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

[Colin Carrie, Conservative, Parliamentary Secretary to the Minister of Industry]

Mr. Speaker, I listened to the member's speech. She did not really address some of the great things in the budget.

I come from Oshawa. We manufacture cars. The manufacturing sector has suffered under 13 years of Liberals, who did absolutely nothing for the manufacturing sector.

We took the industry committee across Canada. For the first time ever, we listened to manufacturers. We listened to their needs. The NDP industry critic was part of a unanimous report that we gave to the Minister of Finance, and 16 out of 17 fiscal recommendations were addressed in the budget.

The budget has been called the best budget for manufacturing ever. NDP members say that they are in favour of jobs, that they are in favour of industry. However, in the budget they are voting against their own critic's recommendation.

The hon. member did not address the people of Ontario. Nor did she did not address the people of Oshawa, who are struggling right now for manufacturing jobs.

Why is she saying no to manufacturing jobs? Why is she saying no to auto jobs? Why is she saying no to the manufacturing industry that needs the budget and needs it now?

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

Mr. Speaker, I have to disagree with my hon. colleague. I did not see much that is great in the budget. The government sees its budget as the best thing since sliced bread, but unfortunately, we in the NDP do not see that at all.

Over 250,000 manufacturing jobs have been lost. This is a crisis in our country. Yet there is no auto strategy in the budget to address some of those jobs.

The government is selling us out on so many fronts in the manufacturing sector. In British Columbia, where I come from, everyone knows about the softwood lumber sellout, another reason we cannot support so many things the government does such as when it takes our resource sector jobs and sells them out at alarming rates. Around 5,000 jobs have been lost since that sellout.

The member should know that 250,000 jobs in the manufacturing sector are gone from Canada, and that is a complete sellout.

[Merv Tweed, Conservative, Brandon—Souris, MB]

Mr. Speaker, I listened intently to my colleague's comments. I think we all know the implementation bill will pass the House shortly. The concern I have is that the Liberal dominated Senate is currently threatening to delay the bill.

This delay could cost Canadians $4 billion in critical year end funding, including $300 million to B.C. Will the member stand today for B.C. and tell the Senate to pass the bill before funding to B.C. is lost?

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

Mr. Speaker, absolutely, I will stand up for British Columbia and vote against the budget, because we know there is precious little in it for British Columbians.

We probably will see the passage of the budget, with the Bloc support. Bloc members get up day after day to speak against the budget, yet at every turn they vote for it. Unfortunately, we know it will pass.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Mr. Speaker, the member gave a great presentation when she talked about how B.C. had been completely left out of the budget. When the Finance Minister made his presentation, he even talked about his Canada going from the Alberta Rockies to Newfoundland and Labrador.

She talked about the softwood lumber sellout, which has had appalling impacts on British Columbia. She talked a bit about the pine beetle and the fact that the government promised but has not delivered on aid to pine beetle affected communities.

Would the member address another broken promise, and that is leaky condos? Tens of thousands of British Columbians have been left high and dry. The Conservatives promised they would take action, and there is not a penny to address these condos in the budget.

Why does the government treat British Columbians with such disdain?

[The Acting Speaker, Royal Galipeau]

The hon. member for Burnaby—New Westminster left the hon. member for Vancouver Island North 15 seconds.

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

Mr. Speaker, I knew it would be hard for my hon. colleague to keep it short, but absolutely, we have to wonder at the Conservatives when they keep leaving British Columbia out. As I said in my remarks, their Canada goes from the Rockies to the Atlantic, unfortunately, not from coast to coast to coast.

[Deepak Obhrai, Conservative, Parliamentary Secretary to the Minister of Foreign Affairs]

Mr. Speaker, it is a pleasure for me to rise to speak to Bill C-52. Before I start, I take exception to what the NDP just said, and that is the government has not taken British Columbia into account in the budget. Prior to that, we had a Liberal member stand up and talk only about Saskatchewan.

Those members of Parliament think the government is not addressing provincial issues. We are addressing provincial issues. We are addressing issues that affect all Canadians. This is their way of twisting the facts. That is how they want to do it. The actual fact is the budget is for all Canadians from coast to coast to coast. We disagree with the opposition parties, but that is their way it is.

The member from Saskatchewan talked about Saskatchewan and then he went on to talk about the Kelowna accord. I remind him that a short while ago the Prime Minister made a speech on how our new government would address the issue of land claims. What is interesting is the national chief was with the Prime Minister. This is what he said:

—today's announcement...is a positive response to what our people have advocated for decades, and it is a testament to the perseverance and dedication of our people.

By this statement, he is saying that the Liberals ran the country for 13 years and for 13 years they did nothing.

