Bill C-45 (Historical)

Jobs and Growth Act, 2012

A second Act to implement certain provisions of the budget tabled in Parliament on March 29, 2012 and other measures

Part 1 implements certain income tax measures and related measures proposed in the March 29, 2012 budget. Most notably, it
(a) amends the rules relating to Registered Disability Savings Plans (RDSPs) by
(i) replacing the 10-year repayment rule applying to withdrawals with a proportional repayment rule,
(ii) allowing investment income earned in a Registered Education Savings Plan (RESP) to be transferred on a tax-free basis to the RESP beneficiary’s RDSP,
(iii) extending the period that RDSPs of beneficiaries who cease to qualify for the Disability Tax Credit may remain open in certain circumstances,
(iv) amending the rules relating to maximum and minimum withdrawals, and
(v) amending certain RDSP administrative rules;
(b) includes an employer’s contributions to a group sickness or accident insurance plan in an employee’s income in certain circumstances;
(c) amends the rules applicable to retirement compensation arrangements;
(d) amends the rules applicable to Employees Profit Sharing Plans;
(e) expands the eligibility for the accelerated capital cost allowance for clean energy generation equipment to include a broader range of bioenergy equipment;
(f) phases out the Corporate Mineral Exploration and Development Tax Credit;
(g) phases out the Atlantic Investment Tax Credit for activities related to the oil and gas and mining sectors;
(h) provides that qualified property for the purposes of the Atlantic Investment Tax Credit will include certain electricity generation equipment and clean energy generation equipment used primarily in an eligible activity;
(i) amends the Scientific Research and Experimental Development (SR&ED) investment tax credit by
(i) reducing the general SR&ED investment tax credit rate from 20% to 15%,
(ii) reducing the prescribed proxy amount, which taxpayers use to claim SR&ED overhead expenditures, from 65% to 55% of the salaries and wages of employees who are engaged in SR&ED activities,
(iii) removing the profit element from arm’s length third-party contracts for the purpose of the calculation of SR&ED tax credits, and
(iv) removing capital from the base of eligible expenditures for the purpose of the calculation of SR&ED tax incentives;
(j) introduces rules to prevent the avoidance of corporate income tax through the use of partnerships to convert income gains into capital gains;
(k) clarifies that transfer pricing secondary adjustments are treated as dividends for the purposes of withholding tax imposed under Part XIII of the Income Tax Act;
(l) amends the thin capitalization rules by
(i) reducing the debt-to-equity ratio from 2:1 to 1.5:1,
(ii) extending the scope of the thin capitalization rules to debts of partnerships of which a Canadian-resident corporation is a member,
(iii) treating disallowed interest expense under the thin capitalization rules as dividends for the purposes of withholding tax imposed under Part XIII of the Income Tax Act, and
(iv) preventing double taxation in certain circumstances when a Canadian resident corporation borrows money from its controlled foreign affiliate;
(m) imposes, in certain circumstances, withholding tax under Part XIII of the Income Tax Act when a foreign-based multinational corporation transfers a foreign affiliate to its Canadian subsidiary, while preserving the ability of the Canadian subsidiary to undertake expansion of its Canadian business; and
(n) phases out the Overseas Employment Tax Credit.
Part 1 also implements other selected income tax measures. Most notably, it introduces tax rules to accommodate Pooled Registered Pension Plans and provides that income received from a retirement compensation arrangement is eligible for pension income splitting in certain circumstances.
Part 2 amends the Excise Tax Act and the Jobs and Economic Growth Act to implement rules applicable to the financial services sector in respect of the goods and services tax and harmonized sales tax (GST/HST). They include rules that allow certain financial institutions to obtain pre-approval from the Minister of National Revenue of methods used to determine their liability in respect of the provincial component of the HST, that require certain financial institutions to have fiscal years that are calendar years, that require group registration of financial institutions in certain cases and that provide for changes to a rebate of the provincial component of the HST to certain financial institutions that render services to clients that are outside the HST provinces. This Part also confirms the authority under which certain GST/HST regulations relating to financial institutions are made.
Part 3 amends the Federal-Provincial Fiscal Arrangements Act to provide the legislative authority to share with provinces and territories taxes in respect of specified investment flow-through (SIFT) entities — trusts or partnerships — under section 122.1 and Part IX.1 of the Income Tax Act, consistent with the federal government’s proposal on the introduction of those taxes. It also provides the legislative authority to share with provinces and territories the tax on excess EPSP amounts imposed under Part XI.4 of the Income Tax Act, consistent with the measures proposed in the March 29, 2012 budget. It also allows the Minister of Finance to request from the Minister of National Revenue information that is necessary for the administration of the sharing of taxes with the provinces and territories.
