Budget Implementation Act, 2007

An Act to implement certain provisions of the budget tabled in Parliament on March 19, 2007

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 implements income tax measures proposed or referenced in Budget 2007 to

(a) introduce a tax on distributions from certain publicly traded income trusts and limited partnerships, effective beginning with the 2007 taxation year;

(b) reduce the general corporate income tax rate by one half of a percentage point, effective January 1, 2011;

(c) increase the age credit amount by $1,000 from $4,066 to $5,066, effective January 1, 2006;

(d) permit income splitting for pensioners, effective beginning in 2007;

(e) introduce a new child tax credit of $2,000 multiplied by the appropriate percentage for a taxation year, effective beginning in 2007;

(f) increase the spousal and other amounts to equal the basic personal amount, effective beginning in 2007;

(g) increase the age limit for maturing registered retirement savings plans, registered pension plans and deferred profit sharing plans to 71 years of age, effective beginning in 2007;

(h) expand the types of investments eligible for registered retirement savings plans and other deferred income plans, effective March 19, 2007; and

(i) increase the contribution limits for registered education savings plans and expand eligible payments for part-time studies, effective beginning in 2007.

Part 1 also amends the Canada Education Savings Act to increase the maximum annual grant payable on contributions made to a registered education savings plan after 2006.

Part 2 amends the Excise Tax Act to clarify the legislative authority that allows the Canada Revenue Agency to pay refunds of excise tax directly to end-users, where fuel subject to excise has been used in tax-exempt circumstances. It also amends that Act to repeal the excise tax on heavy vehicles and to implement the Green Levy on vehicles with fuel consumption of 13 litres or more per 100 kilometres. It also provides an authority for the Canada Revenue Agency to pay a refund of the Green Levy for vans equipped for wheelchair access.

Part 3 implements goods and services tax/harmonized sales tax (GST/HST) measures proposed or referenced in Budget 2007. It amends the Excise Tax Act to exempt midwifery services from the GST/HST and to zero-rate certain supplies of intangible personal property made to non-GST/HST registered non-residents. It also amends that Act to repeal the GST/HST Visitor Rebate Program and to implement a new Foreign Convention and Tour Incentive Program, which provides rebates of tax in respect of certain property and services used in the course of conventions held in Canada and the accommodation portion of tour packages for non-residents, and establishes new information requirements in the case where rebates are credited by the vendor.

Part 4 implements other measures relating to taxation. It amends the Customs Tariff to increase the duty-free exemption for returning Canadian residents, from $200 to $400, for absences from Canada of not less than 48 hours. It amends the Federal-Provincial Fiscal Arrangements Act to clarify that when a federal corporation listed in Schedule I to that Act pays provincial taxes or fees, wholly-owned subsidiaries of that corporation also pay provincial taxes or fees. It also authorizes the Minister of Finance to make payments totaling $400 million out of the Consolidated Revenue Fund to the Province of Ontario to assist the province in the transition to a single corporate tax administration. This last measure is consequential to the October 6, 2006 Canada-Ontario Memorandum of Agreement Concerning a Single Administration of Ontario Corporate Tax.

Part 5 enacts the Tax-back Guarantee Act, which legislates the Government’s commitment to dedicate all effective interest savings from federal debt reduction each year to ongoing personal income tax reductions. That Part also commits the Minister of Finance to report publicly at least once a year on personal income tax relief provided under the Guarantee to Canadians.

Part 6 amends the Federal-Provincial Fiscal Arrangements Act to set out the amounts of the fiscal equalization payments to the provinces and the territorial formula financing payments to the territories for the fiscal year beginning on April 1, 2007 and to provide for the method by which those amounts will be calculated for subsequent fiscal years. It also authorizes certain deductions from those amounts that would otherwise be payable under that Act. In addition, it makes consequential amendments to other Acts.

Part 6 also amends that Act to provide increased funding for the Canada Social Transfer beginning on April 1, 2007, and to provide for the method by which the Canada Social Transfer and the Canada Health Transfer amounts will be calculated for subsequent fiscal years, including per capita cash allocations. It also provides for transition protection.

Part 7 amends the Financial Administration Act to modernize Crown borrowing authorities.

Part 8 amends the Canada Mortgage and Housing Corporation Act to permit the Minister of Finance to lend money to the Canada Mortgage and Housing Corporation.

Part 9 amends the Bankruptcy and Insolvency Act, the Canada Deposit Insurance Corporation Act, the Companies’ Creditors Arrangement Act, the Payment Clearing and Settlement Act and the Winding-up and Restructuring Act to allow the Governor in Council to prescribe the meaning of “eligible financial contract”. Those Acts are also amended to provide that, after an insolvency event occurs, a party to an eligible financial contract can deal with supporting collateral in accordance with the terms of the contract despite any stay of proceedings or court order to the contrary. This Part also includes amendments to the Bankruptcy and Insolvency Act and the Winding-up and Restructuring Act to provide that collateral transactions executed in accordance with the terms of an eligible financial contract are not void only because they occurred in the prescribed pre-insolvency or winding-up period.

Part 10 authorizes payments to provinces and territories.

Part 11 authorizes payments to certain entities.

Part 12 extends the sunset provisions of financial institutions statutes by six months from April 24, 2007 to October 24, 2007.

Part 13 amends the Department of Public Works and Government Services Act to provide the Minister of Public Works and Government Services with the power to authorize another minister, to whom he or she has delegated powers under that Act, to subdelegate those powers to the chief executive of the relevant department. That Act is also amended with respect to the application of section 9 to certain departments.

Part 14 amends the Financial Consumer Agency of Canada Act to allow the Minister of Finance to provide funding to the Agency for activities related to financial education.


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.


June 12, 2007 Passed That the Bill be now read a third time and do pass.
June 12, 2007 Passed That this question be now put.
June 12, 2007 Passed That, in relation to Bill C-52, An Act to implement certain provisions of the budget tabled in Parliament on March 19, 2007, not more than one further sitting day shall be allotted to the consideration of the third reading stage of the Bill; and That, 15 minutes before the expiry of the time provided for Government Business on the day allotted to the consideration of the third reading stage of the said Bill, any proceedings before the House shall be interrupted, if required for the purpose of this Order, and, in turn, every question necessary for the disposal of the said stage of the Bill shall be put forthwith and successively, without further debate or amendment.
June 5, 2007 Passed That Bill C-52, An Act to implement certain provisions of the budget tabled in Parliament on March 19, 2007, as amended, be concurred in at report stage with further amendments.
June 5, 2007 Passed That Bill C-52 be amended by deleting Clause 45.
May 15, 2007 Passed That the Bill be now read a second time and referred to the Standing Committee on Finance.
May 15, 2007 Passed That the question be now put.

TaxationOral Questions

April 18th, 2007 / 2:40 p.m.
See context

Whitby—Oshawa Ontario


Jim Flaherty ConservativeMinister of Finance

Mr. Speaker, the commitment in the budget is firm and it is incorporated in Bill C-52, which is the first budget implementation bill that is now before the House. I believe it is up for debate today as a matter of fact. The commitment is quite clear.

I congratulate the hon. member on his new appointment as the finance critic for the Bloc.

Bill C-52--Budget Implementation Act, 2007Points of OrderOral Questions

April 17th, 2007 / 3:15 p.m.
See context


Derek Lee Liberal Scarborough—Rouge River, ON

Mr. Speaker, I rise today on a point of order in relation to Bill C-52, the budget implementation bill.

It is my view that a portion of that bill is drafted in a way that is not in keeping with the practices and customs of this House, that the bill attempts to exempt itself from our rules regarding parliamentary scrutiny of subordinate law, and does not even comply with the government's own internal rules on proper drafting of legislation.

The part of the bill I am referring to is clause 13(1) at page 20, line 16. It amends section 122 of the Income Tax Act and bears the bill subclause number (2)(b) and deals with the issue of income trusts and how they are to conduct themselves for tax purposes over the next four years, until the year 2011. For ease of reference, the margin heading reads “Application of Definition SIFT trust”, which is the short acronym for income trusts.

A notice of ways and means motion on the subject of income trusts was tabled in the House during the afternoon of October 31, 2006 and was concurred in a few days later. The intent of that ways and means motion was in part to impose a 31.5% tax on income trusts starting in 2007, but that for existing income trusts the start date would be 2011.

On December 21 the government released a draft bill for consultation on this issue. However, the clause in question today never appeared in that draft bill. The implementation of the ways and means motion is now found in Bill C-52. Subclause (2)(b) of the bill found on page 20 referred to earlier reads as follows:

the first day after December 15, 2006 on which the trust exceeds normal growth as determined by reference to the normal growth guidelines issued by the Department of Finance on December 15, 2006, as amended from time to time, unless that excess arose as a result of a prescribed transaction.

This clause which I have just read deals with transitional tax measures involving how a large segment of the Canadian economy and billions of dollars of taxpayer assets are to be governed under our tax laws for the next four years, and yet this is proposed to be administered by way of a reference in legislation to guidelines only, which themselves are no more than a press release. I have a copy of that press release that sets the guidelines which I am prepared to table today. Worse yet, this press release, according to the clause in question, can be amended from time to time, as I have just read.

