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 Specifically, the excise tax exemptions for renewable fuels, including ethanol and bio-diesel, are repealed, effective April 1, 2008.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

[Larry Bagnell, Liberal, Yukon, YT]

Mr. Speaker, in spite of the significant input from northerners about increasing the northern residents tax deduction, the member is absolutely correct. There has been no response at all from the government. Many people in his riding and in my riding have signed petitions asking the government to increase the northern residents tax deduction. I have some petitions in my office. Our municipal councils would like it increased and they have sent resolutions to the government. However, the government has been absolutely silent on this issue.

While we are putting this on the record, I would like to change the way the government calculates the northern allowance for the trip out. All sorts of people in my riding are being audited on this, sometimes time and time again. It is far too complicated. The government does not always ask for receipts but when people are asked for them later they do not always have them. This could be simplified just by increasing the amount of the deduction for northerners. This would save the government a lot of administrative work and help northerners keep up with inflation. As the member said, this deduction has not been increased for years.

[Dean Del Mastro, Conservative, Peterborough, ON]

Mr. Speaker, I would humbly suggest that the hon. member has still not read budget 2007, and that was some months ago.

The member talked about post-secondary education. I would like to note that the member voted against budget 2007, a budget that made very significant investments into post-secondary education, a 40% increase. It is unparalleled by any government to ever make such a one time, significant investment. However, we did more than that. We also announced that we would index it with inflation.

The member talked about promises that were made in the platform of the former government. We know that when the former government was in power, it slashed post-secondary supports in this country. The Liberals cut the heart right out of them and the students bore the brunt of that. This government has made investments.

I would love to know why that member voted against budget 2007.

[Larry Bagnell, Liberal, Yukon, YT]

Mr. Speaker, I hope the member gets up again. I am making the point that nothing was given to individual students. The budget mentions $100 but that is not enough to buy even one book. We had offered $3,000 for tuition in the first and last year and, for poor students, $3,000 in every year.

Over and above that, the millennium scholarship was Canada's contribution in the millennium year. Other countries built concrete edifices and statutes and things like that, but we invested in our people by providing millennium scholarships for those students who could not afford tuition.

My point is that the Conservative government has given nothing to help individual students who really need the money.

[Roger Valley, Liberal, Kenora, ON]

Mr. Speaker, my colleague mentioned the fact that the Conservatives have very few ideas about the north. They talk good about Arctic sovereignty but they have no idea of the costs involved.

I represent several hundred kilometres of the Hudson Bay coast. My question is about the cost of doing business. If the Conservatives are going to make these promises and say that they will do things for northerners, they need to understand the actual cost of doing business. Perhaps my colleague could comment on how expensive it is to even build a house in the north.

[Larry Bagnell, Liberal, Yukon, YT]

Mr. Speaker, for the people of Nunavut there are huge shipping costs to get everything they need and huge costs for the fly-in communities in Yukon and the Northwest Territories. Just to get things up there costs an absolute fortune, sometimes four or five times the--

[The Acting Speaker, Conservative, Royal Galipeau]

Resuming debate, the hon. member for Winnipeg North.

[Judy Wasylycia-Leis, NDP, Winnipeg North, MB]

Mr. Speaker, I am pleased to join with my colleagues in presenting our very serious concerns about the government's budgetary plans.

We are dealing with announcements made recently in the economic update as well as budgetary measures announced previous to that. Together, these budgetary measures create an absolute missed opportunity for this country.

There is absolutely no question that when we look at this package of budgetary measures and tax provisions, the Conservative government has chosen to abandon Canadians and ignore their major concerns. This is a path that was started by the Liberals and there has been no serious change in direction. It is a disastrous path for this country.

One of the most interesting questions for us today is whether anyone can tell the difference between a Conservative budget and a Liberal budget. If we did not have a name on this package today, how would we know it was a Conservative budget and not a Liberal budget?

[Garry Breitkreuz, Conservative, Yorkton—Melville, SK]

Tax reductions.

[Judy Wasylycia-Leis, NDP, Winnipeg North, MB]

The exact same path and pattern has been taken.

My friend here from the Conservative Party suggests it is tax reductions. I do not think so. For the past 10 years, whether we are dealing with Liberal governments or a Conservative government, we have had nothing but corporate tax cuts and debt reduction. That is it, the sum total for our country.

[Garry Breitkreuz, Conservative, Yorkton—Melville, SK]

Personal taxes.

[Judy Wasylycia-Leis, NDP, Winnipeg North, MB]

My friend here suggests there have been personal tax reductions. If we look at the total amount of taxes reduced for ordinary families, I think we end up with a small amount of money that will hardly pay for the services that are needed but have been cut back by the governments of the day.

How will a few hundred dollars in tax savings help families pay for rising tuition so that their children can receive an education tuition? How will the few hundred dollars that the Conservative government is so generously providing middle income Canadians help create child care spaces and build centres that are desperately needed by working families?

We are talking about an absolute dereliction of duty on the part of the Conservative government, exactly the direction in which the Liberals took this country. Just look at the statistics between 1997 and the present. How much money in unanticipated surpluses did we have? How much money went automatically against the debt because Conservatives and Liberals chose to hide the figures and refuse to be accountable to this place?

That is $89.9 billion. If we say that number to all of those organizations fighting for better housing or child care or health care, people seeking justice from their own government so that they can live decent and normal lives, if we tell them how it was that Liberal and Conservative governments over 10 years put $89.9 billion against the debt but only pennies toward dealing with the human deficit, the infrastructure deficit, and the reduction of the prosperity gap in this country, they cannot understand it.