Part 4 enacts and amends several Acts in order to implement various measures.
Division 1 of Part 4 amends the Trust and Loan Companies Act, the Bank Act, the Insurance Companies Act and the Jobs and Economic Growth Act as a result of amendments introduced in the Jobs, Growth and Long-term Prosperity Act to allow certain public sector investment pools to directly invest in a federally regulated financial institution.
Division 2 of Part 4 amends the Canada Shipping Act, 2001 to permit the incorporation by reference into regulations of all Canadian modifications to an international convention or industry standard that are also incorporated by reference into the regulations, by means of a mechanism similar to that used by many other maritime nations. It also provides for third parties acting on the Minister of Transport’s behalf to set fees for certain services that they provide in accordance with an agreement with that Minister.
Division 3 of Part 4 amends the Canada Deposit Insurance Corporation Act to, among other things, provide for a limited, automatic stay in respect of certain eligible financial contracts when a bridge institution is established. It also amends the Payment Clearing and Settlement Act to facilitate central clearing of standardized over-the-counter derivatives.
Division 4 of Part 4 amends the Fisheries Act to amend the prohibition against obstructing the passage of fish and to provide that certain amounts are to be paid into the Environmental Damages Fund. It also amends the Jobs, Growth and Long-term Prosperity Act to amend the definition of Aboriginal fishery and another prohibition relating to the passage of fish. Finally, it provides transitional provisions relating to authorizations issued under the Fisheries Act before certain amendments to that Act come into force.
Division 5 of Part 4 enacts the Bridge To Strengthen Trade Act, which excludes the application of certain Acts to the construction of a bridge that spans the Detroit River and other works and to their initial operator. That Act also establishes ancillary measures. It also amends the International Bridges and Tunnels Act.
Division 6 of Part 4 amends Schedule I to the Bretton Woods and Related Agreements Act to reflect changes made to the Articles of Agreement of the International Monetary Fund as a result of the 2010 Quota and Governance Reforms. The amendments pertain to the rules and regulations of the Fund’s Executive Board and complete the updating of that Act to reflect those reforms.
Division 7 of Part 4 amends the Canada Pension Plan to implement the results of the 2010-12 triennial review, most notably, to clarify that contributions for certain benefits must be made during the contributory period, to clarify how certain deductions are to be determined for the purpose of calculating average monthly pensionable earnings, to determine the minimum qualifying period for certain late applicants for a disability pension and to enhance the authority of the Review Tribunal and the Pension Appeals Board. It also amends the Department of Human Resources and Skills Development Act to enhance the authority of the Social Security Tribunal.
Division 8 of Part 4 amends the Indian Act to modify the voting and approval procedures in relation to proposed land designations.
Division 9 of Part 4 amends the Judges Act to implement the Government of Canada’s response to the report of the fourth Judicial Compensation and Benefits Commission regarding salary and benefits for federally appointed judges. It also amends that Act to shorten the period in which the Government of Canada must respond to a report of the Commission.
Division 10 of Part 4 amends the Canada Labour Code to
(a) simplify the calculation of holiday pay;
(b) set out the timelines for making certain complaints under Part III of that Act and the circumstances in which an inspector may suspend or reject such complaints;
(c) set limits on the period that may be covered by payment orders; and
(d) provide for a review mechanism for payment orders and notices of unfounded complaint.
Division 11 of Part 4 amends the Merchant Seamen Compensation Act to transfer the powers and duties of the Merchant Seamen Compensation Board to the Minister of Labour and to repeal provisions that are related to the Board. It also makes consequential amendments to other Acts.
Division 12 of Part 4 amends the Customs Act to strengthen and streamline procedures related to arrivals in Canada, to clarify the obligations of owners or operators of international transport installations to maintain port of entry facilities and to allow the Minister of Public Safety and Emergency Preparedness to require prescribed information about any person who is or is expected to be on board a conveyance.
Division 13 of Part 4 amends the Hazardous Materials Information Review Act to transfer the powers and functions of the Hazardous Materials Information Review Commission to the Minister of Health and to repeal provisions of that Act that are related to the Commission. It also makes consequential amendments to other Acts.