The bill is silent on any mechanism for amending these guidelines or press releases and there is no official or specified repository of this information. What we have in this clause, in effect, is a delegation of subordinate law, not by regulation nor by ministerial directive, but by press release.

This action of the government, that is to say to apply a tax burden or levy against a group of taxpayers using a so-called guideline or press release, is unprecedented. As a matter of fact, the only reference I could find to a budget implementation bill using guidelines dates back some 11 years to 1996 and dealt with the reimbursement of a conservation expense. In other words, the 1996 initiative gave money back to the taxpayer. For the benefit of the Chair, this was clause 66.1(6) of that bill. The situation now before the House is the reverse.

Let me remind the House that the contents and consequences of using that news release are not minor in nature. They are very broad in scope and have a large impact on this broad group of taxpayers involving billions of dollars. The news release itself says, “The deferred application of these measures is conditional on existing,” and income trusts are referred to by using the acronym SIFT, “respecting the policy objectives of the proposals”.

Materials released with the minister's announcement indicated that, for example, the undue expansion of an existing income trust might cause the deferral to be rescinded. This introduces a whole layer of conditions, at least some of which appear totally arbitrary in nature and which the taxpayer must fulfill in order to benefit from the 2011 delay date of tax liability set out in the bill, and yet the bill is silent on these conditions. They appear nowhere in the bill, only in the news release.

The news release includes the concept that if the conditions are not met, the minister, by some unknown authority, can cause the taxpayer's deferral to be rescinded. That would actually result in a tax increase to the taxpayer. That is a new power found only in the news release, that the minister could by some unknown authority rescind a taxpayer's deferred status and somehow force the person to pay the tax sooner than the bill would otherwise have him or her do. That increases the tax burden.

What we are trying to prevent is a situation where the minister or his officials conclude, based on a news release or guidelines, not as a matter of law, that this or that condition in the news release is not being met or has been amended and then is not being met and so, almost by a fiat, a taxpayer's deferral is rescinded. The taxes would be imposed on the person sooner than the 2011 date that Parliament has set out and the taxpayer would be left wondering why and how all this could happen.

Marleau and Montpetit's House of Commons Procedure and Practice reminds us at pages 686 and 687:

In 1950, Parliament adopted the Regulations Act, which decreed that all “orders, regulations and proclamations...” would be systematically and uniformly published and tabled in the House.

This language is from the Regulations Act, 1950. I ask rhetorically, how does the scheme described in the bill herein comply with these practices. Clearly, they do not. It attempts to exempt itself from those rules.

Erskine May's Parliamentary Practice also has references defining statutory instruments.

Our current Statutory Instruments Act provides clear direction regarding subordinate law, offering instructions in areas such as the coming into force date, the means or instruments by which the coming into force will be achieved, the method to be used to publish the subordinate law, and even Parliament's role in the revocation of the instrument should it be found not to be in compliance.

Again, the so-called guideline tax measure referred to in the budget implementation bill also appears to exempt itself from parliamentary scrutiny.

I want to briefly turn to the oversight issue. Marleau and Montpetit at page 688 describes the authority of the Standing Joint Committee for the Scrutiny of Regulations to “scrutinize any statutory instrument made on or after January 1, 1972”. Statutory instruments are referred to therein as:

--any rule, order, regulation, ordinance, direction, form, tariff of costs or fees, letters patent, commission, warrant, proclamation, by-law, resolution or other instrument issued, made or established...in the execution of a power conferred by or under an Act of Parliament.

Clearly, Parliament intended that important issues such as the one found in the budget implementation bill, should be manifested in a statutory instrument subjected to parliamentary oversight and not left to the status of a guideline or press release which can be amended from time to time by an unidentified government official with a computer and a printer.

Again, referring to the Statutory Instruments Act, the Standing Joint Committee for the Scrutiny of Regulations is mandated to report to this House to ensure that instruments conform to 13 criteria of good governance. I draw the attention of the Speaker to criterion number 7, which requires compliance with the act with respect to transmission, registration or publication.

How are members of this House to know whether or not one of the minister's guidelines, which can be amended from time to time, was even published, let alone whether or not it conforms to the rules?

Criterion number 11 guards against an unusual or unexpected use of the powers conferred in enabling legislation. Again, in this case, members will not have the tools to make such a determination because a press release was used.

Clearly in this clause and perhaps others, the government has attempted to create subordinate law by press release in a way that is not accountable to anyone and certainly not accountable to this Parliament. This is not a proper and accountable way to legislate, particularly for a government that proclaims or touts accountability as an attribute of its administration.

Finally, this part of the budget implementation bill does not even conform to the government's own rules on proper legislative drafting. I have in hand a copy of the Privy Council Office document entitled “Guide to Making Federal Acts and Regulations”, which I am prepared to table as well. Page 3 of the document describes what it considers to be proper subordinate law-making. Suffice to say this bill, or at least the clause I have referred to, does not even come close to adherence to those rules governing the making of subordinate law. Given the historic strictness with which the House imposes on tax measures, these vague and arbitrary provisions should be treated as out of order and a nullity. This is taxing by press release.

I conclude by inviting the Chair to review this submission and to rule that the clause in the budget implementation bill is out of order and cannot be proceeded with in its current form. A bill with references such as this should not be accepted in principle and read a second time. This clause, and any other clause or subclauses ancillary to it, should be struck from the bill and ordered reprinted.

If the government insists on proceeding with the objectives of this clause, as wrong-headed as some members may think they may be, it could do so by way of a separate, properly drafted bill dealing with its scheme for taxing income trusts to which the transition rules are central, which the government seemed to be prepared to do last December in any case and which a committee of the House endorsed earlier this year. Obviously, we would expect that the new bill would be properly drafted and conform to the rules of the House.

Given that Bill C-52 could be voted on at second reading fairly soon, I would ask the Chair respectfully to rule on this at the earliest possible opportunity.

Budget Implementation Act, 2007Government Orders

April 16th, 2007 / 6 p.m.
See context


Mario Laframboise Bloc Argenteuil—Papineau—Mirabel, QC

Mr. Speaker, I am pleased to rise today to speak to Bill C-52, An Act to implement certain provisions of the budget tabled in Parliament on March 19, 2007. For the benefit of the Quebeckers and Canadians who are watching, this is the budget implementation bill, which must be voted on and passed.

Obviously, once again, the Conservative Party needs the Bloc Québécois to see this bill pass, just as it needed the Bloc for the budget to pass. It always makes me smile when other members call into question the presence of the members of the Bloc Québécois, my colleagues here in this House. Once again, this only proves the importance of our presence today. If the Bloc Québécois had not supported this budget, there would be no debate regarding the budget implementation. Lastly, the most important reason for the Bloc's support of this budget has to do primarily with the partial correction of the fiscal imbalance.

If I may, I would like to go over a bit of history with the House. As we all know, Quebec's motto is “Je me souviens”—I remember. Quebeckers certainly remember the Conservatives' excessive spending of the 1980s, which is what drove Canada into debt. I am sure we all recall the cuts in transfer payments to the provinces that the Liberal Party was forced to make, cuts that jeopardized Quebec's entire fiscal balance. I was affected by those cuts—not as a privileged witness, but on the front lines.

My background is in municipal government, so I remember the first deep cuts very clearly because the Government of Quebec had to pass on some of the costs to the municipalities. Those with experience in municipal government will remember the first reform, known as the “Ryan reform”. The entire secondary road network was transferred from the Government of Quebec to the municipalities, which had to pay and are still paying the bill for Sûreté du Québec. Quebeckers are well aware of this when the time comes to pay their municipal taxes. There is a nice little “Sûreté du Québec” item on the tax bill for people in the regions who have to pay for the Quebec provincial police. Obviously, the big cities were already paying for their municipal police forces.

I would just like to remind my colleagues that the Atlantic Accord and the agreements the federal government signed with the provinces are all well and good, but that since the federal government cut provincial transfer payments in 1993-94, it has begun to reinvest.

Perhaps I will have an opportunity to explain to what extent. However, I would like to paint a picture for you with respect to the 2007-08 budget, which is before us today, and the federal government's provincial transfer payment increases. Since 1993-94, when deep cuts forced municipalities and school boards to shoulder many new responsibilities, Quebec has recuperated 55% of what it lost, while elsewhere in Canada, the other provinces have recuperated 66%.

Today in Quebec, despite the restoration of fiscal balance, the Liberals and the Conservatives are at each other's throats. Nonetheless, many agreements, including the Atlantic accord and other natural resource revenue agreements, have been signed with the other provinces. I hope that my colleagues in this House, whether Conservative, Liberal or New Democrat, will never forget that Quebec has always paid for one quarter of all investment in oil, but that the rest of Canada has never contributed to the development of hydroelectricity in Quebec, which is our trademark and which Quebeckers have paid for through their electricity bills.

We received nothing from the federal government. We developed our own energy with our own money even though we paid for 25% of the cost of developing the energy of other Canadian provinces. In addition, they share the resources and the profits from these energy sources that we do not have. Today, the blame is being placed on the resolution of the fiscal imbalance, which is considered acceptable for the 2008 budget. Once again, there is a long way to go, because Quebec wants its due.

