FINA Committee Report

Conservative Party of Canada’s Dissenting Report

Canada Is Broken, Call A Carbon Tax Election Now

Common Sense Conservatives oppose this Pre-Budget Consultation report because it fails to Axe the Tax, Build the Homes, Fix the Budget, and Stop the Crime.

Therefore, the Conservative Party of Canada recommends the following:

Axe the Taxes

Common Sense Conservatives continue to call for the NDP-Liberal government to Axe the Carbon Tax. If they will not, call a Carbon Tax election now so a Common Sense Conservative government can Axe the Tax on everything, for everyone, for good.

Since the Liberals have introduced the carbon tax, gas, groceries, and home heating have all become more expensive.

More than 2 million Canadians are visiting a food bank in a single month, food banks are struggling to keep up with demand, and 1 in 4 Canadians are skipping meals. [1]

The Food Professor, Dr. Sylvain Charlebois from Dalhousie University noted in his recent report, the carbon tax increases the cost of inputs for food production and transportation, which ultimately drives up the cost for consumers. [2] He also notes it affects the behaviour of producers of food and agricultural inputs. This could result in companies reacting to the tax and other NDP-Liberal environmental policies by “adjusting the quantities produced, the pricing of their products, and the making of investments in productivity enhancement.” [3]

The Canadian Trucking Alliance testified at committee that the carbon tax adds an additional $2 billion to the cost of trucking services, adding an additional $15,000 to $20,000 per year per truck. [4] They also project once the NDP-Liberal government quadruples the carbon tax, the cost will increase to $4 billion annually across the industry. [5]

We know that when you tax the farmer who grows the food, the trucker who ships the food, and the retailer who sells the food, you tax everyone who buys the food.

The carbon tax has increased the cost of everything for everyone. The Parliamentary Budget Officer (PBO) says when accounting for fiscal and economic costs, Canadians pay more into the carbon tax than what they get back in rebates. [6] At the same time, the government cannot prove if the carbon tax has any positive impact on reducing emissions and the Environment Commissioner has said once again the government is on track to miss its 2030 emissions targets. It is clear this is a tax plan, not an environmental plan.

But what the government does admit, is the carbon tax will cost $25 billion in GDP by 2030. [7]

This NDP-Liberal carbon tax is not worth the cost. Axe the Tax to bring home lower prices for Canadians.

Common Sense Conservatives call on the NDP-Liberal government to exclude aircraft from the Luxury Items Tax Act.

The President and Chief Executive Officer of the Aerospace Industries Association of Canada told the Finance committee that:

The reality is that it’s [the Luxury Items Tax] a job-killing manufacturing tax that’s damaging both our sector and the economy while undermining Canada’s international reputation. Despite multiple assessments, reports and warnings, the facts are now clear. By the government's own account, the luxury tax has cost taxpayers $19 million to administer. By the government's own account, only $15 million has been collected related to aircraft. Industry estimates that it has lost over $1.8 billion in sales. According to a report from Professor Roy, those sales would have generated potentially $90 million in GST revenue for the government.

Mr. Mueller also told the committee that nearly “4000 well-paying jobs” are at risk across the country.

Rick Layzell, CEO of the Boating Ontario Association, has expressed that the luxury tax will have negative affects throughout the entire boating industry:

The most critical thing from our perspective is that we don’t have a choice but to let employees go. And there’s jobs that are going to be affected by this immediately, and the jobs are not the rich yacht salespeople – it is the boat detailers, it’s the truck drivers who move boats, it’s the bookkeeping staff in the marinas, its the yard staff in the marinas, it’s the marine technicians, its all of that.

Mr. Layzell explained to Transport Committee that “we've watched over a hundred jobs disappear from the industry already.”

By including aircraft and watercraft in the Luxury Items Tax Act, the NDP-Liberal government is putting families across Canada at risk. If the government wants to focus on creating jobs and industries that will attract investment into Canada, they should remove aircraft and watercraft from the Luxury Items Tax Act.

Common Sense Conservatives call on the NDP-Liberal government to cancel its job killing Capital Gains Tax hike.

This job killing tax hike vilifies the success of Canadian workers, farmers, fishers, physicians, tradespeople, truckers, small business owners, entrepreneurs, innovators, and investors. It punishes them for growing a business, innovating new technologies, or contributing to the economy.

University of Calgary President’s Fellow Jack Mintz warned committee of the economic vandalism this tax hike will cause.

