Bill C-10 (Historical)

Income Tax Amendments Act, 2006

An Act to amend the Income Tax Act, including amendments in relation to foreign investment entities and non-resident trusts, and to provide for the bijural expression of the provisions of that Act

Part 1 of the enactment enacts, in accordance with proposals announced in the 1999 budget, amendments to the provisions of the Income Tax Act governing the taxation of non-resident trusts and their beneficiaries and of Canadian taxpayers who hold interests in foreign investment entities.
Part 2 enacts various technical amendments that were included in Part 1 of a discussion draft entitled Legislative Proposals and Draft Regulations Relating to Income Tax released for consultation by the Minister of Finance on February 27, 2004. Most of these amendments are relieving in nature, and others correct technical deficiencies in the Act. For example, Part 2 enacts amendments
–       to implement various technical amendments to qualified investments for deferred income plans,
–       to clarify that certain government payments received in lieu of employment insurance are treated the same as employment insurance for income tax purposes,
–       to extend the existing non-resident withholding tax exemption for aircraft to certain air navigation equipment and related computer software,
–       to allow public corporations to return paid-up-capital arising from transactions outside the ordinary course of business, without generating a deemed dividend,
–       to confirm an income tax exemption for corporations owned by a municipal or public body performing a function of government in Canada, and
–       to provide that input tax credits received under the Quebec Sales Tax system are treated for income tax purposes in the same way as input tax credits received under the GST.
Further, Part 2 enacts provisions to implement announcements made by the Minister of Finance
–       on September 18, 2001, limiting the tax shelter benefits to a taxpayer who acquires the future business income of another person,
–       on October 7, 2003, to ensure that payments received for agreeing not to compete are taxable,
–       on November 14, 2003, to simplify and better target the tax incentives for certified Canadian films,
–       on December 5, 2003, to limit the tax benefits of charitable donations made under certain tax shelter and other gifting arrangements, and
–       on November 17, 2005, relating to the cost of property acquired in certain option and similar transactions.
Part 3 deals with provisions of the Act that are not opened up in Parts 1 and 2 in which the following private law concepts are used: right and interest, real and personal property, life estate and remainder interest, tangible and intangible property and joint and several liability. It enacts amendments to ensure that those provisions are bijural, that is that they reflect both the common law and the civil law in both linguistic versions. Similar amendments are made in Parts 1 and 2 to ensure that any provision of the Act enacted by those Parts are also bijural.

[Mario Silva, Liberal, Davenport, ON]

Mr. Speaker, the great writer George Bernard Shaw once said, “Without art, the crudeness of reality would make the world unbearable”. This is a statement that members across the floor on the government benches would do well to ponder.

In his gleeful statement about his virtually unfettered access to the upper echelons of the Conservative government, the unregistered lobbyist, Mr. Charles McVety, all but jumps with excitement in proclaiming that his campaign against the arts community had found an audience within the current government.

The arts do matter. They add character and meaning to our lives. They take us beyond the utilitarian nature of life and they cause us to question, to learn and to grow as human beings and as a society.

In his recent critique of Bill C-10, the commentator John Moore wrote the following in the National Post:

The reason the arts matter is because the day man first drew a picture of a bison on a cave wall was the day life became more than a grim struggle for survival.

This is the point which the current government must come to understand. The arts are not some commodity to be contained and restrained using the power of the public purse. They are supposed to challenge our belief system and they are supposed to do so in ways that are provocative and visionary.

What the government is proposing is quite simply more appropriate in a period 200 years ago than it is today. Modern societies are enriched by the arts and by artists and do not benefit from those who would seek to limit their work.

I am sure that almost all members of the House are familiar with the writer Oscar Wilde, whose work was heavily criticized by some during his lifetime. I would defy anyone here today to name the judge who imprisoned him. We remember Oscar Wilde because his work endured; it was provocative and had meaning. We do not recall those who persecuted him because they worked to limit the human imagination rather than free it. His artistic work is timeless. Their names are long forgotten.

In my city of Toronto, the arts are an important part of our community. The arts employ 8% of Toronto's workforce.There are 21,000 resident artists in Toronto. There are hundreds of arts organizations and festivals, ranging from small venues to globally known events such as the Toronto International Film Festival.

In my riding of Davenport, there are many outstanding artists and arts organizations, such as the Clay and Paper Theatre, that are invaluable to our community's life and spirit.

Although the arts generate considerable revenue for the city of Toronto and for communities across our country, their value is measured far beyond the revenue they generate.

It is vital to ensure that the arts prosper in Canada and we can only do this by encouraging innovative, thought-provoking and visionary artistic expression. Bill C-10 has the potential to rob all of us of such opportunities to experience and to question the great ideals of human existence.

