Bill C-28 (Historical)

Budget and Economic Statement Implementation Act, 2007

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

Part 1 implements goods and services tax and harmonized sales tax (GST/HST) measures proposed in the March 19, 2007 Budget but not included in the Budget Implementation Act, 2007, which received Royal Assent on June 22, 2007. Specifically, the Excise Tax Act is amended to
(a) increase the percentage of available input tax credits for GST/HST paid on meal expenses of truck drivers from 50% to 80% over five years beginning with expenses incurred on or after March 19, 2007;
(b) increase the GST/HST annual filing threshold from $500,000 in taxable supplies to $1,500,000 and the annual remittance threshold from $1,500 to $3,000, both effective for fiscal years that begin after 2007;
(c) increase the GST/HST 48-hour travellers’ exemption from $200 to $400 effective in respect of travellers returning to Canada on or after March 20, 2007; and
(d) implement changes to the rules governing self-assessment under Division IV of Part IX of the Excise Tax Act to ensure that GST/HST applies appropriately in respect of intangible personal property acquired on a zero-rated basis and consumed in furthering domestic activities, applicable to supplies made after March 19, 2007.
Part 2 amends the non-GST portion of the Excise Tax Act to implement measures announced in the March 19, 2007 Budget. Specifically, the excise tax exemptions for renewable fuels, including ethanol and bio-diesel, are repealed, effective April 1, 2008.
Part 3 implements income tax measures proposed in the March 19, 2007 Budget but not included in the Budget Implementation Act, 2007, which received Royal Assent on June 22, 2007. In particular, it
(a) introduces a new Working Income Tax Benefit;
(b) eliminates income tax on elementary and secondary school scholarships;
(c) eliminates capital gains tax on donations of publicly-listed securities to private foundations;
(d) enhances the child fitness tax credit;
(e) expands the scope of the public transit tax credit;
(f) increases the lifetime capital gains exemption to $750,000;
(g) increases the deductible percentage of meal expenses for long-haul truck drivers;
(h) provides tax relief in respect of the 2010 Winter Olympic and Paralympic Games;
(i) allows for phased-retirement options for pension plans;
(j) extends the mineral exploration tax credit;
(k) enhances tax benefits for donations of medicine to the developing world;
(l) streamlines the process for prescribed stock exchanges;
(m) introduces an investment tax credit for child care spaces;
(n) introduces a new withholding tax exemption with respect to certain cross-border interest payments;
(o) prevents double deductions of interest expense on borrowed money used to finance foreign affiliates (the Anti-Tax-Haven Initiative);
(p) eases tax remittance and filing requirements for small business;
(q) introduces a mechanism to accommodate functional currency reporting;
(r) provides certain tobacco processors that do not manufacture tobacco products with relief from the Tobacco Manufacturers’ Surtax; and
(s) provides authority for regulations requiring the disclosure by publicly traded trusts and partnerships of information enabling investment managers to prepare the tax information slips that they are required to issue to investors on a timely basis.
Part 4 implements the disability savings measures proposed in the March 19, 2007 Budget. The measures are intended to support long-term savings through registered disability savings plans to provide for the financial security of persons with severe and prolonged impairments in physical or mental functions. Part 4 contains amendments to the Income Tax Act to allow for the creation of registered disability savings plans. It also enacts the Canada Disability Savings Act. That Act provides for the payment of Canada Disability Savings Grants in relation to contributions made to those plans. The amount of grant is increased for persons of lower and middle income. It also provides for the payment of Canada Disability Savings Bonds in respect of persons of low income.
Part 5 implements measures that provide for payments to be made to provinces as a financial incentive for them to eliminate taxes on capital under certain circumstances.
Part 6 enacts the Bank for International Settlements (Immunity) Act.
Part 7 amends the Pension Benefits Standards Act, 1985 to permit phased retirement arrangements in federally regulated pension plans by allowing an employer to simultaneously pay a partial pension to an employee and provide further pension benefit accruals to the employee. These amendments are consistent with amendments to the Income Tax Regulations to permit phased retirement.
Part 8 authorizes payments to be made out of the Consolidated Revenue Fund for the purpose of Canada’s contribution to the Advance Market Commitment.
Part 9 amends the Canada Oil and Gas Operations Act to authorize the National Energy Board to regulate traffic, tolls and tariffs in relation to oil and gas pipelines regulated under that Act.
Part 10 amends the Farm Income Protection Act to allow financial institutions to hold contributions under a net income stabilization account program.
Part 11 amends the Federal-Provincial Fiscal Arrangements Act to provide for an additional fiscal equalization payment that may be paid to Nova Scotia and Newfoundland and Labrador. This Part also specifies the time and manner in which the calculation of fiscal equalization payments will be made and it amends that Act’s regulation-making authority. In addition, this Part makes consequential amendments to other Acts.
Part 12 amends the Canada Education Savings Act to clarify the authority of the Minister of Human Resources and Social Development to collect, on behalf of the Canada Revenue Agency, any information that the Canada Revenue Agency requires for purposes of administering the registered education savings plan tax provisions.
Part 13 authorizes payments to be made out of the Consolidated Revenue Fund to an entity, designated by the Minister of Finance, to facilitate public-private partnership projects.
Part 14 implements tax measures proposed in the October 30, 2007 Economic Statement. With respect to income tax measures, it
(a) reduces the general corporate income tax rate;
(b) accelerates the tax reduction for small businesses;
(c) reduces the lowest personal income tax rate, which automatically reduces the rate used to calculate non-refundable tax credits and the alternative minimum tax; and
(d) increases the basic personal amount and the amount upon which the spouse or common-law partner and wholly dependent relative credits are calculated.
Part 14 also amends the Excise Tax Act to implement, effective January 1, 2008, the reduction in the goods and services tax (GST) and the federal component of the harmonized sales tax (HST) from 6% to 5%. That Act is amended to provide transitional rules for determining the GST/HST rate applicable to transactions that straddle the January 1, 2008, implementation date, including transitional rebates in respect of the sale of residential complexes where transfer of ownership and possession both take place on or after January 1, 2008, pursuant to a written agreement entered into on or before October 30, 2007. The Excise Act, 2001 is also amended to increase excise duties on tobacco products to offset the impact of the GST/HST rate reduction. The Air Travellers Security Charge Act is also amended to ensure that rates for domestic and transborder air travel reflect the impact of the GST/HST rate reduction. Those amendments generally apply as of January 1, 2008.

