The hon. member for Kings--Hants.
Budget Implementation Act, 2006, No. 2
A second 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 implements the following income tax measures proposed or referenced in Budget 2006:
– the new Canada Employment Credit;
– the new Textbook Tax Credit;
– the new tax credit for public transit passes;
– the new deduction for tradespeople’s tool expenses;
– a complete exemption for scholarship income received in connection with enrolment at an institution which qualifies the student for the education tax credit;
– the new Children’s Fitness Tax Credit;
– a doubling, to $2,000 from $1,000, of the amount on which the pension income credit is calculated;
– an extension of the $500,000 lifetime capital gains exemption, and various intergenerational rollovers, to fishers;
– the new Apprenticeship Job Creation Tax Credit;
– a reduction of the current 12 per cent small business tax rate to 11.5 per cent for 2008 and to 11 per cent thereafter;
– an increase, to $400,000 from $300,000, of the amount that a small business can earn at the small business tax rate, effective January 1, 2007; and
– a reduction of the minimum tax on financial institutions.
Part 2 implements the proposal in Budget 2006 to lower the income tax rate on large corporation dividends received by Canadians.
Part 3 implements the proposal in Budget 2006 to reduce excise duties for Canadian vintners and brewers.
All sorts of information on this bill is available at LEGISinfo, an excellent resource from 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-28s:
Budget Implementation Act, 2006, No. 2Government Orders
Scott Brison Liberal Kings—Hants, NS
Mr. Speaker, I would urge the hon. member to actually read the speech I gave in this House in 2001 at the time of the decision to ratify Kyoto in which I actually said I supported Kyoto. In fact, I attacked the government for not putting in place a plan at that time to meet Kyoto targets, so I was critical at that time of a government that did not implement a plan immediately to respect Kyoto targets. I was supportive of the Kyoto accord.
Today I find myself attacking a Conservative government that has actually undone a plan, has taken apart and destroyed a plan, that the Liberal government actually implemented. I supported that plan. I was part of a cabinet and in fact, under the leadership of my current leader who was environment minister at the time, a plan was implemented that made sense, that advanced the environmental file that would help us respect and achieve our Kyoto targets. This government is undoing it, so I am being entirely consistent.
I attacked when there was no plan to respect Kyoto targets and I am attacking today a government that completely gutted a Liberal government's plan to move toward meeting those Kyoto targets, so I have been entirely consistent.
One of the differences between the old Progressive Conservative Party and the Reform Party is that the old Progressive Conservative Party understood that climate change was a reality. It understood that we had to take action as a government, and in fact believed that Kyoto was the right thing but the plan needed to be in place to respect those targets.
Budget Implementation Act, 2006, No. 2Government Orders
The Acting Speaker Royal Galipeau
I am going to give the floor to the member for Jeanne-Le Ber so he can ask a question.
I would like the hon. member for Kings--Hants to keep an eye on the Chair so that I can give him advice as to how the clock is running.
Thierry St-Cyr Bloc Jeanne-Le Ber, QC
Mr. Speaker, I listened to the member for Kings—Hants and I was pleased, if surprised, to hear him talk about how our tax system must stop encouraging polluting industries and instead give tax benefits to companies in the sector who can contribute to improving our environment because major investments are needed. I was pleased because the Bloc Québécois has long held this position. If the member's riding were in Quebec, I think he would be ready to join the Bloc Québécois.
At the same time, I was surprised because many of the measures that help the oil industry were set up during the Liberal government's tenure. We remember the many gifts that were given, including accelerated capital cost allowances for 100% of oil sands investment. That means that according to the Liberal Party, an oil sands development has a useful life of one year. That is absolutely ridiculous.
Among other things, when the Standing Committee on Finance was drafting its pre-budget consultation report, I made a proposal to abolish this tax incentive, which encourages pollution. Unfortunately, the committee rejected the proposal.
I would like to know why we did not get his party's support to abolish a tax incentive that encourages polluters.
Scott Brison Liberal Kings—Hants, NS
Mr. Speaker, I thank the hon. member for the question.
