Bill C-9 (Historical)

Jobs and Economic Growth Act

An Act to implement certain provisions of the budget tabled in Parliament on March 4, 2010 and other measures

Part 1 of this enactment implements income tax measures proposed in the March 4, 2010 Budget. In particular, it
(a) introduces amendments to allow a recipient of Universal Child Care Benefit amounts to designate that the amounts be included in the income of the dependant in respect of whom the recipient has claimed an Eligible Dependant Credit, or if the credit is not claimed by the recipient, a child of the recipient who is a qualified dependant under the Universal Child Care Benefit Act;
(b) clarifies rules relating to the Medical Expense Tax Credit to exclude expenses for purely cosmetic procedures;
(c) clarifies rules relating to payments made to a Registered Education Savings Plan or a Registered Disability Savings Plan through a program funded, directly or indirectly, by a province or administered by a province;
(d) implements amendments to the family income thresholds used to determine eligibility for Canada Education Savings Grants, Canada Disability Savings Grants and Canada Disability Savings Bonds;
(e) reinstates the 50% inclusion rate for Canadian residents who have been in receipt of U.S. social security benefits since before January 1, 1996;
(f) extends the mineral exploration tax credit for one year;
(g) reduces the rate of interest payable by the Minister of National Revenue on tax overpayments made by corporations;
(h) modifies the definition “taxable Canadian property” to exclude certain shares and other interests that do not derive their value principally from real or immovable property situated in Canada, Canadian resource property, or timber resource property;
(i) introduces amendments to allow the issuance of a refund of an overpayment of tax under Part I of the Income Tax Act to certain non-residents in circumstances where an assessment of such amounts has been made outside the usual period during which a refund may be made;
(j) repeals the exclusion for indictable tax offences from the proceeds of crime and money laundering regime; and
(k) increases the pension surplus threshold for employer contributions to registered pension plans to 25%.
Part 2 amends the Excise Act, 2001 and the Customs Act to implement an enhanced stamping regime for tobacco products by introducing new controls over the production, distribution and possession of a new excise stamp for tobacco products.
Part 2 also amends the Excise Tax Act and certain related regulations in respect of the Goods and Services Tax/Harmonized Sales Tax (GST/HST) to:
(a) simplify the operation of the GST/HST for the direct selling industry using a commission-based model;
(b) clarify the application of the GST/HST to purely cosmetic procedures and to devices or other goods used or provided with cosmetic procedures, and to services related to cosmetic procedures;
(c) reaffirm the policy intent and provide certainty respecting the scope of the definition of “financial service” in respect of certain administrative, management and promotional services;
(d) address advantages that currently exist in favour of imported financial services over comparable domestic services;
(e) streamline the application of the input tax credit rules to financial institutions;
(f) provide a new, uniform GST/HST rebate system that will apply fairly and equitably to employer-sponsored pension plans;
(g) introduce a new annual information return for financial institutions to improve GST/HST reporting in the financial services sector; and
(h) extend the due date for filing annual GST/HST returns from three months to six months after year-end for certain financial institutions.
In addition, Part 2 amends regulations made under the Excise Tax Act and the Excise Act, 2001 to reduce the interest rate payable by the Minister of National Revenue in respect of overpaid taxes and duties by corporations.
Part 3 amends the Air Travellers Security Charge Act to increase the air travellers security charge that is applicable to air travel that includes a chargeable emplanement on or after April 1, 2010 and for which any payment is made on or after that date. It also reduces the interest payable by the Minister of National Revenue to corporations under that Act.
Part 4 amends the Softwood Lumber Products Export Charge Act, 2006 to provide for a higher rate of charge on the export of certain softwood lumber products from the regions of Ontario, Quebec, Manitoba or Saskatchewan. It also amends that Act to reduce the rate of interest payable by the Minister of National Revenue on tax overpayments made by corporations.
Part 5 amends the Customs Tariff to implement measures announced in the March 4, 2010 Budget to reduce Most-Favoured-Nation rates of duty and, if applicable, rates of duty under other tariff treatments on a number of tariff items relating to manufacturing inputs and machinery and equipment imported on or after March 5, 2010.
Part 6 amends the Federal-Provincial Fiscal Arrangements Act to provide additional payments to certain provinces and to correct a cross-reference in that Act.
Part 7 amends the Expenditure Restraint Act to impose a freeze on the allowances and salaries to be paid to members of the Senate and the House of Commons for the 2010–2011, 2011–2012 and 2012–2013 fiscal years.
Part 8 amends a number of Acts to reduce or eliminate Governor in Council appointments, including the North American Free Trade Agreement Implementation Act. This Part also amends that Act to establish the Canadian Section of the NAFTA Secretariat within the Department of Foreign Affairs and International Trade. In addition, this Part repeals The Intercolonial and Prince Edward Island Railways Employees’ Provident Fund Act. Finally, this Part makes consequential and related amendments to other Acts.
Part 9 amends the Pension Benefits Standards Act, 1985. In particular, the Act is amended to
(a) require an employer to fully fund benefits if the whole of a pension plan is terminated;
(b) authorize an employer to use a letter of credit, if certain conditions are met, to satisfy solvency funding obligations in respect of a pension plan that has not been terminated in whole;
(c) permit a pension plan to provide for variable benefits, similar to those paid out of a Life Income Fund, in respect of a defined contribution provision of the pension plan;
(d) establish a distressed pension plan workout scheme, under which the employer and representatives of members and retirees may negotiate changes to the plan’s funding requirements, subject to the approval of the Minister of Finance;
(e) permit the Superintendent of Financial Institutions to replace an actuary if the Superintendent is of the opinion that it is in the best interests of members or retirees;
(f) provide that only the Superintendent may declare a pension plan to be partially terminated;
(g) provide for the immediate vesting of members’ benefits;
(h) require the administrator to make additional information available to members and retirees following the termination of a pension plan; and
(i) repeal spent provisions.
Part 10 provides for the retroactive coming into force in Canada of the Agreement on Social Security between Canada and the Republic of Poland.
Part 11 amends the Export Development Act to grant Export Development Canada the authority to establish offices outside Canada. It also clarifies that Corporation’s authority with respect to asset management and the forgiveness of certain debts and obligations.
Part 12 enacts the Payment Card Networks Act, the purpose of which is to regulate national payment card networks and the commercial practices of payment card network operators. Among other things, that Act confers a number of regulation-making powers. This Part also makes related amendments to the Financial Consumer Agency of Canada Act to expand the mandate of the Agency so that it may supervise payment card network operators to determine whether they are in compliance with the provisions of the Payment Card Networks Act and its regulations and monitor the implementation of voluntary codes of conduct.
Part 13 amends the Financial Consumer Agency of Canada Act to provide the Financial Consumer Agency of Canada with a broader oversight role to allow it to verify compliance with ministerial undertakings and directions. The amendments also increase the Agency’s ability to undertake research, including research on trends and emerging consumer protection issues. Finally, the Part makes consequential amendments to other Acts.
Part 14 amends the Proceeds of Crime (Money Laundering) and Terrorist Financing Act to confer on the Minister of Finance the power to issue directives imposing measures with respect to certain financial transactions. The amendments also confer on the Governor in Council the power to make regulations that limit or prohibit certain financial transactions. This Part also makes a consequential amendment to another Act.
Part 15 amends the Canada Post Corporation Act to modify the exclusive privilege of the Canada Post Corporation so as to permit letter exporters to collect letters in Canada for transmittal and delivery outside Canada.
Part 16 amends the Canada Deposit Insurance Corporation Act to allow the Governor in Council to specify when a bridge institution will assume a federal member institution’s deposit liabilities and allow the Canada Deposit Insurance Corporation to make by-laws with respect to information and capabilities it can require of its member institutions. This Part also amends that Act to establish the rules that apply to the assignment, by the Canada Deposit Insurance Corporation to a bridge institution, of eligible financial contracts to which a federal member institution is a party.
Part 17 amends the Bank Act and other related statutes to provide a framework enabling credit unions to incorporate and continue as banks. The model is based on the framework applicable to other federally regulated financial institutions, adjusted to give effect to cooperative principles and governance.
Part 18 authorizes the taking of a number of measures with respect to the reorganization and divestiture of all or any part of Atomic Energy of Canada Limited’s business.
Part 19 amends the National Energy Board Act in order to give the National Energy Board the power to create a participant funding program to facilitate the participation of the public in hearings that are held under section 24 of that Act. It also amends the Nuclear Safety and Control Act to give the Canadian Nuclear Safety Commission the power to create a participant funding program to facilitate the participation of the public in proceedings under that Act and the power to prescribe fees for that program.
Part 20 amends the Canadian Environmental Assessment Act to streamline certain process requirements for comprehensive studies, to give the Canadian Environmental Assessment Agency authority to conduct most comprehensive studies and to give the Minister of the Environment the power to establish the scope of any project in relation to which an environmental assessment is to be conducted. It also amends that Act to provide, in legislation rather than by regulations, that an environmental assessment is not required for certain federally funded infrastructure projects and repeals sunset clauses in the Regulations Amending the Exclusion List Regulations, 2007.
Part 21 amends the Canada Labour Code with respect to the appointment of appeals officers and the appeal hearing procedures.
Part 22 authorizes payments to be made out of the Consolidated Revenue Fund for various purposes.
Part 23 amends the Telecommunications Act to make a carrier that is not a Canadian-owned and controlled corporation eligible to operate as a telecommunications common carrier if it owns or operates certain transmission facilities.
Part 24 amends the Employment Insurance Act to establish an account in the accounts of Canada to be known as the Employment Insurance Operating Account and to close the Employment Insurance Account and remove it from the accounts of Canada. It also repeals sections 76 and 80 of that Act and makes consequential amendments in relation to the creation of the new Account. This Part also makes technical amendments to clarify provisions of the Budget Implementation Act, 2008 and the Canada Employment Insurance Financing Board Act that deal with the Canada Employment Insurance Financing Board.

