Budget and Economic Statement Implementation Act, 2007

An Act to implement certain provisions of the budget tabled in Parliament on March 19, 2007 and to implement certain provisions of the economic statement tabled in Parliament on October 30, 2007

This bill was last introduced in the 39th Parliament, 2nd Session, which ended in September 2008.

Sponsor

Jim Flaherty  Conservative

Status

This bill has received Royal Assent and is now law.

Summary

This is from the published bill. The Library of Parliament often publishes better independent summaries.

Part 1 implements goods and services tax and harmonized sales tax (GST/HST) measures proposed in the March 19, 2007 Budget but not included in the Budget Implementation Act, 2007, which received Royal Assent on June 22, 2007. Specifically, the Excise Tax Act is amended to

(a) increase the percentage of available input tax credits for GST/HST paid on meal expenses of truck drivers from 50% to 80% over five years beginning with expenses incurred on or after March 19, 2007;

(b) increase the GST/HST annual filing threshold from $500,000 in taxable supplies to $1,500,000 and the annual remittance threshold from $1,500 to $3,000, both effective for fiscal years that begin after 2007;

(c) increase the GST/HST 48-hour travellers’ exemption from $200 to $400 effective in respect of travellers returning to Canada on or after March 20, 2007; and

(d) implement changes to the rules governing self-assessment under Division IV of Part IX of the Excise Tax Act to ensure that GST/HST applies appropriately in respect of intangible personal property acquired on a zero-rated basis and consumed in furthering domestic activities, applicable to supplies made after March 19, 2007.

Part 2 amends the non-GST portion of the Excise Tax Act to implement measures announced in the March 19, 2007 Budget. Specifically, the excise tax exemptions for renewable fuels, including ethanol and bio-diesel, are repealed, effective April 1, 2008.

Part 3 implements income tax measures proposed in the March 19, 2007 Budget but not included in the Budget Implementation Act, 2007, which received Royal Assent on June 22, 2007. In particular, it

(a) introduces a new Working Income Tax Benefit;

(b) eliminates income tax on elementary and secondary school scholarships;

(c) eliminates capital gains tax on donations of publicly-listed securities to private foundations;

(d) enhances the child fitness tax credit;

(e) expands the scope of the public transit tax credit;

(f) increases the lifetime capital gains exemption to $750,000;

(g) increases the deductible percentage of meal expenses for long-haul truck drivers;

(h) provides tax relief in respect of the 2010 Winter Olympic and Paralympic Games;

(i) allows for phased-retirement options for pension plans;

(j) extends the mineral exploration tax credit;

(k) enhances tax benefits for donations of medicine to the developing world;

(l) streamlines the process for prescribed stock exchanges;

(m) introduces an investment tax credit for child care spaces;

(n) introduces a new withholding tax exemption with respect to certain cross-border interest payments;

(o) prevents double deductions of interest expense on borrowed money used to finance foreign affiliates (the Anti-Tax-Haven Initiative);

(p) eases tax remittance and filing requirements for small business;

(q) introduces a mechanism to accommodate functional currency reporting;

(r) provides certain tobacco processors that do not manufacture tobacco products with relief from the Tobacco Manufacturers’ Surtax; and

(s) provides authority for regulations requiring the disclosure by publicly traded trusts and partnerships of information enabling investment managers to prepare the tax information slips that they are required to issue to investors on a timely basis.

Part 4 implements the disability savings measures proposed in the March 19, 2007 Budget. The measures are intended to support long-term savings through registered disability savings plans to provide for the financial security of persons with severe and prolonged impairments in physical or mental functions. Part 4 contains amendments to the Income Tax Act to allow for the creation of registered disability savings plans. It also enacts the Canada Disability Savings Act. That Act provides for the payment of Canada Disability Savings Grants in relation to contributions made to those plans. The amount of grant is increased for persons of lower and middle income. It also provides for the payment of Canada Disability Savings Bonds in respect of persons of low income.

Part 5 implements measures that provide for payments to be made to provinces as a financial incentive for them to eliminate taxes on capital under certain circumstances.

Part 6 enacts the Bank for International Settlements (Immunity) Act.

Part 7 amends the Pension Benefits Standards Act, 1985 to permit phased retirement arrangements in federally regulated pension plans by allowing an employer to simultaneously pay a partial pension to an employee and provide further pension benefit accruals to the employee. These amendments are consistent with amendments to the Income Tax Regulations to permit phased retirement.

Part 8 authorizes payments to be made out of the Consolidated Revenue Fund for the purpose of Canada’s contribution to the Advance Market Commitment.

Part 9 amends the Canada Oil and Gas Operations Act to authorize the National Energy Board to regulate traffic, tolls and tariffs in relation to oil and gas pipelines regulated under that Act.

Part 10 amends the Farm Income Protection Act to allow financial institutions to hold contributions under a net income stabilization account program.

Part 11 amends the Federal-Provincial Fiscal Arrangements Act to provide for an additional fiscal equalization payment that may be paid to Nova Scotia and Newfoundland and Labrador. This Part also specifies the time and manner in which the calculation of fiscal equalization payments will be made and it amends that Act’s regulation-making authority. In addition, this Part makes consequential amendments to other Acts.

Part 12 amends the Canada Education Savings Act to clarify the authority of the Minister of Human Resources and Social Development to collect, on behalf of the Canada Revenue Agency, any information that the Canada Revenue Agency requires for purposes of administering the registered education savings plan tax provisions.

Part 13 authorizes payments to be made out of the Consolidated Revenue Fund to an entity, designated by the Minister of Finance, to facilitate public-private partnership projects.

Part 14 implements tax measures proposed in the October 30, 2007 Economic Statement. With respect to income tax measures, it

(a) reduces the general corporate income tax rate;

(b) accelerates the tax reduction for small businesses;

(c) reduces the lowest personal income tax rate, which automatically reduces the rate used to calculate non-refundable tax credits and the alternative minimum tax; and

(d) increases the basic personal amount and the amount upon which the spouse or common-law partner and wholly dependent relative credits are calculated.

Part 14 also amends the Excise Tax Act to implement, effective January 1, 2008, the reduction in the goods and services tax (GST) and the federal component of the harmonized sales tax (HST) from 6% to 5%. That Act is amended to provide transitional rules for determining the GST/HST rate applicable to transactions that straddle the January 1, 2008, implementation date, including transitional rebates in respect of the sale of residential complexes where transfer of ownership and possession both take place on or after January 1, 2008, pursuant to a written agreement entered into on or before October 30, 2007. The Excise Act, 2001 is also amended to increase excise duties on tobacco products to offset the impact of the GST/HST rate reduction. The Air Travellers Security Charge Act is also amended to ensure that rates for domestic and transborder air travel reflect the impact of the GST/HST rate reduction. Those amendments generally apply as of January 1, 2008.

Elsewhere

All sorts of information on this bill is available at LEGISinfo, provided by the Library of Parliament. You can also read the full text of the bill.

