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)

[The Acting Speaker, Conservative, Barry Devolin]

The hon. member for Etobicoke North.

[Kirsty Duncan, Liberal, Etobicoke North, ON]

Mr. Speaker, the hon. member and I have indeed had good discussions.

My concern is that when we look at where the investment has gone, we have seen a large percentage go to Conservative ridings. Last week, a Conservative candidate stated very clearly that the reason one of the ridings did not receive funding was because it was a Liberal riding.

Investment in child care is extremely important. It helps women and their families participate in the economy. Canadian researchers calculate a 2:1 economic and social return for every dollar invested in child care. American researchers demonstrate a 3:1 or 4:1 return for low-income families and show that childhood development programs could have a substantial payoff for governments in terms of improved labour skills, reduced poverty and increased global competitiveness.

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

Mr. Speaker, I know that in opposition we can often have it both ways. We can demand that the government spend money and then criticize it when there is a deficit.

I would just caution members not to be shrill on the issue of the $56 billion deficit when in fact just months ago we were demanding that the government bring in a stimulus package. Then, when it brought it in, we said it was not big enough and it should be larger.

In opposition we have a responsibility to not only criticize the government for deficits when they exist but also to offer suggestions as to how we should deal with the deficit, such as raising taxes. That is just one of the problems of being in opposition.

I know years ago in Manitoba a Conservative opposition member said, “Well, you know, in opposition, we can have it both ways; we can demand you spend money on a new bridge one day and the next day we can criticize you for increasing the deficit on that same bridge”. It is something that we have to be a little careful about when we are criticizing.

Other than that, I think the member gave a fine speech, as she always does.

[Kirsty Duncan, Liberal, Etobicoke North, ON]

Mr. Speaker, my concern is that government has to foresee the challenges coming down the line. In the summer of 2008 we were talking about good times and saying there would not be a recession. The government did not see the recession coming. There has been a global recession, but we also have to have accountability. The numbers have continued to climb. We must be accountable to Canadians.

[John McKay, Liberal, Scarborough—Guildwood, ON]

Mr. Speaker, I know the hon. members opposite are all fussed about an “unnecessary election”, but this time last year we were in the middle of an unnecessary election. It was interesting to go back to the quotes of the Prime Minister and the Minister of Finance during that unnecessary election and find out what they were thinking at the time, or at least telling Canadians about the deficit.

The Prime Minister, on CTV Question Period, on October 12, said:

We're not running a deficit. We have planned a realistic scenario. We've got conservative budget estimates.

That is probably true; we do have Conservative budget estimates.

He said:

We've got a modest platform that doesn't even fill the existing fiscal room....

Before the Business News Network, he said:

I know economists will say that we can run a small deficit, but the problem is once you cross that line, as we see in the United States, nothing stops deficits from getting larger and larger and spiralling out of control....

Come on, I do not think so. Some economists will say it is probably true. It is more true than possibly what a politician running an election wants to tell the Canadian public. The finance minister, who should know the numbers better than most, on October 9, just a year ago, said:

We will not run a deficit.

On September 16, he said:

We're running a balanced budget, we're running a surplus, we're paying down debt, so our government finances are solid.

Even during that fiscal year, the finance minister and the Prime Minister were being a touch economical with the truth, because this fiscal year is not the first year that this government has run a deficit. It was the last fiscal year. It is the fiscal year during the election, that unnecessary election that we were told we did not need.

Deficits do not just spring out of nowhere; we actually have to work at it. We have to really work at mismanagement in order to take a $13 billion surplus that we inherited from the previous government and run it into a $60 billion deficit over a period of four budgets. The Conservatives started out with revenues, in really their first year of administration, of $236 billion. The revenues then went up to $242 billion and that is where they peaked. They went down to $233 billion, and then down to $223 billion, roughly where they were five budgets ago.