Jobs and Growth Act, 2012

[Scott Brison, Liberal, 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.

[Shelly Glover, Conservative, Saint Boniface, MB]

It's important that I clarify this because that's the problem with people who have outside interests. I just ask that we be very clear about both sides of the story.

When we talk about third-party delivery, I appreciate that Mr. Bergevin said he doesn't take issue with that, as long as there are rules. The rules are there. The inspectors are accredited. There are no two ways about it. That is clear.

I also want to correct the record with regard to the size of the budget bill. Let's get to the facts. Bill C-10, which was Budget 2009, was bigger than this one. Bill C-9, Budget 2010, BIA number two, was 880 pages. Bill C-13, Budget 2011, BIA number one, was 644 pages. They were all bigger than this one. This is not unusual in any way, shape or form.

These studies are done over years. One of the witnesses mentioned that. I just want to make that clear so Canadians understand the full picture on some of these issues.

Opposition Motion—Closure and Time Allocation

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

Mr. Speaker, I wish to inform you that I will share my time with the hon. member for Bonavista—Gander—Grand Falls—Windsor.

I find it a little sad that, with this government, we always start with the end instead of the beginning. Regardless of what we may think, this government does what it wants and cares little about parliamentary procedures and tradition.

Since the last election, we are seeing too much abuse. This government is abusing its majority, thinking that with the support of 39% of Canadians it can do anything. And this is an inflated number because it does not include the 40% of Canadians who did not vote. So, it is not even 30% of Canadians who supported the government. Therefore, it should at least respect the opinion of all Canadians. It is not the first time that we raise this issue.

Today, we are talking about the government cutting debate short after introducing a bill, and not even after several hours of debate. This government has shown repeatedly its contempt for our institutions. In the case of Senate appointments, it has also shown that it does not respect its own promises. Indeed, the government had committed to appointing only elected senators. However, two weeks after the election, the Prime Minister not only appointed to the Senate individuals who had lost their election, but he did so without consulting the provinces, as he had promised to do.

Recently, we saw that this government had even set criteria to appoint an officer of Parliament. I am not going to get into details, but there were two basic and very simple criteria to select the Auditor General. First, the individual had to be an accountant and, second, he or she had to be bilingual. This government ignored the fact that the appointee had to be bilingual and it hired an accountant who had some experience in a small province. We can already see the abuse of power.

As we have seen so far, there is always a double standard with this government. We believe the government is abusing its power by constantly resorting to closure to avoid debate. That is the only motive we can find today. It has already done it close to ten times over a period of a few weeks, when none of the bills involved were urgent.

We have seen time allocation invoked on six out of 10 bills. That does not mean time allocation has been invoked 6 times. It means time allocation has been invoked on 6 bills at different stages. Just so that listeners are aware of how many stages a bill would go through, normally a bill would go through second reading, report stage and third reading. If we multiply six bills times three, that would be 18 times that the government could potentially invoke time allocation. To date, we have a calculation of about 10, so we can look forward to seeing more of these bills undergoing time allocation for the next few steps.

The government House leader has stated that the issues on the government's legislative agenda so far this session have been discussed in detail since the government took office. I do not understand it.

The point is that during the elections the Conservative government made promises. However, if we look at the makeup of the House, at least 40% of the members are new parliamentarians, so this debate never took place. Also, what was said during the election campaign was not necessarily in a legislative format. Our job as parliamentarians is to debate these pieces of legislation.

That brings me to another subject, one that is not necessarily tied into the debate today. I am a member of the scrutiny of regulations committee, and we see that if legislation is not properly worded, then a lot of this legislation and, in turn, a lot of its regulations get bogged down. We then have things that are not necessarily clear, Canadians are not happy with how the legislation is worded, and the courts have to get involved. It is all just a churning of bureaucracy and a waste of money.

The claim that the government has already consulted Canadians is far from what the government has actually done. It has not consulted Canadians.

It is saying that three or four hours of debate it is sufficient for a bill. However, let us look at some of the bills that have been tabled. As an exaple, the budget is made up of 600 pages of legislation. It is a government omnibus bill. As a lawyer, I sat in on some of the committee hearings and I can tell members that it was not the easiest thing to follow. I just cannot imagine how a couple of hours of debate would suffice for a proposed bill that is going to affect all Canadians, not just the criminals. It will affect all Canadians, because one day they will have to deal with these issues, and if they do not have to go before a court of law, they will have to at least pay taxes to pay for all the costs that are going to be incurred in trying to monitor these pieces of legislation and put them into force.

We are trying to avoid just passing these pieces of legislation blindly. We are trying to ensure proper vigilance before these pieces of legislation are passed; however, that does not seem to be a valid argument for the government.

