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.

The Budget

[Josée Verner, Conservative, Minister of International Cooperation and Minister for la Francophonie and Official Languages]

Mr. Speaker, this is an important issue.

In the Budget Implementation Act, 2007, we committed to giving $135 million to reconstruction and development in Afghanistan. Unfortunately, unelected Liberal senators are delaying Bill C-52.

We hope that the opposition members will support our development efforts for the Afghan people. Were they not the first to demand more money for reconstruction and development in Afghanistan and Kandahar?

Health

[Joy Smith, Conservative, Kildonan—St. Paul, MB]

Mr. Speaker, yesterday the Liberal MP for Bramalea—Gore—Malton made a statement in the House praising Rick Hansen for his dedication to raising research funding to treat spinal cord injuries. Yet this week the member voted against a budget that gave the Rick Hansen Foundation $30 million to continue its important work.

Could the Minister of Health convey to the House what will happen to that funding if the Liberal Senate delays the adoption of Bill C-52?

Budget 2007 Implementation Act

[Daniel Petit, Conservative, Charlesbourg—Haute-Saint-Charles, QC]

Mr. Speaker, the Liberals do not recognize the fiscal imbalance, and now they are voting against Bill C-52.

The bill is now before the Senate, which is comprised of a majority of unelected Liberal senators. If the bill is blocked by the Liberals in the Senate, it will result in the loss of more than $4 billion in tax breaks and funding for programs to the end of the 2006 fiscal year, including more than $1 billion to help provinces reduce patient wait times and $1.5 billion for provincial environmental initiatives in support of projects that reduce greenhouse gas emissions.

The Leader of the Liberal Party should show a bit more leadership by urging irresponsible Liberal senators to make the interests of Canadians their priority, to respect the will of the House of Commons and to vote for bill C-52.

Bill C-52--Time Allocation Motion

[Tom Lukiwski, Conservative, Regina—Lumsden—Lake Centre, SK]

Mr. Speaker, my question is simply this. Since I understand, from hearing comments in the media today from some of the unelected, unaccountable Liberal senators, that those senators may be willing to block Bill C-52 when it finally gets to the Senate, could he tell me if there has been any precedent in Canadian parliamentary history for this occurrence?

[Tom Lukiwski, Conservative, Parliamentary Secretary to the Leader of the Government in the House of Commons and Minister for Democratic Reform]

Mr. Speaker, I want to speak for a few moments about the allegations we have been hearing this morning as to the fact that there has not been ample time given for debate on Bill C-52. I want to underscore a point first made by my colleague, the hon. Minister of Finance, when he pointed out quite correctly that in this House on 22 occasions there have been concurrence motions brought forward by members of the opposition parties.

If we take a look at what concurrence motions actually do, we will see that they allow three hours of debate on that particular concurrence motion but that they in effect prevent three hours of debate, per concurrence motion, for government legislation. In effect, then, 66 hours that could have been used to debate important pieces of government legislation were absolutely boycotted by members of the opposition, because they felt they wanted to usurp the responsibility of the government to enter debate on legislation.

Any time I hear members of the combined opposition complaining about lack of meaningful debate, it is their own fault, and they have done it for purely political reasons--

[Jim Flaherty, Conservative, Whitby—Oshawa, ON]

Mr. Speaker, while I thank the member for her questions, she raises the point of reasonable and timely debate. She is a member of the New Democratic Party. There are 29 members of that party in this place. I understand that a total of 24 speeches were given by that party on this bill. One would think that tends toward a fulsome debate on a particular bill.

With respect to moving the bill forward and consultations and agreements, as I mentioned earlier, there was an agreement between the government and the Liberal Party, the official opposition, to move Bill C-52 to the Senate by June 6. That agreement was broken by the Liberal opposition. That is one of the reasons, of course, why we have to move forward.

The government kept asking the other parties in this place how many speeches would be given. Some of the other parties kept adding speakers, so we have come to a place where, as a responsible government, what does one do? We have these very substantial large transfers from the federal government to our government partners in Canada in the provinces and the territories. We need to get them out. The Liberal opposition apparently does not feel any urgency to work with our partners in Confederation for this to happen. In fact, the Liberal opposition broke its agreement to move this bill to the Senate by June 6.

