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

[Paul Dewar, NDP, Ottawa Centre, ON]

Mr. Speaker, it is an honour to rise in the House to speak on a document that is as important as our budget. I want to start with some of what I think is actually positive about this budget and some of what we fought hard for in opposition, both with the previous government and with the present government.

Not to alarm anyone, I will have a critique on some of the things that I find puzzling and am concerned about in terms of this budget. Sadly, they outweigh the positive things I see in this budget.

Among the things I see as important and that we in the NDP fought for is that we are looking at money for reduced wait times. I think there is a consensus in this country that this needed to be done. There also was some budget money put toward e-health technologies.

We fought for the expansion of the transit pass credit to weekly passes. That is going to be addressed. As well, there is the incentive to buy green cars, which I will come back to in a minute.

Another positive thing is the move to conserve land like the Great Bear park and boreal forest.

That is about it. After that, we have negatives. Sadly, there is a long list.

There was no national housing strategy. There was no national transit strategy.

There was nothing on employment insurance reform. There was no establishment of the $10 minimum wage to deal with the prosperity gap. There was no poverty reduction strategy. There was no plan to end student debt. There was no cancellation in regard to the corporate taxes.

There was nothing for pharmacare, home care, long term care, or improved access to health care for aboriginal people. There was nothing for coordinated training for medical professionals. There was nothing about catastrophic drugs for the Atlantic region.

There was no significant new money for aboriginals.

There was only a quarter of the money we wanted and needed in child care and there was no real vision for child care. There was nothing on autism, as my colleague mentioned.

There was no ban on bulk water exports.

There was nothing new for the pine beetle.

There was nothing for seniors. There was no increase in OAS. There was no action on the veterans first motion.

There was nothing on forestry, nothing for ACOA, and nothing for western diversification.

That is quite a long list. I want to point to a couple of things in the budget. I did read it carefully. It is important to look at the budget from last year. I looked at page 33 of the budget, which talks about corporate profits. We see from the graph by Statistics Canada that corporate profits were at an historic high, with a 14.2% increase in corporate profits.

This year it is in a similar vein. We see an increase in corporate profits. Some would say that is a good thing because it shows a healthy economy. I do not disagree with that, but the problem we in the NDP have with it is where those corporate profits are going and where they are being spent.

They are not being spent in reinvestment. They are not being spent on retooling. Sadly, there is only a small smidgen of action in the budget about making sure there is some money for the manufacturing base so it can put money back into plants and into capital, but it is not directed enough.

In fact, what we have is more corporate tax cuts, because they were there before and they continue. Sadly, this budget does not address the prosperity gap. It does not address the kitchen table economics that we speak of. It does not address the need for more investment in people and the need to make sure that corporations invest in retooling, which is so desperately needed.

There is another thing I want to mention. On page 218 of this year's budget, the government talks about the initiatives around foreign credential recognition. It states:

This initiative, along with the improvements to the Temporary Foreign Worker Program, will increase the number of individuals wanting to come to Canada. Budget 2007 provides $33.6 million over the next two years to ensure that those who come to Canada through these avenues have the valid documentation and meet Canada's health and security requirements.

I am not sure if the Conservatives have been talking to people who have come to this country recently, but this is not the problem.

If they are spending money on this initiative and not dealing with foreign credential recognition and real employment for people in the professions, then they have wasted time and taxpayers' money, because the issue is not about trying to get valid documentation to meet the health and security requirements. In fact, that is part of the problem.

I will give an example. I had three town halls before the Christmas holiday. They showed that for people from all walks of life who are foreign trained professionals, doctors, engineers, people in the medical profession, pharmacists, et cetera, the main problem for them is Canadian experience, foreign credential recognition and employment. Sadly, in this budget there is nothing to help them.

There is nothing in the budget that says there are opportunities right here in the public service or to coordinate job opportunities. The government promised to deal with the issue of foreign credential recognition in the budget but it did not. All there is now is a referral desk. That is not what anyone envisaged in terms of what needs to happen on foreign credential recognition and employment for those who so desperately need it.