We in the Liberal Party are trying to do our job, but the government is making allegations that we are obstructing and we are using unreasonable amendments. I can understand the government's point of view, because sometimes the NDP acts irrationally and tries to filibuster and makes ridiculous amendments. However, I think the Liberal Party has made pretty reasonable amendments up to now. We have been first up to bat on making amendments on proposed bills. I think that we have done our job, but the government refuses to allow us to continue to do our jobs. We want the public, whether it be experts or third parties who are affected by these bills, to come forward to testify and make suggestions so that we can actually make these bills work properly.

Let us look at some of the bills for which time allocation has been introduced. The budget implementation bill was introduced and read for the first time on June 14; there was time allocation at all stages, and it was voted on June 15.

This is nothing new. Budget implementation bills are introduced twice every year, plus the budget. The budget implementation bill is not a partisan issue. It is normally the bill that introduces the legislation to put the budget into application.

Usually it is technical. It requires people affected by the budget to provide us with their input and tell us what changes they would like to see; if there are no changes, they at least come forward to give us their interpretation of that particular bill.

In the past, whether it was a majority government or a minority government, we have always been able to get consensus on how many hours of debate we needed in the House and in committee. However, the government seems to be using its majority at will and is just punching the legislation through. It has done that for the two budget bills, Bill C-9 and Bill C-13.

On Bill C-10, the omnibus crime bill, the Conservatives invoked time allocation not only in the House but in committee as well. I was there. They suddenly said that they did not want to hear what we had to say. They had made up their minds. It was impossible that they would need opinions from experts. They did not even have to hear from the bar association. They did not even have to hear from the provinces.

Even though members from the province of Quebec had numerous valid amendments to introduce into the bill, the government had already decided it was not going to listen to anyone. I understand that the NDP had numerous amendments that were not relevant to the case and had to be rejected, but my colleague, the member for Mount Royal, introduced some pretty important amendments that were backed up by Minister Fournier from the Quebec government. We are going to have report stage next week, and I am hoping that the government can change its mind and adopt some of the amendments.

With regard to the Canadian Wheat Board, it was not a matter of procedure. Again, that was just rammed through. These farmers are working, and they do not have the time to come here and be notified because everything has to be rammed through.

I see my time is up. I am hoping that I will have some good questions and that I can continue.

[Robert Carrier, Bloc, Alfred-Pellan, QC]

Thank you.

I'm now going to talk about FINTRAC, where we ultimately find people who analyze cases. You were clear, in fact, that since last year, with Bill C-9, tax evasion is being more formally targeted and it is more your responsibility to monitor it. You also said that you have had special training from the Canada Revenue Agency for analyzing those cases.

Since you have been doing a precise analysis of it, has that opened up a new area of activity where there is the potential for picking up on cases that should be examined in depth?

[Shelly Glover, Conservative, Saint Boniface, MB]

Thank you, Mr. Chair.

I am very impressed with Inspector Rudderham's reputation. We in the police service in Winnipeg are very familiar with the work he's done in Saskatchewan and Manitoba.

I'm going to have to tailor some of my questions; I'll ask them when you come back and we'll be in camera. But I do want to ask you, sir—because we only have seven minutes—with your experience in the proceeds of crime world, money laundering, etc., if you have some recommendations to improve the system, I would ask that you share those with us here and now.

We have listened to the police services across the country, and that's why Bill C-9 has come about. I believe that this is a tool that you are able to use now. What would you suggest that we, as the lawmakers, could do to improve the ability to target these tax havens and these tax evaders?

[Assistant Commissioner Stephen White, Director General, Financial Crime, Royal Canadian Mounted Police]

Good morning, Mr. Chair and members of the committee. Thank you very much for inviting us to participate in today's hearing.

I have here with me today Superintendent Stephen Foster, who oversees our commercial crime branch at our headquarters in Ottawa, and Inspector Dave Rudderham, who oversees our commercial crime unit in the city of Winnipeg. I am the director general for the RCMP's financial crime programs.

I'm pleased to have this opportunity to say a few words about financial crime, our involvement related to income-tax-related investigations, and our ongoing relationship with the Canada Revenue Agency.

In today's complex and increasingly global environment, criminal activity often involves multiple jurisdictions. Criminals today are becoming much more sophisticated in disguising their illegal profits without compromising themselves. Criminals are now taking advantage of the globalization of the world economy by transferring funds quickly across international borders. Rapid developments in financial information, technology, and communication allow money to move anywhere in the world with speed and ease, making it much more difficult for law enforcement scrutiny and providing criminal organizations new financial avenues. As a result, addressing increasingly complex transnational financial crimes requires law enforcement to work closely together with domestic and international partners.

Generally, tax evasion involves individuals or companies attempting to conceal income earned from taxation authorities. This same increasingly connected global environment also creates significant opportunities for tax evasion-related activities. In August 2010, Bill C-9 amended the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, making tax evasion a designated predicate offence for money laundering. In other words, tax evasion is a criminal offence that, if committed, could give rise to criminal proceeds—the evaded taxes. In addition, laundering the proceeds of tax evasion will also be a money laundering offence.

Unlike the Canada Revenue Agency, the RCMP is not a primary recipient of tax evasion information. CRA has its own investigative capacity and is well positioned to investigate tax evasion. As a result, the RCMP generally does not investigate income tax evasion related to legitimate funds earning income offshore.

When the RCMP does identify activity related to income tax matters, it is almost always incidental to an investigation we are conducting on another matter. When feasible, matters are referred to the CRA for their action.

The RCMP commercial crime and integrated proceeds of crime programs have long had a close working relationship with the Canada Revenue Agency. The working relationship between the CRA and the RCMP commercial crime program dates back to the early 1970s, and the integrated proceeds of crime units have been working closely with the CRA since they were created in the mid-1990s. The RCMP may share information with the CRA; however, the RCMP only shares information with the CRA when it is permitted by law and the sharing will not jeopardize an ongoing criminal investigation.

Information sharing between the Canada Revenue Agency and the RCMP as it relates to income tax matters is generally from the RCMP to the CRA. The Canada Revenue Agency does not generally make referrals to the RCMP. When requested by CRA investigators, the RCMP does provide assistance to them. In some instances, tax-related information may be provided by the Canada Revenue Agency to the RCMP pursuant to a judicial order under the Criminal Code or after charges have been laid in relation to a criminal investigation.

Through the RCMP integrated proceeds of crime program, the RCMP regularly shares and refers information to the Canada Revenue Agency regarding tax-related matters. Between March 1999 and March 2009, the RCMP proceeds of crime program made referrals to the Canada Revenue Agency that resulted in federal tax assessments totalling approximately $145 million.

In preparation for this appearance, we conducted a search of the RCMP's occurrence records and found that for the same 10-year period, from 1999 to 2009, the RCMP initiated 542 files related to the Income Tax Act. These files pertained primarily to providing assistance to the Canada Revenue Agency.

Within the RCMP financial crime program we currently do not have any investigative resources dedicated solely to tax evasion. However, with the recent legislative amendments I just mentioned, the future may see the RCMP becoming more involved in investigating tax evasion connected to proceeds of crime and money laundering.

As I indicated earlier, the changing environment is one of the greatest challenges we face in our efforts to combat all types of financial crime. The growing sophistication of criminal activity is abetted by the same techniques and technologies that spur legitimate opportunities for business.

