This bill is from the 39th Parliament, 1st session, which ended in October 2007.
Jim Flaherty Conservative
This bill has received Royal Assent and is now law.
This is from the published bill.
Part 1 implements income tax measures proposed or referenced in Budget 2007 to
(a) introduce a tax on distributions from certain publicly traded income trusts and limited partnerships, effective beginning with the 2007 taxation year;
(b) reduce the general corporate income tax rate by one half of a percentage point, effective January 1, 2011;
(c) increase the age credit amount by $1,000 from $4,066 to $5,066, effective January 1, 2006;
(d) permit income splitting for pensioners, effective beginning in 2007;
(e) introduce a new child tax credit of $2,000 multiplied by the appropriate percentage for a taxation year, effective beginning in 2007;
(f) increase the spousal and other amounts to equal the basic personal amount, effective beginning in 2007;
(g) increase the age limit for maturing registered retirement savings plans, registered pension plans and deferred profit sharing plans to 71 years of age, effective beginning in 2007;
(h) expand the types of investments eligible for registered retirement savings plans and other deferred income plans, effective March 19, 2007; and
(i) increase the contribution limits for registered education savings plans and expand eligible payments for part-time studies, effective beginning in 2007.
Part 1 also amends the Canada Education Savings Act to increase the maximum annual grant payable on contributions made to a registered education savings plan after 2006.
Part 2 amends the Excise Tax Act to clarify the legislative authority that allows the Canada Revenue Agency to pay refunds of excise tax directly to end-users, where fuel subject to excise has been used in tax-exempt circumstances. It also amends that Act to repeal the excise tax on heavy vehicles and to implement the Green Levy on vehicles with fuel consumption of 13 litres or more per 100 kilometres. It also provides an authority for the Canada Revenue Agency to pay a refund of the Green Levy for vans equipped for wheelchair access.
Part 3 implements goods and services tax/harmonized sales tax (GST/HST) measures proposed or referenced in Budget 2007. It amends the Excise Tax Act to exempt midwifery services from the GST/HST and to zero-rate certain supplies of intangible personal property made to non-GST/HST registered non-residents. It also amends that Act to repeal the GST/HST Visitor Rebate Program and to implement a new Foreign Convention and Tour Incentive Program, which provides rebates of tax in respect of certain property and services used in the course of conventions held in Canada and the accommodation portion of tour packages for non-residents, and establishes new information requirements in the case where rebates are credited by the vendor.
Part 4 implements other measures relating to taxation. It amends the Customs Tariff to increase the duty-free exemption for returning Canadian residents, from $200 to $400, for absences from Canada of not less than 48 hours. It amends the Federal-Provincial Fiscal Arrangements Act to clarify that when a federal corporation listed in Schedule I to that Act pays provincial taxes or fees, wholly-owned subsidiaries of that corporation also pay provincial taxes or fees. It also authorizes the Minister of Finance to make payments totaling $400 million out of the Consolidated Revenue Fund to the Province of Ontario to assist the province in the transition to a single corporate tax administration. This last measure is consequential to the October 6, 2006 Canada-Ontario Memorandum of Agreement Concerning a Single Administration of Ontario Corporate Tax.
Part 5 enacts the Tax-back Guarantee Act, which legislates the Government’s commitment to dedicate all effective interest savings from federal debt reduction each year to ongoing personal income tax reductions. That Part also commits the Minister of Finance to report publicly at least once a year on personal income tax relief provided under the Guarantee to Canadians.
Part 6 amends the Federal-Provincial Fiscal Arrangements Act to set out the amounts of the fiscal equalization payments to the provinces and the territorial formula financing payments to the territories for the fiscal year beginning on April 1, 2007 and to provide for the method by which those amounts will be calculated for subsequent fiscal years. It also authorizes certain deductions from those amounts that would otherwise be payable under that Act. In addition, it makes consequential amendments to other Acts.
Part 6 also amends that Act to provide increased funding for the Canada Social Transfer beginning on April 1, 2007, and to provide for the method by which the Canada Social Transfer and the Canada Health Transfer amounts will be calculated for subsequent fiscal years, including per capita cash allocations. It also provides for transition protection.
Part 7 amends the Financial Administration Act to modernize Crown borrowing authorities.
Part 8 amends the Canada Mortgage and Housing Corporation Act to permit the Minister of Finance to lend money to the Canada Mortgage and Housing Corporation.
