Bill C-43 (Historical)

Budget Implementation Act, 2005

An Act to implement certain provisions of the budget tabled in Parliament on February 23, 2005

Part 1 amends the Income Tax Act and the Income Tax Application Rules to
(a) increase the amount that Canadians can earn tax free;
(b) increase the annual limits on contributions to tax-deferred retirement savings plans;
(c) eliminate the foreign property limitations on tax-deferred retirement savings plans;
(d) increase the Child Disability Benefit supplement to the Canada Child Tax Benefit;
(e) allow for a longer period for the existence of and contributions to a Registered Education Savings Plan in certain circumstances where the plan beneficiary is eligible for the disability tax credit;
(f) increase the maximum refundable medical expense supplement;
(g) exclude emergency medical services vehicles from the standby charge;
(h) extend to January 11, 2005 the date for charitable giving in respect of the 2004 taxation year for the tsunami relief effort;
(i) eliminate the corporate surtax; and
(j) extend the SR&ED tax incentives to SR&ED performed in Canada’s exclusive economic zone.
Part 2 amends the Air Travellers Security Charge Act to reduce the air travellers security charge for domestic air travel to $5 for one-way travel and to $10 for round-trip travel, for transborder air travel to $8.50 and for other international air travel to $17, applicable to air travel purchased on or after March 1, 2005.
Part 3 amends Part IX of the Excise Tax Act to extend the application of the 83 per cent rebate of the goods and services tax (GST) and the federal component of the harmonized sales tax (HST) to eligible charities and non-profit organizations in respect of the tax they pay on their purchases to provide exempt health care supplies similar to those traditionally provided in hospitals. It also amends that Act to provide that a director of a corporation may, under certain conditions, be held liable not only for unremitted net GST/HST amounts, but also for GST/HST net tax refund amounts to which the corporation is not entitled. Finally, it amends that Act to allow, under strict conditions, the creation of a Web-based GST/HST registry to facilitate the verification of a supplier’s registration by a registrant for the purposes of claiming input tax credits.
Part 4 amends Schedule I to the Excise Tax Act to phase out the excise tax on jewellery through a series of rate reductions over the next four years.
Part 5 amends the Federal-Provincial Fiscal Arrangements Act to authorize the Minister of Finance to pay funds to a trust established to provide the provinces with funding for the purpose of early learning and child care.
Part 6 authorizes the Minister of Finance to pay funds to a trust established to provide the Territories with funding for the purpose of assisting them to achieve the goals of the Northern Strategy.
Part 7 amends the Auditor General Act to permit the Auditor General to conduct inquiries into and report on the affairs of certain corporations that have received at least $100,000,000 in funding from Her Majesty in right of Canada. This Part also amends the Financial Administration Act to extend the application of financial management and control provisions in that Act to wholly-owned subsidiaries of parent Crown corporations and certain parent Crown corporations.
Part 8 authorizes the payment of funds to various foundations, including the Federation of Canadian Municipalities for the purpose of providing funding to the Green Municipal Fund.
Part 9 amends the Asia-Pacific Foundation of Canada Act to focus the mandate of the Foundation, to modify its governance structure, to establish qualifications for the appointment of the directors and the President, to impose a duty of care on the directors and the President and to require that the Foundation offer its services in both official languages. It also amends the Act to specify the type of funds the Foundation may receive and the appropriate use of those funds and to require that those funds be invested in accordance with policies, standards and procedures established by the board. In addition, the provisions of the Act respecting auditing, annual reports and winding-up have been expanded.
Part 10 amends Part 1 of the Budget Implementation Act, 1998 to broaden the category of persons to whom the Canada Millennium Scholarship Foundation may grant scholarships and bursaries to include not only persons who are Canadian citizens or permanent residents of Canada within the meaning of subsection 2(1) of the Immigration and Refugee Protection Act but also persons who are protected persons within the meaning of subsection 95(2) of that Act, for example, Convention refugees.
Part 11 authorizes the Minister of State (Infrastructure and Communities), pursuant to the initiative commonly known as “A New Deal for Cities and Communities”, to make payments for the purpose of providing funding, in the fiscal year 2005-2006, to cities and communities for environmentally sustainable infrastructure initiatives, in accordance with agreements to be negotiated with provinces, territories and first nations.
Part 12 enacts the Nova Scotia and Newfoundland and Labrador Additional Fiscal Equalization Offset Payments Act. The legislation will implement the arrangements of February 14, 2005 reached with Newfoundland and Labrador and Nova Scotia on offshore revenues. To do this, the legislation will
(a) authorize the payment of equalization offset payments to Newfoundland and Labrador and Nova Scotia for 2004-05 to 2011-12, set out the conditions under which payments will be extended to any of fiscal years 2012-13 to 2019-20, and authorize payments for that period should those conditions be met;
(b) set out the manner in which the offset payments are to be calculated;
(c) authorize the making of a cash pre-payment in the amount of $2 billion in respect of the agreement with Newfoundland and Labrador and a cash pre-payment in the amount of $830 million in respect of the agreement with Nova Scotia; and
(d) implement all other aspects of the agreements.
Consequential amendments to the Budget Implementation Act, 2004 respecting offset payments to Nova Scotia will also be required to ensure that 100 per cent offset is being provided for in fiscal years 2004-05 and 2005-06.
Part 13 establishes an Agency, to be called the Canada Emission Reduction Incentives Agency, to acquire greenhouse emission reduction and removal credits on behalf of the Government of Canada.
Part 14 enacts the Greenhouse Gas Technology Investment Fund Act. That Act establishes an account in the accounts of Canada called the Greenhouse Gas Technology Investment Fund to which are to be charged amounts paid by the Minister of Natural Resources for the purpose of
(a) research into, or the development or demonstration of, technologies or processes intended to reduce emissions of greenhouse gases from industrial sources or to remove greenhouse gases from the atmosphere in the course of an industrial operation; or
(b) creating elements of the infrastructure that are necessary to support research into, or the development or demonstration of, those technologies or processes.
The Act also provides for the creation of technology investment units in respect of amounts that are contributed to Her Majesty for those purposes.
Part 15 amends the Canada Deposit Insurance Corporation Act to
(a) increase the deposit insurance coverage limit for insurable deposits from $60,000 to $100,000;
(b) repeal the authority of the Corporation to make by-laws respecting standards of sound business and financial practices for member institutions; and
(c) provide that the deposits of a federal institution shall automatically be insured.
Part 16 amends the Canada Student Financial Assistance Act to provide for the termination of the obligations of certain borrowers in respect of student loans in the event of their death or if, as a result of their permanent disability, they are unable to repay their loan without exceptional hardship, taking into account their family income.
Part 17 amends the Currency Act with respect to the Exchange Fund Account and the management of Canada’s foreign exchange reserves. These amendments include authorizing the Minister of Finance to establish a policy concerning the investment of assets held in that Account and to advance funds to that Account on terms and conditions that the Minister considers appropriate.
Part 18 amends the Department of Public Works and Government Services Act to provide the Minister of Public Works and Government Services with responsibility for the procurement of goods and services for the federal government, and to authorize the Minister to negotiate and enter into contracts on behalf of the Government of Canada and to make commitments to a minimum volume of purchases on its behalf.
Part 19 amends the Employment Insurance Act and the Department of Human Resources Development Act to allow the Canada Employment Insurance Commission to set the premium rate under a new rate-setting mechanism. In setting the rate, the Commission will take into account the principle that the premium rate should generate just enough premium revenue to cover payments to be made for that year, as well as the report from the employment insurance chief actuary and any public input. On an as-needed basis, the Commission may also contract for the services of persons with specialized knowledge in rate-setting matters. If it is in the public interest to do so, the Governor in Council may substitute a different premium rate. In any given year, the rate cannot change by more than 0.15% ($0.15 per $100) from the previous year’s rate, and for the years 2006 and 2007 must not exceed 1.95% ($1.95 per $100).
Part 20 amends the Employment Insurance Act, for the purpose of the implementation of a premium reduction agreement between the Government of Canada and a province, to allow for a regulatory scheme to make the necessary adjustments and modifications to that Act as required to harmonize it with a provincial law that has the effect of reducing or eliminating the special benefits payable under that Act. A consequential change is also made to the parental benefits provisions.
Part 21 amends the Financial Administration Act to provide the authority for the President of the Treasury Board to create a shared-governance corporate entity for the purpose of administering group insurance or other benefit programs. In addition, the amendments provide the authority for the Treasury Board to establish or modify those programs not just for employees of the public service but for other persons or classes of persons as well.
Part 22 amends the Old Age Security Act to increase the guaranteed income supplement by $18 a month for single pensioners and by $14.50 a month for each pensioner in a couple, effective January 2006. Also, the amendments increase the allowance by $14.50 a month and the allowance for the survivor by $18 a month, effective January 2006. In addition, the amendments provide for identical increases to the guaranteed income supplement, the allowance and the allowance for the survivor in January 2007.
Part 23 authorizes the Minister of Finance to pay funds directly to the provinces of Quebec, British Columbia and Saskatchewan and to each of the three Territories.