For all of these reasons it is our duty as a government to move forward and make sure that the country works well as a federation in the fiscal sense, that is, that transfers happen for these important areas of government activity, for the people of Canada and of course for those relying on transfers relating to the environment, the Canada social transfer and the other important transfers.

[Libby Davies, NDP, Vancouver East, BC]

Mr. Speaker, I want to begin by saying that what began as a tendency of the government and then turned into a trend has now turned into a measure of desperation as it has complete and utter disregard for the Standing Orders in the House in terms of how it is bringing business forward.

I would like to follow up on what was said by the member for Winnipeg North, who pointed out that the Standing Orders are being used in a way that is not intended. Standing Order 78(1) makes it clear that a minister of the crown can seek agreement from all parties for time allocation. That was not done. Standing Order 78(2) makes it clear that the government can seek a majority of representatives for time allocation. That was not done.

Today the government now is asking for time allocation, without any consultation, but Standing Order 78(3) makes it very clear that this is to be done on the basis that an agreement could not be reached. I have to point out to you, Mr. Speaker, and to other members, that no agreement was sought.

Here we have another example of the government ignoring and disregarding our Standing Orders, even in how it uses this procedure. I find that very objectionable. I think the government should be accountable for that. The government should respond to that and tell this House why it is disregarding the Standing Orders in terms of how it brought forward this time allocation.

Second, why is time allocation required for Bill C-52 in the first place? As we have heard time and time again, this House has a calendar to sit until June 21. We have heard that the finance committee dealt with the bill in good order, heard witnesses and brought the bill back to the House. It was the government itself that either was incompetent or deliberately did not wish to bring this bill forward at second reading. There is a clear indication that there were 11 sitting days when the government could have brought this bill forward if it is as urgent as the government claims.

I bring this to the government's attention again because here we are now, the Conservatives are desperate, and they are using time allocation. They are not consulting with the parties as they should under the Standing Orders. They now are trying to rush this through when nobody in this place has held up Bill C-52.

We are asking only for reasonable and timely debate. One day at report stage cannot be characterized as stalling. I would ask those questions of the government.

[Jim Flaherty, Conservative, Whitby—Oshawa, ON]

Mr. Speaker, I thank the member for Peterborough not only for the good question, which actually gets at the factual issues here in the House and the factual consequences, but also for his speech on this bill last Friday and for his hard work in the House of Commons finance committee on many issues, including Bill C-52.

What happens if this budget bill does not pass? When we talk about the environment, this will not happen: $1.5 billion to support provincial and territorial governments to reduce greenhouse gas emissions and air pollutants. In health, this will not happen: $612 million to support provinces and territories to put in place a patient wait times guarantee, which is vitally important to all of us across Canada.

In terms of training and post-secondary education, there is to be $570 million for Ontario for post-secondary education and training, which is very important to the people of my home province of Ontario. In terms of the territories, there is to be $54 million for the Northwest Territories to cover payments related to the previous formula arrangements. It very important to the territorial governments that they gets the funds to which they are entitled so they can carry on with day to day government in Canada's north.

In British Columbia, and these are important environmental initiatives, there is to be $30 million to promote environmentally sustainable practices in the spirit bear rainforest and Queen Charlotte Islands areas, which are beautiful areas of British Columbia.

Again on training, there is to be $21 million for Manitoba and $18 million for Saskatchewan for labour market training.

As I say, all of these things will not happen unless we pass Bill C-52.

[Jim Flaherty, Conservative, Whitby—Oshawa, ON]

Mr. Speaker, the member opposite is correct that Bill C-52 does address a very serious inequity in the Canadian tax system, that is, it would introduce a tax on distributions from certain publicly traded income trusts and limited partnerships, effective beginning with the 2007 taxation year. I thank the members of the NDP for supporting that measure.

Unlike the member for Mississauga South and his colleagues, we believe in tax fairness. This is an issue of some corporations that were paying the normal corporate tax rate and some that were choosing to become income trusts so they would not have to pay their fair share of taxes in Canada, which simply means that unless we change the law this advantage would be taken by certain corporate entities over some other corporate entities. It means that other people would have to make up the taxes so that we would have proper funding of health care, education and other important priorities of Canadians.

There is no mystery to this. It is quite straightforward. As I say, I thank the NDP for seeing the light. I regret that the Liberal opposition, including the member for Mississauga South, has failed to see the importance of tax fairness for Canadians.