• Based on a conservative assumption that an increase in the tax-inclusive cost of capital by 10% causes the capital stock to fall by 7%, I estimate that Canada's capital stock would fall by $127 billion. Employment would permanently decline by 414,000. To put this in terms of its impact on unemployment, the capital gains tax hike would increase unemployment from 1.4 million to 1.8 million Canadian workers, based on the employment data for September 2024. GDP will fall by almost $90 billion, and real per capita GDP by 3%. [8]

Dr. Mintz also refuted NDP-Liberal claims that only the wealthiest 0.13% of Canadians will be impacted by this tax hike. He told committee, “Far more Canadians will be affected by the tax change than the government seemed to anticipate. I estimated that 22,088 unique Canadian taxpayers per year, or 1.26 million Canadians on a lifetime basis – 4.3% of taxpayers – will be affected by the increase in the capital gains tax on individuals, half of whom earn less than $117,000 per year.”

Mr. Kim Moody further refuted NDP-Liberal claims that capital gains and employment income should be taxed the same. Mr. Moody points out the difference in earning income through employment and earning capital gains through entrepreneurial investor risk. [9]

Organizations such as the Canadian Council of Innovators and Platform Calgary warn of the impact of investors withholding investments in Canadian start-up companies because of the job killing tax hike. [10] [11] Canada is already seeing start-ups, innovators and investors fleeing to the US where they have lower taxes and better returns on their investment.

The committee also heard from agricultural organizations, farmers, and small business owners on the impact of a capital gains tax hike on their ability to pass on their business to future generations. [12] Common Sense Conservative Private Member’s Bill C-208 was given royal assent in June 2021. [13] This tax hike undoes the spirit of C-208 and makes it harder for farm families and small business owners to transfer their farm or business to their family.

After 9 years of Justin Trudeau, Canada is in a productivity crisis. We need entrepreneurs, innovators, tradespeople, farmers, and fishers to be successful and to draw in investments that grow businesses, create jobs, and bring home powerful paycheques.

Canada is also in a housing crisis and a healthcare professional shortage. Punishing construction businesses, tradespeople, and physicians is not just bad policy, it hurts Canadians.

Instead of vilifying the success of Canadians and their businesses, the government should be celebrating them and getting out of the way to let them grow and succeed.

Build the Homes

Common Sense Conservatives call for the NDP-Liberal government to Axe the Sales Tax on new homes under $1 million and spark the construction of 30 000 new homes.

Canada is facing a serious housing and affordability crisis. 82% of Canadians now worry that the housing crisis is impacting the health and well-being of Canadians, while 88% of renters now say that the dream of homeownership is out of reach. Worse, 59% of Canadians and 75% of renters are having to sacrifice basic needs such as food, clothing, and their education to afford rent or mortgage payments.[14]

Mr. Ronald Butler of Butler Mortgage reaffirmed at committee that “Without family help, without co-signers and without significant gifts of down payments, in major centres across Canada there are no opportunities for people with a moderate income of $55,000 to $65,000 to enter the housing market.”[15] Mr. Butler also stated that the number of new homes that will be constructed in the 416-area code will be 1550 in 2029.

In Ontario, about 39% of total taxes on new homes goes to politicians and bureaucrats in Ottawa. Common Sense Conservatives call for the removal of the GST on new homes under $1 million. This measure will have a positive and direct impact on the number of new homes being built in Canada, meaning that more Canadians will have a place to call home.

Common Sense Conservatives call on the NDP-Liberal government to reintroduce and pass Bill C-356, more commonly known as the Building Homes Not Bureaucracy Act.

The Canada Mortgage and Housing Corporation (CMHC) has reported that Canada needs to build at least 3.5 million homes by 2030 to restore housing affordability.[16] Housing starts across Canada are down because of the NDP-Liberal government’s subsidies and handouts to cities who are not building homes.

The Canadian Home Builders’ Association submitted the following recommendation to the committee:

• Remove Barriers and red Tape within the Home Building Process – While the federal government is rightly looking to municipalities to cut red tape, it is itself, at the same time, introducing red tape that is needlessly getting in the way of building more homes while also unnecessarily driving up house prices.[17]

By passing the Building Homes Not Bureaucracy Act the NDP-Liberal government can require cities to build more homes and speed up the rate at which they are built in order to meet federal housing targets, reward the cities who are exceeding building targets with increased funding, and cut the bonuses and salaries, and if needed, fire the gatekeepers at the CMHC if they are unable to speed up the process in which new homes builds are approved.

If the NDP-Liberal government is serious about addressing the housing and affordability crises in Canada, they will pass Bill C-356 and remove the GST off new home builds under $1 million. All Canadians deserve a safe, healthy, and affordable place to call home. These measures will provide immediate relief for the struggles that Canadians are facing.

Fix the Budget

Common Sense Conservatives call on the NDP-Liberal government to implement a one for one law to rein in their out-of-control deficit spending.

