget 2014 Graduated Rate Taxation of Trusts and Estates Eliminated. 01-Jan-2014 Finance The federal LSVCC tax credit will be reduced from 15% to 10% for the 2015 taxation year, from 10% to 5% for the 2016 taxation year, and will be eliminated for the 2017 and subsequent taxation years. 01-Jan-2014 Finance 40 Deduction reduced to 30% per year on declining balance ba sis (from 01-Jan-2015 full expensing in year incurred). Phased in between 2015 and 2018. Finance 10 20 Additional allowance for tangible assets phased out starting in 2017 01-Jan-2017 and eliminated as of 2021. Finance Additional deduction reduced from 100% before 2013 to 80% for 2013, 60% for 2014, 40% for 2015, 20% for 2016 and eliminated as of 2017. Rate increased from $2.8925 to $5.3125 per 50 grams or fraction thereof. Taxation years ending on or after March 22 2013 22-Mar-2013 Finance Graduated tax rates eliminated for most testamentary trusts; replaced with a top flat rate (29%) for federal income tax. 2016 and later taxation vears Finance ' Mining Expenses- Accelerated Capital Cost Allowance for Mining 2 10 30 40 60 80 85 75 65 60 55 50 45 20 70 75 80 Page3 Finance Finance Q-928 a(ii) a(iii) Rate or Amou nt of Change Effective Date a(iv) a(i) Tax, Tariff, Charge, Fee or Credit 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 (millions of dollars) 2015-16 2016-17 2017-18 2018-19 5 25 25 25 30 A 60-month deferrai on liability for federal income tax (29% rate) was eliminated. 95 675 650 630 610 590 Rate increased from $0.425 to $0.52575 for each 5 cigarettes or fraction thereof, with corresponding in crea ses in ether tobacco 1 10 10 10 10 10 435 1,750 1,780 1,810 1,835 1 Non-Resident Trusts Rate of Excise Duty on Cigarettes Excise Duty Treatment of Tobacco Products in Duty Free Markets 2019-20 2014-15 2013-14 a(v) Department that Made Change 2014 taxation years Financé (but with 1-year deferrai or existing trusts_l 12-Feb-2014 Finance lproducts. Rate increased from $0.374875 to $0.52575 for each 5 cigarettes or 12-Feb-2014 fraction thereof, with corresponding increases in ether tobacco lproducts. Finance Helping Families Prosper (Prime Minister News Release- October 30 2014) Elimination of the Child Tax Credit 7 1,870 Proposed elimination. 01-Jan-2015 Finance * Changes to the Dividend Tax Credit in Budgets 2008 and 2013 have been excluded from this table because they are deemed to have been consequential changes due to reductions in federal corporate income tax rates. 1. The figures shawn in this table are estimated revenue impacts of the relevant measures, and generally th ose released at the ti me of the announcement (e.g., the budget). These do not necessarily caver ali of the years requested. Estimated revenue impacts for some measures were updated and extended, and were obtained from Table A2.2 in Budget 2014. 2. The elimination of the GST Visiter Rebate Pro gram was announced on September 25, 2006 as part of a larger package of spending restraint measures announced by the government. 3. The Visitor Rebate Program was eliminated and subsequently replaced with the Foreign Convention and Tour lncentive Program (FCTIP). The FCTIP, which was introduced on April1, 2007 at a cast $15 million, was more limited and focused, providing GST/HST rebates in respect of foreign conventions held in Canada and the accommodation portion of tour packages for non-residents. 4. This measure first took effect in 2011; revenue impacts in Budget 2007 were only shown up to 2008-09. S. The rates include the GST or the federal portion of the HST where applicable. 6. The reduction of the general credit rate and ether changes to the Scientific Research and Experimental Development Tax lncentive Program announced in Budget 2012 were intended to streamline and improve the program. The savings generated by these actions were invested in direct support programs to reinforce business innovation in Canada. 7. As announced on October 30, 2014, the Child Tax Credit is being replaced with an enhanced Universal Child Ca re Benefit as part of a la ri'; er p_ackage of of tax relief and benefits for Canadian families. Page4 INQUIRY OF MINISTRY DEMANDE DE RENSEIGNEMENT AU GOUVERNEMENT PREPARE IN ENGLISH AND FRENCH MARKING "ORIGINAL TEXT" OR "TRANSLATION" PRÉPARER EN ANGLAIS ET EN FRANÇAIS EN INDIQUANT "TEXTE ORIGINAL" OU "TRADUCTION" QUESTION NO.fNO DE LA QUESTION BY 1DE Q-928 M. Goodale (Wascana) DATE Le 9 décembre 2014 REPL Y BY THE MINISTER OF FINANCE RÉPONSE DU MINISTRE DES FINANCES Signé par M. Saxton PRINT NAME OF SIGNATORY INSCRIRE LE NOM DU SIGNATAIRE SIGNATURE MINISTER OR PARLIAMENTARY SECRETARY MINISTRE OU SECRÉTAIRE PARLEMENTAIRE QUESTION En ce qui concerne les taxes fédérales, dont les droits de douane, les frais de service et les frais d'utilisation : depuis 2005, a) dans quels cas une augmentation, une nouvelle imposition ou l'élimination d'un crédit ou d'une prestation ont-ils été. décrétés, en précisant (i) la taxe, le tarif, les frais ou le crédit particulier, (ii) le taux ou le montant, (iii) la date d'entrée en vigueur, (iv) les recettes produites, (v) le ministère ayant effectué la modification; b) quel est le total annuel des recettes produites par chacune des modifications en a), ventilé par année? REPLY 1RËPONSE ORIGINAL TEXT TEXTE ORIGINAL D TRANSLATION TRADUCTION Le gouvernement a consenti des allègements fiscaux importants aux particuliers, aux familles et aux entreprises, contribuant ainsi davantage à façonner un environnement dans lequel les Canadiens peuvent réussir et où les entreprises canadiennes peuvent croître, créer de nouveaux emplois bien rémunérés et ê~re plus compétitives sur la scène internationale. Aujourd'hui, malgré des années d'incertitude économique mondiale, le plan du gouvernement du Canada axé sur des impôts bas et la saine gestion des finances publiques portent leurs fruits. Le fardeau fiscal fédéral est à son plus bas niveau depuis plus de 50 ans . Le tableau ci-joint contient la liste demandée des changements fiscaux fédéraux. Ces mesures mettaient l'accent sur l'amélioration de l'équité et de la neutralité du régime fiscal. Parmi les autres mesures incluses dans ce tableau, notons les modifications apportées à la Loi sur les douanes afin d'intégrer les matières protéiques de lait dans le système de gestion de l'offre du Canada, ainsi que les droits d'exportation sur les produits de bois d'œuvre exportés de la Colombie-Britannique, de l'Alberta, de la Saskatchewan, du Manitoba, de l'Ontario et du Québec vers les États-Unis (É.-U.), conformément à l'Accord sur le bois d'œuvre résineux entre le Canada et les États-Unis. Le gouvernement a également ins~auré des mesures visant à améliorer l'intégrité du régime fiscal (c'est-à-dire, des mesures qui éliminent des échappatoires). Étant donné que ces mesurés ont comme unique but de veiller à ce que le résultat soit conforme à l'intention originale de la politique plutôt que de modifier la politique,·elles ne sont pas incluses dans le tableau ci-joint. Toutefois, les mesures d'intégrité instaurées par le gouvernement et les répercussions estimées sur les recettes sont énumérées dans le tableau A2.2 du Plan d'action économique de 2014.