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 Specifically, the excise tax exemptions for renewable fuels, including ethanol and bio-diesel, are repealed, effective April 1, 2008.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

[Mario Silva, Liberal, Davenport, ON]

Mr. Speaker, the member speaks of initiatives the government has brought forward, but yet we see our cities crying for infrastructure moneys and a need for more child care spaces without any support from the government.

The member opposite forgets that this is a government for the first time in the history of our country which has no elected members in any of the large major cities in this country: none in Montreal, none in Vancouver, none in Toronto. The reason for that is because Conservatives do not understand the real needs of the major cities and their concerns facing poverty, issues of homelessness, issues affecting seniors, and issues affecting infrastructure.

That is the reason the government has no support within the major cities across this country. If we look at its record, it speaks for itself. It is the record that a majority of our seniors cannot support because of the fact that the Conservative government has a dismal record when it comes to addressing issues of poverty, homelessness, and child care in our cities that is so badly needed.

I would challenge the member to go out and speak to those groups and tell them it has done exactly what he said because most cities, most municipalities, and most mayors would laugh in his face.

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

Mr. Speaker, I did not have the opportunity before to ask a third question. However, perhaps my Liberal colleague could respond.

A great deal has been said about this heartless government that refuses to pay back money owed to seniors cheated out of the guaranteed income supplement. I realize that our views on state assistance to citizens will vary according to our political philosophies. The belief that solidarity is important or that personal initiative and individualism are more important will depend on whether we are on the left or the right side of the political spectrum. I can understand that. However, I believe that one thing should be clear to all members, whether they are on the left or the right, and that is that we must be concerned with justice. When money is owed to seniors—or to anyone for that matter—it should be given to them even though the debt goes back one, two, three, five or ten years. A debt must always be paid.

Does my Liberal colleague agree that, no matter whether we are on the right or the left, it is reasonable that seniors who failed to claim amounts to which they were entitled, over the years, should receive these amounts?

[Mario Silva, Liberal, Davenport, ON]

Mr. Speaker, the seniors of our country, the elderly, need our help. That is very obvious. The poverty rate in our country is too high. Poverty among seniors is scandalous. As parliamentarians, we must help all the seniors in our country.

Lowering the GST will not solve the problem. We must find a solution that will help the seniors in our society.

[Irene Mathyssen, NDP, London—Fanshawe, ON]

Mr. Speaker, I am certainly pleased to have an opportunity to speak to the 2007 economic update.

I must say, though, that it is a woefully inadequate document. It simply does not take Canada in the direction that Parliament and the House of Commons is obligated to take our country. It quite simply sees this government, as with the past government, taking Canada down the wrong path.

It is not a balanced approach and it completely overlooks an unprecedented opportunity to invest in the people and the communities of this nation.

If we think about it, year after year we have seen incredible surpluses, surpluses that could have been invested in a way that is appropriate and helpful.

The point is that we have not had any real investment in this country. We have not had a new social program in the last 30 years. This government and the government before it had all kinds of chances to invest in national housing, child care, students, and in every juncture but both failed and failed quite miserably.

New Democrats are very concerned about the economic statement and we want to make it very clear that we will not be supporting the government's financial statement. We see it has no promise for the people we represent.

What we wanted and did not get was a balanced approach, investment in people and communities, targeted tax relief for those who need it most, and a chance to close that ever increasing prosperity gap.

I would like to speak a little bit about the reality that I see in my constituency and what this budget will not mean for the people of London—Fanshawe.

[Ted Menzies, Conservative, Macleod, AB]

Mr. Speaker, I rise on a point of order.

My apologies to the hon. member who is speaking, but I think it is pertinent that this point be raised with you, Mr. Speaker.

During a question and comment period, the member for Jeanne-Le Ber used an unparliamentary term and I would request that you, Mr. Speaker, review the blues and act in accordance with your decision.

[The Acting Speaker, Royal Galipeau]

I thank the hon. the parliamentary secretary for his point of order. I will review the blues forthwith and come back to the House if necessary.

The hon. member for London--Fanshawe has the floor.

[Irene Mathyssen, NDP, London—Fanshawe, ON]

Mr. Speaker, while I certainly would never support unparliamentary behaviour in this place, it would seem to me that we should be a lot more focused on the needs of the people of our community, their economic needs and the security of those communities, than to be dancing on words.

At any rate, I want to speak about the city I live in, the city of London, and I want to tell members what this budget and previous budgets have meant to those who are most vulnerable.

