This bill was last introduced in the 41st Parliament, 1st Session, which ended in September 2013.
Jim Flaherty Conservative
This bill has received Royal Assent and is now law.
This is from the published bill. The Library of Parliament often publishes better independent summaries.
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.
All sorts of information on this bill is available at LEGISinfo, an excellent resource from the Library of Parliament. You can also read the full text of the bill.
Sadia Groguhé NDP Saint-Lambert, QC
Mr. Speaker, I thank my colleague for her speech. However, this House should be reminded that this is another omnibus bill that covers many laws. It is imperative that the bill be debated in this House and also studied in committee.
My question concerns the Navigable Waters Act. Can our colleague tell us what compensation the provinces will receive to defray the cost of their new responsibilities?
Cathy McLeod Conservative Kamloops—Thompson—Cariboo, BC
Mr. Speaker, I am pleased to talk about the Navigable Waters Protection Act. I think my example said it all. It was creating a lot of bureaucracy for what was, in this case, a little creek that did not need that bureaucracy associated with it. We were focused on navigation, which is what it is. It is not about environment. Navigable waters is about navigation.
I think what we will find is that it would remove an incredible amount of time and bureaucracy in terms of moving forward. The municipalities are very enthused about having this legislation changed.
James Rajotte Conservative Edmonton—Leduc, AB
Mr. Speaker, it is a pleasure to speak today to Bill C-45, a second act to implement certain provisions of the budget tabled in Parliament on March 29, 2012 and other measures.
It is very important legislation that deals with a lot of specific technical changes, such as changes to the registered disability savings plan, which was introduced by this government and is a benefit for families to deal with some of the costs related to a person in the family with a disability. It also deals with changes to the Indian Act, which is something that was presented to the finance committee by the member for Macleod. A member of the Kamloops Band presented the idea with respect to changing the ownership on reserves. This would be a real step forward and it is something I will return to later in my remarks. There are number of measures in this comprehensive legislation.
As chair of the finance committee, I thought I would provide some context for members of Parliament and Canadians in terms of the process that we go through to arrive at budget implementation acts.
The process actually starts at the finance committee each fall. In fact, it starts in June when the finance committee sends out a notice asking Canadians to give us their thoughts on what should be in the next budget in the upcoming budgetary cycle. Canadians respond and, over the last two years, in dramatic numbers. This year we have had nearly 800 submissions from organizations and individuals from across Canada giving us their thoughts on what should be in the next budget.
This year we tried a slightly different process. We put five questions on the public website and asked Canadians to respond to those five questions. We put all the responses online. This is the second time we have done this as a committee. We want to be very transparent in terms of the input the committee is receiving.
The deadline for submissions was in the summer. We then had the submissions translated and put online. Members of the finance committee from all parties are now working diligently to go through those submissions.
In addition to that, we are doing what the committee has done for over a decade now, which is to hear from individuals and organizations before the committee. We will hear from approximately 120 organizations and individuals. We will have a very good dialogue with members of Parliament in terms of what should be in the next budget.
This is a very broad process and there is no topic that cannot be raised at the finance committee in prebudget consultations. However, following some of the discussions last year on the first budget implementation act, there was the thought that maybe we should narrow our focus at the finance committee but members from all sides said no, that it should be a very broad public consultation process. Anyone should be able to come and say anything in terms of where the country should go because fiscal matters are incredibly broad. We hear from environmental groups, health groups, aboriginal groups, small business organizations and chambers of commerce across the country, anyone bringing forward any type of measure. This is not simply related to tax, financial or fiscal information. It is very broad. It is a fantastic discussion and I think members from all sides enjoy the debate.
That then leads to the committee deliberating on what should go into the report that it will table in Parliament in December. Obviously, that report is public and Canadians can compare the submissions that came into the committee to what the committee decided in terms of what it wants to recommend to the government for the next budget. The Minister of Finance then takes the report under consideration and presents the budget typically in February or March.
