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 Specifically, the excise tax exemptions for renewable fuels, including ethanol and bio-diesel, are repealed, effective April 1, 2008.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

[Alexa McDonough, NDP, Halifax, NS]

Mr. Speaker, I do not want to be disrespectful and I do not want to accuse the member of being sexist in his insistence that we are talking about waitresses. I would think in this day and age we would be talking about servers, but since he clearly means women, let me talk about women who are working at very inadequate wages.

They are desperate for universal child care programs because they understand that the child care program is not only essential to ensure the safety, health and security of their child but it is early childhood development. It is early learning that is critical to the development and well-being of the child.

Let me talk about women earning very inadequate wages. It means that they are hurting because the government has not done anything about affordable housing, especially special needs housing, in some cases for single parents, and in some cases for older women who find themselves widowed or divorced and with inadequate incomes.

We know there are older women working as waitresses these days because they, in many cases, have the need for prescription drugs, either for their own illnesses or because they are supporting, with no help from the government thank you very much in terms of a universal home care program, and trying to provide desperately expensive prescription drugs for a family member or spouse who is ill.

I think if the member could just raise his sights a little bit to see the bigger picture, he would understand that most hard-working family members or single women, whom he has in his sights here, would rather have seen the investment in these kinds of programs. That would lift those in deepest poverty up out of poverty and give a break to hard-working families and individuals who are suffering because of the increasing gap between the haves and have-nots in our society.

[Dean Del Mastro, Conservative, Peterborough, ON]

Mr. Speaker, I would just like to point out to the member that probably the best way to raise people out of poverty is through good paying jobs and one of the things that the member is not aware of is that corporations largely pass high taxes on to consumers. They pass them back onto people and they also pass them on in the way of lower wages.

We have heard this in the finance committee time and again. The more we tax corporations there is less investment, less money is paid to their employees, and higher prices have to be paid for their products.

I do not understand why the NDP does not get it. We are trying to benefit all Canadians and provide more opportunity. They are standing in the way.

[Alexa McDonough, NDP, Halifax, NS]

Mr. Speaker, I think that was an assertion, not a question. Sometimes it is hard for us in this corner of the House to know whether it is a Conservative or a Liberal member speaking because we cannot tell a bit of difference between them when they sing the praises of making even faster and deeper tax cuts for the wealthiest corporation.

Let us be clear.

[An hon. member]

It's a race.

[Alexa McDonough, NDP, Halifax, NS]

Yes, it is a race to see who can give away the bigger tax cuts. The statistics are truly--

[The Acting Speaker, Conservative, Royal Galipeau]

Resuming debate, the hon. member for Malpeque.

[Wayne Easter, Liberal, Malpeque, PE]

Mr. Speaker, I am pleased to speak to the budget and economic statement implementation act. I will use this time to spell out how serious the hog and beef crisis is in this country and the absolute neglect that the new Government of Canada is showing toward that industry in its time of trouble. I will keep my statements mainly on the new government's lack of commitment to Canadian farmers.

Nothing is so glaring in this economic statement as the new government's failure to respond to the crisis that primary producers are facing. I could go into a lot of areas, including the fact that the Prime Minister committed 18 months ago to a cost of production. Nothing has happened. There has been no cost of production for Canadian farmers.

I could point out the fact that the new government promised to scrap CAIS but all it did was change the name and pass a few little amendments that are already in place. Even with those few little amendments, the safety net program does not meet the needs of producers in the livestock industry.

The simple fact is that this country's beef and hog producers are facing the worst crisis in a century, bar none. There is no question that BSE was a crisis in the beef industry but it does not have a patch in terms of the crisis in economic pricing that the beef and hog industry is facing at the moment.

The new government, with its huge surpluses, is failing to address that need. I do not know whether it is caught in the Ottawa bubble, where nothing exists outside of Ottawa, and it does not understand the concerns, but it is certainly not acting when it should be acting in farmers' interests.

Traditionally in this country when commodity crises have hit in the past, previous governments have acted with haste and resolve to do their part to support a commodity in crisis. It does not matter whether it was Brian Mulroney with his $1 billion and $1.2 billion Canadian grain payments or the previous government under Jean Chrétien and Paul Martin in terms of BSE and other--

[The Acting Speaker, Conservative, Royal Galipeau]

The hon. member for Malpeque is one of the most experienced members of the House and I am sure he meant to the refer to the hon. member for LaSalle—Émard.

[Wayne Easter, Liberal, Malpeque, PE]

Mr. Speaker, my apologies. The fact is that other governments have acted but the new government is failing to do so.

The new government should realize that there are ways of acting. If I have time I will get into what the previous government did on beef in the past just as an example so that the new government will understand that there are things it could be doing.