Votes

  • Dec. 13, 2007 Passed That the Bill be now read a third time and do pass.
  • Dec. 10, 2007 Passed That Bill C-28, An Act to implement certain provisions of the budget tabled in Parliament on March 19, 2007 and to implement certain provisions of the economic statement tabled in Parliament on October 30, 2007, be concurred in at report stage.
  • Dec. 10, 2007 Failed That Bill C-28 be amended by deleting Clause 181.
  • Dec. 4, 2007 Passed That the Bill be now read a second time and referred to the Standing Committee on Finance.

Jobs and Growth Act, 2012
Government Orders

November 29th, 2012 / 3:15 p.m.
See context

Liberal

Scott Brison Kings—Hants, NS

Mr. Speaker, I rise to speak to the Conservatives' latest omnibus budget legislation, Bill C-45, at report stage.

I will focus my remarks today on: one, how the New Democrats worked closely with and supported, helped, aided and abetted the Conservatives in their ramming of this omnibus bill through committee; two, a very dangerous precedent that was set at finance committee during the study of Bill C-45; and, three, some of the flaws in Bill C-45 that were identified by Canadians during the committee's study.

As members know, Bill C-45 is a mammoth bill. It is over 400 pages long and would amend over 60 different laws. It includes a large number of provisions that simply do not belong in a budget bill: rewriting the laws protecting Canada's waterways; redefining aboriginal fisheries, without even consulting first nations peoples; and eliminating the Hazardous Materials Information Review Commission. These are just a few examples of what is in Bill C-45 and examples of measures that would really have nothing to do with the fiscal situation of the country.

Canadians overwhelmingly disapprove of the Conservatives' use of omnibus budget bills to ram a large number of unrelated measures through Parliament without sufficient study or debate. A recent poll by Forum Research shows that 64% of Canadians oppose the Conservatives' omnibus legislative approach. Even a majority of Conservative supporters oppose the Conservatives' use, overuse and abuse of omnibus bills.

The Prime Minister once opposed the use of omnibus bills, but under his watch we have seen a clear trend toward the use of omnibus legislation. In fact, Bill C-13 in 2006 was 198 pages; Bill C-28 in 2007 was 378 pages; Bill C-10 in 2009 was 552 pages; Bill C-9 in 2010 was 904 pages; Bill C-13 in 2011 was 658 pages; and Bill C-38 earlier this year was 452 pages.

To put this in context, the largest Liberal budget bill was Bill C-28 in 2003, which was 144 pages in length, and it focused on fiscal measures, not on unrelated measures.

I will also speak about the NDP in this case. The NDP actually helped the Conservatives in passing Bill C-45 as quickly as possible through committee. The New Democrats say that they oppose Bill C-45 and they say that they oppose closure. However, their actions speak louder than their words. While they talk the talk, they do not walk the walk when it comes to actually standing up to the Conservatives and their abuse of Parliament. Instead of standing up to the Conservatives and providing any real opposition to Bill C-45, the New Democrats have actually been helping the Conservatives.

Here are a few examples. The New Democrats voted with the Conservatives to impose time allocation to limit the debate on Bill C-45 at committee. The New Democrats voted with the Conservatives to overrule the finance committee chair, the member for Edmonton—Leduc, a chair who is respected by all members of the House for his judgment. To have him rebuked by his own colleagues was bad and it was terrible to see the New Democrats gang up with the Conservatives against the member for Edmonton—Leduc. The New Democrats voted with the Conservatives to throw out the rules at committee and to shut down opposition to Bill C-45. The New Democrats then gave up one of their votes at finance committee and worked out a schedule with the Conservatives so the finance committee could get through Bill C-45 as quickly as possible. The New Democrats voted with the Conservatives almost 2,000 times at the finance committee to oppose measures that could have delayed certain parts of Bill C-45.

Canada-Colombia Free Trade Agreement Implementation Act—Speaker's Ruling
Points of Order
Oral Questions

October 22nd, 2009 / 3:10 p.m.
See context

Liberal

The Speaker Peter Milliken

I am now prepared to rule on the point of order raised on October 9, 2009, by the hon. member for Argenteuil—Papineau—Mirabel regarding the use of Standing Order 56.1 to disallow further amendments and subamendments at the second reading stage of Bill C-23, Canada-Colombia Free Trade Agreement Implementation Act.

I want to thank the hon. member for Argenteuil—Papineau—Mirabel, as well as the hon. member for Vancouver East and the hon. Minister of State and Chief Government Whip for their comments.

The member for Argenteuil—Papineau—Mirabel argued that the motion of the Leader of the Government in the House of Commons, having been moved pursuant to Standing Order 56.1, should be ruled out of order since it does not fall within the definition of a routine motion as prescribed in that Standing Order. Instead, he argued that the Standing Order was used to limit debate, in the same fashion as moving the previous question.

In addition to agreeing with the arguments raised by the member for Argenteuil—Papineau—Mirabel, the member for Vancouver East expressed concern about the expanded use of Standing Order 56.1 and the “creeping, sort of incremental change” accompanying this, which then led her to question the appropriateness of its use in this case. She added that there are other mechanisms available to the government to manage the amount of time allocated to debate on Bill C-23.

The chief government whip contended that the government was applying Standing Order 56.1 correctly and that there had been previous instances where the Standing Order was used in this fashion.

For the benefit of members, the motion adopted on October 9, 2009, reads as follows:

That, notwithstanding any standing order or usual practices of the House, the second reading stage of Bill C-23, An Act to implement the Free Trade Agreement between Canada and the Republic of Colombia, the Agreement on the Environment between Canada and the Republic of Colombia and the Agreement on Labour Cooperation between Canada and the Republic of Colombia, shall not be subject to any further amendments or sub-amendments.

As mentioned by the member for Vancouver East, similar concerns over the expanded use of Standing Order 56.1 were raised in 2001 when it was used for the disposition of a bill at various stages. When I ruled on that point of order on September 18, 2001 in the Debates at pages 5256 to 5258, I expressed reservations about the trend toward using that Standing Order for purposes other than for motions of a routine nature. My predecessor had already urged the Standing Committee on Procedure and House Affairs to examine the use of Standing Order 56.1, and I reiterated this need for the committee to do so at the earliest opportunity.

In the absence of such feedback, on May 13, 2005 in the Debates at pages 5973 to 5974, I allowed a motion that provided for the completion of the second reading stage of two bills to be moved pursuant to Standing Order 56.1. Again, I highlighted the fact that the Standing Committee on Procedure and House Affairs still had not undertaken a study of Standing Order 56.1, and as such, I was not in a position to rule definitively on the appropriateness of that Standing Order's use and I stated the following on that occasion.

I believe having had nothing back [from the committee] I can only allow this one to proceed at this time, particularly so when the time allocated here is much more generous than would be the case under closure or under time allocation…Accordingly the motion appears to be in order.