First, our government implemented positive changes to honour our commitments under the Kyoto accord: for example, EnerGuide and the other programs to encourage people and businesses to make a difference and invest in clean energy.
I absolutely agree with the member. We need to do more. That is why I have suggested ways of doing so.
It is clear to me that Quebeckers are particularly aware of environmental issues. I have confidence that Quebeckers and all Canadians can be rallied around a major national objective such as the environment. I hope that with effective policies, it will be possible to unite the country, Quebeckers and all Canadians, around this objective. Perhaps with that approach, it will be possible for us to work together in my party, the Liberal Party.
Dennis Bevington NDP Western Arctic, NT
Mr. Speaker, I thank my hon. colleague for his thoughtful dissertation on the green economy and all the things we could do within it. Certainly, we have to make choices. We have made some choices in the past. One of the choices the Liberal administration made in the last few years, which was backed up by the Conservatives when they got in, was to encourage the development of liquefied natural gas terminals in Canada. These terminals would bring gas from other countries to Canada at very high environmental cost in terms of the CO2 emissions to get the gas here. As early as May, the North American Energy Working Group was busy continuing this plan to develop the infrastructure of delivery of another fossil fuel from somewhere else.
As a Liberal member of cabinet before, does he now see the error in supporting the development of this new fossil fuel energy source for this country? It exports money and creates pollution in other countries. Does he think this is the kind of thing with which we should be moving ahead if we are really, truly talking about a green economy in Canada?
Scott Brison Liberal Kings—Hants, NS
Mr. Speaker, the member refers, in a pejorative way, to fossil fuels. Perhaps he is of a different mindset because I know some people believe that we can achieve all the energy requirements that the world needs with wind, solar energy, biofuels and these others. In fact, that is not accurate.
We need to start with cleaner fossil fuel technology; the way we extract and the way we refine. We need to invest in the kinds of technologies that can lead to cleaner oil, cleaner gas and cleaner coal. However, we should not dismiss offhand any form of energy when the technology is available or waiting to be commercialized to actually produce it in a more environmentally sound way.
I mentioned earlier, and he may be adverse to this, that we have to have a broader discussion about nuclear power as a greater part of meeting our energy requirements in Canada. France is producing 78% of its energy with nuclear power. We cannot have a reasonable discussion on reducing greenhouse gas emissions unless we are willing to actually talk about nuclear power when it is one technology that does not produce or contribute to greenhouse gas emissions.
We as a country have significant uranium resources. I have been told that we are one of three countries in the world that is stably and democratically governed, until recently, and, at the same, has significant uranium resources. We need a broader discussion, but we should not be coming at it from an ideological perspective. I think that there are opportunities for us to produce all the forms of energy in a--
Budget Implementation Act, 2006, No. 2Government Orders
The Acting Speaker Royal Galipeau
The hon. member for Kings—Hants had been asked to look at the Chair and I would have avoided interrupting him.
The hon. member for Jeanne-Le Ber may continue.
Thierry St-Cyr Bloc Jeanne-Le Ber, QC
Mr. Speaker, I am pleased to speak today about this notice of ways and means on the budget. Although the Bloc Québécois has always had serious reservations about this budget, we have decided to support it, as we believe it contains a number of gains that the Bloc Québécois has long been calling for. Moreover, today, during question period, I was glad to hear the Minister of Transport, Infrastructure and Communities remind this House that he needed the support of the Bloc Québécois. I think that clearly shows how useful and relevant the Bloc Québécois is.
Here are some of the gains and long-standing requests that we have successfully obtained from the government. The first is tax exemption on bursaries. We believe that if one level of government gives money to students for their studies, no part of that money should be taken away from them in the form of taxes. We also obtained tax improvements for micro-breweries. This is of particular concern to me, because the McAuslan brewery is in my riding. If time allows, I may discuss this further a little later. In any case, we had been calling for this for quite some time. A tax credit for public transit users, something that the Bloc Québécois requested on several occasions, was part of our platform. We are pleased to have obtained this. We had also long been asking for removal of the excise tax on jewellery, a tax credit for tools—the government even extended this to apprentices—and a 50% reduction in the right of landing fee.
