Bill C-15 (Historical)

Budget Implementation Act, 2016, No. 1.

An Act to implement certain provisions of the budget tabled in Parliament on March 22, 2016 and other measures

Part 1 implements certain income tax measures proposed in the March 22, 2016 budget by
(a) eliminating the education tax credit;
(b) eliminating the textbook tax credit;
(c) exempting from taxable income amounts received as rate assistance under the Ontario Electricity Support Program;
(d) maintaining the small business tax rate at 10.‍5% for the 2016 and subsequent taxation years and making consequential adjustments to the dividend gross-up factor and dividend tax credit;
(e) increasing the maximum deduction available under the northern residents deduction;
(f) eliminating the children’s arts tax credit;
(g) eliminating the family tax cut credit;
(h) replacing the Canada child tax benefit and universal child care benefit with the new Canada child benefit;
(i) eliminating the child fitness tax credit;
(j) introducing the school supplies tax credit;
(k) extending, for one year, the mineral exploration tax credit for flow-through share investors;
(l) restoring the labour-sponsored venture capital corporations tax credit for purchases of shares of provincially registered labour-sponsored venture capital corporations for the 2016 and subsequent taxation years; and
(m) introducing changes consequential to the introduction of the new 33% individual tax rate.
Part 1 implements other income tax measures confirmed in the March 22, 2016 budget by
(a) amending the anti-avoidance rules in the Income Tax Act that prevent the conversion of capital gains into tax-deductible intercorporate dividends;
(b) qualifying certain costs associated with undertaking environmental studies and community consultations as Canadian exploration expenses;
(c) ensuring that profits from the insurance of Canadian risks remain taxable in Canada;
(d) ensuring that the dividend rental arrangement rules under the Income Tax Act apply where there is a synthetic equity arrangement;
(e) providing specific tax rules in respect of the commercialization of the Canadian Wheat Board, including a tax deferral for eligible farmers;
(f) permitting registered charities and registered Canadian amateur athletic associations to hold limited partnership interests;
(g) providing an exemption to the withholding tax requirements for payments by qualifying non-resident employers to qualifying non-resident employees;
(h) limiting the circumstances in which the repeated failure to report income penalty will apply;
(i) permitting the sharing of taxpayer information within the Canada Revenue Agency to facilitate the collection of certain non-tax debts; and
(j) permitting the sharing of taxpayer information with the Office of the Chief Actuary.
Part 2 implements certain goods and services tax/harmonized sales tax (GST/HST) measures proposed in the March 22, 2016 budget by
(a) adding insulin pens, insulin pen needles and intermittent urinary catheters to the list of GST/HST zero-rated medical and assistive devices;
(b) clarifying that GST/HST generally applies to supplies of purely cosmetic procedures provided by all suppliers, including registered charities;
(c) relieving tax to ensure that when a charity makes a taxable supply of property or services in exchange for a donation and an income tax receipt may be issued for a portion of the donation, only the value of the property or services supplied is subject to GST/HST;
(d) ensuring that interest earned in respect of certain deposits is not included in determining whether a person is considered to be a financial institution for GST/HST purposes; and
(e) clarifying the treatment of imported reinsurance services under the GST/HST imported supply rules for financial institutions.
Part 2 also implements other GST/HST measures confirmed in the March 22, 2016 budget by
(a) adding feminine hygiene products to the list of GST/HST zero-rated products; and
(b) permitting the sharing of taxpayer information in respect of non-tax debts within the Canada Revenue Agency under certain federal and provincial government programs and in respect of certain programs where information sharing is currently permitted under the Income Tax Act.
Part 3 implements certain excise measures proposed in the March 22, 2016 budget by
(a) ensuring that excise tax relief for diesel fuel used as heating oil or to generate electricity is targeted to specific instances; and
(b) enhancing certain security and collection provisions in the Excise Act, 2001.
Part 3 also implements other excise measures confirmed in the March 22, 2016 budget by permitting the sharing of taxpayer information in respect of non-tax debts within the Canada Revenue Agency under certain federal and provincial government programs and in respect of certain programs where information sharing is currently permitted under the Income Tax Act.
Division 1 of Part 4 repeals the Federal Balanced Budget Act.
Division 2 of Part 4 amends the Canadian Forces Members and Veterans Re-establishment and Compensation Act to, among other things,
(a) replace “permanent impairment allowance” with “career impact allowance”;
(b) replace “totally and permanently incapacitated” with “diminished earning capacity”;
(c) increase the percentage in the formula used to calculate the earnings loss benefit;
(d) specify when a disability award becomes payable and clarify the formula used to calculate the amount of a disability award;
(e) increase the amounts of a disability award; and
(f) increase the amount of a death benefit.