Budget Implementation Act, 2005

[Rona Ambrose, Conservative, Edmonton—Spruce Grove, AB]

Mr. Speaker, our amendment to part 14, which is Motion No. 7 before us right now that relates specifically to the creation of the greenhouse gas technology investment fund, is to allow the minister and the government to have more flexibility to create more than just the one fund that is specified right now in Bill C-43.

We believe that this is important because it will allow the minister and the government of the day to look at regional issues and industry issues that we believe will not only help the environment, but also help industry work with the government to come up with the kinds of programs that will result in not only allowing industry to be a part of this program but ensuring that all of the investments do stay here in Canada.

We pointed out in committee that it was really important to the Conservative Party that Canadian companies and Canadian jobs come first and that the Canadian environment comes first. We were concerned that the legislation might create a fund where Canadian companies might contribute only to see that money end up in the hands of their competitors. We want to ensure that the government has the flexibility to address some of the concerns that industry has raised and frankly, environmental groups have raised as well.

This is the intent of the amendment to part 14. We want to create more flexibility that will result in not only better legislation on the environmental side but also better legislation on the industry side in allowing industry to work with the government on a better environmental plan.

[Rona Ambrose, Conservative, Edmonton—Spruce Grove, AB]

Mr. Speaker, I rise today to speak to Motion No. 7 which is an important part of Bill C-43. I am fortunate to sit on the finance committee which examined Bill C-43 in its entirety.

The Conservative Party of Canada has agreed to and supports Bill C-43, although I am here today to make an important amendment to the main spending bill of the government.