As the Minister of Transport, Infrastructure and Communities stated this morning, the government needs the support of the Bloc Québécois in order to advance its issues. We are also working on another large file. We are hoping, as the parliamentary secretary said this morning, to be very pleasantly surprised and see the government finally fulfill its promise to correct the fiscal imbalance in the next budget.
However, I must confess that we are skeptical about this, to say the least, because, since tabling the last budget, all signs from the government seem to minimize the seriousness of the problem. We were even seriously told in this House and in committee that the GST reduction was helping to resolve the problem. This illustrates the government's failure to understand the problem of the fiscal imbalance. We are told that the problem is being resolved, although meanwhile, Ottawa cancelled a child care agreement with the Quebec government, thus adding to the fiscal imbalance.
Some say that the Bloc Québécois' requests are far-fetched, although the minister, Mr. Séguin, made the same requests in the National Assembly on behalf of Quebeckers. The number is the same. No matter how you try to calculate it, the answer is always $3.9 billion.
So, for us this is essential and it will be critical in the next budget. If the Minister of Transport, Infrastructure and Communities was serious this morning when he said that he needs the support of the Bloc Québécois, he will take note that this is our main demand. This is why Quebeckers put their trust in the Bloc Québécois. They know that we always follow up on our commitments, including resolving the fiscal imbalance issue. Quebec must receive $3.9 billion annually, through transfers or through the equalization program. In the short or the middle term, the government will also have to consider a true tax room transfer. Indeed, the middle or long term solution that is needed to solve the fiscal imbalance issue can only be achieved through a tax transfer.
No one in Quebec wants to be subjected to the risks that result from having various governments in Ottawa, various parties that change the programs, that abolish them, or that suddenly reduce federal transfers, like the Liberals did in 1995. We want to be able to manage our own financial resources, since it is our taxes that we are sending to Ottawa. This is a top priority for the Bloc Québécois.
In his economic statement, the Minister of Finance also talked about the government's intention to limit the federal government's spending power.
We are not opposed to that. On the contrary, this is interesting but, once again, we are very skeptical.
I asked the minister, when he appeared before the committee, to elaborate a little more on this, but he said very little. Now that this House has recognized that Quebeckers form a nation, it would be nice to include, in the next budget, real and concrete measures to limit the federal government's spending power.
What does this mean? When we talk about restricting the federal government's spending power, it is clear, at least in Quebec, that we are talking about the right to opt out with full financial compensation from any program put in place by the federal government in a Quebec or provincial jurisdiction. This measure will also have to be retroactive, so that the governments of Quebec and the provinces can say, “There is currently a program in my jurisdiction. We are asking for the right to opt out with full compensation, to be able to set up our own programs”.
This could be the case, for example, with the child care program. The approach used by the government in this area is totally different from the one selected by Quebec, which is to establish a public child care program shared by all.
If the government is really serious about limiting the use of its spending power, it has to expect that the Government of Quebec might say, for instance, “We are withdrawing from this program, taking the money currently provided by the federal government for child care and investing it in our own program”.
In its next budget, the government will have to correct errors and problems with taxation which penalize Quebeckers. I touched on that earlier this morning. The biggest problem was the impact of the child care program and cuts to Quebec in terms of the tax credit for child care, among other things.
In the rest of Canada, parents claiming tax credits for child care may claim $25, $30 or $40 a day, while in Quebec, parents who have access to public day care can claim only $7 a day. They still have to pay the difference through their taxes in Quebec, but they cannot claim more than $7 a day on their federal income tax. This makes for substantial savings for the federal treasury, while Quebeckers lose control over that money.
I questioned the parliamentary secretary this morning. As part of the Conservative government's alleged commitment to flexible federalism, will her government announce that it will respect the choice made by Quebeckers? Will it give back to the Quebec government the money saved each year on tax credits unclaimed by Quebec parents, so that this money can be invested in Quebec's own child care services? The parliamentary secretary would not commit to do so. It is very sad to see that this commitment to flexible federalism has remained little more than lip service. Flexible federalism really has to be taken to mean, “We are prepared to make an effort whenever it is no trouble and it serves us. Otherwise, it's your problem. We will not go out of our way for you”.