With respect to speaking to the bill, I am told that at report stage the member for Calgary—Nose Hill, who is my parliamentary assistant, spoke to the bill.

Of course, the government members have the advantage of working directly in making sure that we answer their questions and that I can answer their questions concerning the budget bill, but also, they see the absolute importance of getting this bill passed before the end of June so that the transfers, the important Canada social transfers for important parts of provincial agendas, can be transferred to the provinces and territories. They see that clearly. Regrettably, it does not appear to have been seen by the members opposite, including the member for Mississauga South.

[Jim Flaherty, Conservative, Whitby—Oshawa, ON]

Mr. Speaker, I understand the concerns mentioned by the member. I also understand that 22 concurrence motions have been brought in with respect to debate on this matter.

The member talked about thorough and reasonable debate. I understand that 30 speeches in total have been given by Liberal members on Bill C-52 and 24 speeches in total by the NDP. This includes a series of members from both of the Liberal Party and the New Democratic Party who have spoken more than once to this issue, which is their right.

However, when the member raises the issue of reasonable debate, I think it is reasonable to look at the number of speeches that have been given, the number of concurrence motions that have been brought forward and the number of members who have spoken more than once with respect to Bill C-52.

With respect to consultations, I understand that the government House leader and the deputy government House leaders have had a series of discussions with their opposition counterparts with respect to the progress of the bill.

[Judy Wasylycia-Leis, NDP, Winnipeg North, MB]

Mr. Speaker, my questions have to do with the use of a very blunt instrument to achieve the government's agenda when it had many other avenues available to it to ensure that the budget was passed on a reasonable basis.

Today we are faced with a government that has chosen to bring in the heavy hand of closure on democracy and debate in this place. It is a measure that we regret. We know it was used hundreds of times by the Liberals but we thought the Conservatives were different. They said that they were different. They said that they believed in an open and democratic process. They said that they would not resort to these heavy-handed tactics and yet today they did so without having used all available means at their fingertips to move the process along.

My questions are threefold.

First, why did the government miss 11 days of opportunity to advance this bill through second reading? We know that between April 17 and May 11 there were 11 days when Bill C-52 could have been called for second reading debate. The government chose not to that and put us back on a schedule so we are at this point today.

Why did the government not use every opportunity, and the will of this House, to have a thorough and reasonable debate on Bill C-52, the budget implementation bill? Does the government have something to hide? Is it afraid of the developments that we are seeing today with respect to the Atlantic accord and Saskatchewan? Did they prevent the government from having the open debate back then? Was the government afraid that it would get out in the open? If that is the case, the government really hoisted on its own petard because it just created the circumstances for a much greater outcry from across this country.

Second, why is the government now using closure when the finance committee did its job in a very expeditious way? We took only five sittings to deal with this bill in terms of all of its ramifications, to have hearings and to do clause by clause. We were very responsible in that way and yet the government still brings in closure.

Third, why did the government not take advantage of our Standing Orders for consulting around the use of closure? The government has avenues for consulting with all parties, for seeking opinions and advice. Instead, the government chose to go immediately to the last resort measure in the Standing Orders, which is to unilaterally impose this motion on Parliament.

[Jim Flaherty, Conservative, Whitby—Oshawa, ON]

Mr. Speaker, the member wants me to answer the questions but he continues talking. I will try to answer the question. What he does not want to hear is that the budgets that we have brought in reduced taxes by more than four times what was done in the previous budgets by the Liberal Party opposite.

A tax reduction is important, which is why Bill C-52 going forward is important for Canadians.

The question was about consultations among House leaders. I understand that there was an agreement to report the bill to the Senate by June 6 but, obviously, that has gone by. There was a comment about there being an attempt to move forward today by the opposition House leader. If he wants to move forward today, that is exactly what we are proposing to do, to move forward with Bill C-52 to third reading today. I am sure the opposition House leader will support that since he says that is something he wanted to do, which is to move forward today with Bill C-52 to a vote.

In terms of the timing of Bill C-52, which has been debated here at some length, there were discussions between the House leaders about the number of speakers. I am told that the Liberal opposition kept adding more speakers after saying that they would only have so many speakers. This elongates debate, which is a good thing.

As to whether there were other bills being debated in this place, yes, important bills about democratic reform of the unelected Senate that is dominated by Liberal senators who are, as I say, unelected. We are trying to reduce their terms somewhat from a lifetime appointment to age 75 without them ever being elected.