I would remind members that the budget document is the primary document that the government presents to Parliament each and every year and it is a very broad document. Here are some of the sections in the budget that the minister tabled in March.
With regard to entrepreneurs, innovators and world-class research, the budget proposes to support the research and innovation that is happening in this country, as well as education and training at the universities and colleges across the country.
Improving conditions for business investment deals with a lot of the changes to SR&ED and acts on the Jenkins report, which the government commissioned and which I think it was a report that was fairly well received in all quarters.
The budget also deals with investing in our natural resources; expanding trade and opening new markets for Canadian businesses; keeping taxes low for job creators; strengthening business competitiveness; financial sector advantages; and investing in trade infrastructure and opportunities, which involves human resources in terms of investing in the skills that Canadians have.
On infrastructure, there is the Minister of Transport, Infrastructure and Communities, but all the infrastructure is funded first through finance.
On expanding opportunities for aboriginal peoples to fully participate, obviously we have a committee and a minister that deals with aboriginal peoples but that is all funded through the budget first.
Supporting families and communities, investing in communities, protecting Canada's natural environment and wildlife, and the sustainable management of public finances are all included in a very large budget document, but the budget document itself, as a policy document, is somewhat specific. In certain areas it outlines in general where the government would want to go with respect to items like responsible resource development, the deficit reduction action plan and returning to balanced budgets over the medium term. Various officials then draft legislation to deal with the budget. They typically do two budget implementation acts, one in the spring and one in the fall. They are very comprehensive pieces of legislation.
In terms of the deficit reduction action plan, which is a policy that was endorsed by Parliament after the budget was introduced, all of the specific items under that action plan are then put forward in the two implementation acts which, in my view, is the way it should be happen. The overall policy should be in the budget, but the specific items, which are what we dealt with both in the act in the spring and then partly in this act, actually deal with everything that is in the deficit reduction action plan.
Some people have asked if they would be able to vote. Our colleague across the way from the official opposition asked legitimately if they could vote on each and every section. In fact, they can at committee. As the member knows, we vote on each and every clause at committee and the official opposition and the Liberal Party can choose to support or oppose that specific clause on the record. We can have recorded votes on any specific clause at committee and the member could say they voted in favour of that clause but still oppose the bill at third reading. That is certainly an option for the members opposite. It is important to know that process.
I want to return to one specific item that was raised by Manny Jules, someone whom I think has been a real trailblazer in trying to improve economic development and the economic opportunities for aboriginals within this country. I believe it was three years ago, and I am looking at the member for Macleod and hoping I am correct in my timeline, that the finance committee actually met Mr. Jules.
We went to a former residential school, which has now been turned into offices, and he described to us the challenges that first nations people have in owning property on reserves. He said there have been some steps forward in this area, but we need to do more to change the legislation to ensure that aboriginal people have the same full opportunities on reserve, frankly, that other Canadians have in terms of ownership of property.
It was a very interesting idea. I thought members of all parties listened to the idea very carefully and in varying degrees, I think they all thought it was a good idea that should be followed up. It has been looked at. It was endorsed by the finance committee in a report. While it is technically under aboriginal affairs, it actually did end up in the budget and it is therefore in a budget implementation act.
This is the way the process has worked for years. This is not something the Conservative government has invented. This is, in my view, the way the process should work. It should go back to an idea presented to a parliamentary committee. That committee puts it in a report. It goes in a budget and then it goes into a budget implementation act. There is a thread through that entire process that I think we have to draw attention to.
In terms of some of the other changes in the implementation act, I know members at committee will take them very seriously. They will go through all the items. In terms of registered disability plans, something that we introduced as a government, many of the people who have used the benefit have said there are ways in which the program could be improved.
People talked about the navigation act. The Federation of Canadian Municipalities, municipalities in my area and other areas across this country have said to the government that it has to amend this act in terms of municipalities and their own growth and investment so that they can move forward.
