Budget and Economic Statement Implementation Act, 2007

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

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


Jim Flaherty  Conservative


This bill has received Royal Assent and is now law.


This is from the published bill. The Library of Parliament often publishes better independent summaries.

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 Specifically, the excise tax exemptions for renewable fuels, including ethanol and bio-diesel, are repealed, effective April 1, 2008.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


All sorts of information on this bill is available at LEGISinfo, provided by the Library of Parliament. You can also read the full text of the bill.


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

Budget and Economic Statement Implementation Act, 2007Government Orders

December 12th, 2007 / 5:15 p.m.
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Louise Thibault Independent Rimouski-Neigette—Témiscouata—Les Basques, QC

Mr. Speaker, I would like my colleague to give us his views on an issue that affects many of us: the situation of our seniors. This situation is very disturbing, because we know that thousands of seniors are living well below the poverty line. Earlier, the member made comments about democracy. He just made other comments about the surplus.

I would like to know whether he believes, as many of us do, that the government should be focusing on rectifying the lack of action, the fundamental lack of concern about increasing the guaranteed income supplement and making decent retroactive payments to those people who were shortchanged. Bill C-28 does not address this issue.

Budget and Economic Statement Implementation Act, 2007Government Orders

December 12th, 2007 / 5:05 p.m.
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Pat Martin NDP Winnipeg Centre, MB

Mr. Speaker, I am surprised by the intervention by my colleague from Wild Rose, who I know is a democrat and who I know believes in the democratic process. I believe the member for Wild Rose worked just as hard as I did to get here and earn his seat in the House of Commons so that he could vote in a democratic way.

We should all be outraged when two parties conspire to deny the right to vote to the third and the fourth parties in this House.

Everyone here knows that the rule you read, Mr. Speaker, says that by agreement of the government and the opposition whips they may agree to curtail the bells and come and vote. It does not say that the government and the official opposition whips can come together to deny the vote of any other minority party in this House. This really, really bugs me. It is not even that important a vote.

Let me reverse, then, with what little time I have, to talk about why we are opposing Bill C-28, which clearly is the irritant that motivated the government and the Liberals to conspire against democracy today and deny me my privilege, my right to vote in the House of Commons. That is because we oppose Bill C-28. We oppose the fall 2007 economic update for a number of very good reasons.

First of all, it simply takes Canada further in the wrong direction in terms of economic policy for this country. It is not a balanced approach. It is weighted heavily on the side of this ideological vision of the Conservatives that all of our social ills, all of our economic ills and all of our problems with the manufacturing sector can be solved by deeper and deeper corporate tax cuts. That ideology has been disproved any number of times.

I point out that we are the victims of a kind of game of chicken, a race between the Conservatives and the Liberals as to who can cut corporate taxes faster. The Minister of Finance, when he was first crafting this economic update, was saying that he would reduce corporate taxes from 22% to 19.5% to 18%.

The Liberals then said they would do it even faster and deeper if they were in power, so the Minister of Finance said that if the Liberals wanted it deeper, here was deeper. Then he decided to move it to 16.5% in 2011 and to just 15% in 2012. This is literally a reckless, irresponsible game of chicken, which results in the squandering of the fiscal capacity of this government and future governments to meet the social deficit and all the other necessary spending that we promised Canadians.

Fair taxation policy is an economic instrument for the redistribution of wealth. It is a way that we can all benefit in the bounty of this great nation by investing in public services so that people from all income strata can benefit. Those guys over there are completely and 110° in the wrong direction.

Budget and Economic Statement Implementation Act, 2007Government Orders

December 12th, 2007 / 5 p.m.
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Pat Martin NDP Winnipeg Centre, MB

Mr. Speaker, I will use my four minutes to address Bill C-28, but I will preface my remarks by stating how I can barely give my speech on Bill C-28 because I am so angry. My blood is boiling over the way the Liberals and the Conservatives conspired to deny me my right to vote.

I am serving notice right now that I will be raising a question of privilege at a later time. I will be filing a formal complaint in that vein because these guys and you, Mr. Speaker, have been cobbled into this compact between the Liberals and the Conservatives to deny us our democratic right to vote.

