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 House resumed at 12 p.m.)

The House proceeded to the consideration of Bill C-52, An Act to implement certain provisions of the budget tabled in Parliament on March 19, 2007, as reported (with amendment) from the committee.

Speaker's Ruling

[The Acting Speaker, Royal Galipeau]

I have a ruling by the Speaker concerning Bill C-52, An Act to implement certain provisions of the budget tabled in Parliament on March 19, 2007. There are nine motions in amendment standing on the order paper for the report stage of Bill C-52.

Motion No. 2 will not be selected by the Chair, because it requires a royal recommendation.

Motions Nos. 1, 3 and 4 will not be selected by the Chair, because they were defeated in committee.

All remaining motions have been examined by the Chair and the Chair is satisfied that they meet the guidelines expressed in the note to Standing Order 76.1(5) regarding the selection of motions in amendment at the report stage.

Motions Nos. 5 to 9 will be grouped for debate and voted upon according to the voting pattern available at the table.

I will now put Motions Nos. 5 to 9 to the House.

Motions in Amendment

[Monte Solberg, Conservative, Medicine Hat, AB]

moved:

Motion No. 5

That Bill C-52 be amended by deleting Clause 45.

Motion No. 6

That Bill C-52, in Clause 46, be amended by replacing lines 1 and 2 on page 51 with the following:

“46. (1) Section 234 of the Excise Tax Act is amended by adding the following after subsection (2):”

Motion No. 7

That Bill C-52, in Clause 48, be amended:

(a) by replacing lines 1 to 4 on page 53 with the following:

“the Minister shall, subject to subsection (8) and section 252.2, pay a rebate to the person equal to the tax paid by the person in respect of the accommodation.”

(b) by replacing lines 30 to 34 on page 53 with the following:

“the Minister shall, subject to subsection (8) and section 252.2, pay a rebate to the particular person equal to the tax paid by the particular person in respect of the accommodation.”

(c) by deleting lines 37 to 46 on page 53 and lines 1 to 3 on page 54.

(d) by deleting lines 25 to 30 on page 54.

Recommendation

(Pursuant to Standing Order 76.1(3))

Her Excellency the Governor General recommends to the House of Commons the appropriation of public revenue under the circumstances, in the manner and for the following amendment to Bill C-52, “An Act to implement certain provisions of the budget tabled in Parliament on March 19, 2007”. That Bill C-52, in Clause 48, be amended:

(a) by replacing lines 1 to 4 on page 53 with the following:

“the Minister shall, subject to subsection (8) and section 252.2, pay a rebate to the person equal to the tax paid by the person in respect of the accommodation.”

(b) by replacing lines 30 to 34 on page 53 with the following:

“the Minister shall, subject to subsection (8) and section 252.2, pay a rebate to the particular person equal to the tax paid by the particular person in respect of the accommodation.”

(c) by deleting lines 37 to 46 on page 53 and lines 1 to 3 on page 54.

(d) by deleting lines 25 to 30 on page 54.

Motion No. 8

That Bill C-52 be amended by deleting Clause 50.

Motion No. 9

That Bill C-52, in Clause 51, be amended:

(a) by replacing lines 20 to 32 on page 57 with the following:

“51. (1) Paragraph 252.4(1)(a) of the French version of the Act is replaced by the following:

a) la fourniture de biens ou de services relatifs au congrès, effectué par un inscrit qui est l’organisateur du congrès;”

(b) by deleting lines 33 to 42 on page 57 and lines 1 to 28 on page 58.

(c) by replacing lines 29 to 42 on page 58 and lines 1 to 13 on page 59 with the following:

“(5) Paragraphs 252.4(3)(a) and (b) of the Act are replaced by the following:

(a) the tax paid by the organizer calculated on that part of the consideration for the supply or on that part of the value of property that is reasonably attributable to the convention facility or related convention supplies other than property or services that are food or beverages or are supplied under a contract for catering, and

(b) 50% of the tax paid by the organizer calculated on that part of the consideration for the supply or on that part of the value of property that is reasonably attributable to related convention supplies that are food or beverages or are supplied under a contract for catering.”