Similarly, on October 3, 2006, I allowed a motion moved pursuant to Standing Order 56.1 which in part disallowed further amendments or subamendments to the second reading stage of Bill C-24, the Softwood Lumber Products Export Charge Act, 2006. Another motion with such provisions was allowed to proceed on December 12, 2007, in reference to Bill C-28, An Act to implement certain provisions of the budget tabled in Parliament on March 19, 2007 and to implement certain provisions of the economic statement tabled in Parliament on October 30, 2007.

As was the case in those two most recent examples, even though the current motion disallows further amendments and subamendments, it still allows members who have not yet done so to speak to the amendment and the main motion. Furthermore, as I then stated in my ruling in the Debates on October 3, 2006 at page 3571:

The motion does not set a deadline for completion of the proceedings, as would be the case under time allocation or closure...There is a significant difference.

This does not, however, negate the concerns expressed by members over time about the need for a clearer and agreed upon understanding of this Standing Order. The following quote from my 2006 ruling still applies in this case:

My predecessor and I have both encouraged the Standing Committee on Procedure and House Affairs to examine the appropriate use of the Standing Order. To date I am not aware of any report by that committee on this question.

Should the House feel the need to change the parameters pertaining to the use of Standing Order 56.1, I would suggest once more that members bring their concerns to the Standing Committee on Procedure and House Affairs. Since the committee has not yet offered clear direction on the definition of Standing Order 56.1, and since motions disallowing amendments and subamendments have been ruled admissible in the past, I rule that the motion moved by the Government House Leader on October 9, 2009 is in order.

I thank hon. members for their attention.

Extension of Sitting Hours
Routine Proceedings

June 9th, 2008 / 3:10 p.m.
See context

York—Simcoe
Ontario

Conservative

Peter Van Loan Leader of the Government in the House of Commons and Minister for Democratic Reform

Mr. Speaker, I would like at this time to move the standard motion that can be made only today. I move:

That, pursuant to Standing Order 27(1), commencing on Monday, June 9, 2008, and concluding on Thursday, June 19, 2008, the House shall continue to sit until 11:00 p.m.

Mr. Speaker, as I indicated last week in answer to the Thursday statement, this is we have work to do week. To kick off the week, we are introducing the customary motion to extend the daily sitting hours of the House for the final two weeks of the spring session. This is a motion which is so significant there is actually a specific Standing Order contemplating it, because it is the normal practice of this House, come this point in the parliamentary cycle, that we work additional hours and sit late to conduct business.

In fact, since 1982, when the House adopted a fixed calendar, such a motion has never been defeated. I underline that since a fixed calendar was adopted, such a motion has never been defeated. As a consequence, we know that today when we deal with this motion, we will discover whether the opposition parties are interested in doing the work that they have been sent here to do, or whether they are simply here to collect paycheques, take it easy and head off on a three month vacation.

On 11 of those occasions, sitting hours were extended using this motion. On six other occasions, the House used a different motion to extend the sitting hours in June. This includes the last three years of minority government.

This is not surprising. Canadians expect their members of Parliament to work hard to advance their priorities. They would not look kindly on any party that was too lazy to work a few extra hours to get as much done as possible before the three month summer break. There is a lot to get done.

In the October 2007 Speech from the Throne, we laid out our legislative agenda. It set out an agenda of clear goals focusing on five priorities to: rigorously defend Canada's sovereignty and place in the world; strengthen the federation and modernize our democratic institutions; provide effective, competitive economic leadership to maintain a competitive economy; tackle crime and strengthen the security of Canadians; and improve the environment and the health of Canadians. In the subsequent months, we made substantial progress on these priorities.

We passed the Speech from the Throne which laid out our legislative agenda including our environmental policy. Parliament passed Bill C-2, the Tackling Violent Crime Act, to make our streets and communities safer by tackling violent crime. Parliament passed Bill C-28, which implemented the 2007 economic statement. That bill reduced taxes for all Canadians, including reductions in personal income and business taxes, and the reduction of the GST to 5%.

I would like to point out that since coming into office, this government has reduced the overall tax burden for Canadians and businesses by about $190 billion, bringing taxes to their lowest level in 50 years.

We have moved forward on our food and consumer safety action plan by introducing a new Canada consumer product safety act and amendments to the Food and Drugs Act.

We have taken important steps to improve the living conditions of first nations. For example, first nations will hopefully soon have long overdue protection under the Canadian Human Rights Act, and Bill C-30 has been passed by the House to accelerate the resolution of specific land claims.

Parliament also passed the 2008 budget. This was a balanced, focused and prudent budget to strengthen Canada amid global economic uncertainty. Budget 2008 continues to reduce debt, focuses government spending and provides additional support for sectors of the economy that are struggling in this period of uncertainty.

As well, the House adopted a motion to endorse the extension of Canada's mission in Afghanistan, with a renewed focus on reconstruction and development to help the people of Afghanistan rebuild their country.

These are significant achievements and they illustrate a record of real results. All parliamentarians should be proud of the work we have accomplished so far in this session. However, there is a lot of work that still needs to be done.

As I have stated in previous weekly statements, our top priority is to secure passage of Bill C-50, the 2008 budget implementation bill.

This bill proposes a balanced budget, controlled spending, investments in priority areas and lower taxes, all without forcing Canadian families to pay a tax on carbon, gas and heating. Furthermore, the budget implementation bill proposes much-needed changes to the immigration system.

These measures will help keep our economy competitive.

Through the budget implementation bill, we are investing in the priorities of Canadians.

These priorities include: $500 million to help improve public transit, $400 million to help recruit front line police officers, nearly $250 million for carbon capture and storage projects in Saskatchewan and Nova Scotia, and $100 million for the Mental Health Commission of Canada to help Canadians facing mental health and homelessness challenges.

These investments, however, could be threatened if the bill does not pass before the summer. That is why I am hopeful that the bill will be passed by the House later today.

The budget bill is not our only priority. Today the House completed debate at report stage on Bill C-29, which would create a modern, transparent, accountable process for the reporting of political loans. We will vote on this bill tomorrow and debate at third reading will begin shortly thereafter.

We also wish to pass Bill C-55, which implements our free trade agreement with the European Free Trade Association.

This free trade agreement, the first in six years, reflects our desire to find new markets for Canadian products and services.

Given that the international trade committee endorsed the agreement earlier this year, I am optimistic that the House will be able to pass this bill before we adjourn.

On Friday we introduced Bill C-60, which responds to recent decisions relating to courts martial. That is an important bill that must be passed on a time line. Quick passage is necessary to ensure the effectiveness of our military justice system.

Last week the aboriginal affairs committee reported Bill C-34, which implements the Tsawwassen First Nation final agreement. This bill has all-party support in the House. Passage of the bill this week would complement our other achievements for first nations, including the apology on Wednesday to the survivors of residential schools.

These are important bills that we think should be given an opportunity to pass. That is why we need to continue to work hard, as our rules contemplate.

The government would also like to take advantage of extended hours to advance important crime and security measures. Important justice measures are still before the House, such as: Bill S-3, the anti-terrorism act; Bill C-53, the auto theft bill; Bill C-45 to modernize the military justice system; and Bill C-60, which responds to recent court martial decisions.