I think you have been used by these guys, Mr. Speaker, and I draw your attention to the fact that the very chapter and verse that you cited said--

Fisheries and OceansCommittees of the HouseRoutine Proceedings

December 12th, 2007 / 4:15 p.m.
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Pitt Meadows—Maple Ridge—Mission B.C.


Randy Kamp ConservativeParliamentary Secretary to the Minister of Fisheries and Oceans

Mr. Speaker, it is a pleasure to rise in the House and speak to this motion. I should say at the outset that I fear this motion is more about not getting back to the debate on Bill C-28 than it is about the Fisheries Act, but whether that is the case or not, I always appreciate the opportunity to speak on behalf of a new, modernized Fisheries Act which is what Bill C-32 is about.

Today's motion though is about whether we should send the bill directly to committee. In reality we are wasting valuable time debating this motion when we should be able to get up in the second reading debate and talk about the merits of Bill C-32 and get it on the record. That is what we would like to do as the government.

Bill C-32 is good legislation. It will make a significant and positive difference to the future of fish and fish habitat in this country, to fishing and the fisheries and to those who rely on it for their livelihood. Therefore, I move:

That the debate be now adjourned.

Business of the HouseRoutine Proceedings

December 12th, 2007 / 3:45 p.m.
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The Speaker Liberal Peter Milliken

I will read the motion to the House and it will be translated for the hon. member. She can listen to the translation channel to hear it in the other official language. The motion is that the government House leader, seconded by the member for Prince George—Peace River, pursuant to Standing Order 56.1(1)(a), moved:

That, in relation to the third reading stage of Bill C-28, Bill C-28 shall not be subject to any amendments; and that, on any day that Bill C-28 is under consideration at third reading, the House shall sit beyond the ordinary hour of daily adjournment and shall not be adjourned before such proceedings have been completed except pursuant to a motion to adjourn proposed by a Minister of the Crown.

Will those members who object to the motion please rise in their places?

And fewer than 25 members having risen:

Business of the HouseRoutine Proceedings

December 12th, 2007 / 3:45 p.m.
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Libby Davies NDP Vancouver East, BC

Mr. Speaker, I rise on a point of order. I wonder if the government House leader or the Speaker would make it clear to all members of the House what the standing order is that the government House leader is trying to introduce at this point. It would be helpful to all members if he would explain what he is trying to do in terms of this procedure.

We know that Conservatives are trying to prevent debate and put closure on Bill C-28, but we would appreciate, first of all, seeing a copy of the motion. I believe all members of the House should have a copy of the motion in both official languages. I would ask the government House leader or the Speaker to make clear what motion is being put before the House at this time.

Business of the HouseRoutine Proceedings

December 12th, 2007 / 3:45 p.m.
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York—Simcoe Ontario


Peter Van Loan ConservativeLeader of the Government in the House of Commons and Minister for Democratic Reform

Mr. Speaker, pursuant to Standing Order 56.1, I move:

That, in relation to the third reading stage of Bill C-28, Bill C-28 shall not be subject to any amendments; and that, on any day that Bill C-28 is under consideration at third reading, the House shall sit beyond the ordinary hour of daily adjournment and shall not be adjourned before such proceedings have been completed except pursuant to a motion to adjourn proposed by a Minister of the Crown.

Statutes Repeal ActRoutine Proceedings

December 12th, 2007 / 3:40 p.m.
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Peter Van Loan Conservative York—Simcoe, ON

Mr. Speaker, I seek the unanimous consent of the House for the following motion. I move: That, in relation to the third reading stage of Bill C-28, Bill C-28 shall not be subject to any amendments; and that, on any day that Bill C-28 is under consideration at third reading, the House shall sit beyond the ordinary hour of daily adjournment and shall not be adjourned before such proceedings have been completed except pursuant to a motion to adjourn proposed by a Minister of the Crown.

FinanceOral Questions

December 12th, 2007 / 3 p.m.
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Whitby—Oshawa Ontario


Jim Flaherty ConservativeMinister of Finance

Mr. Speaker, in Bill C-28 there are several very important initiatives for vulnerable Canadians and low income Canadians. One is the working income tax benefit, which can come into force January 1, just a couple of weeks from now, to help Canadians get over the welfare wall, to help them get to work. The other is the registered disability savings plan, which can also come into force January 1, to help some of the most vulnerable people in our society and their financial security in the future.