The main purpose of Motion No. 7 is to establish legislation for the formation of a greenhouse gas technology investment fund. We on this side of the House have long advocated for a made in Canada solution to the environmental problems of our times.

In the Standing Committee on Finance we introduced many helpful amendments to improve clause 14 which is the greenhouse gas technology fund. We wanted to bring more transparency and accountability to the fund and how the proposed advisory board would operate. We successfully passed an amendment in which the minister must publish advice within 30 days and make that advice public. We are glad to see that it was supported by the other opposition parties as well.

We are still concerned about the unaccountable 12 member advisory board which does not necessarily bring back much needed trust that Canadians should have in their government.

With these various amendments in committee we wanted to depoliticize this process, so that it would not be so open ended. We are glad that we were able to bring some accountability and transparency to the greenhouse gas technology fund process. We want to see more flexibility put into the process of the greenhouse technology fund and how it is administered.

Having said that, I wish to introduce an amendment that we believe will substantially improve the greenhouse gas technology investment fund. I move:

That motion 7 be amended in section 8 by replacing the words “Canada for any of the purposes referred to in” with “Canada or to any fund designated by the Minister, for the purposes of this subsection, for any of the purposes referred to in”

[Ken Dryden, Liberal, for the Minister of Finance]

moved:

Motion No. 7

That Bill C-43 be amended by adding, after clause 97, the following new clause

PART 14

GREENHOUSE GAS TECHNOLOGY INVESTMENT FUND

GREENHOUSE GAS TECHNOLOGY INVESTMENT FUND ACT

1. The Greenhouse Gas Technology Investment Fund Act is enacted as follows:

An Act to establish the Greenhouse Gas Technology Investment Fund for the reduction of greenhouse gas emissions and the removal of greenhouse gases from the atmosphere

SHORT TITLE

1. This Act may be cited as the Greenhouse Gas Technology Investment Fund Act.

INTERPRETATION

1. The following definitions apply in this Act.

“eligible contributor” means a person who is subject to requirements — set out in regulations made under any Act of Parliament — respecting emissions of greenhouse gas from industrial sources, other than a person who is a vehicle manufacturer.

“Fund” means the Greenhouse Gas Technology Investment Fund established in section 3.

“greenhouse gas” means any gas listed in Annex A to the Kyoto Protocol to the United Nations Framework Convention on Climate Change done at Kyoto on December 11, 1997, as amended from time to time, to the extent that the amendments are binding on Canada.

“Minister” means the Minister of Natural Resources.

“vehicle” means any vehicle that is capable of being driven or drawn on roads by any means other than muscular power exclusively, but does not include any vehicle designed to run exclusively on rails.

GREENHOUSE GAS TECHNOLOGY INVESTMENT FUND

1. There is established in the accounts of Canada an account to be known as the Greenhouse Gas Technology Investment Fund.

2. Thereshall be paid into the Consolidated Revenue Fund and credited to the Fund

(a) all amounts contributed to Her Majesty in right of Canada by an eligible contributor for the purpose of

(i) research into, or the development or demonstration of, technologies or processes intended to reduce emissions of greenhouse gases from industrial sources or to remove greenhouse gases from the atmosphere in the course of an industrial operation, or

(ii) creating elements of the infrastructure that are necessary to support research into, or the development or demonstration of, those technologies or processes; and

(b) an amount representing interest of the balance from time to time to the credit of the account at the rate and calculated in the manner that the Governor in Council may, on the recommendation of the Minister of Finance, prescribe.

1. There shall be charged to the Fund the amounts paid out under section 6.

GRANTS OR CONTRIBUTIONS

1. (1) The Minister may, out of the Consolidated Revenue Fund, make grants or contributions in any amount that he or she considers appropriate for any purpose referred to in paragraph 4(a).

(2) In making a grant or contribution, the Minister shall consider

(a) the competitiveness and efficiency of industry;

(b) the sustainable development of Canada’s natural resources;

(c) the development of Canadian scientific and technological capabilities; and

(d) any recommendations made by the standing committee of the House of Commons that normally considers matters related to the environment.

(3) No grant or contribution may be made in excess of the amount of the balance to the credit of the Fund.

ADVISORY BOARD

1. (1) The Governor in Council shall appoint an advisory board of not more than 12 members to hold office during pleasure for a term of not more than three years, which term may be renewed for one or more further terms.

(2) The role of the advisory board is to advise the Minister on any matter respecting the making of grants or contributions for any of the purposes referred to in paragraph 4(a), including the types of projects that are most likely to result in significant reductions of greenhouse gas emissions and the matters referred to in paragraphs 6(2)(a) to (d).

(3) The Minister shall publish the advice given under subsection (2) within 30 days after receiving it from the advisory board.

(4) The Governor in Council may appoint any person with relevant knowledge or expertise to the advisory board, including persons from industry, institutions of learning and environmental groups.

(5) The Minister shall appoint one of the members as Chairperson of the advisory board.

(6) The members of the advisory board are to be paid, in connection with their work for the advisory board, the remuneration that may be fixed by the Governor in Council.

(7) The members of the advisory board are entitled to be reimbursed, in accordance with Treasury Board directives, the travel, living and other expenses incurred in connection with their work for the advisory board while absent from their ordinary place of residence.

(8) The Chairperson may determine the times and places at which the advisory board will meet, but it must meet at least once a year.