Recommendation

(Pursuant to Standing Order 76.1(3))

Her Excellency the Governor General recommends to the House of Commons the appropriation of public revenue under the circumstances, in the manner and for the following amendment to Bill C-52, “An Act to implement certain provisions of the budget tabled in Parliament on March 19, 2007”. That Bill C-52, in Clause 51, be amended:

(a) by replacing lines 20 to 32 on page 57 with the following:

“51. (1) Paragraph 252.4(1)(a) of the French version of the Act is replaced by the following:

a) la fourniture de biens ou de services relatifs au congrès, effectué par un inscrit qui est l’organisateur du congrès;”

(b) by deleting lines 33 to 42 on page 57 and lines 1 to 28 on page 58.

(c) by replacing lines 29 to 42 on page 58 and lines 1 to 13 on page 59 with the following:

“(5) Paragraphs 252.4(3)(a) and (b) of the Act are replaced by the following:

(a) the tax paid by the organizer calculated on that part of the consideration for the supply or on that part of the value of property that is reasonably attributable to the convention facility or related convention supplies other than property or services that are food or beverages or are supplied under a contract for catering, and

(b) 50% of the tax paid by the organizer calculated on that part of the consideration for the supply or on that part of the value of property that is reasonably attributable to related convention supplies that are food or beverages or are supplied under a contract for catering.”

[The Acting Speaker, Royal Galipeau]

The hon. member for Markham--Unionville is rising on a point of order.

[John McCallum, Liberal, Markham—Unionville, ON]

Mr. Speaker, I rise to contest a ruling by the chair of the finance committee during clause by clause consideration last week. During that consideration, the chair of the committee ruled that an amendment referenced at the committee under the number 2972723 was out of order and could not be moved.

The amendment in question sought to provide a tax reduction to a group of taxpayers who would have otherwise paid 31.5% tax on proceeds from income trusts. Under my amendment, they would pay only 10%. The amendment also provides for a tax refund or credit of this tax for certain taxpayers. Both of these measures are clearly tax reductions.

With respect to the general tax reduction from 31.5% to 10% contained in the amendment, it was in no way questioned by the chair at the meeting. The chair presumably knew that such a tax reduction was in order. However, in committee, the chair ruled out of order another part of the same amendment that I proposed to clause 21 of the bill to reduce the tax on Canadian residents even further by way of a tax refund or credit, in subclause 2.1. Here I will quote the chair of the committee, who said that this “would require government spending”.

He then concluded, again erroneously, that this latter tax reduction required a royal recommendation, which if this was the case obviously could not be moved in committee. Therefore, the chairman mistakenly ruled the amendment out of order and the committee did not consider the amendment that I was proposing.

In addition, a number of amendments standing under my name at the committee simply could not proceed because the central amendment, which I have just described, could not be moved. The chair's ruling thus had an adverse effect not only on the amendment itself but on a number of other amendments as well.

I now want to touch briefly on the procedural arguments as to why I think the committee chair's ruling was erroneous. While I accept that increasing a tax or levy as well as increasing a benefit or grant are prerogatives of the Crown, my amendment did no such thing. It dealt with refunding a tax to a group that would otherwise have paid it.

On Monday, October 9, 1957, Speaker Lamoureux ruled in this place that reducing a tax by way of an amendment and without a royal recommendation was in order. This decision can be found in the Journals of the House of that day at page 254.

Speaker Lamoureux, in his decision, was basing himself on Erskine May's treatise on parliamentary procedure and form, the 15th edition, which says at page 704 that provisions for the alleviation of taxes are not subject to the rules of financial procedure. At page 572, May also states that a bill diminishing or repealing a tax or other public burden, unless the imposition of a new tax is proposed by way of substitution, needs no royal recommendation.

In our own House in the last Parliament, a number of private members' bills were passed, without royal recommendation, to provide tax alleviation. Two such examples were the bills to provide for a tax deduction for tools for automobile mechanics and a bill to provide similar relief for workers who purchase transit passes.

Only a few weeks ago, we passed private member's Bill C-294 to reduce income taxes for the benefit of lodging and other such allowances to young athletes, mainly hockey players. This bill was sponsored by the Conservative member of Parliament for Prince Albert.

Surely if it is in order to offer an exoneration of taxes for hockey players, which it certainly was and which I supported, it is equally in order to offer an amendment to reduce taxes to Canadian senior citizens who are now the innocent victims of the Prime Minister's broken promise on income trusts.

Finally, I wish to draw to the attention of the House a booklet published by the Procedural Services of the House of Commons under the authority of the Speaker and entitled “Amending Bills at Committee and Report Stages in the House of Commons”. At page 5 of this document, under the rubric “Financial Initiative of the Crown”, it is stated, “Any amendment to reduce public spending or to reduce a tax is admissible”.