As Canada's national police service, the RCMP recognizes that it has an important role to play in combatting financial crime and helping to protect Canada's economic integrity.

Mr. Chair, honourable members of the committee, that concludes my prepared remarks. I would now be happy to answer any questions you may have.

Thank you.

[Denis Meunier, Assistant Director, Financial Analysis and Disclosures, Financial Transactions and Reports Analysis Centre of Canada]

Thank you, Mr. Chairman.

I would like to make a brief opening remark about FINTRAC's mandate and what we do.

With me today is our senior legal counsel, Yvon Carrière.

The legislation adopted by Parliament in 2000, the Proceeds of Crime (Money Laundering) Act, created FINTRAC as an independent agency reporting to the Minister of Finance with a mandate to detect, deter, and prevent money laundering. In 2001, post-9/11, the Anti-terrorism Act added combatting terrorist activity financing to our mandate.

FINTRAC is Canada's financial intelligence unit, or FIU. We have a staff of slightly over 300, and we have three regional offices in addition to our headquarters.

We are a unique agency in Canada, as our mandate is both to analyze financial transaction information and disclose certain information to investigators within the thresholds, and to provide strategic-level financial intelligence.

The Minister of Finance is responsible to Parliament for our act and for making proposals for amendments to the act and the regulations made under it.

I think it is important to clarify exactly what money laundering is. The Financial Action Task Force, or FATF, defines money laundering as the processing of the proceeds of criminal acts to disguise their illegal origin. In essence, money laundering makes it more complicated to identify the criminal origin of the money, which is now clean. That is where we come in.

Under Canadian law, a money laundering offence involves various acts committed with the intention to conceal or convert property or the proceeds of property, such as money, knowing or believing that these were derived from the commission of a designated offence.

In this context, a designated offence means most serious offences under the Criminal Code or any other federal act. It includes, but is not limited to, those relating to illegal drug trafficking, bribery, fraud, forgery, murder, robbery, counterfeit money, stock manipulation, and, since very recently, tax evasion.

To give you the most accurate picture of our agency, I would also underline what FINTRAC is not. We are not an investigative body. We do not have powers to gather evidence, lay charges, seize and freeze assets, or create watch lists of suspect terrorist financiers. FINTRAC does not investigate or prosecute suspected offences.

Rather, we are an analytic body that produces financial intelligence to be disclosed, if appropriate, to help further investigations conducted by law enforcement and security agencies and to provide strategic-level analysis to policy departments and assessment agencies.

Because we hold millions of financial transaction records of Canadians, Parliament wanted to ensure that the act was drafted quite carefully to be very specific and clear on what information we can receive and what information we can disclose. The act stipulates that we can only release information to police where we have reasonable grounds to suspect that the information would be relevant to an investigation or prosecution of a money-laundering offence or a terrorist activity financing offence.

Furthermore, the act requires that, once FINTRAC has reached that "reasonable grounds to suspect" threshold, it must disclose that information. In the same way, once FINTRAC has reasonable grounds to suspect that certain information would be relevant to threats to the security of Canada, the act stipulates it must disclose that information to the Canadian Security Intelligence Service.

Our job, in brief, is to provide financial intelligence leads to law enforcement and to national security and intelligence agencies. We are a resource for every police department in Canada, with a unique ability to follow the criminal money trail across the country and around the world.

We also disclose information to the Canada Revenue Agency, the Canada Border Services Agency and the Communications Security Establishment when specific additional statutory tests in relation to disclosure to these agencies are met. Finally, we may disclose information to foreign financial intelligence units, as well.

Our work begins with the daily intake of over 65,000 reports on several kinds of financial transactions from a variety of businesses, which we call reporting entities. The most prominent of these entities are banks; however, we also receive reports from casinos, credit unions, life insurance companies, and money service businesses, not to give you an exhaustive list, but all of whom are obligated by the act to send reports to us.

We received several categories of reports. We are required by law to receive terrorist property reports, suspicious transaction reports, or STRs, and reports of attempted suspicious transactions, large cash transaction reports of $10,000 or more, or LCTRs, casino disbursement reports, and reports of international electronic funds transfers, or EFTs, of $10,000 or more. When I say “international”, I mean EFTs entering or leaving the country. We are not authorized to receive reports of domestic EFTs.

Over the years we have built a very large database of these different types of transaction reports. Through sophisticated computer programs and the skills of highly trained and experienced analysts, we can analyze this data from both a tactical and strategic perspective and understand it in combination with information from other sources, such as law enforcement databases, commercially or publicly available databases, and sometimes information from foreign financial intelligence units.

We specifically look for financial transactions and patterns that make us suspect money laundering or terrorist activity financing. As you can imagine, the movement of illicit funds is often a well-hidden and complex affair, involving hundreds and sometimes even thousands of transactions, as well as dozens of individuals and companies.

I would like to note that our act was carefully crafted to provide the highest possible protection for personal information, while also making it possible for some information to be disclosed to law enforcement.

We are the only federal agency whose mandate specifically includes an obligation to ensure the protection of personal information under its control. Our data banks cannot be accessed by any other outside body. And the act provides for serious criminal penalties to be applied to the unauthorized disclosure of information.

Now let me turn to the subject of interest to this committee, that is, tax evasion by Canadians through use of offshore bank accounts.

In the last two years, we have stepped up our disclosures to the Canada Revenue Agency, sending them 287 cases. These disclosures have been used for criminal investigation into tax matters and also by their Special Enforcement Program, which targets those persons suspected of deriving taxable income from such crimes as commercial fraud and drug trafficking. We know from feedback from CRA that our disclosures have been useful to them in carrying out their investigations and audits and recovering millions in federal taxes.

Until just recently, FINTRAC could provide case disclosures to the Canada Revenue Agency when a dual threshold was met. First, there had to be a reasonable suspicion that the information being disclosed was relevant to money laundering, and secondly, a determination had to be made that the information was relevant to tax evasion.

In the cases we disclosed to the CRA in the past, the predicate offence was very often linked to drug trafficking or fraud. I might add that in these cases the police are the lead investigators, and the culprits are usually investigated in relation to the predicate offence and money laundering. In other words, the law did not permit us to use tax evasion as a predicate offence, that is, the criminal activity giving rise to the proceeds from which to build a case disclosure.

With the recent adoption of Bill C-9, we are now permitted to use tax evasion as a predicate offence from which to build a case disclosure. The Criminal Code regulations were amended to make tax evasion a predicate offence to money laundering when determining whether to send a case to the CRA.

But equally important, just weeks ago, on February 14, pursuant to the coming into force of the regulations to the bill, the threshold for disclosing information to CRA was lowered from “determining” to “reasonable grounds to suspect” that the information being disclosed is relevant to tax evasion.

As you may know, we received additional funding in Budget 2010 to help fight tax evasion. FINTRAC analysts recently received in-depth training on the impact of these legislative and regulatory changes. Also, we received training from CRA specialists on tax evasion with respect to the work they do.

In cases of money laundering, we have developed what we call indicators of money laundering, which are used more or less by financial intelligence agencies around the world to determine money laundering. We have now done the same with tax evasion, through the assistance of CRA. Over the last three years we have worked with the Canada Revenue Agency to develop indicators of tax evasion that would help our analysts determine when cases could be referred to the CRA.

With the changes in the law, the additional funding, and with such training, we feel we are poised to provide more information to help tax investigators with their tax evasion cases.