There are a number of other bills that we would like to see advanced in order to improve the management of the economy. There are other economic bills we would like to advance.

These include Bill C-7, to modernize our aeronautics sector, Bill C-5, dealing with nuclear liability, Bill C-43, to modernize our customs rules, Bill C-39, to modernize the Canada Grain Act for farmers, Bill C-46, to give farmers more choice in marketing grain, Bill C-57, to modernize the election process for the Canadian Wheat Board, Bill C-14, to allow enterprises choice for communicating with customers, and Bill C-32, to modernize our fisheries sector.

If time permits, there are numerous other bills that we would like to advance.

These include Bill C-51, to ensure that food and products available in Canada are safe for consumers, Bill C-54, to ensure safety and security with respect to pathogens and toxins, Bill C-56, to ensure public protection with respect to the transportation of dangerous goods, Bill C-19, to limit the terms of senators to 8 years from a current maximum of 45, and Bill C-22, to provide fairness in representation in the House of Commons.

It is clear a lot of work remains before the House. Unfortunately, a number of bills have been delayed by the opposition through hoist amendments. Given these delays, it is only fair that the House extend its sitting hours to complete the bills on the order paper. As I have indicated, we still have to deal with a lot of bills.

We have seen a pattern in this Parliament where the opposition parties have decided to tie up committees to prevent the work of the people being done. They have done delay and obstruction as they did most dramatically on our crime agenda. They do not bother to come and vote one-third of time in the House of Commons. Their voting records has shown that. All of this is part of a pattern of people who are reluctant to work hard.

The government is prepared to work hard and the rules contemplate that it work hard. In fact, on every occasion, when permission has been sought at this point in the parliamentary calendar to sit extended hours, the House has granted permission, including in minority Parliaments.

If that does not happen, it will be clear to Canadians that the opposition parties do not want to work hard and are not interested in debating the important policy issues facing our country. Is it any wonder that we have had a question period dominated not by public policy questions, but dominated entirely by trivia and issues that do not matter to ordinary Canadians.

The government has been working hard to advance its agenda, to advance the agenda that we talked about with Canadians in the last election, to work on the priorities that matter to ordinary Canadians, and we are seeking the consent of the House to do this.

Before concluding, I point out, once again, that extending the daily sitting hours for the last two weeks of June is a common practice. Marleau and Montpetit, at page 346, state this is:

—a long-standing practice whereby, prior to the prorogation of the Parliament or the start of the summer recess, the House would arrange for longer hours of sitting in order to complete or advance its business.

As I stated earlier, it was first formalized in the Standing Orders in 1982 when the House adopted a fixed calendar. Before then, the House often met on the weekend or continued its sittings into July to complete its work. Since 1982, the House has agreed on 11 occasions to extend the hours of sitting in the last two weeks of June.

Therefore, the motion is a routine motion designed to facilitate the business of the House and I expect it will be supported by all members. We are sent here to engage in very important business for the people of Canada. Frankly, the members in the House are paid very generously to do that work. Canadians expect them to do that work and expect them to put in the time that the rules contemplate.

All member of the House, if they seek that privilege from Canadian voters, should be prepared to do the work the rules contemplate. They should be prepared to come here to vote, to come here to debate the issues, to come here for the hours that the rules contemplate. If they are not prepared to do that work, they should step aside and turnover their obligations to people who are willing to do that work.

There is important work to be done on the commitments we made in the Speech from the Throne. I am therefore seeking the support of all members to extend our sitting hours, so we can complete work on our priorities before we adjourn for the summer. This will allow members to demonstrate results to Canadians when we return to our constituencies in two weeks.

Not very many Canadians have the privilege of the time that we have at home in our ridings, away from our work. People do not begrudge us those privileges. They think it is important for us to connect with them. However, what they expect in return is for us to work hard. They expect us to put in the hours. They expect us to carry on business in a professional fashion. The motion is all about that. It is about doing what the rules have contemplated, what has always been authorized by the House any time it has been asked, since the rule was instituted in 1982. That is why I would ask the House to support the motion to extend the hours.

Message from the Senate
Royal Assent

December 14th, 2007 / 1:15 p.m.
See context

Conservative

The Acting Speaker Royal Galipeau

I have the honour to inform the House that when the House did attend His Honour the Deputy to Her Excellency the Governor General in the Senate chamber His Honour was pleased to give, in Her Majesty's name, the royal assent to the following bills:

Bill S-2, An Act to amend the Canada-United States Tax Convention Act, 1984--Chapter 32;

Bill C-15, An Act respecting the exploitation of the Donkin coal block and employment in or in connection with the operation of a mine that is wholly or partly at the Donkin coal block, and to make a consequential amendment to the Canada--Nova Scotia Offshore Petroleum Resources Accord Implementation Act--Chapter 33;

Bill C-35, An Act for granting to Her Majesty certain sums of money for the federal public administration for the financial year ending March 31, 2008--Chapter 34;

Bill C-28, An Act to implement certain provisions of the budget tabled in Parliament on March 19, 2007 and to implement certain provisions of the economic statement tabled in Parliament on October 30, 2007--Chapter 35;

Bill C-12, An Act to amend the Bankruptcy and Insolvency Act, the Companies' Creditors Arrangement Act, the Wage Earner Protection Program Act and chapter 47 of the Statutes of Canada, 2005--Chapter 36;

Bill C-18, An Act to amend the Canada Elections Act (verification of residence)--Chapter 37.

It being 1:20 p.m., the House stands adjourned until Monday, January 28, at 11:00 a.m., pursuant to Standing Orders 28(2) and 24(1).

(The House adjourned at 1:20 p.m.)

Budget and Economic Statement Implementation Act, 2007
Government Orders

December 13th, 2007 / 1 p.m.
See context

Conservative

The Acting Speaker Andrew Scheer

It being 1 p.m. the House will now proceed to the taking of the deferred recorded division on the motion at the third reading stage of Bill C-28.

Call in the members.

Canada-United States Tax Convention Act, 1984
Government Orders

December 13th, 2007 / 10:30 a.m.
See context

Macleod
Alberta

Conservative

Ted Menzies Parliamentary Secretary to the Minister of Finance

Mr. Speaker, it is wonderful, in the spirit of Christmas, how things are moving along quickly here today. We know that all hon. members want to get home to their families to celebrate Christmas. It is wonderful to see everyone working together here this morning.

We do have some business to finish up, so I rise today to speak to Bill S-2 at third reading. The passing of this bill, once it receives royal assent, completes Canada's role in the ratification of an agreement to update major elements of the Canada-U.S. tax treaty.

The U.S., for its part, must also ratify this agreement before it comes into effect.

As the House may know, Canada and the U.S. have had a tax treaty in place since 1980. Since that time, there have been four updates or protocols to this treaty. This is to ensure that our respective tax systems evolve to reflect economic and social changes.