Will the government recognize the need to promote artistic freedom by withdrawing the ill-conceived and unnecessary Bill C-10, which threatens the arts community across Canada?

Food and Drugs Act

[Robert Thibault, Liberal, West Nova, NS]

Mr. Speaker, that is a very good point. It is a point that is often overlooked by the House when we approve a bill. We saw it with Bill C-10. One small element of a regulation was missed by the House, but luckily it was picked up by the Senate, as it would have led to censorship in our film and television production.

In this case, there are a number of acts, such as the Canadian Food Inspection Agency Act, the Fisheries Act, and some agricultural aspects, which the next speaker will certainly want to raise. The joint administration and the cross-regulation between the Health Act, the Food and Drugs Act and other acts necessitate all these amendments.

These are some of the things that we certainly will be studying at committee. We will ask the Library of Parliament for the analysis, which it does very well. We have had the preliminary one. As well, witnesses will appear who can show us if there will be difficulties within their areas of jurisdiction or administration.

Canadian Environmental Protection Act, 1999

[Bill Siksay, NDP, Burnaby—Douglas, BC]

Mr. Speaker, I am pleased to have this opportunity to join in the discussion today of Bill C-33, An Act to amend the Canadian Environmental Protection Act, 1999, regarding biofuels.

As we have been hearing, this is very important legislation. The amendment before us today is also very important, as it relates to how we do the business of the people of Canada in this place.

The intent of Bill C-33 is to enable the government to regulate renewable content and fossil fuels and proceed with plans to mandate a 5% renewable content in gasoline by 2010 and a 2% average renewable content in diesel and heating oil by 2012. This is something that we have supported in this corner of the House, although we supported it with reservations in the hope that we might see some important changes made when it was before the committee.

My colleague from British Columbia Southern Interior and my colleague from Western Arctic have worked hard to see improvements made to the legislation before it came back to the House. Unfortunately, that work was only partially successful. That is the reason we have this amendment before us today.

I should say that in committee there was some success, in that my colleague from British Columbia Southern Interior managed to ensure that a parliamentary review would be undertaken every two years on the environmental and economic impacts resulting from the biofuel industry. That was a very significant addition to the legislation.

It is certainly something that needed to be there, especially given the changing scene regarding biofuels and the concerns that are being raised more intensely with every passing day, it seems, about the effect of this industry and these fuels on our planet and on food production in particular. Achieving that review at committee as an amendment to the legislation was a very important contribution to the debate around Bill C-33 and will have an important and lasting effect should this legislation ultimately pass.

The other problem, however, is that the other amendments introduced by the NDP and my colleague from British Columbia Southern Interior did not get through the committee. They were very significant as well, in that they would have ensured that Canadian farmers benefited from any federal investment in the biofuel industry by the prohibiting of imported grains and oils for the production of biofuels. These amendments would have made sure that what is used in the biofuel industry is produced here in Canada.

The other part of the amendments that unfortunately was lost at committee called for the protection of the natural biodiversity of the environment from contamination by genetically modified trees and seeds. We have seen over and over again the concern about genetically modified foods being grown in Canada. There is a particular concern about the use of genetically modified seed and the effect that will have on agriculture in Canada. Given the interest in producing for biofuels, we wanted to make sure that there was some limitation on genetically modified seed and trees being used. Unfortunately, that did not make it through the committee either.

Finally, my colleague from British Columbia Southern Interior tried to ensure that prohibiting the exploitation of sensitive biodiverse regions for growing crops for biofuel production was part of the legislation. That seems to be a very reasonable addition. It is something we should be concerned about when we are going down this road of biofuels, but sadly that did not make it through either.

The final and most blatant statement, I think, and the most important statement of all, was that food production should come first, before production for biofuels. We wanted to see that enshrined in the legislation as a principle as well. That did not make it through the committee process.

These are all very serious issues that were raised by the NDP in the debate at committee and ours were all very reasonable and appropriate amendments to bring forward. I am sad that they did not get the support of the other parties to get them included in the legislation we are debating here today.

That being said, we are putting forward another amendment today at this stage of the debate. That amendment would ensure the scrutiny of the regulations related to the bill that are brought forward and would make sure that the appropriate committee of the House has that opportunity specifically to look at the regulations. We heard earlier from my colleague from Winnipeg that often the devil is in the details. When it comes to legislation, the details are often in the regulations.

That is why we believe it is important to pass this amendment. As well as having oversight of the overall environmental and economic impact of heading down the biofuels road, we want to make sure that we look specifically at the regulations that are brought forward by the government relating to this bill. That is extremely important. Often we do not pay the kind of attention that we should. Given the very serious concerns related to biofuels, it is important that we do that.

