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

[Geoff Regan, Liberal, Halifax West, NS]

Mr. Speaker, I am pleased to take part in this debate on the budget implementation bill.

It seems to me that in January of 2006, in the election of last year, when the public gave its decision in the election, it gave the Conservative Party a minority. It did not say, “Here is a majority”. It said, “Here is a minority. Now all of you go make it work”.

What concerns me, among other things, is that it appears that many times the Conservative Party thinks it can behave as if it has a majority, which it does not have. We have seen many instances of that. At the same time, since it does not have a majority, we have a Prime Minister who clearly wants a majority and wants to have an election. He has already unveiled his fear factory in the southern part of Ottawa somewhere. It is clear that the government will say or do just about anything to get that majority.

Therefore, we saw a budget that I would describe as a divide and conquer budget, a budget that is aimed at certain key target groups that might help get that 40% or 41%, to get majority that the government is after. It is divide and conquer.

It is not surprising though, in many ways. What kind of government is it? What kind of government has it been? What kind of Prime Minister have we seen over the past 15 months or so?

We have seen a Prime Minister who cancels child care spaces. A child care program, which would provide thousands of spaces, was cancelled. In its place, what do Canadians get? They get a monthly amount of $100 which is taxable, which is taxed back, so they will lose most of it anyway. In addition, it provides no spaces whatsoever. To me, that is deliberate, it is deceitful and it is despicable.

We had the promise in the last election that the Conservatives, if elected to government, would never tax income trusts. They could not have been any clearer about their intention. They must have known the risk that other companies in the future might turn into income trusts, but they decided to take the chance, to be reckless and made the promise anyway. What did they do? They broke their word and wiped out the savings of thousands of savers, of seniors who relied upon their word.

What kind of a Prime Minister is that? What kind of a government is that? It was deliberate, deceitful and despicable.

We have a Prime Minister who pledges, in writing, to uphold the Atlantic accord, the accords with Nova Scotia and Newfoundland and Labrador. Then he rips them both up and throws them in the faces of the people of those two provinces.

There is an old Gaelic proverb that some of my colleagues may have heard by now, because it was in a brochure that was sent out by Conservative MPs in those two provinces during the negotiation of the accord. The old Gaelic proverb is, “There is no greater fraud than a promise not kept”. Those are not my words. That proverb is from a brochure sent out by Conservatives during the negotiation of the offshore accords, so they should be familiar with that because it was part of their propaganda strategy.

It is ironic that we see a time now when their own words come back to haunt them in the wake of what can only be described, and what has been described by the Premiers of Newfoundland and Labrador and Nova Scotia and by the minister of finance of Nova Scotia, as a betrayal. Even the Conservative candidate in the riding of Halifax is recognizing this is a betrayal, and she cannot accept this part of the budget. It is deliberate, deceitful and despicable. That is the description of the government.

What did Danny Williams say about this government, its nature and the way it has been behaving on a variety of matters? He said:

This is the same prime minister who basically reneged on money for women , for literacy groups, for volunteers, students, minority rights, has not lived up to the Kyoto accord, for aboriginal people.

It is deliberate, deceitful and despicable. That is what the Conservative government is all about, as we have seen in so many examples. The Prime Minister broke his clear promises in Nova Scotia and in Newfoundland and Labrador.

I know the accord pretty well. I was part of the negotiations. The words in it in fact say that the accord applies to the equalization program as it exists at the time. Therefore, no matter how the program changes, the provisions of the accord and the benefits that flow from it still apply. They still flow.

It cannot be said, as the Minister of Finance tries to do, that the province can still have the accord, but it can only be applied to the old equalization, that the province cannot have the new equalization and the accord. This is not the deal that was signed. This is not the deal that we made. This is not the deal that Conservative MPs from Newfoundland and Labrador and Nova Scotia argued for so vehemently for in the House two years or so ago. This is deliberate, deceitful and despicable.

Nova Scotia's finance minister, Michael Baker, a Progressive Conservative, in his budget speech not long ago, Friday, March 23, said:

The new federal equalization formula essentially forces Nova Scotia to give up a portion of potential future revenues that were guaranteed under the Offshore Accord.

One of the ways the media described it was “last week's hatchet job on the offshore accord”.

This again proves that unfortunately Canadians cannot trust the Prime Minister to keep his word or even to honour a signed contract. It is phenomenal. Who would have thunk it? It is disappointing, deceitful and deliberate.

[Dean Del Mastro, Conservative, Peterborough, ON]

Disingenuous.

[Geoff Regan, Liberal, Halifax West, NS]

Yes, it is disingenuous for the government to say that it will not tax income trusts and then to do it, or to say it will respect the offshore accords, knowing what they contain, and then not do it. That is absolutely disingenuous.

