Bill C-51 (Historical)

Economic Recovery Act (stimulus)

An Act to implement certain provisions of the budget tabled in Parliament on January 27, 2009 and to implement other measures

Part 1 implements income tax measures proposed in the Budget tabled in Parliament on January 27, 2009 but not included in the Budget Implementation Act, 2009, which received royal assent on March 12, 2009. In particular, it
(a) introduces the Home Renovation Tax Credit;
(b) introduces the First-time Home Buyers’ Tax Credit; and
(c) enhances the tax relief provided by the Working Income Tax Benefit.
In addition, Part 1 extends the existing tax deferral available to farmers in prescribed drought regions to farmers who dispose of breeding livestock because of flood or excessive moisture and sets out the regions prescribed either as eligible flood or drought regions in 2007 to 2009.
Part 2 authorizes payments to be made out of the Consolidated Revenue Fund for multilateral debt relief and in relation to offshore petroleum resources. It also makes the following amendments:
(a) the Bretton Woods and Related Agreements Act is amended to implement amendments proposed by the Board of Governors of the International Monetary Fund;
(b) the Broadcasting Act is amended to extend the Canadian Broadcasting Corporation’s borrowing limit to $220,000,000;
(c) the Budget Implementation Act, 2009 is amended to clarify the purposes for which payments may be made;
(d) the Canada Pension Plan is amended to
(i) remove the work cessation test in 2012 so that a person may take their retirement pension as early as age 60 without the requirement of a work interruption or earnings reduction,
(ii) increase the general drop-out from 15% to 16% in 2012 allowing a maximum of almost seven and a half years of low or zero earnings to be dropped from the contributory period and to 17% in 2014 allowing a maximum of eight years to be dropped,
(iii) require a person under the age of 65 who receives a retirement pension and continues working to contribute to the Canada Pension Plan and thereby create eligibility for a post-retirement benefit,
(iv) permit a person aged 65 to 70 who receives a retirement pension to elect not to contribute to the Canada Pension Plan, and
(v) have the adjustment factors that apply to early or late take-up of retirement pensions fixed by regulation after December 31, 2010 and have the Minister of Finance and the ministers of the included provinces review the adjustment factors and make recommendations as to whether the factors should be changed;
(e) the Canada Pension Plan Investment Board Act is amended by repealing section 37 and by permitting the approval of regulations made under subsection 53(1) before they are made;
(f) The Canada-Nova Scotia Offshore Petroleum Resources Accord Implementation Act is amended to provide for Crown share adjustment payments to be made in accordance with an agreement between Canada and Nova Scotia;
(g) the Customs Tariff is amended to change the conditions relating to containers temporarily imported under tariff item 9801.10.20 and to add new tariff item 9801.10.30 relating to temporarily imported trailers and semi-trailers;
(h) the Financial Administration Act is amended to require that departments and parent Crown corporations cause quarterly financial reports to be prepared every fiscal quarter and to make them public; and
(i) the Public Service Superannuation Act is amended by adding the name of PPP Canada Inc. to Part I of Schedule I to that Act.
Part 2 also amends the Bankruptcy and Insolvency Act and chapter 36 of the Statutes of Canada, 2007 to correct unintended consequences resulting from the inaccurate coordination of two amending Acts.

Economic Recovery Act (stimulus)

[Lawrence Cannon, Conservative, Pontiac, QC]

moved that Bill C-51, An Act to implement certain provisions of the budget tabled in Parliament on January 27, 2009 and to implement other measures, be read the second time and referred to a committee.

[Andrew Saxton, Conservative, Parliamentary Secretary to the President of the Treasury Board]

Mr. Speaker, I rise to speak to the second reading of the economic recovery act. This important piece of legislation will implement key portions of budget 2009, Canada's economic action plan, along with other vital measures. There is no doubt that Canada's economy has been profoundly affected by the global economic slowdown, but Canada's economic action plan is getting results, stimulating the economy, protecting and creating new jobs.

While we are still fighting the recession, one we must always remember was not of our making, we are beginning to see tentative signs of an economic recovery both here and abroad.

As Warren Jestin, chief economist at Scotiabank noted:

Monthly job losses appear to have crested and confidence surveys suggest that consumers and businesses are becoming less negative about current conditions and cautiously more optimistic...