Without that kind of scrutiny, and given that this is broad enabling legislation, we worry that we are handing the government another blank cheque. The Conservative government seems to be very interested in those kinds of blank cheques. It seems to be very interested in promulgating legislation, guidelines and regulations that are big enough to drive a Mack truck through. We have seen this over and over again.

We saw this with Bill C-10. That bill was essentially about closing income tax loopholes, but also included a guideline around the film and video tax credit dealing essentially with the censorship of film and video production in Canada. It is a very broad guideline that gives the minister and the government very broad powers with respect to deciding, based on apparently their own personal tastes, what should or should not be funded when it comes to film and video production in Canada. We in this corner of the House and many people in the arts community and the film and video production community in Canada are concerned about that and are extremely upset about it. It is another example of putting a very broad guideline or regulation into a piece of legislation that would give the government broad powers to make decisions without being clear and transparent.

We have also seen this with respect to Bill C-50, the budget implementation bill. The bill includes similar broad powers for the Minister of Citizenship and Immigration when it comes to dealing with immigration applications from people wishing to come to Canada. It gives the Minister of Citizenship and Immigration the power to choose to ignore immigration applications. This is very inappropriate. The NDP has fought long and hard for an immigration system that is transparent, that is guided by clear regulations and clear policy. To give this kind of broad arbitrary power to the Minister of Citizenship and Immigration who can ignore immigration applications based on unknown decisions to us, such as personal preference or biases of the current government, seems unreasonable.

We see Bill C-33 as very broad legislation. It would essentially give the government a blank cheque to develop regulations around the biofuels industry. The NDP is very concerned about that. It should be more closely delineated. There should certainly be, at least as a bare minimum, more opportunity for scrutiny of the overall direction of the legislation and the impact it would have, as well as direct scrutiny of the regulations that are brought forward relating to it. That is what our amendment deals with today.

The whole question of biofuels is part of what some people are calling the perfect storm. In an article Gwynne Dyer wrote about the coming food catastrophe, he sees it as a piece of the perfect storm, related to population increase, related to the demand for food which is growing faster than the population, and to the changes in diet in countries like China and India where there is a growing middle class. It is related to global warming. Some countries are seeing changes in climate that affect their ability to grow food. Again there is the whole question of biofuels and whether they supposedly reduce carbon dioxide emissions, but because of the change in food growing patterns that they are evoking around the world, they actually may strongly increase carbon dioxide emissions. Biofuels may not be a solution to the problem, but in fact may make it worse.

Gwynne Dyer certainly sees all of these things coming together as the perfect storm. He quoted Professor Robert Watson, a former adviser to the World Bank, who said, “It would obviously be totally insane if we had a policy to try and reduce greenhouse gas emissions through the use of biofuels that is actually leading to an increase in greenhouse gases”.

National Defence

[Denis Coderre, Liberal, Bourassa, QC]

Mr. Speaker, I could have asked a question today regarding the incompetence of the Minister of Canadian Heritage, Status of Women and Official Languages, who says one thing in private and the opposite in public concerning Bill C-10. That is real minor league stuff. I could also talk about the incompetence of the Minister of Foreign Affairs, who embarrassed us in Afghanistan. Actually, he embarrasses us everywhere.

However, considering that General Hillier, the real National Defence minister, has just announced his resignation, can the other Minister of National Defence tell us why he insists on muzzling the military police complaints commission and literally destroying over a year's worth of work on the torture investigation? What does he have to hide?

Liberal Party of Canada

[Harold Albrecht, Conservative, Kitchener—Conestoga, ON]

Mr. Speaker, Canadians are finding it increasingly difficult to understand and trust the Liberal Party's divergent positions on almost every issue. Despite claims it is united, all evidence points to a number of different factions within it, all with extremely varying positions.

What is more remarkable is that the Liberal Party's own leader changes his position on issues from day to day and week to week. Who can believe anything he says when one week he is against the budget and the next week he supports it, one week he does not agree with our immigration reforms, and the next week he is supporting the government?

The Liberals voted in favour of Bill C-10, the same measure announced by the previous Liberal government in 2003, but have now changed their minds.

It is the Liberal Party that has trouble sorting out its policy. Riddled with division and frustration, the Liberals have become the party of no policy, no leadership and no credible plan for Canada.

Judges Act

[Jean-Claude D'Amours, Liberal, Madawaska—Restigouche, NB]

Mr. Speaker, I am very pleased this afternoon to speak to Bill C-31. As I already mentioned earlier, this bill is extremely important if we look at the needs of our judicial system across the country. It is also very important because of the current vacancies within the judiciary. The government has come up with Bill C-31 to appoint 20 extra judges.