Thank you.

Economic Development Agency of Canada for the Region of Northern Ontario Act

[Robert Bouchard, Bloc, Chicoutimi—Le Fjord, QC]

Madam Speaker, I am very pleased to rise today on this bill, especially since this is my maiden speech in the House of Commons as Bloc Québécois critic for regional development.

From the outset, I should say that we are in favour of Bill C-309, An Act establishing the Economic Development Agency of Canada for the Region of Northern Ontario. This new federal body’s mission will be to promote and develop Northern Ontario, just like the Economic Development Agency of Canada for the Regions of Quebec does in Quebec.

The Bloc Québécois stands up for Quebec’s interests. It is in this spirit that we previously voted against Bill C-9, an Act to create the Economic Development Agency of Canada for the Regions of Quebec.

The Bloc Québécois, just like Quebec governments for the past 45 years or more, believe that to formulate an integrated regional development policy, Quebec must be master of its own regional development programs.

The regions are the ones with the solutions. There are organizations in Quebec dedicated to regional socio-economic development. They are capable of effectively advising the minister regarding regional needs and of overseeing program implementation. One need only think of the Centres locaux de développement, the CLDs, and the Conférences régionales des élus, the CREs. It is for these reasons that the Bloc Québécois has consistently been in favour of decentralization in this area.

We know that not all governments share the same priorities, and despite instances of flagrant encroachment in the past, should the government of Ontario decide to favour this kind of organizational structure for its regional economies, the Bloc Québécois would be very hard pressed to oppose it.

In 2009, the government created the Federal Economic Development Agency for Southern Ontario. There is still no equivalent agency for Northern Ontario. Northern Ontario does have FedNor, an equivalent program that essentially shares the same objectives as an agency. The main difference however is that FedNor is the responsibility of the Minister of Industry, who can amend its budget as he sees fit. Agencies, on the other hand, are independent and have ministers of state, as is the case with the Economic Development Agency of Canada for the Regions of Quebec.

In actual fact, the reason for creating the economic development agency of Canada for the region of northern Ontario is to transform the FedNor program into an agency that would then be more independent of the government’s budgetary decisions, as currently exists in Quebec and in other regions served by agencies.

The Federal Economic Development Initiative in Northern Ontario or FedNor has existed since 1987. Its purpose is to encourage economic growth and diversification and the generation of jobs and incomes in northern Ontario by providing support for private sector projects.

Even though the Bloc Québécois is in favour of the bill, a regional development strategy necessarily includes such diverse things as natural resources, education and training, municipal affairs, infrastructure and settlement of the land, which all fall under provincial jurisdiction. In fact, the Constitution makes the provinces responsible for most of the issues involved in regional development.

From 1973 to 1994, there was a framework agreement between Quebec City and Ottawa. Both governments had to agree, or else Ottawa could not do anything. Most federal government funding passed through Quebec agencies. But since 1994, the federal government has been acting unilaterally.

No more co-operation with the Government of Quebec. No more respect for its priorities and the priorities of the regions. This is very unfortunate and even unacceptable.

Following the passage of Bill C-9 in 2005, the federal government appointed a minister responsible for the regions of Quebec. The result has been more quarrels between Quebec City and Ottawa, more duplication, more confusion, a federal government obsession with raising its profile in the regions, and most of all, less respect for the priorities of Quebec and its regions.

Ottawa should stop interfering in Quebec’s areas of jurisdiction and instead start working together with Quebec on determining all federal economic priorities that have an impact on Quebec, while taking into account the economic development priorities of the regions.

Having seen how obviously ineffective the Economic Development Agency for the Regions of Quebec actually is, we wonder what use such an institution would be for northern Ontario. The Bloc Québécois would like to warn the Ontario government of the possible harmful consequences of the federal government's integrated, centralized approach.

Take a concrete example. In April 2007, the then Minister of Labour and of the Economic Development Agency of Canada for the Regions of Quebec announced a measure that was heavy with consequences for local groups, such as not-for-profit organizations, working in the area of economic development. He eliminated their grants. Here is an excerpt from the Jonquière newspaper, Le Quotidien, of April 28, 2007:

The Economic Development Agency of Canada will no longer provide operating funding for non-profit organizations that work in economic development and will no longer fund pure research.

However, these non-profit organizations play an important role for small and medium-size businesses. They support innovation and the development of international markets. They have become an essential link in the local economic fabric in many regions in Quebec.

As a result of increased pressure by many economic stakeholders in Quebec, the federal government reversed its decision to some degree by creating a new policy concerning non-profit organizations and partially restoring some funding for those organizations. In fact, nearly a quarter of the non-profit organizations that had received funding in 2007 could reapply.

The Bloc Québécois fiercely opposed cuts to the non-profit organizations that had been subsidized in part by the Economic Development Agency of Canada for the Regions of Quebec and were active in the economic sector. This absurd situation calls into question the economic development model that Quebec has been requesting for several decades. Since it is an inappropriate measure that is extremely prejudicial to the economic fabric of the regions of Quebec, it could result in the loss of some jobs in local communities.

I would like to close by saying that the Bloc Québécois does not oppose the will of the Government of Ontario and that we support Bill C-309.

Disposition of Abolition of Early Parole Act

[Alexandra Mendes, Liberal, Brossard—La Prairie, QC]

Mr. Speaker, I would like to participate in the debate on the motion to prevent debate on the content and substance of Bill C-59. I find it rather odd that the Bloc has supported the government's attempt to stifle any attempt at debate on the substance of this bill.

No one in the House can accuse the Liberals of not supporting the idea of eliminating parole eligibility after one-sixth of the sentence is served for economic crimes. Two years ago, my colleague from Bourassa, our candidate in Saint-Bruno—Saint-Hubert and our member for Lac-Saint-Louis participated in a press conference with several of Earl Jones' victims to call on the government to quickly bring forward a bill to eliminate parole eligibility after one-sixth of the sentence is served, especially for criminals who commit major fraud and have multiple victims.

No one can accuse the Liberals of not supporting that idea. I think it is really dishonest of the government to make that kind of accusation when it knows very well what the Liberals' position is. This was pointed out by my colleague from Notre-Dame-de-Grâce—Lachine.

Now I would like to talk about the debate and the fact that the Conservatives and the Bloc members want to limit the scope of the debate. Just seven months ago the members of the Bloc rose in the House to criticize the government for doing the exact same thing it is doing now with Bill C-59. The government moved a motion to block debate.

Last June, the member for Saint-Maurice—Champlain rose in the House to criticize the government for moving a motion to block debate on the Canada-Colombia Free Trade Agreement Implementation Act. The Bloc member for Hochelaga also rose to oppose a government motion to block debate on Bill C-9, the Jobs and Economic Growth Act, by imposing time allocation.

We are opposed to this time allocation motion because we believe that Bill C-59 addresses a very important issue. Furthermore, for two years now, the Liberals have been calling on the government to eliminate parole eligibility after one-sixth of the sentence is served for economic crimes like those committed by Earl Jones, Vincent Lacroix and others.

I think it is a shame that some would have people believe that the Liberals do not want to protect victims. That is simply not true. When the government introduced Bill C-21 on economic crimes and it was referred to committee, the Liberal justice critic proposed an amendment to the bill to eliminate eligibility for parole after one-sixth of the sentence in cases of economic crime. The Conservatives and the Bloc defeated the motion.