(9) The members of the advisory board are deemed to be employees for the purposes of the Government Employees Compensation Act and to be employed in the federal public administration for the purposes of any regulations made under section 9 of the Aeronautics Act.

TECHNOLOGY INVESTMENT UNITS

1. (1) Subject to subsections (2) to (5), the Minister must create technology investment units in respect of contributions made by eligible contributors to Her Majesty in right of Canada for any of the purposes referred to in paragraph 4(a).

(2) The technology investment units are to be created in respect of a contribution by an eligible contributor in a manner that allows them to be recorded in a database established in relation to the emission requirements applicable to the eligible contributor.

(3) Technology investment units may be created only in respect of contributions made on or after January 1, 2008.

(4) Subject to subsection (5), the Governor in Council may, on the recommendation of the Minister of the Environment, make regulations

(a) fixing the amount that must be contributed for technology investment units to be created, or the manner of calculating that amount; and

(b) determining the maximum number of those units that may be created in any period specified in the regulations.

(5) Until December 31, 2012, the maximum amount that may be contributed for a technology investment unit to be created may not be more than $15.

(6) Technology investment units may only be used by the eligible contributor in respect of whom they were created and that eligible contributor may use them only in accordance with any regulations in force that govern the manner in which they may be used to meet requirements relating to emissions of greenhouse gases from industrial sources.

Motion No. 8

That Bill C-43 be amended by adding, after Clause 97, the following new clause:

“COMING INTO FORCE

1. This Part comes into force on a day to be fixed by order of the Governor in Council.”

[Pat Martin, NDP, Winnipeg Centre, MB]

Mr. Speaker, I am pleased to speak to the amendments to Bill C-43 and to the bill in its broader context.

For the first time in many years the NDP had an active role in the development of the budget. We take great pride in the fact that we used our minority status in this Parliament to the advantage of the greater Canadian population by trying to steer this budget process toward a spending pattern that would use our tax dollars to benefit Canadians. That is the best way to sum it up.

We cannot really speak to the amendments to Bill C-43, the main Liberal budget, in isolation without speaking in extension to the changes that the NDP negotiated.

We saw Bill C-43 as not meeting the needs of Canadians. We saw it as another typical Liberal budget with great shortcomings. The Conservatives voted for the original Liberal budget as it stands, but are now moving amendments that seek to break out the environmental provisions that would seek to improve the environment.

I do not understand their thought process. I am not sure they understand fully the logic behind their approach to Bill C-43. They voted for it at one stage and then when the NDP managed to seek amendments in a completely separate bill, they cannot see fit to support either.

I find the position of the Conservative Party on environmental issues not unusual, but difficult to understand, especially the spending to help us come in line with the Kyoto accord. I have watched an agonizing process as the Conservatives, and previously the Alliance and before that the Reform Party, tried to get their minds around the issue of global warming. I should note that they started out in complete denial.

When I first came to this place in 1997, the Reform Party members were in complete denial that global warming was a problem. They would bring up all the old yarns that cow farts were more devastating to the environment than the impact of human activity. We watched that thought process evolve. The member for Red Deer had the unenviable task of trying to represent the Reform Party's views on global warming which seemed to be evolving as fast as global warming itself.

I do not envy the public watching who are trying to get their minds around where the budget is going and where their tax dollars are going to be spent because it is in a state of flux and contradiction. The Conservative Party voted for the original Liberal budget, which contained elements for spending on meeting our Kyoto targets and fighting greenhouse gas emissions. We voted against it because that budget had no spending for social issues, and the biggest deficit that Canada has today is the social deficit left in the wake of years of budgetary cutbacks.

A flip-flop took place. As soon as the NDP successfully used its minority status in this opposition Parliament to lever its agenda onto the public domain, as a good political party would do, the Conservatives reversed their position. They are now against the Liberal budget even though it has been broken into two separate bills. The original budget that they first voted for is Bill C-43 and they seem to be opposed to that now, and by extension they are opposed to any social spending.

This contradiction is not lost on Canadians. This contradiction has been partly responsible for the absolute plummet in the public opinion polls for the Conservative Party. If Canadians ever did see that party as a grassroots party here to represent the little guy, they certainly do not see that anymore.

What Canadians see is a party that is using its significant opposition status in this minority Parliament as the Queen's official opposition to no constructive purpose at all. In fact, opposition members are holding back some very good news spending for ordinary Canadians, municipalities, post-secondary education, and social housing in the very communities that they were sent here to represent.

The contradiction is glaring in our mind, for those of us who deal with it every day. However, it is glaring in the minds of ordinary Canadians too who are tuning in and trying to figure out just what the Conservatives are doing. We almost feel like saying that if they cannot do something constructive, why do they not just stay home because they are just getting in the way of us trying to do something constructive on behalf of ordinary Canadians.

It must be terribly frustrating for the voters who sent them to Ottawa to act on their behalf. The ultimate task and duty of any member of Parliament is to bring home the bacon. Well here they have an opportunity to bring home the bacon and they are obstructing. They are stalling and opposing spending for their home communities.

In other words, they think that it is squandering taxpayer dollars to invest in things such as social housing, post-secondary education, and cleaning up the environment, the very air we breathe. As Canadians are choking on smog days to an unprecedented degree, we have a budget that actually plans on spending money to address smog days, but the Conservative Party is opposing it. It boggles the mind. The plummet in the public opinion polls can be attributed in part to this confusing message that the Conservative Party is sending to Canadians.