The government certainly has its share of the responsibility for the current situation with respect to judicial appointments. When we look at the situation, the Conservatives are certainly the only ones to blame. They cannot blame anyone else but themselves in this case.

As far as the appointment of 20 extra judges is concerned, as I have said, we must make sure that Canadians receive the services to which they are entitled. This is not just a matter of people appearing in court or before a judge because they have done something wrong. Canadians also appear before a judge or judges because they want to fight for their rights.

We have a rather concrete example, which I just gave, of a woman, who, thanks to the court challenges program, was able to fight for her right to be served in French by the RCMP. The court ruled that the woman's complaint was well-founded. As the House can see, Canadians do not just appear before a judge when they have done something wrong, but also when they want to stand up for their rights, the fundamental rights of this country that cannot be denied any Canadian citizen. One of the great things about our country is also the fact that we are free to speak up for ourselves, which is possible because of the judicial system.

We need extra judges, but we also have to wonder about Bill C-31. Since January 2006, since the Conservatives have been in power in Ottawa, we have had to wonder quite a bit. What we hear and what the Conservatives say are rarely the same thing. That is why I wonder about certain aspects of the bill.

One of the aspects is ensuring the independence of the judiciary. That is what the government tries to say, but the opposite happens when it comes time to make a decision. A number of examples show that we should still be worried. Sometimes, when the government introduces a bill, we wonder if they are acting with utmost sincerity or if they have a hidden agenda. I will not go on and on. I know that some members of the government will say that I am off topic, but let us look at the example of Bill C-10 and the question of censorship. That is flagrant proof that the government is trying to introduce bills containing elements that make us believe they are sincere, while in reality they are hiding elements from us.

I spoke earlier about the importance of the independence of the judiciary. I have serious issues with certain elements—I am thinking about the members of the provincial advisory councils. The Conservatives decided to appoint people in order to obtain power. In northern New Brunswick, they appear to have stacked the deck in an attempt to control the judicial system. The Conservative government is wrong to do that. The other element in terms of Canadian judicial system appointments has to do with the appointment of people who are influential within the Conservative Party.

The Conservatives say that it is important that the best people be appointed.

Yes, it is important to appoint the most qualified people, and that should guide all of the government's decisions every day. However, a closer look at the situation suggests that it might be more than coincidence.

The Conservatives have just said that the best, most qualified people should be appointed, but we have to wonder. As it happens, the Prime Minister's former campaign director for New Brunswick, the former president of the Conservative Party in Quebec, and the former chief Conservative Party fundraiser for Alberta were all awarded judgeships.

As it also happens, the Conservative government said that there must be transparency—especially on the part of the government—that the best people must be appointed and that the most qualified people must get the job. This is about fairness and about giving people a reason to have faith in the system.

However, it just so happens that high-ranking Conservative Party members got lucky. It is quite the coincidence that these people were appointed and the others were rejected.

We might think that from time to time, party supporters might get lucky and be appointed, but that is because they are the best candidates with the best qualifications, people who can demonstrate that they have the best skills for the job.

We should take a look at the situation in the provinces. I gave just a few examples earlier of very high-ranking Conservative Party members who were appointed to the Canadian judicial system.

I find these elements very troubling. The Canadian people also have concerns about this party, which is easy to understand when things like this come up. The government is trying to make itself look as though it is transparent, as though it is the political party, the government, that wants to do things with as much clarity and transparency as possible. The sad truth is that it is filling up the room and filling up the committees via the back door. What does the Conservative government want the appointees to abide by? By Conservative ideology, of course.

Canadians have every reason to fear the Conservatives. In fact, Canadians have every reason to fear the Conservative ideology, because the future of the country in many respects is certainly not currently in the right hands. People in my riding say so all the time. There are things going on, and people are afraid of the Conservatives.

When we say, myself included, that Conservatives are not transparent, that they try to slip things in through the back door, that they add things to bills to bring them in line with the Conservative ideology, we need to be prepared to back this up. Moreover, we must be able to provide even more proof to Canadians that the Conservative government is making decisions not for the well-being of the Canadian people or of minorities, but solely for the well-being of the political party currently in power.

Ethics

[Diane Marleau, Liberal, Sudbury, ON]

Mr. Speaker, tapes seem to be the Conservatives' nemesis. The Secretary of State (Multiculturalism and Canadian Identity) was taped speaking about the Sikh community. Senator Angus was taped speaking about Bill C-10. The Parliamentary Secretary to the Leader of the Government in the House of Commons was taped speaking about homosexuals. The Prime Minister was taped speaking about the Cadman affair.