With the drastic cuts of the 80's and 90's, and the accumulation of debt by the Conservatives, who put Canada in the poor house, the provinces were the ones to pay. Quebec made a major contribution to repayment of the federal deficit.

Today, Quebec is asking for what it is owed. There is a reason why the Bloc Québécois has always called for a solution to the fiscal imbalance. It was neither the current Conservative government and its Prime Minister nor the Liberals who invented it. It was Bernard Landry's Parti Québécois government that set up the commission. Those who followed the debate in Quebec will remember the Séguin commission that presented its report in 2001 and declared that there was a large fiscal imbalance in Canada. That is easy to figure out. Ottawa has too much money compared to the provinces.

We must realize that the federal government does not look after health, education and transportation. So what does it do? Health, education and transportation are a large part of a citizen's life. The rest—the water from taps, waste and so forth—are municipal responsibilities. The federal government looks after security.

Here again, when we look at the gaping holes in Canada's security, we see that the government has not always done its job. It is not meeting the real, everyday needs of Canadians. It is only natural that Quebec, which feels it has contributed too much in the past, should want to correct this imbalance and have most or all of the 52.8% of taxes that Quebeckers pay the federal government come back to them. We know that the government keeps a lot for itself, but a portion has to come back to Quebeckers, and not in formulas invented for Quebec. We are not asking for anything new.

What the Bloc Québécois asked for and what the federal government has done in part is to modify the equalization formula. It was clear that the equalization formulas had to take into account the revenue of all 10 Canadian provinces, which was not the case previously.

The balance had to be right, and the revenue of all the provinces had to be calculated so that equalization would be fair. That is part of Canada's constitution, the famous constitution that Quebec never ratified, whereby the have-not provinces are compensated by the others.

Quebec would like to be a province that contributes more and that gives rather than receives. That is our goal. Quebec would like to stop seeing the aluminum ingots produced in Quebec taken to make cars in Ontario.

The only automotive industry in Quebec was closed and all the jobs associated with it were eliminated. In addition, we often manufacture our products and offer competitive hydro rates paid for out of Quebeckers' pockets. Here again, nothing comes from the federal government. We make products that are then processed in the other Canadian provinces. The people in those provinces have the good jobs. They think it is only natural that they should have the good jobs.

We are seeing this again with the Boeing contracts. Between 55% and 60% of the aerospace industry is in Quebec. Boeing negotiated an agreement for 30%, while the federal government required that just 15% of the spinoffs go to Quebec. But 55% to 60% of the aerospace industry is in Quebec. As the member for Mirabel, I know what I am talking about. Part of the industry is located my riding and elsewhere in Quebec: in Longueuil, Montreal, and in the greater Montreal area.

Once again, when contracts are negotiated, the Conservative ministers from Quebec stand up and say that private companies have to fend for themselves. They are probably glad because the private sector does more than it is asked to do. They are glad to leave private companies to fend for themselves. The Conservatives wanted 15% of the economic spinoffs to go to Quebec, but Boeing wanted 30%.

I am dumbfounded that such things still go on. Quebec will be penalized and 70% of the industry will go elsewhere with the contracts for the C-17s and the Chinooks. Military investment in the aerospace industry will go to other Canadian provinces and will create jobs. It will also create an even bigger imbalance.

There will always be hon. members in this House who will stand up to say that Quebec is always at the mercy of the rest of Canada. That is why the members from the Bloc Québécois would one day like to leave this chamber and for Quebec to become a country so that it can take care of its own affairs and stop being told it is piggybacking on the others.

When we are gone, they will understand that they are the ones who were piggybacking on Quebec, with its natural resources, its raw materials and all they transform outside of Quebec and for which we pay a good part.

The budget now recognizes the fiscal imbalance the Bloc Québécois had estimated. Indeed, the Léonard committee produced a report ordered by the Bloc and it estimated the fiscal imbalance at $3.9 billion. Even the former Quebec Liberal finance minister agreed with that estimation. So nobody should be surprised by it. That was the amount we requested to resolve the fiscal imbalance and the amount the government is giving us. We gave the Prime Minister another chance after last year's budget. He had said that he needed one year to review, analyze and study the issue and that he would propose a solution to the fiscal imbalance this year. I will remind the House that he promised to hold a first ministers conference. Finally, that never happened because he was unable to do it.

We ended up with the $3.3 billion we now see in the budget to resolve the fiscal imbalance. We asked for $3.3 billion in three years. The Bloc has always been a fair player. It has always showed great openness by acknowledging that this was not easy to do and that there were difficult decisions to make. We gave ourselves a three year deadline to get that issue solved. We got $3.3 billion when we were asking for $3.9 billion in 2003 dollars. No need to say that indexation had not been included. We did not want to risk being accused of all sins in the world. But the fact is that we would have considered $3.9 billion a real solution to the fiscal imbalance. However, the proposed $3.3 billion remains a useful amount and that is why the Bloc Québécois has given its support to the budget.

This started at the time of Bernard Landry's Parti Québécois government with the Séguin commission, which was followed by the Léonard committee, set up here by the Bloc Québécois. The committee used the federal government's numbers. No other party wanted to do it, and none of the parties in Quebec were able to do it because it meant taking a close look at the federal administration's inner workings. The Léonard committee spent a year studying all of the data to justify that figure, which, as I said, has not been challenged yet. So that resolves the fiscal imbalance in part. Fixing the fiscal imbalance for Quebec fixes it for the other provinces. Fixing equalization for Quebec fixes it for the other provinces too.

Thanks to agreements signed by other prime ministers, including the former Liberal Prime Minister, other provinces have received additional revenue. Those provinces want to keep getting the same equalization payments as before in addition to new money. It is never-ending. That is why I am saying that because it is so complicated to understand how Canada works, Quebec would be better off as its own country, taking care of its own business. That would be the ideal solution. It would save the rest of Canada a lot of trouble, and it would save us the eternal frustration of constant recriminations. Quebec is always wrong, regardless of the fact that its natural resources are taken away to be processed in other Canadian provinces, which rake in the cash and refuse to give any of it back. This has to end sooner or later. One day, the other provinces will understand. When Quebec leaves, they will miss us a lot because they will finally understand to what extent our natural resources prop up their economies.

The House resumed consideration of the motion that Bill C-52, An Act to implement certain provisions of the budget tabled in Parliament on March 19, 2007, be read the second time and referred to a committee, and of the motion that this question be now put.

Budget Implementation Act, 2007Government Orders

April 16th, 2007 / 5:40 p.m.
See context


Scott Simms Liberal Bonavista—Gander—Grand Falls—Windsor, NL

Do not say no. The member for Peterborough would like to say no but he does not understand it.

I would suggest that the member go to downtown Peterborough, talk to the people at Haaseltons Coffee & Sweets and find out just how the budget is not selling to the people of southern Ontario as well as Newfoundland and Labrador.

Every province is supposed to be better off and yet an independent assessment by Dr. Wade Locke proves that is not true.

It seems to me that in this run up right now we also had a quote from the Minister of Finance during his budget speech. He said that the era of bickering between provinces is now over.

I would not say that our premier, Danny Williams, is bickering or that he is troubled. He is downright angry. As I have just pointed out, he has every right to be angry. He was promised in two campaigns that there would be a total exclusion of non-renewable resources, no caps, nothing of that sort, no hindrances.

If he had followed through on his promise, he would have given the province of Newfoundland $11 billion more than what it was to receive under the accord.

Let me illustrate just how angry the province of Newfoundland and Labrador is in light of us now being in an era of no bickering. Danny Williams is not the only premier. He just happens to be mine.

In a recent release on April 13 entitled “Federal Government Misled Province on Impact of New Equalization Program”, the minister of finance, Tom Marshall, said:

We identified this problem more than a week ago and immediately wrote the federal government seeking clarification. We have yet to hear back from them.

It is funny because they seemed to be quite chatty back in 2004 and 2005.

The fact that they don’t bother to respond to us, but manage to find the time to speak with and offer clarification to independent economists, is insulting to the elected government and people of Newfoundland and Labrador. The Government of Canada has an obligation to explain themselves.

It tried to but it did not work out.

The federal budget legislation contradicts everything we have been told by Ottawa.

The minister said it is increasingly clear that the cost of the Prime Minister’s broken promise is significant. Dr. Locke’s numbers suggest that the shortfall from the Prime Minister’s commitment is now $11 billion. What’s more, it appears to be more financially advantageous for the province to opt to stay with the existing equalization program as it provides approximately $1 billion more than the new equalization program.

But for all, the Minister of Fisheries and Oceans has said unequivocally that Newfoundland and Labrador would not be worse off. As a matter of fact, the Minister of Fisheries and Oceans put out a press release complimenting Dr. Locke on his findings before he ran those numbers again, before receiving all the information and clarification from the finance department of the Government of Canada. He was quite pleased that we were getting an additional $5 billion but yet not much has been said since we truly found out that we would be receiving $1 billion less.