Division 14 of Part 4 amends the Agreement on Internal Trade Implementation Act to reflect changes made to Chapter 17 of the Agreement on Internal Trade. It provides primarily for the enforceability of orders to pay tariff costs and monetary penalties made under Chapter 17. It also repeals subsection 28(3) of the Crown Liability and Proceedings Act.
Division 15 of Part 4 amends the Employment Insurance Act to provide a temporary measure to refund a portion of employer premiums for small businesses. An employer whose premiums were $10,000 or less in 2011 will be refunded the increase in 2012 premiums over those paid in 2011, to a maximum of $1,000.
Division 16 of Part 4 amends the Immigration and Refugee Protection Act to provide for an electronic travel authorization and to provide that the User Fees Act does not apply to a fee for the provision of services in relation to an application for an electronic travel authorization.
Division 17 of Part 4 amends the Canada Mortgage and Housing Corporation Act to remove the age limit for persons from outside the federal public administration being appointed or continuing as President or as a director of the Corporation.
Division 18 of Part 4 amends the Navigable Waters Protection Act to limit that Act’s application to works in certain navigable waters that are set out in its schedule. It also amends that Act so that it can be deemed to apply to certain works in other navigable waters, with the approval of the Minister of Transport. In particular, it amends that Act to provide for an assessment process for certain works and to provide that works that are assessed as likely to substantially interfere with navigation require the Minister’s approval. It also amends that Act to provide for administrative monetary penalties and additional offences. Finally, it makes consequential and related amendments to other Acts.
Division 19 of Part 4 amends the Canada Grain Act to
(a) combine terminal elevators and transfer elevators into a single class of elevators called terminal elevators;
(b) replace the requirement that the operator of a licensed terminal elevator receiving grain cause that grain to be officially weighed and officially inspected by a requirement that the operator either weigh and inspect that grain or cause that grain to be weighed and inspected by a third party;
(c) provide for recourse if an operator does not weigh or inspect the grain, or cause it to be weighed or inspected;
(d) repeal the grain appeal tribunals;
(e) repeal the requirement for weigh-overs; and
(f) provide the Canadian Grain Commission with the power to make regulations or orders with respect to weighing and inspecting grain and the security that is to be obtained and maintained by licensees.
It also amends An Act to amend the Canada Grain Act and the Agriculture and Agri-Food Administrative Monetary Penalties Act and to Repeal the Grain Futures Act as well as other Acts, and includes transitional provisions.
Division 20 of Part 4 amends the International Interests in Mobile Equipment (aircraft equipment) Act and other Acts to modify the manner in which certain international obligations are implemented.
Division 21 of Part 4 makes technical amendments to the Canadian Environmental Assessment Act, 2012 and amends one of its transitional provisions to make that Act applicable to designated projects, as defined in that Act, for which an environmental assessment would have been required under the former Act.
Division 22 of Part 4 provides for the temporary suspension of the Canada Employment Insurance Financing Board Act and the dissolution of the Canada Employment Insurance Financing Board. Consequently, it enacts an interim Employment Insurance premium rate-setting regime under the Employment Insurance Act and makes amendments to the Canada Employment Insurance Financing Board Act, the Department of Human Resources and Skills Development Act, the Jobs, Growth and Long-term Prosperity Act and Schedule III to the Financial Administration Act.
Division 23 of Part 4 amends the Canadian Forces Superannuation Act, the Public Service Superannuation Act and the Royal Canadian Mounted Police Superannuation Act and makes consequential amendments to other Acts.
The Canadian Forces Superannuation Act is amended to change the limitations that apply in respect of the contribution rates at which contributors are required to pay as a result of amendments to the Public Service Superannuation Act.
The Public Service Superannuation Act is amended to provide that contributors pay no more than 50% of the current service cost of the pension plan. In addition, the pensionable age is raised from 60 to 65 in relation to persons who become contributors on or after January 1, 2013.
The Royal Canadian Mounted Police Superannuation Act is amended to change the limitations that apply in respect of the contribution rates at which contributors are required to pay as a result of amendments to the Public Service Superannuation Act.
Division 24 of Part 4 amends the Canada Revenue Agency Act to make section 112 of the Public Service Labour Relations Act applicable to the Canada Revenue Agency. That section makes entering into a collective agreement subject to the Governor in Council’s approval. The Division also amends the Canada Revenue Agency Act to require that the Agency have its negotiating mandate approved by the President of the Treasury Board and to require that it consult the President of the Treasury Board before determining certain other terms and conditions of employment for its employees.