Clearly the chair of the Standing Committee on Finance erred when he refused to allow me to move my amendment at committee. Equally clearly, the effect of not being able to move this important amendment was such that other amendments which I was offering either could not be moved because they were subordinate in nature or, in the case where they could be moved, did not carry much support simply because the main subject could not even be debated.

For greater clarity, I note that the Chair of the committee was in error when he suggested that subclause 2.1 was new tax expenditure. It is not. The subclause itself makes this point when it states, “Every individual who is resident in Canada and liable to pay tax under Part 1 may claim a refund or credit against tax otherwise payable”.

This subclause involves no new net tax expenditure by the Crown. It simply allows an individual taxpayer who is a Canadian resident to recover tax already paid on his or her behalf to the Crown.

A taxpayer who is a Canadian resident can recover not one penny more than that which was remitted on his or her behalf already to the Crown. Therefore, there is no new tax expenditure whatsoever.

In short, the withholding in question is then reimbursable to a specific category of investors, namely, Canadian residents, who would get their money back. For example, foreign investors would not qualify because they do not pay sufficient or any Canadian taxes. Pension funds would not qualify either because of their tax exempt status.

Therefore, there is a clear case of tax alleviation as identified by Erskine May, as I mentioned earlier.

That is why I am seeking this remedy in asking the Speaker that my amendment be allowed to be debated and voted on at report stage. The Chair of the committee provided an erroneous ruling which prevented me from doing my work of representing my constituents and Canadians generally at the committee.

[Diane Ablonczy, Conservative, Parliamentary Secretary to the Minister of Finance]

Mr. Speaker, I have a few comments on my friend's point of order that may prove helpful to the Chair.

First of all, we note that the four motions he brings forward today are, as he mentioned, similar to motions that were already proposed and defeated at committee stage. Further, they are flawed on so many levels that it is difficult to know where to begin, but I will touch on just a few of the many problems with these proposed amendments. Fortunately for all concerned, I believe they are entirely out of order and that the Speaker will find them so, but I do want to add the concerns that the House should be aware of.

It is well recognized that rules of parliamentary procedure preclude the introduction of a motion to amend a bill if the motion exceeds the scope of the notice of ways and means motion on which the bill is based, without the introduction of a new notice of ways and means motion on which the House has concurred. Further, the introduction of a motion is precluded if it increases the amount of an appropriation without having first obtained a royal recommendation.

Contrary to what my friend just said, these motions fail on both of those counts. The hon. member for Markham—Unionvale did not obtain the concurrence of this House on these motions before they were moved, nor was a royal recommendation obtained. Thus, these motions should be ruled out of order on this basis alone.

Furthermore, an amendment that would make a clause unintelligible is also out of order. For reasons which I will explain, the proposed amendments are simply incomprehensible. Accordingly, these motions should be ruled out of order. Should they proceed, they should be defeated on the basis of their confusion and questionable policy. I would like to explain briefly.

Motion No. 1 proposed by the hon. member for Markham-Unionvale is a prime example of an amendment that renders a clause unintelligible. In particular, the draft purports to apply a 10% tax on certain distributions made by trusts described in subsection 197(1). The difficulty here is that there are no trusts described in subsection 197(1), either as proposed in the bill or as amended by any other motions put forward by the hon. member. Accordingly, the motion is totally ineffectual and should on that basis alone be ruled out of order.

However, if one were to give the hon. member the benefit of the doubt and accept that the amendment proposed is actually meant to reference a trust described elsewhere, then there is another problem. I suspect the hon. member thinks he is reducing the trust distribution tax proposed by this bill to 10%. However, the text of the motion actually adds the proposed 10% tax to the existing 29% tax applicable to trusts.

Hence, the motion would, if one could make sense of it, expose trusts to a 39% tax on distributions of non-portfolio earnings. This compares with the 31.5% tax proposed in the bill for 2011 and therefore clearly represents a tax increase. This tax increase is not within the scope of the notice of ways and means motion on which the bill is based and the motion should therefore be ruled out of order.

Motion No. 2 appears to be another attempt to impose a 10% tax on SIFT trusts, curiously in a part of the act that is under the title “Tax on SIFT Partnerships”. Further, this 10% tax purports to apply to all distributions by SIFT trusts and not just distributions on non-portfolio earnings. The text of the motion also again adds the proposed 10% tax to the existing 29% tax applicable to trusts.

Hence, if we ignore Motion No. 1, Motion No. 2 would expose trusts to a 39% tax on distributions by SIFT trusts.