Did the Minister of Fisheries and Oceans know or did he not know? Was he not properly briefed? It is a question for Newfoundlanders and Labradorians and certainly a question for his own riding of St. John's South—Mount Pearl.

The press release goes on to state:

These numbers contradict everything the federal government and [the] Fisheries and Oceans Minister..., in particular, have said since budget day.

Mr. Marshall also states:

Despite assurances from the Federal Minister of Finance that the accords would be protected, fundamental amendments to the legislation implementation implementing the 2005 Atlantic Accord agreement had been proposed without any consultation with the Government of Newfoundland and Labrador. These amendments can be found in the 'consequential amendments' section of the 2007 Federal Budget Implementation Act. Consequential amendments are normally reserved for housekeeping items to fix technical issues. It is not a place to shroud fundamental changes of this magnitude.

In other words, the second half, up to 2020, is now in jeopardy and hidden somewhere in the back of Bill C-52, this so-called implementation act.

I would like to thank the people of Newfoundland and Labrador for standing behind us 100%.

Budget Implementation Act, 2007Government Orders

April 16th, 2007 / 5 p.m.
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Paul Szabo Liberal Mississauga South, ON

Mr. Speaker, we are debating Bill C-52, the budget implementation bill. I did not take the opportunity to participate in the debate on the budget itself. As members know, the implementation bill is a bill which takes the specific provisions of the budget and puts them into the legal language necessary to amend various statutes, and to create new statutes to give effect to them, and that is what the House is dealing with.

One of the things that I thought I would do is rather than try to blanket the budget and the budget implementation bill and give my own personal commentary, I wanted to carve out at least two issues which I think are very important to Canadians. Those two issues happen to be issues for which I believe that the government has broken its promise.

This is a very serious issue, to suggest that the government has broken a promise. In fact, the Prime Minister himself in circulating a document prior to the last election put out this document which said on the cover that there was no greater fraud than a promise not kept.

Let us talk about income trusts because I think this has to be the most significant broken promise in the history of Canadian politics. I am pleased to see that the finance minister is here. He is already upset that I am raising this.

Budget Implementation Act, 2007Government Orders

April 16th, 2007 / 4:30 p.m.
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Bill Siksay NDP Burnaby—Douglas, BC

Mr. Speaker, it is a pleasure to participate in the debate on Bill C-52, the budget implementation act. I want to share my time with the hon. member for Parkdale—High Park.

In this corner of the House, NDP members did not support the budget that was presented by the government at the end of March. The main reason we did not support the budget is that we do not believe that it addresses the growing prosperity gap in Canada. We do not believe that it helps ordinary and working class families meet their expectations, see the advancement they had hoped to find. It does not help immigrant and refugee families find their place in Canada and find that new life in Canada they had hoped for when they came to this country.

We do not see the budget as doing anything to end the growing prosperity gap that Canadians face. We could have made some progress on that. The government has a strong surplus at its disposal which it could have used to bring in the kinds of programs that would reduce the growing prosperity gap in Canada.

The government could have chosen to end some of the huge corporate tax giveaways that it has made since coming to power, $9 billion worth of corporate tax cuts that could have been used in other ways that would have been of benefit to Canadians from coast to coast to coast.

This is pointed out very clearly by some of the work the Canadian Centre for Policy Alternatives has been doing on the prosperity gap in Canada. A recent study it put forward demonstrated that most Canadians are not better off in recent years and that in fact most Canadian families are putting in more work time and 80% of them are getting a smaller share of Canada's growing economy. The Canadian Centre for Policy Alternatives has shown that over the last 20 years Canadians are working longer hours and for fewer benefits. The gap between the rich and the poor is growing largely because, as it points out, the lion's share of benefits of Canada's economic growth are going to the richest 10% of families. It is not going to the majority, the 80% of families whose income is under $100,000, and that is a huge number of people and a very high threshold.

The income gap is growing. In 2004 the richest 10% of families earned 82 times more than the poorest 10%. That is almost triple the ratio in 1976 when the richest earned only 31 times more; it was significant but it was only 31 times more in 1976. That gap is at a 30 year high.

It is also not just a question of incomes, but people are working longer for those questionable incomes. All but the richest 10% of families are working more weeks and hours in the paid workforce, 200 hours more on average since 1996, and yet only the richest 10% saw any significant increase in their earnings, a 30% increase. Everybody else either stayed the same or actually lost ground. In fact, the poorest Canadians saw their real incomes drop in that period.

We do not see that the budget has done anything to alleviate that situation. That is a pretty hard statistical overview of the situation. It does not look at the real hardships that are caused to families, families who cannot afford the drugs they need when they are ill, families who cannot afford the child care they need, families who cannot afford the education they know will help them realize some of their hopes for life in Canada.

The budget was a huge missed opportunity to address the growing prosperity gap in Canada.

I want to talk specifically about the post-secondary education situation in Canada. There are two major post-secondary institutions in my riding, Simon Fraser University and the British Columbia Institute of Technology, one of Canada's leading polytechnic institutions.

We know in my riding that affordability in education is a huge crisis for most families and for students. Students are graduating with huge debts. Families are struggling to ensure that their children can have a decent post-secondary education and build for their own futures.

Working and middle class families and immigrant and refugee families particularly know the importance of a good education. Many of them are struggling to ensure that their children have a good education here in Canada.

In this budget the Conservatives put students last. The measures that are introduced in the budget do not go any way to help reduce the cost of post-secondary education. The budget directly affects only 1,000 students by the graduate student scholarship. That is one-tenth of 1% of all students in Canada. There are one million students in Canada and the Conservatives have chosen to only look out for about 1,000 of them.

In fact, the Conservatives have given more money in the budget to attract students from other countries to Canada, $1 million, than to increase access for prospective Canadians to college, undergraduate, medical or law students. They have tweaked the RESP system, but the benefits disproportionately go to wealthier families. That is something that is completely unfair in this country at a time when ordinary middle class families are struggling to ensure that their children get a decent post-secondary education. With a $9 billion surplus and $8 billion in corporate tax cuts, the investment in post-secondary education is less than $1 billion in the coming years.

There are some marginal increases in core transfers, but the rate is so small that it is going to take years to accomplish anything significant. It is going to take years to even get back to where we were in the 1980s and early 1990s.

In 1983-84 the percentage of GDP for post-secondary education transfers was .56%. That dropped to .41% in 1992-93 and went way down to .19% in 2004-05. It dropped again to .17% in 2007-08 and has come up only very slightly in the projections for 2008-09 to .22%. We are still dramatically behind where things started out before the Liberals made their huge cuts to transfer payments for post-secondary education in Canada. There is nothing that will get us back to the point where there is some real assistance for students to ensure their education in this budget.

Students were explicitly excluded from the working income tax benefit even though hundreds of thousands of students have to work full time to afford their tuition fees and lower their eventual student debt. There is no plan to address student debt in the budget. There is no plan to address the expiry of the Canada Millennium Scholarship Foundation.

That is not where the problems end with this bill for young people. Last week in my riding I attended a conference called Toward Effective Community Practice for High Risk Youth. Youth workers from Burnaby and New Westminster attended. There were many concerns raised about the lack of a coordinated approach to high risk youth and the problems they face in our society. There is no national strategy on youth, no coordinated effort to deal with the problems of high risk youth. There is no attempt to deal with the various boundaries and jurisdictional problems that face young people in difficulty in our country.

Programs for 8 to 12 year olds are particularly important, but they are the ones most dramatically lacking. Teens and those reaching the high end of the age limits of these programs are left without any kind of support whatsoever at a huge cost to Canadian society later on. The question of how we support youth in our society is also something that is very significant.

I hope to talk a bit about the situation of new immigrants and refugees in Canada and what this budget has not done for them. Maybe I will get a chance to do that later, but I want to mention three specific things in Burnaby.

There are three important projects for which the city of Burnaby was looking for support from the federal government and which did not appear in this budget. One is for the establishment of an immigration and refugee services hub in the centre of Burnaby. We need money for infrastructure in Burnaby to deal with the growing population of immigrants and refugees in the community. It is a good thing for our community, but the infrastructure is not there. We need a facility to do that. The city has put aside the land for it, but needs help from the other levels of government.

The city of Burnaby and other communities in the Lower Mainland also need support from the federal government for the World Police & Fire Games in 2009. We need to show support for our police and firefighters by supporting them in this project. The games were recently completed in Adelaide, Australia and the premier of the state of South Australia has indicated what a huge boon they were to the economy of that state and how important they were to its communities.

There is also the question of Burnaby Lake. There was money in this budget to help Lake Winnipeg and Lake Simcoe but there was nothing for Burnaby Lake which is quickly deteriorating from an open water lake into a swamp and marshland. We need to preserve this important habitat for all kinds of wildlife to ensure that Burnaby Lake remains an open water lake.

The city of Burnaby has been seeking a commitment from the federal government for years. It was not forthcoming from the previous government even though the Leader of the Opposition when he was minister of the environment visited and promised to look into it. Nothing was forthcoming and there is still nothing forthcoming from the current government even though the city and the province have committed to this important project.