Simply put, Canada is losing its hog industry and our beef industry is in serious trouble.

We in the House and Canadians need to understand that this is not just about losing a business. These are family farms and some corporate farms as well, but farming is not only a business. These are third, fourth, fifth and sixth generation farmers who are now going down the tube or exiting the industry as a result of financial pressures they find themselves under. These are not just numbers. These are farm families. These are human beings who are actually losing their heritage as a result of this farm crisis in which they find themselves.

The government must absolutely act, as other governments have in the past.

For those who do not understand the farming industry, these are not poor or inefficient farmers. They are the most efficient farmers in the industry who are now facing financial ruin. They are farmers who have responded to calls from governments over the last 20 years to increase production and increase their efficiencies so we could get into the export industry. Those farmers met that call that governments asked them to meet. They produced more efficiently, increased their production and exports from Canada went up and up. However, farm incomes went down considerably during that period of time.

These people, who met the call of government to become more efficient, more productive and produce more, are now facing financial ruin for themselves and their families. It is not because of anything they have done. It is because of events far beyond their control. Yes, part of it is the dollar, part of it is high feed costs and part of it is the amount of subsidy going into ethanol production, which pushes up the price of the feed costs, but they are efficient farmers.

The new government has a huge surplus. What is needed is an immediate cash infusion.

Last Thursday night, in my province of Prince Edward Island, the beef and hog producers had a meeting. I was not able to attend because I was returning from an international event on food safety. However, I have reports from that meeting. The beef and hog producers who attended outlined their fear and their frustration of where they were at in the industry and whether they could survive.

In Prince Edward Island, 30% of the hog industry has already closed its doors. Many others are hanging on by a very thin financial thread. For these people, this is a life's work, not only one life's work but, in many cases, several generations' life's work destroyed, while the government sits on its hands on a huge surplus and fails to put in an ad hoc financial payment to tide them over.

Previous governments have done that. Why will the government not act when it is absolutely necessary to act for the beef and hog industry in this country?

I have spoken about Prince Edward Island but it is the same across Canada. On the beef industry, let me read from a letter from the executive director of the P.E.I. Cattlemen's Association, Mr. Bradley. He said:

There is no doubt the Island's beef industry is in crisis. I get calls every day from producers asking if there is any government assistance on its way. Farmers are desperate. There is a huge amount of concern and desperation out there....

He goes on to say:

...The operations we are losing today belong to some of the best farmers in the region and once they are gone, they won't return.

Even The Guardian, our local newspaper, which covers the Island like the dew, talked about the situation. It said:

This province has been built on agriculture and Islanders need to think carefully before allowing that foundation to erode.

It goes on to state:

...almost 30 per cent of hog producers have closed their doors and most are losing $60-$80 per hog.

The article continues to state:

This isn't a question of whether farmers can weather this or that challenge; it's whether they can survive.

This is about the farmers of Canada. This is about hog and beef producers in this country. This is about food security. Do we want to be dependent on other nations for our food supply in this country? The crisis in which these individuals find themselves is not the farmers' doing. It is more the government's doing than any others.

In news reports on the Minister of Agriculture's meeting with the Canada Pork Council, they revealed that the minister expressed concern. I am telling the House today, on the third day of December, that a lot of these farmers will not be around by Christmas. Will we allow these farmers, the people who feed this nation, to go broke before Christmas? The minister does not need to show concern. He needs to come up with actual cash, with an ad hoc payment that will do some good.

The Minister of Agriculture owes it to the hog and beef producers of Canada to state clearly what his government intends to do and he needs to state that immediately. Governments have a responsibility to act and the Conservative government has displayed a consistent aversion to acting on behalf of struggling farmers. The hog and beef industry needs action now. I call on the government to act today.

[Dean Del Mastro, Conservative, Peterborough, ON]

Mr. Speaker, that member frequently stands and talks about how our government is not acting in response to farmers and is not assisting farmers, but he forgets his government's abysmal record on agriculture.

For years the Liberals neglected agriculture in this country and they hurt farmers. BSE should never have happened in Canada, except that they failed to act when all the signs were there. When protection should have been put in place, they did nothing.

This government is standing up for farmers. We brought in compositional standards for cheese. We filed an article 28 against milk protein concentrates entering this country. That is good for dairy and it will help our dairy farmers.

We got the border open to Canadian beef exports and that will help the Canadian beef industry.

We are entering into a biofuels industry so our grain and oilseeds producers will have another market and can be self-sufficient.

This Conservative government put more money into agriculture, record agricultural funding to support our farmers because we believe in food sovereignty. We believe in our producers and we stand up for them each and every day.