These are responses to things we hear at committee, which are later put in the budget and then come into the budget implementation act.
I want members to go through that whole process. At committee they can do a very thorough study. The government has indicated it is very open to other committees studying the legislation. I heard the member for Wascana say he saw that as something he would certainly welcome.
It is my understanding that we could have any other committee study a piece of the bill and report it back to the finance committee. The finance committee members can then vote yea or nay to any specific clause or provision of the bill.
I look forward to comments from the other side but I do hope they take into account the whole process that occurs, with the policy idea originating here and ending up in a budget implementation act at the end.
Guy Caron NDP Rimouski-Neigette—Témiscouata—Les Basques, QC
Mr. Speaker, I listened to the speech by the chair of the Standing Committee on Finance, of which I am currently a member. I found it interesting that he mentioned that, on this committee, members can generally vote on each clause of a monster bill such as this one. He is correct in stating that we vote on each clause. However, that is just one of the steps. There is first reading, which does not require a vote. At second reading, we debate the bill and vote. Then there is report stage, and another vote. Finally there is third reading, which is also subject to a vote.
Each time we must vote as a block. I am sure that the member will agree with me that it is the last vote, at third reading stage, that gets the public's attention. It is also the vote to which government members refer when they say that the opposition voted against a particular measure. If they would just check what happened in committee, they would see that we quite often vote in favour of good measures.
The member spoke about process. The Minister of Finance says that there are no surprises in the budget implementation bill because all the measures were already in the 2012 budget. However, there is no mention of abolishing the Grain Appeal Tribunal, the Hazardous Materials Information Review Commission and the Canada Employment Insurance Financing Board. So—
The Acting Speaker Conservative Bruce Stanton
I am sorry to interrupt the member for Rimouski-Neigette—Témiscouata—Les Basques, but his time has expired.
The member for Edmonton—Leduc.
James Rajotte Conservative Edmonton—Leduc, AB
Mr. Speaker, I want to thank my colleague, who serves and works very well on the finance committee. In fact I think he made some of my arguments for me in the sense of the process.
First reading, as we all know, is simply an introduction of the bill in the House. Second reading is a broad public policy debate and a vote in general on the principle of the bill as to whether members support it or not. Then at committee stage we go through the bill clause by clause.
We generally start with officials that go through each and every clause of the bill. Members can ask questions. We hear from witnesses who may support or oppose any one of those clauses. Then there are votes on each and every one of the clauses themselves and any member can ask for a recorded vote on any clause. If the member himself wants to vote against the bill in its entirety but support certain clauses, it is on the record. It is public and usually televised. The member could then refer to how he voted any time he wants to.
The bill comes back at report stage, as he pointed out, and there is opportunity for further amendments that could not have been moved at the committee. Then there is a vote on the third and final reading and it goes through the process in the Senate. I think that is a very good process.
In terms of certain items, the deficit reduction action plan, which I referenced in my speech, was a general policy put forward by the government and embraced by Parliament, which said that we wanted to reach a balanced budget in the medium term. The work the Treasury Board committee did on the deficit reduction action plan is now resulting in certain changes that are in the budget implementation act. The start of it was the deficit reduction action plan.
The Acting Speaker Conservative Bruce Stanton
I appreciate the enthusiasm that members have for their comments and questions. I would just ask, particularly when we are in a five-minute question period that follows a 10-minute speech, that hon. members keep their comments and responses as brief as they can. We can see the interest that members have in questioning the various speakers.
Questions and comments, the hon. member for Kingston and the Islands.
Ted Hsu Liberal Kingston and the Islands, ON
Mr. Speaker, on January 1, the EI premiums are going to be hiked for small businesses something like $400 million. The government is offering a tax credit for small businesses to offset that but it is only $200 million. I would like to ask the chair of the finance committee if he would support doubling that tax credit for small businesses so that his fellow Conservative members would not have to vote for a tax hike on small businesses.