I believe Canadians across the country, certainly in my province and in Newfoundland and Labrador, will hold Conservative MPs to account for the promises they break.

Back in 2004, my hon. colleague, the member of Parliament for South Shore—St. Margaret's, said:

This is about fairness and the future of Nova Scotia and Newfoundland and Labrador. This is about honesty and about keeping promises.

What is he saying now? He says now that if Nova Scotia has to give up the accord, it would not be so bad. What a change. What happened? How did he become suddenly a changed person? How did he go from a Conservative MP and a Nova Scotia member of Parliament to a harpercrit? It is a decision that he has made.

[The Acting Speaker, Royal Galipeau]

The hon. member for Halifax West knows that I have been very attentive to his speech. He also knows that I have been respectful of his experience in the House and that experience is sufficient for him to know not to identify by name any member of the House.

He may want to go on with his train of thought, but not get me up again.

[Geoff Regan, Liberal, Halifax West, NS]

Mr. Speaker, I appreciate your attentiveness. I will certainly take your advice, as always.

Let me just say that the decision by my hon. colleague for South Shore—St. Margaret's was a deliberate decision. It was disappointing and it was deceitful.

Here is what the member for Cumberland—Colchester—Musquodoboit Valley said in 2004.

I call on the government to... just get down to the point and say, “We made a promise. Now we are going to keep it”.

Now he has changed his mind. He decided to say that the important thing was Nova Scotia could choose. I have already explained what this choice is about. It is not the deal we made. This choosing nonsense is not the deal that he and his colleagues insisted that our province deserved. That was disappointing, deceitful and deliberate.

In March of last year, the new finance minister, although after 15 months we can hardly call him new, said that equalization had been made a mess because of these deals with Nova Scotia and Newfoundland and Labrador. The Conservative members of Parliament from those two provinces made the decision, the deliberate decision to say nothing then. This is plain disappointing.

What is the part time ACOA minister saying today? The poor member for Central Nova is so despondent about this betrayal that there are unsubstantiated reports that he spent the weekend after the budget planting potatoes, but he got over it because when Nova Scotians said it was a betrayal—

[The Acting Speaker, Royal Galipeau]

Questions and comments.

The hon. member for Peterborough.

[Dean Del Mastro, Conservative, Peterborough, ON]

Mr. Speaker, I am not quite sure where to start with that speech. It lacked any basis in fact whatsoever and rambled from one area to the next. But one thing I would like to ask, since the member brought it up, I would love to know why the member stands up for corporate tax holidays.

In fact, I mentioned a little while ago that I read an article in the Toronto Star today, a paper that generally is quite favourable to the member's party. Following this line of thought that the Liberals happen to be following, which is supporting a corporate tax holiday, corporations not paying their fair share tax, that is not going to ring very well in the homes of Canadian voters. I would like to know what the member's own constituents in the province of Nova Scotia think about his stance in supporting corporate tax holidays. I would love to hear that.

[Geoff Regan, Liberal, Halifax West, NS]

Mr. Speaker, as my hon. colleague knows, my comments have an entire basis in fact.

The first question I would have for him when he poses this kind of comment, is how is it that he did not make those same complaints about a policy of not allowing income trusts when his party promised it during the election? Why did he not object then? Where were his objections? Where were these strong and vehement opposition comments in relation to this issue when his own party was promising it would not tax income trusts?

Suddenly, he has a totally different point of view. However, I am glad he brought it up because it gives me the chance to remind members that when Nova Scotians talked about what happened in our province as a betrayal, the minister for the province said to get over it and “We'll see you in court”. What kind of an attitude is that? It is a shameful response.

[Olivia Chow, NDP, Trinity—Spadina, ON]

Mr. Speaker, ordinary Canadians are paying more and more for drugs. Last year the average increase was 9%; actually every year since 2000. It costs about $20 billion for Canadians to buy drugs. The amount spent on prescription drugs has doubled since 1999. We also know that at least four million people in Canada have no access to public or private insurance plans for drugs. It is really time for a public pharmacare program.

The Liberals did not deliver it even though it was promised and the Conservatives, in this budget, have no pharmacare program. What is the member planning to do about that?

[Geoff Regan, Liberal, Halifax West, NS]

Mr. Speaker, my hon. colleague from Trinity--Spadina raises an important issue. It certainly was not one that I had a chance to address in my comments, but she is entitled to raise it.

All of us are concerned, I think, about the rising cost of prescription drugs and the need to provide for that. My hon. colleague seems to forget, when she talks about the 12 years and two months that the Liberals were in government, that when we arrived in government there was a $42 billion deficit.