The NDP finds itself frustrated to one degree because it would like to send Canadians a positive message before this minority Parliament adjourns for the summer break. Our party would like to say that we have used our time well, that we have used our time constructively, and that we have used what little influence we have in these 19 seats way over in this corner of the House of Commons. Our party has managed to use its political capital to lever some good news spending for Canadians and our members are very proud of that track record. Look at what we have done with 19 seats. If we only had 99 seats like the Conservative Party of Canada has, imagine the constructive good news spending that could take place.

There is one message that I would leave people with as my time expires. It is plain to see that when voters send more New Democrats to Ottawa as members of Parliament, good things start to happen. That is self-evident and abundantly clear, and Canadians apparently have taken note.

They also know that when they send 99 Conservative members of Parliament to Ottawa, it stalls progress. They are the antithesis of progressive. Maybe that is why they took the word “progressive” out of their name because progress is stalled when 99 Conservatives are standing in the way. It is like 99 bottles of beer on the wall. We have to knock them off, so we can move forward with the agenda that we have.

[Rob Nicholson, Conservative, Niagara Falls, ON]

moved:

That Bill C-43, in Clause 89, be amended by replacing lines 18 and 19 on page 67 with the following:

“domestic credits.”

That the Bill C-43, in Clause 89, be amended by replacing lines 23 to 30 on page 69 with the following:

“18. The Agnecy may not acquire eligible Kyoto units.”

Mr. Speaker, I am pleased to say a few words on this area. I appreciate the ruling of the Speaker earlier today ruling theses motions in order. They are an important public policy issues. I am pleased that we have the opportunity to say a few words on the motion.

This is part of a whole area within the federal budget that relates to the Canadian Environmental Protection Act. The first question Canadians might have asked themselves on budget night was, “Why is this in the middle of the federal budget?” Generally, environmental legislation stands alone. It is introduced by the Minister of the Environment, it is debated and the House decides on it.

In my opinion, by sticking it in the budget, the government figured it might get the budget through anyway, so it might as well load it up. The government might as well have put a few amendments to the Criminal Code in the budget if it thought they might be unpopular. In any case, the government decided to go ahead with amendments in this area.

The motion that we have put forward deals with the whole question of carbon credits. The budget proposed something known as the Canadian emission reduction agency. This would be a new agency of the federal government.

It is a hot day in Ottawa. I bet that gives members a bit of a chill that a new government agency would be created. Is that not a wonderful idea and it comes with its own bureaucracy too. This is another great idea from the Liberals to deal with this. Who knows, maybe a few Liberal friends have a little time on their hands. Maybe they could help out and dole out the money. After all, it has a $1 billion budget. I bet it will be very popular.

There are some of us who think that this is exactly what we do not need. What this agency is charged with is buying, among other things, foreign carbon credits.

Incredibly, this is a plan to start purchasing outside the country the right for Canadian companies to pollute inside the country. We pay other people outside of Canada. Try to even explain this to people. Most people would find it incredulous. The obvious candidate for this is communist China. We already heard that it is the beneficiary of largesse from the Canadian government. Go figure, the more repressive the regime, the more favourable its treatment from the Canadian government.

In any case, if we buy foreign carbon credits, apparently China is on the must go to list. It does not make sense to spend Canadian money outside the country for the right for Canadian companies to pollute. We sure do not need one more bureaucracy set up by the government to dole out money. That is exactly what Canada does not want.

This is why the Conservative Party has been saying for some time to make a made in Canada environmental policy. My colleague, the member for Red Deer, has been on this case for quite some time. He has been getting excellent reviews across the country when he presents his made in Canada plan from our party and for our country. Our plan makes sense. Who should be subsidizing pollution over in China? Who should be sending Canadian dollars outside our country? It does not make any sense whatsoever.

We think any money for an agency such as this should be spent on green technology in Canada, helping out Canadian companies to reduce pollution, not to be subsidizing it and sending the money outside the country.

Our position on this is very straightforward. We want a made in Canada solution. We are absolutely committed to cleaning up the environment in our country. There are those who say take the word “Conservative”, conserve what we have by protecting Canada's natural resources and cleaning up the water, air and land. Our party stands for that and this is why we have to oppose things like this.

It should not be in the budget at all and putting it in the budget still does not make it a good idea. It is a bad idea and we have opposed this all the way along. We sure do not need one more Liberal organized bureaucracy in this town. We also sure do not need to give them any budget where they can start spending money.

We know how difficult it has been for the government to keep an eye on money that is supposed to be spent in Canada. We have had months of testimony on all the problems it has had keeping track of money. The Minister of Finance is not quite sure where all the advertising money went. He claims he was unaware of the program.

If the Liberals do not know where the money goes when it is spent in Canada, how will they figure out where it is spent when it is sent overseas? They will not know how or where that money ends up. This is a bad idea and I hope all members of the House accept and support us on these very reasonable amendments.

Those are my comments and I certainly look forward to the support of all members of the House.

[Judy Wasylycia-Leis, NDP, Winnipeg North, MB]

Mr. Speaker, I am very pleased to have this chance to speak to three amendments to Bill C-43 which are critical to the NDP's overall position on this better balanced budget. They certainly were part of the deliberations we had with the Liberal government.