That member did nothing when he was in government. We will take no advice from him.

[Wayne Easter, Liberal, Malpeque, PE]

Mr. Speaker, that member may be able to peddle wild stories in his riding about what the previous government did or did not do but nobody pumped as much money into agriculture as the previous government did.

Let us talk about BSE. The border was supposed to be opened in June when the Conservatives formed government, but because the Prime Minister was so close to President Bush he did not put the heat on to ensure that it opened in June.

The member said that we did nothing on BSE. Let us go through the list: $520 million for a BSE recovery program; $200 million for a cull animal program; and $680 million for a transitional industry support program. We stopped supplemental beef imports. It was not the member's government.

We had a fed cattle set aside program. We had a feeder cattle set aside program. We had authorized case special advances. We managed the older animals program. We assisted in establishing traceability. We fostered expanding export markets. We fostered increased slaughter capacity in this country. We put in place the loan loss review program. We expedited established review and plant appeals for slaughter plants. We increased the CFAA line inspectors. Finally, we put $80 million in place for traceability in the plants. It took the member's government 18 months to negotiate how that $80 million would be spent.

That member does not need to talk to me about what we did or did not do because I have just shown him our record. His government is failing. When the industry was in crisis we acted. It is time for that government to act today.

[Wayne Marston, NDP, Hamilton East—Stoney Creek, ON]

Mr. Speaker, that was an interesting exchange. The descriptions of the mismanagement between the Conservatives and the Liberals are wonderful to hear. I will comment on the previous Liberal record. Obviously Canadians were not satisfied because they booted the Liberals out of office.

I want to get back to the update, which we are supposed to be discussing. It becomes very clear to us that there is not one thing in the budgetary update for ordinary, hard-working Canadians. As with the previous Liberal government, the Conservatives are continuing their corporate welfare program with large cuts to corporate taxes. We will hear a variety of stories around how good that is for corporations. I suggest the corporations and the banks are doing quite well in fact. The tax breaks for the corporations will reduce taxes by a further $14 billion a year. Together with the massive cuts contained in the bill, these will amount to $190 billion in years to come.

The obvious concerns I hear back in Hamilton are around the fact that Canadians fear the loss of fiscal capacity for the federal government in years to come.

Today, as we all know, Canadian cities are facing huge infrastructure problems. Last week, the Federation of Canadian Municipalities demonstrated this very clearly in its report. According to its information, there are some $123 billion of an infrastructure deficit in Canada.

In my community of Hamilton, year in and year out our city council has to turn to the province of Ontario for assistance, in the amount of approximately $20 million a year, and the Ontario government has said that this is not sustainable. When there is about a $4 billion deficit in infrastructure for sewage repairs that need to be done in Hamilton, what will happen when that hits us. Each year more and more watermains break because of the aging infrastructure.

Another point I will make is that Hamilton is the second stop for new Canadians when they come to Canada. When they find that they cannot afford to live in Toronto, Vancouver or Montreal, then Hamilton is their second home for them. The first moneys go to those other communities and Hamilton receives none. In the budget update there is no new money for immigration services.

What I am about to say will not come as a great surprise to members present, but Canadians are people with a lot of common sense. When I spoke to a number of them in my riding of Hamilton East—Stoney Creek, they were quick to point out that they were surprised a government with surpluses would not approach the matter with that same common sense.

Canadians know when the country is doing well, it is a time to invest in repairs and upgrade their homes and put a little money aside to prepare for that eventual downturn. They do not run to the bank and pay off their mortgage. They know that keeping reasonable debt to help sustain their cash flow is a wise proposition.

Another topic of conversation at our Timmies is the fact that seniors know they have been underpaid by some $500 per year for a number of years due to a federal government error. These seniors are waiting to hear from the taxman. I presume the government will be quick to move to ensure that Canadians get back the money they are owed. We know for sure that if the taxman were owed money, the government would be knocking on their doors right away.

When I speak about Hamilton in particular, it is one of the hardest hit areas of new unemployment in the last number of years. A manufacturing crisis is hitting all across our country. Hamilton has been the core of manufacturing for so many years and the crisis is particularly hard there.

We know that 11,000 people lost their jobs last year in Hamilton. They rightfully think the government would help them because of that loss in employment. In fact, the national average for accessing EI is about 40% and in the urban areas it runs between 20% and 22% in places such as Hamilton.

I have raised repeatedly in the House the desperate cycle of poverty that too many Canadians are living with today, the day in, day out misery they are suffering. In fact, in Hamilton one in five persons lives below the poverty line, many of whom are seniors. They could use that $500. As well as seniors, there are far too many working poor. Where there are working poor, there are poor children.