Part 9 amends the Bankruptcy and Insolvency Act, the Canada Deposit Insurance Corporation Act, the Companies’ Creditors Arrangement Act, the Payment Clearing and Settlement Act and the Winding-up and Restructuring Act to allow the Governor in Council to prescribe the meaning of “eligible financial contract”. Those Acts are also amended to provide that, after an insolvency event occurs, a party to an eligible financial contract can deal with supporting collateral in accordance with the terms of the contract despite any stay of proceedings or court order to the contrary. This Part also includes amendments to the Bankruptcy and Insolvency Act and the Winding-up and Restructuring Act to provide that collateral transactions executed in accordance with the terms of an eligible financial contract are not void only because they occurred in the prescribed pre-insolvency or winding-up period.
Part 10 authorizes payments to provinces and territories.
Part 11 authorizes payments to certain entities.
Part 12 extends the sunset provisions of financial institutions statutes by six months from April 24, 2007 to October 24, 2007.
Part 13 amends the Department of Public Works and Government Services Act to provide the Minister of Public Works and Government Services with the power to authorize another minister, to whom he or she has delegated powers under that Act, to subdelegate those powers to the chief executive of the relevant department. That Act is also amended with respect to the application of section 9 to certain departments.
Part 14 amends the Financial Consumer Agency of Canada Act to allow the Minister of Finance to provide funding to the Agency for activities related to financial education.
All sorts of information on this bill is available at LEGISinfo, an excellent resource from the Library of Parliament. You can also read the full text of the bill.
Bill numbers are reused for different bills each new session. Perhaps you were looking for one of these other C-52s:
Larry Bagnell Liberal Yukon, YT
Mr. Speaker, the member talked about the incentives for vehicles. There was a story about an incentive for a vehicle that would not even have access to the proper fuel to take advantage of that.
Because the member comes from an auto constituency, could he comment on that?
Brian Masse NDP Windsor West, ON
Mr. Speaker, the interesting thing about the ethanol pursuit is there are only two stations where we can get E-85 to actually put into vehicles. It is amazing that we do not have the infrastructure to provide the facilities to get cleaner fuel.
Interestingly enough, the government has also let the oil and gas sector off the hook on standards. Canada does not have any standards. There are standards in the United States. On top of that, the U.S. is investing in the infrastructure, the fuelling stations, to get the cleaner technology and fuels. That is being done through a series of incentives. The U.S. is also making the oil and gas industry come to the table.
When we did our manufacturing study it was interesting. Canada's oil and gas sector in terms of its profits puts back less than 1% into research and development. That is less than 1% for research and development from our most profitable industry. It is unacceptable. Canadians deserve better than that.
Budget Implementation Act, 2007Government Orders
Oshawa Ontario
Conservative
Colin Carrie ConservativeParliamentary Secretary to the Minister of Industry
Mr. Speaker, I was amazed to hear the member's opening comments, because I had the pleasure of attending numerous meetings across the country with the member during our manufacturing study.
As the member mentioned correctly, recommendations were put forth by the committee to the Minister of Finance. Where the member is incorrect is that the Minister of Finance has actually taken the recommendations of the unanimous report that the member supported and out of the 22 recommendations, he has addressed most of them in the new budget.
I want to ask the member if he actually read the budget and took the time to look at the recommendations. It is unprecedented that a Minister of Finance has listened to a committee and virtually implemented most of the recommendations in a unanimous report.
Brian Masse NDP Windsor West, ON
Mr. Speaker, I would differ with my colleague on the industry committee. If we look at the recommendations and compare them to the budget, we would find rhetoric around some of those issues, and there is no doubt about that.
Implementing some of those measures did not happen. I did not see anything about the South Korea trade deal. I did not see a whole series of things for which we advocated. The most obvious one is the capital cost reduction allowance. Why would the Conservatives move that from a five year recommendation to a two year recommendation? I do not understand that.
I do not understand how the oil and gas industry continues to get the best all the time, not just once, twice or three times, but all the time, while in manufacturing we are hemorrhaging job losses right now. We are not telling manufacturers that they can come forward with a plan for two, three, four, five years, protect the workers, protect the sector, protect the jobs now and we will be there with them.
It is more than just automotive. Tool and die, for example, is another group that requires some type of support system now because of unfair trade practices. The government did not touch that.
The most important thing we have to get our heads around is that we can do things in our country if we want to, but most important, we have to stop undermining ourselves by subscribing to international obligations which hurt our workers directly. The first thing we have to do is protect ourselves from injurious trade deals that have cost us so much already.
