Bill C-28 (Historical)

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

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 Specifically, the excise tax exemptions for renewable fuels, including ethanol and bio-diesel, are repealed, effective April 1, 2008.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.

Budget and Economic Statement Implementation Act, 2007

[Peter Stoffer, NDP, Sackville—Eastern Shore, NS]

Mr. Speaker, I want to start by first saying that I have tremendous respect for the hon. member who just spoke, but she talked about the values that Canadians wish to have, such as investments in health, education, infrastructure and so on, yet her own government announced, and she said so in her speech, $100 billion worth of tax cuts in 2000.

We said the same things in 2000 that she says now. We said that many people were left behind, including autistic children and veterans, as well as the shipbuilding industries and everything else.

Yes, it is indeed important to ensure that taxes are done fairly and equitably right across the board. If reductions need to take place, they need to be done with a proper and thorough debate in the House of Commons.

I would like to give the member an opportunity to elaborate a bit more on this style of government we are seeing, with a government that turns around and gives a massive tax break to very profitable corporations, usually in the financial and the oil and gas sectors, corporations that are already making record profits under the current tax system.

Yet the government turns around, and except for a penny or two off a cup of coffee or whatever, average Canadians will not realize any major tax reduction at all in their taxes. Yet the very wealthy who run some of these corporations will realize the lion's share of these cuts.

Does the hon. member not think it appropriate that we should be investing in those people who are going to be left behind by the government, including farmers, fishermen, Inuit, first nations people, children with autism--I go back to that again and again--and families who are suffering? What about homelessness? What about infrastructure and so on? There are so many things the government can and should be investing in, but it simply has re-gifted many things that we in the NDP pushed for in Bill C-48 of the previous Parliament.

Why does the member think that the Conservative government and its Conservative members, who individually are really decent people, collectively seem to have lost their minds? They have gone blank. I would like to give the member a chance to elaborate a bit more and enunciate to us why the Conservatives would be so cold-hearted on many of the things I have just mentioned.

[Karen Redman, Liberal, Kitchener Centre, ON]

Mr. Speaker, lest this sound like a mutual admiration society, I would have to say that I have eminent respect for the colleague who just posed the question. I know that, in the main, members in all parties of the House come here to make this a better country for their constituents, their provinces and Canadians across Canada.

In direct response, I would look at the accelerated writedown of capital costs and ask why the government would choose to continue to have a richer writedown of capital costs for people in the oil sands, who have record profits right now, and ignore the plight of manufacturers.

I think there are many things the government has done that really underscore a philosophical bent. There is an expression, and I do not know if people viewing this on TV will understand, known as “retail politics”. It is what will sell at the ballot box. It is the politics of division in choosing winners and creating losers.

The government had a $14 billion legacy of surplus left over from the hard work not just of the previous Liberal governments but all Canadians, because we recognize that everyone collectively tightened their belts to get rid of the $42 billion deficit that we as a government inherited.

The government has cancelled the court challenges program. Philosophically, they have taken word “equality” out of the mandate of the Status of Women department. There seems to be an absolute philosophical bent to decide who votes for them and how to reward them.

Communities and cities right across the nation need the kind of partnership that we can create at the federal government. I look at Waterloo region and Kitchener Centre. I look at the homeless issue. I look at the supporting community initiatives of over $320,000 that went into my riding and at what the local levels of government and non-profits did to make sure that nobody was left behind in my community.

That is the kind of leadership and partnership Canadians deserve and should expect from the federal government. It is not the kind of leadership they are getting from this minority Conservative government.

[Raymond Gravel, Bloc, Repentigny, QC]

Mr. Speaker, I am pleased today to speak to 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

First of all, I would like to reiterate my colleagues' comments that this bill does not address the Bloc's five priorities, which we all know are as follows: complete elimination of the federal spending power, tax measures for regions affected by the forestry crisis, maintaining in full the supply management system for agriculture, withdrawal of Canadian troops from Afghanistan in 2009, and full respect for the Kyoto protocol and Quebec's interests.

In this bill, the rich continue to have the biggest piece of the pie. Oil companies benefit the most from corporate tax reductions. Because Quebec manufacturing companies make no profits, this bill does nothing for them.

The bill does not include any measures to help the manufacturing and forestry sectors, which are in crisis. Yesterday, in response to a question, my colleague from Trois-Rivières said that it would take shock treatment. The Conservatives are not here to provide that sort of treatment.

This bill also has nothing for seniors. Since this is an issue I feel strongly about, I am going to talk about it.