There are many things missing from this budget, many things that do not address the prosperity gap, many things that do not address the particular needs of the community that I represent. The government could have done a better job.

Budget Implementation Act, 2007Government Orders

April 16th, 2007 / 3:30 p.m.
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Pierre Paquette Bloc Joliette, QC

Mr. Speaker, it is my pleasure to rise in debate on the budget implementation bill, Bill C-52. As you know, from the moment the Minister of Finance delivered his budget speech, the Bloc Québécois has supported this budget, even though it is not perfect. This has to be made very clear. It does, however, have enough good stuff in it for us to be comfortable voting for it and, consequently, voting for Bill C-52.

Obviously, in the budget implementation bill, not all budget items are implemented. But the bill does contain items such as measures concerning corporate and personal income tax, fiscal arrangements with the provinces, particularly with respect to equalization, the Canada social transfer, and the Canada health transfer. This budget implementation bill also deals with trusts and new funds, the amount of such trusts, and direct payments to the provinces, territories and other entities. It also provides the legislative framework for using money saved in debt service from paying down the debt to lower taxes, and it contains a number of other measures I do not intend to get into in any great detail, except perhaps for one, and I will start with that one.

As I was saying, this bill has many items, some more interesting than others. I will primarily focus on the measures affecting fiscal arrangements with provinces and environmental issues.

Moreover, I want to start by bringing up an extremely sensitive point concerning income trusts. Obviously, the Bloc Québécois has supported the principle of preventing corporations from converting into income trusts as of the Minister of Finance's announcement on October 31, for a number of reasons based on various factors. Tax leakage was obviously brought up. While the committee was working on this issue, I realized that there were some revenue losses because of income trusts, but the department was unable to pinpoint to what extent. We were given an absolutely unbelievable figure, which included tax deferrals, since some shares in trusts are in registered retirement savings plans. This represented at least half of the figure presented, and, though I will not go as far as to call it dishonest, I think this method was completely biased.

There was tax leakage for the federal government and the Government of Quebec, but certainly not to the extent that the minister was talking about. Moreover, Minister Audet, who, up until the last election, was the Quebec finance minister—we will soon know who will replace him since, as you probably know, he decided not to run again—told me that the Government of Quebec was currently losing approximately $40 million a year because of income trusts. This is rather far from the figure provided by the Minister of Finance, which was in the billions of dollars over the next few years.

I believe that the government decided to put the brakes on income trust conversions primarily because they would have put pressure on a number of businesses. Take BCE, which did not necessarily want to convert to an income trust but was under pressure because a competitor, Telus, had announced that it intended to do so. It was therefore conceivable that in the future, some immature sectors needing investment would convert to income trusts, thereby causing problems for all of Canada and Quebec. I find this argument more convincing than the tax evasion argument.

Moreover, as I said, on October 31 we were in favour of no longer allowing corporations to convert to income trusts. However, that did not address the problem of existing income trusts. We would have been comfortable with changes to existing trusts that had taken advantage of the established rules for years. The Prime Minister's announcement during the election campaign that the rules were set in stone was irresponsible. It is clear that he promised not to change the rules for income trusts. He broke his promise, but as I said, it was an irresponsible promise anyway. I explained why a few minutes ago.

Nonetheless, the people who invested in existing income trusts did so in good faith, thinking they could trust the Prime Minister, who, as I said, promised not to touch income trusts.

We studied ways to minimize the impact on existing trusts. We would have been comfortable with keeping the 250 or so existing trusts and preventing more from being created. We could have agreed to that.

The government, however, decided to force them to convert back to corporations within four years or to pay the equivalent of the taxes paid by people who invest in regular stocks—which is not entirely true, as the committee found during its work.

As I said, the government decided to allow just four years for the transition. We think the government could easily have extended that period to eight or ten years to mitigate the impact of the October 31 announcement.

As I mentioned earlier, we are going to support the budget. However, when election time comes, the government, that is the Conservative Party, will have to explain to us why it did not heed the recommendations of the Standing Committee on Finance. The Liberals, like the Bloc Québécois, gave suggestions for minimizing the negative impact on the 2.5 million Canadians, including Quebeckers, who invested in good faith in these income trusts and who have since been swindled, despite the Prime Minister's promise during the election campaign.

These 2.5 million Canadians, including many Quebeckers, are not all millionaires or wealthy people. Many of them are even retired individuals who are now having a hard time making ends meet, because they have had a good portion of their income cut off. I understand why they are angry. The Standing Committee on Finance, the Bloc Québécois and the Liberal Party have made suggestions to the Minister of Finance. He did not consider those suggestions. Thus, it is up to the Conservatives, the Prime Minister and the Minister of Finance to explain, in an election campaign, why they did not consider the suggestions made to them, for example, by the Bloc Québécois.

That said, as I mentioned, we agreed with the approach in principle. We believe that the Conservative government, the Minister of Finance and the Prime Minister failed to show compassion for hundreds, if not hundreds of thousands of people who invested in good faith in income trusts.

I therefore wanted to send out this caveat—or update—because, clearly, many people who followed the work of the Standing Committee on Finance concerning income trusts are having a hard time understanding that, even though we disagree with how this measure is being implemented, we are nevertheless going to vote in favour of the budget.

We are going to support the budget because—as I have said many times—it represents a significant, yet largely insufficient, step towards correcting the fiscal imbalance. We are talking about money that Quebec desperately needs.

As we all know, the Prime Minister promised on December 19, 2005, to correct the fiscal imbalance. Thus, the Bloc Québécois supported the previous budget primarily, although not exclusively, because it promised to correct the fiscal imbalance in this budget.

The Bloc Québécois looked at what an appropriate solution would mean for Quebec and made a certain number of conditions. They may not have been met in their entirety but some have been partly met by this budget. In any event, the conditions have been met to the extent that the Bloc Québécois feels it can support Bill C-52 at this stage. However, this is not an indication of what will happen in future, especially when the next budget is tabled. If no other significant steps are taken towards the definitive resolution of the fiscal imbalance, we reserve judgment on future budgets.

I would like to say one thing. What was extremely important to the Bloc Québécois was that there first be an increase in transfers to Quebec and a change in the equalization formula to take some of Quebec's claims into account. When the amounts were announced, the financial imbalance caused by the Liberal government, the former Prime Minister and the former Minister of Finance in 1994-95 and 1995-96—when draconian cuts were made to provincial transfers to deal with the deficit—had to be corrected. At that time, the problem was simply dumped on the provinces.

What is very serious is that, beginning in 1997-98, large surpluses were routinely recorded and the situation was not resolved. The imbalance has yet to be corrected.

We calculated that $3.9 billion was needed to correct the fiscal imbalance. Because we are realistic, understanding and moderate in our approach, we proposed that this amount be disbursed over three years. Therefore, in this year's budget, there is the equivalent of an additional $1.7 million in equalization payments, the Canada social transfer and the Canada health transfer.

Unfortunately, I must subtract $270 million from this amount because the Conservative government unilaterally tore up the child care agreements it had with the provinces. Therefore, this year there is an additional $1.723 billion for Quebec, which is not bad in view of the fact that two years ago the Government of Quebec had to sell $800 million of its own assets in order to balance its budget. This money was needed.

For the next year, according to the 2007-08 budget, the government is already announcing an additional increase of $888 million and of $330 million for 2008-09. I know that this is very far from now, but this wish has been expressed and put down on paper. This comes to a total of $2.9 billion, or almost $3 billion. Adding a number of other things, we reach $3.3 billion, which is not far from the financial target of $3.9 billion that we had established.

This is a financial adjustment. The former Liberal prime minister said that the provinces were under financial pressure and this would have to be corrected at some point. That had never been done systematically. Some money was put into health and some into infrastructure programs, but, as a whole, the government had no approach and was unable to put a figure on the adjustment that had to be made to reach a fiscal balance.

However, the current Prime Minister promised us to redress the fiscal imbalance, not the financial imbalance. Now, all he has done is partially redressing the financial imbalance. As I was mentioning, the increases that would be necessary to correct the situation that was created in the middle of the 1990s were estimated at $3.9 billion in the third year, and he is at $3.3 billion. Let us say that, in the next few years, we force him to put in a little more, if we are all still here, of course. As we know, this Conservative government is in a minority position, and I hope it will keep that in mind.

So, we are currently at $3.3 billion. A little extra effort will be necessary to get closer to $4 billion. Still, that does not correct the fiscal imbalance because, as indicated by the word fiscal, this is a fiscal matter, something having to do with the level of fiscal autonomy that can be achieved by the provinces and Quebec. This means that the tax base will have to be renegotiated. But there is no indication in Bill C-52, or in the budget for that matter, that the federal government is prepared to open negotiations with the provinces to transfer the part of the tax base corresponding to the transfers for health, education and social programs. It makes absolutely no sense for Quebeckers to send money to Ottawa and then be forced to grovel on their knees to try and get their tax money back for programs that fall under the jurisdiction of the provinces, Quebec in this instance. We are talking about health, post-secondary education and social solidarity.