I also wanted to touch on those who are falling behind, those who need child care, those who need housing and those who are disabled, who cannot take advantage of tax cuts. The budget is a little bit for everyone but in the end there is nothing for anyone in many respects. The budget contains little tax credit boutique programs, which the Conservatives readily critiqued when they were in opposition. The Conservatives are helping the people they think are their target voters, let us make no doubt about that.

In fact, before the budget was presented, the Prime Minister went on the road and made 21 announcements on new initiatives. He did it in campaign style. He is trying to win a majority but he is leaving people behind. The prosperity gap grows and the people who need the help are not being helped by the budget.

I will read some comments that I have received from constituents who have told me their stories and what is happening to them:

I am a disabled person; paying high rent. I can barely make ends meet. I have applied for subsidized housing in 2003, and was told I have to wait “8 yrs”.

It will eight years before the application is considered. Try living on $979 a month, with a rent of $600 and phone bills for emergency purposes. This person is not going to be helped by the budget. These are the people we need to help. Another person who wrote to me recently is a little better off, but is looking at taking out a $60,000 loan to afford child care in downtown Ottawa:

I am securing middle class but cannot afford child care! Help!

There is nothing in the budget that will help that person. They are real people, ordinary Canadians, everyday people we are here to represent. They have been forgotten, the disabled, aboriginal people and those who are in the middle class who are trying to secure a middle class way of life and cannot and who are having to take out a loan for child care. It is a disgrace. It is wrong. That is why I will not be able to support the budget, why my party will not be able to support the budget.

If we had some vision in the country we would not be putting all of our eggs into one tax cut basket, or corporate tax cuts, which has happened in previous years. We would invest in Canadians.

During the Quebec election campaign we saw the handover of money from the federal government, no strings attached, to let the province spend where it will. It made our federal government look like an ATM machine where the provinces can take out money at their will, but where does it go? It does not go to services. In the case of Quebec. It will go to a tax cut.

Exactly what Quebeckers wanted was better services. I think the story of the Quebec election was that there was a population that demanded services and got nothing in return but another broken promise. They will see that the federal government will not take a leadership role and provide real investment, show real leadership and make sure that the dollars that are sent to provinces are spent on child care, housing, dealing with clean water and other issues.

It is an opportunity missed. Last year the title of the budget was “Focusing on Priorities” and this year it is “Aspire”. Sadly, what we have is a missed opportunity, little aspiration and definitely no vision.

[Lynne Yelich, Conservative, Parliamentary Secretary to the Minister of Human Resources and Social Development]

Mr. Speaker, I would like to make a correction to some of the mistruths the member is projecting.

Our new government recognizes autism spectrum disorder. It is an important concern and we are committed to working with our partners, provinces, territories and other stakeholders on this issue.

The federal government supports research on ASD through the Canadian Institutes of Health Research. It has invested nearly $50 million since 2000. It is a sponsor of the ASD stakeholder symposium in 2007. These are just a few examples.

The institute is beginning to explore the establishment of a research chair focusing on effective treatment. It has launched a consultative process on the feasibility of developing an ASD surveillance program. It has a dedicated page on the Health Canada website. The Health Policy Branch of Health Canada has been designated as an ASD lead.

The member is quite concerned about what the provinces might do with the money and he specifically mentioned Quebec. He should look at the rest of Canada. His counterparts in Saskatchewan have no respect for any of these issues. We have lost children with autism to Alberta because Saskatchewan would not educate or help the parents and families.

I would suggest that the member maybe look a bit deeper. He will find out that it is Alberta specifically and Ontario that lead in helping parents with an autistic child. Saskatchewan has abandoned these children. Saskatchewan has an NDP government. That province will be one of the beneficiaries of the really good agreement that has just been promoted through budget 2007.

The provincial NDP government in Saskatchewan has just announced its budget and there is nothing in it for farmers and agriculture, which is the backbone of that province. Our health minister could not get Saskatchewan on board with respect to wait times. Our Indian affairs minister could not get the province on board with respect to education for aboriginals.

Why does the member think that I do not like to see some of this money going to Saskatchewan? I want what is fair and what is equitable. However, I want a premier too who will spend it where it is needed.

[Paul Dewar, NDP, Ottawa Centre, ON]

Mr. Speaker, I think there was a question there somewhere.