James Rajotte Conservative Edmonton—Leduc, AB
Mr. Speaker, I will try to keep my response brief but it is a fairly technical question. We do not want to do what the previous government did, which was to take EI premiums and use them for general revenues and move toward a balanced budget on the backs of entrepreneurs and people who are paying EI premiums. That is why we want to move to a system that is self-sustaining over the short, medium and long term.
With respect to the hiring credit, I hope the member and his party consider voting for this budget implementation act specifically because of the extension of the hiring credit, which was one of the main things that small businesses and the Canadian Federation of Independent Business asked for in their presentation to the finance committee.
We have also restrained the increase, though, in terms of trying to find a balance between the premiums that are going in and the moneys that are going out from that. It is not a specific fund, but trying to equalize that was also a recommendation made by small businesses. We have to balance every single suggestion, such as the one that the member made, but another suggestion from small businesses was to move to a balanced budget over the medium term.
One of the strongest recommendations of the CFIB each and every year is that the government must move toward a balanced budget and live within its means. We owe it to people living in Canada today and to future generations. We have to balance any increase in terms of a hiring credit or anything else against that need to balance our budget over the medium term.
Guy Caron NDP Rimouski-Neigette—Témiscouata—Les Basques, QC
Mr. Speaker, I am pleased to have this opportunity to rise in the House and speak to Bill C-45, Jobs and Growth Act, 2012, even though, clearly, it does not come close to meeting the targeted objectives.
I know the government members do not like talking about procedure. We cannot avoid talking about it, because that is how we can evaluate this government's good governance.
We are opposition members; of course we examine the government's initiatives, particularly those like Bill C-45. We look at the elements that we do agree with, as well as the elements that we oppose. And we suggest ideas that we think could help the government get back on track regarding certain elements that we believe are headed in the wrong direction.
We have a majority government that can decide whether to accept or reject the proposed recommendations. However, based on what happened when the previous mammoth budget bill was introduced in June 2012, we know that this government has no respect for this process, which is absolutely crucial to the good governance of Canada, and particularly of our economy, which is having difficulty right now and needs our attention.
We are dealing with a 450-page budget implementation bill, which is not to be confused with the budget itself. This bill amends, adds or repeals 64 different laws. Thus, this one bill affects 64 different pieces of legislation.
I heard my colleague from Edmonton—Leduc say that this is a completely normal process. I imagine that is why the Conservatives did what they did in June. That must also be why they introduced a bill that was 800 or 900 pages long in 2009, when stimulus was needed for the economy during the recession.
This is not normal. According to media commentators, constitutional experts and parliamentary experts, our parliamentary system was not designed for this. At present, the government is using a single bill to address a good number of issues that, in many cases, have nothing to do with the budget, were not mentioned in the budget and could have very easily been introduced in a separate bill. We have been sitting since the middle of September. Many initiatives that were not introduced could have been introduced at that time in order to be examined separately. Instead, they are all included in this monster bill.
The government often says that we should not just focus on numbers, such as the number of pages and acts, and that we must read the bill. But we must do both. We cannot do away with process, because democracy itself is a matter of process. This government seems to have profound contempt for the democratic process and the parliamentary process. We need only think of the fact that the Prime Minister's Office decided to prorogue Parliament, not as part of the normal process to transition to a new legislative agenda, but simply to protect itself and avoid a defeat on a confidence vote in the House. We need only think of the gag orders or time allocation motions, such as the one we saw this morning for Bill C-45. I cannot even count how many we have had since the last election. Obviously, there is also the use of omnibus bills like the one before us today.
Omnibus bills are not the right approach. Unfortunately, that is what the government has decided to use in this case. We find that deplorable because our economy is cause for concern right now. We have told the government many times. Economic indicators clearly show that we are in a period of uncertainty. The latest unemployment statistics are one example. Despite the creation of 52,100 jobs, the unemployment rate increased by 0.1% in September 2012. Between 2000 and 2009, Canadian productivity increased on average 0.6% a year, but the average for all OECD countries was 1.5% per year. So we are lagging behind right now.