In addition, it contains transitional provisions that provide, among other things, that the Minister of Veterans Affairs must pay, to a person who received a disability award or a death benefit under that Act before April 1, 2017, an amount that represents the increase in the amount of the disability award or the death benefit, as the case may be. It also makes consequential amendments to the Children of Deceased Veterans Education Assistance Act, the Pension Act and the Income Tax Act.
Division 3 of Part 4 amends the sunset provisions of certain Acts governing federal financial institutions to extend by two years, namely, from March 29, 2017 to March 29, 2019, the period during which those institutions may carry on business.
Division 4 of Part 4 amends the Bank Act to facilitate the continuance of local cooperative credit societies as federal credit unions by granting the Minister of Finance the authority to provide transitional procedural exemptions, as well as a loan guarantee.
Division 5 of Part 4 amends the Canada Deposit Insurance Corporation Act to, among other things, broaden the Corporation’s powers to temporarily control or own a domestic systemically important bank and to convert certain shares and liabilities of such a bank into common shares.
It also amends the Bank Act to allow the designation of domestic systemically important banks by the Superintendent of Financial Institutions and to require such banks to maintain a minimum capacity to absorb losses.
Lastly, it makes consequential amendments to the Financial Administration Act, the Winding-up and Restructuring Act and the Payment Clearing and Settlement Act.
Division 6 of Part 4 amends the Office of the Superintendent of Financial Institutions Act to change the membership of the committee established under that Act so that the Chairperson of the Canada Deposit Insurance Corporation is replaced by that Corporation’s Chief Executive Officer. It also amends several Acts to replace references to that Chairperson with references to that Chief Executive Officer.
Division 7 of Part 4 amends the Federal-Provincial Fiscal Arrangements Act to authorize an additional payment to be made to a territory, in order to take into account the amount of the territorial formula financing payment that would have been paid to that territory for the fiscal year beginning on April 1, 2016, if that amount had been determined using the recalculated amount determined to be the gross expenditure base for that fiscal year.
Division 8 of Part 4 amends the Financial Administration Act to restrict the circumstances in which the Governor in Council may authorize the borrowing of money without legislative approval.
Division 9 of Part 4 amends the Old Age Security Act to increase the single rate of the guaranteed income supplement for the lowest-income pensioners by up to $947 annually and to repeal section 2.‍2 of that Act, which increases the age of eligibility to receive a benefit.
Division 10 of Part 4 amends the Special Import Measures Act to provide that a finding by the President of the Canada Border Services Agency of an insignificant margin of dumping or an insignificant amount of subsidy in respect of goods imported into Canada will no longer result in the termination of a trade remedy investigation prior to the President’s preliminary determination. It also provides that expiry reviews may be initiated from a date that is closer to the expiry date of an anti-dumping or countervailing measure and makes amendments related to that new time period.
Division 11 of Part 4 amends the Pension Benefits Standards Act, 1985 to combine the authorities for bilateral agreements and multilateral agreements into one authority for federal-provincial agreements, and to clarify that federal-provincial agreements may permit the application of provincial legislation with respect to a pension plan.
Division 12 of Part 4 amends the Employment Insurance Act to, among other things,
(a) increase, until July 8, 2017, the maximum number of weeks for which benefits may be paid to certain claimants in certain regions;
(b) eliminate the category of claimants who are new entrants and re-entrants; and
(c) reduce to one week the length of the waiting period during which claimants are not entitled to benefits.
Division 13 of Part 4 amends the Canada Marine Act to allow the Minister of Canadian Heritage to make payments to Canada Place Corporation for certain celebrations.
Division 14 of Part 4 amends the Jobs, Growth and Long-term Prosperity Act to authorize the Minister of Infrastructure, Communities and Intergovernmental Affairs to acquire the shares of PPP Canada Inc. on behalf of Her Majesty in right of Canada. It also sets out that the appropriate Minister, as defined in the Financial Administration Act, holds those shares and authorizes that appropriate Minister to conduct, with the Governor in Council’s approval, certain transactions relating to PPP Canada Inc. Finally, it authorizes PPP Canada Inc. and its wholly-owned subsidiaries to sell, with the Governor in Council’s approval, their assets in certain circumstances.
Division 15 of Part 4 amends the Canada Foundation for Sustainable Development Technology Act to modify the process that leads to the Governor in Council’s appointment of persons to the board of directors of the Canada Foundation for Sustainable Development Technology by eliminating the role of the Minister of Natural Resources and the Minister of the Environment as well as the consultative role of the Minister of Industry from that process. It also amends the Budget Implementation Act, 2007 to provide that a sum may be paid out of the Consolidated Revenue Fund to the Foundation on the requisition of the Minister of Industry and to clarify the maximum amount of that sum.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