I will address the autism issue. I heard the member mention websites, processes, and special projects being set up. I can take that member to communities where people are remortgaging their homes because they are trying to afford a way to deal with their children's future.

It is not good enough to talk about plans and websites. We know what we can do about autism. We can stand up and deliver. Sadly, this Conservative budget did not. It is plain and simple.

On the issue of provinces, let me be very clear. The government had a surplus of $14.2 billion. There was no debate in terms of what we should do with that surplus. Our party said we should have a debate so we know where the money is going and not just decide to fob it off on programs, or tax cuts in the case of Quebec, as I mentioned, without any strings attached.

We need to start talking about national standards. If I were raising an autistic child in Ontario and I go to Saskatchewan or Alberta, I should not have to worry about whether or not that province has the capability to deal with my autistic child. If I were to send my children to university in Quebec, I should not have to worry about whether or not they were born there so they can have an affordable education. That is the reality and that is the reality that the Conservative government does not understand.

[Ken Epp, Conservative, Edmonton—Sherwood Park, AB]

Mr. Speaker, I take note of the fact that this is a good news budget. There is more good news all the time from this government. I am very pleased that there are a sufficient number of members in this House who recognize it is a budget worth supporting. They are doing that and looking past some of the misinformation that is being put out by different individuals across the country, misinformation that unfortunately does not communicate properly what this budget does achieve and what we are doing on behalf of Canadian people.

I am so seriously supportive of this budget that I would like to move:

That this question be now put.

[Some hon. members]

No.

[Ken Epp, Conservative, Edmonton—Sherwood Park, AB]

Yes, I can do that.

[Some hon. members]

No.

[Ken Epp, Conservative, Edmonton—Sherwood Park, AB]

It is not unanimous. Mr. Speaker, I am afraid you did not hear this. I moved, seconded by the member for Blackstrap, that this question be now put.

[The Acting Speaker, Royal Galipeau]

The hon. member for Hull--Aylmer is rising on a point of order.

[Marcel Proulx, Liberal, Hull—Aylmer, QC]

Mr. Speaker, I understand that the member wanted the question to be put.

[The Acting Speaker, Royal Galipeau]

Mr. Epp, seconded by Mrs. Yelich, moved that this question be now put.

[Ken Epp, Conservative, Edmonton—Sherwood Park, AB]

On a point of order, Mr. Speaker, perhaps for the edification of other members, some of whom have not been here quite as long as I have, this is a motion that simply precludes the putting of further amendments to the motion. That is what happens, and now we simply resume debate and carry on and hopefully we will get to 1:30 p.m. and we will go to private members' business.

[The Acting Speaker, Royal Galipeau]

I am calling for debate on this question. Debate. Resuming debate, the hon. member for Etobicoke North.

[Roy Cullen, Liberal, Etobicoke North, ON]

Mr. Speaker, I want to speak to the budget because I found it to be totally lacking in vision and direction. It has a number of little things here and there for various groups, but when we look at it substantively, we realize that it lacks direction and vision and leaves out large segments of our society.

One aspect I find particularly disturbing, although there were a couple I mentioned earlier in a question and comment period, is the fact that aboriginal people are left out in the cold again. After the Liberal government negotiated in Kelowna a very strategic accord which would help aboriginal people with housing, education and water and the Conservatives callously ignored that.

They also callously ignored the child care agreements that the Liberal government had meticulously negotiated with the provinces. They would have provided real child care spaces for people who needed them. The $200 a month allowance per child just does not do it. It does not create any child care spaces.

The other aspect I find very disturbing is this. If we are to compete in a global economy, an economy that includes emerging economies like India, China and Brazil, there is nothing in this budget to encourage that. In fact, we take steps backward.

When the Liberal government came into power, it had to deal with a $42 billion deficit that it inherited from the Conservatives. When we got it under control, within a very short time, the Liberals started to reinvest in R and D and put chairs in universities, which was very well received. We also established the Canada Foundation for Innovation, founded the Canadian Institutes of Health Research and provided overheads to the universities.

Guess what happened? Researchers came back to Canada because they were very pleased with the research environment here. What does that lead to? That leads to invention, innovation and entrepreneurship. That is what we need in the country if we are to create the value added jobs of the future.

