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MINUTES OF PROCEEDINGS
 
Meeting No. 55
 
Tuesday, December 5, 2006
 

The Standing Committee on Finance met in a televised session at 10:04 a.m. this day, in Room 253-D, Centre Block, the Chair, Brian Pallister, presiding.

 

Members of the Committee present: Diane Ablonczy, Dean Del Mastro, Rick Dykstra, Hon. John McCallum, Hon. John McKay, Massimo Pacetti, Brian Pallister, Michael Savage, Thierry St-Cyr, Mike Wallace and Judy Wasylycia-Leis.

 

Acting Members present: Claude Bachand for Pierre A. Paquette.

 

In attendance: Library of Parliament: June Dewetering, Principal. Standing Committee on Finance: Shaila Anwar, Co-Clerk of the Committee.

 

Witnesses: Department of Finance: Carlos Achadinha, Chief, Alcohol, Tobacco and Excise Legislation, Tax Policy Branch, Tax Legislation Division; Gérard Lalonde, Director, Tax Legislation Division, Tax Policy Branch.

 
Pursuant to the Order of Reference of Monday, October 30, 2006, the Committee commenced consideration of Bill C-28, A second Act to implement certain provisions of the budget tabled in Parliament on May 2, 2006.
 

Pursuant to Standing Order 75(1), consideration of Clause 1 is postponed.

The Chair called Clause 2.

 

Debate arose thereon.

 

By unanimous consent, Clauses 2 to 9 inclusive carried on division.

 

On Clause 10,

Rick Dykstra moved, — That Bill C-28, in Clause 10, be amended by

(a) replacing lines 40 to 45 on page 27 with the following:

(ii) subject to subparagraph (iii), where the property is, immediately before the taxpayer’s death, a share of the capital stock of a family fishing corporation of the taxpayer, a share of the capital stock of a family farm corporation of the taxpayer, an interest in a family fishing partnership of the taxpayer or an interest in a family farm partnership of the taxpayer,

(b) replacing line 46 on page 28 with the following:

to which subsection 100(3) applies), and the taxpayer's legal representative further elects, in the taxpayer's return of income under this Part for the taxation year in which the taxpayer died, to have this subparagraph apply to the taxpayer in respect of the property,

(c) replacing lines 36 to 39 on page 32 with the following:

(ii) subject to subparagraph (iii), where the property is, immediately before the beneficiary’s death, a share of the capital stock of a corporation described in subparagraph (9.3)(c)(i) or (ii) or a partnership interest described in subparagraph (9.3)(c)(iii),

(d) replacing line 22 on page 33 with the following:

est to which subsection 100(3) applies), and the trust further elects, in its return of income under this Part for the taxation year in which the beneficiary died, to have this subparagraph apply to the trust in respect of the property,

 

After debate, the question was put on the amendment of Rick Dykstra and it was agreed to on division.

 

Clause 10, as amended, carried on division.

 

On Clause 11,

Mike Wallace moved, — That Bill C-28, in Clause 11, be amended by

(a) replacing lines 19 to 23 on page 44 with the following:

(a) subject to paragraph (c), where the property was, immediately before the transfer, a share of the capital stock of a family fishing corporation of the taxpayer, a share of the capital stock of a family farm corporation of the taxpayer, an interest in a family fishing partnership of the taxpayer or an interest in a family farm partnership of the taxpayer, the

(b) replacing lines 16 to 20 on page 45 with the following:

(b) subject to paragraph (c), where the property is, immediately before the transfer, a share of the capital stock of a family fishing corporation of the taxpayer, a share of the capital stock of a family farm corporation of the taxpayer, an interest in a family fishing partnership of the taxpayer or an interest in a family farm partnership of the taxpayer, the child is

(c) replacing line 30 on page 45 with the following:

tion 100(3) applies), the taxpayer receives no consideration in respect of the transfer of the property and the taxpayer elects, in the taxpayer’s return of income under this Part for the taxation year which includes the time of the transfer, to have this paragraph apply in respect of the transfer of the property,

 

After debate, the question was put on the amendment of Mike Wallace and it was agreed to on division.