I'll deal with something more specific and maybe a little more obtuse.

Bill C-15 deals with bank recapitalization. I was wondering if you can offer a few comments on how the specific measures in the bill continue to strengthen our banking system while ensuring that depositors remain protected.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

Thank you, Mr. Chair. Welcome, Minister, and thank you for your comments and your continuing leadership.

I have to admit that I found your comments on the innovation and infrastructure side refreshing. The ability to move people, goods, services, and information from both rural and urban Canada to where they need to be is crucial for our long-term prosperity. On the innovation front, we need to be part of those ecosystems that exist and form every day. That's where the high-quality, high-paying jobs are, so we are going in the right direction. I'm glad to be part of a government that recognizes that.

What I would like to ask is more of a broad-based question. I've called Bill C-15 “the blueprint after the budget“. What I would like to know is how this begins a major step forward to enhance Canada's long-term growth profile and to strengthen our middle class, while doing so in a fiscally prudent manner.

[Bill Morneau, Liberal, Minister of Finance]

Thank you very much, Mr. Chairman.

For clarity, Nick Leswick is assistant deputy minister, economic and fiscal policy, and he's really good at his job too.

I want to thank you, Mr. Chair, and I want to say that I'm pleased to be here today to speak to the distinguished members of the Standing Committee on Finance about Bill C-15 and the investments that our government will make to strengthen the middle class and keep Canada's economy strong and growing for the long term.

The measures in the budget implementation bill will enable us to move forward on our ambitious economic agenda, designed to strengthen the middle class and ensure long-term growth by making smart, necessary investments in our country's future. It's a plan I was honoured to table in the House through our very first budget on March 22. Since that day, I have been telling Canada's story from coast to coast as well as in the United States, Europe, and most recently at the G7 finance ministers' meeting in Sendai, Japan.

Meetings like this one are a great opportunity to demonstrate Canada's leadership on important international issues and to send the message that Canada is back, that we're engaged, and that we're a global leader. In Japan, at the G20, at the IMF spring meetings on Wall Street, as elsewhere over the last two months, people kept telling me the same thing: “We really like what you're doing in Canada.”

Members may have read that the Financial Times called Canada a “glimmer of light”.The Wall Street Journal called Canada the poster child for the International Monetary Fund's global growth strategy. Christine Lagarde, head of the IMF, praised our approach.

Our budget earned these endorsements because, I firmly believe, our government is focused on exactly the right things, and it has answered the call of millions of Canadians, who have told us both before the budget and after that they want real change.

Even before the budget, our government set to work to create the conditions that help middle-class Canadians and their families. On December 7, 2015, we took a significant first step to strengthen the middle class by cutting taxes for nearly nine million Canadians.

In addition to the tax cut, we introduced the new Canada child benefit in budget 2016. This benefit is intended to help parents better support their most precious resource, their children.

The Canada child benefit is a simpler, more generous tax-free benefit for Canadians. It's also better targeted to those who need it most than the previously existing child benefits were.

It's estimated that about 300,000 fewer children will be living in poverty in the 2016-17 fiscal year compared with the 2014-15 fiscal year, once the Canada child benefit is in place. This means that families will have extra funds to help them afford cleats for their kids playing soccer or to attend summer camp. It means the increased likelihood of the numerous little things that make summer in childhood the carefree, refreshing time that it's meant to be.

This is a tangible measure that gives families across this country options, options they may not have had before. It represents the most significant social policy in a generation.

But this isn't the only significant social policy within the pages of this budget implementation bill. Equally important are those that help our most vulnerable citizens find renewed support for the unique challenges they may face.

There are three broad areas in this bill that reflect our actions in this regard.

The first is seniors.

