Very good. Very good.
Budget Implementation Act, 2006
An Act to implement certain provisions of the budget tabled in Parliament on May 2, 2006
This bill is from the 39th Parliament, 1st session, which ended in October 2007.
This bill is from the 39th Parliament, 1st session, which ended in October 2007.
Jim Flaherty Conservative
This bill has received Royal Assent and is now law.
This is from the published bill.
Part 1 amends the Excise Tax Act to implement, effective July 1, 2006, the reduction in the Goods and Services Tax (GST) and the federal component of the Harmonized Sales Tax (HST) from 7 to 6 per cent. It also amends the Act to provide transitional rules for determining the GST/HST rate applicable to transactions that straddle the July 1, 2006, implementation date, including transitional rebates in respect of the sale of residential complexes where transfer of ownership and possession both take place on or after July 1, 2006, pursuant to a written agreement entered into on or before May 2, 2006. The Excise Act, 2001 and the Excise Act are amended to increase the excise duties on tobacco and alcohol products to offset the impact of the GST/HST rate reduction. The Air Travellers Security Charge Act is amended to ensure that rates for domestic and transborder air travel reflect the impact of the GST/HST rate reduction. Those amendments generally apply as of July 1, 2006.
Part 2 implements income tax measures proposed or referenced in Budget 2006 to
(a) reduce personal income taxes;
(b) increase the child disability benefit;
(c) increase the refundable medical expense tax credit;
(d) eliminate capital gains tax on charitable donations of publicly-listed securities and ecologically-sensitive land;
(e) reintroduce the mineral exploration tax credit for new flow-through share agreements entered into before April 2007;
(f) expand the eligibility criteria for the disability tax credit;
(g) expand the list of expenses eligible for the disability supports deduction;
(h) expand the list of expenses eligible for the medical expenses tax credit;
(i) clarify the eligibility of home renovation and construction expenses for the medical expenses tax credit;
(j) double the amount of disability-related and medical expenses that can be claimed by a caregiver;
(k) introduce a tax credit in respect of adoption expenses;
(l) introduce a tax deferral for shareholders of agricultural co-ops;
(m) reduce corporate income taxes;
(n) eliminate the federal capital tax; and
(o) extend the carry-over period for non-capital losses and investment tax credits.
Part 3 amends Schedule I to the Excise Tax Act to repeal the excise tax on clocks, items made from semi-precious stones and items commonly known as jewellery, effective May 2, 2006.
Part 4 amends the First Nations Goods and Services Tax Act to facilitate the establishment of taxation arrangements between the government of specified provinces and interested Indian Bands situated in those specified provinces. It also amends the Yukon First Nations Self-Government Act to provide transitional income tax measures consistent with negotiated agreements.
Part 5 amends the Excise Tax Act, the Excise Act, 2001, the Air Travellers Security Charge Act and the Income Tax Act to harmonize various accounting, interest, penalty and related administrative and enforcement provisions. These amendments will apply based on an implementation date that is the later of April 1, 2007, and Royal Assent. It also amends the Excise Tax Act to confirm that debt collection services that are generally provided by collection agents to financial institutions are not financial services for GST/HST purposes and are therefore taxable for GST/HST purposes.
Part 6 enacts the Universal Child Care Benefit Act to assist families by supporting their child care choices through direct financial support to a maximum of $1,200 per year in respect of each of their children who has not attained the age of six years. It also makes consequential and related amendments to the Income Tax Act, the Employment Insurance Act, the Children’s Special Allowances Act and the Old Age Security Act.
Part 7 amends the Federal-Provincial Fiscal Arrangements Act to determine the amount of the fiscal equalization payments to the provinces and the territorial formula financing payments to each of the territories for the fiscal years beginning after March 31, 2006 and to authorize the Minister of Finance to make an additional fiscal equalization payment to British Columbia and Newfoundland and Labrador, and to make an additional territorial formula financing payment to Yukon and Nunavut, for the fiscal year beginning on April 1, 2006.
Part 8 provides for a total payment of $650,000,000 to the provinces and territories for the fiscal year 2006-2007 in respect of early learning and child care. It provides for payments to the territories for the fiscal year 2006-2007.
Part 9 authorizes the Minister of Finance to enter into an agreement to provide protection to mortgagees in respect of mortgage insurance policies that are provided by a mortgage insurer that is approved by the Superintendent of Financial Institutions to sell mortgage insurance in Canada. It also fixes the maximum amount of such protection and determines how that amount can be changed.