Minister of Finance Chrystia Freeland said in 2023 that one of her fiscal anchors would be that the 2023-24 deficit stay at or below $40 billion. [18] In Budget 2024 it was projected at $40.1 billion.

Since then, the government has increased it’s spending from $449.2 billion at the beginning of the fiscal year in April 2024, to $486.7 billion as of November 2024. [19] [20]

In the first half of the government’s fiscal year, the deficit was $13 billion, $5 billion higher than the deficit was in the first half of fiscal year 2023-24. [21]

The PBO now estimates the Liberals will exceed the $40 billion deficit guardrail by nearly $7 billion.

Days after the PBO made this projection, the Liberals announced a $1.6 billion 2-month temporary tax trick that takes the GST/HST off candy, alcohol, and Christmas trees. This is an unfunded temporary pause on GST/HST that adds more to the deficit and debt.

If the deficit grows beyond $40 billion as the PBO projects, it will further add to the cost of interest on the federal debt. That means even more money going to bankers and bond holders than goes to provincial health transfers.

Even Liberals know this. The committee heard back in October 2023 from former Liberal finance adviser Robert Asselin who pointed out “the more we spend on interest rates rising and servicing our debt, the less we spend on [the] core missions of the state.” [22]

Implementing common sense spending controls like requiring departments to find a dollar of savings for every new dollar of spending, would prevent growing inflationary deficits and help to cut down the waste.

Firing the Liberal insider consultants, ending Liberal slush funds like the Canada Growth Fund or Canadian infrastructure Bank, and defunding the CBC will further help to balance the budget and stop adding more to the federal debt.

Common Sense Conservatives call on the NDP-Liberal government to end their productivity killing policies and tax hikes.

As the Senior Deputy Governor of the Bank of Canada said in her March 2024 speech, Canada is in a break glass productivity emergency. [23]

As was reported by Statistics Canada, Canada’s GDP per capita fell in the third quarter of 2024 by 0.4%, the sixth consecutive per capita quarterly decline. [24] Only the growth in government expenditures accounted for GDP growth in the third quarter, and half of the increase in domestic demand. [25]

This shows the Canadian economy is rapidly weakening as Justin Trudeau’s tax hikes and failed economic policies drive out investments and jobs and punish the success of businesses and Canadian workers.

NDP-Liberal attacks on the success of Canadians and our businesses, makes it harder to generate capital and good paying jobs, and invest in Canadian workers, machinery, manufacturing, technology, and innovation, the basic investments needed for productivity growth.

As Carleton University Professor Dr. Ian Lee told the committee, “A C.D. Howe study found that capital available per Canadian worker has been shrinking since 2015.” [26] He added:

“Capital is the jobs and the factories of tomorrow. If we don't have capital, we're not going to have those good jobs of tomorrow. Worse, the gap between investment per worker in Canada versus the other OECD high-income countries is widening. Today, Canadian workers only receive 66 cents of new capital for every dollar their OECD counterparts receive and a mere 55 cents per dollar compared to U.S. workers.” [27]

The gap between Canada and the US is only growing. GDP per capita in the US is 43% higher than in Canada, having doubled after 9 years of Justin Trudeau. This gap makes the US more attractive for businesses and investors.

Since 2015, there has been a $460 billion net outflow of investment from Canada to the US.

As Dr. Lee, Dr. Mintz, Mr. Moody, and others have warned in committee and in public, Canada cannot see the productivity and economic growth it needs with the job killing tax hikes, failed economic policies, and business bashing of Justin Trudeau’s NDP-Liberal government.

If Canada is to Fix the Budget, bring home lower prices and powerful paycheques for Canadians, and start to address the productivity crisis, it must start by Axing the Carbon Tax, cancelling the job killing capital gains tax hike and oil and gas cap, removing anti-energy laws like the Impact Assessment Act and tanker ban, and create a tax system that is lower, simpler, and fairer.

Stop the Crime

Common Sense Conservatives call on the Standing Committee on Finance to undertake the statutory review of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) and call on the NDP-Liberal government to actually enforce anti-money laundering and anti-terrorist financing laws to stop the crime.