The other legislation that is in this House, which has been opposed and delayed repeatedly by the Liberal opposition, relates to crime. I come from the greater Toronto area and crime is an important issue for us. One would think that the Liberal opposition would have been anxious to pass a bill that would have a minimum sentence for the use of a gun in a criminal offence, particularly given what we live through in urban areas of Canada, particularly the greater Toronto area. However, the Liberals were not. Those bills needed to be brought to this place for debate so we could get them passed and we could strengthen anti-crime measures in the country, which does not seem to be of interest to the members opposite.

Another question had to do with what went on in the finance committee but I would leave that to the members of the finance committee to debate.

The last point raised by the member opposite had to do with the Atlantic accords and the sort of discussions that have been taking place. It is always interesting to hear these questions from the opposition Liberals because they are led by a leader who says that there is no fiscal imbalance between governments in Canada. In fact, he goes further and says, “Fiscal imbalance is a myth”. Therefore, if the Liberals were the government they would do nothing on this subject, led by the current leader of the Liberals, and yet they want to ask questions about the Atlantic accords.

If we go back and look at the history--

[Jim Flaherty, Conservative, Minister of Finance]

Mr. Speaker, Bill C-52 is, of course, the first budget implementation bill. As a new government, I am very pleased that our budget 2006 had the usual spring implementation bill and the fall implementation bill and, together with this budget, reduces taxes for Canadians by $40 billion or so over three years. It is a very substantial tax reduction and in fact four times higher--

[Ralph Goodale, Liberal, Wascana, SK]

Mr. Speaker, I have four or five questions that I would like to address to the government House leader and I will attempt to put them all together at once and, hopefully, the answers could be forthcoming.

First, Standing Order 78 contemplates consultations to achieve an agreement on time allocation among all or, failing that, a majority of the parties in the House. I would like to ask the government why the government House leader did not consult with the official opposition on this particular matter.

I would point out to the government House leader that yesterday, in a debate about Bill C-52, I specifically indicated to him and to the House that from the perspective of the official opposition, we expected Bill C-52 to be disposed of today. I made that comment before the notice was given with respect to the minister's intention under Standing Order 78.

That being the case, having given that very clear overture, I would ask the government why there was no effort to consult about this matter and why there was no attempt to reach an agreement in advance of the minister taking the action that he has today.

Second, in the flow of events around Bill C-52 the government itself only got to its 2007 budget very late in this sitting, about the middle of March, and then the government only pursued debate on Bill C-52 sporadically. At one point there was a full, unexplained three week hiatus in the debate at second reading. Why did the government deliberately delay and avoid its own budget bill at several stages during its course through Parliament before we got to the situation that we are in today? What was the government's strategy in delaying its own legislation?

Third, in the committee proceedings on Bill C-52, the government first tried to avoid any scrutiny whatsoever by avoiding all witnesses being called to the committee. The opposition insisted on basic decent hearings and extracted a commitment from the government to hear at least some witnesses in a serious and dignified manner, especially those who believed that the government had not told them the truth. I am thinking here particularly of people who had invested in income trusts and a number of the provinces which believed they had been betrayed on equalization and the Atlantic accords.

The format for these committee hearings to hear these witnesses was unilaterally changed at the last minute by the Conservative committee chair, thus breaking the all party agreement on how to dispose of Bill C-52. Why did the government violate the agreement that was in place on how to hear these committee witnesses, especially any provincial premiers and especially Premier Calvert?

Fourth, and my final question, the Prime Minister and the government have defended Bill C-52 in blanket terms. They deny, for example, that this bill affects and changes the Atlantic accords but still they admit that discussions are indeed underway to fix the problem that Bill C-52 poses for the Atlantic accords. Either there is something that needs fixing or there is not. If Bill C-52 does not negatively affect the Atlantic accords, then what is being discussed with Premier MacDonald of Nova Scotia and will the same flexibility be shown toward Premier Williams of Newfoundland and Labrador and Premier Calvert of Saskatchewan?

[Peter Van Loan, Conservative, Leader of the Government in the House of Commons and Minister for Democratic Reform]

moved:

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 third reading stage of the Bill;

and fifteen minutes before the expiry of the time provided for government business on the day designated for the consideration of the said 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.