Thank you.

Hello, Mr. Chairman. My name is Tamara Rozansky. I'm a partner in the indirect tax team at Deloitte Canada based in our Montreal office. I'm a tax policy adviser to the coalition.

Let me start by saying we appreciate that tax matters are usually a topic for your colleagues on the Standing Committee on Finance, but in this instance, as it could impact the future of blockchain technology in Canada, the coalition's disagreement with the Department of Finance is directly on point.

Last February, Finance proposed amendments to the Excise Tax Act, Canada's GST/HST legislation. These amendments focused on digital or crypto-asset mining activities. The principal feature of these proposed tax amendments was to declare that digital asset mining activities are not a commercial activity in Canada. That would mean that companies engaged in digital asset mining would no longer be eligible to receive input tax credits, ITCs. For larger digital asset mining companies, these ITCs can have a value in the tens of millions of dollars.

Subject to certain exceptions, the fundamental principle of Canada's GST/HST is that all activity that is undertaken for gain or to produce income in Canada is deemed to be commercial activity and is taxable. In this respect, the GST/HST paid on any goods or services that go into this commercial activity is generally recoverable as an ITC refund by the commercial business. Only the end consumers of goods or services in Canada pay GST/HST that is not recoverable.

When only consumption and not production is taxed, the GST/HST promotes the global competitiveness of Canadian businesses. From a GST/HST policy perspective, the Finance proposal is unprecedented. In its current form, the proposal is a direct threat to the sustainability and continued growth of digital asset mining companies in Canada.

I look forward to your questions.

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