Bill C-45—Time Allocation Motion

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, the government should be ashamed of itself, because once again it moved time allocation on a very important piece of legislation, which ultimately would have a profound impact and which encompasses many changes with respect to other pieces of legislation that should have been introduced in a separate fashion.

This is part two of a previous government budget bill. Canadians do want to ensure that there is legitimate debate, but unfortunately the government has chosen to deny that.

I will provide a classic example. At a time when we are losing services for immigrants and the unemployed, and so many thousands of jobs are being lost, in the same year we have the government increasing the size of the House of Commons. It will be creating 30 new seats for members of Parliament at a time when we are having serious cutbacks in terms of services for real Canadians. That is all about bad priorities.

Unfortunately, even the New Democrats are supporting increasing the number of members of Parliament. That is why it will be up to the Liberal Party to ensure that the government recognizes what is important and what the priorities are when it comes to immigration services, unemployment services and so forth.

My question to the government is this. Why has it decided to once again bring in time allocation to try to expedite the bill and deny the opportunity for true accountability inside the House of Commons by bundling it and then rushing it through in an undemocratic fashion?

[Ted Menzies, Conservative, Macleod, AB]

Mr. Speaker, that was a bit of a wandering question, much of it not even part of the discussion of the budget implementation act—in fact most of it, I would suggest.

Talking about representation, this is our opportunity to represent our constituents. This is our opportunity for all members of Parliament to talk about what the benefits are and what more we can do to help our constituents. I talked previously about the $1,000 hiring credit for small businesses, which is very effective.

We are improving the registered disability savings plan in this budget implementation act. It is a very effective program and very helpful to families who have disabled members, whether they are children or adults. We have found some ways to enhance that. We have been communicating with the provinces. There have been some challenges to get the financial institutions the authorities they need to make sure the money stays with the family member. We have been working on that and we found some solutions. That is part of this. Let us talk about something like that.

[Bev Shipley, Conservative, Lambton—Kent—Middlesex, ON]

Mr. Speaker, I want to thank the Minister of State for Finance for taking the time today to be part of this great discussion. I agree that we need to focus on what is really going to be important in this bill.

In my riding of Lambton—Kent—Middlesex, it is basically rural and small businesses. Small businesses employ around 50% of the people in Canada. What are most of the businesses in Canada, in the high 90%? They are small businesses. In budget 2011, we brought in the hiring credit for small businesses. It is deemed to have been successful and in this bill there is an extension of that hiring credit for small business.

I know you have talked about it, Mr. Minister, and I am wondering if you could again talk about the significance of it in this country, not only in Lambton—Kent—Middlesex but for small businesses that are, quite honestly, the engine of this country.