It is another ball game where equalization is concerned, because equalization is entrenched in the Canadian Constitution. As long as we are a part of Canada, the Constitution should continue to apply to us. Incidentally, I often like to joke about the Bloc Québécois being the only party in this House that really cares about enforcing the Constitution of 1867 and respecting the areas of responsibility of the provinces and the central government, which is much more than a federal government. That is what we will be working on in the coming months. My colleague from Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, who will be taking over as our finance critic, will therefore bring pressure to bear so that negotiations are opened with respect to transferring to those provinces that so desire the part of the tax base corresponding to the transfers for health, post-secondary education and social programs. Quebec so desires, and the Séguin commission was very clear in that regard.

As I have already mentioned, equalization will continue to be implemented. This program is not only enshrined in the Constitution, but it is a program that transfers revenues with no strings attached for the Government of Quebec to use as it sees fit, which is not the case with dedicated transfers. This is the first thing that is missing from Bill C-52 that we are working on.

The second thing is federal spending power. The government has not been silent about this, but it talks about it in a roundabout way and it simply pays lip service. The federal government and the Conservative Party are committed to limiting spending power. We do not want to limit it; we want it to be controlled. We are waiting for a very clear bill from the Minister of Finance to explain how he intends to control the federal government's power to spend in the jurisdictions of Quebec and the provinces. How can federal spending power be controlled in Quebec's jurisdictions? There is just one way: by giving the provinces who so desire the unconditional right to opt out with full financial compensation of a program implemented by the federal government in a shared jurisdiction or an exclusive jurisdiction of the provinces; and the province should be compensated.

Unfortunately, that is not exactly where things are headed. I will read a number of paragraphs from the 2007 Budget Plan for budget 2007-08. For example, I will read from page 120. In the objectives stated by the government, by the Minister of Finance, for renewing and strengthening the Canada Social Transfer, they talk about jurisdictions belonging to Quebec and the provinces. Among the concerns are: “The accountability and transparency of the CST—”.

As far as the accountability of the Canada Social Transfer is concerned, what are the Conservatives talking about? The provinces and Quebec are accountable to the federal government when it transfers their money to them.

We are far from the true approach to controlling or even limiting the federal government's spending power. The following sentence is smooth, “—Canadians are not informed of how much federal support is being provided to each of the three priority areas that the CST supports (post-secondary education, social assistance and social services, and support for children)”.

Not only does the Conservative government not have any intention of limiting or controlling the spending power, but it also wants to ensure that federal support—which is essentially the taxes of all Canadians and Quebeckers—will be more visible in the jurisdictions of Quebec and the provinces. It has absolutely no responsibility in this jurisdiction.

However, because of the fiscal imbalance, the federal government has more money than responsibilities. It is looking for responsibilities and is finding them in provincial areas of jurisdiction. So it adds money. Otherwise, what would it do with that money? It could lower taxes and transfer that money in the form of a tax base to the provinces that want it, as I already mentioned. It could also do useful things in its own jurisdiction. For example, what about the RCMP detachments that were closed? The Conservative Party promised to reopen RCMP detachments that had been closed, as was done in the Lanaudière region, where the Saint-Charles-Borromée detachment was closed. What about employment insurance, which falls under federal jurisdiction? It could at least ensure that the program meets the objectives for which it was created.

As we can see, it is a small step that is significant enough for us to be comfortable supporting Bill C-52, but not enough to talk about correcting the fiscal imbalance. I am sure that Quebeckers understand this very well. I am also sure that they will send back a majority of Bloc members to the House after the next election, to truly defend them. They will force the government—Liberal or Conservative—to genuinely correct the fiscal imbalance. The government cannot just go part way, as it is doing now, when it comes to restoring federal government transfers in areas of provincial jurisdiction.

Budget Implementation Act, 2007Government Orders

April 16th, 2007 / 3:25 p.m.
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Paul Szabo Liberal Mississauga South, ON

Mr. Speaker, I want to thank the member for his intervention in the debate on the budget implementation bill, Bill C-52. He is a member from the Yukon and travels a great deal to participate in this place. In fact, he is here as often as anyone doing his job. His constituents should be very pleased with that.

He spoke very eloquently about the impact of the budget on his constituency, about the impact on the needs for aboriginals and maybe the lack of support for the needs of the aboriginal community. His speech was so full of insight that I want the member to elaborate on the consequences of not having the kind of funding that would have been prescribed under the Kelowna accord but which the Conservative government has totally rejected and voted against. What would it mean to our first nations, Inuit and Métis to have the kind of supports that were proposed in the Kelowna accord represented in the budget?

The House resumed consideration of the motion that Bill C-52, An Act to implement certain provisions of the budget tabled in Parliament on March 19, 2007, be read the second time and referred to a committee, and of the motion that this question be now put.

Budget Implementation Act, 2007Government Orders

April 16th, 2007 / 1:15 p.m.
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Judy Wasylycia-Leis NDP Winnipeg North, MB

Mr. Speaker, the member for Peterborough provokes some discussion in the House around Bill C-52, the budget implementation act. He suggests that this budget is filled with so much goodness and so many progressive ideas that we should be falling all over ourselves to support it.

Tories do that. Conservatives, just like Liberals, have done this for years. They give us a scattergun approach. They do a little here, as my colleague from Halifax just said, and a little there but they do not address the systemic issues facing this country, and then expect all kinds of support to miraculously appear.

The member for Peterborough should know better because he sat through all the committee hearings. The finance committee heard from hundreds of groups from across the country. People recommended a substantive, meaningful approach to education once and for all. They did not recommend another series of band-aids on band-aids. They did not recommend a hodgepodge of little tax cuts here and there.

Every major institution that appeared before the committee, every student organization, every professor organization, every administrative organization pertaining to education, whether it had to do with college or university, recommended that the government, once and for all, increase transfer payments to at least the point they were before the Liberals cut the heck out of education. They wanted to see transfer payments increased and an overhaul of the student aid program which is now a mess because of neglect over the last 13 years. They wanted to see a separate education transfer.

I cannot think of anyone at our hearings who disagreed with that. I do not think anybody said that we should not make education a priority and not have separate transfer funds for education. Everybody, from businesses to labour organizations, to social justice coalitions, to ordinary citizens groups, to individual citizens believe that the future of this nation rests on how we ensure that everyone, regardless of background, has access to quality education.

Members sitting on the Conservative and Liberal benches should remember that we do not have a universal education system today. We have a selective system that allows the well-to-do to access post-secondary education and those who come from families who have been able to invest in things like registered education savings plans, but it does not open doors or provide anything for those who struggle day to day to make ends meet and who have as much right to universal education as their rich next door neighbours.

The system is getting more elitist with every day that passes. If it were not for the efforts of some provincial governments, like the Manitoba NDP government that has frozen tuitions, there would be exclusive education with very few opportunities for ordinary rank and file Canadians to better themselves and look for future opportunities through our post-secondary education system.

On the most important issue facing the future of this country, this budget fails and fails miserably.

Much must be said about this bill but the most fundamental thing that has been mentioned by my colleague from Halifax and others is that it is our job as parliamentarians to ensure that we work to equalize conditions in this country. That is the role of government and of Parliament. Our job is to close the gap between the rich and the poor. Our job is to ensure that so much wealth is not concentrated in so few hands; that we see opportunities and conditions equally available and distributed in this country.

I will go back to education for a moment. Education is one of the last remaining institutions to equalize conditions in this country. Over the years, through consecutive Liberal and Conservative governments, we have seen national programs that help equalize conditions disappear, cut back, torn apart, deregulated, out-sourced, privatized and so on.

Education is one of the things that we hold on to. Health care is in deep trouble as privatization is allowed to take hold. There is no meaningful national family allowance care program because we have never come to grips with what that really means in terms of families. There is no national child care program There is no set of programs across the country that help to equalize conditions.

Although education is vital to our future, the Conservatives missed a golden opportunity in the budget. They blew it. They did not get the point that Canadians raised with us time and time again and that is if we invest at all we must invest in education.

The budget does not close the prosperity gap. It does not ensure that education remains as a national institution to help equalize conditions. It does not help those who are working hard to improve themselves and their families and are looking for some assistance from government so they can help themselves, like literacy.

Today the teacher's federations from across the country are all over this precinct lobbying members of Parliament for a number of very important objectives that we thought had been accomplished long ago but we are starting all over again, one, of course, being the achievement of 0.7% in international aid; the other being the restoration of literacy programs, the court challenges programs and programs that help women and women's equality. Those are the very issues that help people to help themselves but which the Conservatives decided to throw out the window.

After hearing from so many representatives and receiving so much testimony, the finance committee agreed that the government should restore the funds that it cut from literacy, court challenges, women's equality programs, museums, the volunteer initiative, and the list goes on. All of those programs are important for individuals and communities to help themselves through difficult times. This is not a hand out but a hand up. This is not social assistance but the tools by which they can fend for themselves and feed their families. When it comes down to it, that is the one outstanding and fundamental truth when it comes to elected representation in this country and our role as members of Parliament.