The bill does not provide for indexing the guaranteed income supplement or for fully retroactive benefits for seniors who were cheated for years. It does not include an assistance program for older workers who have lost their jobs and cannot find work. This bill enhances a side deal benefiting Nova Scotia and Newfoundland and Labrador, which cuts the heart out of the equalization program, and Quebec is paying the price.

That is why we are opposed to this bill. Whether we are talking about tax credits or the decrease in the GST, the people who are benefiting from these measures are still the richest members of our society, while the others are continuing to sink deeper and deeper into poverty. Yet these are the people who need help.

I have been sitting in this House as a Bloc Québécois member for a year now. When I look at how the government operates, I sometimes get the feeling that we are the only ones who are defending the poor.

With regard to the 1% cut in the GST, which will cost the federal government $6 billion and the Government of Quebec $100 million, we wonder who really benefits. I talked to other people about this, and the example I was given is totally absurd. I was told that someone who buys a $300,000 house will benefit from the 1% decrease in the GST. I wonder who can afford a $300,000 house. Are most people in Canada and Quebec buying $300,000 houses? I doubt it very much. Surely not. Who benefits from the decrease in the GST?

I would like to talk further about seniors who are living in dreadful conditions and whose income puts them, in large part, below the poverty line.

I toured Quebec in the spring and I saw to what extent certain seniors live in extreme poverty. In 2004, a study established the low income cutoff at $14,794. That was in 2004 for a single person. In 2007, even with the $18 increase from the Conservatives, the maximum income under the guaranteed income supplement was $13,514. That means that a poor senior who receives the maximum guaranteed income supplement is living below the poverty line. That person is $1,280 a year, or $106 a month, shy of reaching the low income cutoff.

There is something scandalous about that. Once we know about it, then we have a moral and human obligation to do something. The government is up to its neck in surpluses: $11.6 billion this year and $14.5 billion next year. The government should be doing something for the least fortunate in our society, but it is not.

What is more, we know that in Quebec, and even in Canada, a good number of seniors are not receiving the guaranteed income supplement even though they are entitled to it, quite simply because they are not receiving the necessary information. Seniors are not aware of this program and the government is not doing anything to reach them. In Quebec alone, an estimated 40,000 seniors are poor—and therefore eligible for the guaranteed income supplement—but are not receiving the supplement for lack of information.

A few years ago, an MP from the Bloc Québécois, Mr. Gagnon, did an extraordinary job of finding these seniors. He reached thousands of them, but unfortunately many more remain.

A few weeks ago, we all saw the story on Radio-Canada television of the woman in Toronto, Mrs. Bolduc, 78, who was living on $7,000 a year. She was entitled to the guaranteed income supplement, but did not know it. A social worker took up her case. Once again, we would have liked Mrs. Bolduc to receive five years of retroactivity after being cheated by the government for years. However, she was granted just 11 months of retroactivity even though five years of retroactivity would have amounted to just $12,000. The reporter asked her what she would do with $12,000. She said she would buy winter clothes, because winter was coming.

I called Mrs. Bolduc the day before yesterday, and I spoke to her for an hour. She was just leaving the hospital after breaking her arm last Friday when she fell in a Toronto subway station. I asked her if I could talk about her today, and she gave me her blessing. As I priest, that was all the encouragement I needed. I am usually the one giving people blessings, but in this case she gave me her blessing.

Mrs. Bolduc said something to me that I would like to share with the House. She said that in a country as rich as ours, it is shameful to deprive seniors of a decent income. I think this bears repeating so that the Conservatives will really hear it. The worst of it is that the government knows about the situation but is not doing anything to fix it. The government would rather spend its surplus on the debt than enable our to seniors live with dignity. I find that scandalous and immoral.

It is indecent to be treating our seniors like this. They are the people who built this country. They are not asking for handouts. They are just asking for their due. We know that seniors are getting poorer and poorer. We know that there is not enough housing and that much of it is inadequate. We know that suicide rates among seniors are climbing. It is scandalous that nothing is being done to help them.

Members of the Bloc Québécois cannot support this bill because it perpetuates gross injustices upon older workers, the manufacturing sector and seniors. It is important to speak out against it.

I have two minutes left, so I would like to share some lines that Georges Lalande, the president of the Quebec seniors council, included in a document that was sent to Quebec seniors. He quoted Victor Hugo to illustrate how important seniors are in a society like ours. Here is what Hugo wrote:

All things found upon this earth
Rich tradition gave them birth
All things blessed by heav'n on high
All thoughts human or divine
These things, if rooted in the past
Bear leaves that will forever last.

I think this means that seniors are important because they represent where we came from and help us to see where we are going.