Part 10 extends the sunset provisions of financial institutions statutes by six months from October 24, 2006 to April 24, 2007.
Part 11 amends the Canadian Forces Superannuation Act, Public Service Superannuation Act and the Royal Canadian Mounted Police Superannuation Act to change the existing formula by which adjustments are made to a contributor’s annuity.
Part 12 enacts the Mackenzie Gas Project Impacts Act, the purpose of which is to create the Corporation for the Mitigation of Mackenzie Gas Project Impacts. The corporation will provide contributions to regional organizations that will fund projects that mitigate the existing or anticipated socio-economic impacts on communities in the Northwest Territories arising from the Mackenzie gas project. The Part also provides that a payment of $500,000,000 may be made to the corporation and adds the name of the corporation to the schedule of certain federal Acts.
Part 13 amends the European Bank for Reconstruction and Development Agreement Act to permit the European Bank for Reconstruction and Development to carry out its purpose in Mongolia and to allow the Governor in Council to amend, by order, the schedule to that Act. It amends the Freshwater Fish Marketing Act to increase the Freshwater Fish Marketing Corporation’s legislative borrowing limit from thirty million dollars to fifty million dollars. It also amends the Public Sector Pension Investment Board Act to create share capital for the Public Sector Pension Investment Board
All sorts of information on this bill is available at LEGISinfo, an excellent resource from the Library of Parliament. You can also read the full text of the bill.
Bill numbers are reused for different bills each new session. Perhaps you were looking for one of these other C-13s:
Budget Implementation Act, 2006Government Orders
John Williams
Very good. Very good.
Paul Szabo Liberal Mississauga South, ON
I hear one member is enthusiastic about it anyway.
Most Canadians know, when they filled out their 2005 income tax return, that the tax rate on the first tax bracket was in fact 15% and that the budget would increase it to 15.5%. How can that be? I know the finance minister did not want to deliberately mislead the House, so how do we explain this? It is easy.
Every time changes are made which affect the Income Tax Act they are usually done in a budget. We have a budget and it has been referred to the finance committee. Today we are debating a budget implementation bill, which would legislate the changes that were articulated in the budget. It has not been passed yet. It is still in debate. It still has to go through the full legislative process. Therefore, we can say that the change from 16% down to 15% was not legislated. It was in force and will be in force until it is either reversed by a subsequent statutory instrument or by an implementation bill itself.
I wanted to raise that point because the summary of the provisions, which relate to individuals and families, says:
--the basic personal amount—the amount that an individual can earn without paying federal income tax—...grows each year and remains above currently legislated levels for 2005, 2006, and 2007.
That statement is absolutely true. The legislation has not been passed, but it is in force. It has been proclaimed. Canadians know they paid 15% on their 2005 income tax return. This is game playing and unfortunately Canadians have to be exposed to it.
If the government were talking about tax changes for individuals, it would also have to indicate that the $500 reduction in the personal exemption, the amount on which Canadians do not pay tax, was also eliminated by the budget. The government did not boast about this too much, and only because it increases the tax burden on Canadians.
Then the government comes in with its taxable child care allowance of $1,200, which most Canadians thought would be money in their pockets. However, that is not exactly correct because it is taxable. Concurrent with this is the elimination of the young child supplement under the Canada child tax benefit program. That amounts to $249 a year. The Caledon Institute has calculated that if we take this plus the increase in the effective taxation of the first tax bracket, a family making about $20,000 a year will only benefit on a net basis of around $200. A family making $200,000 could benefit by as much as $1,100 of the $1,200. This tends to paint a picture.
There are many items in the budget which have higher benefits for wealthier Canadians and low and middle income Canadians have been left behind. The gap between the rich and the poor will grow. Poverty and inequity between Canadians are not concerns of the government, but it says it is.
Just this morning, the finance minister rose to speak to the bill. He said very plainly that the benefits of the budget on the taxation side are evenly distributed to all Canadians. This is not the case.
In his own document, on the benefits to helping individuals and families, it says that someone earning less than $15,000 will benefit from this tax relief by $51 in the year 2006. Let us move up the line. Someone making $15,000 to $30,000 will get $199. Someone from $30,000 to $45,000 goes up to $367. I could read out the list, but when we get to $100,000 to $150,000, the benefit to someone is $795 a year.