[Canada] was dragged fully into the global recession only when faltering emerging economies triggered a collapse in resource prices and export earnings...[and] the erosion in employment, housing activity and car sales has been less severe than [it has been] south of the border.

The bottom line--we will soon begin moving away from one of the most difficult economic setbacks experienced in our lives, but patience will be required because the road to recovery will be a long and winding one.

Clearly, we must remember there is still more to do. We must stay on course. Doing anything else would be reckless and irresponsible. Indeed the goals of the measures included in the economic recovery act are to stay the course, maintain our competitive economic position today and build on it by laying the groundwork for the necessary stability to grow Canada's economy tomorrow, stability to ensure that when the global recession eases, Canada will exit in a stronger position.

My constituents in North Vancouver are concerned about the global economic slowdown and expect us to act. And we have acted. I am proud of this government's record.

Later today, my colleague and a new member of the finance committee, the member for Saskatoon—Rosetown—Biggar, will outline a few of the highlights of this act, such as the home renovation tax credit, the first-time homebuyers' tax credit, and the enhancement to the working income tax benefit. These are benefits that I hear about as I speak with my constituents in North Vancouver. I hear how they are enjoying the benefits of the home renovation tax credit. Families as well as small businesses are benefiting.

First-time homebuyers in my riding are excited about the first-time homebuyers' tax credit, and I am proud to be part of the government that is working on behalf of all Canadians. During my speech I will review some of the important initiatives included in this act. Among them is one that will significantly improve government transparency and accountability while also fulfilling a promise that our Prime Minister made during the 2008 election campaign.

Last fall the Prime Minister and the Conservative Party pledged to make government more accountable for the use of taxpayers' money. As laid out on page 25 of our campaign platform, we promised Canadians that a re-elected Conservative government would require all federal departments and agencies to produce detailed quarterly financial statements.

I am happy to report that through the economic recovery act, we are delivering on that campaign promise.

The act will amend the Financial Administration Act to require federal departments and crown corporations to prepare public quarterly financial reports and more importantly, make them available to the public. Quarterly financial reporting will ensure parliamentarians and Canadians are provided with greatly enhanced information on government spending. This will also help to ensure more timely and better oversight of government expenditures by parliamentarians and taxpayers so that expenditures are subject to regular, ongoing and necessary scrutiny.

Our Conservative government, the government that created the Parliamentary Budget Office and brought in the Accountability Act, believes that taxpayers' dollars are just that--taxpayers' dollars. We believe that respecting taxpayers' money and prudently managing it includes the provision of transparent and timely accounting of how taxpayers' money is spent. Currently, Parliament and Canadians are provided financial statements only several months after the end of each fiscal year.

Unlike the previous Liberal government, we believe that this is just not good enough. That is why passage of this act would require federal departments and crown corporations to provide quarterly financial reports on their activities, ensuring parliamentarians and Canadians have useful, up-to-date financial information that allows them to more quickly and accurately track spending.

One wonders what politician could possibly oppose the kind of transparency and accountability which our economic recovery bill would bring into force. Shockingly, the Liberal leader and his Liberal members, in an effort to force an unnecessary election, have pledged to vote against this bill and this landmark measure.

However, that is not the only key measure the Liberal leader and the Liberal members are voting against for no reason other than to force an election that no Canadian wants. The Liberals are also opposing key reforms to strengthen public pensions in Canada, reforms to the Canada pension plan, or CPP, that will allow increased flexibility in how Canadians live, work and retire, while ensuring CPP remains affordable and fair for future generations.

The Canada pension plan remains one of the most successful pension plans in the world. As Susan Eng of Canada's Association for the Fifty-plus, better known as CARP, recently declared, the CPP was the pension plan that survived the recent global economic downturn almost unscathed.

Through the CPP, Canadians are provided with a secure, indexed and lifelong benefit. The additional measures proposed in the economic recovery bill not only will help maintain the quality of the CPP but also will actually improve it for seniors during these difficult economic times.

I note that these reforms were unanimously agreed to by each and every federal, provincial or territorial government, governments of all political stripes such as the New Democratic government in Manitoba, the Liberal governments of Ontario and New Brunswick, the Progressive Conservative government in Alberta, and the list goes on.