Since the Conservative government has come into power, it has taken action. We know the previous government was run by Mr. Dithers. The Conservative government is run by Mr. Action. The Prime Minister has shown commitment and action. He has given a firm direction of where we want the country to go. That is reflected in the budget.

Very clearly, this is a Conservative budget with Conservative values. This is not a Liberal budget that dithers on this side or that side.

What are the Conservative values in the budget? They are restoring fiscal balance, tax relief, debt reduction, investing for Canadians, preserving the environment, improving health care, supporting our troops, supporting our farmers and supporting our seniors.

The NDP and the Liberals of course do not support it or the things about which I have talked. They want to go down to their narrow, little agenda.

Let me talk about seniors. This is what CARP, an association for people who are 50-plus, had said. Again, after years of advocating when the Liberals were in power, nothing was done. Now they stand and cry indignation about all the things which they did not do. CARP says, “After years of advocating for the age at which RRSPs must be converted from 69 to 71, this has happened as well as income splitting”. CARP is saying that this is a good budget for seniors.

Let me talk now about tax fairness, income splitting and income trusts. The previous speakers did not address the issue of income trusts. Do they really think we could have the income tax burden moved from corporations on to the shoulders of ordinary Canadians? That is what would have happened. They do not want to talk about that. That is why the government was very firm, despite the fact that we had to change the rules on income trusts. We knew tax fairness was very important for Canada. The Conservative government stands for that.

Budget 2007 carries the Conservative policies, which are good for Canadians. It addresses issues that Canadians want. Of course we do not expect the Liberals to like this budget because they never did it.

What is really very funny about the Liberals is they argue about things as if they were never in power. It is as if they had nothing to do with the situation we are in today. However, the good thing about is the Conservative government is very forceful. We know where we want to go. The Prime Minister made it very clear in the election promise as to where our direction would go. That is strongly reflected in the budget.

When the Liberals and the NDP members vote against the budget, this is what they will vote against.

The budget is about tax relief for individuals and families. It is about tax relief for businesses. It is about money for infrastructure. It is about making Canada's economy stronger. It is about reducing federal debt. It is about post-secondary education and skills and training. It is about science and technology. It is about defence and public security. It is about preserving our environment. It is about investing in Canadians, improving our health care system and most important, restoring the fiscal balance for a stronger federation.

The main point is the budget is the firm direction, the firm road map to where Canada will go, after listening to Canadians. The budget is all about that. When the Liberals and the NDP vote against this, they will vote for what Mr. Dithers and the Liberals did for the last 12 years they were in power.

I sat on that side through three Liberal budgets and I listened to the Liberals. They had this whole beautiful budget that would make Canadians feel good because they would address all these issues. At the end of the day, most of the issues were never addressed.

I am very happy and glad that the new Conservative government will tackle those issues right.

[Roy Cullen, Liberal, Etobicoke North, ON]

Mr. Speaker, listening to the member for Calgary East, one would think the budget was very laudable. We know from the reaction of Canadians and the provinces that it is exactly the opposite.

The member prides himself on how the government took firm action, was resolute and moved forward in that way. I guess, in a sense, it did in that it took a resolute decision around the equalization and the Atlantic accords. Conservatives were very firm in being very unfair and going back on their word to Atlantic Canada. They were also very resolute in the way that they dealt with income trusts when they took away about $25 billion to $30 billion out of the assets of Canadians and seniors who had saved through that vehicle for their retirement.

The Conservative government was quite firm and resolute in the way it screwed up the interest deductibility, which takes away an advantage of Canadian companies that want to compete internationally and acquire some foreign companies.

I noticed the other day the Conservatives were very firm and resolute when they finally, in reacting to political pressure on foreign acquisitions, and meekly said that they would table some changes to the Investment Canada Act, which is about time. However, unfortunately, it looks like they will deal only with elevating the criteria from strictly an economic test to one which deals with security interests, which is not far enough.

Could the member opposite tell me if there are any more surprises that the government will bring forward in a resolute way, which will work against Canadians and will have everybody's back up in the way it has treated the fiscal realities of our country?

[Deepak Obhrai, Conservative, Calgary East, AB]

Mr. Speaker, I assure my hon. friend that we will come forward resolutely to address the issues that help Canadians, not go against them. We are very confident. We will come forward with a firm decision, with a firm will to ensure that Canada moves on the right path, not in the way the member's government did while dithering on this side and that side.

Most important, he talks about fiscal balance. As the Prime Minister said, we have broken no promise. In fact, we have strengthened the fiscal balance to ensure that all provinces get maximum advantage. They have the choice. They should also look at what the budget does overall for their citizens. There is no such thing as only a citizen of Saskatchewan or a citizen of Nova Scotia. They are all Canadians and the majority of this is to their benefit as Canadians.