It is pretty clear from the government's own document that low income Canadians do not benefit evenly. In fact, they are getting about one-sixteenth the amount of a high income earning family from these benefits. It is a disturbing picture. Some have suggested that there is a motive here and I suppose we will find out.
I would suggest that members look at the Caledon Institute website to see the analysis of how low income Canadians will not get the same benefits. I am sorry to say that many of these people will not realize that and will not find that out until they file their next tax return for the 2006 taxation year.
Many of those people who are employed and have source deductions, and always have a small difference of a $1 here owing or $1 refundable, will find out they owe hundreds of dollars to pay back the amounts that they received under that $1,200 family allowance.
The Conservatives boast about the benefits of the GST adjustment. Yes, it is politically correct, but there is no economic expert who would support the policy strength of making such a move.
Could members imagine a theatre that charges $50 for a ticket? Will it now start charging $49.32 or something like that? Nonsense, it will not be passed on. That is one of the problems of having reductions in certain, either ad valorem or consumption taxes. There is no way to track it. Even on gasoline, the producers will simply increase the price because they know the consumer is getting a little break on the tax side and the consumer, on a net basis, will be no better off. There must be a way to deal with it.
When we think about it, people making $30,000 a year and after they pay taxes of about $8,000, their disposable income of that, about 60% of it, may be attracting GST. All of a sudden we are talking about something like $12,000 that may be GST taxable. On $12,000, the savings will be $120, and that is the maximum they could get, simply because that is the amount they can afford to spend, unless they go out and borrow it, in which case, chances are their interest rate costs will destroy the economics of making the purchase in the first place.
The higher we go up the income scale, the more disposable income is available. It means that Canadians who buy much more expensive automobiles, other consumer durables or even be a big house, will tend to be in a position to reap the majority of the benefits. Again, it is not as advertised. It is not evenly distributed. It is not what the minister said. He mislead the House by saying Canadians would benefit evenly.
I would really think that he should be straight. If the policy is good, give it to us with all the details, all of the numbers and the analysis, so that Canadians can see these things.
On Sunday on the TV program Question Period, the health minister spoke about health issues, and particularly the guaranteed wait time. That issue was in the election platform of the government. It was one of the five items that were dealt with, that the Conservatives said they would deal with in the budget.
When we look at it, and it is kind of interesting, the Minister of Finance did not dispute that there was no money in there for the guaranteed wait times, but the health minister said something different. He said that there was enough money in the $42 billion health accord signed by the previous government and therefore there was no new money for the guaranteed wait times.
I would suggest that again, it was not as advertised. The House has been misled and Canadians have been misled because there is no money in the budget for guaranteed wait times. It is an expensive proposition. This is a promise made and a promise broken.
Dave Batters Conservative Palliser, SK
Mr. Speaker, I listened to the member's comments with great interest. I believe he is using some language which he knows full well is unparliamentary and not to be used in this place.
He used the word misled, so let us use that word. Who were truly misled were Canadians in the mid-nineties. We would not be in the situation we are in today, with the terrible strain on our health care system in terms of wait lists and wait times, and people having to wait for knee and hip replacements and cataract surgery. Why is that? Why are we in the situation that we are in today? It is because of the $25 billion social transfer cut that was forced upon this country by the then Liberal government. That is why we are in the situation we are in today.
In January of this year, Canadians voted for change. They voted for a party that is going to finally address some of these issues that were left to us by the previous government.
This is the second time today that I have heard him speak about wait lists. This seems to be an important issue to him. I would like him to comment on what his feelings are about the huge social transfer cut of $25 billion by the then Liberal government and how that has impacted our health care system today. If he could comment on that, that would be great.
Paul Szabo Liberal Mississauga South, ON
Mr. Speaker, those things had to be done after the Conservative government left us a $42 billion annual deficit. That is the reason. If we do not get our fiscal house in order, there is nothing that we can do for anybody. That is the reality.
The member again was not quite clear on the language. I did not speak about wait times. I spoke about the guarantee. That is different. Wait times were addressed by the previous government in consultation with the provinces and wait times benchmarks had been set and agreed to. That is not the issue.
The issue is that the government said it would guarantee those wait lists and start to shuttle people and their families from province to province, or even to the United States, to get them the health care they needed. The government was going to pay for that. That does not come free, but there is not one penny, not one new dollar of health care money for the guarantee, which is going to be significantly expensive.