I know that never was an issue of concern to the NDP members and that they never supported any of the measures taken to deal with that deficit, get it under control, and put our country and its economy on a much better basis, on a basis that provided thousands and millions of jobs across this country.

We can recall the 1993 election when Kim Campbell, then leader of the of the Conservatives and then prime minister, said there would be no jobs created until the year 2000. As it turned out, under a Liberal government between 1993 and 2000, there were two million jobs created because the economy was put in a better position. The economy reduced poverty, it allowed us to put money into health care, and it allowed us to do all kinds of good things. There were not many of those that the NDP members supported but there were one or two of those they actually supported, but never any of the efforts to get us in the place to do it.

[Keith Martin, Liberal, Esquimalt—Juan de Fuca, BC]

Mr. Speaker, I would like to ask my hon. colleague, who I thought gave an inspired speech, a very simple question. The Conservative government raised taxes on the poor. Does he think that the Conservative government violated one of the basic principles of a government, that is, to care for that group which is most needy in our society, and does he not think the right thing to do would be to drop the taxes on the lowest income earners in this country?

[Geoff Regan, Liberal, Halifax West, NS]

Mr. Speaker, obviously in the budget a year ago the Conservatives raised income taxes on people in the lowest income bracket. It was an outrageous thing and I have no excuse for it.

[Libby Davies, NDP, Vancouver East, BC]

Mr. Speaker, I am pleased to rise in the House today with an opportunity to speak to the budget implementation bill, especially from the perspective of residents of east Vancouver.

A budget is a test and measure for any government. To me a budget is about who gains and who loses. When we look at the Conservative budget that was brought out a couple of months ago, it was very clear that many Canadians felt they had lost. When we look at a riding like east Vancouver and see some of the pressing issues that people are dealing with on a daily basis, there was really nothing in the budget that helped people.

It strikes me as a massive contradiction that on the one hand we can spend billions of dollars in Afghanistan, I think more than $4 billion to date, on a war that is simply unwinnable, a mission that is totally wrong for Canada, yet we can ignore pressing issues in our own country, such as homelessness or lack of affordable housing.

British Columbia is getting ready for the Olympics in 2010. There is certainly a lot of pride and activity taking place, but there is also a lot of concern that as we approach the Olympics things are going to get very expensive, that we do not have the right kind of investment in our social infrastructure and that a lot of people are going to get left behind.

One of the recent initiatives that took place was a remarkable process that brought together representatives of government, the city, NGOs, local community groups and business. It was the 2010 B.C. in the city housing table that looked at issues around the Olympics, with particular focus on housing.

It was remarkable that this diverse group of organizations and different interests came together and agreed that for the 2010 Olympics we needed to build a minimum of 3,200 units of social and affordable housing in the city of Vancouver. If it is not done, then we are going to see a real tragedy take place. Already homelessness has doubled in Vancouver in the GVRD over the last few years.

I raise this because to me housing is a very basic human right. Housing is a very basic issue that affects Canadians. If there is no adequate, safe, affordable, secure housing, then pretty well everything else in one's life is going to go wrong. It is a basic thing that needs to be there.

When we look at the fact that homelessness has actually doubled and there are many more tens of thousands of people who are threatened to be or are on the verge of being homeless, then to me it is simply astounding that in the last federal budget put forward by the Conservative government there was no new money for an affordable housing strategy. There was no new money for even a housing strategy that would have focused on the so-called marketplace, nevermind co-op or social housing, which I know the Conservatives generally are ideologically opposed to.

This is a very glaring omission in the Conservative budget and it is something that concerns us greatly, not only in my own community of east Vancouver but in British Columbia generally. Even the B.C. Liberal government has woken up to the reality to some extent on the housing crisis in British Columbia. It recently announced a number of initiatives that would begin to at least take some initial steps to deal with the housing crisis that is going to loom greater and greater as we approach the 2010 Olympics.

The large question that people have is this. Where is the federal government? Why is the federal government not at the table providing a strategy and the funding complement to ensure that people are not sleeping on the street, that people are not paying 40%, 50% and 60% of their incomes on housing, and that people have the right access to secure, safe and affordable housing?

That is one very severe problem with this budget. On the one hand it is spending billions of dollars in Afghanistan, continuing with $8 billion corporate tax cuts, and yet it is not focusing any money to a basic need such as housing.

Let us be very clear; it is not a lack of fiscal capacity. The federal government is rolling in cash. We have seen a $13 billion surplus last year. We have seen a $5 billion surplus this year. The last two Conservative budgets are very ideologically driven. They are driven in terms of offering a few tax incentives. They are driven in terms of providing a few individual incentives, but they do nothing to eliminate the growing inequities that we see in our society where the gap between poverty and wealth is getting bigger and bigger.