Canada's retirement income system has been successful at reducing the incidence of poverty among Canadian seniors; however, some seniors continue to be at a heightened risk of living in a low-income situation.

The budget will help Canadians retire with security and dignity by making significant new investments that support them throughout their retirement years. These include resetting the age of eligibility for old age security and guaranteed income supplement benefits to 65 from 67, and for allowance benefits to 60 from 62 over the 2023 to 2029 period.

The passage of the bill will also increase the guaranteed income supplement top-up benefit by up to $947 annually for the most vulnerable single seniors, starting in July 2016.

The second area deals with Canadians who've fallen on hard times because of a loss of employment.

This bill proposes immediate action to enhance the employment insurance program so that out-of-work Canadians have the support they need while they look for their next job.

I'd particularly like to highlight that passage of the bill will extend EI regular benefits by five weeks to all eligible claimants in regions of the country that have experienced the sharpest and most severe increases in unemployment. We'll also extend employment insurance regular benefits by up to an additional 20 weeks for long-tenured workers in those regions.

I'd like to highlight another area where we'll provide much-needed support: veterans. We'll give back to those who've given so much in service to our country. Some $1.6 billion over five years will flow directly to veterans and their families in the form of higher direct payments. These enhancements deliver on mandate commitments and respond to recommendations from key stakeholders, including the veterans ombudsman.

Budget 2016 is about supporting the middle class now through helping Canadian families. It will continue to do so in the future by laying the foundation for long-term economic growth.

Canada's population is aging. The global economy is volatile. Oil prices are, of course, unpredictable. We need to take steps to improve competitiveness and productivity in Canada so we become drivers of our own success now and in a generation from now.

We need to ensure that the steps we take now will help our kids and our grandkids. The budget signals a number of areas known to do just that. The largest are in the important areas of infrastructure and innovation. Our $120-billion ten-year infrastructure plan and our innovation agenda will be articulated over the coming year. Once in place, they'll deliver a long-term boost to the Canadian economy. They'll create good jobs now and in the future.

Investments in public transit will also help mom and dad to get to work on time. Investments in green infrastructure will help to keep our water clean, and investments in housing will help entire communities to thrive. Investments in and a commitment to a more innovative economy mean jobs after graduation, a cleaner resource sector, and a strong Canadian presence for the world stage.

Infrastructure and innovation are just part of the underlying objective of the 2016 budget. This objective is the development of a robust growth strategy to create the conditions for long-term sustained and inclusive growth for the middle class and those working hard to join it.

This is a multi-dimensional task, one that brings together a number of growth-related initiatives going on inside and outside government. It's also a team effort. I'm proud to be working with my cabinet colleagues, including Ministers Freeland, Bains, Sohi, and Mihychuk on delivering this agenda.

We know we don't have all the answers. We're open to innovative new ideas. As we look to a long-term growth strategy, we know we have to find ways to do things differently.

Just a few weeks ago, I hosted the inaugural meeting of the new advisory council on economic growth to advise the government on key elements of our strategy. It was the first step toward figuring out what Canada will need to create and sustain long-term economic growth that benefits the middle class and those working hard to join it.

That's why this council has been tasked with finding solutions to some of our biggest challenges, things like how to transform innovative ideas into high-value goods and services that will help Canadians and Canadian businesses, how to ensure that the historic investments in infrastructure make it easier for Canadians to get to work on time or get their products to market, and what can be done today so Canadians can take advantage of the job opportunities of tomorrow.

I expect that budget 2017 will become the blueprint for this next chapter of Canada's economic growth and another step toward ensuring that when you have an economy that works for the middle class, you have a country that works for everyone. By working together, we can ensure all Canadians continue to enjoy a high and rising standard of living.

Mr. Chairman, it's been a highlight and honour to be able to promote our government's vision. I know we all believe that Canada is a place of opportunities where people can dream of a future in which their children can thrive and succeed. Through our budget, we're making investments that will leave Canada, our middle class, our cities, and our economy better off. We promised real change. We owe it to Canadians to make it happen.

Mr. Chair, I look forward to working with members of this committee, Parliament, and all Canadians as we implement our plan and position Canada for a brighter future.

Thank you.

[The Chair, Liberal, Wayne Easter]

I call the meeting to order.

Welcome, Minister. We are running a little late and we appreciate the fact you had a little difficulty getting here.