The NDP is talking the bill out. It is time for action. I encourage them to act in the true Christmas spirit.

FinanceOral Questions

December 12th, 2007 / 3 p.m.
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Jeff Watson Conservative Essex, ON

Mr. Speaker, as we approach Christmas, the NDP is saying, “Bah, humbug” to Canadians. While it likes to pretend it is the party of Bob Cratchit, the NDP really acts like Ebenezer Scrooge.

Can the Minister of Finance tell Canadians what is being delayed by the NDP's foot dragging on Bill C-28? Why the NDP lump of coal in Canadians' Christmas stockings?

Budget and Economic Statement Implementation Act, 2007Government Orders

December 11th, 2007 / 5:15 p.m.
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Pat Martin NDP Winnipeg Centre, MB

As my colleague says, other people will get hurt in this game of chicken. It is like two teenagers on a road race down a dark country road, hell-bent and determined to get more reckless and careless than the other. However, there is a lot of collateral damage with that kind of irresponsible behaviour.

Clearly the Conservatives are trying to impress corporate Canada. One thing we should keep in mind is the Conservatives do not have to deliver wheelbarrows of guilt to corporate Canada any more. We have changed the election financing laws. There is no reciprocity any more. Corporate Canada cannot buy the government. It does not have to be bought. The Conservative government can break this pattern. It can cast off the shackles of its obligations to corporate Canada. Corporate Canada can no longer sponsor the Conservative Party, not legally at least.

What is frustrating for me is the irresponsible recklessness that is embodied in Bill C-28. The government has undermined and left behind the fiscal capacity to do anything to build Canada. Cutting, hacking and slashing will not build a great nation. That seemed to be the ideology throughout the 1990s and creeping into this decade as well.

We cannot build a great nation by letting our infrastructure suffer, by letting our social infrastructure deteriorate to the point where education and housing and all those basic fundamentals are falling by the wayside. It is more apparent in areas of low income and poverty. I know members are well aware of the inner city of Winnipeg. In my riding 47% of the families live below the poverty line, 52% of all children.

When economic and social policy ignore these basic needs, it is felt more acutely by those who are already at the margins and, by negligence, if they are already struggling, they are pushed over the edge into abject poverty.

This is not unique to the Conservative budgets that we have seen to date. I have been here since 1997. This pattern developed since 1993 when the Liberals took over. Most of the years I have been here, I have been under the Liberal regime. I really cannot blame the Conservatives for the social conditions in my riding. They have not had time to undermine and destroy anything in my riding yet, although they seem hell-bent and determined to match the Liberals in their record.

When the Liberals took over, they embarked on the most neo-Conservative, right wing agenda that our country had ever seen, possibly in the world. Their fiscal policy was completely in keeping with the Thatcherism, the Reaganism and the neo-Conservatism that the country had just rejected. It was an outdated ideology that bordered on cruelty, when we look at how it manifested itself in my riding of Winnipeg Centre.

I once heard the Reverend Jesse Jackson speak. He told an audience of trade unionists that if there were five children but only three pork chops, the solution would not be to kill two of the children. He went on to say that neither was the solution to carve those three pork chops into five equal pieces because then all the children would go to bed hungry and no one would get everything they needed.

The social democratic or trade union point of view to that scenario is to challenge the whole notion that there are only three pork chops, to challenge the absolute lie that we do not have the wealth in this country to provide the basic needs for a family to survive. Those who are saying that are lying. We live in the richest and most powerful civilization in the history of the world.

He said not to ever let anybody say that we cannot afford to provide the basic needs for a family to survive, and not just survive, but to flourish, to prosper and to develop themselves to their true potential, instead of the terrible loss of human potential we see when 52% of children in my riding live below the poverty line. That is the urgent need that we bring to the House. That is the message that we bring.