[Thierry St-Cyr, Bloc, Jeanne-Le Ber, QC]

Mr. Speaker, I congratulate my colleague from Repentigny for his moving remarks about a senior who was short changed with the guaranteed income supplement. He spoke a little about how it was shameful that the government is going to pay down the national debt—which is not a bad thing—when it should start by paying back the money owed to seniors.

The Bloc Québécois is not asking for new subsidies to be created here. They have a right to that money; they simply did not claim it in the past, because the government did not provide enough information.

If, as a country, we are going to pay our debts, we should start by paying back the debt we owe to seniors. It is even more shocking that they cannot get full retroactivity. I think that if the situation were reversed, if the seniors had failed to pay their taxes for five or ten years, they would not be able to tell the tax man that it has been more than 11 months, and too bad for him, but they are not going to pay their taxes.

Does my colleague not find this double standard absolutely disgraceful? If a senior owes the government money, it will go back 5, 10, 15 years, but when the government owes money to seniors, for some inexplicable and unknown reason, they get only 11 months retroactivity.

Also, does my colleague not find it shameful that during its election campaign, the government promised to fix this problem and it still has not? It is breaking—

[The Acting Speaker, Conservative, Royal Galipeau]

The hon. member for Repentigny.

[Raymond Gravel, Bloc, Repentigny, QC]

Mr. Speaker, I thank my hon. colleague for his questions. Indeed, this is scandalous. An older person once said to me that the government has a long arm when the time comes to take money from our pockets, but its arm is not nearly as long when it is time to dig into its own pockets. That is one way of describing the injustice that exists. And it is true.

Considering the surplus accumulated by the government this year, the retroactivity question could easily be resolved. It would cost $3.1 billion for all of Canada, and there is a surplus of $11 billion. Thus, this problem could be resolved, especially given the growing numbers of seniors in this country. We have heard that by 2015, 28% of the population will have reached age 60.

It seems to me that we must find a place for them, especially since these people often live in insecurity; they are often disadvantaged, afraid and need help. There are growing numbers of poor seniors. This is important.

The second question had to do with the Conservatives' broken promise. During the election campaign, the Conservatives promised to resolve this problem, but it remains unresolved. An increase of $18 a month was given, when we know that $110 is what is needed just to reach the low income cutoff, the poverty line. This is also scandalous and is, in many ways, immoral.

[The Acting Speaker, Conservative, Royal Galipeau]

I invite the hon. member for Jeanne-Le Ber to take his seat for a moment, because I would like to allow the hon. member for Berthier—Maskinongé to speak.

[Guy André, Bloc, Berthier—Maskinongé, QC]

Mr. Speaker, I would like to thank my colleague for his speech. As we all know, our colleague from Repentigny has a long history of spiritual and social involvement, and I am sure that he finds the government's contempt for seniors and workers scandalous. This week, they voted against the $55 billion employment insurance fund, thereby depriving seniors and workers of income.

What does the member for Repentigny think of this right-wing government—

[Thierry St-Cyr, Bloc, Jeanne-Le Ber, QC]

Heartless, a heartless government!

[Guy André, Bloc, Berthier—Maskinongé, QC]

—that wants to get rid of all social programs and policies for the most needy in our society?

[The Acting Speaker, Conservative, Royal Galipeau]

The member for Repentigny has 20 seconds to reply.

[Raymond Gravel, Bloc, Repentigny, QC]

Mr. Speaker, I will be brief. I would like to respond to part of the question. Yes, it is scandalous. Take housing, for instance. As I travelled around Quebec, I went to Rimouski, where seniors in wheelchairs were living on the fourth floor of a building with no elevator.

We know that the Canada Mortgage and Housing Corporation records a surplus every year, so we are asking the government to increase transfers to Quebec based on the population and—

[The Acting Speaker, Conservative, Royal Galipeau]

We must continue with the debate. The hon. member for Davenport.

[Mario Silva, Liberal, Davenport, ON]

Mr. Speaker, I welcome the opportunity to speak to the government's budget and economic statement implementation act.

Although budgets often seem to be about numbers, balance sheets and allocations, the reality is they are truly about people. They are not just dollars and cents.

The decisions that are made here directly affect the lives of millions of Canadians, and this is an important and enduring responsibility. I have always believed that, in this context, budgets must be fair, balanced and responsible, not just responsible in fiscal terms but in how they treat Canadians.

I am always pleased and honoured to have the opportunity to visit with constituents and agencies within my riding of Davenport. Their insights are invaluable to me and they are truly caring and dedicated people.

During the recent break in the parliamentary calendar, I met with many of these wonderful people, who live and provide invaluable service in my riding. I visited with agencies like FoodShare, the Working Women Community Centre, St. Christopher House and Stop Community Food Centre. I also had the opportunity to meet with residents of Terra Nova Apartments, New Horizons, Rankin Apartments and St. Anne's Place.