Negotiations were undertaken for a very important reason. In this minority Parliament and at a time when so many needs of Canadians were being ignored, we felt it incumbent upon us to try to make Parliament work in the best interests of Canadians. I know the Conservatives have a hard time with that concept. I know they are suffering from NDP envy.

I know the Conservatives wish they had taken the opportunity to improve the budget when they had the chance starting on February 23. At that time the Conservative leader chose to glance at the budget. He gave it a cursory review, walked out of this chamber and told the world that he thought it was generally an acceptable budget. Obviously since then, the Conservatives have had many second thoughts and doubts. They have changed their position four times, back and forth and back and forth. And they talk about Liberals dithering. It really is hard to tell the two parties apart when it comes to uncertainty and indecisiveness.

Today we are dealing with some amendments that Canadians want, that will make life better for many Canadians. The amendments will actually make a real difference to the objectives we have in common for improving the economy, for contributing to growth and thereby ensuring that more people, ideally every person in this great nation of ours is able to contribute fully according to his or her talents.

That is something that is now denied many people because of a decade or more of regressive Liberal policies falling on the heels of a Conservative government that certainly had no interest in putting people before profits. Governments under those two parties over a long period of time have done serious damage to the fundamental principles of our country which allow for the values of Canadians to flourish so that people can contribute to their fullest and make a difference for themselves and their families.

These amendments before us today simply eliminate the corporate tax reduction proposed in Bill C-43. It is a relatively small step. It means that the corporate tax rate does not move from 21% to 19%. This is after years of corporate tax breaks, not the least of which was the most recent reduction from 28% to 21%, in the supposed interest of building this great country.

We have not seen the results that have been touted by Liberals and Conservatives in terms of those corporate tax breaks. Profits have soared. We are witnessing record level profits among large corporations in Canadian society today. We have seen over the last five or six years record level corporate tax reductions. At the same time the profits have been going up, tax breaks have been going up for the big corporations, and investment has been going down.

There has not been a payoff for Canadians as a result of that kind of giveaway to the corporate sector. Canadians have not reaped a benefit. Jobs have not been created. Speaking of jobs, is it not ludicrous for the Conservatives to question this small shift in the corporate tax break, this putting on hold a further corporate tax break, despite the fact that corporations are now getting to the tune of $9 billion a year in corporate tax breaks until 2010?

It is interesting to note that the Conservatives say this small amount of $2.3 billion a year for two years is going to cause layoffs and economic disaster. They point ludicrously to the recent announcement by the automakers and the suggestion that there will be layoffs in the near future. That is primarily coming from the United States, which the Conservatives claim has the lowest corporate tax rate, contrary to the facts, a goal to which Canadians must aspire for us to be competitive.

Do the Conservatives want it both ways? Do they have any kind of mathematical sense to their fiscal policies? Do they have any kind of intellectual analysis of what has transpired?

I hear nothing but fearmongering and scare tactics which are not based on scientific fact or sound fiscal analysis. I see Mickey Mouse mathematics, something the Conservatives have the gall to accuse New Democrats of, when in fact there has not been one sign of reason, one sensible analysis throughout this entire debate about this tiny shift in corporate tax policy.

The Conservatives are not going to do anything objective on this front. We have had to get feedback from renowned public sector analysts as well as private sector corporate heads who know the importance of what we are doing. They recognize that when we invest in education, housing and the environment we get double the impact. We will get measures that help people deal with the basics of life so they can be contributing members of society without worrying about how they are going to pay for tuition, without worrying about the air they breathe, without worrying about whether they have a roof over their head.

We have investment in a sector that produces jobs. Thousands of jobs will be created as a result of this relatively small investment in important areas of public policy.

In this budget process we worked very hard to convince the Liberal government to put on hold the corporate tax reduction and invest the money in programs that are in dire need of attention, but which were not covered at all in the Liberal budget. One is education, because students are facing a growing crisis in trying to access affordable education without being left with a huge debt load. Another is housing, because there are thousands of Canadians who are trying to put a roof over their heads and access affordable housing. The other is aboriginal Canadians who have been denied the right to decent, safe housing as well as the right to access education. These are areas that were missing in the federal budget despite the need.

We convinced the Liberals that they had to take some of this investment from another tax cut for large corporations that would not produce a lot of results and put it into areas that would actually create jobs. We convinced them to stop playing games with the surplus, at least to some extent, something the Conservatives have always wanted, by bringing forward legislation that would ensure in a transparent way that we are taking into account the anticipated surplus in a way that Parliament has a say and the public knows what is happening.

It is interesting that the Conservatives went to all the trouble of supporting our initiative to have independent budget forecasters make predictions so that we can be sure about the surplus dollars. However, when those forecasters come up with the forecast, which by the way shows on average $8 billion in additional surplus every year for the next three years, the Conservatives ignored it. They said that this little bit of movement from a corporate tax cut to investment in housing and education would suddenly cause us to go into debt and deficit. I hope the Conservatives will come to their senses and realize that what is being done is something Canadians want.

We have before us a better balanced budget that will serve Canadians well. I hope the Conservatives will stop playing games, tying up the House in knots, obstructing and filibustering and being disrespectful to witnesses and to officials of the House and to parliamentarians and start getting on with the job of serving Canadians.

[Guy Côté, Bloc, Portneuf, QC]

Mr. Speaker, I take this opportunity to mention that I too love to work with my colleague from the NDP. While we do not always agree on various matters, we respect each others' divergent positions.