Bill S-2 represents the fifth update to the treaty. Canada has numerous tax treaties with other countries as well. However, given the unique relationship we have with the Americans, the Canada-U.S. tax treaty is generally viewed as the one of most importance.

This treaty is part and parcel of the government's plan to create a tax advantage for Canada and we have a long term economic plan for Canada's future called “Advantage Canada”. This plan was designed to improve our quality of life and to make Canada a world leader for today and for future generations.

“Advantage Canada” promotes five competitive economic advantages we need to succeed in today's global economy: a fiscal advantage, a tax advantage, a knowledge advantage, an entrepreneurial advantage and an infrastructure advantage. Each of those advantages does not stand alone. Rather, they stand interconnected with each other. In other words, we are creating a Canadian advantage on those five fronts.

Given that we are talking about a tax treaty today, it is creating a tax advantage that I would like to highlight today. A Canadian tax advantage will help individuals, families and businesses to get ahead and stay ahead. Moreover, it will reward initiative and make Canada the global investment destination of choice. A tax advantage starts with reducing taxes for Canadians. Of course, taxes pay for Canada's important public services but high taxes limit Canadians' opportunities and choices.

With a more focused government, we can both lower taxes to create better incentives for Canadians to succeed and provide significant funding for priorities.

A tax advantage is about reducing taxes in all areas to stimulate investment and economic growth. This includes reducing personal income taxes to improve rewards from working, from saving and investing in new knowledge and skills. It includes creating a business tax advantage that will encourage businesses to invest in Canada. In turn, this will spur innovation and growth leading to more jobs and higher wages for Canadian workers.

The government also continues its commitment to restoring tax fairness. Canadians deserve to know that everyone will pay their fair share of taxes. That is what tax fairness is all about.

Indeed, tax fairness is key to the “Advantage Canada” plan. This plan will make our tax system simpler, fairer and more competitive. This will help us to compete in the global marketplace. We have taken significant action in that direction.

Most recently, this fall's economic statement proposed broad based tax relief of almost $60 billion for individuals, families and businesses over this and the next five fiscal years.

Combined with previous relief provided by the government, total tax relief over the same period is almost $190 billion. These dramatic tax reductions and initiatives will benefit families with children, workers, seniors, persons with disabilities and others.

They will also strengthen our tax advantage to help all Canadian businesses compete and succeed in the global marketplace. These important initiatives will help attract investment to Canada. Moreover, this action will increase productivity and economic growth and create more and better jobs for Canadians.

What, one may ask, does this have to do with tax treaties? Tax treaties and tax fairness are inextricably linked. Our tax treaties help contribute to the growth of the Canadian economy, particularly by encouraging trade. This is principally important because exports account for more than 40% of Canada's annual GDP.

In addition, tax treaties help attract investment in Canada. This investment means inflows of capital, technology and information, all of which contribute to Canada's economic growth, job creation and the well-being of our citizens.

In short, our government must ensure that Canada's system of international taxation is competitive. We have worked to ensure that our network of bilateral tax treaties is up to date in order to help Canadian companies and investors to prosper and succeed.

One important function of tax treaties to keep in mind when considering this bill is that they help eliminate double taxation. I trust that hon. members would agree that there is little that can have more of a negative impact on the expansion of our trade and the movement of capital and labour between countries than double taxation.

The potential for double taxation comes about when a taxpayer resides in one country and earns income in another. Without a tax treaty in place, both countries can claim tax on that same income.

One of the goals for Canada, therefore, in negotiating its tax treaties, is to remove the potential for double taxation. This not only helps provide incentives for investment, it promotes fairness in our tax system. That is why one of the proposals in Bill S-2 would allow taxpayers to demand that otherwise insoluble tax issues be settled through arbitration, thus ensuring that there is no double taxation of immigrants' gains.

Given the special relationship that Canada has with the U.S., it makes sense that our tax treaty would also be special. Indeed, Canada's income tax treaty with the United States is vital. It helps to ensure the efficient flow of trade between our two countries. These changes to the treaty, signed in September, will stimulate further trade and investment and make our tax systems more efficient.

Canadians and Canadian businesses will benefit from this treaty update in a number of ways. They will see reduced borrowing costs and a more competitive lending market with the elimination of withholding tax on interest paid on all arm's length debt.

Since treaty benefits will be extended to limited liability companies, the protocol in Bill S-2 would provide better access to U.S. capital. With further harmonization of the tax treatment of pension contributions in the two countries and new rules to clarify the treatment of stock options, this proposed legislation would also provide more mobility for Canadians working in the U.S.

Furthermore, these changes would, among other benefits, reduce the cost of cross-border financing and would have a positive effect on investment and, above all, simplify the tax system. All of these benefits, in turn, support the competitiveness of Canada's multinational enterprises. These are important considerations that we need to keep in mind when debating this bill.

One of the most important aspects of the Canada-U.S. tax treaty is the proposal respecting withholding tax. Reaction from taxpayers to this measure has been particularly positive.

Following the signing of the treaty, the director of the C.D. Howe Institute said:

And our research suggests that the bilateral elimination of withholding taxes will substantially improve the efficiency of capital markets, attract foreign direct investment to the country, and help Canadians penetrate the North American market on a more competitive basis.

Reaction from the other side of the border has been equally supportive. Treasury Secretary Paulson, at the signing of the agreement in September, said that updating our treaty enables us “to move even more swiftly in the global economy”.

Canadians will particularly benefit from easier cross-border investment as the withholding tax is removed from interest paid between non-arm's length persons between Canada and the U.S.

I will explain why this is a good thing for Canadians. Canada and most other countries levy a withholding tax on passive forms of income earned by non-residents. This fifth protocol will eliminate the source country tax on cross-border interest paid between unrelated persons and will gradually eliminate the maximum withholding rate for interest payments between related persons.

For unrelated party interests, the withholding tax is zero as soon as the protocol becomes ratified. An example would be in the interest that banks pay to a depositor. For related party or non-arm's length interest, the tax will be eliminated in three stages: from 10% to 7%, then to 4% and finally to zero after three years. This could be, for example, between a Canadian company and its subsidiary in the U.S.

With these important tax reductions for payments to and from the United States, the government is in a position to remove the withholding tax on all arm's length interest payments to non-residents, regardless of where they reside.

This initiative announced in budget 2007 represents a major step forward in Canada's international tax policy. The legislation to implement this measure contained in Bill C-28 is currently going through the parliamentary process, as we have watched in the last few days. Once passed, this measure will increase access to foreign capital markets. It will reduce costs for Canadians and Canadian businesses that borrow from foreign lenders.

It is important to point out here that the government had originally planned to tie the effective date of this general tax reduction to the Canada-U.S. tax treaty protocol. However, given the uncertainty of when the protocol will be ratified on both sides of the border, the government proposes to give the domestic rule a fixed start date of January 1, 2008. This will provide certainty for Canadian investors so that after 2007 they will no longer need to withhold interest on tax paid to arm's length persons in any country.