Every MP is entitled to his or her opinion on bills that we are called on to debate in the House. It is a fundamental aspect of the democratic process. The operative word here is “debate”, and the collusion between the Conservatives and the Bloc is preventing us from acting as responsible parliamentarians.

We would like to hear from experts. We want to know how this bill will truly address a gap in the law, how it will do justice to victims, how this bill will improve the chances of rehabilitation for those who once lost control of their lives.

Perhaps we should indeed eliminate parole after one-sixth of a sentence for offenders who have committed serious economic crimes and left a number of victims.

However, for non-violent criminal acts that are not fraud, we believe that evidence has shown that parole after one-sixth of a sentence has been very effective and that the rate of recidivism is much lower.

We will never know what the experts might have said since this closure motion eliminates any chance to consult experts. With this government so eager to control everything, it has become somewhat of a tradition to just pass a bill without any idea of the facts that might call it into question.

The Liberals are against this closure motion. It is not justified, and we regret that the Bloc has decided to join the Conservatives to limit the debate on this bill. As far as the substance of the bill is concerned, in the past and still today, no one could accuse the Liberals of not showing their support for eliminating parole after one-sixth of the sentence for economic crimes.

In order to illustrate the government's intellectual dishonesty, I would like to present a chronology of the Conservatives' failures in their so-called fight against crime.

I am referring here to the various bills that have died on the order paper for all sorts of reasons or that have remained in the House or at committee indefinitely.

Here they are. Bill C-15, An Act to amend the Controlled Drugs and Substances Act and to make related and consequential amendments to other Acts, died on the order paper when Parliament was prorogued; Bill C-19, An Act to amend the Criminal Code (investigative hearing and recognizance with conditions), died on the order paper before the House had a chance to vote on it; Bill C-26, An Act to amend the Criminal Code (auto theft and trafficking in property obtained by crime), also died on the order paper. It is certainly not the opposition that forced the government to prorogue Parliament.

Bill C-31, An Act to amend the Criminal Code, the Corruption of Foreign Public Officials Act and the Identification of Criminals Act and to make a consequential amendment to another Act, died on the order paper, and Bill C-36, An Act to amend the Criminal Code, on the faint hope clause, died on the order paper before being brought back this session. One committee meeting was held on Bill C-46, An Act to amend the Criminal Code, the Competition Act and the Mutual Legal Assistance in Criminal Matters Act, before it died on the order paper. Bill C-52, An Act to amend the Criminal Code (sentencing for fraud), which is related to Bill C-59, the bill we are dealing with today, died on the order paper when Parliament was prorogued. Bill C-58, An Act respecting the mandatory reporting of Internet child pornography by persons who provide an Internet service, died on the order paper. The prorogation of Parliament killed many bills.

Among the bills introduced by the Minister of Public Safety was Bill C-34, the Protecting Victims From Sex Offenders Act, which also died on the order paper. The bill to deter terrorism and to amend the State Immunity Act died on the order paper. Bill C-43, An Act to amend the Corrections and Conditional Release Act and the Criminal Code, died on the order paper. Bill C-47, An Act regulating telecommunications facilities to support investigations, died on the order paper. Bill C-53, An Act to amend the Corrections and Conditional Release Act (accelerated parole review) and to make consequential amendments to other Acts, died on the order paper. Bill C-60, An Act to implement the Framework Agreement on Integrated Cross-Border Maritime Law Enforcement Operations between the Government of Canada and the Government of the United States of America, died on the order paper.

To date, no meetings have been held to discuss Bill C-16, An Act to amend the Criminal Code. Bill C-17, An Act to amend the Criminal Code (investigative hearing and recognizance with conditions), was given first reading 51 days after Parliament was prorogued, and the committee still has not met to discuss that bill.

Bill C-21, An Act to amend the Criminal Code (sentencing for fraud), was fast-tracked at committee in just one meeting and still has not reached second reading. Bill C-22, An Act respecting the mandatory reporting of Internet child pornography by persons who provide an Internet service, was given first reading 64 days after Parliament was prorogued, and the government delayed it for 26 days at report stage because of the debate on the short title.

Bill C-48, An Act to amend the Criminal Code and to make consequential amendments to the National Defence Act, was given first reading 89 days after Parliament was prorogued, and we are still waiting for the next step. Bill C-50, An Act to amend the Criminal Code (interception of private communications and related warrants and orders), was given first reading after 94 days, and we are still waiting. First reading of An Act to amend the Criminal Code, the Competition Act and the Mutual Legal Assistance in Criminal Matters Act took place 243 days after Parliament was prorogued. Bill C-53, An Act to amend the Criminal Code (mega-trials), was given first reading and nothing more.

Bill C-54, An Act to amend the Criminal Code (sexual offences against children) only made it to first reading. Bill C-5, An Act to amend the International Transfer of Offenders Act was introduced at first reading by the Minister of Public Safety 15 days after prorogation. Two committee meetings were held and nothing has happened since. As for Bill C-23B, An Act to amend the Criminal Records Act and to make consequential amendments to other Acts, we are still waiting. After a few meetings on the subject, the minister was supposed to come back with amendments that he felt were necessary in order to make the bill more comprehensive and definitely more respectful. Bill C-39, An Act to amend the Corrections and Conditional Release Act and to make consequential amendments to other Acts was introduced for first reading 104 days after prorogation and we still have not met in committee to discuss it. Bill C-49, An Act to amend the Immigration and Refugee Protection Act, the Balanced Refugee Reform Act and the Marine Transportation Security Act was introduced for first reading 232 days after prorogation and there it remains. Bill C-52, An Act regulating telecommunications facilities to support investigations was also introduced for first reading 243 days after prorogation and we are waiting for the next step. The Senate introduced Bill S-7, An Act to deter terrorism and to amend the State Immunity Act for first reading 49 days after prorogation and we are still waiting for the next step. Bill S-10, An Act to amend the Controlled Drugs and Substances Act and to make related and consequential amendments to other Acts was introduced for first reading in the Senate 60 days after prorogation. Bill S-13, An Act to implement the Framework Agreement on Integrated Cross-Border Maritime Law Enforcement Operations between the Government of Canada and the Government of the United States of America was introduced for first reading 237 days after prorogation.

I am pointing this out to prove that it is not the opposition parties that are slowing the process down. For all sorts of unknown reasons, the government introduces these bill and then goes no further with them.

To conclude, I would like to question the justification for Bill C-59 and the fact that the Conservatives and the Bloc felt this was urgent enough to warrant this closure motion, which is an affront to parliamentary dialogue.

[Lorraine Berzins]

I don't have it here with me. We also appeared before the Senate committee on the same issue. It was on the mandatory minimums as well as the conditional sentencing issues: Bills C-10 and C-9, back then.

Pensions

[Russ Hiebert, Conservative, South Surrey—White Rock—Cloverdale, BC]

Mr. Speaker, I continue to hear from constituents about Bill C-428, the private member's bill from the Liberal member for Brampton—Springdale.

My constituents are outraged about a Liberal bill that would raise taxes to give a pension to someone who has only been a resident of Canada for three years. They want to know how the Liberals could justify raising taxes to give a pension to someone who has done little or nothing to earn it.

