Bill C-52 (Historical)

Budget Implementation Act, 2007

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

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.

Budget Implementation Act, 2007

[Some hon. members]

Agreed.

No.

[Garth Turner, Conservative, Halton, ON]

Mr. Speaker, can I wrap up now?

[The Deputy Speaker, Bill Blaikie]

No. Your time is up. Questions and comments, the hon. government whip.

[Jay Hill, Conservative, Secretary of State and Chief Government Whip]

Mr. Speaker, I will not take all the time. I am sure there are other members who would like to question this particular member.

Throughout his intervention, he used some very strong language. He said “despicable” and implored the necessity to tell the truth, if I heard him correctly.

This particular member, as I recall, said that he would resign his seat before he would turn to another party. He said that there should be a process in place in the House that members should not be allowed to change political stripes during a Parliament. Yet, we find that he is still here. He is still sitting here.

I would ask, why? If he is so insistent that people tell the truth, what about himself? Why did he not tell the truth and resign his seat?

[Garth Turner, Conservative, Halton, ON]

Mr. Speaker, Mike from Rodney says, “You personally promised that you would not let other parties get away with taxing income trusts. Silly for us to assume that you condemned other parties for a promise your party was not willing to do”.

Another comment states, “Mr. Harper, Mr. Flaherty and the remaining Conservative MPs: you placed our country in jeopardy with your policy regarding income trusts, changes in interest deductibility and withholding taxes for corporations. Something--

[The Deputy Speaker, Bill Blaikie]

Order, order. There has to be some intimation of relevance and the member is perfectly in order, except he is not in order when he keeps using the names of ministers in the context of the letters.

So we will go to the hon. member for Burlington.

[Mike Wallace, Conservative, Burlington, ON]

Mr. Speaker, I think the hon. member for Halton has missed his calling. He treats this place as a theatre and does not take the issues seriously. He is obviously playing for the television.

Here is what I want to ask. First, on November 7 did he or did he not vote for the Conservative government's income trust motion?

Second, “my vote acknowledged that wholesale corporate conversions to trusts are unhealthy”. Is this true or not that these were his words on www.garth.ca on November 6, 2006?

Third, “reforming the income trust business and stemming the tide of conversions is necessary for the long term health of this economy”, again on his website and spoken by him. Is this true or not? Did he say it?

Fourth, “too many new conversions, lost tax revenues, unfairness in corporate tax treatment, money leaking to foreign investors, the threat of the banks morphing into trusts, the writing was on the wall--

[The Deputy Speaker, Bill Blaikie]

Order, please. The hon. member has managed to get three and a half questions in and we have only got a little time left.

The hon. member for Halton.

[Garth Turner, Conservative, Halton, ON]

Dwight from Chatham says:

The blackening-out of the purported rationale by the Finance Department during the FINA hearings was a shock to me. This was then coupled with the hiding of the bill inside the budget so that no discussion was possible. These actions appear to cover up the guilty knowledge that the true facts could not stand up to public scrutiny.

Harold says:

In view of the Prime Minister’s explicit election promise never to impose a tax on income trusts, and the fact that this promise undoubtedly gave existing and potential trust investors a high degree of comfort, why did the Minister of Finance not take one of the many routes available which would still have accomplished his aim without destroying massive amounts of--

[The Deputy Speaker, Bill Blaikie]

Order, please. One last question by the hon. member for Sault Ste. Marie.

[Tony Martin, NDP, Sault Ste. Marie, ON]

Mr. Speaker, I admire the member's ability and effort to hear from constituents using the various technologies that are available today. He is probably in some ways way ahead of his time.

I was wondering if in his reaching out to his constituents and asking them to comment on the budget if he went beyond income trusts. Did he hear anything from seniors, for example, who are by the hundreds of thousands not getting their entitlements because the government has not acted on recommendations to change the way that information is disseminated, re-entitlements to seniors, and seniors themselves having to actually apply and then become automatically qualified for things like CPP, OAS and GIS?

[Garth Turner, Conservative, Halton, ON]

Yes, Mr. Speaker. Actually, all the people I am quoting right now are seniors. For example, Dave Marshall and his wife in Cornwall, Ontario say--

[The Deputy Speaker, Bill Blaikie]

Resuming debate, the hon. member for Vancouver Island North.