In response to my hon. colleague, I will provide relatively simple explanations.

After a corporate tax cut was announced in Bill C-43, on April 21, 2005, the Government of Quebec brought down its own budget. That government has announced a major corporate tax reform.

In light of Bill C-43, Quebec Finance Minister Audet cut the capital tax by half for the next five years and raised the tax rate slightly for large corporations. When combined, these two measures result in a tax reduction for corporations.

This corporate tax reform in Quebec is only possible, however, if the conditions on which it was predicated remain unchanged. This means that the federal government has to maintain the same course with respect to tax relief for larger corporations, so that, in turn, the Government of Quebec can move into this tax field from which the federal government has withdrawn.

That is totally in line with what we have been calling for for months and even years, that is, to correct the fiscal imbalance.

As regards federal responsibilities, the federal government taxes way too much. It does not leave any room to the governments of the provinces and Quebec. If the federal government withdraws, the Government of Quebec can then go ahead with its corporate tax reform by moving into this tax field and thus resolve at least a small part of the fiscal imbalance problem.

[The Deputy Speaker]

Earlier this morning, the hon. Parliamentary Secretary to the Minister of Finance requested clarification concerning the groupings of motions in amendment at the report stage of Bill C-43.

The Chair had suggested that Motions Nos. 5 and 6 standing in the name of the hon. member for Niagara Falls would be grouped for debate, thus creating a new Group No. 2 and, as a result, moving Motions Nos. 7 and 8 into a new Group No. 3.

The Speaker has reviewed the motions to see whether Motions Nos. 5 and 6 could be included in Group No. 1, as the parliamentary secretary suggested, but he has concluded that the arrangement of three groups will stand.

To review: Group No. 1 includes Motions Nos. 1, 2 and 3 in respect of income tax (corporate surtax); Group No. 2 includes Motions Nos. 5 and 6 in respect of the Canada emission reduction incentives agency; and Group No. 3 includes Motions Nos. 7 and 8 in respect of greenhouse gas technology investment fund.

I thank all hon. members for their contributions to the arrangement of the report stage of this bill.

We were at questions and comments. The hon. member for Winnipeg North.

[Rob Nicholson, Conservative, Niagara Falls, ON]

Mr. Speaker, I am pleased to say a few words at the report stage of Bill C-43, the original Liberal budget. At some point soon we will be debating the NDP budget, the companion budget. I am not quite sure how often in Canadian history we have had two budgets, but it is even rarer to have an NDP budget. That has to be a first. I am sure it will be talked about for generations to come.

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

Mr. Speaker, I obviously agree with the hon. member. This is a rivetting debate on the budget implementation bill. One of the parts of the motion has to do with the reduction and the general elimination of the corporate surtax.

Currently, if I may try to put it as simple as possible, the budget proposed the elimination of corporate surtax on all corporations. That was the preferred way in which we would proceed. Now the amendment to the budget implementation bill proposes that the schedule of elimination be maintained for corporations that have capital below $50 million. If the corporation's capital base is less than $50 million, the schedule proposed in the original budget, Bill C-43 without amendment, would proceed.

For those corporations that have capital less than $75 million, the elimination of the corporate surtax will proceed on a schedule that is one-half of the rate so that their elimination will be phased in over a greater period of time. For those corporations with capital in excess of $75 million, this amendment to the budget proposes to keep the corporate surtax in place that presently exists.

I hope that is helpful to the hon. member and I too would prefer some charts so that we in turn could help those who want to watch this rivetting debate on corporate surtax.

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

Mr. Speaker, we had some concern about that very point. I take it I am no longer splitting my time with my hon. colleague from Etobicoke North. I know we are all disappointed that we will not be hearing from the member because he speaks quite eloquently about these issues and he is quite knowledgeable. Were the member for Etobicoke North able to speak, I know he would be speaking about things such as standard of living which has, over the past number of years, increased somewhat dramatically in this country.

In fact, the Minister of Finance is currently speaking with his colleagues in the G-7. He is in a fairly enviable position because he is the only finance minister at the table who is in a surplus position. These are all of the major industrial nations of the world and Canada is the only one that will be there with a surplus position, that will have a debt to GDP ratio that is declining, that will have a projection forward, as this budget does, of five years of anticipated surpluses. Therefore the finance minister is in something of an enviable position vis-à-vis his colleagues.

He is also in an enviable position vis-à-vis Canada's productivity growth. This is something that we are very concerned about and this budget addressed over the course of both the budget implementation bill and the budget speech itself.

In the G-7 we are second only to the United States in terms of productivity growth. We would like to be closer to the United States in terms of our own productivity growth but in the industrial world Canada is second highest in productivity growth. With productivity growth goes a country's standard of living.

We are therefore very conscious of the issues arising from a competitive business environment, to wit the introduction of a general reduction in corporate taxes and the elimination of the surtax over time. The reason for the original implementation of those provisions into the budget was to maintain something of a competitive tax advantage, vis-à-vis the competition that Canadian industry faces in the United States.

Capital is highly mobile. It can move virtually in an electronic instant from one country to another. if we do not have a competitive environment for our corporations, our businesses, our exports and our imports we will not do well in terms of improvements in the standard of living of the nation and in terms of productivity.

