Budget and Economic Statement Implementation Act, 2007

An Act to implement certain provisions of the budget tabled in Parliament on March 19, 2007 and to implement certain provisions of the economic statement tabled in Parliament on October 30, 2007

This bill was last introduced in the 39th Parliament, 2nd Session, which ended in September 2008.

Sponsor

Jim Flaherty  Conservative

Status

This bill has received Royal Assent and is now law.

Summary

This is from the published bill.

Part 1 implements goods and services tax and harmonized sales tax (GST/HST) measures proposed in the March 19, 2007 Budget but not included in the Budget Implementation Act, 2007, which received Royal Assent on June 22, 2007. Specifically, the Excise Tax Act is amended to
(a) increase the percentage of available input tax credits for GST/HST paid on meal expenses of truck drivers from 50% to 80% over five years beginning with expenses incurred on or after March 19, 2007;
(b) increase the GST/HST annual filing threshold from $500,000 in taxable supplies to $1,500,000 and the annual remittance threshold from $1,500 to $3,000, both effective for fiscal years that begin after 2007;
(c) increase the GST/HST 48-hour travellers’ exemption from $200 to $400 effective in respect of travellers returning to Canada on or after March 20, 2007; and
(d) implement changes to the rules governing self-assessment under Division IV of Part IX of the Excise Tax Act to ensure that GST/HST applies appropriately in respect of intangible personal property acquired on a zero-rated basis and consumed in furthering domestic activities, applicable to supplies made after March 19, 2007.
Part 2 amends the non-GST portion of the Excise Tax Act to implement measures announced in the March 19, 2007 Budget. Specifically, the excise tax exemptions for renewable fuels, including ethanol and bio-diesel, are repealed, effective April 1, 2008.
Part 3 implements income tax measures proposed in the March 19, 2007 Budget but not included in the Budget Implementation Act, 2007, which received Royal Assent on June 22, 2007. In particular, it
(a) introduces a new Working Income Tax Benefit;
(b) eliminates income tax on elementary and secondary school scholarships;
(c) eliminates capital gains tax on donations of publicly-listed securities to private foundations;
(d) enhances the child fitness tax credit;
(e) expands the scope of the public transit tax credit;
(f) increases the lifetime capital gains exemption to $750,000;
(g) increases the deductible percentage of meal expenses for long-haul truck drivers;
(h) provides tax relief in respect of the 2010 Winter Olympic and Paralympic Games;
(i) allows for phased-retirement options for pension plans;
(j) extends the mineral exploration tax credit;
(k) enhances tax benefits for donations of medicine to the developing world;
(l) streamlines the process for prescribed stock exchanges;
(m) introduces an investment tax credit for child care spaces;
(n) introduces a new withholding tax exemption with respect to certain cross-border interest payments;
(o) prevents double deductions of interest expense on borrowed money used to finance foreign affiliates (the Anti-Tax-Haven Initiative);
(p) eases tax remittance and filing requirements for small business;
(q) introduces a mechanism to accommodate functional currency reporting;
(r) provides certain tobacco processors that do not manufacture tobacco products with relief from the Tobacco Manufacturers’ Surtax; and
(s) provides authority for regulations requiring the disclosure by publicly traded trusts and partnerships of information enabling investment managers to prepare the tax information slips that they are required to issue to investors on a timely basis.
Part 4 implements the disability savings measures proposed in the March 19, 2007 Budget. The measures are intended to support long-term savings through registered disability savings plans to provide for the financial security of persons with severe and prolonged impairments in physical or mental functions. Part 4 contains amendments to the Income Tax Act to allow for the creation of registered disability savings plans. It also enacts the Canada Disability Savings Act. That Act provides for the payment of Canada Disability Savings Grants in relation to contributions made to those plans. The amount of grant is increased for persons of lower and middle income. It also provides for the payment of Canada Disability Savings Bonds in respect of persons of low income.
Part 5 implements measures that provide for payments to be made to provinces as a financial incentive for them to eliminate taxes on capital under certain circumstances.
Part 6 enacts the Bank for International Settlements (Immunity) Act.
Part 7 amends the Pension Benefits Standards Act, 1985 to permit phased retirement arrangements in federally regulated pension plans by allowing an employer to simultaneously pay a partial pension to an employee and provide further pension benefit accruals to the employee. These amendments are consistent with amendments to the Income Tax Regulations to permit phased retirement.
Part 8 authorizes payments to be made out of the Consolidated Revenue Fund for the purpose of Canada’s contribution to the Advance Market Commitment.
Part 9 amends the Canada Oil and Gas Operations Act to authorize the National Energy Board to regulate traffic, tolls and tariffs in relation to oil and gas pipelines regulated under that Act.
Part 10 amends the Farm Income Protection Act to allow financial institutions to hold contributions under a net income stabilization account program.
Part 11 amends the Federal-Provincial Fiscal Arrangements Act to provide for an additional fiscal equalization payment that may be paid to Nova Scotia and Newfoundland and Labrador. This Part also specifies the time and manner in which the calculation of fiscal equalization payments will be made and it amends that Act’s regulation-making authority. In addition, this Part makes consequential amendments to other Acts.
Part 12 amends the Canada Education Savings Act to clarify the authority of the Minister of Human Resources and Social Development to collect, on behalf of the Canada Revenue Agency, any information that the Canada Revenue Agency requires for purposes of administering the registered education savings plan tax provisions.
Part 13 authorizes payments to be made out of the Consolidated Revenue Fund to an entity, designated by the Minister of Finance, to facilitate public-private partnership projects.
Part 14 implements tax measures proposed in the October 30, 2007 Economic Statement. With respect to income tax measures, it
(a) reduces the general corporate income tax rate;
(b) accelerates the tax reduction for small businesses;
(c) reduces the lowest personal income tax rate, which automatically reduces the rate used to calculate non-refundable tax credits and the alternative minimum tax; and
(d) increases the basic personal amount and the amount upon which the spouse or common-law partner and wholly dependent relative credits are calculated.
Part 14 also amends the Excise Tax Act to implement, effective January 1, 2008, the reduction in the goods and services tax (GST) and the federal component of the harmonized sales tax (HST) from 6% to 5%. That Act is amended to provide transitional rules for determining the GST/HST rate applicable to transactions that straddle the January 1, 2008, implementation date, including transitional rebates in respect of the sale of residential complexes where transfer of ownership and possession both take place on or after January 1, 2008, pursuant to a written agreement entered into on or before October 30, 2007. The Excise Act, 2001 is also amended to increase excise duties on tobacco products to offset the impact of the GST/HST rate reduction. The Air Travellers Security Charge Act is also amended to ensure that rates for domestic and transborder air travel reflect the impact of the GST/HST rate reduction. Those amendments generally apply as of January 1, 2008.