Quebeckers have to come to the realization that the only real choice left is to become our own country, to be able to make our own decisions and our own choices without having to ask permission of other levels of government. In the meantime, the Bloc Québécois will be here to try to limit the damage.
Moreover, there is absolutely nothing about Kyoto in this budget, which is very sad. Not only is there nothing on Kyoto, but the Minister of the Environment told us earlier this year that she would not give the $320 million that Quebec needs to implement its Kyoto plan.
In this regard, there is a similarity between the Conservatives and the Liberals. Neither of these parties acted on the Kyoto protocol. Yes, the Liberals ratified the protocol. The leader of the official opposition held a nice conference in Montreal and said a lot of nice things, but that does not change the fact that, under the previous government, Canada's record with regard to greenhouse gas emissions was nothing less than catastrophic.
For years the Liberals told us that it was important to meet our targets, but they did nothing. As for the Conservatives, they told us that it was impossible to meet our targets, so they did nothing. The Conservatives know they are incompetent and unable to deal with this problem, whereas the Liberals pretended they did not know. I think it is the only difference between those two parties. We hope that the next budget will include funds for the environment and for the Kyoto protocol and that the Government of Quebec will at least receive the money it has requested to fund its plan.
There is something else missing in this budget. It is a shame because what is missing would not cost much. I am talking about funding to set up an appeal tribunal for refugees, in accordance with the legislation. The regulatory and legislative framework already exists. The government just needs to fund this tribunal so that refugee status claimants can fully affirm their rights. They are currently dealing with commissioners who are often appointed for partisan purposes.
We recently saw in the media that the Conservatives are blocking some appointments for partisan reasons. By having an appeal division with truly independent judges, a refugee claimant who is the victim of a commissioner's error could appeal the decision and truly obtain justice. In my riding, there is a very real, very concrete example in the case of Abdelkader Belaouni, who is a refugee in sanctuary in a church basement in Pointe-Saint-Charles. This person was clearly wronged by a commissioner. This example is clear and striking because Laurier Thibault, the commissioner who denied Mr. Belaouni's claim, has not approved a single claim in the past two years. This is a commissioner who denies almost 100% of all claims. That cannot be right.
If a true appeal tribunal were set up, we would notice this situation even more. Maybe that is what the government is afraid of. Impartial judges might not have a 100% rejection rate and would see that many claims are justified and legitimate. Furthermore, Abdelkader Belaouni is quite involved in Pointe-Saint-Charles and has the community's support. This man wants to contribute to society and he wants to work. He has been here for 10 years. It is truly sad to see that such situations exist in Canada because the Minister of Finance did not include in his budget a few million dollars to set up this appeal tribunal.
In the meantime, the Minister of Citizenship and Immigration should personally intervene, as far as the law allows him, in order to compensate Abdelkader Belaouni and regularize his situation. Since there was no appeal tribunal in place to prevent this situation, the minister must act to repair the damage done, at least. This would be a good way to make amends.
The ways and means motion before us would implement part of the budget, Bill C-28. As I have said, the Bloc Québécois asked for a number of measures, including a tax credit for public transit, a tax credit for textbooks and tax deductions for microbreweries. We support these measures, as well as measures to assist and reduce the burden on small and medium businesses in Quebec.
It is therefore not surprising that we will support Bill C-28 even though we have serious concerns about this budget overall.
There is one particularly interesting measure that I mentioned before: a different excise tax for micro-breweries. Since the budget was tabled, the measure has been modified somewhat to cover nearly all Canadian breweries. Even so, it will help a lot and we are pleased to have made progress in this area. As I said, I think that this will help local economies like those in my riding where the McAuslan microbrewery is located. It produces a good product, does excellent work, employs people and helps our communities survive. This is an excellent example of how the Bloc Québécois can contribute by encouraging the government to make good decisions for people.