[Catherine Bell, NDP, Vancouver Island North, BC]

Mr. Speaker, I would like to begin my remarks today by painting a picture for my hon. colleagues about how this budget fits into the overall course that Canada seems to be taking under this Conservative government. This course is guided by its not so obvious agenda and if members read between the lines, they will see that it is there.

This agenda is also driven by five priorities: one, help the rich get richer and pretend the prosperity gap does not exist; two, privatize at all costs, including municipalities and their infrastructure; three, treat first nations with disdain and ignore their advice; four, invest as little as possible in social programs, no matter how big the surplus; and five, ignore the crisis situation in the forestry sector.

This Conservative agenda masquerades behind what it likes to call the harmonization of inefficiencies. This language is often used by the right as a kind of code. To the rest of us, harmonization of inefficiencies loosely translated means the alteration of policies to the benefit of rich corporations and to the detriment of ordinary Canadians.

This policy change ignores the ever-increasing prosperity gap, environmental conditions, food safety concerns, health care services and the control of our natural resources. Furthermore, this budget offers deep integration with the U.S. at the cost of our sovereignty.

This agenda of privatization by stealth has been going on for many years. This path has seen the rich get richer and the rest of us get the leftovers.

This budget is nothing short of deceiving. While the Conservatives beat their chests about standing up for Canada, their actions suggest quite the opposite to hard-working families. While they talk about a stronger Canada, they intentionally attack our public institutions; thereby, eroding the foundation of an independent Canada.

Allow me to elaborate more clearly what I believe the government's real priorities are. Priority number one: ignore the widening gap between the super rich and ordinary Canadians.

Surplus after surplus of hard-working Canadians' taxes have gone to tax cuts for large corporations. These surpluses subsidize the development of the oil sands at a time when the industry is making record profits. It gets to continue to receive subsidies until 2015. That is six years before it even starts to see a phase-out. But no money from the federal budget went to the thousands of Canadians whose families are looking for affordable housing.

In fact, affordable housing was not even mentioned in this budget. So, how is it that a profitable corporation can continue to receive subsidies but ordinary families are ignored? The gap between the rich and the poor in this country is widening and this government has no plan to correct it.

Priority number two: use privatization as a mantra for change. How do we start the process of privatization? First, we need to set up shop.

On page 162 of the budget, it states this government will, “establish a new federal office to identify and implement opportunities for public-private partnerships in infrastructure”.

Step two, then we have to make it mandatory. On page 169 of the budget, it goes on to state that municipalities, “seeking funding...will also be required to demonstrate that the option of undertaking the project as a public-private partnership has been fully considered”. This is simply bad policy and a waste of Canadians' money.

We have seen the experience of public-private partnerships when companies take over a public project. The focus shifts away from the public interest and meeting community needs to ensuring profit for the company's shareholders. Maybe the Conservatives should have consulted with the Federation of Municipalities who believe that this government should not be forcing a one size fits all policy down their throats.

Mandatory P3s are not the only privatization at play. People in Vancouver Island North, in my riding, are very concerned that this government is trying to privatize one of the largest common property resources in the country: our fishery. While it may not be part of the budget, the fact that the bill was introduced with no consultation with fishermen, lodge owners, recreational and sport fishermen, first nations or anyone else is a huge concern in my riding.

Then there is the issue of our forests. We in the NDP have spoken at length about the softwood lumber sellout and now we are seeing the result of that bad deal: raw logs exported at an ever-increasing rate and the government not willing to take a stand and implement a made in Canada policy to protect jobs in our communities.

Priority number three is that the Conservatives went out of their way to exclude first nations from the budget. This is one of the most outstanding and offensive omissions I have ever seen.

I have been meeting with many of the chiefs in Vancouver Island North over the past couple of weeks to talk about the budget. We have also spoken about many other issues of concern to their communities. The level of frustration and anger they are feeling because of what is lacking in the budget is very high.

The government announced $300 million for a housing initiative that allows them to buy their own homes, but it is a reannouncement of old money, nothing new. What the chiefs want to know is when they use the $300 million for housing and there is no new money, what programs they are going to lose to have to pay for it.