Budget and Economic Statement Implementation Act, 2007

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Mr. Speaker, it is important to note that none of the Conservatives are standing up to defend the budget because they understand full well there is not much to defend in it.

The member for British Columbia Southern Interior asked what I envisage for the country. Certainly in the next Parliament I envisage the member for Toronto—Danforth as prime minister and a lot more effective, hard-working New Democrats in the House doing their due diligence, which the Conservatives seem to fail to do. They do not do their homework. They do not do their due diligence. The result will be that Canadians will judge them on that basis.

Canadians expect us to address the issues that they are living through. They want us to make life better for them, to build a better quality of life for most Canadian families. That means helping with escalating drug costs. That means helping their kids get adequate levels of post-secondary education and training. It means making sure that we have a better and cleaner environment. It means making sure that we have an industrial sector in place to actually create family sustaining jobs. It means having a trade strategy that is not based on reverse as the only gear.

Since the Conservative government came to power, we have had the softwood sellout, Liechtenstein bamboozling the government on negotiations in the trade sector. We have seen it time after time that the government only seems to negotiate going backwards.

What Canadians expect is a federal government that is actually proud of Canada and is able to stand up for Canadians' interests and most important, for the interests of Canadian families.

That would include stopping the SPP, the security and prosperity partnership. I know the hon. member for British Columbia Southern Interior has been a very strong advocate against the secrecy and the anti-democratic nature of the SPP, and how it affects the quality of life of Canadians. An NDP government would put a stop to the SPP immediately.

I have a lot of optimism for the future. I know Canadians have seen that the Conservatives are just the same as the old Liberals.

[Tony Martin, NDP, Sault Ste. Marie, ON]

Mr. Speaker, I appreciate the opportunity to put some thoughts on the record regarding the agenda put forward by the present Conservative government and to say to members of the House and the public that it is not something that we New Democrats would do.

With respect to the priorities in this country, we believe what is necessary is that we invest whatever money is available to us in community infrastructure, social infrastructure, health infrastructure and education infrastructure. In that way we can position this country to be the best in the world when it comes to economic performance and look after our citizens in the many ways in which Canada has come to be known in the rest of the world.

What is happening out there and in here are at cross purposes with each other. The government is proposing in its economic statement a cut in the federal corporate income tax rate from 22% to 19.5% in 2008, to 18% in 2010, to 16.5% in 2011, and to just 15% in 2012. That will take anywhere from $6 billion to $12 billion out of the government coffers.