There is a community of women who have been supported by a remarkable place: My Sister's Place. About four years ago, when a review was done of services for women in the city of London, it was discovered that services for women suffering from mental illness or living in abusive situations were woefully inadequate. So, out of the housing budget, out of the SCPI budget, allocations were made to support My Sister's Place and it received about $150,000 a year.

That might sound like a lot of money, but when we put it into the large picture of things, it is really very little money for what we see in terms of services to the women of my community.

One woman told me, quite frankly, that if it had not been for My Sister's Place she would have died, that she, quite simply, would have perished, that she owed her life to the staff and the sisterhood that she found at My Sister's Place. Because it is not just the staff, although they are absolutely remarkable and do extraordinary work, it is the other women, the 60 or so women who come in every day, who provide that additional love and support that women who are abused, women who are homeless, women who are suffering from addictions and mental illness so desperately need. It is lonely out there.

My great regret is that this government does not understand what it means to be alone, what it means to be afraid, what it means to be homeless, and what it means to do without day after day. I wish that the Conservatives would try to understand.

At any rate, under the SCPI funding, it received $150,000. It was always from one year to the next. It had to reapply every year. It had to fill out extensive forms. Nobody was ever sure whether that money was coming through because the Liberal government had nothing in terms of core funding. It was a band-aid approach that left all of us, I would say, wondering, worrying and trying to figure out how we would manage.

This government came through with a new program. They call it HIPPY on the street. It is supposed to take the place of SCPI.

The interesting thing is that the government cut in half the allocation for My Sister's Place and the other agencies that make up the homelessness coalition in London. In September, it was very clear that this very important service was going to, quite simply, disappear and so the folks at My Sister's Place went into fundraising. At this point in time, they have been able to cobble together a plan and find enough community support to manage.

However, that is not good enough. The charity of the community is not infinite and the time will come when the lack of funding is going to cause significant problems for My Sister's Place and for At^Lohsa, which provides services to aboriginal people living in this city, and programs for street youth. In fact, we have lost a great deal of the programming that we had for street youth.

Quite ironically, we have a government standing on its hind legs, carrying on about how it will address crime with boot camps and all kinds of criminal bills to get tough on kids. I would call it a devastation of the youth in our communities. The government has done nothing to prevent children from being involved in crime. There are no preventative measures, and I have seen that first-hand in my city.

Another thing that this so-called budgetary interim statement fails to address is the infrastructure problem. I stood in the House about three weeks ago and talked about the six metre sinkhole, which appeared in the middle of downtown, and the crumbling infrastructure. I found out subsequently that older cities like Montreal, Toronto, London are in desperate need of infrastructure dollars. In fact, the Federation of Canadian Municipalities has indicated that there is a $123 billion deficit, which is soon to become a $150 billion deficit.

The end result of this lack of investment in our cities has caused a real problem, not just the mess that a sinkhole and crumbling infrastructure creates, but a problem in regard to clean water. About 40% of the clean water produced in cities is leaking from old infrastructure. It costs a great deal to ensure that water is safe and clean. It is a very expensive proposition. We are losing that because we have inadequate infrastructure.

I had a great deal more to say, but I want to conclude by saying the economic update provides $1.50 a day to the average Canadian family, but $14.5 billion to big oil, to big banks, to those who need it least. The end result is the $190 billion is being taken from the federal government funding capacity, our ability to address the need for housing and need for infrastructure.

The Conservative government has done nothing. The Liberal Party sat on its hands. It is not acceptable.

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

Mr. Speaker, I would like to thank my colleague for her speech.

As we know, the Bloc wanted specific measures to help the workers, companies and regions affected by the forestry crisis. But the economic statement in this bill does nothing for the manufacturing sector, nothing in terms of a program to assist older workers, and even less than nothing for seniors who receive the guaranteed income supplement.

By the way, as my colleague said earlier, the guaranteed income supplement is money that the government owes to seniors.

The Bloc Québécois believes that whether a person is on the left or the right, regardless of his political beliefs, the least he can do is keep his word. But the Conservatives did not do that. When they campaigned in Quebec, they said they would solve the problem with the guaranteed income supplement for seniors, but they did not solve it, nor did they announce a new POWA. The independent employment insurance fund now stands at $55 billion. But this week, they voted against a bill that would do something about it.

How can a government that is forecasting an $18 billion surplus over the next four years do nothing for the poor and less fortunate in this country?

[Irene Mathyssen, NDP, London—Fanshawe, ON]

Mr. Speaker, I guess it is a matter of priority.

I will follow up with a couple of observations. He talked about seniors. The status of women committee looked at the economic security of women primarily, but we also touched on senior women and seniors in general. We discovered that far too many of our seniors were living in poverty.