There was nothing in the budget for land claims and treaty settlements. First nations are ready to settle. They want to move forward for their communities, for their economic well-being, but they cannot because the government says it does not have a mandate to settle. The government underlined that in the budget by not putting any money in it for land claims.

Priority number four is that no matter how big the surplus, no matter how well our economy is running, the Conservatives invest nothing in social programs. This particular priority hurts every community and quite often the most vulnerable in our society.

A reintroduction of the same money the Conservatives introduced last year for child care, $250 million, will not help build a national child care program. That program would be helping ordinary working families and parents with escalating child care costs and a lack of spaces.

There is nothing in the budget for the arts. There is no mention of culture. It is not even on the government's agenda. There is nothing for art programs for kids and communities, nothing for artists and sadly, nothing for museums. There is nothing for pharmacare, home care or long term care for seniors. There may be some old money to address wait times, but the government said that last year and wait times actually went up. These programs are what made Canada a great country; at least my Canada includes them.

Priority number five is to pretend that a crisis does not exist in the forest industry. On the contrary, the current state of the lumber industry is a perfect example of how Canada is losing on trade with the U.S. The steady creep toward free trade and further harmonization at any cost is hurting this country.

Our timber mills are closing. Over 5,000 jobs have been lost since the softwood lumber agreement was signed. Ask the mill workers in my riding who have seen their jobs and their logs get trucked over the border on a daily basis. “Did this government stand up for Canada?” they are asking. I say no. Instead, in a rush to placate their Conservative counterparts in the south, the Conservatives ignored five international trade rulings in favour of Canada. They signed a bad lumber agreement and managed to give away $1 billion in the process.

This whole mess was done in the name of harmonizing inefficiencies. What is so efficient about losing jobs? The Conservatives may have made harmony with the U.S., but they sure left a heck of a mess behind in their wake. And to add insult to injury, the budget provided no funds to help struggling communities when our mills are closing.

The government cannot just ignore these problems and hope they go away. It has to take action to help these communities. The government has to stop exporting raw logs from federally regulated lands. Then it needs to clean up its act by providing aid and a comprehensive plan to help these communities and stop mill closures. But there is no plan. There is no stabilization funding. It cannot be found in the budget. The government needs to start making decisions that actually help hard-working Canadians.

As a former labour representative, I understand the intent of these policies. Their point is to undermine local democracy and allow private corporations to benefit from government contracts. That is it. The result is there is a steady race to the bottom in the quality of work being completed while municipalities struggle to accommodate more and more needless bureaucracy.

While the government beats its chest about standing up for Canada, ordinary Canadians are beginning to recognize that the truth speaks louder than words. The truth is the prosperity gap is growing. The truth is our communities, infrastructure and natural resources are being privatized. The truth is first nations are being ignored. The truth is investment in social programming is abysmal. The truth is the forest sector is in crisis.

Canada's corporate CEOs are getting richer and richer. Ordinary hard-working Canadians are being left in the dust. They deserve better. They deserve fairness, and the budget does not deliver it. For those reasons, I cannot support the budget.

[Mike Wallace, Conservative, Burlington, ON]

Mr. Speaker, I appreciate the intervention by my colleague from the New Democratic Party, but I do not agree with her at all. She talked about truth. What is important for Canadians is there needs to be some truth in what is said in the House.

I have the budget in front of me. I went through it a couple of times as a member of the finance committee. For example, we have introduced the WITB, which is a program to help people get over the welfare wall, to give the working poor in this country an advantage. If someone leaves social services and starts a job at $8.25 an hour, our program in the end will improve that person's quality of life and his or her disposable income by 25%. That is an important piece that we are providing for working families.

The member said that we are not doing anything to address the gap between those who have and those who do not. We are doing what we can. We have outlined a program in the budget that directly affects people's ability to move ahead as a family economically in this country.

The member also stated that there was no mention of culture in the budget. That is absolutely not true. If she would turn to page 98 of the budget, it talks about a program of $30 million over two years for local arts and heritage festivals; summer museum internships to help small museums across the country get the quality people they need to provide the services and programs that communities are demanding; and a Canadian heritage sports program to help sports that are important to the history of this country.

My question--