As a point of clarification and for background, I note that the CPP is a jointly managed federal, provincial and territorial plan. Federal or provincial governments cannot unilaterally alter the CPP. Instead a joint review of the plan is required to be undertaken by federal, provincial and territorial governments every three years. The most recent review, concluded in May 2009, recommended the reforms that I will be outlining in my remarks today.

Furthermore, let me note that the recommendations flowing from that review were publicly announced in May. As well, a detailed information paper that explains the proposed changes and their impacts upon workers and employers in Canada is available to Canadians.

As previously mentioned, the reforms proposed in the economic recovery bill are intended to modernize the CPP to better reflect the many different paths people take to retirement today. These reforms will provide greater flexibility for older workers to combine pension and work income if they wish to do so, expand pension coverage and improve fairness in the plan's flexible retirement provisions.

The reforms specifically include removing the work cessation test in 2012 so that a person may take his or her retirement pension as early as age 60 without the requirement of a work interruption or earnings reduction; increasing the dropout from 15% to 16% in 2012, and to 17% in 2014, a change that would allow a maximum of almost seven and a half years of low or zero earnings to be dropped from the contributory period; and requiring a person under the age of 65 who receives a retirement pension and continues working to contribute to the CPP, thereby creating eligibility for a post-retirement benefit.

As I mentioned earlier, the reforms I have outlined were publicly released in May and have already generated considerable positive feedback.

An Edmonton Journal editorial from May welcomed the reforms, remarking that they will

allow Canadians of a certain age to draw on their Canada Pension Plan benefits and still be allowed to work...the prospect that thousands will be able to discern a horizon when they can not only choose to be gainfully employed but also collect on a pension they paid into for years must come as some relief...

In fact, upon even the briefest reflection it seems odd that this rather simple case of fair play wasn't in force years ago...After all, what would we think if our private pensions were withheld or clawed back because we decided to pick up a job or two following official retirement?

As well, a nation rooted in liberty such as ours should never, ever build in disincentives for those who want to be engaged in productive work. That's simply antithetical to the story of Canadian enterprise. Another positive aspect of the proposed CPP amendments will allow those who are 65 or older and still employed to continue to contribute to the plan.

As well, citizens will be permitted to drop an additional low-earning year from the equation that calculates pension benefits. Those who decide to delay the start of their CPP income until age 70 will be further rewarded, with benefits pumped up to 42 per cent versus the current maximum of a 30-per cent increase for working longer.

The Edmonton Journal editorial concluded by cheering what it labelled an “overdue update”, as it:

...reflects contemporary realities. Older Canadians are healthier than ever and getting even fitter. If they want or need to continue to make a material contribution to the nation's productivity, they mustn't be discouraged.

However, that is not the only positive feedback we have heard. Jack Mintz, public policy professor at the University of Calgary, applauded them by saying, “the more flexibility you build into pension arrangements, the better”.

Finn Poschmann from the C.D. Howe Institute declared that they were:

...an important shift in public pension policy...[t]he proposed adjustments mark an important sea change in government pension policy's approach to dealing with population ageing and, in particular, making it easier for those people who want to work later in life to do so.

Clearly, the new measures will ensure that the CPP continues to address the needs of Canadians.

I would also note that this is only one example of how our Conservative government has been engaged in the important issue of pensions. Indeed, our Conservative government has been and is working hard on this issue, work that would be derailed should the Liberal scheme to force yet another unnecessary election on Canadians succeed.

Our Conservative government has already been engaged in a discussion with Canadians on pensions. In January we released a major research paper on federally regulated pension plans for comment, after which we conducted cross-country and online public consultations open to all. Based on the feedback we received from Canadians coast to coast, comprehensive regulatory changes to improve the federal pension framework are being drafted and will be released shortly.

Also, we have long recognized the need to work with our provincial partners to examine the larger pension concerns facing Canadians. That is why we raised this issue at the annual meeting of finance ministers in late 2008, and earlier this year set up a joint federal-provincial research working group, with respected academic Jack Mintz as director of research to conduct an in-depth examination of retirement income adequacy. The finance minister has already convened a meeting of his provincial and territorial counterparts for this coming December to discuss the findings of this important group.