While the Liberals will have to answer for this in the next election, the Conservatives already have good news for Canadian pensioners. Our Conservative government's Bill C-9, which passed in July, reforms our pension system and has made the retirements of millions of Canadians more secure. Now employers can contribute more to workers' pensions and pensions are better protected in law.

While the Liberals are busy scheming to raise taxes, the Conservatives are working hard to improve the lives of Canadian seniors.

Sustaining Canada's Economic Recovery Act

[Thomas Mulcair, NDP, Outremont, QC]

Mr. Speaker, it is interesting to hear the Bloc Québécois support the Conservative government's budget policies, but it is also a little surprising. In fact, we have often stood alongside the Bloc to denounce, for example, the theft from the employment insurance fund. Bills C-9 and C-47 are spinoffs of this. The employment insurance fund is in there. For example, they are imposing new airline security taxes, which are inflating airline ticket prices in Canada. The Bloc is supporting that. There is a new regulation concerning the harmonized sales tax. The Bloc has not done anything to obtain compensation for Quebec for the harmonization it has already undertaken in this area. We are very surprised to hear the member for Holchega kowtow to the Conservatives once again and support the government's budget policies. We are very surprised by that.

Let us take a look at what is in Bill C-47, which the Bloc is supporting, and in the Conservative government's economic policy. Everything that happen in politics happens in a certain context. I would like to read a Reuters article from today, which was written by business journalist, Louise Egan.

I will read from this article from Reuters entitled “Canada record-high current account gap spurs worry”.

Louise Egan says this on behalf of Reuters:

Canada entered the club of countries with oversized current account deficits in the third quarter, posting the biggest shortfall on record as its worsening trade profile heralded a further slowdown in economic growth.

That is today.

Statistics Canada said on Monday:

The country's eighth consecutive quarterly shortfall in the current account--a measure of transactions in goods, services and investment income--totaled C$17.54 billion...compared with a revised second-quarter gap of C$12.98 billion.

Analysts surveyed by Reuters had forecast $15 billion.

What is interesting to note is that we are getting observations from people like Doug Porter at BMO Capital Markets, who said “Canada suddenly finds its broadest trade deficit in the company of countries that have typically been cited as extravagant over-spenders/under-savers”. He also said, “This may prove to be a passing phase but it is in fact an early warning that the country may be living beyond its means”.

In the days leading up to the G20 summit of the world's leading emerging and advanced economies, the U.S. treasury proposed capping current account surpluses and deficits at 4% as a way of achieving a better balance between surplus nations like China and debt ridden importers like the United States. We are above that 4% right now.

What we have to look at is how this fits into the overall budgetary plan of the Conservatives, such as it is. That is probably more of a compliment than they deserve to even mention the word plan when discussing the tragedy that has been visited upon the Canadian economy in the past five years since the Conservatives came to power.

We occupy the second largest land mass in the world and we have only 35 million people to try to give that value. That has always required the understanding of a government that placed value on the creation of jobs, on the creation of long-term growth and on the idea that we would try to go into those sectors of the economy that were the most forward-looking and the most productive. The Conservatives will have none of that.

The Conservative ideology is that anyone who seeks to have the government take a look at the economy, to balance it out and to have it grow long-term and make sense in some way is trying to pick winners. Their central thesis is a pristine marketplace that effectuates the best choices in all circumstances.

What we have had is an across the board tax cut being proposed by the Conservatives since they arrived in power. That is their panacea. That will solve all the problems. There is one slight difficulty with that. Any company, especially in the manufacturing field, that was not making a profit had not paid any taxes, so they did not get anything from the Conservatives tax decreases. The most profitable companies received those tax decreases, companies in the oil sector. The banking sector saw the same thing.

We will see a bit later this week the most recent quarter of bank profits, but for the first nine months of this year, Canada's chartered banks made $15 billion in profit. That is not because they are clever managers. It is because they have a quasi monopoly and they can charge people basically whatever they want, especially since the Conservatives came into power. Paying 25% on a credit card is no problem. Banks gouge customers every time they go to the banking machine. No problem. Why not? As far as the Conservatives are concerned it is normal to give a tip to the bank president every time someone accesses money at an ATM.

The real problem is the Conservatives have been destabilizing the erstwhile balanced economy that Canada had so painstakingly built up since the second world war. They are doing it by giving these across the board tax cuts, blind to any notion of productivity, blind to any notion of the creation of stable, long-term jobs which would allow people to raise a family. That is a thing of the past. As far as Conservatives are concerned, the market can decide.

When companies like Encana and Enbridge get millions of dollars in windfall because they have had a reduction in their taxes, we are still hollowing out the manufacturing sector. We are superheating the petroleum sector, bringing in an artificially high number of U.S. dollars, putting increasing pressure on the Canadian dollar, something that the textbooks refer to as “the Dutch disease”. This was after the situation that existed in Holland in the 1960s where the discovery of gas meant that a large number of foreign currencies were coming into the country, pushing the guilder ever higher. All of a sudden the Dutch realized that what was supposed to be manna from heaven was in fact destroying their economy because they could no longer afford to export their goods.

When we look at today's StatsCan figures, we realize the only thing that Canadian companies are spending is on equipment coming in from other countries. We can no longer produce on a competitive basis. Our manufacturing sector is being hollowed out. It is interesting to note that StatsCan, shortly after the Conservatives came to power, almost in a defensive statement, which I have never seen anything like it from StatsCan, said Canada was not suffering from the “Dutch disease”. When somebody bothers to use a term like that and then to affirm that it does not apply, my radar is automatically starting to ping. Why is it even mentioning it if it is not the case? That statement was made in 2006.

Between 2004 and 2008, in other words in 2008 before the current crisis hit, StatsCan put out new figures that showed precisely the opposite of what it had affirmed two years earlier. Between 2004 and 2008, Canada, mostly in Ontario and Quebec the industrial heartland, had bled off 322,000 good paying manufacturing jobs. The prime reason for that was we failed to internalize the costs of the oil sands. Instead of taking the fiscal space that was available and trying to help those sectors of the economy that needed it the most, we were giving the money to those sectors of the economy that were already making the largest profits.

How did we create the fiscal space for the $60 billion in tax increases that had been given to Canada's most profitable corporations? It is not very complicated. The Conservatives finished off the job started by the Liberals. They took $57 billion out of the employment insurance account and transferred it to general revenues of the government. A lot of people would look at that and say “so what, who cares”, that it was government money before and it government money after, but there is a huge difference. Every company, whether they were making money or losing money, had paid into that EI account as had every employee. We had that $57 billion purpose built, dedicated to take care of the inevitable cyclical aspect of the job market in Canada and when the recession hit, there would be money there to pay people employment insurance benefits.

The Conservatives cleaned out the account and now there was no more money there. There is going to be a $15 billion deficit that is going to have to be paid back again by all companies. Whether they are making profits or not or whether they are paying taxes or not, they are going to have this payroll tax for every job in their companies. That is what the Conservatives did. They created that fiscal space to give the tax decreases to the most profitable corporations by looting the employment insurance account, by taking the money that was there to create the fiscal space to do it.

When we talk about sustainable development, the notion that comes most immediately to mind is the environmental aspect. That is after all the driving force behind the United Nations report by Brundtland, the former prime minister of Norway. He put together this important report with a view to the Rio summit in 1992. That was a way of saying every time the government had to come to a decision with regard to a problem, it had to look at not only the environmental but also at the social and economic aspects.