[The Deputy Speaker, NDP, Joe Comartin]

I would remind all members to address their questions to the Chair.

The hon. minister of state.

[Ted Menzies, Conservative, Macleod, AB]

Mr. Speaker, I thank my hon. colleague and friend for raising a very important issue. I know he works hard with the small businesses in his riding. Most of us have heard from small businesses that this has actually helped them. This will provide, as I said before, an opportunity for some 536,000 businesses across this country to hire new Canadians to continue with the job growth, a job growth that I would remind all hon. members is the strongest job recovery growth in the G7. We are expecting to be among the strongest growth in the economy, but this is the strongest job recovery in the entire G7. We have recovered all of the jobs lost and the economic loss as well. It was through policies such as this.

This is an innovative policy that was put forward on a temporary basis. We cannot continue it until it is legislated. Let us get it to committee, approve it, legislate it and provide businesses the opportunity to hire more Canadians.

[Bruce Hyer, Independent, Thunder Bay—Superior North, ON]

Mr. Speaker, many of us on this side are commenting about the unfortunate way these omnibus budget bills are going forward, in a hypocritical manner.

In the last election, I remember the newly re-elected Prime Minister making a promise to Canadians in the media. He did not use the words “false majority”, but given that he got only 39% of the popular vote, therefore he has a false majority. He promised to represent not only that 39% but all Canadians, the two-thirds who did not vote for him as well. Yet today we have evidence that is not happening. We are having inadequate debate because Conservatives feel they have a majority and can rush through whatever they want.

I would like the hon. member to explain why the Conservatives, the Prime Minister and he are not adequately representing all Canadians on these important issues.

[Ted Menzies, Conservative, Macleod, AB]

Mr. Speaker, members will not be surprised to hear me disagree with that comment. I would suggest that we actually are representing all Canadians. We are representing our constituents, as the opposition members will have adequate time to do.

Rather than standing and asking process questions, we should be talking about what is actually in this. There are a number of policies that we are putting forward, extensions of some of the good work that has helped create jobs.

We will have ample opportunity, as we move this to the health committee, the transport, infrastructure and communities committee, the aboriginal affairs and northern development committee, the agriculture and agri-food committee, the environment and sustainable development committee, the fisheries and oceans committee, the justice and human rights committee, the public safety and national security committee, the human resources, skills and social development and status of persons with disabilities committee, which is where the RDSP will go, the citizenship and immigration committee, and let us not forget the finance committee which will be reviewing the tax improvements that are in this.

There will be ample opportunity to discuss all of these policies. We can bring witnesses in to talk about the benefits that they will see from this.

We encourage hon. members to get on with it. If they want to discuss more about what is in the budget legislation right now, I am happy to do that. Let us move forward and get it to committee where we can discuss it at length.

[Sadia Groguhé, NDP, Saint-Lambert, QC]

Mr. Speaker, I must say, I am genuinely outraged, because we have seen this sort of thing before. The Conservatives have become experts in time allocation motions.

I think this does a real disservice to our democratic process, because when the government refuses to allow us as members, as parliamentarians, to debate a bill as important as Bill C-45, it is an affront once again to our democracy. This is also an affront to Canadians, because muzzling us, the members of the House, means muzzling all Canadians.

I want to say that we can still discuss and debate the contents of the bill, both here in the House and in committees. The work of parliamentarians is done in both places. It is important to remember that.

[Ted Menzies, Conservative, Macleod, AB]

Mr. Speaker, I am certainly not, in any way, trying to diminish the great work that is done within this House of Commons.

We do not all get back to our ridings every weekend but we try to engage our constituents and to listen to what they are saying. We get back on a break week and we talk to them then. However, there is no better way to engage citizens than through the committee process. Those witnesses come to the committee with a specific purpose to speak to a specific piece of this legislation. They will bring their thoughts and some of those are very learned thoughts. We need to hear that from those individuals who would benefit from many of the policy changes and improvements that we are putting in this budget implementation bill. Those are the people we need to hear from and that is important.