Libby Davies NDP Vancouver East, BC
Mr. Speaker, the hon. member has done a lot of work to protect the jobs in his community. I would like him to talk about what we need to do in order to produce value added jobs and to protect the jobs that we have.
Brian Masse NDP Windsor West, ON
Mr. Speaker, we have to simply understand that this nation is more about taking our natural resources and handing them over to somebody else to get the value added jobs.
Whether it be softwood, oil, manufacturing through auto, aerospace and textile, there is something more in Canada than just shipping out our stuff for somebody else to do something with it. We can do it here. We have the people, the skills, the technology and the will. That is where the real jobs are. The prosperity gap will diminish if we have value added jobs.
Budget Implementation Act, 2007Government Orders
The Acting Speaker Royal Galipeau
Resuming debate. The hon. member for Esquimalt--Juan de Fuca has 10 minutes of which three minutes are today and seven minutes are in the bank for next time.
Keith Martin Liberal Esquimalt—Juan de Fuca, BC
Mr. Speaker, it is a privilege to speak to this bill, and since I only have three minutes, I am going to get to the point.
The government introduced a budget that is an orgy of spending, three times the rate of inflation. The government is sprinkling little goodies here and there with one purpose which obviously is to win the next election.
In a time of surplus, there are great opportunities. I am going to offer the government some ideas that I hope it will consider adopting to improve our country and our citizens' well-being dramatically.
I would propose that the government adopt my private member's bill on the Canadian low income supplement. It would give $2,000 to those Canadians who make less than $20,000 a year. That would put real money in the hands of the most underprivileged in our society.
The budget failed to deal with the real fiscal imbalance, and that is the imbalance between the rich and the poor, the haves and the have nots. That was utterly ignored in the budget and was a huge blunder on the government's part.
The government has to decrease the lowest income tax rate on those who are the poorest.
The government has to increase investments in research and development and technology. When we were in government, Canada went from being 19th in the world in Rx and D to third in the world in research and development.
The government should introduce further tax credits, something called tax shifting. If we used tax shifting we would be able to shift the taxes in such a way that would convince Canadians and industry to use green technologies and thereby improve our environment.
The government needs to deal with the crisis in affordable housing. The way to do that is to use public-private partnerships. No single segment in society is going to be able to deal with this challenge that is coast to coast. P3s would work. Canadians are looking to the government for leadership and the federal government has a responsibility to act. So far it has failed.
The government needs to provide strategic investments in health care. Health care is truly the number one issue in the lives of Canadians and the government has failed to deal with this. It should open up a centre for best practices under the Canadian Institute for Health Information.
The government needs to exert a leadership role with other partners on a national workforce strategy for health care workers. As we are getting older, so too are caregivers. This is a massive crisis that will not be resolved overnight.
The government needs to do a better job of investing in local infrastructure. It should reduce the federal taxes on gas prices.
These and other solutions that my colleagues have would dramatically improve the welfare of Canadians. I hope the government does the right thing and listens to us.
Budget Implementation Act, 2007Government Orders
The Acting Speaker Royal Galipeau
It is with regret that I interrupt the hon. member for Esquimalt--Juan de Fuca. When we return to the study of Bill C-52, there will be seven minutes left in his speaking time.
The House resumed from April 23 consideration of the motion that Bill C-52, An Act to implement certain provisions of the budget tabled in Parliament on March 19, 2007, be read the second time and referred to a committee, and of the motion that this question be now put.
Navdeep Bains Liberal Mississauga—Brampton South, ON
Mr. Speaker, I greatly appreciate the opportunity to speak to Bill C-52, the budget implementation act.
As I stand here today to represent the concerns of my constituents of Mississauga—Brampton South with respect to the 2007 federal budget, my comments and remarks will focus on three areas: economic competitiveness; social issues and the lack of social investment; and how the budget has damaged our reputation abroad.
I am glad to hear today that the Minister of Finance has withdrawn a major part of a controversial budget measure. I believe it is widely accepted that this has been the worst policy to come out of Ottawa in over 35 years. He understands now that he should allow interest deductibility to ensure Canadian companies can be more competitive abroad. The Minister of Finance also mentioned in his remarks this morning that he would put forth a panel of experts to review Canada's international tax system. More work needs to be done in this area and he has a great deal of explaining to do.
As I indicated, my remarks on the budget will focus on the economic aspect of the budget. It is so important at the federal level that the government show leadership with respect to how to improve competitiveness in our country.