Canada has earned a global reputation of being a safe haven for money laundering. It is so prevalent here observers have given it its own nickname, “snow washing.” [28]

The US State Department has even named Canada as a “major money laundering country.” [29]

Jeffrey Simser a lawyer and leading expert on money laundering law, highlighted how Mexican Cartels and the Communist Chinese regime abuse the weak enforcement and safeguards in Canada to launder money and benefit the illegal drug trade. [30]

Mr. Simser made the following recommendations to strengthen enforcement of money laundering laws:

• Repeal the structured financial transactions offense recently added to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and instead make it a designated offence under the Criminal Code. [31]
• Amend the Proceeds of Crime (Money Laundering) and Terrorist Financing Act to provide clarity on how FINTRAC's voluntary information and civil forfeiture information records operate in order to ensure that the information does not cause a derivative use problem. [32]
• Charge RCMP protocols within their operational manual to make civil forfeiture part of the early planning on cases. [33]
• Amend section 461 of the Bank Act so that, for the purpose of a civil forfeiture proceedings, bank accounts may be located wherever associated transactions take place. [34]

These recommendations should be reviewed and considered as part of the statutory PCMLTFA review.

In October 2024, Canadian based TD Bank’s US subsidiaries TD Bank US Holding Company and TD Bank N.A., pled guilty to failing to comply with anti-money laundering laws and failing to file accurate Currency Transaction Reports. [35] The Bank was forced to pay a $3 billion fine, had its assets in the US capped, and other administrative penalties were taken by the US Government and its financial sector regulators. [36]

This guilty plea is a result of the US subsidiary of TD Bank being alleged to have helped a Chinese drug cartel launder over $600 million while its employees are alleged to have accepted bribes to facilitate the illegal activity. The US Justice Department tied the money laundered to an investigation of fentanyl trafficking happening in New York and New Jersey.[37]

Common Sense Conservatives have moved motions to undertake the statutory review of the PCMLTFA and to question TD Bank and other federally regulated financial institutions to prevent what happened with TD Bank’s US subsidiary from happening in Canada. It would be naïve to believe that what happened in the US stops at the US border. Yet, Liberal and NDP members of the committee have routinely blocked these motions.

Department of Finance Canada officials informed the committee that the Financial Action Task Force, an international organization that monitors countries anti-money laundering and anti-terrorist financing regimes, is undertaking its five-year review of Canada in 2026. Part of that review is whether Canada has completed its statutory review of the PCMLTFA. Even Minister Freeland asked the Finance Committee to undertake the statutory review of the PCMLTFA in October 2023, and to complete the review by the end of 2023. The Finance committee has yet to complete this study.

Money laundering affects all Canadians. There is an estimated $113 billion a year that is laundered in Canada. This is money that is used by criminal organizations to fund other criminal activities or used to buy real estate that pushes up the cost of housing. [38]

Common Sense Conservatives call on the NDP-Liberal government to reverse their disastrous failed bail policies, to stop attacking law abiding responsible firearms owners and to redirect those resources to stopping actual crime.

After nine years of Justin Trudeau, crime, chaos, drugs, and disorder run rampant in the streets. Violent crime has increased by 50 percent since Justin Trudeau first became Prime Minister while violent gun crime has increased by 116 percent.

The committee heard from the Toronto Police Association (TPA) that testified Toronto has “experienced a 43% increase in shootings, and the number of gun-related homicides has grown by 67%.”  TPA also testified that bail reform “is desperately needed,” as officers are arresting criminals who are out on bail, processing them, only to have them be released on bail again to commit crimes. TPA said, “stop placating us with the system you think we need, and to give us the system we're asking for.” [39]

Premiers, police chiefs, and police associations across Canada are joining with the Common Sense Conservatives to call for an end to the NDP-Liberal failed policies that have unleashed a crime wave across Canada, including Bill C-75 that implemented catch-and-release bail policies, and Bill C-5, which removed mandatory minimum sentences for certain major crimes.

Instead of reforming the bail system and ensuring law enforcement has the resources it needs, this NDP-Liberal government has instead gone after responsible, law-abiding firearms owners. That means farmers, hunters, first nations, and sports shooters are being targeted with overreaching gun bans, while resources are not being provided to CBSA to stop the smuggling of guns from the US, or to local police to crack down on organized crime using illegal guns.

Canadians need to feel safe in their communities, and they need a government that takes law and order seriously. It is time for jail, not bail, for repeat violent offenders, and for a plan to support our police, secure the borders, and stop the crime.

Conclusion

Everything in Canada feels broken after 9 years of this NDP-Liberal government.

The good news is that it was not like this before Justin Trudeau, and it will not be like this after he is gone.

We know that these out of touch and incompetent Liberals are too weak to implement the recommendations above.

Common Sense Conservatives are calling for a Carbon Tax election now, so Canadians can have the choice between four more years of Liberal misery, tax hikes, and failed policies, or a strong Common Sense Conservative government led by Prime Minister Pierre Poilievre who will bring home lower prices, powerful paycheques, homes people can afford, safer streets, freedom, and the Canada we all once knew, and still love.