On the other hand, the hon. member who tabled these motions has given no indication that the motions are to be alternatives. Accordingly, Motions No. 1 and 2, read together, would increase the tax on distributions by trusts of non-portfolio earnings to 49%.

Both of these scenarios would clearly be a tax increase, which exceeds the scope of the notice of ways and means motion on which the bill is based, and should, therefore, again, be ruled out of order. Indeed, by proposing such tax increases, one has to wonder what the hon. member has against income trusts.

Motion No. 2 also expresses a very strange policy. It subjects existing income trusts to the new Liberal tax but does not apply this tax to new trusts created after October 2006. Motion No. 2 goes on to allow individual Canadian residents to claim a refund of an amount designated by an issuer of the security in prescribed form. The member talked about that.

Further, the motion goes on to allow a beneficiary of an RRSP to claim a refundable tax credit equal to the amount of the tax paid by a SIFT trust or partnership. This would create a right for any beneficiary of an RRSP, whether or not liable to pay tax, to receive an amount to be taken out of the consolidated revenue fund.

Given that this motion would require that money be taken out of the consolidation revenue fund, it should be ruled out of order on the basis that it was not accompanied by a royal recommendation.

Again, the motion shows the difficulty that the hon. member's party has with developing tax policy.

The bill before us today already allows for a dividend tax credit claimable by Canadian resident individuals and respective trust distributions that are subject to the SIFT tax.

The dividend tax credit is intended to provide an offset against tax payable by an individual up to the amount of tax payable on the distribution of the trust. This distribution is deemed to be a dividend eligible for a dividend tax credit.

This motion would allow an individual to claim a refund for the trust tax paid but would also allow a dividend tax credit to be claimed on the same income. Perhaps the double credit for the individual investors has some connection with the Liberal proposal to tax trusts at 39% or 49%, but I suspect it is just another example of the flaws in the thinking behind these motions.

As well, the refund for individuals is in an amount designated by the trust in prescribed form, but no guidance is provided for the calculation of the amount that can actually be refunded. Could it actually exceed the tax paid by the trust on the distribution?

Just briefly again, let me say a few things about Motion No. 3. Motion No. 3 adds yet another 10% tax to trusts that fail to comply with the provisions of the part of the bill that apply to SIFT partnerships. Now we have an amendment in the partnership provisions that purports to add yet another 10% tax not only on SIFT partnerships but also on SIFT trusts. This time bringing the tax up to what, 59%?

There is precious little in the partnership provisions that a trust could be non-compliant with. Or, it is just an attempt to confuse. Again, this motion clearly purports to effect an increase in a tax that would exceed the scope of the notice of ways and means motion on which the bill is based and should therefore again be ruled out of order.

Finally, Motion No. 4 is consequential to the other motions. Since those earlier motions should be ruled out of order so, too, should Motion No. 4.

I trust you will find that of assistance, Mr. Speaker.

[The Acting Speaker, Royal Galipeau]

Are there any other points of order? The hon. member for Markham—Unionville on the same point of order.

[John McCallum, Liberal, Markham—Unionville, ON]

Yes, Mr. Speaker. I thank my hon. member for her help. However, her error is not limited to referring to my riding as Markham--Unionvale rather than Markham--Unionville.

I am afraid she is complicating the matters in an effort to sow confusion because my point is a very simple one. I believe that her allegations about us raising the taxes are due to the fact she forgot that we proposed to delete certain provisions which are part of the government's plan. However, that has nothing to do with my appeal to the Speaker.

My appeal to the Speaker is on one particular amendment which we presented to the committee regarding the refundable payments to residents. That was the only thing ruled out of order. Our arguments, as I have just presented, and she did not counter them at all, are for the various reasons I have described.

The amendment that we proposed and that was ruled out of order by the chair should indeed be in order. That is my sole request to the Speaker, apart from the fact that once the Speaker admits that amendment has been in order, then the associated amendments, which we presented before committee, should also be voted upon as a group.

[The Acting Speaker, Royal Galipeau]

Is the hon. member for Mississauga South also rising on the same point of order?

[Paul Szabo, Liberal, Mississauga South, ON]

Yes, Mr. Speaker. That indeed was the gist of my comments, that the matter raised by the hon. member has to do with the decision of the chair, which based on the evidence that was presented in the presentation of the point of order by the hon. member would tend to bring into question whether or not the chair had erred in its ruling and therefore there were consequential amendments.