That is fine. We are all in favour of reduced taxes. If I listen to the members on the opposite side, they can hardly speak a sentence without using the phrase, “reducing taxes”, et cetera. I am all in favour of that. We all like to reduce taxes, but there is another side to that equation, which is that the Conservatives are spending and spending. They started out in, effectively, their first fiscal year with $222 billion worth of spending, and over those years they ran it up to $272 billion worth of spending. That is $222 billion to $272 billion, $50 billion worth of increased spending. Meanwhile they destroyed or flatlined their revenues for a variety of reasons, largely having to do with the ideological predisposition to cut taxes at every corner.

Essentially, the Conservatives made a $25 billion paydown on the debt, and we will even give them the $13 billion from the previous Liberal government, so we will say that is north of $35 billion, $38 billion worth of paydown on the debt. That is all good stuff. We like that. In the last two years, they have run up the deficit by $60 billion. So in that four- or five-year budget cycle, that period of time, they have essentially run the government into a deficit position.

This is not even within the Mulroney era of deficits. The last time we had a Conservative administration it was $42 billion. These guys have exceeded Mr. Mulroney and now it is $56 billion.

I was amused at the fantasyland of going from September or October of last year, where they said they were not running a deficit, that the nation's finances were under control and they would not do the dumb things that were being done in the United States, to the fairy tale in November called “the fiscal update”. The fiscal update showed a small surplus of $1 billion.

They then induced upon themselves a political crisis and suddenly they got a little more realistic. Between the end of November and the beginning of February, we went from a small surplus to a $34 billion deficit. Then we went from January and February to May of this year and we were up to a deficit of $50 billion. As of last month, we were at a deficit of $56 billion.

Lord knows what next month will bring as far as a fiscal update is concerned. Perhaps we will be getting more fanciful statements from the Prime Minister and the Minister of Finance saying that the nation's finances are under control, that it is a conservative budget. It certainly is that. It is a Conservative budget. It is a Conservative example of gross mismanagement of the nation's finances, and members wonder why the Liberal Party would withdraw confidence in the government.

The Prime Minister is given enormous powers in our system of government. He gets to control the executive of the government by appointing the cabinet. He gets to influence the judicial branch of government by appointing the justices who sit on the Supreme Court and all the ones below that. He gets to influence the legislative branch of government by appointing senators, and he of course has shown some great enthusiasm for appointing senators lately.

There is enormous power concentrated in one person and in one office, and the only thing that this system requires of the Prime Minister is that he maintain the confidence of the House, and he has not. He does not maintain the confidence of the House.

When we were allowing him to govern, he spent an inordinate amount of taxpayers' money ridiculing the leaders of our party, and I imagine those expenditure go on. He spends an inordinate amount of time and money destroying the nation's finances. We got to the point where enough was enough and the confidence of the Liberal Party has been withdrawn from the government.

One would hope that the government would learn its lessons but I have no great anticipation that it will do so. It appears to be the same gang that ran the Mulroney show, which ran deficit after deficit.

In four budget cycles, five if we want to count the tail end of the Liberal administration, we have gone from revenues of $222 billion to revenues of $223 billion, which is wonderful. They have flatlined it. Meanwhile, the population has grown over that period of time by a million people and expenditures have run from about $209 billion to $272 billion, an increase of $63 billion.

Mr. Speaker, I do not know how you run your household, but I imagine that everybody sitting in this room has to run their households within their fiscal ability, and if they do not have an increase in their revenues, they cannot go crazy on their spending. The government has gone crazy on its expenditures and we will pay and we will pay and we will pay.

In today's news, there was an item about an Australian bank raising its interest rates. If one does it, they are all going to do it and the low-interest environment that the Bank of Canada has created here will go. If it goes, then all bets are off, because in terms of what we see here now, we ain't seen nothing yet.

[Judy Sgro, Liberal, York West, ON]

Mr. Speaker, certainly one of the things I do not understand is how the government can continue to spend and spend and spend. This comes from a very proud Liberal who helped to make sure that we got rid of the deficit. How could the government continue to spend and have decreasing tax revenues and possibly think that it can move forward without at some point having to deal with the deficit and having to cut many great programs? I am particularly concerned about seniors and pensions.

Could the member tell me how he thinks the government is going to be able to do that in the future?