Every day I talk to groups and organizations who ask: How can this government, that is awash in so much money, cut back on organizations, how can it cut back on the Canadian Health Network, how can it eliminate this research body which was providing some useful information to Canadians?

How did it choose, in the face of this kind of surplus, to decide to cut back on organizations working to prevent HIV and AIDS? How is it possible for a government today, just like the previous government, to cut back in those community efforts to prevent the spread of HIV and AIDS?

How is it possible for the government to betray Canadians and take money from one pot, which is helping deal with a serious problem at the community level, and put it into another pot, the Gates Foundation, to help find a cure for HIV and AIDS when that was contrary to the agreement to begin with?

How is it possible to cut Ontario organizations involved in HIV and AIDS by 30% when this government just put $14 billion against the debt and chose not to actually put a balanced approach before Canadians. Yes, the debt is important and we will put some of that money against the debt, but, goodness gracious, there are programs here that are worth saving and fighting for because they are important to the health and well-being of Canadians.

How is it possible that these Conservatives chose to do exactly what the Liberals did for 10 years and take all of the fiscal capacity and put it against the debt or give it to corporations in the form of tax cuts?

How is that possible that they did not learn their lessons from the Liberals and act in the best interests of Canadians?

Not only that--

[An hon. member]

It's a great model.

[Judy Wasylycia-Leis, NDP, Winnipeg North, MB]

I hear a Liberal over there say that it is a great model.

Here is how good the Liberals were, in terms of being a model for this Parliament, and why we cannot tell the difference between Liberals and Conservatives.

Let us go back to the budget of 2007, when the Conservatives promised, like the Liberals, to reduce corporate taxes. Then they promised to get the corporate tax rate down to 18.5% by 2011. We thought that was offensive. No breaks for Canadians but more breaks for corporations.

But, lo and behold, along came the Liberals and the leader of the Liberals said this was not good enough. He wanted corporate tax cuts. He called the government to task for not being responsible and vigilant enough in terms of corporate taxes.

There is a saying, “Be careful what you ask for”. The Conservatives jumped on this signal from the Liberals and said, “Aha, we've got all the support we need to go another step further”, or to do as the finance minister said and bring in corporate tax cuts that are the deepest and the fastest ever contemplated in the history of this country.

What did the Conservatives do? With the Liberals' encouragement, they lowered their target even further. Instead of it being 18.5% by 2011, they are going for 15%. So, an even bigger tax cut.

More and more Canadians are looking for decent housing, or child care to meet their needs when families struggle today to work and provide for their families, or health care. Look at the issue this past week of a death at a Brampton hospital in Ontario. One just has to read through this situation involving Mr. Sidhu to wonder what this government is doing that it cannot even find money to deal with its election promise to reduce waiting lists.

So a man with a burst appendix goes to emergency. He cannot be seen or get treated. He dies because of a burst appendix in a hospital that has been constructed under this infamous Liberal and Conservative pet project, the P3s, the public-private partnership that is costing us all a lot more and producing dubious results and that, in fact, has led to the death of an individual who should not have died.

Shame on this government. Shame on the Liberals who promoted the idea of P3s and cut back on health care.

It is time to put the priorities of Canadians first and that means a balanced approach. It means not putting all our money toward debt reduction and corporate tax cuts. It means putting money into quality, universally accessible health care. It means putting money into environmental protections to save this planet. It means putting money into housing, so we are not the only industrial country in the world that does not have a national housing policy. It means helping organizations to help themselves because without that kind of support the future of this country is bleak.

[Dean Del Mastro, Conservative, Peterborough, ON]

Mr. Speaker, I have a lot of respect for the passion of the member. I have served on committee with her. I think that she is well meaning. I do not happen to agree with her on this issue though.

I think there is a tremendous contrast between the Conservative government and the previous Liberal government. I think that we have worked very hard in ensuring that when we are targeting tax reductions and savings that we are doing so for the benefit of everyday Canadians.

We are trying to ensure that people have the good jobs that they need. We are trying to ensure that families do not bear an excessive burden in taxes. Last year we made a difficult decision to close the income trust loophole, something that needed to be done. The member supported it and she was attacked vehemently by the Liberal Party and its allies in the income trust lobby.

I would like to know this. Does the member understand why the Liberals still stand in the House against logic, truth and continue to give contrary versions of reality when it comes to trusts?

[Judy Wasylycia-Leis, NDP, Winnipeg North, MB]

Mr. Speaker, the answer to that question is simple. It is impossible to have any other conclusion from a party that is so intertwined and interconnected with the corporate sector and so ready to jump when some individuals feel that losses in the corporate sector have to be compensated for. However, the real issue is the failure on the part of the Conservatives to actually take this a step further and understand that this is not just about dealing with lost tax revenue because of this loophole around income trusts.

We are talking about $190 billion in lost fiscal capacity because the Conservatives are following the Liberal path of putting all their eggs in one basket.

How do they explain the fact that they can put $14 billion against the debt and not have anything to say to the family of Harnek Singh Sidhu, a 52 year old Brampton transit driver who had a burst appendix and could not get service at an emergency waiting room?

How do they explain the closure of Peel Memorial Hospital and the added waiting lists created at the Brampton Civic Hospital?

Why has there not been a word of concern from the government, not a mention in the budget nor in the economic update about money necessary to deal with health care, to alleviate long waiting lists or to ensure that people have timely access to the service they need. That is the real question of the day.