 

Clause 11, as amended, carried on division.

 

By unanimous consent, Clauses 12 to 20 inclusive carried on division.

 

On Clause 21,

Massimo Pacetti moved, — That Bill C-28, in Clause 21, be amended by replacing line 22 on page 70 with the following:

““eligible activity expense” in respect of a”

 

The Chair ruled the proposed amendment inadmissible because it was beyond the scope of the Bill, as provided on page 654 of House of Commons Procedure and Practice.

 

Whereupon, Massimo Pacetti appealed the decision of the Chair.

The question: "Shall the decision of the Chair be sustained?" was put and the decision was sustained, by a show of hands: YEAS: 6; NAYS: 5.

 

The Chair ruled that the following three (3) amendments were consequential to the previous amendment and therefore they were also inadmissible:

That Bill C-28, in Clause 21, be amended by replacing line 32 on page 70 with the following:

“of prescribed activity and, for the”

That Bill C-28, in Clause 21, be amended by replacing line 7 on page 71 with the following:

“prescribed activity.”

That Bill C-28, in Clause 21, be amended by replacing line 27 on page 71 with the following:

“eligible activity expense in respect of the”

 
Massimo Pacetti moved, — That Bill C-28, in Clause 21, be amended by replacing line 4 on page 71 with the following:

“18 years.”

 

The question was put on the amendment of Massimo Pacetti and it was negatived, by a show of hands: YEAS: 5; NAYS: 6.

 

Clause 21 carried on division.

 

Clause 22 carried on division.

 

On Clause 23,

Massimo Pacetti moved, — That Bill C-28, in Clause 23, be amended by replacing line 43 on page 72 with the following:

“(a) $200 is multiplied by the number of”

 

The question was put on the amendment of Massimo Pacetti and it was negatived on the following recorded division: YEAS: John McCallum, John McKay, Massimo Pacetti, Michael Savage, Judy Wasylycia-Leis — 5; NAYS: Diane Ablonczy, Claude Bachand, Dean Del Mastro, Rick Dykstra, Thierry St-Cyr, Mike Wallace — 6.

 
Massimo Pacetti moved, — That Bill C-28, in Clause 23, be amended by replacing line 1 on page 73 with the following:

“(b) $60 is multiplied by the number of”

 

The question was put on the amendment of Massimo Pacetti and it was negatived on the following recorded division: YEAS: John McCallum, John McKay, Massimo Pacetti, Michael Savage, Judy Wasylycia-Leis — 5; NAYS: Diane Ablonczy, Claude Bachand, Dean Del Mastro, Rick Dykstra, Thierry St-Cyr, Mike Wallace — 6.

 

Clause 23 carried.

 

By unanimous consent, Clauses 24 to 34 inclusive carried on division.

 

On new Clause 34.1,

 
Dean Del Mastro moved, — That Bill C-28 be amended by adding after line 34 on page 90 the following new clause:

34.1 (1) Subparagraph 127.52(1)(h)(i) of the Act is replaced by the following:

(i) the amounts deducted under any of subsections 110(2), 110.6(2), (2.1), (2.2), (3) and (12) and 110.7(1),

(2) Subsection (1) applies to taxation years that end on or after May 2, 2006.”

 

After debate, the question was put on the amendment of Dean Del Mastro and it was agreed to on division.

 

Clause 34.1 carried.

 

By unanimous consent, Clauses 35 to 38 inclusive carried on division.

 

On Clause 39,

Mike Wallace moved, — That Bill C-28, in Clause 39, be amended by replacing lines 26 to 27 on page 92 with the following:

(a) the amount is paid under the letter of

 

After debate, the question was put on the amendment of Mike Wallace and it was agreed to on division.

 

Clause 39, as amended, carried.