A budget is an opportunity for any government, but particularly the federal government, to look at that big picture, to look at that macro picture, to look at the fact that we have lost 250,000 manufacturing jobs since 2002, to look at the fact that we have a housing crisis, to look at the fact that most women in this country find it harder to keep pace, and most families find it harder to keep pace because they cannot find child care and if they do, they cannot afford it.

Those are some of the measures and it is very disappointing, which is an understatement, to see that this federal budget did not address any of those questions. Most of the groups that I know and work with in my riding have been struggling even to keep going. Many of them faced a lot of difficulties in even knowing if they would receive the limited funds to continue in the new fiscal year, whether it was arts groups, housing groups who rely on emergency housing programs, or women's programs.

Even at that very basic front line service delivery level, many organizations have been thrown into near crisis because they could not get a clear answer as to whether or not their very small operating funds were actually going to come through under the Conservative government. That is a pretty sad state of affairs.

In the aboriginal community there are many organizations that are really struggling to make ends meet. The demands that they face in terms of providing emergency programs, shelter programs, training programs are enormous. The need out there in the community is simply enormous. In the 10 years that I have been an MP, whether under the Liberal government and now under the Conservative government, we have seen these demands get bigger and bigger. What has happened in this country is that the social safety net that people used to be very proud of, not only does it have holes in it but it is really now non-existent.

There are many artists in east Vancouver. There is nothing in this budget, even a simple thing like tax averaging that would give artists a little bit of a break.

Within the NDP we voted against the budget because we thought it was a dismal failure. It was not placing priorities where they needed to be. It is a budget that is clearly directed toward corporate elites in this country. It is not a budget that is directed toward meeting the needs that people have on a daily basis, whether it is health care, drug costs, housing, child care, support for aboriginal people, dealing with children's programs, and the list goes on and on, not to mention students.

How long have we stood in the House and talked about the terrible situation that students face where their debt load has increased and tuition has tripled in the last 15 years. Again this would have been an opportunity for the federal government to take some real concrete steps in saying that if we believe in our future generation, we are going to make sure that post-secondary education is accessible. Unfortunately, it is becoming less and less accessible because the federal government has moved away from supporting post-secondary education.

I have to say that from the point of view of my local community, from the point of view of a national perspective and even our international obligations, this budget gets a failing grade and that is why we are opposing it.

[Rick Dykstra, Conservative, St. Catharines, ON]

Mr. Speaker, I certainly heard a lot of ideology from the member. However, we are trying to speak to the pragmatic part of what Canadians are looking for.

I heard a lot of ideology preached today but I did not hear a lot of facts. The member spoke specifically about social housing and said that it was not in the budget. I was astounded to hear the member say that because incorporated within the context of the budget is $800 million for social housing that were allocated in the 2006 budget to be carried over two years. All of those funds, every last cent, were put into a third party trust account to ensure that it would be spent in the way it was supposed to be.

Why did the member not support that part of affordable housing, which obviously was to be invested across this country: $312 million in Ontario, for example, and millions in British Columbia?

I do not know whether the Liberal government in British Columbia has yet determined whether they should or should not be spending that money but those funds, for the last two budgets, have been allocated directly into that fund.

In terms of tax fairness, we can talk about a lot. In fact, there were measures within the budget that she and her party said they supported but are now voting against. However, speaking specifically to the point that she made about affordable housing, which is factually incorrect, it was in the 2006 budget and she can rest assured that it is there in 2007.

[Libby Davies, NDP, Vancouver East, BC]

Mr. Speaker, all I can say is thank God for the NDP that we were here to get at least that amount of money in a previous government budget and then to force the Conservatives to carry it over. I pointed out correctly that there was no new money in the federal budget to deal with the housing crisis across the country. I would correct the member on that point.

One of the things that slipped through in the budget that was of a lot of concern is that the Conservatives have fundamentally changed Canada's drug strategy. I am not talking about prescription drugs, but illicit drugs. They have basically changed the so-called four pillar approach, law enforcement, prevention, treatment and harm reduction, and have dropped harm reduction. It was buried in the budget. This should be a very alarming signal to a lot of the organizations across the country that have worked very hard on harm reduction: things like needle exchanges and the safe injection site in my riding in the downtown east side.

This brings me back to my point that this was very much an ideologically driven budget. The Conservatives have ignored real evidence that is out there in terms of what works. Whether it is on a drug strategy, on a housing investment or on public transit, they have ignored the evidence out there and have basically produced a budget that is at the very core of their political and ideological agenda.

That is why we need to get up and tell the government that its budget is a failure, that it does not work for most of the people I represent. It might contain the odd thing here and there but overall the major points in people's lives, whether it is housing, child care, jobs, EI, dealing with the drug strategy or support for women, none of those things are in the budget.