[John McKay, Liberal, Scarborough—Guildwood, ON]

Mr. Speaker, one of the reasons we have withdrawn confidence in the government is that we do not think it can govern anymore. We think we could do better. The next government is going to have to deal realistically with the fiscal mess that it is going to inherit. Something is going to have to give.

If my anticipation is correct that interest rates are going to take off, then the $33 billion that we spend every year on interest to service the national debt will go through the ceiling. We will be talking $35 billion, $40 billion, maybe $45 billion. That would inevitably constrain the fiscal capacity of any government. That is a fairly realistic scenario.

Even the governor of the Bank of Canada said that he can only hold the line until June of next year. If interest rates take off, then they take off for the government, everybody in this chamber, and everybody watching. The cost of a mortgage will go up. The cost of doing business will go up. Business will go down. The government will be in an even worse situation than it is now.

The Conservative government has not made the decisions that it could have made during the good times and we are caught in the whirlwind.

[Dean Del Mastro, Conservative, Parliamentary Secretary to the Minister of Canadian Heritage]

Mr. Speaker, I listened with some interest to the member. He talked about how he likes lower taxes and so forth, but that was not true in the last election campaign.

That member wholeheartedly supported the green shift massive tax increase on Canadians. That tax increase was why Canadians voted largely against the Liberals. The Liberal massive carbon tax was rejected by Canadians. Everyone remembers that. I do not believe that member has ever actually supported any of the tax cuts that we brought in that have brought tax freedom day 20 days sooner.

A lot of other jurisdictions in Europe, and even the United States under President Obama, have brought tax cuts in for families and individuals and seniors as a method of boosting their economies. The member does not understand that.

He said that he has lost faith in the government and in the finance minister. Euromoney magazine has not lost faith in our finance minister. It named him G7 finance minister of the year. Maybe the member would like to speak to that. It is quite an honour for our finance minister to be acknowledged in such a fashion.

[John McKay, Liberal, Scarborough—Guildwood, ON]

Mr. Speaker, I do not know how the hon. member could spend so much time on finance committee and learn so little.

It is very interesting that the finance minister should be awarded anything by any magazine, however obscure. Apparently his competition is not all that serious. The United States has a runaway deficit, trillions of dollars worth of deficit. Relatively speaking, the finance minster is only incompetent as opposed to grossly incompetent.

The point of the hon. member's little intervention was that somehow or another tax freedom day is sooner. There are no free lunches in this world. Tax freedom day may be a day or two sooner, but debt freedom day certainly will be later.

We are going to start going back up that horrible path. We thought we had learned a lesson but apparently we have not. We thought our finances would not resemble those of a third world nation. Apparently that is the fiscal ability of the Conservative government.

Is it therefore any wonder that we in the Liberal Party do not have confidence in the government.

[Dean Del Mastro, Conservative, Parliamentary Secretary to the Minister of Canadian Heritage]

Mr. Speaker, it is obviously a great opportunity to speak today in support of the economic recovery act, an important piece of legislation to enact key parts of Canada's economic action plan, along with other crucial initiatives.

I understand the Liberal Party will vote against this legislation, sight unseen, for no reason other than to force an unnecessary election which no Canadian wants. It is my hope in today's debate, along with colleagues on this side of the House, to show that now is not the time for that sort of self-serving opportunism.

The stakes for Canadians and their families are high. The member for Scarborough—Guildwood does not understand that the stakes for his constituents are high. He mentioned a moment ago that he is surprised I spent so much time on the finance committee and did not get it. He has been on the finance committee a lot longer than I have, in fact he is a former parliamentary secretary to the minister of finance, and he still does not get it. So I guess I still have some time by his scale to get it. Maybe I will catch up, I do not know.

We simply cannot play political games because we cannot jeopardize a recovery with an unnecessary election. Catherine Swift, president of the Canadian Federation of Independent Business, warned recently:

We've got some good news.... [W]e've been seeing three months of good recovery...we got the highest confidence level in over two years.... All we need is a stupid election to put things right back in the tank. What we need is certainty. Elections do not produce certainty.

I am going to digress for a minute. I mentioned the Liberal green shift. The Liberal green shift means anything but certainty for business.