If members truly believe the future of Canadian pensions deserves attention, they will recognize our efforts and work with our Conservative government, support the economic recovery bill and not jeopardize it and plunge Canada into yet another election. While I doubt that the Liberal opposition will reconsider their obsession with forcing an election, Canadians should rest assured that our Conservative government stands with hard-working Canadians who want to be able to count on their pension plan for a stable retirement. We will take the steps required to make sure Canada's pension framework is strong.

The economic recovery act, with these important reforms to CPP, is a tangible demonstration of that. There is much more to the economic recovery act such as supporting farmers affected by severe weather as we extend important tax deferrals; ensuring dependability for public broadcasting by increasing the borrowing limit for the CBC, as requested by the CBC board of directors; promoting global growth and cooperation by giving small and low-income countries a bigger voice at the IMF, while strengthening Canada's commitment to debt relief; and resolving the Crown share saga, as our Conservative government, after decades of neglect by previous Liberal governments, is ensuring that Nova Scotia finally benefits from its resources through Crown share adjustment payments in accordance with the landmark agreement between Canada and Nova Scotia.

Yet the Liberal leader would vote a against these measures, not out of principle, not out of some disagreement over the contents of the act, for he has likely never even read it, but for narrow, partisan self-interest. He wants an election, regardless of the consequences, not because he has an economic agenda, but because he wants power. In a period of major economic uncertainty, Canadians deserve better from their elected representatives. As Macleans' magazine trumpeted this past August:

Almost any way you look at it, Canada is uniquely positioned...Compared to the U.S. and many other countries, Canada has done well and we should be proud. But it's one thing to gloat, and another to exploit our relative lead.

Let us not exploit our lead, as the Liberals would with a pointless election. Let us work together, keep our focus squarely on the economy through measures like the economic recovery act, and make certain Canada remains in the lead for decades to come. Canadians deserve that.

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

Mr. Speaker, the member has highlighted a particular dilemma for his government, which he has an opportunity now to resolve. His indicated that much work would be stopped if there were election now.

Just recently in Canada's economic action plan, the third report to Canadians, various projects were highlighted as being part of the economic stimulus in direct response to the economic recession that began in the second and third quarters of 2008. A small craft harbour project in Goose Cove, Newfoundland and Labrador was highlighted in particular.

The economic report indicated that $1.25 million would be provided for additional berthage and improve the functionality of the service area to better meet the needs of harbour users. The economic report says that this is in direct mitigation of the economic downturn of 2008. The bulk of that $1.25 million was actually tendered and spent in 2005 and 2006.

Could the member relay to the House how a $1.25 million project, the bulk of the funding of which was spent not only long before 2008, but in 2005 and 2006, can be related to an actual stimulus measure to the economic recession that we are involved in today?

[Andrew Saxton, Conservative, North Vancouver, BC]

Mr. Speaker, Canada's economic action plan is implementing infrastructure projects across the country from coast to coast. It is extremely popular. I was door knocking recently in my riding of North Vancouver and it was remarkable to see the number of people who were taking advantage, for example, of our home renovation tax credit.

Let me quote from an Ottawa Citizen editorial, which states the home renovation tax credit:

—has turned out be effective and smart....Even the quietest streets roar with hammers and saws....This is keeping construction workers employed who, in turn, spend money that keeps others employed. Home centres and hardware stores are humming....helping the construction industry was exactly the right thing to do. Credit where credit is due, when it comes to the reno credit.

We are taking—

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

Mr. Speaker, I rise on a point of order. I would invite the hon. member to answer the question about small craft harbours and money spent in 2005 and 2006.

[The Deputy Speaker, Conservative, Andrew Scheer]

That is not quite a point of order.

The hon. parliamentary secretary.

[Andrew Saxton, Conservative, North Vancouver, BC]

Mr. Speaker, I wanted to mention what others were saying about Canada's economic action plan.

First, the IMF yesterday released its world economic outlook, a report card on the global economy, saying what we have said all along, that our economic action plan is working as Canada is weathering the global economic storm better than almost everyone. Not only does it forecast we will experience one of the smallest drops in 2009, it has declared Canada will be the fastest growing economy in 2010.

The world recognizes that our government is on the right track. Why can the Liberals not do the same?

[Gérard Asselin, Bloc, Manicouagan, QC]

Mr. Speaker, the member who just spoke talked about the renovation tax credit.