The budget has denied Canadians the opportunity to help themselves. Today we stand and implore the Conservative government to not do what we have seen happen over the last 13 years, which is that the very things that create unity in this country, that connect us, the ties that bind, are not destroyed and dismantled in the face of this compelling determination to create the survival of the fittest philosophy, survival of the laws of the jungle and a free for all in our society today.

The government must recognize that the founding principle of this country is to help one another, to cooperate and to build a strong society. That is fundamental to who we are as Canadians and that is being torn apart and being allowed to be destroyed through this kind of a budget. We cannot let that happen. It has been going on for too long.

I could go on at length about the last 13 years but I made a promise to focus on the present, a promise that I intend to keep because Canadians know that the Liberals let them down over the years but now we are on to a new scenario and we must try to do the best we can to convince the government to repair the damage that was done by the Liberals and build for a better day in the future.

I implore members on the Conservative benches who are listening here today and who, I think, are ready to ask questions, to do what they can to put back at least the funds that were chopped out of fundamental issues starting with literacy, child care, equality programs, with basic--

Budget Implementation Act, 2007Government Orders

April 16th, 2007 / 12:50 p.m.
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Michel Guimond Bloc Montmorency—Charlevoix—Haute-Côte-Nord, QC

Mr. Speaker, I am pleased to speak to Bill C-52 on the budget implementation.From the outset I want to confirm that the Bloc is in favour of it. As I will have the opportunity to point out later, one of the reasons we were in favour of the budget brought down by the government was that it introduces a major step toward correcting the fiscal imbalance. However, I am tempted to say this is an unfinished symphony. I do not remember who wrote the Unfinished Symphony. In any event, it is still unfinished and we therefore we do not know the final result. I will come back to that.

Bill C-52 before us confirms that Quebec will receive, through equalization and various tax transfers, some $3.3 billion more a year, in 2009-10. It also confirms the creation of the ecotrust, which will allow Quebec to implement its plan for reducing greenhouse gas emissions.

By the way, the federal Conservative government would do well to look at what Quebec is doing to reduce greenhouse gas emissions. Quebec's leadership role in this has not gone unnoticed on the international stage. Hon. members will recall that a French political leader recognized Quebec as a true innovator at a conference in Nairobi, Kenya. We also know that at that same conference, while the Conservative government had promised that Quebec would play a more significant role on the world stage, the former environment minister refused to give Quebec's then environment minister, Mr. Béchard, a chance to explain the difference and the avant-garde nature of Quebec. Quebec's environment minister had asked for a mere 45 seconds, but was denied. The federal government said it was speaking with one voice, the voice of Canada. And this government brags about having an open federalism. We saw in Nairobi what this government means by “open federalism”. Quebec's environment minister, Claude Béchard, just waited in the wings.

Bill C-52 also confirms the payment of $110 million for reconstruction in Afghanistan in 2007-08. Last week's sad events prove beyond a shadow of a doubt that this mission must be re-evaluated, its objectives made much clearer, and we must focus our efforts more on reconstruction.

Over the weekend, I heard my colleague, the hon. member for Saint-Jean, the Bloc's defence critic, speaking to the media. He told Radio-Canada, I believe, that he has visited Afghanistan twice, but that the members of the Standing Committee on National Defence were never able to see for themselves any reconstruction work, any schools back up and running, any hospitals fixed up, or any roads or bridges rebuilt. Instead, they were confined to the air base to receive briefings—and not to say “biased briefings”—given by military personnel. I therefore believe that this $110 million for reconstruction in Afghanistan constitutes a step in the right direction, but the mission in Afghanistan must be seriously reconsidered. In any case, this is what the Bloc Québécois has been calling for from the beginning.

Lastly, Bill C-52 introduces the government's tax fairness plan, which enacts legislation regarding the new tax regime for income trusts, while allowing income splitting between spouses and an increase in the age credit.

In the time I have, I would like to focus on one area in particular, and that is the fiscal imbalance. Naturally, the Prime Minister, the Minister of Transport, Infrastructure and Communities, and the Minister of Labour and Minister of the Economic Development Agency of Canada for the Regions of Quebec like to strut through our regions boasting that they have corrected the fiscal imbalance. We believe, however, that the fiscal imbalance has only been partially corrected, as I said at the beginning.

However, they forget to talk about the one party in this House that, for years, even before the election in 2000, has been pointing out the fiscal imbalance and fighting for the correction of the fiscal imbalance. In this House, that party is the Bloc Québécois; in the Quebec National Assembly, it is the Parti Québécois. I would remind the House that it was Premier Landry who established the Séguin commission, who mandated the former Liberal finance minister—himself a federalist—to study the whole fiscal imbalance issue.

I recognize that the Minister of Transport, Infrastructure and Communities comes to our regions to announce good news. Last week, I was with him when he announced that the issue of the Les Escoumins and Trois-Pistoles wharves had been settled. But this is another unfinished symphony. As I stated in my press release after the announcement, the minister should set aside money to compensate the regions affected by the closure of the wharves and the cancellation of the ferry service. The regional economy—both Les Escoumins in my riding and Trois-Pistoles in the regional municipality of Les Basques—has suffered as a result. We would have expected the government to set aside some money for compensation of the regional economies.

The Bloc Québécois believes that the government recognized that there was a fiscal imbalance because of all the hard work that we, the sovereignists, did. The Liberals refused to even accept the term. Hon. members will recall that the former Prime Minister and member for LaSalle—Émard, who was elected in 2004—I cannot name him because he is still a member—refused to use the term “fiscal imbalance”. It was as if it gave him hives or he was afraid he would get pimples on his tongue if he said the words. He recognized that the provinces suffered financial pressures.

With regard to financial pressures, the federal government in Ottawa collects too much tax from Quebeckers for the services they get. That is the fiscal imbalance: Ottawa has the surplus, but the provinces have the needs. We, the sovereignists in the Bloc Québécois, succeeded in having the term recognized and put pressure on the government in the hope of eliminating this fiscal imbalance.

Without being overly parochial and partisan, we recognize that Bill C-52 on the budget provides initial financial results for Quebec. But it is not enough.

We believe it needs to go further. The federal transfers included in the budget are not quite enough for eliminating the needs Quebec is currently facing. That is why we feel that the current Conservative Prime Minister did not entirely keep his promise to eliminate the fiscal imbalance.

Upon reading budget 2007-08, we see that the full correction of the fiscal imbalance promised by the Conservative leader has not been achieved. The Prime Minister is completely disregarding the Séguin report, which achieved consensus in Quebec. There was consensus among the National Assembly, the Liberal Party of Quebec, the Parti Québécois and the Action démocratique du Québec. They all agree that to fully correct the fiscal imbalance would require a transfer of tax points or the GST to Quebec and the provinces. That is what prompts us to say that the budget is still unfinished.

The tax fields must be redistributed so that Quebec can increase its independent revenues and thereby have more room in terms of the choices that Quebec and the elected members of the National Assembly could make to protect themselves from unilateral cuts by the federal government.

I will conclude my presentation by speaking about one more point. The Bloc Québécois deplores the fact that the Conservative government has not made any plans to put an end to federal spending power in Quebec's areas of jurisdiction, as recommended by the Séguin report. It is all well and good to say that monies will be transferred. However, if the vicious circle resumes at the first possible opportunity and the federal government interferes in provincial jurisdictions, we are not making progress. According to the Constitution, the federal government has spending power even in areas of exclusive provincial jurisdiction. This interference must stop. In future, when there are pan-Canadian programs in place and Quebec decides to implement its own programs, it must be able to withdraw unconditionally and with full compensation each time it believes it must do so.

I would like to close by saying that the Conservative government, with its budget, now has the obligation to govern. It has a fair bit of work to do to find a definitive solution to the fiscal imbalance and to deal with the other concerns of Quebeckers.

The Bloc Québécois members will continue to fight to bring the decisions of the National Assembly to this House. On March 26, an election was held in Quebec. The minority government will have to continue working with the decisions developed in the past in the National Assembly. The Bloc Québécois will do its duty and bring the decisions of the National Assembly to this House . Defending the interests of Quebeckers is an intrinsic part of the responsibilities of the Bloc Québécois and all those elected under the banner of our party.

(The House resumed at 12 p.m.)

The House resumed from March 30 consideration of the motion that Bill C-52, An Act to implement certain provisions of the budget tabled in Parliament on March 19, 2007, be read the second time and referred to a committee, and of the motion that this question be now put.

The House resumed consideration of the motion that Bill C-52, An Act to implement certain provisions of the budget tabled in Parliament on March 19, 2007, be read the second time and referred to a committee.

Budget Implementation Act, 2007Government Orders

March 30th, 2007 / 10:05 a.m.
See context

Calgary Nose Hill Alberta


Diane Ablonczy ConservativeParliamentary Secretary to the Minister of Finance

Mr. Speaker, l am very pleased today to be able to present the budget implementation bill at second reading.

This year's budget is historic.

It is historic because it accomplishes so much to ensure that Canada remains strong today and becomes even better tomorrow.

That is because Canada's new government has an economic plan for Canada, a plan that will create greater opportunities for Canadians to fulfill their dreams of a good job, a world class education for their children, a home of their own, and a retirement that they can count on.