In reference to income trusts, I remind my friend on the other side that he and his government did not take any action. He literally believes that the tax burden should shift from the corporations to ordinary Canadian taxpayers. Does he really believe that is the way it should go?

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Mr. Speaker, the member talked about responsibility. He said that the budget was responsible and that Conservative actions have been responsible.

I have a question for him. When we see the practices of the Conservative government, we see exactly the opposite. This budget continues $9 billion in corporate tax cuts at a time when Canadians are trying to get better health care and access to post-secondary education. We have a homelessness crisis, a housing crisis and an affordability crisis. Most Canadian family incomes have actually gone down.

The government is giving $9 billion to the corporate sector. It has shovelled $1 billion off the back of a truck to the profitable oil and gas industry. Most recently, there is the forgiving of $400 million in taxes owed by the former Hollinger company. How does the member square that frivolity of throwing money around with so-called Conservative responsibility?

[Deepak Obhrai, Conservative, Calgary East, AB]

Mr. Speaker, the actions we have taken are to strengthen the Canadian economy. We are very pleased to provide tax relief to individuals, families and businesses. We are very pleased to reduce the federal debt. All of these actions work to strengthen the Canadian economy. That will benefit the workers of Canada.

[The Acting Speaker, Royal Galipeau]

It is my duty, pursuant to Standing Order 38, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Madawaska—Restigouche, Justice; the hon. member for Gatineau, Official Languages.

[Bill Casey, Independent, Cumberland—Colchester—Musquodoboit Valley, NS]

Mr. Speaker, it is a pleasure to rise again to talk about the budget and the implementation bill, Bill C-52.

I want to address the hon. parliamentary secretary who just spoke so eloquently. I want to draw his attention a couple of things. He mentioned Mr. Dithers and criticized him and described the current Prime Minister as Mr. Action. I want to point out to him that it should not be just Mr. Action, but Mr. Right Action.

There are a lot of good things in the budget for my riding. It is a rural riding and I do not hesitate to say that there are a lot of good things in the budget for my riding, but it does not mean that one can break a contract. As we have heard over and again, this budget breaks a contract with the people of my province of Nova Scotia.

It is a nine paragraph contract signed by Cecil Clarke, the minister of energy at the time. It is the Atlantic accord agreement, which gives Nova Scotia 100% access to the gas and oil revenues, with no clawbacks, and it was meant to be applied to whatever equalization formula is in existence at the time.

Anyway, that is now broken in this budget that we are debating here today. Every day I hear the Minister of Finance, maybe the Prime Minister and maybe other ministers say that Nova Scotia can have the new formula or the old Atlantic accord. That simply is not true. They say over and again that the Atlantic accord has no amendments, that it is not changed. I do not know how they can say that because of consequential amendments in Bill C-52.

I want to read this into the record: “Section 220 of the Canada-Newfoundland Atlantic Accord Implementation Act is replaced by the following:”, and after that there could be about 10 paragraphs of replacements and amendments. Several parts of this act are amended.

As well, clause 81 amends the Canada-Newfoundland Atlantic Accord Implementation Act by adding another paragraph. This goes on for several amendments, replacements, additions and so on. This also includes the 2005 offshore revenue agreement that was negotiated by John Hamm. It is amended as well. Whole paragraphs are amended and definitions are changed. It is just not accurate to say that the old Atlantic accord is still available.

I hope that in these closing hours leading up to the vote tonight the government side will come to its senses and restore the Atlantic accord exactly as it was signed by John Hamm in 2005.

Members may recall that I voted against the budget on this issue. It was a difficult decision in a way, but in a way it was not. It was not a matter of policy whereby we decided whether it was good policy or bad policy; it was just right and wrong. The contract with my province of Nova Scotia was supposed to be a 15 year contract. In two years the government has made all these amendments to which I just referred. That changes the contract. It was supposed to go for 15 years, but it only went two years before the changes were made.

At this time I want to say that I did not make this decision easily. I want to thank my wife and others for helping me make that decision, because it affects her as much as it does me. It has had a big impact on my family and is going to have a big impact on whatever future I may have as a politician. My wife Rosemary was a very big part of this decision and I hope she is listening. I also want to thank my brother Dan. He is not interested in politics and does not have anything to do with politics, but he helped me because he actually gave me a non-political point of view on this.

Also, I had a lot help from friends and people in my riding association. A lady by the name of Tilly Armstrong said some things I will not forget. Her husband Dave and son Scott said a lot of things I will never forget. There were others like Jeff Hunt. Many people helped me make that decision.