With respect to individual taxation, the tax credit for toolkits purchased by tradespeople is also something we have been asking for for a long time. In many cases, people whose jobs require tools end up spending a lot of money every year. This is how they make their living, so they do not have a choice. They must buy these tools. Therefore, we are very pleased with this measure, which we have been asking for for so long.
As for the transit tax credit, that was in our 2004 election platform and we are pleased to see that the government finally listened to reason and included this measure in its budget. Obviously, this will not solve the problem with greenhouse gas emissions or the problem with public transit in general. The issue of underfunding must be addressed through the elimination of the fiscal imbalance. If the government is really serious about wanting to deal with transit issues, it will have to deal with the fiscal imbalance.
There are also a few measures for the most disadvantaged, including increasing to $1000 the amount deductible from the taxable income for pensioners. This is a good measure. However, it would be hard not to say that this does not even compensate for the billions of dollars still owed to seniors who were cheated out of the guaranteed income supplement. This program was too difficult to understand and too difficult to use for many of them. There are people who, for years, would have been entitled to apply for the GIS but never did. When they became aware of it, it was too late. The government agreed to pay the money back only for the last 11 months. That was under the Liberals. We would have thought that the Conservatives would act differently, but no, they are still refusing to give full retroactivity to those seniors who were cheated out of the guaranteed income supplement.
Yet, I challenge anyone not to pay taxes for four or five years and then tell the government, when it asks for its money, that it will only get the last 11 months worth of taxes, and that it is too bad if it did not notice anything sooner. Of course, that would not work. The person would have to pay the taxes owed for the whole period of time. The Bloc Québécois thinks that the government should refund seniors for the whole period during which they did not get the support that they needed.
Finally, as regards corporate taxation, we are also in favour of increasing the sales figure that allows small and medium size businesses to benefit from a reduced tax rate. We think this is a measure that will help develop the Quebec economy. In fact, we talked about this in our 2000 election platform, when the Bloc proposed a reform of corporate taxation to give more leeway to small and medium size businesses by reducing their tax burden, because this would allow them to better compete on international markets. So, we like this measure.
In conclusion, the next budget will have to include a true support program for older workers, as pledged by the government in its throne speech. That has not been done, but it will have to be done in the next budget.
Dennis Bevington NDP Western Arctic, NT
Mr. Speaker, the hon. member mentioned some issues surrounding the fiscal imbalance and the tax points that he would like to see as part of this fiscal imbalance and how we can move money from the federal government to the provinces.
In this budget and in the budgets of the Liberal Party prior to this one, for many years we have seen reductions in corporate tax rates and that has not allowed provinces to pick up tax points.
Corporations in this country are free to file their tax returns in whatever province they want. In my territory, the Northwest Territories, we have had extreme difficulty with our fiscal situation when we adjust the corporate tax rate. Either we scare off all the corporations and they run to another province to file or we lower the rate and they run to us.
I would like my hon. colleague to speak to how we can deal with the corporate tax rate in Canada that is applied in provinces. Do we not need some kind of agreement across the country to fix the corporate tax rate that will apply and will prevent these corporations from treating us as pawns in their game to reduce their after tax rate?
Thierry St-Cyr Bloc Jeanne-Le Ber, QC
Mr. Speaker, I agree entirely that tax reductions, whether for corporate taxes, personal income tax, the GST and so on, are not the answer to correcting the fiscal imbalance. These are measures aimed at giving money back to Canadians, measures often suggesting that the government is trying to please the population by distributing a little money here and there, but this is in no way a genuine solution to the fiscal imbalance issue.
As for general tax reductions for corporations, I would point out that, in recent years, although tax rates have been considerably reduced for Canadian businesses, there has been no real increase in investments made by businesses. One might wonder where that money went? Where did those freed up assets go, if not into investments? We might assume that they went directly into the hands of shareholders and that, in the end, it was not as beneficial for our economy as we thought.