It has been in the area of 18 years since the House took the decision on a motion to end child poverty by the year 2000. Obviously, it missed that particular mark. In the budget, with the surplus moneys available to the government, we would have thought there would be something to help poor children.

In my riding of Hamilton East—Stoney Creek, there are programs within the schools, but some children do not have $1 to buy a hotdog at lunch or a slice of pizza. They are missing out on gym programs because they cannot afford a pair of gym shoes to take part in a much needed program.

I want to return to seniors for a moment. With a surplus of tens of billions of dollars, here was an opportunity for the federal government to offer some dignity to seniors as they are living out their final years. It could have moved forward on a national home care program.

Further, there was an opportunity for another very significant program of great benefit to seniors in particular. That would be a national prescription drug program. We have all heard horror stories in the House of so many people who cannot afford prescriptions. It is sad to say that seniors, the most respected people in our country, are top among those who cannot afford to purchase prescriptions that their doctors have said are essential to them.

Along with seniors and children, the government has failed students. The bill does not even mention students or student debt.

My theme today has, to a great extent, been on poverty and missed opportunities. A significant missed opportunity, in my opinion, was the chance to restore a federal minimum wage, which was taken out by the Liberals previously, at a base level of $10 per hour. This would be in combination with provincial minimum wage programs of $10 an hour to start to address poverty.

I would go so far as to suggest that the title of the bill before us today should be changed to the lost opportunities bill, lost opportunities for communities to invest for the future, lost opportunities for our children in poverty and lost opportunities for our seniors to live out the last of their days in dignity.

Speaking of lost opportunities, one serious lost opportunity was sacrificed recently by the Liberal Party opposite. Day in and day out we have heard other people calling for a national manufacturing strategy. The opportunity presented itself recently when the Bloc moved a motion in the House on manufacturing, with a call to action and suggestions for the government to stand up for the manufacturing sector, the workers who are at risk and the ones who have lost their jobs.

What did the Liberals do? They sat on their hands and did not vote. I find it extremely baffling as to why that would occur. It was not even a confidence motion. It was something that should have been what is called motherhood and apple pie. It should have been very easy for them.

The bill before us today has ripped the fiscal capacity out of the present and future governments. It has taken away all the opportunities I mentioned, and I am very concerned for the future of Canadians.

[John Cannis, Liberal, Scarborough Centre, ON]

Mr. Speaker, I listened to the member for Hamilton East—Stoney Creek, and I was quite amazed. He touched upon several things, one being the national manufacturing strategy. He also touched upon students, children, seniors, needy parents and lost opportunities.

I will ask the member a question because I am really puzzled.

Prior to 2006, the manufacturing sector, at least in my province of Ontario, which is where the member is from, did not have the hundreds of thousands of lost jobs. Since the new Conservative government has taken over, they are being lost. He did not talk about the bill. He talked about the Liberals. That is what prompted me to get up on my feet.

As for lost opportunities, in the last budget, which the NDP supported and enhanced, there was money for students, for seniors and for the cities. There was the early childhood program, which the NDP supported. We agreed to part of the recommendations.

I believe the hon. member's heart is in the right place. However, why did the NDP betray those programs and overthrow the government? Indeed, he is right, all the programs have now been thrown out. The question is not what the Liberals did, it is why the NDP betrayed the constituents. The NDP members lent their vote and now Canadians know what they lost.

[Wayne Marston, NDP, Hamilton East—Stoney Creek, ON]

Mr. Speaker, I responded to a similar statement, a speech given by the member for LaSalle—Émard. He talked about the Liberals and all the things they had done. It was very clear, at that point in time, there was an air of blame for the NDP.

The practical reality is Canadians were fed up with the corruption. They were fed up with the dollars being funnelled into Quebec, the $42 million of which a small part of it was uncovered by the Gomery Commission.

The Liberals still, to this day, have not respected the vote of Canadians. Canadians voted for change because they were tired of the same old insider politics. They were tired of the corruption of that party. Until the Liberals take ownership of that, until they heal, the poll numbers they see day in and day out will remain the same and get worse.

[John Cannis, Liberal, Scarborough Centre, ON]

Mr. Speaker, again, I was prompted to respond to the use of the word “corruption”. There was an open and transparent judicial inquiry. We caught the culprits. They went to prison. There was restitution sought and paid back. I do not know to what the member is referring. We addressed it in a transparent way.

Members opposite wanted a commission. They talked about the boondoggle for years. After an inquiry and millions of dollars were spent, the auditors said that they could not find $64,000 and a couple of hundred dollars, to the tune of millions of dollars that could have gone to the program to which the he referred. I do not know what the member is talking about when he talks about corruption.