Appearing before the committee today, pursuant to order of reference of Tuesday, May 10, 2016, on Bill C-15, An Act to implement certain provisions of the budget tabled in Parliament on March 22, 2016 and other measures. is Minister Morneau, Minister of Finance. Welcome.

With the minister is Andrew Marsland, who's the senior assistant deputy minister, tax policy branch; Marta Morgan, associate deputy minister; and Nick Leswick. I'm not sure of your title, Nick, but welcome, all.

Minister, you have the floor, and then we'll go to questions.

[Phil McColeman, Conservative, Brantford—Brant, ON]

Yes, thank you, Chair.

Before we begin I'd like to put before the committee an issue that has come to light, and I know we were not able to address this effectively in our last meeting or put it on the table, but we've become aware that there are two pages of incorrect translation from English to French in Bill C-15. I'd like to present these to you, Chair, with the corrections to the bill we feel are required because of the improper translation, and we've itemized it by line item. I'm happy to share this list with other committee members. I don't have copies with me in both official languages, but I'd like to be able to submit this so that we can get the bill translated correctly.

Bill C-14—Time Allocation Motion

[John Brassard, Conservative, Barrie—Innisfil, ON]

Mr. Speaker, as a new member of the House I am extremely disappointed with respect to the government's actions. Like all new members in the House, the expectation among my residents in supporting me to come to this great place was that I was going to be able to extend my voice in the debates. As we have seen by the actions of the government, what amounts to effectively a basic dictatorship, debates have been stifled in the House.

I want to remind Canadians and I want to remind the government exactly what it said, what it handed to the Governor General in the throne speech. It is proving not to be worth the paper it was written on now. The throne speech said:

Canada succeeds in large part because here, diverse perspectives and different opinions are celebrated, not silenced. Parliament shall be no exception. In this Parliament, all members will be honoured, respected and heard, wherever they sit. For here, in these chambers, the voices of all Canadians matter.

Further on in the throne speech, it says:

And to give Canadians a stronger voice in the House of Commons, the Government will promote more open debate and free votes, and reform and strengthen committees.

Four times now, with Bills C-6, C-10, C-15 and now C-14, we are seeing debate thwarted. Why the hypocrisy on the part of the government? All Canadians deserve to know.

[Glenn Campbell, Director, Financial Institutions, Financial Sector Policy Branch, Department of Finance]

Yes, Mr. Chair. Thank you.

While I provided an introductory comment at my previous experience on Tuesday, May 10, I thought a quick recap of part 4, division 5, of Bill C-15 would be helpful.

The proposed amendments in part 4, division 5, provide a legislative framework for a bank recapitalization, or a bail-in regime. Bail-in is the power to convert certain long-term debt of a failing bank into common shares to absorb losses, recapitalize the bank, and allow it to keep operating.

As we clarified in our last discussion, all deposits are excluded. Amendments to the Canada Deposit Insurance Corporation Act would provide CDIC with the power to undertake a bail-in conversion. Implementation of the proposed bail-in regime would give authorities an additional tool to deal with the unlikely failure of a major bank in a manner that protects financial stability as well as taxpayers.

These reforms would strengthen our tool kit for managing bank failures, so that it remains consistent with international best practices and standards endorsed by the G-20 following the financial crisis. We would be pleased to address any additional questions the committee may have.

[Elissa Lieff, Senior General Counsel, Family, Children and Youth Section, Policy Sector, Department of Justice]

I have a statement.

Thank you for inviting us to respond to your questions.

I am here to speak to you about the impact of the new Canada child benefit on the federal child support guidelines.

Bill C-15 proposes to replace the Canada child tax benefit and the universal child care benefit with a new Canada child benefit, which for simplicity, I will refer to as the CCB. The CCB will be a monthly amount paid to help families with the cost of raising children. It will not be considered income for tax purposes. The Department of Justice has been asked to provide information on the impacts, if any, of the CCB on the federal child support guidelines. The current Canada child tax benefit is used for comparison purposes, as from a child support perspective, it's very similar in its application to the new CCB.

Federal, provincial, and territorial governments share responsibility for family law matters. Provincial and territorial governments are responsible for laws that apply to unmarried couples and married couples who separate but do not divorce. The federal government is responsible for marriage and divorce laws. The federal child support guidelines are regulations under the Divorce Act. They consist of a set of rules and tables to apply to determine child support in divorce cases. Provinces and territories have adopted similar guidelines, except the Province of Quebec, which has its own model.