Catherine Swift said that what we need is certainty and that elections do not produce certainty. With the economy turning right now, this is a bad time to have it. She said that we are just seeing things come back, that we are just seeing confidence come back.

It is clear that we must stand together with our global partners and stay the course. We must keep our focus squarely on protecting our economy and building on the success of Canada's economic action plan and stabilizing our economy.

As declared in the G20 leaders' statement following the Pittsburgh summit:

Our forceful response helped stop the dangerous, sharp decline in global activity and stabilize financial markets.

A sense of normalcy should not lead to complacency.

The process of recovery and repair remains incomplete. In many countries, unemployment remains unacceptably high. The conditions for a recovery of private demand are not yet fully in place. We cannot rest until the global economy is restored to full health, and hard-working families all over the world can find decent jobs.

Clearly, Canada must stay on track by continuing to implement our economic action plan and its related components, like the economic recovery act. This is fundamental to securing Canada's success in the face of ongoing economic challenges.

As expected, to date, Canadians have risen to face these challenges head on and allowed our economy to outperform where others have struggled. This has lessened the recession's relative impact. A sentiment shared by private sector economists, CIBC World Markets forecast that Canada will lead all industrialized nations in economic growth next year, while RBC economists expect that Canada's recession will turn out to be the least severe of the past three.

Our Conservative government has supported the efforts of Canadians with an unprecedented and timely stimulus contained in Canada's economic action plan, representing $61 billion in effective targeted measures.

Only last week we confirmed in the third report to Canadians on the implementation of the action plan that 90% of its 2009-10 funding is now committed. Canadians will continue to benefit from what is proportionately the largest fiscal stimulus package among all G7 partners with a projected 220,000 jobs being created or maintained by the end of 2010.

As Scotia Capital economist Aron Gampel points out:

The substantial stimulus injected into the economy from both monetary and fiscal measures is beginning to show more signs that the economy is regaining traction, but the full impact will become more visible in the months ahead.

Contrary to the views of the doom and gloom Liberals, there are more encouraging signs that Canada is leading the recovery with our strong fundamentals intact. Indeed, last week the International Monetary Fund, IMF, forecast that Canada will be the least affected by the global downturn and that our recovery will be the strongest in the G7.

Contrast that with what we are hearing from the Liberal members. We are not hearing these things. They are talking down the Canadian recovery. They are talking down the Canadian economy. For whatever reason, they do not want to see things recover in Canada because they think that hurts their political fortunes. Canadians do not care about the Liberals' political fortunes. What they care about is their families and their jobs. They want Canada to work. They want parties working together provincially and federally. They want municipalities to be engaged. That is what our government is doing. It is not what the Liberal Party supports, by the way.

Nevertheless, Canada and the global economy will continue to be challenged. As noted in the G20 leaders' statement, we have yet to sustain a full private sector supported recovery. Likewise, as IMF managing director Dominique Strauss-Kahn conceded recently, even though we are seeing tentative signs of recovery it remains fragile. I quote, “I want to be crystal clear. Until unemployment will decrease, it is difficult to say the crisis is over. It is too early to crow victory”.

Without a doubt we are at a critical juncture. If we hope to stabilize our economy and secure this recovery, we must stay the course and stay focused on the economy. Parliamentarians of all stripes can accomplish that, not by throwing Canada into an unnecessary election, but by passing the economic recovery act into law on a timely basis.

The economic recovery act is a complex and multifaceted piece of legislation with many components that have been highlighted by previous speakers.

For the remainder of my allotted time, I would like to focus on the reforms to strengthen the Canada pension plan, or CPP, that are included in the economic recovery act. However, before continuing, I should point out that the CPP is a jointly managed federal-provincial plan. Neither the federal government nor provincial governments can unilaterally alter the CPP.

The reforms laid out in the legislation were unanimously agreed to by federal, provincial and territorial governments this past May as part of a mandated triennial review of the Canada pension plan. Moreover, these reforms were made public at that time, available for all to review.