Elsewhere

All sorts of information on this bill is available at LEGISinfo, an excellent resource from the Library of Parliament. You can also read the full text of the bill.

Votes

Dec. 13, 2007 Passed That the Bill be now read a third time and do pass.
Dec. 10, 2007 Passed That Bill C-28, An Act to implement certain provisions of the budget tabled in Parliament on March 19, 2007 and to implement certain provisions of the economic statement tabled in Parliament on October 30, 2007, be concurred in at report stage.
Dec. 10, 2007 Failed That Bill C-28 be amended by deleting Clause 181.
Dec. 4, 2007 Passed That the Bill be now read a second time and referred to the Standing Committee on Finance.

Budget and Economic Statement Implementation Act, 2007Government Orders

December 12th, 2007 / 7:35 p.m.


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NDP

Jack Layton NDP Toronto—Danforth, ON

Mr. Speaker, I am very proud to be here this evening to present our position on this budget. I say “budget”, because, clearly, Canada's extraordinary surplus gives us a golden opportunity. We are living in a country that has been presented with an incredible opportunity. However, the budget and the so-called mini-budget are devoid of any measures that take advantage of the opportunities we have. With such an extraordinary surplus, we could make investments that would meet the goals of average Canadians, our communities and our society, based on our shared values.

We really have two visions in front of us. One is the vision of the Conservatives, supported by the Liberals. It is a vision that would reduce taxes, give much more to the wealthy in our society, give more to the largest companies, especially the ones making big profits, like the banks, the big oil companies, the companies that are the biggest polluters. They will benefit the most from this approach chosen by the Conservatives and their friends of the moment, the Liberals.