My colleague from Sault Ste. Marie has tirelessly tried to remind Canadians that, yes, we are in a bubble of economic prosperity, and yes, it is a boom time for Canada, that regionally we are doing very well and productivity and profits are way up, but we are leaving so many people behind. Among those are kids who are living in poverty and not realizing their true potential. There are so many stories to be told and opportunities that might be told.

The only real measurement of how we are doing as MPs, as elected representatives, is to ask whether we are showing any tangible benefits in terms of elevating the standard of living of the people we represent. Surely that is why people send us here. They say to me, “You are one of us. Go to Ottawa and do your best to make my life better”. That is summing it up in very simple terms. That is our goal and objective.

One of the most effective economic policy instruments we have to redistribute wealth in an equitable way, if that is still one of our goals as a nation, is a fair taxation policy. Fair taxation is a way of levelling the playing field. We encourage good behaviour by the way we tax businesses and we discourage bad behaviour by making sure that individual Canadians are not overtaxed and that taxes are used to provide public services so that everyone has access to them equally. That is one of the basic tenets on which our country was founded and built.

We can measure that by something put out by Statistics Canada from time to time, the income quintile distribution. It divides the economic spectrum into earnings, average family income, the bottom quintile 20% to the top 20%. I argue that this might be the only meaningful statistical measurement that we need to pay any attention to. The results are shocking.

We have lived through 10 or 11 surplus budgets now and we have set records every time. There have been billions and billions of dollars in surplus, which I remind everyone came from our pockets. That is our money. Rather than put it toward the needs that we have identified, in a very reckless and spend free way, first the Liberals and then the Conservatives decided that the best use for that money was not to address the pressing social deficit but to provide more and more tax breaks for their buddies on Bay Street.

The income quintiles that I am talking about are in a chart, which I would be happy to table for the edification of any members who may not be able to see this far away at this end of the House. The bottom quintile, the lowest earning Canadian families, in the period of 1985 to 2005, in constant 2005 dollars actually went down 11%. In a period of unprecedented economic growth and fabulous economic opportunities for the top quintile, the highest earners in the country, it rose 16%. That is a 27% spread between the lowest earners and the highest earners.

Surely it would be our goal through a fair taxation policy to elevate the standards of the lowest to perhaps get into the medium. Their average family earning actually dropped in 2005 constant dollars by 11%.

For the second quintile, usually working families making around $30,000 a year, their actual earnings dropped by 4%. We are not making this stuff up; this is Statistics Canada information. For the third quintile, probably tradespeople, nurses, teachers, bus drivers around the $45,000 a year average family income, their real purchasing power dropped by 2%. Then when we get up to the top quintile, families making $118,000 to $147,000 per year, they rose 16%.

The rich are doing a lot better. The poor will have slipped even further behind. It is a tired cliché that the rich get richer and the poor get poorer. People get tired of hearing that, but in Canada it is true.

In spite of having a Liberal government, a government that ran from the left and governed from the right, after 13 years of Liberal government, the Liberals will not even stand and oppose this bill now. They sit on their hands even though they claim they are ideologically opposed to this bill.

Coming from the core area of Winnipeg, some of the social policies that the Liberals made, the cutting and hacking and slashing that they did on every social policy by which we define ourselves as Canadians had a profound impact on the quality of life of the people I represent, in fact a deleterious impact. We went backward in that period of time. There were surplus budgets, but relentless constant cutbacks to social programs. Let me give one example.

The former prime minister, the member for LaSalle—Émard, was very proud that he announced $100 billion in tax cuts. Again the Liberals were in some kind of a competition with the Conservatives as to who could cut and hack and slash taxes more deeply. Where did he get that $100 billion?

Well, $30 billion came from the surplus in the EI fund, of all places, taking it--my colleague used the term “steal”, but I do not know if I can get away with that--but certainly that is like another tax on working people. If we deduct something from people's paycheques and promise them a benefit if they become unemployed and then deny them that benefit, that is not the government's money, it is an insurance fund and it should have gone to benefit the unemployed. That is where $30 billion came from.

