Bill C-63 (Budget) - Third Reading
Honourable senators, I rise today to speak to Bill C-63, A second Act to implement certain provisions of the budget tabled in Parliament on March 22, 2017 and other measures, or the “Budget Implementation Act,” as it appears in its short title. I would like to speak particularly to Part 4, not surprisingly perhaps, which refers to the Federal-Provincial Fiscal Arrangements Act.
Presently, the Federal-Provincial Fiscal Arrangements Act does not provide the necessary authorities for the Minister of Finance to enter into coordinated cannabis taxation agreements with the provinces and territories, which is, of course, the essence of the act and reflects similar federal-provincial fiscal approaches. Currently, the Minister of Finance has this authority with respect to tax collection agreements and sales tax harmonization agreements.
On the question of undue haste, I feel compelled to remind honourable senators that the government’s intention to introduce legislation to legalize and strictly regulate cannabis was made known on December 4, 2015. An expert task force was struck on July 30, 2016. Legislation was introduced in April 2017. All of that is against the backdrop of a country — our country, Canada — which has had a robust medical cannabis framework in place for several years.
The amendments to the Federal-Provincial Fiscal Arrangements Act would ensure that a coordinated cannabis taxation framework is established well in advance of non-medical cannabis potentially being legalized, in a planned way. The proposed amendments to the Federal-Provincial Fiscal Arrangements Act will allow for the Minister of Finance, on behalf of the Government of Canada, to enter into agreements with interested provinces and territories concerning a coordinated taxation framework for cannabis — something provinces and territories have clearly been interested in doing.
It is necessary that the Minister of Finance be designated this authority in order to ensure a streamlined, coordinated and planned approach for the potential implementation of the legalization and regulation of cannabis, which is the objective, as we just heard a few moments ago, of Bill C-45, presently before this chamber.
The government must be able to strike appropriate agreements between the provinces and territories regarding the price and taxation of cannabis and have sufficient time to do so.
The risks of harms associated with cannabis use is a necessary factor to be considered when trying to strike a balance in price and taxation for cannabis products. Appropriate pricing controls can discourage use of cannabis and provide the government with revenues to offset related costs. However, pricing cannabis too high may drive users to the illicit market.
In its 2016 report, the Task Force on Cannabis Legalization and Regulation recommended taxes should be high enough to limit the growth of consumption, but low enough to compete effectively with the illicit market. In order to do achieve this, the task force recommended that the federal government work with provinces and territories to determine a tax regime that includes equitable distribution of revenues, and that this work result in a flexible system that can adapt price and tax with a changing marketplace.
Honourable senators, if the amendments to the Federal-Provincial Fiscal Arrangements Act are not adopted now in advance of the potential legalization of cannabis, the government will be unable to conclude fiscal negotiations between the provinces and territories. It is essential for the federal government to have the flexibility and the authorities necessary to ensure that such a framework is in place in both a timely and a predictable fashion in order to be responsive to governments and its partners.
The government began engaging with the provinces and territories on the issue of pricing and taxation shortly after the legislation was introduced in the House of Commons in the spring. It was an item on the agenda at the first ministers’ meeting June 18 and 19, six months ago, and a revenue split proposal was presented to the premiers at the premiers’ meeting on October 3. In addition, on November 10, 2017, the government announced the publication of a public consultation paper on the proposed price and taxation of cannabis products, and engaged with governments and stakeholders on these proposals through until December 7.
Because I, as you do, honourable colleagues, work hard to fulfill my constitutional responsibility to engage with my region, I can say with certainty that officials of the Province of Ontario have been deeply engaged and have continually consulted on cannabis reform over the past 18 months. Nothing has been rushed about it.
For your information, Ontario will be ready on July 1.
It was proposed that the combined rate of tax for cannabis flowering material contained in a final packaged product should not exceed $1 per gram, or 10 per cent of the producer’s sale price of that product, whichever is higher, with this tax room divided equally between the province or territory and the federal government. After further consultations on the initial proposal and after the finance minister’s meeting in Ottawa on Monday, you will know that the government reached a deal that would increase the proposed share to the provinces and territories from 50 per cent to 75 per cent of tax revenues from the sale of legal cannabis over the next two years. This agreement would also see any tax revenue in excess of $100 million go to the provinces and territories.