With regard to the report stage motions that were proposed, Motions Nos 1 to 4, Motion No. 2 was with regard to a royal recommendation requirement. The other three were, according to the Speaker's ruling, on questions that were already defeated at committee. As a consequence, it is very clear that the items in question are not the ones in fact on the report stage listing in the order paper today but rather with regard to another matter on which the chair ruled and which has consequential amendments.

Accordingly, I believe it would be appropriate, Mr. Speaker, to review the basis for the decision by the chair. Should there be a clarification or correction of that decision, it then would appear that there may be other consequential amendments that would be necessary to make to the bill at committee stage which would also obviously impact possibly further report stage motions.

[Diane Ablonczy, Conservative, Calgary Nose Hill, AB]

Mr. Speaker, first of all, let me sincerely apologize to my friend, the hon. member for Markham—Unionville for misspeaking the name of his excellent riding.

I would just point out that the information I provided to the Chair I think should assure all members of the House that the chair of the finance committee in fact made a correct ruling and that the ruling should not be tampered with by the House because that was an entirely defensible and proper ruling.

I hope, Mr. Speaker, that this matter will be put to rest and we can get on with debating the bill.

[The Acting Speaker, Royal Galipeau]

Does anyone else wish to speak to the point of order?

I thank the hon. members for Markham--Unionville, Mississauga South and also the Parliamentary Secretary to the Minister of Finance for their submissions. They will be reviewed by the Speaker who will return to the House with a ruling in due course.

Resuming debate, the hon. Parliamentary Secretary to the Minister of Finance.

[Diane Ablonczy, Conservative, Parliamentary Secretary to the Minister of Finance]

Mr. Speaker, I see everyone is very happy that I am getting up on debate and I too am very pleased to rise today to speak to Bill C-52 at report stage. It has been a long road but here we are at report stage.

The bill proposes to implement certain measures from budget 2007 along with other tax initiatives along with other tax initiatives that were announced prior to the budget.

I would like to start today by giving a quick tour of the key themes and messages of budget 2007. I will then outline the key measures in Bill C-52 and illustrate how they fit into the big picture.

Today, Canada is strong. Canada's new government has a plan to make it even better for tomorrow. The measures in budget 2007 will help up achieve that goal. It will do so by delivering on the commitments made in “Advantage Canada”, the government's long term economic plan for Canada.

It takes historic action to restore fiscal balance with the provinces and territories by investing an additional $39 billion over the next seven years. These important investments are made in things that matter to Canadians: a modern health care system, a strengthened post-secondary education system, new child care spaces, a clean environment, an approach to labour market training that is more responsive to the needs of Canadians, and infrastructure like roads, bridges and public transit.

Budget 2007 builds on action from budget 2006 by further reducing the tax burden in Canada to make it easier for working families to get ahead and stay ahead through initiatives such as the tax back guarantee and our working families tax plan.

This year's budget cracks down on corporate tax avoiders to restore fairness to Canada's tax system. It invests in the social priorities that have come to define Canada as one of the truly great and caring nations of the world. In short, budget 2007 is an ambitious catalyst for action that builds upon the tremendous progress we made in our government's first budget.

This budget is about making our strong economy even stronger. We know that by creating a climate of hope and opportunity, and providing the necessary tools so Canadians from all walks of life can reach their full potential, Canada can be an example to the rest of the world, an example of a truly great and prosperous nation, an example of a compassionate and benevolent nation.

Canada's new government aspires to a stronger, safer and better Canada. Budget 2007 is a path to those ends.

Bill C-52 gives effect to the policies and programs that will get us there. A key element of budget 2007 is the restoration of fiscal balance with the provinces and territories and Canadian taxpayers.

Bill C-52 proposes to legislate key budget measures on fiscal balance, delivering on the specific commitments made in budget 2006 regarding fiscal balance and going even further. Through these measures fiscal balance is restored in a principled way, in a national context, and by respecting existing agreements and commitments.

To begin, the fiscal balance is being restored with the provinces and territories by putting transfers on a long term principles-based footing.

Bill C-52 proposes to legislate renewed and strengthened equalization and territorial formula financing programs that will provide more money over the next two years to eligible provinces and the three territories.

It also proposes to renew and strengthen the Canada social transfer making it fair by providing the same support to all Canadians regardless of where they reside and by making significant new investments in support of post-secondary education and children.

The budget also takes another step toward restoring fiscal balance with Canadian taxpayers through major tax reductions and the tax back guarantee. I will come back to the tax reduction point in a moment.