Another $30 billion of the $100 billion the Liberals gave away in tax cuts came from the surplus in the public service pension plan. People forget that. Marcel Masse's last move as the president of the Treasury Board before retiring was to change the law so that any surplus in the public service pension plan is not the property of the employees. It is not even to be shared between management and labour. It is the exclusive property of management. They scooped $30 billion out of the benefits from public service pensioners, most of whom are women and whose average pension is $9,000 a year. The Liberals could have doubled the average pension of those seniors living in poverty who had worked their whole career, instead of giving it to their friends.

The third $30 billion out of that $100 billion the Liberals gave away to their corporate buddies was from cuts and hacks and slashing to the Canada health and social transfer, the social programs.

That is where the Liberals scooped up $100 billion to give away. That is their idea of redistributing wealth. They take it from low income seniors through the pension plan, from unemployed people through the EI fund and from cuts and hacks to social spending. That was their idea. They were the most right-wing ideological neo-conservatives this country has ever seen. The current government has a long way to go before it ever gets as right-wing as the Liberals were because we have never seen a finance minister like that and certainly not a prime minister like that.

Let me get to the Conservatives. These guys are about to squander wastefully $190 billion of fiscal capacity. That is a Conservative trait I have come to know on the Prairies because I watched the Saskatchewan government experience. I have seen waste by Conservatives the likes of which no one will ever see again. People would not believe how wasteful and irresponsible they are.

Somehow they try to sell themselves as fiscally responsible, that because they are from the business community they are businesslike and responsible. Since Enron, nobody thinks that being businesslike is being responsible. The two do not go hand in hand.

We watched the Blakeney government with nine or ten years of balanced budgets. Before that, there was the Tommy Douglas government in Saskatchewan with 17 years of balanced budgets and responsible social program development. Then the Grant Devine government came in and eight years in a row--

Budget and Economic Statement Implementation Act, 2007Government Orders

December 11th, 2007 / 5:15 p.m.
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Pat Martin NDP Winnipeg Centre, MB

Mr. Speaker, on behalf of the NDP caucus, I am pleased to join in the debate on the fall 2007 economic statement, or Bill C-28 as it is called.

I know the public and our colleagues in the House have not heard much of the NDPs opinion on the bill. Therefore, I am glad to enlighten them somewhat as to our objections with it and why we do not support the government in its economic statement, especially as it pertains to its ideological zeal or orthodoxy that all of Canada's social, economic and infrastructure ills can be solved by even deeper corporate tax cuts.

We have to challenge that very premise. We have to challenge the very theme or motif that seems to make the government tick. The Conservatives have been raised on the orthodoxy that all the country needs is lower corporate tax cuts. In that ideology, the Conservatives are in competition with the Liberals, who also believe it. They are playing some reckless game of chicken with our budgets and with the tax dollars of Canadians.

Budget and Economic Statement Implementation Act, 2007Government Orders

December 11th, 2007 / 4:40 p.m.
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Joe Comartin NDP Windsor—Tecumseh, ON

Mr. Speaker, when members rise and speak to this bill, the immediate thing that has to come to mind is the missed opportunity, the missed opportunity for us as a country to invest in our country, to make our economy stronger, and to create greater benefits for all citizens of our country. This mini-budget fails on all counts. It lacks vision; it lacks a plan.

It is like listening to the Conservatives over and over again say their mantra that tax breaks are going to solve all the problems of the world. We know that just does not work. We look in particular at what happened with the corporate tax breaks and the vast majority of the dollars which will go to the large corporations.

Let us do a quick history. In February-March of this year the government brought forth the budget. In that budget there were substantial tax cuts for the corporate sector. That would have had the effect over the period of 2007 through to 2011 of reducing the effective corporate tax rate in this country, which is at this point actually lower than the corporate tax rate United States, which is a point the Conservatives constantly forget, but the Conservatives were going to reduce it from 22% down to 18.5% by 2011.

That budget passed with the assistance of the Bloc Québécois at that time. We then come forward through the summer and the Liberal Party is collapsing around itself and its new leader. We see the government, because it really did not have a plan, finally decide to prorogue Parliament and come back with a new throne speech.

In the new throne speech there are a number of provisions of an economic nature, but there is no particular mention of any further substantial reductions in the corporate tax rate.