We can debate it here, and it is helpful, but there is a tremendous benefit to moving this to all of the committees that I referred to earlier. That is very important to provide the opportunity for each one of the members of Parliament to sit on those committees and to ask the questions of the witnesses who will appear.

We need to hear from them, and then move this as quickly as we can. A number of the items that are in here are actually time sensitive. We need to get these moving. For example, we need to get the tax credits moving so we can actually implement them.

[Elizabeth May, Green, Saanich—Gulf Islands, BC]

Mr. Speaker, my question is for the hon. Minister of State for Finance . I preface it by requesting him to please not criticize members of the opposition when our response to a motion on process and procedure is to respond to a motion on process and procedure. I always try to ensure my comments are relevant to the matters at hand and I find it frustrating when others do not.

As a matter of process, the motion before us is to expedite a bill, as others have noted, of over 400 pages that would effect changes to many different of laws. Many of them have nothing to do, with all due respect, to a budget that was tabled in March 2012. They have nothing to do with jobs, growth and the economy. I point to changes, for instance, that would demand that visitors to Canada from foreign nations fill out forms in advance. These are new barriers to tourism. In that sense, I suppose it is related to jobs because it would cost jobs.

I look at the Navigable Waters Protection Act and realize that we could get quite far at debate in second reading in identifying some of the issues before this goes to committee. For instance, we have been told not to worry, that although federal rights of navigation have disappeared from most of Canada's waterways, they are protected in common law. How on earth will the Canadian who finds that navigation has been impaired find the money to hire the lawyers to go to court to redress damage already done by seeking remedies in common law? This is an excuse and not an answer.

I would ask my hon. friend to allow full debate. It is the government of the day, the Privy Council's choice, to bring forward an enormous bill. It requires full debate.

[Ted Menzies, Conservative, Macleod, AB]

Mr. Speaker, I could not agree more, which is why we are trying to give it full debate and, I would suggest, more debate than any other budget bill has actually had. We are trying to move it to all of these different committees. All I am encouraging hon. members to do is to get it to those committees so we can actually talk about it.

The hon. member talked about navigable waters. I will explain exactly what the amendments to the act would do. They would clearly define the major waterways upon which regulatory approval is required prior to the placement or construction of a work and rely on the common law to protect navigation in long listed waters. We all have examples, especially those of us in rural Canada, of where this change is needed. For example, I had a feedlot in my riding where, because a culvert was washed out in a flood, e 10,000 cattle could have perished because we could not get feed to them. It was an intermittent stream. We simply wanted to put the culvert back in place. It took months to get that done. There were no fish in that because it was an intermittent stream. We are trying to bring some common sense to what is navigable water and what is not.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Mr. Speaker, I have two very succinct points for my friend across the way.

First, this is the natural stage of a bill which the government has chosen today procedurally to shut down debate. The Conservatives are limiting the amount of time that MPs will have to interact and hold the government to account. I will look for a very specific commitment from my friend because he has made much of these committees that will now have a chance to look at the bill but not actually affect the bill, which is a strange way to divide the bill for further studies. MPs will be there, they can look at it, they can hear from witnesses but they cannot make any amendments for changes.

The government says that it wants full debate and study at these committees. Will the member's government commit to not moving time allocation and closure, which it has done for the first stage, at the second stage and third stage which is when it comes back to the House? Will he commit to at least that today for Canadians, that there will be no time allocation at committee, that we can hear from those witnesses, take the testimony, improve the mistakes and make this bill something that will actually hold up in court, in law and in practice?

[Ted Menzies, Conservative, Macleod, AB]

Mr. Speaker, as members know, committees are masters of their own destiny so we will leave those decisions up to the committees. However, we need to assume that we will be able to bring witnesses on both sides of the debate. That is what the committee process is all about and we will leave it up to the committees to decide.

[The Deputy Speaker, NDP, Joe Comartin]

That completes the 30 minutes allocated for that session.

The question is on the motion. Is it the pleasure of the House to adopt the motion?

[Some hon. members]

Agreed.

No.