We are here this evening because we witnessed an extraordinary event in the House of Commons a few hours ago. We saw the two whips walk down the aisle together, before the usual time, in order to hold a vote to consummate that union properly in front of everyone. The budget is the product of that union. It is too bad, because the vision behind it runs counter to the hopes of our constituents.

I am proud of our team, the NDP, because it is a party with principles. We are prepared to stand up because we have principles and values to defend. As we have said many times in this House during this debate, this budget is not at all balanced. It is continuing to take Canada in the wrong direction. It is not a balanced approach. There was an unprecedented opportunity to invest, but the government and its friends missed it. It was a perfect opportunity to give tax relief to the people who need it most, but the government missed it. It was an opportunity to reduce the imbalance and the growing prosperity gap in our society, but the government ruled out any possibility of taking action.

For these reasons, we will oppose the bill. It is the wrong direction for Canada.

It was a rather bizarre moment to watch as parliamentary rules were stretched to the limit, and I would say beyond reasonable limit, to the point of actually abusing the privileges of members to be present during a vote, to see the respective whips of the Conservatives and the Liberals walking down the aisle together, not quite hand in hand but metaphorically at least as much. The consequence of course is that democracy in this chamber was pushed aside. Why? In favour of massive corporate tax reductions for those who are already doing incredibly well in our society.

I have canvassed my constituents, as have our members of Parliament. We have yet to find one person, and I would challenge people to be in touch with us if I am wrong, who was calling for reductions in taxes for the big banks shortly after they posted record profits. It may be that there is someone there who was calling for it and could demonstrate that this is somehow for the good of Canada, but I have yet to hear that voice. The fact is that it is the wrong direction for the country. It is absolutely the wrong direction for the country.

I have yet to hear anybody tell me that the largest oil and gas companies in Canada needed a break. What I do hear is that people need a break from the big oil and gas companies in the way people get gouged every time they go to the pump.

When it comes to people trying to get access to their own money at the bank, they need a break from the banks and the bank presidents who stick out their hands metaphorically and grab some of that money back. That is unacceptable.

The fact is that the government took a very narrow-minded view of where we could go at this unprecedented moment in our history. I believe that our party has a very good idea about where we need to go, a sense of the vision shared by a great many Canadians. In fact, this debate has put these two visions before Canadians.

It is unfortunate that the debate is being cut short by those who share one particular point of view, the Liberals and the Conservatives, because frankly, we should have more discussion. We are talking here about billions of dollars that, over subsequent years, are going to be unavailable to invest in what we need. What kind of things do we need in our country today?

We need investments that are right for our families. This budget is wrong for families. We need investments that are right for our communities, our municipalities, our cities. This budget is wrong for all of those people and their communities. We need an approach that represents some sense of balance and common sense. This budget certainly does not do that at all. We do need some targeted tax help for those who are most in need. We do not see that here. In fact, what we see is a budget that would widen the prosperity gap that already is widening rapidly in our society.

That is why, if we talk to the average person today, the middle class, the working families, however we want to describe them, we are going to find people who are finding it harder and harder just to get by. It is not that they are complainers. In fact, Canadians are as far from complainers as we are going to find. The fact is that they are working harder.

Independent studies have shown that the average Canadian family is working 200 hours more every single year. That is the equivalent to five full time working weeks. They were already working hard. How is this happening? They are taking second jobs. They are taking third jobs. They are trying to get by. They are trying to cover the rent. They are trying to pay the mortgage. They are trying to put food on the table. They are trying to educate the young people in their family so that their hopes and their dreams can be accomplished. They are finding that tougher.

The students end up with more debt than they have ever had. Somehow we regard it as sensible as a society to load them up with more. I do not know any other species that would do that to their young. But we seem to think that throwing as many millstones around their necks at the very time they are supposed to take off and succeed and build our future, that dragging them down and pulling on the handbrake is the way we ought to treat young people.

Are we doing any better when it comes to seniors, the people who actually built this country?

It was an opportunity in this budget to correct a wrong with regard to seniors. The government has admitted that in its indexing of the payments to seniors, their pensions, something to keep them out of poverty, something they deserve after building our country and raising their families, it made a mistake in the inflation increase seniors were supposed to be getting. Their food costs are going up. Their rents are going up. Their transit costs are going up. The price of everything they do in their modest way in their lives as seniors in our communities is going up, but the government has failed to keep up with inflation, and the government admits it.