Summing up, this tax treaty bill, like others that preceded it, is directly related to international trade and investment. These bills have a significant and a direct benefit to the Canadian economy. This is no small consideration in a world where Canadian exports, as I said earlier, account for more than 40% of our annual GDP.

Furthermore, direct foreign investment, as well as inflows of information, capital and technology, represent the lifeblood of Canada's economic wealth. As a result, eliminating tax impediments in these areas, as this bill proposes to do, is of utmost importance, and that is why passing this bill is also of utmost importance.

I, therefore, encourage the hon. members from all parties to pass this bill into law quickly.

Budget and Economic Statement Implementation Act, 2007
Government Orders

December 12th, 2007 / 8 p.m.
See context

Independent

Louise Thibault Rimouski-Neigette—Témiscouata—Les Basques, QC

Mr. Speaker, I would like to take this opportunity to make a few comments about Bill C-28. As usual, my comments will focus on how this affects the people of my riding.

Practical items that concern me the most for the people in my region have to do with the lack of serious speeches and measures from the Conservative government on Bill C-28.

I am thinking about an economic sector that is vital in my region, in particular, but also in a number of regions in Quebec and Canada, and that is the forestry sector. This sector is going through a crisis and its workers are affected by it more so than workers in other sectors. Unfortunately, there is a crisis in many other manufacturing sectors as well.

We all know that circumstantial factors contributed to making an already difficult situation even worse. In light of these circumstances and this crisis, we expected the government, which has the means to provide informed and dynamic governance, to help the people. After all, the role of government is to redistribute wealth and to be fair to all its citizens, whom it is meant to serve.

While we expected measures to help these sectors, both businesses and workers, we have seen in official documents just a small sentence, as though this were not as important—the Leader of the New Democratic Party was just talking about this a few minutes ago—as the oil sectors, the banks and high finance. Nonetheless, when it comes to sectors that are vital to the people in our regions, there are just a few words that leave a whole lot to be desired in the economic statement.

I am not speaking only about workers and what could be very legitimate expectations regarding employment insurance. I am speaking of course for workers who have been laid off, in particular. I am thinking of employability measures that will keep our forestry workers on the job, as well as our businesses.

We all know that in our various communities, our towns, municipalities and regions, thousands of jobs are being lost. We now know that, in many cases, there have been temporary closures in the forestry sector, but we also know that, quite often, they will unfortunately not be temporary. Some closures could be permanent. Given the lack of timely support and vision, municipalities and towns are being put at risk of devitalization, for which the people will pay the price.

While firm action was needed to allow these businesses in the forestry sector, among others, to reposition themselves, modernize, diversify and become more competitive, absolutely nothing has been done. This is unacceptable for everyone involved, since the possibilities were and are significant.

What is the government doing? As I said earlier, with one short sentence, it thinks it will console someone or that perhaps no one will even see it. The Conservative government—and this has already been clearly and eloquently stated—is nevertheless offering considerable tax cuts for businesses that are already thriving.

Clearly, in the provinces and sectors affected by this measure—let us be honest, there are more of them in the west than in the east—businesses and employees will benefit from it.

This is an easy solution. It is certainly not a sign of a government possessed of the vision and the will to use the means available to it to provide enlightened governance by demonstrating that it is concerned about all sectors of the economy, does not play favourites, is not in league with anyone and is fair to everyone. What I find striking, as I just said, is the degree to which these tax cuts will benefit companies that are doing well and making a profit, including, above all, oil companies.

To switch gears, I would like to talk about something I care deeply about, as do many of my colleagues, I am sure. The government failed to take the opportunity to help thousands of people who make up an entire demographic: our seniors. Unfortunately, I am talking about poor seniors. I am talking about seniors who are on fixed incomes because for various reasons, they were unable to put any money aside for retirement even though they worked hard. These people live on their old age pension and their guaranteed income supplement. They receive about $1,100 a month, which places them well below the poverty line.

Here is one example from my riding. Given the cost of living and the poverty line in the Rimouski region, our seniors' annual income is about $4,000 or $5,000 below the poverty line. To add insult to injury, they found out too late, because they were not informed, that they were entitled to receive the guaranteed income supplement. To top it off, the previous government, the party that is now the official opposition, granted them just 11 months of retroactivity.

The new government—the adjective “new” has been used for some time by the other side of the House—had the chance to do something, to make an important decision for our seniors everywhere in Canada. There is nothing partisan or sovereignist about it—I am bringing this forward on behalf of everyone. This government had the opportunity to do something. However, once again, absolutely nothing was done.

In February, I will have the opportunity to table a motion in this House. I hope that this will spur a large number of my colleagues to reflect on the appalling situation of our mothers, grandmothers, fathers, grandfathers, in short, our seniors. They are the ones who built this society and who are largely responsible for who we are and what we have today. At the very least, out of respect for them, we could provide an income that is above the poverty line.

I see that some colleagues have such an interest in this matter that they have been overcome by laughter.

Before I conclude, I would like to suggest to my colleagues in this House that they read a few pages from a very revealing book. It may prove to be a way of learning French but it is also a way to broaden almost everyone's horizons. This book was written by the well known author, Riccardo Petrella. He has just written a new book, Pour une nouvelle narration du monde. Just before these holidays, I believe that the members of the Conservative Party, the Liberal Party and the other parties, as well as the three independents, would benefit from broadening their horizons and realizing that we can look at our world from a different perspective. We can believe in solidarity and sharing, and not just in globalization, competition and in market forces that are completely out of control.

Budget and Economic Statement Implementation Act, 2007
Government Orders

December 12th, 2007 / 7:55 p.m.
See context

Bloc

Réal Ménard Hochelaga, QC

I think that our colleague, the leader of the NDP, should not mislead the House and should clearly say that the Bloc Québécois is opposed to Bill C-28. If he wants to find—

Budget and Economic Statement Implementation Act, 2007
Government Orders

December 12th, 2007 / 7:25 p.m.
See context

NDP

Alexa McDonough Halifax, NS

Mr. Speaker, I am pleased to have an opportunity to comment very briefly and then ask the member for Cumberland—Colchester—Musquodoboit Valley a question on Bill C-28.

I want to commend him not only on his consistent principled position in standing up for the Atlantic accord, but also for him making it very clear that standing up for the Atlantic accord requires voting against Bill C-28. I commend him for taking that position.

My colleague gave an excellent summation of the spectacular betrayal and flip-flop and double-crossing that goes on whenever we deal with this issue. Nothing could be clearer than what the then leader of the official opposition said on the campaign trail in Halifax, the city I am privileged to represent. He then did a complete and total reversal after he found himself in power.

In that sense, it is starting to look a lot like the more familiar pattern of Liberals who run on a progressive platform and then when in government, govern on the right. They are meanspirited and are quite prepared to throw Atlantic Canada overboard, which they have consistently done. When the Liberals were government, they threw Atlantic Canada overboard in the period between 1993 and 1997. That resulted in the 11 sitting Liberals in Nova Scotia being defeated. They were unceremoniously thrown out of office, which brings me to my two brief questions.