I want to come back to the accord, because if the budget passes the House at third reading tonight, the accord as we know it, as it was negotiated in 2005, will be gone. Every single Nova Scotian will feel a loss if this happens. I hope that when it goes to the Senate the senators will use their sober second thought to review it again, to make sure that the right thing is done, and to make sure that the Atlantic accord is restored exactly as it was written, because once it is gone, it is gone, and I doubt that we can get it back.

I did not know a lot about the Atlantic accord until this debate came up. The more I got into it, the more I realized how magic it is and how well thought out it was, how well it was written and how it really represents the interests of Nova Scotia and provides a future for the economy of Nova Scotia.

I want to compliment former premier John Hamm, who did the negotiations, and Cecil Clarke, who was very much a part of them as well. He was the minister of energy at the time. We should all be grateful to them, but we should all also fight to make sure that this accord is kept exactly the way they negotiated it.

Another thing I hear quite often is that Nova Scotia gets this gift of $95 million under the new program. It is not a gift. It is just part of the same program that all the provinces have. It is not a gift any more than whatever the province of Quebec or any other province gets in the way of funding from the equalization formula.

However, somehow it is made out to be a big consideration for Nova Scotia. It is not. It is exactly the same benefit the other provinces get, but what it does do is take away the ability for the offshore revenue agreement to be attached to the new formula, which is what it was always intended to be.

What has happened is that under the budget the government has changed the whole concept of the offshore revenue agreement. It was originally envisioned to go with whatever equalization formula is in place at the time. It was to follow that. It is a rolling commitment to follow whatever the equalization formula is.

What the budget does is lock it into the previous formula. It changes the whole concept and the whole basic formula of the Atlantic accord. It means that after this budget passes it will not apply to the formula that exists at the time, but that is exactly what the formula was supposed to be. That is exactly what its purpose was.

This budget changes it dramatically and takes that away. I do not believe the people of Nova Scotia are going to accept that. Certainly it does not look like it to me from the response I have had, even just from my vote, and it absolutely puzzles me why I am getting this positive response, because all I did was ask the government to honour a signed contract. This is not a political promise. It is not something that was said loosely. This is a signed contract. It is signed by the Government of Canada.

I believe that every Canadian wants the signature of the Government of Canada to be honoured. It does not matter whether it is on a nine paragraph agreement with the Government of Nova Scotia or a trade deal with Washington or some kind of deal with Moscow. When Canada signs a contract, everybody in the world should know that it is rock solid, that it is solid gold and it will be honoured.

In this case, the signature was supposed to mean that the contract would be honoured for 15 years. It was honoured for only two years and now the government is changing it. In any case, it is a sad day at this point due to the fact that we have not made more progress. I understand that the premier of the province of Nova Scotia is in town today. I understand that he has met with the Prime Minister.

However, I do not think the government has agreed to restore the Atlantic accord, which is the only thing that Nova Scotians are going to accept at this point. At some point they might have accepted a compromise, but they are mobilized. Nova Scotians from every walk of life are mobilized and focused. They are crystallized on this matter of maintaining the Atlantic accord. Nothing other than the Atlantic accord will be accepted. We had it. We should continue to have it.

I think the government made an awful mistake to tamper with it. It had been going for two years. Nobody found a problem with it. It was working. It was accepted by all the other provinces. Why in the world the government brought it into the debate on the budget and tried to tamper with it and tried to change it, I will never understand. I think in the end the government is going to pay a price for it because it has opened up the whole debate again.

I hope that Nova Scotia will have the Atlantic accord restored, but I do think it is going to cause other provinces to become more animated in the debate and to seek similar agreements. It is a shame the government ever tried to meddle with this.

With that, I will end my remarks. I hope that between now and the vote tonight the premier of the province of Nova Scotia and the Prime Minister of Canada find a way to restore the Atlantic accord exactly as it was negotiated and as it was signed on Valentine's Day 2005.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Mr. Speaker, the member has paid the price in a very literal and personal way for the Conservatives' betrayal of Atlantic Canada. I think all members of the House respect him for the stand that he took in the interest of his constituents and in the interest of Nova Scotia.

We have seen the reaction of public opinion in Nova Scotia, Newfoundland and Labrador, New Brunswick and Prince Edward Island. We have seen the reaction in Saskatchewan. We have seen the reaction in British Columbia to this bad budget that now the Conservatives are trying to rush through because they are realizing that public opinion is certainly being raised against them right across the country, from coast to coast to coast.

The government brought in closure today to force through the budget bill. We saw last Friday that the government tried to give itself special emergency powers, a conjurer's trick that it tried to use to get the budget through.

Why do the Conservatives not get it? Why do they not understand that these betrayals and broken promises, particularly the betrayal on the Atlantic accord, are simply not acceptable. I want to know the member's opinion. Why do the Conservatives not understand that a broken promise is illegitimate and wrong and they should make amends?