Moreover, we are making governments more accountable to Canadians by clarifying roles and responsibilities, and we have strengthened the economic union based on the plans set out in “Advantage Canada”.

Canada's new government has said all along that Canadians pay too much tax. We have not just talked about doing something about it, we have done something about it in our very first budget last year and again this year in budget 2007.

Since coming to office, Canada's new government has taken action that provides almost $38 billion in tax relief for individual Canadians. Over this year and the next two years, there will be $38 billion in additional tax relief. This kind of action illustrates our commitment to deliver on our promise to reduce taxes for Canadians.

Budget 2007 not only takes historic action to restore fiscal balance in Canada, but provides significant tax relief for individuals, with a focus on supporting working families with children. For example, budget 2007, through Bill C-52, would introduce the working income tax benefit and the working families tax plan. The working income tax benefit would build on the recent progress made in lowering the so-called welfare wall, notably for families with children, through the federal, provincial, territorial national child benefit initiative.

For some Canadians, the working income tax benefit could represent the difference between being better off and worse off as a result of taking a job. For example, a single parent who takes a job, before the bill is passed, can lose almost 80¢ of each dollar earned to taxes and reduced income support, and that is not accounting for additional work related expenses or the loss of in kind benefits.

The working income tax benefit would reward work and strengthen incentives to work for more than $1.2 million low income Canadians by providing up to $1,000 for families and $500 for individuals. To help Canadian families get ahead, the working families tax plan would also introduce a new $2,000 per child tax credit for children under 18. The new child tax credit would benefit about three million taxpayers. What is more, it would take up to 180,000 low income Canadians off the tax rolls and would provide more than 90% of taxpaying families with the maximum benefit of $310 per child.

We also propose to increase the spousal amount to the same level as the basic personal amount. We also, in the bill, enact the tax fairness plan, which delivers over $1 billion in additional tax savings annually for Canadian pensioners and seniors, including income splitting.

We also, as I mentioned earlier, in this bill have the tax back guarantee. This means that the government guarantees that it will use the interest savings from national debt repayments to reduce personal income taxes.

We also have invested in the health care system, the 10 year plan to strengthen health care, which provides $41.3 billion over 10 years to provinces and territories. In this budget we built on that commitment with Canada Health Infoway and with other measures. We also have invested in a cleaner, healthier and safer environment.

I urge the House to support the bill and the measures in it, which would take our country forward in a better and stronger way, and will be helpful for all Canadians, whatever their situation.

[John McCallum, Liberal, Markham—Unionville, ON]

Mr. Speaker, I think the parliamentary secretary's comments were notable for what they did not say more than for what they did say.

The biggest problem with the budget, especially in her own province, is the government's broken promise on income trusts. She has personal experience on that because her riding meeting was flooded with angry income trust people. Therefore, I do not know why she did not even mention it.

It is clear that this was a huge broken promise made by the government. It is clear that it was a badly executed broken promise. It was not necessary to drop a nuclear bomb on that industry. It is clear that tax fairness has become tax unfairness and that tax leakage will be worse because the companies buying up these income trusts are likely to pay no tax at all. It is clear this is a comedy of unintended consequences. It is clear that the income trust holders are deprived of a very useful instrument, especially for seniors who have to use their savings to pay their bills.

Why did she not say a single word about the most disastrous element in this overall disastrous budget?

[Diane Ablonczy, Conservative, Calgary Nose Hill, AB]

Mr. Speaker, I know my hon. friend is having the time of his life bashing the government on the income trust decision.

This was a difficult decision. As the member rightly points out, when we took office, we did not think this move would be necessary. However, the hon. member knows that the landscape changed rapidly with sectors either moving to the trust model or saying that they would move to the trust model and planning to do so. This means we would have most of our businesses in Canada paying no tax. That could not happen because then the tax burden would shift entirely on to the shoulders of individuals.

As I have said before in the House, it would have been easy for the government simply to save its political capital, not take any criticism, especially the criticism the hon. member is enjoying levelling at us, and do nothing about this. However, we have a duty to our country and we have a duty to the future of individual Canadians who need tax revenue for these services, and we moved to do what was right for Canada.

I hope Canadians will appreciate that and support it. I note that the government has kept its promise in every instance where it is able. The hon. member knows this and I think he should applaud that, instead of being so mischievous about something he knew had to be done and he himself said that it was absolutely the right thing to do.