Would the Canada child benefit be considered income under the federal child support guidelines? A key point in understanding the impact on child support is that the CCB would not be considered income for the purpose of the federal guidelines. Under the federal guidelines, the amount of child support paid is determined in part based on a parent's income. The income is used to determine the appropriate basic child support amount under the federal child support tables, which are based on the number of children and the parent's province or territory of residence. The federal guidelines include specific rules to calculate income for child support purposes.

First, you look at the sources of income set out under the heading “total income”, which is line 150 in the T1 general income tax form. Because it will be non-taxable, the CCB will not be included in a person's total income. Second, you adjust the parent's total income in accordance with schedule 3 of the federal child support guidelines. Schedule 3 does not contain adjustments to allow the inclusion in a parent's income used for table purposes of governmental benefits such as the Canada child tax benefit or the new Canada child benefit. This is because these benefits are considered the government's contribution to children and not general income in the hands of parents.

[The Chair, Liberal, Wayne Easter]

We'll call the meeting to order.

The meeting is related to the order of reference of Tuesday, May 10, 2016 for Bill C-15, an act to implement certain provisions of the budget tabled in Parliament on March 22, 2016 and other measures.

As everyone knows, we're under limited time frames due to votes taking place in the House. There will be a vote at about 4:15 or 4:20, another vote at approximately 5:30, and then one at 6:45.

There are a number of divisions under part 4 of the bill that we haven't heard evidence from officials on as yet.

In the discussion I had with members, we'd like to have Justice come forward. Ms. Raitt and Mr. Caron had questions related to Justice as it relates to this bill. We will start with those questions. If we finish the round, then we could let Justice officials go and we would be back right after the vote.

Without going in any particular order, we'll start with Mr. Liepert who I know has a question for Ms. Raitt.

I might introduce Justice officials first. From the Department of Justice, we have Ms. Lieff and Ms. Hassan.

The floor is yours. I don't know if you have anything to say to start or if you want to go directly to questions.

[Steven MacKinnon, Liberal, Gatineau, QC]

Thank you very much.

Mr. Hodgson, I'll turn to you. This committee I think always appreciates your insights and advice. I know that as we debate Bill C-15 and subsequent budgets and economic strategies for the country, a number of us feel there are a couple of ways in which we can contribute. You touched on a couple of them.

You speak of the “new normal”, of “anemic” growth, and also of taxation and the need for tax reform in the country. They converge in this way, and I'd like you to expand on this, if you would. What are the regulatory, institutional, fiscal, or other impediments to growth in the country? How might we rearrange those tools and perhaps lighten the load in terms of regulation or taxation in order to achieve or accelerate growth beyond this new normal?

[Lori MacKay, Chair, PEI Coalition For Fair EI]

Of course.

The PEI Coalition For Fair EI would like to thank the members of the committee for hearing from us. I am pleased to be able to appear before you on behalf of the coalition. We formed this coalition with community groups, citizens, and unions as a response to the 2012 changes to the employment insurance program by the previous government.

The 2012 changes were incredibly punitive to workers in the seasonal industries on Prince Edward Island, and largely still remain so after Bill C-15 was introduced. Some improvements were made, but little for seasonal industries.

The PEI Coalition continues to call on the Liberal government to fulfill its election promise to completely reverse all of the 2012 EI changes. This has not yet been done despite the Minister of Labour's comments in the House of Commons.

We welcome the changes to reduce entrance hours and the reduction of one week from the waiting period for some EI recipients, as was announced in Bill C-15, but they do little to help seasonal workers. The reduction of one week from the waiting period will certainly help to get much needed funds into the hands of unemployed workers who do not use their full number of weeks of benefits, but it will not be helpful to the many seasonal workers in Prince Edward Island who do not have enough insurance to last the entire period of unemployment, especially since 2012. This change means that they will run out of benefits one week sooner.

Bill C-15's response to the downturn in the oil industry, in giving an additional five weeks of benefits to regions that have experienced a 2% increase in unemployment in the last year, certainly will help some workers, but definitely not all that are affected. It creates an unfair gap.

The budget completely ignores P.E.I. and our neighbouring provinces, New Brunswick and Nova Scotia, who lost the additional five weeks in 2012. Despite the fact that P.E.I. has an 11.5% unemployment rate—the second highest in the country, and up 1% from last year in April—this budget bill did not return the five weeks lost. Now the many displaced oil workers from Prince Edward Island are returning home without the five additional weeks that their co-workers are receiving, despite the fact they are returning to areas of higher unemployment and access to fewer jobs—unless of course they're returning to Newfoundland.