One area, as I have indicated, is the reversal of the Finance Minister on interest deductibility. I will outline the concerns we had raised in the past and why this decision was made by the Minister of Finance. It was through the hard work of our finance critic and our leader of the official opposition that really put forth a clear cut message to the Canadian public of how poorly thought out and poorly conceived this measure was.
The proposal in the 2007 budget eliminated deductibility of interest accrued to finance foreign assets. The Conservatives are forcing Canadian companies to compete with one hand tied behind their backs. Competing businesses in the U.S., Japan and Europe all have this tool at their disposal. The Conservative government at least was planning to take this away.
Companies in the U.S. Japan and Europe are all able to write off interest on loans taken out to finance foreign assets. Canadian firms have also been able to that for more than 30 years. This is a very important tool to promote competitiveness.
At a time when the entire world is headed forward, the Conservative government is making it increasingly difficult for Canadian companies to compete globally.
I raise this question in the House because I do not understand why the Finance Minister has difficulty with foreign companies acquiring Canadian companies, but he does seem to have a fundamental problem with the ability of Canadian companies to compete abroad. Removal of the interest deductibility would compromise the competitiveness. Again, I am thrilled the minister has made this reversal. There are probably many measures that I will discuss, which I hope he gets to re-evaluate and reconsider and maybe change the direction of the budget.
Not only is it something about which the Liberals and many Canadians have expressed concerns, but also in the business community as well. The president of the Canadian Chamber of Commerce said this with respect to the budget:
We don't see any broad-based tax relief either for taxpayers or businesses.
The government promised in November that they were going to make Canada more competitive and control spending and I think they broke that promise today.
I will also highlight a theme of broken promises in the budget as well. One area where I believe the Conservative government really misled Canadians was with respect to tax fairness, as it stated. The Conservatives cut the GST, but they increased personal income taxes.
We all know that to improve productivity, it is absolutely vital we have more disposable income for our Canadian public. To improve disposable incomes and to help build greater productivity, the first target for a tax reduction should always be income taxes, not consumption taxes.
In the previous government we lowered the tax rates for low and middle income Canadians in order for them to make greater investment in the economy and save more money. The Liberal government brought forth a comprehensive package to eliminate billions of dollars in taxes for low and middle income Canadians. When the government cut the GST rather than implement our personal income tax, the Finance Minister really constrained his government's fiscal capacity.
A study released on March 29, 2006, by the independent non-partisan research institution, the Canadian Centre for Policy Alternatives, found that the 5% of families earning over $150,000 a year would receive nearly 30% of the benefits of the Conservatives tax cuts, an average of $2,000 roughly savings in each year. Therefore, 5% would receive 30% of the benefit of the tax cut. However, almost over half of Canadians families earning less than $40,000 would only receive 20% of the benefits of the Conservative tax cuts, an average of $163. Their tax fairness policy is about broken promises and appeasing the more affluent in society.
Another issue that again highlights the government's inability to improve productivity and competitiveness and focuses on its trend of broken promises is income trusts. The income trusts reversal hurt Canadian investors, particularly seniors. The decision to cut income trusts wiped out more than $25 billion in savings overnight and reversed a key Conservative campaign promise, a promise on which many people relied. They took their hard-earned savings and invested it in income trusts. Seniors whom I have met at the town hall meetings I have had over the past month have clearly shown their frustration with the government. They are completely appalled with the government for breaking such an important promise and they do not understand the rationale behind it. The government swiped billions of dollars from seniors through income trusts savings as well.
We have already seen not only in income trusts a broken promise, but now we are beginning to see a trend in foreign acquisitions. We have already seen great Canadian companies such as Inco, Molson's, Defasco and Hudson's Bay Company taken over by foreign entities, and Alcoa may be next.
The Conservatives took this initiative with the income trusts by crippling it and using the non-refundable 31.5% instead of the Liberal plan. We put a plan forth of a 10% tax rate which would be refundable to all Canadians, creating an opportunity for Canadians who have invested in income trusts.
Tom d'Aquino, president of the Canadian Council of Chief Executives, has said that the decision with respect to income trusts:
—may seriously undermine the competitiveness of Canada's homegrown champions—the companies that are most active and most successful in building global businesses from head offices in Canadian communities.
It is clear, if we look at the government's agenda when it comes to economic policy, it has crippled our ability to remain productive and has hurt our competitiveness. It has shown the government has continuously broken promises that it made to the Canadian public.
However, it does not end there. Another area in which my constituents have expressed a great deal of concern is with respect to social justice issues and social policy. There was absolutely no mention in the budget of homelessness or affordable housing, an issue that resonates in my constituency, across Ontario and across the country as well.