Again, I come back to that $14.5 billion. All that money is being given to big oil companies and big banks, but nothing for the people who desperately need it. There is no money for seniors or for women who are living below the poverty line because they cannot access programs. Programs, such as the employment insurance fund, have been plundered not just by the Conservative government but by previous governments.

The government has no real consideration or concern about how to build a community, or what must be done to have strong communities. Investment in communities is essential. Yet $190 billion has been taken out of the federal government's ability to invest, to fund communities, to create the kind of nation that real leadership would determine. The government should be concerned.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, why does the member say the previous Liberal government did nothing? Does she believe that taking a country that had a $42 billion annual deficit in the fiscal year ended March 31, 1994, and turning that into eight or nine consecutive surplus budgets, paying down debt by $135 billion, reducing income taxes and giving Canada the lowest unemployment rate in 30 years is doing nothing?

If those are the facts, which I know they are, why would the member insult everyone's intelligence and suggest that somehow the previous government did nothing, as she said in her speech?

[Irene Mathyssen, NDP, London—Fanshawe, ON]

Mr. Speaker, that is interesting. I have a little story in regard to those surpluses and that reduction of the deficit.

In 1997, at a luncheon, Jean Chrétien congratulated himself for reducing the deficit and bringing about prosperity. What he did not tell everyone was that he had raided the EI fund and people entitled to employment insurance were receiving none.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, it is a Friday and it is just a few minutes before we move into the last part of the day with private members' business. I would have liked a full time slot to talk about repackaging, and it has nothing to do with industry or business. It has to do with that government over there, which has not come up with anything new that was not already in the works when it became government. Then it reintroduced it.

On the transportation bill, I remember the parliamentary secretary stood and said that the government had held extensive consultation on it and had come with the bill. In fact, there were extensive consultations and they went on for two years, but the Conservatives took credit for it. They took credit for the bill. It was a good bill, and we will support it.

Then there is some more repackaging. The Conservatives came up with 10 or 12 justice bills. They all went through the process and to the justice committee. Then all of a sudden, the justice committee could only deal with one bill at a time. It had been loaded up. It had no chance whatsoever to deal with all the bills because they had to be done in a reasonable order.

Then the Prime Minister got up at a function and said that the other parties had wasted 1,000 days in getting through the government's important legislation on crime. The government has not even been in power a thousand days. That is a long time.

Here is how the Prime Minister thinks. The bill waited for another bill that was before the committee. It waited 200 days. The next bill waited 250. The next bill waited 200 to 300 days. He added them all up and came up with a thousand. This is the new math of the Conservative government. I have a feeling Canadians have to beware of what they have been shown. It is the tip of the iceberg. This is a government that cannot be trusted.

As the transport minister just indicated, the government is very scary. That is the point.

What did the Conservatives do on a scary night like Halloween? They had the biggest broken promise in the history of Canadian government. They had promised during the election—

[Lawrence Cannon, Conservative, Pontiac, QC]

You guys had the biggest scandal in the history of Canadian governments.

[Paul Szabo, Liberal, Mississauga South, ON]

The Minister of Transport, Infrastructure and Communities wants to yell me down. Canadians should know that when a member is trying to speak and a minister is trying to yell him down, he must be on the right track. I know I am on the right track. The minister is now very animated. I am glad he is entertained.

The fact is the Conservatives promised, during the election campaign, to never tax income trusts. Then they turned around and levied a 31.5% tax on income trusts. This affected about 2.5 million Canadians, many of whom are seniors, and their retirement nest eggs were attacked. That is shameful of the government. Even the Prime Minister, when he circulated a piece of literature during the last election, said that by far the greatest fraud was a promise not kept.

Halloween was a scary night for seniors who did not know whether they would be able to survive on what was left of their hard-earned retirement savings. It was a scary night for those people who did not have anything but those income trusts and all of a sudden their equity was gone. It was a scary time for people who did not know they could not trust the government. They made decisions based on that trust.

The government interfered with the marketplace. It hurt Canadians, mostly seniors. It touched at the very core of integrity and credibility of government. Those are the things of which Canadians should be scared.

That government has a terrible record, whether it is on basic things like saying it actually reduced taxes when in fact it increased personal income taxes or other things. The Conservatives think that just because it was a budget implementation item or a mini budget that it is not law until that implementation bill actually passes.

I can tell them that if they want to apply those kinds of rules, we are presently talking about the 2007 budget implementation bill, and none of it is law in Canada until it passes. They should not take credit for something that is not law.

[The Acting Speaker, Royal Galipeau]

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

When we next return to the study of Bill C-28, there will be four and a half minutes left for the hon. member for Mississauga South.