Finance Minister Morneau announced that the federal government, provinces and territories would meet again in December 2018 to assess how this deal is working, should Bill C-45 be enacted.
However, in the absence of the amendments proposed in Bill C-63 under Part 4, the government will not have the necessary authorities to solidify these important agreements that are responsive to regional impacts and costs for the legalization and regulation of cannabis.
It was also proposed that revenues raised from the taxation regime would help support investments in public education, enforcement, research and other activities integral to an effective system of legalization and regulation of cannabis. This is the sort of certainty that provinces and territories have been seeking. And given all of our concerns about appropriate cannabis-related resources for provinces and territories, I know that you will all want to be supportive of this.
The proposed amendments in the Federal-Provincial Fiscal Arrangements Act would permit the federal government to formalize cannabis taxation agreements. It’s important that the provinces and territories have the ability to negotiate on pricing regimes that consider their regional interests and individual cannabis frameworks for the protection of all governments, stakeholders and Canadians.
A streamlined approach to pricing and taxation will ensure that the public health and safety of Canadians are protected in the way that all of us here would want to see. I encourage all honourable senators to vote in favour of Bill C-63. The amendments in Part 4 are necessary to coordinate the effective implementation of legalization and regulation of cannabis should this be approved by Parliament. Thank you very much.
Hon. A. Raynell Andreychuk: Honourable senators, I sit on the Finance Committee, and I am the first to admit that finances are not my great expertise and capability.
But I looked at the number of policy issues that troubled me within Bill C-63. The issues in Bill C-63 with respect to certifying authorities who would apply to the medical expense tax credit, the child care expenses deduction, the Registered Disability Savings Plan and registered pension plan regulations were part of what I was concerned about.
The committee heard testimony from the Canadian Nurses Association, which represents nearly 139,000 registered nurses and nurse practitioners across Canada. Carolyn Pullen, Director of Policy, Advocacy and Strategy, noted to our committee that the CNA welcomed these new responsibilities.
In the committee, I questioned the training afforded to nurse practitioners related to these new responsibilities. Ms. Pullen responded:
Certainly, the national association and the provincial regulatory bodies stay abreast of these changes and work collaboratively to advance these changes where appropriate. And in follow-up, it falls to us to be among the leaders if providing information and education to the nurses who are affected by these changes.
She went on to explain the training and that there will be resources to have the nurse practitioners brought up to specialized standards to be able to deliver this responsibility of certification.
However, what troubled me, and what I think the CNA is also concerned about, is the fact that they will be trained on how to handle these increased medical responsibilities — how to identify mental illness, physical illness and the like.
But these nurse practitioners will now be certifying for the CRA whether people are entitled to these exemptions and credits. If they deny someone a credit, they will be the face of the CRA to that patient or to that individual.
Very special training needs to be given to the nurse practitioners so that they can understand the rulings of CRA, and the government needs to provide some more thinking about how one goes about questioning a nurse practitioner. You have them standing there. They have the medical training. They will either say you’re entitled or not entitled, and they will be acting, really, on behalf of CRA.
CRA may be the last appeal, but in between, nurse practitioners, who, as they said, are on the side of the patients to give them the absolute best care, will also have to determine the pluses and minuses of providing the certificate, which is a highly technical issue and, in fact, something that perhaps an accountant or auditor would be best placed to do.
I’m flagging this. I believe the government needs to reconsider which resources and training need to be given to these nurse practitioners to make this effective. I understand that in northern areas and rural areas nurse practitioners are the only fallback position and they’re embedded in the communities, but it would be unhelpful if the nurse practitioner in a small community has to deny someone a certificate and then continue to provide care in that community.
So I think this issue is not as simple as certifying nurse practitioners in the area. We need to monitor and see that we support our nurses in this role.
I, along with many others, also have great concerns about the legalization of cannabis. Again, in my very short time on the Finance Committee, we were hit by tax reform amendments — and now with the cannabis — where the questions were not answered.
The implementation strategy is not in place. The announcement of legalizing cannabis was done. We moved from an illegal substance to a discussion about decriminalization and have moved now to legalization without a full cost analysis, without a full implementation strategy and without consultations with the provinces and, therefore, the municipalities, who will bear the brunt of these changes.
Listen to my speech here!