Those were the original reasons that these budget implementation parts were put into the bill. We wanted to have a competitive tax environment. Since 1997, 25 out of 30 OECD countries have implemented statutory corporate tax relief because they are all competing for the same capital, the same increases in the standard of living.

The Government of Canada is focused on improving the competitiveness of Canada's business taxes, the depreciation schedules and various other grants and programs that can be done in order to stimulate industry in this country. That was initially started once we moved into the surplus position in 1997. We implemented shortly thereafter a five year tax reduction plan totalling something in the order of $100 billion, the corporate side of which reduced the general corporate tax rate from 28% to 21%. Were the budget implementation bill passed in its original form, that would in turn have gone from 21% down to 19%.

We are very concerned that we maintain a competitive tax advantage vis-à-vis the United States which is, of course, our main competition in business. We have that rate. We do have some time to maintain that rate but the schedule proposed by the president and congress will erode that advantage over time.

Last year the U.S. legislated a plan to reduce its corporate tax rate on manufacturing income by an equivalent of 3.15 percentage points by the year 2010. Had clauses 9, 10 and 11 of the budget implementation bill been supported by the party opposite, then we would have been able to match that corporate tax advantage.

To maintain Canada's corporate tax advantage, budget 2005 proposed a two percentage point reduction in the general corporate rate from 21% down to 19%, and an elimination of the corporate surtax in 2008. These corporate tax reductions would allow Canada to maintain its corporate tax advantage.

When the budget was introduced in February of this year, that was the budget plan. When Bill C-43 was introduced, that was the budget plan. Regrettably, the Conservative Party withdrew its support of the budget and another configuration had to be entered into. It is with some regret that we introduced Motions Nos. 1, 2 and 3 in order to reflect that new configuration. It is, however, the intention that once the budget implementation bill does pass that these tax measures will be restored on a separate legislated track.

[Ken Epp, Conservative, Edmonton—Sherwood Park, AB]

Mr. Speaker, I rise on a point of order and I extend my apologies. I tried to get your attention before the member began. I was taught as a youngster not to interrupt someone else when they are talking, so I really feel uneasy doing this.

However, I would like to have a clarification, if I may. Bill C-43 has been reported back by the committee. The copies that we have available are the ones that were printed at first reading. Has there been any substantial change on report stage in terms of what the committee has reported back and if so, could we have the revised copy of the bill?

[John McKay, Liberal, Parliamentary Secretary to the Minister of Finance]

Mr. Speaker, I appreciate the opportunity to speak to these motions. As they have been properly grouped, the first group has to do with tax implications and the second has to do with environmental implications.

I note overall that this budget has enjoyed a great deal of support among Canadians. It is clearly a popular budget and has resonated with Canadians. However, we live in a parliamentary democracy and the government needs to have the support of the House. In the course of weeks of debate and some period of time in committee as well, we have had to make some changes to the provisions in the original Bill C-43. If I may, I would like to speak to that first group.

Mr. Speaker, I will be splitting my time with the member for Etobicoke North.

Generally speaking, these amendments have to do with two things.

[Jim Peterson, Liberal, for the Minister of Finance]

moved:

Motion No. 1

That Bill C-43, in Clause 9, be amended by replacing lines 2 to 8 on page 7 with the following:

“for a taxation year is

(a) if the taxable capital employed in Canada of the corporation for the taxation year is equal to or less than $50,000,000, that proportion of 4% that the number of days in the taxation year that are before 2008 is of the number of days in the taxation year; and

(b) if paragraph (a) does not apply, the percentage determined by the formula

A + B [(C - $50,000,000)/$25,000,000]

where

A is that proportion of 4% that the number of days in the taxation year that are before 2008 is of the number of days in the taxation year,

B is that proportion of 4% that the number of days in the taxation year that are after 2007 is of the number of days in the taxation year; and

C is the lesser of $75,000,000 and the taxable capital employed in Canada of the corporation for the taxation year.

(3) For the purpose of subsection (2), the taxable capital employed in Canada of a corporation for a particular taxation year is

(a) if the corporation is associated with one or more other corporations in the particular taxation year, the total of all amounts each of which is the taxable capital employed in Canada (within the meaning assigned by subsection 181.2(1) or 181.3(1) or section 181.4, as the case may be) of the corporation, or of such an associated corporation, for its last taxation year that ended in the calendar year preceding the calendar year in which the particular taxation year ends; and

(b) if the corporation is not associated with one or more other corporations in the particular taxation year, the taxable capital employed in Canada (within the meaning assigned by subsection 181.2(1) or 181.3(1) or section 181.4, as the case may be) of the corporation for the particular taxation year.”

Motion No. 2

That Bill C-43 be amended by deleting Clause 10.

Motion No. 3

That Bill C-43 be amended by deleting Clause 11.

[The Speaker]

There are eight motions in amendment standing on the notice paper for the report stage of Bill C-43.

Motions Nos. 4 to 6 will not be selected by the Chair because they could have been presented in committee.

All remaining motions have been examined and the Chair is satisfied that they meet the guidelines expressed in the note to Standing Order 76.1(5) regarding the selection of motions in amendment at report stage.

The motions will be grouped for debate as follows:

Group No. 1 will include Motions Nos. 1 to 3.

Group No. 2 will include Motions Nos. 7 and 8.

The voting patterns for the motions within each group are available at the table. The Chair will remind the House of each pattern at the time of voting.