I will bet people have noticed how quickly the government is prepared to come after them, and I will say seniors here too, because I know a lot of seniors are frightened by this, if they have made a little mistake on their taxes. By golly, a $10 mistake, a $50 mistake and the government is writing letters telling people they must do this and they must do that, and the government charges interest, too, at rates that are not far from the usurious rates of the banks, I might say.

The government is very happy to reach out into seniors' lives and pull something back if they have made a little mistake on their taxes, but what happens if the government makes a mistake on seniors' taxes? It simply says that it is too bad and there is nothing it will do about it.

This could involve $1 billion or even more that should be in the hands of seniors. Here we have a surplus. We could have done something about that in this budget bill. It absolutely could have been corrected, and should have been corrected. Our seniors deserve it.

The fact is a lot of Canadians are one or two paycheques away from living in poverty. A great number of other Canadians already live in poverty, many of them seniors, single mothers, first nations, Inuit and Métis people. There are people who are living in abject poverty. Even the world organizations have come forward and pointed out how Canada is mistreating its own in so many ways.

This would have been an opportunity to do something about affordable housing in first nations communities. This would have been an opportunity to do something about affordable housing in cities so that we do not have the growing crisis of homelessness, where more and more people are dying on our streets. This winter could turn out to be the worst ever.

All we get from the government is the recycled announcements of funds that were put aside when we debated a previous budget two years ago. That is when the NDP insisted that corporate taxes should be cancelled and money should be put into affordable housing, including for aboriginal people, post-secondary education for our young people, the environment, public transit, foreign aid, the priorities of Canadians.

Now the government is making these announcements again, but the fact is, it has gone right back to the old practice.

The Conservatives already had a corporate tax cut planned. We know that. They made that clear. However, along came the Liberals and the leader of the Liberal Party who said that there should be an even deeper cut to corporate taxes. This was only a few weeks before he said that his biggest priority was dealing with poverty. Guess whose poverty he was apparently concerned about. It was the poverty of the struggling multinational corporations, the profitable companies. It was their definition of poverty that most concerned him.

That is why we saw the Liberals sit down on the job. When it came time for them to stand up for Canadians, they stood up for the privileged. That is what happened. It cannot be denied, because we all saw it, and we have seen it time and time again.

Now we see the marriage is being brought together in an even more intimate way. There may even be votes of support. We might even see a vote of support this evening. Who knows what will happen with the so-called official opposition, an official opposition that could not even muster the numbers of an official party in the House the other night on a vote, if I may make that comment.

We are here as representatives, 30 members of Parliament across the country raising these issues. We are raising them in the context of a very important moment in the life of any Parliament. That is when we decide how our taxation laws are going to work and how we are going to raise the funds from one another to put them forward in a common project to build the country of our dreams.

What we have chosen here to do, apparently, is to begin to deconstruct, to take apart the country of our dreams. In case there are any doubts, people should talk to municipal mayors about what is happening in their communities. I am here with the member for Outremont, who once represented in another place a community known as Laval, where a bridge collapsed and tragedy happened.

Right across this country there is over $100 billion of infrastructure deficit. Instead of investing in infrastructure the way we should, the government is saying it is not going to respond to the needs of municipalities, except for the occasional megaproject financed by one of its corporate friends, most likely in one of these triple so-called public-private partnerships for some sort of mega-enterprise that it can put its signature on. Clearly, the government has lost track of the need to make sure that communities have fresh drinking water when they need it, or that the infrastructure, the roads and bridges are sound, and the recreation centres for our young people are able to stay open in our communities.

A grave mistake is being made, a very grave mistake. We are not alone in believing this. Many across the country have said that it is time to invest. We have the opportunity in front of us to do that, just as families would do if they suddenly found themselves with the opportunity of having funds to invest. They would not sit around the table and make the kind of decision that has been made here. They would say, “Let us invest in our young people. Let us invest in our homes to make them more sound. Let us invest in our future. Let us make sure that we are leading in the investments that are needed and responding to the needs of Canadians”.

It is a question of being balanced. It is a question of representing working families, seniors, young people, people from coast to coast to coast who are counting on us to respond to their concerns.