To that end, budget 2007 follows through on our plan with key investments in Canada's future.

This year's budget invests in Canadians, preserves and protects our environment, and improves the quality of our health care system for all.

Budget 2007 also restores fiscal balance by working with provinces and territories to deliver sustainable services for Canadians and their families.

The budget creates competitive advantages for a stronger economy for Canada, an economy that will put us on a solid track for tomorrow. It does this by reducing Canada's debt and lowering the taxes of hard-working families.

Budget 2007 also ensures that multinational corporations pay their fair share of taxes.

It helps Canadian businesses compete globally by making unprecedented investments in the infrastructure that connects our nation.

Budget 2007 does much more.

It makes our communities safer and more secure.

It supports the men and women of the armed forces, including our veterans, and it brings new hope to people beyond our borders through more effective international aid.

As the Minister of Finance said when he introduced budget 2007 in this chamber, “it is time to unleash Canada's full potential”, and unleash our potential it does.

Budget 2007 aims to create a Canada that we will be proud to pass on to our children, with a standard of living and quality of life second to none.

The measures contained in this bill before the House today reflect those goals. I would now like to take a few minutes to illustrate.

Bill C-52 contains some of the key initiatives taken by Canada's new government to make Canada a better place in which to live and do business. Legislation to implement the remaining budget 2007 measures will be introduced in a later bill.

First is tax relief. Our government has heard it from Canadians from all across this great country of ours: we pay too much in tax.

Budget 2007 builds on the previous action in last year's budget by reducing personal income taxes to encourage people to work, save and invest. It also helps businesses succeed, through lower taxes to spur innovation and growth.

Those of us with children know that raising a family can be a challenge. With higher costs of living, housing and energy, it is not easy.

That is why in budget 2007 Canada's new government makes life more affordable for hard-working families by creating a working families tax plan.

The government understands that no two Canadian families are exactly alike. Each has its own circumstances and needs.

Budget 2006 introduced the universal child care benefit, which provides $100 per month for each child under age six to help parents choose the child care option that best suits their family's needs, whether that means formal care, informal care through neighbours or relatives, or a parent staying at home.

This benefit provides more than $2.4 billion each year to one and a half million families and over two million children.

Bill C-52 proposes to provide even more support for families to recognize that raising children involves additional expenses.

Effective January 1, 2007, families will be able to claim a new tax credit for each child under 18. The new child tax credit proposed in this bill will benefit about three million taxpayers. This measure takes up to 180,000 low income Canadians off the tax rolls and provides more than 90% of taxpaying families with the maximum benefit of $310 per child.

Currently, taxpayers who have low income spouses or single taxpayers who support dependents such as a child or elderly parent receive a tax free amount of up to $7,581 in 2007. The tax relief for the supporting person is reduced as the spouse's or dependent's net income increases and is fully phased out once it reaches $8,340.

Bill C-52 will increase the credits for low income spouses and dependents of single individuals. This measure will provide up to $209 in additional tax relief so that single earner families will receive the same tax relief as that already provided through the basic personal amount to two earner families. The new child tax credit and increases to the spousal and dependent amounts will provide significant personal income tax relief to families.

Bill C-52 also enacts the tax fairness plan, which delivers over $1 billion in additional tax savings for Canadian pensioners and seniors. This plan, introduced last fall and committed to in budget 2007, proposes to increase the age credit amount and allow pension income splitting for pensioners. This builds on the almost $20 billion over two years of tax reductions provided for individuals in budget 2006 and will significantly enhance the incentives to save and invest for family retirement security.

Canada's new government delivers on its commitment from our economic plan, Advantage Canada, to dedicate all interest savings from federal debt reduction each year to ongoing personal income tax reductions. This is our government's tax back guarantee. It will ensure that Canadians benefit directly from federal debt reduction.

To ensure that happens, as the federal government pays down national debt it will be required to use the interest savings to cut personal income taxes for hard-working Canadians. Bill C-52 proposes to set out the tax back guarantee in legislation.

Budget 2007 takes historic action to restore fiscal balance in Canada.

A restored fiscal balance will ensure that provinces and territories have the means to build and provide things that matter to Canadians. When the provinces and territories invest in health care, post-secondary education, modern infrastructure, child care and social services, everybody wins and all of Canada is stronger.

Budget 2007 invests an additional $39 billion over the next seven years and puts all major fiscal arrangements on a long term, principles-based track to 2013-14. Bill C-52 implements a number of key fiscal balance measures.

It renews and strengthens the equalization and territorial formula financing programs, which will be providing $2.1 billion more in the next two years to eligible provinces and the three territories. It improves the fairness of the Canada social transfer and the Canada health transfer by legislating an equal per capita cash support for these transfers as they are renewed.

It also renews and strengthens the Canada social transfer by making new and growing investments in support of post-secondary education, children and social programs. The restoration of fiscal balance will allow governments to go forward and focus on building a stronger and more prosperous Canada.

It is our responsibility as Canadians to protect our environment. It is only through a healthier environment that Canadians can create the quality of life and the standard of living to which we all aspire.

That is why budget 2007 invests $4.5 billion to clean our air and water, reduce greenhouse gases and combat climate change, as well as protect our natural environment.

Bill C-52 proposes to enact one of the important environmental measures from this year's budget, a new Canada ecotrust for clean air and climate change, announced by the Prime Minister on February 12, 2007.

Climate change and air pollution affect all Canadians. That is why our response must be national in its scope.

The new Canada ecotrust for clean air and climate change will provide support to those provinces and territories that identify major projects which will result in real reductions in greenhouse gas emissions and air pollutants. Moreover, the provincial and territorial initiatives supported by the ecotrust will complement industrial regulations and existing federal initiatives.

Projects could include provincial and territorial technology and infrastructure development, such as carbon sequestration and clean coal and electricity transmission, which will lead to a significant decrease in greenhouse gas emissions and air pollution.

Under Bill C-52, the government will invest over $1.5 billion in the trust.

Few among us would disagree that the Canadian health care system is one of the things that makes Canada the modern, compassionate and prosperous country that it is.

Budget 2007 takes action to improve our health care system by helping reduce wait times, preventing diseases like cancer of the cervix, and modernizing Canada's health system.

Bill C-52 provides funding for the development of patient wait time guarantees, which will be used to assist the provinces and territories as they move forward with the implementation of guarantees.

Specifically, to support jurisdictions that made commitments to patient wait time guarantees prior to the end of March 2007, Bill C-52 proposes to set aside up to $612 million, well over half a billion dollars, to be used to help accelerate the implementation of patient wait time guarantees.

There will be $500 million allocated on an equal per capita basis and funding for eligible provinces and territories will be paid into a third party trust. Through the trust, those eligible provinces and territories will also be provided with base funding of $10 million per province and $4 million per territory to move forward with patient wait time guarantees.

We know that immunization is considered a very cost effective means of preventing illness and provides long term savings to the health care system. When effective new vaccines become available, it is in the best interest of Canadian families to receive them as quickly as possible.

Cancer of the cervix is the second most common cancer in Canadian women aged 20 to 44, after breast cancer. In July 2006 the government approved a vaccine for use by young girls and women that prevents the majority of this type of cancer, providing protection against the two types of human papillomavirus, or HPV, that are responsible for approximately 70% of cancers of the cervix in Canada.

The government will provide funding to the provinces and territories to support the launch of a national program for the HPV vaccine that will focus on protecting women and girls from cancer of the cervix. Bill C-52 proposes to put $300 million, a third of a billion dollars, into a third party trust in 2007-08 for the benefit of provinces and territories, allocated on a per capita basis.

Canada's new government understands that a strong system of higher education is a crucial source of ideas and innovation, creative energy that our economy needs to foster national prosperity. We know that having a post-secondary education contributes to the well-being of Canadians and that of their communities.

The government is also aware that parents across this country are struggling with the costs of post-secondary education. We are helping parents save for their children's education by strengthening the RESP program, and we have invested more in post-secondary education.

Bill C-52 proposes to increase the Canada social transfer by $800 million per year starting in 2008-09 for provinces and territories with the objective of strengthening the quality and competitiveness of Canada's post-secondary education system. As a result, CST funding for post-secondary education will increase by 40% to $3.2 billion in 2008-09.

Just as importantly, this support will continue to grow over time as a result of the annual 3% escalator that is part of the renewed CST. This increased and earmarked transfer of funding meets the government's commitment to deliver a new approach to funding support for post-secondary education by ensuring long term predictable support for provinces and territories, and greater transparency and accountability to Canadians.

In summing, what does Bill C-52 mean to Canadians? For one thing, it means lower taxes. Canada's new government followed through on its commitment to cut taxes for Canadians and going forward we will continue to look at new ways to reduce the tax burden on hard-working Canadians.

Bill C-52 also proposes funding to ensure that our major fiscal arrangement with the provinces and territories are on a sound and principled track for the future. This bill proposes initiatives that will help improve the operation of our education and health care system.

In short, Bill C-52 will deliver significant benefits to Canadians, benefits that help secure a strong future for Canada. I would therefore encourage all members of the House to support this budget implementation bill.