At each location, I was deeply moved by the concerns expressed by these caring and concerned people. The concerns touched on things we should all see as priorities. They spoke about poverty in our country, the crisis facing our cities and fair taxation policies, to name but a few of the things about which they talked.

I share the concerns of my constituents on the issue of poverty and, in particular, the realities that many of our children and most vulnerable citizens must face each and every day. Only a few days ago a report was issued that indicated one in every eight Canadian children lives in poverty. This is an outrage in a country as blessed and prosperous as Canada. It is amazing when a statistic like this is released and all the government can do is speak of growth statistics and optimistic fiscal forecasts, which fail to take into account the human face of poverty.

In my city of Toronto 93,000 households live in poverty. During my meeting at the Rankin Apartments in my riding, the people spoke of the realities of poverty. In the context of the government's fiscal plan, not one economist of note, anywhere in the country, agrees that the 1% cut in the GST is a sound fiscal policy. In fact, most agree that the reduction of GST will have such minimal effect for the average family. The supposed gains would be virtually negligible.

As the Leader of the Opposition has suggested repeatedly, the funds from 1% of the GST would have been much better spent to address issues facing Canada's most vulnerable people. Can anyone imagine the investment that could be made in the fight against poverty with the billions of dollars the government is relinquishing on the GST cuts? People in my riding can. Why can the government not?

During my visits to programs like FoodShare and Stop Community Food Centre, the realities of hunger are rarely more apparent. What kind of government adopts policies for political shows while many of its most vulnerable citizens go hungry?

I am proud that the leader of my party has announced a real plan of action on this issue of poverty in Canada. The 30:50 plan would create a “making work pay benefit”, improve the child tax benefit, lift seniors out of poverty, assist first nations people and, as per its name, cut the number of people living below the poverty line by 30% within five years and reduce the number of children living below the poverty line by 50% in five years. This is a real plan of action, not just platitudes and political posturing.

The residents of St. Anne's Place, Terra Nova Apartments and New Horizons live in the heart of Toronto. They witness each day the need for investment in our cities, particularly in the areas of infrastructure and public transit.

Cities across the country require a minimum of $123 billion in infrastructure funding. Like the famous line from the movie once asked: “Where is the money?” Unfortunately, from this government there is very little to be found even in a time of unprecedented prosperity that it inherited as a result of the hard work of the previous Liberal government.

My colleague, the member for Don Valley West, who served as infrastructure minister in the previous Liberal government, welcomed cities to the table and had begun a process of supporting them with real and meaningful funding. We do not see this from the current government.

Yesterday we heard of the government's action with regard to HIV-AIDS funding and its decision to honour commitments made by the Bill & Melinda Gates Foundation by taking money away from other programs instead of putting forward new money as agreed. This is simply wrong.

In 2005 the former Liberal government put forward a real fiscal plan of action to help seniors, assist students, address poverty, support child care, and improve the lives of millions of Canadians. That is what a budget should really be about. The reality is that the government is like the salesperson who sells a shiny new car with gleaning paint, clean windows, nice upholstery, but the car has no engine. It is all smoke and mirrors.

For Canada's most vulnerable, for those most in need including our seniors, students, the working poor, and the cities in which they live, there is nothing in this budget document that provides any hope for a better future.

I am proud to belong to a party which has a more just, more equitable, and more humane view of Canada. We on this side of the House are heirs to the legacy of Trudeau and Pearson, the party of national health care and the Canada pension plan, and we will always speak up for those who are most vulnerable as I am proud to do today.

[David Sweet, Conservative, Ancaster—Dundas—Flamborough—Westdale, ON]

Mr. Speaker, I too want to correct the record. It was actually a Conservative prime minister who brought in the Canada pension plan. As well, it was Prime Minister Diefenbaker who lowered the age to 65.

However, the member was talking about fairness and justice. When the people of Canada elected us, we had a situation where there was an unbalanced marriage penalty in the taxation laws, there was an accelerated capital cost allowance for the oil fields, the majority of families had no benefit at all for child care, the corporate tax rate was such a burden on Canadian companies it was hard for them to compete, and the Liberals had promised to scrap the GST but never did.

We corrected the marriage penalty and now a spouse who stays at home has the same exemption. We cut the GST to 5%. The personal exemption rate went down by $1,000. The age exemption for seniors also was raised another $1,000 so they pay less tax. We have also introduced income pension splitting for seniors. Which one of those initiatives would the member like us to remove for the people of Canada? These are all initiatives for people who are in vulnerable situations and who need help.