The government claims that it is taking measures, such as Bill C-45 and Bill C-38, and that the economy is its top priority, but at the end of the day, we have to wonder if it is headed in the right direction.
I would like us to consider two situations. The first has to do with productivity, which is more or less stagnant right now. Since 2006, the government has tried different measures to increase productivity, but nothing is working.
A good indicator of productivity is research and development. In the budget and in Bill C-45—for once there is something in the bill before us that actually has to do with the budget—the government introduced changes to the way companies are allowed to do research and development. Instead of issuing tax credits, the government has chosen to provide companies with direct research and development subsidies.
Unfortunately, there are two problems with this approach that the government has not yet addressed. The first problem is that these measures leave the door wide open for the government to pick winners in every industry. The second is that a lot of money has been lost in the process. Consequently, there will be no increases in amounts allocated to research and development or in corporate assistance for research and development. Canada will ultimately lose out as a result, and our productivity will not improve. This is a recurring problem.
There is another problem with the overall reduction in corporate income tax. The government usually argues that the general corporate income tax measure, which was extended in the last budget, is a measure that allows businesses to invest. However, there are two problems with that. When the Conservative government came to power in 2006, the corporate tax rate was 22%. Starting next year, it will be 15%. Every percentage point cut results in a reduction in revenue, which varies from $2 billion to $4 billion, depending on the year. The government is foregoing an enormous amount of tax revenue through this measure, in the hope, of course—since this is the argument of the government and many economists—that businesses will reinvest the money and create employment.
What have we seen so far? Businesses are sitting on approximately $500 billion, half a trillion in unused cash or dead money. This money is not being reinvested. It is currently lying in coffers waiting to be used, and it is not benefiting the economy in any way.
Another aspect that has to be considered in evaluating the success of these measures is whether the money has in fact been reinvested. If we look at Canadian statistics on reinvestment, we see that net real investment has stagnated in the past 10 or 15 years. So the government is making massive tax cuts and losing the tax room for various programs and services that help Canadians, but we are not seeing any significant increase in investment. Private sector businesses are sitting on a considerable amount of cash that could be invested in economic growth but is not.
The government has to ask itself some questions about this situation. It has to ask itself why the methods it is using do not seem to be working. Yet, we are seeing no such introspection on the government's part. This is a major problem. We know the definition of insanity.
The definition of insanity is doing the same thing over and over again and hoping that things will change.
That is what the government is doing. Eventually, the Conservatives are going to have to revise their economic ideology to allow the Canadian economy to achieve its potential. Right now, it most definitely is not.
As I told the chair of the Standing Committee on Finance, the member for Edmonton—Leduc, there are many things in Bill C-45 that were not in the budget. The Conservatives can do all the mental gymnastics they like, but there are things that were not in the budget, contrary to what the Minister of Finance told the House.
A number of these elements are important enough to warrant separate debate.
Take, for example, the elimination of the Canada Employment Insurance Financing Board. It was created by the Conservatives, but never did much of anything. In fact, its only function was to set employment insurance premiums. Once again, a board created for a very specific purpose will be abolished, even though it could have been useful to the government. In the end, even though the government went to the expense of creating it, the board will be shut down, which will result in more power being concentrated in the hands of the minister. That is another example of the use of discretionary authority, which is becoming a habit with this government.
Who is going to cover the cost of abolishing the Hazardous Materials Information Review Commission? Workers. These are not trivial matters. We are talking about monitoring hazardous materials that many Canadian workers handle in chemical and pharmaceutical manufacturing. With a stroke of the pen, and with no mention of it in the budget, this commission is being eliminated.
There was also no mention in the budget of abolishing the Grain Appeal Tribunal. The government is trying to make us believe that one measure in the budget, written in very imprecise and vague language, covered this. That is not the case. If a budget is headed in a certain direction and budget items, offices and agencies must be eliminated, then this should be set out in the budget so we can vote on these elements. That is not currently the case.