The health minister on Sunday said that there is enough money within the accord moneys delivered by the Liberal government, so in fact, the Conservatives, in the last election, promised to agree to or to follow through with the Liberal government program. That is no promise at all. It was already there.
John Williams Conservative Edmonton—St. Albert, AB
Mr. Speaker, I listened to my hon. colleague across the floor trying to explain this concept. I think his phrase was “legislation not passed but in force” regarding a proposal by the Liberals last November that could perhaps be an income tax cut, which is one of those deathbed conversions. I think it was the fourth budget last year that brought in some proposals regarding tax relief.
However, the point is, as we all know, that legislation passes this House, it goes down the hall and passes in the Senate, receives royal assent, and then, after being published in the Canada Gazette, it comes into force, so that Canadians understand the law of the land. It is this Liberal arrogance that we still hear coming from the other side of the House, where those members say they just have to make an announcement and they think it is the law of the land.
Would the member please tell us how he thinks that the Liberals can make these kinds of pronouncements and call them legislative tax cuts when they have not even been debated in this place or in the other place or given royal assent?
Paul Szabo Liberal Mississauga South, ON
Mr. Speaker, I am sorry, but this member has no idea what he is talking about. When he did his tax return for the year 2005, the income tax rate on the first tax bracket was 15%. If he is saying it is not there, I will believe him. But in fact, most Canadians will see, if they look at their tax return, that it was 15%.
This is more about the fuzziness. He says these tax cuts are more than what came in the last four years. When we have a budget that delivers tax cuts for the next five years, it is okay to say, yes, it was not promised in the last four years, but it is being delivered.
When we think about it, and I have the numbers here, since 1997, when the budget was finally balanced after the abysmal job that Mulroney had done, the tax cuts to Canadians have averaged $16 billion a year. This Conservative budget only delivers $6 billion. The Conservatives are way behind.
Gary Goodyear Conservative Cambridge, ON
Mr. Speaker, I rise on a point of order. If it is the will of the House, I would like to revert to motions for just one moment, please.
Budget Implementation Act, 2006Government Orders
The Acting Speaker Andrew Scheer
Does the hon. member for Cambridge have unanimous consent to revert to motions?
Budget Implementation Act, 2006Government Orders
Some hon. members
Agreed.
The House resumed consideration of the motion that Bill C-13, An Act to implement certain provisions of the budget tabled in Parliament on May 2, 2006, be read the second time and referred to a committee, and of the motion that this question be now put.
John Williams Conservative Edmonton—St. Albert, AB
Mr. Speaker, I am also pleased to engage in the budget debate and listen to my hon. colleagues in the House. I listened to the member for Trinity—Spadina earlier this morning, who talked about the fact that Canadians need a better deal.
After 13 years of Liberal government, of course we on this side of the House have to agree with her. Canadians absolutely need a better deal because we have been taxed to death and every time the Liberals see a tax dollar they try to find a way to spend it. I am glad to see that the NDP is also on our side, where Canadians need a better deal.
Let us just look at some of the ideas that we have for Canadians in this budget, which is a great budget. It has been extremely well received by Canadians because they are going to pay less tax. They are going to pay $20 billion less in taxes over the next couple of years.
The GST will go down by 1%. Who would object to a reduction of 1%?
Budget Implementation Act, 2006Government Orders
Some hon. members
Liberals.
John Williams Conservative Edmonton—St. Albert, AB
Yes, and let me ask members if they recall when the GST was first introduced. The Liberals fought it tooth and nail. They just about tore the building down and the doors off the other place as they fought against the GST.
Now they are fighting against the reduction of the GST. It beats me. I do not understand it. We can be on one side of the fence or we can be on the other side of the fence, but to be on both sides, I guess, means they are Liberals.
Let us take a look at the other things we have done for Canadians. We have heard a lot of talk about the $100 a month, the $1,200 per child.
By the way, I am going to be splitting my time with the member for Sarnia—Lambton.
The $1,200 per year is a great boon for all Canadians with children under the age of six, and not just those in urban areas, but parents who live on the farm or in the country. Were they ever going to get a day care place from the other party? No, they were not, never. We have given them an opportunity to augment their own incomes so they can afford to have a spouse stay at home, perhaps, or to have someone else help them with the children. It is this type of benefit that Canadians want.
Then there is the $1,000 for the Canada employment credit. We want to help people in the employment area.