As we have cleaned out the manufacturing sector in Canada, we have shovelled forward onto the backs of future generations not only the environmental debt, which I will talk about in a minute with regard to the tar sands, but we have shovelled the financial and fiscal burden onto their backs. Hundreds of thousands of people will be coming to retirement in the next decades. They will no longer have a proper pension plan. At least in the manufacturing sectors those used to be provided for. We have seen what has happened to companies like Nortel, but more generally, employers that take over companies in Canada with the complicit attitude of the Liberals especially and the Conservatives, the first thing they go after is the pension plan of their employees. That is for the social aspect.

However, let us look now at the long-term deficit with regard to the environment and how that is continuing to cause one of the biggest problems in the Canadian economy. One of the basic principles of sustainable development is we have to internalize the costs of the environment. These are basic principles like user pay, polluter pay. We have to ensure we look at the life cycle analysis of anything that is put on the market.

Right now we are as guilty as a company that is manufacturing a product that is pushing all of its garbage into a river and claiming that it is making a good profit because it can sell cheaper, the way we are developing the tar sands. Right now we have a way of developing them which means we are not cleaning up the mess, we are not including it in the price. We are not even including the price of attempts to go after carbon capture and storage. That is being left on the general tax burden on the backs of every Canadian.

We have an unusual situation. We claim that we have the strategic resource that we are exploiting in the public interest, but in fact we are leaving a huge environmental burden on the back of future generations in addition to the fiscal and financial burden.

I talked about the $57 billion looted from the EI account. I talked about the $60 billion in tax reductions for Canada's richest corporations. It is no coincidence that Conservatives have also racked up the largest deficit in Canadian history also to the tune of $60 billion, and the three are related.

If we continue like this, we will have hollowed out manufacturing sector, we will have become, for all intents and purposes, a third world country relying almost exclusively on the exploitation and extraction of resources that we pump to our neighbours as quickly as possible. That is not a figure of speech, that is literally the case.

Let us look at what we have done with the tar sands. There are projects like Keystone, Alberta Clipper, Southern Lights and we are putting in these pipelines. The Conservatives had them approved rapidly since they became government. They have scrapped the Navigable Waters Protection Act since they came to power. Just recently, they scrapped the whole environmental assessment process in Canada to send it over to the National Energy Board, which has no experience or expertise in the matter, to ensure these large energy projects get approved as quickly as possible.

Then the North American Free Trade Agreement moved in to provide its impetus in all of this. Under the North American Free Trade Agreement, there is a proportionality clause that means, essentially, that once we have started exporting the raw bitumen in such large quantities to the United States, we cannot reduce the quantities we export unless we reduce what we send to ourselves.

An independent outside analysis of just one of those projects, the Keystone project, concluded that there were 18,000 jobs being exported to the U.S. at the same time. Like a third world country, we do not even add the value here. There is no processing. Nothing is added. There is no refining. We are not doing anything with it to create permanent, long-term jobs here. It is a shameful way of destabilizing the balanced economy that we have built up since the second world war.

The government has always argued that it is not what is really happening, that those of us who say that the government can and should play a role in building a stable economy are trying to pick winners. The Conservatives have chosen their winners and it is the oil companies and the banks. People are going to pay for those lousy choices. Instead of looking at the most productive jobs and the most forward-looking parts of the economy, things that could be helping us for the future, creating a system of green renewables across the country, that is all going to be lost.

We have had an extraordinary occasion for the past five years to do something for future generations, but the vituperative, closed, narrow-minded attitude of the Conservatives has meant that they spew their venom at those who want the government to do something right with the economy. They claim to be doing a good job, but today's Reuters article, which will be in various forms in all of the economic papers across Canada tomorrow, prove just the contrary, that what the NDP has been saying for years in the House, that the Conservatives are destroying the balanced economy that Canada built up since the second world war, is in fact true.

The NDP is not alone in saying that Canada is suffering from the Conservatives' political and economic choices. It is now proven by today's statistics from Statistics Canada. That is why the NDP has no issues with saying that Bill C-47 will never receive our support, no more than Bill C-9 will, because it reflects the Conservatives' overall budget policy.

Earlier, I listened patiently to the member for Hochelaga, who said that the NDP was going to vote against, but he did not know why. I will return the compliment to my friend and colleague, the member for Hochelaga, by saying that, aside from general remarks about Bill C-47—he seems to have plenty to draw on—it would have been nice if he had told us exactly which clauses in Bill C-9 he likes. Furthermore, with everything we now know about the awful consequences of emptying the employment insurance fund, how can he support a bill that deals yet another blow to employment insurance? How can he support a bill that imposes yet more taxes on people who buy airplane tickets? How can he stand there and vote on the harmonized value-added tax without saying a word about how Quebec was the first province to harmonize its taxes? I was in the National Assembly when that happened. When the maritime provinces later did the same thing, I was there, and I saw how Bernard Landry reacted, with good reason, by saying that Quebec had already harmonized its taxes and was entitled to the same compensation the maritime provinces received.

They said the rules had changed. Even though Quebec was the first, its harmonization was not the same as theirs, so only the maritime provinces would receive compensation. It just so happens that the maritime provinces were about to vote in a federal election, and the Liberals really needed their support.

Then the same thing happened in British Columbia and Ontario. We have already spoken out against that, and we know how the story played out. Still, they said that the rules had changed again.

For all of these reasons, the NDP will once again vote against the Conservative government's budget policies.

[Marc Garneau, Liberal, Westmount—Ville-Marie, QC]

Okay.

I guess the last part is that if none of the things that are to be rewritten for Bill C-9 occur, does the impact of Bill C-501 change for you?

[Leigh Ann Bastien]

I can make a couple of observations, first about Bill C-501.

The stated intention for Bill C-501 is that the entire deficit become one held by a super-secured creditor. The words in Bill C-501 are less definite. I would say that when you're doing your clause-by-clause, it's very important to be sure that the words match what you think they ought to mean.

Bill C-501 refers to regulations made under the Pension Benefits Standards Act. It defines the liability that it's targeting by way of a regulation. Under Bill C-9 that regulation has yet to be rewritten; it's going to be rewritten.

So you have a moving landscape. That's my first observation.

Secondly, what we see in Bill C-9—in the statute itself, prior to seeing the regulation—is that there are special payments that are due up until the date of a plan termination. I think I heard a reference to this earlier today. Some think this is the intended scope of Bill C-501. But Bill C-9 introduced a new element to pension plan funding. That's an obligation to fully fund the deficit after a plan is terminated and to fully fund it over five years.

In my view, the language in Bill C-501 is not clear enough to tell me with any certainty that this liability has been excluded. In fact, I think you can even read it to say that the entire deficit is captured, even though Bill C-9 doesn't require a full deficit funding in one moment but requires it over five years.

[Marc Garneau, Liberal, Westmount—Ville-Marie, QC]

Thank you, Mr. Chair.

I'd like to ask my question to Madame Bastien.

I know you were here in the previous session, so you may have heard me asking a question of Mr. Breton. It was concerning the issue of arrears and special payments. That seemed to be what Bill C-501 was addressing. I was asking how much effect that would have, really, on the markets. He brought in the fact that it wasn't just Bill C-501; it was also Bill C-9.

I heard you mention that you're familiar with Bill C-9, so I was wondering if you might shine some light on the linkage, to show why it's a bigger thing than perhaps I've appreciated.