My first concerns the position of the premier. A very accurate summation was given of the premier's initial outrage at the fact that the Atlantic accord had been trashed. He pleaded with every Nova Scotian at considerable public expense. He put out what we would call a householder to every Nova Scotian, asking for them to petition the government to reinstate the Atlantic accord. So far so good.

More recent, the premier sent out a second householder in which he made a number of claims that turned out to be simply untrue. He made a number of claims about how Bill C-28 would fix the problem and that it justified his decision to abandon the fight for the Atlantic accord. The benefits that were promised are not delivered in Bill C-28. As far as he is concerned, he is off the hook. Many of the claims he has made in that document are simply not accurate. They are not substantiated.

What does the member for Cumberland—Colchester—Musquodoboit Valley make of the premier's betrayal of his own commitment to fight to ensure the full reinstatement of the Atlantic accord?

What does he make of the Liberals from Atlantic Canada, who are cozying up to him when it comes to the full vote on Bill C-28, and then he is completely abandoned, thrown overboard, by every other member of that party with no intentions of supporting Bill C-28 changes, which would reinstate the Atlantic accord?

Budget and Economic Statement Implementation Act, 2007
Government Orders

December 12th, 2007 / 7:15 p.m.
See context

Independent

Bill Casey Cumberland—Colchester—Musquodoboit Valley, NS

Mr. Speaker, when I finished my first 10 minutes I was going through the contradictions in the ongoing discussions about the Atlantic accords and the different things that came up that confused Nova Scotians and Newfoundlanders about the approach that the government has about the Atlantic accords and the fact that it just took them away.

In case there is any question about the accords being taken away, I would like to read from the Atlantic Provinces Economic Council, an independent think tank, that said:

The new program also reverses a pre-election commitment to exclude natural resource revenues, and includes 50% of these revenues.

It goes on to say:

The protection provided by the Accords is undermined.... In the authors’ view, this violates both the letter and the spirit of the Accord.

Just today the Premier of Newfoundland said:

Essentially, we are being railroaded into an untenable situation whereby we are forced to choose the O’Brien formula....

In the mail-out that he sent around to every Nova Scotian, Premier MacDonald said:

That budget effectively ripped up our Offshore Accord and all of the opportunities it is expected to bring to Nova Scotians.

Also in the mail-out, Premier MacDonald called on all Nova Scotians to join him and sign a petition “demanding that Ottawa honour the Offshore Accord and all agreements it signs with any province or territory”.

We would not think we would need to have a petition to get the Government of Canada to honour a signed agreement with anyone, whether it is a province, another country, a business person or a single person. However, the Premier of the Province of Nova Scotia felt compelled to call on Canadians, and Nova Scotians in particular, to sign a petition demanding that the government honour signed agreements.

We now have an agreement with Nova Scotia but it is not the Atlantic accord as requested in the petition that the Premier of Nova Scotia asked for.

I want to go on to another bit of confusion. I want to point out that when the Prime Minister came to Nova Scotia in 2005 he was very supportive of the Atlantic accords. I want to read a couple of things he said. In the Halifax Sunday Herald of February 6, he said:

...it was Mr. Hamm's leadership that brought home the agreement, which he described as the best opportunity Nova Scotia had in 138 years.

Why would he say that and then take it away? That is confusing to a lot of people.

The Prime Minister went on to say that the accords were “courageous and visionary”. I do not understand how he could say that and now the government refers to the accords as double-dipping, cherry-picking and double-stacking.

I do not know how one goes from courageous and visionary to double-dipping, double-stacking and cherry-picking, but somehow the exact same agreements, which were at one time, in the Prime Minister's view, courageous and visionary, are now double-dipping, double-stacking and cherry-picking.

It is confusing for the people of Nova Scotia to wonder how the Prime Minister and the government could zig and zag on this very issue.

When the government decided to break the Atlantic accord, it gave two reasons. One was that it wanted to have a single, principled base equalization formula for the whole country. It has done exactly the opposite with Bill C-28.

In Bill C-28, the government established an equalization formula for two provinces and a different one for eight provinces. Two provinces have a 3.5% escalator clause until 2020. Eight do not have that escalator clause. Two provinces have an agreement that goes to 2020. Eight provinces have an agreement that goes to 2013. The government has created exactly what the Prime Minister said he would not do.

I want to again read part 11 in Bill C-28, which states:

Part 11 amends the Federal-Provincial Fiscal Arrangements Act to provide for an additional fiscal equalization payment that may be paid to Nova Scotia and Newfoundland and Labrador.

Previously the Atlantic accord was not an equalization payment. It was an offset payment, but now the government has established a different equalization formula, which seems to me to totally contradict the goal of the Prime Minister in establishing one equalization formula because now we do have two formulas. The ironic thing is that when we had the Atlantic accord and the O'Brien formula we had one equalization formula, which is exactly what he said he wanted.

The other goal was to eliminate any side deals. I do not know how we would describe the side deals in Bill C-28, but it is full of side deals as far as the accord goes. One is that two provinces would get the 3.5% escalator until 2020 and the other one is that at the end of each year the federal government may pay Nova Scotia an amount of money each year if the parallel calculation is more than the O'Brien formula. Each one of those is a side deal for each year.

That is the reason I will be voting against Bill C-28. I voted against it before and I will be voting against it again.

I am not arguing that the province of Nova Scotia has negotiated a new deal, and it may be a good deal, but we do not know because we have never seen the projections. Senators, members of Parliament and the media have asked for the projections to confirm what the government says when it says that the new deal is good for Nova Scotia.

We had the provincial projections but we have never had the federal projections. If any of the Conservative members do stand up I hope they will table the projections so we will know whether it is a good deal for Nova Scotia, not based on the federal government.

Officials have told us that they have done their projections. They have done the best case scenario and the worst case scenario, but as yet we have not been able to get them to share those projections with us so we can share their enthusiasm for this program if it is accurate. However, we do not know because we do not have the projections.

I will close my remarks with that but I will say that the Atlantic accord is still in effect. It is a two-page agreement and it is still there. It is just that the government has chosen not to honour or respect it and it has chosen to take a different route. It is a shame. It is a two-page agreement, nine paragraphs long and the Conservatives have decided to break the deal and not honour it. They have tried to come up three alternatives now, none of which are the Atlantic accord. That is why I will be voting against Bill C-28.

Budget and Economic Statement Implementation Act, 2007
Government Orders

December 12th, 2007 / 7:15 p.m.
See context

Conservative

The Acting Speaker Royal Galipeau

When we were last debating Bill C-28, the hon. member for Cumberland—Colchester—Musquodoboit Valley still had 10 minutes and he now has the floor.

Budget and Economic Statement Implementation Act, 2007
Government Orders

December 12th, 2007 / 5:15 p.m.
See context

Independent

Bill Casey Cumberland—Colchester—Musquodoboit Valley, NS

Mr. Speaker, before I begin my remarks, I would like to add my own thoughts about what just happened in the vote.