Just as important as the need to return the five weeks of additional benefit to our province is the need to immediately remove the additional zone for Prince Edward Island. P.E.I. was always considered one economic zone for the purposes of EI for a reason. Despite the fact that P.E.I. has two cities, with our population size of only146,000, we are a rural economy when it comes to jobs.

There is no large industry that gives much more access to jobs in one part of the province than another, but in February 2014 our province was divided into two zones: urban and rural. This meant that those living in the urban zone had far fewer weeks and less benefits than those in the rural zone, despite the fact the folks living in the urban zone do not have access to more jobs.

The map used to divide our island makes absolutely no sense. There are two cities in P.E.I. with federal government jobs in both. One city is considered urban and the other city rural.

I'll use an example of an area our chair knows well. One small fishing community, North Rustico, located close to the tourist area of Cavendish, is located in rural Prince Edward Island. Its neighbour, only four kilometres away, Mayfield, with many workers from the fishing industry and the tourist industry, and farther from the city of Charlottetown, is considered urban. Workers working side by side in jobs, and making the same money for the same number of weeks, are getting treated very differently when it comes to EI benefits.

The new zone on P.E.I. must be removed immediately. It doesn't work, and it pits Islander against Islander.

To conclude my opening remarks, seasonal workers have been unfairly treated by the last government, and Bill C-15 does little to rectify the situation. We need a jobs strategy in this country that recognizes that some industries are seasonal, but that workers want full-time year-round work.

The planned reduction of EI premiums must be stopped. The experience of the sudden downturn in the oil industry, and the natural disaster of the wild fires in Fort McMurray, highlight the extreme importance of a fully funded EI program for our capitalist economy.

I will be happy to answer any questions the committee members might have.

Thank you.

[Heather Smith, President, Canadian Teachers' Federation]

Thank you for the opportunity to address you regarding Bill C-15.

My name is Heather Smith, and I am president of the Canadian Teachers' Federation. With me here today is Bob McGahey, CTF director of advocacy and labour rights.

After our comments, we do have a written brief that expands on the points that we are going to make.

CTF is a bilingual, non-partisan alliance of provincial and territorial teachers' organizations in Canada. We represent over 200,000 teachers, and that number is growing. As a unified voice of teacher organizations in Canada on education and related social issues, we promote high-quality public education, the status of the teaching profession, and the freedom to learn.

The CTF is on record as being generally pleased with the progressive nature of the most recent federal budget. Teachers do, however, have some concerns about specific initiatives, especially as they relate to the improvement of mental health for students and teachers, the need for education to be a priority for the government's overseas development assistance, and the alleviation of child poverty.

We believe these issues should be government priorities. Our comments today focus on the alleviation of child poverty, and we look forward to future opportunities to comment more broadly on some of our other issues.

Turning to the child tax benefit, the alleviation of child poverty is of critical importance to teachers. Each day in our classrooms, Canadian teachers engage with children and youth who are hungry, tired, and struggling due to poverty.

The Canada child benefit program is a good first step towards alleviating child poverty. We agree with the rationale of the Dignity for All campaign's national anti-poverty plan, which calls for strong federal leadership in reducing and ultimately eliminating poverty. While the Canadian Teachers' Federation commends the government for taking action, we believe that more needs to be done.

With regard to the Canada child benefit, we recommend that, one, provisions be put in place to ensure the benefit is indexed to inflation and, two, the Government of Canada enter into agreements with the provinces and territories to ensure the benefit does not adversely affect entitlement to other social assistance programs.

I will only briefly mention employment insurance, as I believe colleagues from the Canadian Labour Congress have expanded on this, and more information is contained in our brief.

The recommendations are, though, that categories of workers be eliminated from the EI program and all workers be treated equally under the system, and that claimants be provided with a choice regarding the duration of the waiting period so that they may choose to waive the waiting period entirely, take a one-week waiting period, or take the two-week waiting period.

Lastly, I want to focus on the school supplies tax credit. First, as a bit of context, the Canadian Teachers' Federation firmly believes that governments have a responsibility to fully fund the education system so that all children and youth have access to an equitable, quality, publicly funded public education.

