Budget Implementation Act, 2006

An Act to implement certain provisions of the budget tabled in Parliament on May 2, 2006

This bill was last introduced in 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. The Library of Parliament often publishes better independent summaries.

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, provided by the Library of Parliament. You can also read the full text of the bill.

Budget Implementation Act, 2006Routine Proceedings

May 11th, 2006 / 10 a.m.
See context

Whitby—Oshawa Ontario


Jim Flaherty ConservativeMinister of Finance

moved for leave to introduce Bill C-13, An Act to implement certain provisions of the budget tabled in Parliament on May 2, 2006.

(Motions deemed adopted, bill read the first time and printed)