Constituents of Mississauga—Brampton South understand how important this is. The government has cut money from Status of Women, youth programs and the list goes on and on, and again, no investment in these initiatives.
My last is with respect to international trade. This is an area where I believe the government truly had an opportunity to put Canada on the map. It had an opportunity to showcase Canada to the world.
When we were in power, as the Liberal government, we put forth the Can-trade $485 million initiative, which invested in branding Canada. The Conservatives completely wiped that out to replace it with a measly $60 million over two years. It has closed consulate offices and cut funding. The Auditor General's report clearly demonstrates a lack of strategic planning, low morale and the department as well. Therefore, the government has a lot of explaining to do when it comes to the budget.
I am very fortunate that I represent a constituency which is very diverse and has a population of about 130,000 people. It is a hub of economic activity. I have an airport there, looking to the government to show leadership in reducing airport rents. I have major highways and we are looking for funding for infrastructure. Many head offices are looking to expand their businesses abroad and build strong Canadian brands outside of Canada. My residents want to enjoy a high quality of life, but they are very disappointed with the government's poor economic policies, a lack of compassion in investment in the most vulnerable in our society. The government is hurting our reputation abroad.
We are taking steps backwards and we need to provide good public policy, not bad public policy. I think the Canadian public is very impressed that through its hard work and sound management we are in a strong position to create a better and prosperous future for our children. Canadians looked forward to the government to continue to reverse some of its policies. In the meantime, I and the Liberal Party will not support the budget.
Peter Stoffer NDP Sackville—Eastern Shore, NS
Mr. Speaker, the member forgot to mention a couple of other promises the government has broken.
Members may or may not know, but Ottawa was recently blessed with the visit of over 70 war brides from Ontario and the Maritimes. They came to Ottawa to have a terrific weekend, to be together and to enjoy their stories. Many of them are widowed.
One of the things they talked about, when I met them for breakfast this morning, was the veterans independence program. Some of the women get it; others do not. However, they were unanimous in their approach that all widows of all veterans should receive the VIP.
In fact, the Prime Minister also believed that when he was in opposition. He went so far to believe it that he wrote a letter saying that all widows and all widowers and all veterans would receive the VIP immediately upon forming government. He is now government. Sixteen months later, these widows, most of them in their late eighties, are asking, where is it?
I want to give my hon. colleague an opportunity to respond on behalf of the veterans and widows of his riding. What does he think the Prime Minister should do? It is quite a simple answer in that regard: extend the program immediately, as he promised so that these widows and their veterans can get on with their lives.
Navdeep Bains Liberal Mississauga—Brampton South, ON
Mr. Speaker, the passion illustrated by my colleague shows the frustration with the government's consistent pattern of breaking promises.
The VIP should be extended. This is an issue that speaks to the government's style as put forth by the Conservative Party. It is a style that pits province against province, the wealthy against the poor. It is about gimmicks. It is about writing cheques. It is not about building a strong and united country. It is not a way of building good public policy going forward.
Therefore, I understand those frustrations. There are many broken promises. I think the Canadian public is beginning to understand the Conservative government's style in the way it has implemented the budget.
Bruce Stanton Conservative Simcoe North, ON
Mr. Speaker, the hon. member has waxed poetic about this notion of fairness and how he is essentially what appears to be opposed to it.
He mentioned income tax, for example. He suggested that income tax reductions would be the fairest approach to extending tax savings to Canadians. However, how would he ever get tax savings into the hands of the 30% of Canadians who do not even pay income tax? Would he answer that question?
Navdeep Bains Liberal Mississauga—Brampton South, ON
Mr. Speaker, we brought forth a very comprehensive tax policy when we were in government, a tax policy that looked at the lowest-earning income segment of society, ensuring we got people off the rolls so they did not have to pay taxes. We reduced personal income tax amounts for the lowest threshold as well. This was all done by the previous Liberal government, but it was reversed by the current Conservative government.
This policy was widely accepted and promoted by economists, by people who understand the economy. They accept that this was the best means to help the people in the lowest income bracket and that a consumption tax really helped the most wealthy. I provided statistics and information to that effect, when I said that the wealthiest 5% of the people benefited from this consumption tax. That study was done by a non-partisan organization.
Again, I think the government does not understand tax fairness, hence why the Minister of Finance today had to reverse his decision on a very poorly conceived policy, the worst in 35 years coming out of Ottawa.
I hope the government begins to learn that this should be one of many reversals it should undertake with respect to its budget.