The Parliamentary Budget Officer raised two very troubling issues that touch on what we are experiencing with Bill C-45. First, he said—and parliamentary experts agree—that members do not have the information in hand that they need to make decisions about the budget.
In April, we voted for the 2012 budget, but we did not have all of the information. The government was talking about eliminating 19,200 public service jobs and making $5.2 billion in cuts. However, we had no idea where these cuts would be made, and where these jobs would be eliminated, or which sectors would be affected. The information is trickling out as we go along.
That was why the Parliamentary Budget Officer demanded that the government be more transparent in the budgetary process by compelling the departments and agencies to report on their cuts. In doing that, he sought to determine what services would be cut and whether Canadians needed those services. Where will those cuts be made? What objectives does the government want to achieve by making those cuts? What will the consequences be?
The Parliamentary Budget Officer is unable to obtain that information, in spite of the Federal Accountability Act, which the Conservative government asked us to pass in 2006. We fully supported that act. However, the government decided to contravene its own act in order to prevent the Parliamentary Budget Officer from analyzing the impact of budget 2012.
Honestly, I have to say that if the Parliamentary Budget Officer cannot obtain that information, members will have no access to it either and will not be able to conduct a proper debate on budget 2012 and its impact.
We are studying Bill C-45, and we are clearly feeling the impact of budget 2012, for which we have yet to obtain all the information.
Bill C-38 very significantly watered down the environmental assessment process, the Fisheries Act and protection of fish habitat. Bill C-45 will have very significant consequences for the environment, among other things.
Now with respect to the repeal of the Navigable Waters Protection Act, that act concerns the environment, despite what the government claims. It is trying to create a smokescreen by saying the act concerns only navigation. That is not true: it refers to the protection of navigable waters, including waters where one can navigate in a canoe. This is a rigorous process that the government is in a hurry to water down in order to repeal certain provisions that the lakes and rivers development sector does not like.
This is a big problem and will have major consequences, like the massive watering down of the Canadian Environmental Assessment Act and the amendments to or massive watering down of the Fisheries Act. Some aspects of Bill C-45 also concern the Fisheries Act. We were surprised when we read the division of that bill that concerns the Fisheries Act, because most of the provisions correct the errors and excesses of the previous budget implementation bill, C-38, which was passed in June of this year.
We introduced numerous amendments that would have eliminated those errors and excesses, but the government disregarded them. I recall that the government would not agree to any amendments during the study by the Standing Committee on Finance or in the House. Now, a few months later, the Conservatives realize the opposition may have been right on certain points and they are quickly changing things so that no one realizes it. That is what is happening now.
Because of the major repercussions that will result from these important amendments, they really belong in a bill if that is the direction the government truly intends to take, and should be treated separately and given close scrutiny.
There is a great deal of expertise in ocean science, oceanography and biotechnology in the Lower St. Lawrence. In fact, the Université du Québec à Rimouski was rated the best research university by the Toronto magazine RE$EARCH Infosource for its work in this field. The University of Quebec at Rimouski has the capacity for this work because of the networking done by the Technopole Maritime du Québec.
Within the institutional community, UQAR, with its oceanography department and ISMER, its ocean sciences institute, has solid linkages and networks with the Department of Fisheries and Oceans’ Maurice Lamontagne Institute. The UQAR is also linked to private sector organizations like the Centre de recherche sur les biotechnologies marines. The problem is that the massive budget cuts and the dilution of environmental measures put forward in Bill C-38, and reintroduced in Bill C-45, will cripple a region that has succeeded over a 25- to 30-year period in developing internationally recognized cutting-edge expertise. The Maurice Lamontagne Institute’s department of ecotoxicology and the department that studies fish habitat are about to be shut down. The libraries and archives, the only French-language sources serving the university and researchers in the region, are also being closed.