Why do they say one thing in private and another in public?

Afghanistan

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

Mr. Speaker, our position is quite clear. What is difficult to understand is any position on almost any issue coming from the Liberal Party. We understand that because often there are many different groups and many different factions within the party that have different positions.

What is more remarkable is that it is also the leader of the Liberal Party who can take one position on issues of foreign policy one day, and then two weeks later take an entirely different position. Those members did the same thing on the tax bill, Bill C-10. They did the same thing on the immigration bill last week. It is the Liberal Party that has trouble sorting out its policies. That party has no policy, no vision and no leadership. It is all over here.

Arts and Culture

[Bill Siksay, NDP, Burnaby—Douglas, BC]

Mr. Speaker, the Minister of Canadian Heritage, Status of Women and Official Languages is reported to have said that she hates Bill C-10. I hope she has finally joined the club.

Others continue to call on the government to use this tax measure to censor film and video production. Just yesterday, Charles McVety, the lobbyist who claims to have influenced the Conservatives to put this controversial guideline into law, said “decency trumps freedom”.

Given the concerns raised by the arts community and producers, will the minister withdraw this amendment and develop guidelines that fully respect the freedom of expression and directly address the serious concerns about censorship?

Government Policies

[Ralph Goodale, Liberal, Wascana, SK]

Mr. Speaker, tape recordings are a problem for the government, with the Secretary of State for Multiculturalism accusing the Sikh community of racism, on tape, with Senator Angus saying Conservatives are divided over Bill C-10 and censorship, on tape, and with the parliamentary secretary to the government House leader demeaning gay people, on tape. As for the Canada Border Services Agency destroying evidence of misused tasers, it was on tape until the agency got rid of it.

Is this the government strategy, deny members' own words and all that self-incrimination, destroy the evidence, and have an election before Canadians can find out the truth?

Government Programs

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

Mr. Speaker, on the accessibility fund, the deadline has not even passed. Applications have not even been filed yet. How she has decided who has already received the grant is entirely beyond me.

In terms of matters like Bill C-10, we are trying to work together with other parties in a minority Parliament. This is why we were pleased on Bill C-10 that the NDP supported the bill. In fact, the member for Winnipeg North said this in the House when she was speaking about the bill:

Today we are dealing with a bill that arises out of concerns from the Auditor General about the perpetuation of tax loopholes and tax havens.

That is why those members were supporting it. They thought it was a good thing.

Apparently they are like the Liberals and they too are changing their minds every day on where they stand on the issues.

Canadian Heritage

[Pablo Rodriguez, Liberal, Honoré-Mercier, QC]

Mr. Speaker, the Conservative chair of the Standing Senate Committee on Banking, Trade and Commerce, which is currently studying Bill C-10, declared that the Minister of Canadian Heritage, Status of Women and Official Languages told him that she detested the bill in question. She detests it.

Can the minister tell us why she is forced to defend a bill that she detests? Is it simply because she is afraid of her boss?

[Josée Verner, Conservative, Minister of Canadian Heritage]

Mr. Speaker, naturally I appreciate your correction. I dare not, as a minister on this side of the House, point to the opposition critic with another finger, for example.

That said, I will reiterate that I have a document here that was sent to more than thirty groups in 2001 and in which all the provisions contained in Bill C-10 appear with exactly the same wording.

[Denis Coderre, Liberal, Bourassa, QC]

Mr. Speaker, in light of what is happening in the other place with regard to Bill C-10, it is understandable that the only allies of the blacklist minister are her friends from the religious right. The entire industry has rejected outright her plan to become the Canadian champion of censorship across the board.

I have learned from various sources that the office of the blacklist minister is exerting undue pressure on the industry by making any significant funding through the Canadian Television Fund dependent on it showing the expected and desired support for Bill C-10. Why?

Film Industry

[Pierre Poilievre, Conservative, Parliamentary Secretary to the President of the Treasury Board]

Mr. Speaker, some wealthy elites are angry about Bill C-10, which the House passed unanimously. The bill respects freedom of expression and ensures that taxpayers are not forced to pay for purposeless pornographic or ultra-violent films. Such films will continue to be permitted under the law, just not paid for by the public purse.

Today, Sarah Polley, who calls herself a socialist, indicates that she and others in her industry should have the right to spend taxpayer money on whatever they want. Ms. Polley has the right to her socialist views. In fact, she has the right to make any kind of film she wants.

Working taxpaying families only ask that she remember that they are the ones paying her bills. After all, one person's freedom of expression does not entitle him or her to reach into the pocket of another.