I want to go back to the question asked by the Liberal member. There is a wharf in every village and town in Manicouagan and many of these villages depend on the fishing industry.

A home renovation tax credit is being implemented, but do the member and his government intend to repair their own harbour infrastructure in villages that depend on the fishing industry, like those on the Lower North Shore?

[Andrew Saxton, Conservative, North Vancouver, BC]

Mr. Speaker, many projects across the country qualify for our infrastructure stimulus plan. To date, 4,700 have already been submitted. We are 90% along the way in implementing these measures and getting money out the door, creating jobs and putting Canadians back to work.

[Dennis Bevington, NDP, Western Arctic, NT]

Mr. Speaker, my hon. colleague said that we should not gloat, and I agree with him. We should not gloat about the economy right now. I guess the New Democratic Party should not gloat about the fact that for many years in the nineties we fought against deregulation of the banks so we could be in the position we are in today, with an economy that appears to be doing okay in relation to many others around the world.

I would like my colleague to remember that in the fall of last year his leader and his party had predictions for the economy that were completely out of touch with reality.

We are heading into winter now with high rates of unemployment. The recovery that we talked about over the summer did not occur. The projections have not gone the way that economists felt.

How can the member stand there and tell Canadians that we are out of the mess that has been caused by the global recession?

[Andrew Saxton, Conservative, North Vancouver, BC]

Mr. Speaker, we are recovering from the worst economic downturn since the Second World War. We are not out of the woods yet. We have to continue to stay the course and that is what we intend to do.

President Obama said:

—in the midst of this enormous economic crisis, I think Canada has shown itself to be a pretty good manager of the financial system and the economy...And I think that’s important for us to take note of...

He further said:

Canada being a good example... they've actually done a good job in managing through what was a pretty risky period in the financial markets.

Canada's economic action plan has already and will continue to create jobs and provide tax relief. It will assist those who have weathered tough economic times and help build a stronger future for all Canadians.

[Rick Norlock, Conservative, Northumberland—Quinte West, ON]

Mr. Speaker, I listened to the parliamentary secretary and I have listened to some of the questions posed by the opposition. They all want to find little cracks here and there.

We look at world bodies that have passed judgment on this government's ability to navigate through the troubled waters we find ourselves in and are worldwide in scope. As mentioned by the parliamentary secretary, the International Monetary Fund and the World Bank make projections and tell us and the rest of the world that we are on the right track. We have been positioned well for the economic recovery.

During question period, we then listen to questions about the lumber industry and building supplies. Could the parliamentary secretary tell us more about how Canada's economic action plan, and in particular the home renovation tax credit, is helping the people in our lumber industry and home supplies and what Canadians are saying about the type of economic stimulus that is actually happening because of this part of our economic action plan?

[Andrew Saxton, Conservative, North Vancouver, BC]

Mr. Speaker, that question comes up time and time again in North Vancouver. I have been knocking on doors for the last few weeks. People are telling me that they have been putting off renovations to their kids' bedrooms. They have been putting off renovations to their homes and decks, but they are doing it now because of the home renovation tax credit, which was implemented as part of Canada's economic action plan.

An editorial in The Globe and Mail said the home renovation “tax credit has proven one of the more successful of the government's stimulus measures, helping create demand for services and supplies”.

I repeat the Home Hardware CEO, who says, “The home renovation tax credit has been a big help to many of the retailers and certainly we have benefited from that”

It is one of the most popular items in budget 2009. It is despicable that members from the Liberal Party are voting against such a popular measure.

[Jim Maloway, NDP, Elmwood—Transcona, MB]

Mr. Speaker, by harmonizing the sales tax throughout the country, particularly in Manitoba, the government is expanding the sales tax to include home renovations, thereby pretty much negating the effect of the tax credit.

How is the government stimulating the economy when on the one hand it offers the tax credit, but on the other hand it takes it away by expanding the sales tax base?

[Andrew Saxton, Conservative, North Vancouver, BC]

Mr. Speaker, the harmonization of taxes is decided at the provincial level, not at the federal government level. That is a decision for the provinces to make.

Several years ago under the previous Liberal government, three provinces decided to harmonize their taxes. Two more provinces have decided to do it now. It is their decision and their decision alone.