All of these measures, which were not in the budget but derived from it, and about which the Parliamentary Budget Officer would like further details, will diminish the capacity of Rimouski and the lower St. Lawrence to make their mark as international leaders. Is that really what the government wants?
This government should do some soul-searching and look at the measures being put forward in the various budgets tabled and their budget implementation bills. It must seriously consider whether Canada is moving forward or backward.
All of the Canadian and Quebec stakeholders I have heard speak about this issue have a strong feeling that Canada is moving backward. We are deindustrializing and putting all our eggs in one basket, as we used to do when free trade was almost solely with the United States. At least we have been begun to diversify the countries we trade with.
We are putting all our eggs in one basket once again in terms of industries and relying more than anything else on natural resources. This sector is certainly important, but from an economic growth standpoint, it has become the only sector we can rely on. We need to make sure that other sectors in which we could play a leadership role are supported by this government, but there are no signs of this in Bill C-45.
That is why we will oppose Bill C-45 at this stage. We are against the process being proposed and against the content which, although it does contain some interesting ad hoc measures here and there, is definitely not a panacea for the Canadian economy.
Ray Boughen Conservative Palliser, SK
Mr. Speaker, I have a little trouble with what the hon. member has said.
If the member is arguing that fisheries and forestry departments, or others, require funding, what is the difference between these departments finding their funding in a document of 45 pages or a document of 450 pages? The number of pages in the budget does not change the amount in the budget.
Guy Caron NDP Rimouski-Neigette—Témiscouata—Les Basques, QC
Mr. Speaker, I would like to thank the hon. member for his question. However, I am not quite sure I understand exactly what he is getting at with regard to the fisheries, forestry and funding.
With regard to the number of pages, the length of a bill, whether it is 45 pages long or 200, affects our ability to examine all the measures. In this case, 64 laws are created, eliminated or amended. If we could isolate each of those laws, then we would be able to examine them much more thoroughly than we can in this massive bill.
If the hon. member is referring to the end of my speech, when I spoke about oceanography and research and development, then I would say that yes, we are losing our expertise because of these measures. These measures were impossible to see in the 2012 budget. The Parliamentary Budget Officer is looking into them, but the Conservatives are refusing to give him the information he needs.
Now, with Bill C-45, the government is proposing that the opposition once again vote blindly on a bill without knowing what impact it will have, just as we were asked to do in the vote on the 2012 budget.
Ted Hsu Liberal Kingston and the Islands, ON
Mr. Speaker, my question is for my colleague.
Generally speaking, a change in tax regulations is a very technical and complicated subject in and of itself. Is this not sufficient justification to separate out this part of the bill?
Guy Caron NDP Rimouski-Neigette—Témiscouata—Les Basques, QC
Mr. Speaker, a budget implementation bill should contain measures that change laws specifically related to the budget. Generally speaking, before the Conservatives came to power, such bills made changes to the Income Tax Act or the Excise Tax Act because it was a question of important tax-related amendments. For instance, in the case of introducing a tax credit, the Income Tax Act needs to be amended.
The Conservative government has completely hijacked the process by adding many elements that have nothing to do with the Income Tax Act or the Excise Tax Act. All this government is trying to do right now is concentrate an entire legislative agenda from an economic perspective into one bill.
I would remind the House that since Parliament resumed in September, although the government claims that the economy is its top priority, not one bill on any economic issue has been introduced.
Marc-André Morin NDP Laurentides—Labelle, QC
Mr. Speaker, I have a good question to ask my hon. colleague.
When the left hand does not know what the right hand is doing, that is serious. When the brain does not know either, it is even more serious. This government's stubborn, obstinate refusal to allow anyone to examine its work leads me to believe that the Conservatives are trying to hide their incompetence. I have worked in several fields in my life and I have a great deal of work experience. Whenever someone refuses to have their work evaluated, it usually means they are trying to hide their incompetence and their mistakes.
I wonder what my colleague's thoughts are on that.