Before these reforms can take place, they must be officially approved, not only by Parliament, but by two-thirds of the provinces with two-thirds of the population of Canada. Moreover, the approved changes will start to take effect in 2011 and will be gradually implemented with all the changes expected to be in effect fully by 2016.

In short, the reforms agreed to by federal, provincial and territorial governments are intended to modernize the CPP to better reflect the many different paths people take to retirement today.

As Patricia Lovett-Reid, host of Money Talk, a popular Canadian personal finance television show and senior vice-president with TD Waterhouse Canada, noted that the CPP reforms speak “to the fact that we are living healthier and longer”.

Increased flexibility will be offered through the removal of work cessation tests that require individuals who apply to take their CPP benefit early, i.e., before age 65, to either stop work or reduce their earnings. The economic recovery act will remove the work cessation test in 2012 so that individuals will be able to take their benefit as early as age 60 without any work interruption or reduction in hours worked or earnings. This change will benefit those who would like to take their CPP pension while continuing to work either full or part time and could help individuals to use income from their CPP to phase in retirement or supplement their earnings.

Such a proposed reform has been particularly welcomed, as an Edmonton Journal editorial applauding it noted:

--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....

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.

Increased CPP benefits for a number of Canadians will continue through an increase in general lowering dropout which currently allows for 15% of the years where earnings are low or nil for whatever reason, to be dropped from calculations used to determine an individual's CPP retirement pension amount. The economic recovery act will gradually enhance the retirement pension calculation to allow up to an additional year of low earnings to be dropped from the pension calculation. By 2014, it will allow a maximum of eight years to be dropped.

This will benefit virtually all CPP contributors and improve their basic retirement pensions. It will also increase the average CPP disability and survivor pensions, as a calculation of these benefits would be based on the retirement benefit calculation.

It would be particularly helpful to those whose careers suffer more work interruptions for a variety of reasons like those who pursue post-secondary studies or other educational opportunities, those who reduce their participation in the labour force to provide care to a family member, or those who immigrate to Canada as adults.

Respected Sun media financial advice columnist Alan Caplan approved this reform noting:

It's intended to smooth out the earnings history for each pensioner who stopped working. The reasons vary, but may include job loss, further education, illness or care giving and child rearing. Almost everyone benefits from the provision.

[The Acting Speaker, Conservative, Barry Devolin]

I must interrupt the hon. parliamentary secretary at this point. He will have nine minutes remaining when the House returns to this matter.

The House resumed consideration of the motion 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.

[The Speaker, Liberal, Peter Milliken]

Before question period, the hon. Parliamentary Secretary to the Minister of Canadian Heritage had the floor. There are nine minutes remaining in the time allotted for his remarks.

I therefore call upon the hon. Parliamentary Secretary to the Minister of Canadian Heritage.

[Dean Del Mastro, Conservative, Parliamentary Secretary to the Minister of Canadian Heritage]

Mr. Speaker, it is a pleasure once again to rise and speak to Canada's economic recovery legislation.

Members may recall that just before the break I was talking about important provisions to improve the Canada pension plan. As I said earlier, the Liberals have already indicated that they are going to vote against this. If they do not support improvements to the CPP, just going along with their direction in question period, if not, why not? Who could stand against improvements to the CPP? These recommended reforms are incredibly important.

Mr. Finn Poschmann, a significant individual from the C.D. Howe Institute, has given these adjustments high marks. He said:

The proposed adjustments mark an important sea change in government pension policy approach to dealing with population aging and, in particular, making it easier for those people who want to work later in life to do so.

TD Bank's chief economist, Don Drummond, also said that this is a “positive development as it provides further options for Canadians in the tail end of their working careers”.

These are the things people are saying about the reforms to CPP that our government has brought forward. These reforms are in our economic recovery legislation. This is what Bill C-51 is about.

The Liberal Party has indicated that it is not too concerned with economic recovery. The Liberals are not too concerned with supporting Bill C-51 because they are more concerned about forcing an election that nobody wants. That is reprehensible.

I am quite surprised with the number of things the Liberal Party has voted against. The Liberals voted last week against the implementation of the home renovation tax credit. Thousands of Canadians from coast to coast--

[An hon. member]

Hundreds of thousands.