We have reduced personal income tax from 16% to 15.5%. I will acknowledge that members on the other side thought they would like to reduce income tax too, but they lost the election before they put it in place, so we are putting it in place.
Not only have we reduced the lowest rate of personal income tax, but we are also increasing the basic exemption before people start to pay tax, so that means another 650,000 people off the tax rolls, paying no tax at all and paying less GST. How much better could it be? That is why we think this is a great deal for Canadians.
For small business, we have done this the same way. We have increased the basic threshold before they come up into the general tax rate for businesses. They can now earn up to $400,000 at the lower income tax rate, and even that lower rate is coming down from 12% to 11.5% and then to 11% in subsequent years. It is all a great deal for Canadians.
Then, of course, for those who like to imbibe or those who produce wine--my colleague here is from a wine producing area--for small vintners we have taken the duty off Canadian wine. Also, for the small breweries, the excise tax has been removed from the beer they produce. We want to help employment in Canada. Is that not what building Canada is all about? I would think so. We want to give everyone in small business, the backbone of our economy, a great helping hand.
The corporate tax rate is now down to 20.5% and will continue going down.
There is the apprenticeship job creation tax credit of $2,000 to help young people get involved in getting an apprenticeship so they can get training and a skill to carry them through the rest of their lives. It is a small investment by us and a great investment by young people, who learn a trade and go on to earn a satisfactory income for their families. This is building Canada. This is why it is such a great deal.
The apprenticeship incentive grant of $1,000 is the same thing. We want to help employers help young people get the skills to become lifelong earners who look after their families.
In addition to that, of course, many tradespeople have to buy tools. It costs some mechanics $40,000 or $50,000 to invest in tools. We are providing $500 a year. The Liberals refused year after year to do anything about it, knowing full well that these people were incurring costs. We have done it. That is why it is a great deal for Canada.
For those in university, we have eliminated the federal tax on scholarships, bursaries and fellowships, again helping young people to get educated so they can become solid, contributing members of our society.
Is this rocket science?
John Williams Conservative Edmonton—St. Albert, AB
I did not think it was rocket science either, but all we have ever heard for the last 13 years is how the Liberals could find another way to subsidize some segment of the economy because people needed a hand here or they needed a hand there.
Why not provide people the education, training, job opportunities and skills so they can go out, support their families and pay less tax? I think this model is far superior to the one I have had to listen to over the last many years in the House.
With regard to the textbook tax credit, again, we have heard since I came here 13 years ago about university students having to pay hundreds of dollars to buy textbooks. These are not best selling books. They are books students must have in order to learn and to obtain their degrees. There was not a single ounce of sympathy from the Liberal government, but we have said, “Yes, let us help students get their education so they can go on to learn, obtain a satisfactory career, earn income and be great Canadians”. It all flows from the same philosophy.
As for fishers, let me note that farmers have had a half a million dollar capital gains exemption at the end of their careers so that when they sell their family farm or pass it on to the next generation they do not end up bankrupt. We know how hard it is in agriculture these days. If, when they sell their farms, their lifelong assets and everything they have poured their money into gets sucked away by the government in capital gains tax, it kills the family farm. We have to admit that this rule has been in place for a while for farmers, with half a million dollars tax free on capital gains. Now we have given it to the fishers as well so that when they sell their boats and everything else to the next generation, the government does not bankrupt them and take their livelihoods away. It makes common sense.
Then, of course, there is empathy. There is a child disability benefit for those who have significant extra costs. People with disabled children need some help. We have recognized that. We have increased the refundable expense supplement.
Also, we want to help young people,and indeed all people, to stay fit. We know that fitness equals better health. Better health equals better prosperity because of less time off work, fewer medical expenses and less money that we have to pour into health care. The benefits seem to be endless. We are prepared to help people to be physically fit and we encourage people to be physically fit.
It is great to be physically fit. As we cheer on the Edmonton Oilers and all the other teams vying for the Stanley Cup, we recognize how fit the guys on the ice are, and I am sure many people are rather envious or would love to emulate their fitness. This is a great opportunity and they can do it with a tax credit at the same time.
We did not forget about seniors either. We have increased the pension income credit, doubled it in fact, from $1,000 to $2,000.
I could go on to talk about arts and culture, farmers, transit users and affordable housing. The list goes on and on. It is a great budget for Canadians. This is only the beginning. If they keep electing Conservative governments, they will see more budgets like this. It is a great thing for Canada.