 

After debate, Clause 40 carried on the following recorded division: YEAS: Diane Ablonczy, Claude Bachand, Dean Del Mastro, Rick Dykstra, John McCallum, John McKay, Massimo Pacetti, Michael Savage, Thierry St-Cyr, Mike Wallace — 10; NAYS: Judy Wasylycia-Leis — 1.

 

After debate, Clause 41 carried on the following recorded division: YEAS: Diane Ablonczy, Claude Bachand, Dean Del Mastro, Rick Dykstra, John McCallum, John McKay, Massimo Pacetti, Michael Savage, Thierry St-Cyr, Mike Wallace — 10; NAYS: Judy Wasylycia-Leis — 1.

 

Clause 42 carried on the following recorded division: YEAS: Diane Ablonczy, Claude Bachand, Dean Del Mastro, Rick Dykstra, John McCallum, John McKay, Massimo Pacetti, Michael Savage, Thierry St-Cyr, Mike Wallace — 10; NAYS: Judy Wasylycia-Leis — 1.

 

Clause 43 carried on the following recorded division: YEAS: Diane Ablonczy, Claude Bachand, Dean Del Mastro, Rick Dykstra, John McCallum, Thierry St-Cyr, Mike Wallace — 7; NAYS: Judy Wasylycia-Leis — 1.

 

On Clause 43.1,

Dean Del Mastro moved, — That Bill C-28 be amended by adding after line 9 on page 96 the following new clause:

43.1 (1) Subparagraph 74.4(2)(b)(ii) of the French version of the Act is replaced by the following:

(ii) les sommes incluses dans le revenu du particulier pour l'année en application des paragraphes 82(1) ou 90(1) au titre de dividendes imposables qu'il a reçus au cours de l'année, sauf les dividendes réputés reçus en vertu de l'article 84, soit sur les actions reçues de la société en contrepartie du transfert ou en remboursement du prêt qui sont, au moment de la réception des dividendes, une contrepartie exclue, soit sur des actions y substituées qui sont, à ce moment, une contrepartie exclue;

(2) Paragraph 74.4(2)(f) of the Act is replaced by the following:

(f) all amounts included in the individual's income for the taxation year pursuant to subsection 82(1) or 90(1) in respect of taxable dividends received (other than dividends deemed by section 84 to have been received) by the individual in the year on shares that were received from the corporation as consideration for the transfer or as repayment for the loan that were excluded consideration at the time the dividends were received or on shares substituted therefor that were excluded consideration at that time, and

(3) Subsections (1) and (2) apply to amounts received after 2005.”

 

After debate, the question was put on the amendment of Dean Del Mastro and it was agreed to on division.

 

Clause 43.1 carried on division.

 

By unanimous consent, Clauses 44 to 46 inclusive carried on division.

 

On Clause 47,

Dean Del Mastro moved, — That Bill C-28, in Clause 47, be amended by adding after line 21 on page 118 the following:

(c) in applying the definition “low rate income pool” in subsection 89(1) of the Act, as enacted by subsection (1), for taxation years that began before 2006, the description of B in that definition shall be read as follows:

B is the total of all amounts each of which is an amount deductible under section 112 in computing the non-CCPC’s taxable income for the year in respect of a taxable dividend (other than an eligible dividend) that became payable, in the particular taxation year and after 2005, but before the particular time, to the non-CCPC by a corporation resident in Canada,

 

After debate, the question was put on the amendment of Dean Del Mastro and it was agreed to on division.

 

Clause 47, as amended, carried on division.

 

By unanimous consent, Clauses 48 to 63 inclusive carried on division.

 

The Short Title carried.

 

The Title carried on division.

 

The Bill, as amended, carried on division.

 

ORDERED, — That the Chair report the Bill, as amended, to the House.

 

ORDERED, — That Bill C-28, as amended, be reprinted for the use of the House at report stage.

 

At 11:26 a.m., the Committee adjourned to the call of the Chair.

 



Elizabeth B. Kingston
Clerk of the Committee

 
 
2006/12/06 2:33 p.m.