The Bloc Québécois always tries to take an approach that offers real, targeted measures. Consider, for instance, the refundable tax credits for businesses that are willing to invest in research. In this budget, for example, targeted measures for small and medium size businesses can be effective, such as special tax rates for small businesses that are expanding. However, simply lowering the general tax rates for all big businesses does not have any useful effect on our economy. This would no doubt please a certain lobby, but it would not be very effective and would in no way contribute to correcting the fiscal imbalance.
Budget Implementation Act, 2006, No. 2Government Orders
December 8th, 2006 / 1:10 p.m.
Calgary Nose Hill Alberta
Conservative
Diane Ablonczy ConservativeParliamentary Secretary to the Minister of Finance
Mr. Speaker, one of the measures in the budget, the tax credit for the cost of riding public transit, would make the cost of a monthly transit pass tax deductible. The Greater Vancouver Transit Authority has released figures showing that ridership for this year increased 10% in June, a further 10% in July and 13% in August. Those are the latest figures we have.
Would my colleague give us his view of whether this sort of measure to encourage the use of public transit should be encouraged and would he have any other studies or figures that might show whether such measures are effective?
Thierry St-Cyr Bloc Jeanne-Le Ber, QC
Mr. Speaker, we are already on the record as supporting this measure. In fact, we put it forward in our 2004 election platform.
I think it is a matter of letting public transit users know that the government supports what they are doing.
I am not sure, however, to what extent this measure will have a significant effect on ridership. We would have preferred a refundable tax credit, because public transit users are in large part student who, more often than not, do not pay taxes. It is less of an incentive for them. I brought this up when the minister came to committee.
While people do talk to me about the cost of public transit—lower costs would certainly be welcome—running times, frequency, routes and infrastructure are also of concern to them. Those who do not use public transit often argue that it takes too long, that it is too difficult to use, that there are not sufficient routes and that the schedules are not flexible enough.
Transit authorities should be allowed to provide expanded service in terms of frequency, scheduling, flexibility and routes. This has to happen at the level of transit authorities, which come under the purview of the provinces.
If the government is really serious about resolving these issues, it has to stop choking the provinces and provide them with all they need to deliver these services to their inhabitants.
Fiscal imbalance really has to be dealt with. We will work on it with the government, which we will support if it gives back to Quebec the $3.9 billion requested to correct the fiscal imbalance.
Mario Laframboise Bloc Argenteuil—Papineau—Mirabel, QC
Mr. Speaker, first I want to congratulate my colleague from Jeanne-Le Ber on his excellent speech.
I take this opportunity to add to the remarks made by the parliamentary secretary, who forgot to mention that the Bloc Québécois had already introduced in the House on two occasions, through its members, bills concerning the opportunity of such a tax credit. We wanted a refundable tax credit.
We obviously managed to half convince the Conservatives, who were more open than they are now when they were in opposition. Again, as representatives of the Quebec nation, we are happy the carry the real message.
The tax credit is a step in the right direction but next time, it should really be a refundable tax credit. This could be included in the next federal budget to ensure that it is not only taxpayers who are encouraged to use public transit and that those who do not pay taxes receive a fair refund. That would encourage them to use public transit more.
Does my colleague think this is realistic?
Thierry St-Cyr Bloc Jeanne-Le Ber, QC
Mr. Speaker, I thank my colleague for his question.
It is true that we need to go further, and the Bloc Québécois will continue to work toward that goal. As I said earlier, I will continue to talk about this in committee and make recommendations. When the minister came, I told him my thoughts on this.
I will certainly continue to work with the parliamentary secretary and all members of the committee to move this file forward.
I believe that the Bloc Québécois' progress, though not yet complete, once again demonstrates the importance of the Bloc Québécois' work. This coincides with what the Minister of Transport said earlier this morning when he was explaining to the House that he needed the Bloc Québécois' support.
We will continue to do our work rigorously and effectively. The parliamentary secretary also sought our opinion on and support for the public transit tax credit, and we gave it.
It would certainly be nice if the Minister of Transport and the parliamentary secretary explained to some of their Conservative colleagues, who like to talk themselves hoarse criticizing the Bloc Québécois, that the party is useful and that they need it to advance the interests of Canadians and—