As we just heard from my colleague from Outremont, lo and behold, shortly after the throne speech, the leader of the official opposition is up proclaiming that not only do the Liberals support the corporate tax breaks that have already been granted but that if they were in power they would give even greater tax breaks.

Within a day, if not the same day, the Minister of Finance is publicly proclaiming that in fact we are going to get greater corporate tax breaks. Within a month an economic statement came down which is encompassed to some significant degree in Bill C-28 in this mini-budget, and now what have the Conservatives done?

They are going to take that 22%, which is dropping already because of the earlier budget of 2007 and they are going to further reduce it. Now by 2012, the corporate tax rate in this country is going to fall to 15%; 22% this year. In five years or less it is going to be 15%, a full third of the corporate tax is no longer going to be required.

Inevitably, what do Canadians say about this? We have two political parties which have no substantial difference in how they deal with the revenue coming into the coffers of the government. We have to say, let us take a look at where these corporate tax breaks are going to go. We have done the analysis and this has not been contested by the government.

A full one-third of those two corporate tax breaks is going to go to the big banks in this country, the same big banks that in 2006 made $19 billion in pre-tax profit and are on line so far in 2007 to at least make that and probably break over the $20 billion mark. These are companies that we can see are poverty stricken, that are in absolute need of assistance from a government that feels compelled out of a sense of deep compassion to give them a tax break.

Where else is the money going? The next big chunk goes to the oil and gas industry. Natural resources is a bit broader, but primarily to the oil and gas industry. It pays because of its huge pre-tax profits due to all the oil and gas Canada is exporting to the world and contributes quite dramatically to environmental consequences in the form of global warming and climate change.

Those companies are making huge amounts of profit. One-sixth, in fact, of all the pre-tax corporate profits will be in the oil and gas sector, as it was in 2006. Chances are that those profits will be somewhat higher in 2007. Those companies will be picking up a huge chunk. In total, between those two sectors of the economy, they will be getting almost half of all these tax breaks, billions and billions of dollars.

If the government had not given this tax break, where could average, hard-working Canadians and their families have benefited? We have heard over and over again about the ongoing problems with waiting lists in our hospitals and in our medical system. More money could have been put there to deal directly with those waiting lists so that people do not have to wait six months, a year or 18 months just to be diagnosed and then many more months, if not years, beyond that to have surgery.

It could have built a national housing program. We heard from our colleague in question period today of some of the deaths that have occurred across the country as a result of homelessness.

We could have begun to create some child care spaces, one of the promises in the last election that the government likes to conveniently forget about. We are still waiting for the 125,000 or 150,000 new spaces. The government has abandoned that completely. Rather than use some of this revenue to assist in creating child care spaces for young families that need that assistance, what do we see? We see corporate tax breaks, revenue not coming in because the big banks and oil and gas companies need assistance.

Given the problems we are confronted with on the environment, we could have dramatically expanded the funds in many retrofit programs, both in the private sector and the government sector. However, we did not do any of that. We have the mantra that corporate tax breaks and tax breaks generally will solve all the problems. It is obvious, because of the problems we are faced with, whether it is waiting lists, lack of a housing program, homelessness or problems with the environment, that tax breaks are not the be all and the end all.

I want to step back, and this is really hard, and pretend for a minute that I am a Conservative. This is probably more creative than I usually am able to be, but let me pretend to do that for a minute and say that I do not really care about housing, the environment, unemployment and health services. All I really care about is helping big corporations, and that is where my--

Budget and Economic Statement Implementation Act, 2007Government Orders

December 11th, 2007 / 4:40 p.m.
See context


Thomas Mulcair NDP Outremont, QC

Mr. Speaker, my hon. colleague from Yukon must face up to a small problem of logic. He rises in this House to ask the NDP if we think that Bill C-28, which has to do with budgetary issues, is flawed. I have good news for him. The NDP does in fact believe that Bill C-28 is full of flaws.

I have only a brief question for the member in return. Why does he not vote against this bill? Why does he want to keep the Conservatives in power? If he believes at all in what he is telling us, why can he not find an ounce of courage to represent the people who elected him, instead of sitting on his hands like the rest of his colleagues every time one of these important questions is raised here in the House?