Teachers should not have to subsidize the system, yet we know that chronic underfunding has led to a situation in which teachers are spending significant amounts of money to support student learning. A 2010 CTF national study confirmed that out-of-pocket expenditures by educators for classroom materials or class-related activities averaged $453 per educator, and that figure is increasing.

Given that teachers have been subsidizing the education system for years now, the CTF does appreciate that teachers will now be reimbursed at least for some of their out-of-pocket expenses. To improve the credit, however, the CTF has two main suggestions. The first is that Bill C-15 be amended to remove the requirement of a written certificate from employers. This change would recognize the professional judgment of teachers, who are in the best position to determine what needs to be purchased. It would also prevent the potential blurring of this credit with other taxation provisions provided to goods required as conditions of employment.

Our second suggestion is that the list of prescribed items in Bill C-15 be amended to include a subsection E stating “other non-consumable educational resources“. We suggest this addition, as we do not believe it's possible or helpful to enumerate an exhaustive list of the non-consumable items a professional teacher may deem necessary to support student learning in the diverse K-to-12 classrooms across our country.

Thank you for your attention, and I welcome your questions.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

Thank you to our panel for your patience this morning as well.

I could probably speak to each witness, ask questions and stuff, but I would like to focus my remarks on Mr. Galimberti from the steel association.

On a personal level, my riding president is a member of the buyers' side, and another good family friend has their own steel company in Brampton. I was speaking to the first individual, who is a buyer of steel, and I asked him this morning, “Are the Chinese dumping steel?” His comment was, in two words, “Big time”, and he gave me an example.

There were 30,000 tonnes of steel destined for our largest trading partner, the United States. The U.S. put duties on steel, so the steel came to Canada and was sitting on our docks. Then the internal price for steel was around $50 cwt, versus what this steel was selling at, which went from roughly $18, from some upward price pressure, to the mid-$30s.

I do get it, I do understand it. The jobs that are generated by all of the steel industry and the ecosystem around are well paying, have good benefits, and are in highly skilled advanced manufacturing, and we need to protect this industry. We know that there are steel producers in the world where there is over-capacity, and they're dumping steel. We know that the steel producers in Canada and the whole ecosystem is much more environmentally friendly than the steel industry back in some of the Asian countries, in China specifically.

Within Bill C-15 there is part 4, division 10, on the Special Import Measures Act. I take it, Joseph, you're familiar with that.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Thank you.

Mr. Parent, you spoke about the challenges of evaluating the fairness of the measures and compensation promised in the bill. You're well aware that before, the bill was separate and was known as Bill C-12. It's now integrated into Bill C-15.

These are exactly the kind of questions we could have asked and could have gotten answered if experts had appeared before the Standing Committee on Veterans Affairs, to which Bill C-12 would have been referred. If we could have heard what came out of a study by the Standing Committee on Veterans Affairs on this bill, it would have been better than integrating the bill into another bill that also requires discussions with venture-capital representatives, restaurant owners, and retirees, for example.

[Susan Eng, Counsel, National Pensioners Federation]

Thank you, Mr. Chair and members of the committee.

As Herb John has already indicated, the changes in the budget and in the budget bill will go a long way to making sure that no senior ages into poverty. However, a lot more can be done.

For the immediate purposes of this committee study, there is an opportunity to both increase the amount of GIS increase beyond the $78 per month, and to make the change retroactive to January 1 rather than starting that change on July 1. That's an immediate step that this committee can take.

As this committee has mentioned in the past, there's a need to really look at a guaranteed minimum income. I encourage you to start immediately on the research of that. I know that this committee has recommended it in the past. I think there are some positive indications from the government at this point. It should happen as soon as possible. We want every Canadian not to face poverty, at whatever age they happen to be.

One of the measures that would helps us prevent poverty in old age is to make sure people have a good retirement income. As you know, we have been on the record that Canadians support an increase to CPP. At this point, while there has been a lot of talk, there has been very little action. There are a lot of promises at this point, which are also important, but we need to see some kind of action.

At this point, it also seems that the problem is with the provinces. This committee may have full-throated support for the increase to the CPP, but it will mean that each of the committee members and your caucuses will have to ask your provincial counterparts to step up. It has been quite a number of years that we have been talking about this, and even if there were change, it would take at least three years before it could be implemented. We're not getting any younger.

It is important for us to look at these issues when we're talking about the changes that are in the bill. They are targeted, after all, at making sure that people live without poverty at any age, and especially not in retirement.

Thank you very much.