I know a lot of members of Parliament will return to their constituencies over the weeks to come and they will talk about, for example, the few pennies that might go back into people's pockets by virtue of some of these tax cuts. What they will not talk about is how we have missed the opportunity to build. I think Canadians are builders. I do not think they represent the kind of self definition that seems to underlie the point of view here. They want to build something in common. They want to build a collective enterprise. They want society to work for every Canadian, not just for a few or just for themselves.

When we boil it down, there are two visions in front of us.

We have a choice to make. We have a golden opportunity, and we in the NDP will be here and will stand up to defend our principles, because they represent the values of the vast majority of Canadians.

Budget and Economic Statement Implementation Act, 2007Government Orders

December 12th, 2007 / 7:50 p.m.


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Bloc

Réal Ménard Bloc Hochelaga, QC

Mr. Speaker, I thank the Leader of the NDP for his speech. I have to say that the Bloc Québécois considered the issue of poverty and took action a long time ago. As the member for Hochelaga—Maisonneuve, certainly one of the hardest hit ridings in terms of industrial obsolescence, I tabled a bill known as the anti-poverty bill on four occasions, and am about to do so again.

My bill contains four measures that I certainly hope will have the support of my NDP colleagues. My bill would add “social condition” to the prohibited grounds of discrimination in the Canadian Human Rights Act. My colleague for Outremont, who was a member of the National Assembly of Quebec, will remember that eight legislatures, eight provinces, added social condition to the prohibited grounds of discrimination in their human rights codes. It is unacceptable that the federal government has not. Had it done so, we could have successfully challenged certain measures. For example, Lloyd Axworthy's employment insurance contained restrictive measures for new applicants and that was unacceptable.

My bill also provides for a new contravention, by financial institutions, of the Canadian Human Rights Act. I am referring to the refusal by banks to provide credit to disadvantaged communities. I have studied what happened in the United States where, since 1977, the Community Reinvestment Act has provided access to credit for the most disadvantaged communities. I am thinking of black and Hispanic populations.

If adopted, my bill would require Parliament to hold a mandatory debate on poverty, on a regular basis. It would institute the requirement that the Canadian Human Rights Commission assess every bill and its effects on the impoverishment of citizens.

I know that the member and his political party are concerned by these matters. However—the member knows that I am very sensitive—I was somewhat hurt to discover that in Paul Martin's last budget, my NDP colleagues, whom I affectionately refer to—

Budget and Economic Statement Implementation Act, 2007Government Orders

December 12th, 2007 / 7:55 p.m.


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The Acting Speaker Royal Galipeau

I am sorry to have to interrupt the hon. member for Hochelaga. He is a very experienced parliamentarian. He knows that when referring to another member, he must use the name of the member's riding and not his or her name. In any case, the question was long enough and I now give the floor to the hon. member for Toronto—Danforth.

Budget and Economic Statement Implementation Act, 2007Government Orders

December 12th, 2007 / 7:55 p.m.


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Bloc

Réal Ménard Bloc Hochelaga, QC

Mr. Speaker, regarding your intervention, I would like to say that I did not use the name of any colleague or any riding.

Budget and Economic Statement Implementation Act, 2007Government Orders

December 12th, 2007 / 7:55 p.m.


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The Acting Speaker Royal Galipeau

The hon. member for Hochelaga mentioned the name of the right hon. member for LaSalle—Émard.

The hon. member for Toronto—Danforth.

Budget and Economic Statement Implementation Act, 2007Government Orders

December 12th, 2007 / 7:55 p.m.


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NDP

Jack Layton NDP Toronto—Danforth, ON

Mr. Speaker, the hon. member for LaSalle—Émard is not generally in this House. Thus, we can forgive such a mistake from time to time.

I thank my hon. colleague from Hochelaga for his comments and his question. However, I must wonder about something. Why did the Bloc Québécois help the government move this bill along so quickly in committee and why did he vote today to limit the debate on such crucial questions?

Further debate would have allowed for the mistakes in this budget, in this bill, to be pointed out. The bill does not take into account the situation in the manufacturing sector and the forestry crisis. There are no references in this bill to the needs of businesses in those sectors.

Instead, we have tax cuts across the board for all big businesses that are already profitable. The most profitable stand to benefit the most, that is, the banks and oil and gas companies. The Bloc, by supporting an accelerated debate and a limit to democracy, is preventing the opposition parties from opposing this collusion between the Conservatives and the Liberals. I invite the Bloc to make an effort to join our efforts in order to reach a new level of accountability here in the House of Commons.