What has the government done? It has taken a few steps back. Now we are hearing from researchers that they are going to leave Canada because the research environment is not very conducive to the kind of work they want to do. That is a tragedy after the Liberals built that platform. It could have been built on further. There is an amount in the budget for research, but with other steps the government has taken, it is really moving backward.

There were many other flaws in the budget. I watched the Minister of Finance stand in this place and present the budget. He made a statement along the lines that the problems and disputes with the provinces and territories were gone forever. Not knowing what steps would follow, anyone on this side of the House would have known that to make a statement like this was naive in the extreme. I think he was living in fantasy land. We learned very quickly afterward that many provinces in this country disputed the Minister of Finance's claim that disputes with the provinces and territories were over.

In fact, all colleagues from Atlantic Canada on this side of the House know from the detail in the budget that Newfoundland and Labrador, Nova Scotia, Saskatchewan and other provinces have been shafted. My western colleagues also know that full well. They had a good deal under the Liberal government and the Conservative government took it away and left those provinces swinging.

There are other aspects that I find terribly disturbing. The Government of Canada, under the Conservative government, tried to buy off the province of Quebec with increases in transfers. Another $700 million in equalization was handed to Quebec. The ink was barely dry on the cheque when the premier of Quebec said that he would cut taxes by an equivalent amount. I find that shocking.

I know that technically and legally the province can do what it wants with equalization. However, members of Parliament have heard the provinces and territories complain about the fact that they cannot properly fund health care, education and social programs and that they need more transfers from the federal government. We transferred an additional $41 billion in our last mandate in addition to other amounts we had increased.

The province of Quebec, complaining that it needed money for health care and education, got the additional equalization, and then wanted to cut taxes. It did not work. Even though I am sympathetic, and I know my colleagues on this side of the House and perhaps on the other side of the House are sympathetic as well to the federalist cause, we wanted to see the Liberal government trounce the separatists, which it did. However, I think it was a sad commentary and it showed really that Quebeckers could not be bought.

What it tells us is that in the next round of discussions with the provinces and territories, we will hear their bleats and their complains as very hollow when we know that one of the largest provinces in the country took the equalization and cut taxes.

It is also a sad commentary that the province of Quebec, one of the key provinces in terms of population and economic activity, is a have not province. Of the total equalization that is paid out by the federal government, some $12 billion, roughly $7 billion goes to the province of Quebec. I have argued in the House and other places that it is because of the policies of the separatists that Quebec is a have not province.

The other sad reality of the budget bill is that it tries to implement the provisions with respect to the income trusts. A promise was made by the then leader of the Conservative Party that he would not tax income trusts. Many people in my riding of Etobicoke North and other ridings across Canada, based on that assurance when the Conservatives came into power, put their money into income trusts. Guess what? The Conservative Party reneged on that.

Whether we agree that something had to be done with income trusts, and I for one think we had to make some adjustments, the adjustments could have been made in a much fairer way for those people who were already exposed and who ended up losing about $25 billion to $30 billion. The government has done nothing about that in this budget. Nor has it done so in the budget implementation act.

There are a couple of provisions in the budget that I support. One is the pension income splitting. It is helpful to seniors that they can split income. It in some sense partly addresses some concerns of the citizens in my riding, middle income seniors, who have saved all their lives, put money into pensions and they find that their old age security, notwithstanding their best plans, is taxed back in some cases. It starts to get taxed back at around $55,000. Therefore, pension income splitting does not address that fully, but it is a good initiative.

The other sad reality is the budget reflects some of the priorities of the government, one of them being the fact it will arm the guards at the border of Canada. We heard at the committee that it would cost about $1 billion over 10 years to arm the border guards. That does not include the reclassification of the border guards who will become public safety officers. The number I have is about $15,000 per year in added salary. The $1 billion are to train and equip them with guns.

The RCMP advised us that the deterrence effect would be minimal. In fairness to it, it said that no one knew for sure, but it felt the deterrence effect would be minimal.

[The Acting Speaker, Royal Galipeau]

It being 1:30 p.m., the House will now proceed to the consideration of private members' business as listed on today's order paper.