I am an independent member and there are a number of independent members here. We were not given any advance notice about the vote. I was in the lobby and I remember the clock showing that there were 11 minutes and 40 seconds left before the vote. However, when I walked into the chamber the vote was under way.

All I can say is that there are tools that we can use and one of the tools is unanimous consent. If that is the way the game is to be played, that is the way we will play it too. We are a part of this. We were elected and we are entitled to vote. It was just a rotten piece of business the way the vote was conducted.

I want to add my remarks to Bill C-28, the budget implementation bill, and I want to focus on an issue that is very important to Atlantic Canada, and that is the Atlantic accord. Bill C-28 does impact the Atlantic accord, which is a very important part of it.

First I want to say that the Atlantic accords originally were a number of agreements that were not all called Atlantic accords but are assumed now to be called Atlantic accords. Everybody has adopted the term “Atlantic accords” for a number of agreements that took place over a period of time.

Basically, the accords guaranteed that Nova Scotia and Newfoundland and Labrador would receive 100% of the revenue from their offshore oil resources. The last agreement was signed on Valentine's Day, February 14, 2005, with Nova Scotia and negotiated and signed by Dr. John Hamm and the former prime minister of Canada. that agreement was very specific that the Atlantic accord arrangement and the Atlantic accord payment would be based on the equalization formula that existed at the time that the calculation was made.

It is ironic that the original agreement that I just mentioned, signed on February 14, is two pages long and nine paragraphs long and yet there are 24 pages of amendments in Bill C-28 to amend that two page document.

It is not as simple as that, I understand, but that is what has happened with the Atlantic accord issue. It has gone from a very simple, straightforward agreement, to a very complicated, convoluted agreement that is now subject to interpretation and manipulation.

The government said that the Atlantic accords have been honoured and respected. Now it is saying that it has made them whole with the agreement in Bill C-28. With all due respect, that is not true. The government broke the Atlantic accords and everybody in Nova Scotia and Newfoundland knows it. They have been broken. They are not respected. They are not honoured and they have not been made whole. The only way they can made whole is if this little agreement, this nine paragraph agreement, is honoured.

None of the other alternatives that the government has come up, its different interpretations or manipulations, will satisfy the people in Nova Scotia and Newfoundland.

There is a lot of confusion surrounding this and I want to go through some of the confusing issues, because it has been confusing for everybody involved with this arrangement, and why the deal was broken.

The province of Nova Scotia put out a brochure telling every Nova Scotian that:

That budget [in March 2007] effectively ripped up our Offshore Accord and all of the opportunities it is expected to bring to Nova Scotians.

The province of Nova Scotia even started an online petition demanding that Ottawa honour the offshore accord and all agreements it signs with any province or territory.

To me, that is a simple concept, a simple principle that all governments should honour. They should honour signed contracts with the province or territory with which they are made or with an individual, a company or another country.

It is unbelievable that the Government of Canada would break a signed contract. I refer again to the Atlantic accord, which is two pages long. It was signed by a minister of the federal government and a minister of the provincial government. It was a signed contract and the government just decided to disregard that contract, to rip it up in the March 19 budget.

A few things are confusing. It is confusing that a lot of the people who came to the House from Alberta and the western provinces were very upset about the national energy program that was foisted on Alberta in the eighties. It redirected revenue from the gas and oil business in Alberta to the federal government and they were very upset about that. It almost caused a revolution in western Canada. However, those same people turned around and did the same thing to Nova Scotia and Newfoundland. They imposed changes on the gas and oil regime to Nova Scotia and Newfoundland that took away our share of the revenue or reduced our share in the same way that the NEP took away from Alberta.

I do not understand why they can be so upset about the Alberta experience but then turn around and not hesitate to do it to Nova Scotia and Newfoundland and Labrador.

I find it confusing that the government has representatives in Nova Scotia and in Newfoundland but none of them were asked for advice, given any consultation or given an opportunity to represent their constituents through this whole exercise of bringing forth these amendments to the Atlantic accord.

Even more amazing, the government has ministers in Nova Scotia and Newfoundland and neither one of them were informed. They were blind-sided as much as everyone else.

When the budget came down on March 19, everyone was surprised. No politician east of Ontario was consulted on these changes even though they severely impacted Nova Scotia and Newfoundland, and I do not understand that.

I do not understand why the government would not consult with the provincial people, the province of Nova Scotia and the province of Newfoundland, if it were going to make profound changes to this signed contract, but again it did not.

I refer to a statement that Premier Danny Williams made today. He said, “Essentially, we are being railroaded into an untenable situation whereby we are forced to choose the O’Brien formula” and the traditional formula.

The province is being railroaded. That is not the way to run a government and have intergovernmental relations if it wants to succeed.

I do not understand this one. The Prime Minister said that the government essentially broke the accords because it wanted to have one equalization formula in the country and it thought that by doing this that would do it.

However, in the summary of Bill C-28, part 11 states:

Part 11 amends the Federal-Provincial Fiscal Arrangements Act to provide for an additional fiscal equalization payment that may be paid to Nova Scotia and Newfoundland and Labrador.

Therefore, two provinces now have one equalization formula and the other eight provinces have a different one. It is good for Nova Scotia and for Newfoundland and Labrador but it is contrary to what the Prime Minister said. He said that he wanted to have one equalization formula but right here it says that additional fiscal equalization payments will be paid to two provinces but not the others. That does not make sense to me.

Another thing that does not make sense to me, again in the same light that the Prime Minister said that he wanted to have one equalization formula, is that now two provinces under Bill C-28 have the opportunity to calculate an equalization formula, use that formula and take advantage of it, which has a 3.5% escalator clause for every year until 2020. Two provinces have it and eight do not. Again, we have a different equalization program.

The ironic thing is that when we had the Atlantic accord and equalization, we did have a uniform equalization program across the country, plus the Atlantic accord. However, now the government has actually enshrined two different equalization programs in the country, which seems to go against everything the Prime Minister said that he wanted to do and every justification he had for breaking the accords in the first place.

Another issue that confuses me is what the Minister of Finance wrote in the Halifax Herald on June 9. He said, “There will be no side deals on this equalization business”.

This is the ultimate side deal. Every year the province of Nova Scotia and the province of Newfoundland and Labrador, if they choose to take it, will be able to calculate a parallel equalization formula and then at the end of the year, if that parallel calculation is more than the O'Brien formula, the Government of Canada writes a cheque to the province of Nova Scotia. If that is not a side deal that is renewed every year, I do not know what is.

Another thing is, if I understand this correctly, and I think I do, the O'Brien formula goes to 2013. Eight provinces have a commitment on equalization to 2013. Bill C-28 makes a commitment to 2020 for Nova Scotia and Newfoundland that they would get the old amended formula of equalization. Essentially, there is one deal for two provinces to go to 2020 and one deal for the other eight provinces that goes to 2013.

Again, the whole basis for breaking the accords in the first place, based on the government's statement, was to have one principle based equalization formula.