Budget and Economic Statement Implementation Act, 2007Government Orders

December 12th, 2007 / 7:55 p.m.


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The Acting Speaker Royal Galipeau

The hon. member for Hochelaga on a point of order.

Budget and Economic Statement Implementation Act, 2007Government Orders

December 12th, 2007 / 7:55 p.m.


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Bloc

Réal Ménard Bloc Hochelaga, QC

I think that our colleague, the leader of the NDP, should not mislead the House and should clearly say that the Bloc Québécois is opposed to Bill C-28. If he wants to find—

Budget and Economic Statement Implementation Act, 2007Government Orders

December 12th, 2007 / 7:55 p.m.


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The Acting Speaker Royal Galipeau

The hon. member for Hochelaga should know that that was not a point of order, but rather a comment related to the debate.

We shall continue with questions and comments. The hon. member for Victoria.

Budget and Economic Statement Implementation Act, 2007Government Orders

December 12th, 2007 / 7:55 p.m.


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NDP

Denise Savoie NDP Victoria, BC

Mr. Speaker, like my leader, I believe the federal government can be a source of positive change in our country by providing leadership with strong social policy that helps us all move forward. The government can provide stewardship of a vibrant, equitable and sustainable economy. It can also specifically provide a creative vision for our economy and our environment, rather than opposing them as the government does.

I am wondering if our leader would be able to develop a little bit our proposals around creating green jobs and sustaining our economy.

Budget and Economic Statement Implementation Act, 2007Government Orders

December 12th, 2007 / 7:55 p.m.


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NDP

Jack Layton NDP Toronto—Danforth, ON

Mr. Speaker, it is true that we have an opportunity in front of us with the surpluses we have, with the capacities of Canadians, to launch upon a very ambitious project for the 21st century economy. We call it the new energy economy.

We believe, and to pick one example, that it is possible to create what we have been calling green collar jobs all across the country in the energy sector. Not everyone has to go to Fort McMurray to be involved in energy.

What people can do instead is help Mrs. Smith and Madam Cournoyer down the block to renovate their homes, so that they use less energy. It will mean a little less money for the big oil and gas companies, so I can see why the government members do not like the idea.

They will use less energy and thus reduce their daily cost of living. They will reduce the emissions that Canada is putting into the atmosphere at a rate much more ferociously high than virtually any other developed country in the world, and at the same time create work in neighbourhoods for people who are looking for work.

These are opportunities for young people and chances for older workers who have skills but are being laid off. They will be able to put their skills to work right there in their communities.

If we add that to an ambitious renewable energy program right across the country, a green grid right across the country, and all other kinds of other initiatives, we really could be on the right track. Unfortunately, this budget takes us down the wrong track.

Budget and Economic Statement Implementation Act, 2007Government Orders

December 12th, 2007 / 8 p.m.


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The Acting Speaker Royal Galipeau

The hon. member for Outremont has the floor for a question or comment. As a friendly reminder, I would like to say that he has one minute and a half left, which includes the question and answer.

Budget and Economic Statement Implementation Act, 2007Government Orders

December 12th, 2007 / 8 p.m.


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NDP

Thomas Mulcair NDP Outremont, QC

Mr. Speaker, I would like to ask my leader to kindly explain to the House the adverse consequences of the Liberal and Bloc members supporting this bill. They have helped things progress today by voting with the Conservatives on these middle-class budget issues.

Budget and Economic Statement Implementation Act, 2007Government Orders

December 12th, 2007 / 8 p.m.


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NDP

Jack Layton NDP Toronto—Danforth, ON

Mr. Speaker, it is clear what is going on in this House, and it is too bad. Obviously, the Liberals do not want to be forced to stay seated during a vote in January or February. This is why they have gone along with forcing a vote before the bell stops ringing, which is completely unacceptable according to the parliamentary traditions of this House. And this tactic was supported by the Bloc Québécois as well.

Where was the commitment to democracy, to which we aspire in this House? Decisions are being dictated by political and partisan interests instead of the values of our constituents. The NDP will—

Budget and Economic Statement Implementation Act, 2007Government Orders

December 12th, 2007 / 8 p.m.


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The Acting Speaker Royal Galipeau

Resuming debate, the hon. member for Rimouski-Neigette—Témiscouata—Les Basques.