That money could be used to invest in the programs that we all know we need to support our children, to provide a future for generations to come, to make sure our health care system becomes once again the envy of the world, to make sure that our post-secondary education system is available to everybody so that we will have the kind of workers we will need to compete in the evolving global economy.

That cut significantly outstrips the promise in budget 2007 p to cut the corporate income tax rate to 18.5% by 2011. The Minister of Finance commented that the corporate tax cuts are the deepest and fastest ever contemplated. When that is stacked up against the kind of corporate tax cut that was given in the 1990s under the previous Liberal government, one has to be amazed at the aggressive nature and zeal the government has to return money to big corporations that already have more than they will ever need.

Unfortunately, as we look for allies in this place to stop this agenda, we heard the leader of the Liberal Party comment that he supported the corporate tax cut and noted he had called for that very same measure himself. To suggest for a second that there is any opposition in this place, aside from the NDP and at times the Bloc, by the Liberals is to not understand what is going on in this place.

Over the last couple of months since Parliament returned in October after the prorogation, time after time the Liberals have had the opportunity to stand and say no to this slash and burn and cut agenda, this agenda to diminish the capacity of government. Time after time the Liberals have had the opportunity to actually participate in the building up of the common life of this country but they consistently have sat on their hands and have refused to vote. They will not stand to vote yes or no, in that I think some in that party are conflicted, but in any case they will not vote.

The economic statement forecast that the annual revenue cost on full implementation in 2012-13 will be $6 billion. That is $6 billion which is not available to government to invest in those things that students out there know are needed if we are going to ensure that post-secondary education is affordable, and that seniors know are needed if we are going to work with them to ensure they can live lives of dignity, to reflect the work they have done throughout their years in the workplace.

That is $6 billion out of the government's capacity to respond to the crisis in health care. That is $6 billion that will not be available to help our veterans, who have fought in wars on behalf of this country. They have fought for freedom and democracy and have come back to find themselves living in some very desperate circumstances and without the support they need to look after themselves and their families and to live with dignity.

Progressive economists conclude that this $6 billion is actually understated and that the actual figure of forgone revenue from this measure is more likely to be in the $12 billion range. That is a lot of money.

That is a lot of money not available to the government to transfer to the provinces to fix those roads, to invest in public transit, to build bridges and to make sure that our communities are in good shape, to provide clean water, to help the smaller communities that have a very small tax base to deal with some of the new regulations that are coming in with regard to how they deal with waste, waste water and sewage disposal.

The banks and resource sector benefit most from these cuts, so big oil and big banks are the winners. The financial sector, one-third of Canadian corporate pre-tax profits, and the booming oil, gas and mining sectors, one-sixth of Canadian corporate pre-tax profits, account for the bulk of corporate income. They will benefit nicely from this corporate boondoggle that we are going to see delivered if the Liberals do not develop a bit of spine and backbone, and oppose with us this very devastating and damaging agenda that is coming forward.

These blanket corporate tax cuts will do nothing to target the sectors we want to stimulate. So not only will they take away from government's ability to invest in the infrastructure that we need if we are going to continue to have Canada number one and number two in the world when it comes to investing in its people, but it is not going to stimulate the economy either in the way that the government suggests it will because this money is going to the wrong sectors.

We need investment in sectors like manufacturing and green companies where we can help stimulate quality job creation and invest in renewing machinery and equipment, and strengthening research, development and innovation.

What is happening out there, as we debate this very draconian approach to the finances of the government and the country? As I travel the country and meet with people, I find there is an anxiety growing, an unease among the populace, around their future and what they will be able to count on.

Mr. Speaker, I will continue my speech after question period.

[The Acting Speaker, Andrew Scheer]

The hon. member will have 12 minutes remaining to conclude his remarks.

The House resumed consideration of the motion 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 read the third time and passed.

[Tony Martin, NDP, Sault Ste. Marie, ON]

Mr. Speaker, as I was saying before I was interrupted by question period, this agenda item, this mini-budget, this statement by the government takes Canada in the wrong direction.

It is not a balanced approach to the way that we should be doing business in this place on behalf of Canadians and communities across this country. We had in front of us what we believe in the NDP caucus an unprecedented opportunity to invest in people and their communities.

The government has failed to do that. In failing to do that, the real disappointment is that the only caucus in this place to stand up and say so and vote consistently against that agenda item has been the New Democratic caucus. We have had the support of the Bloc from time to time.

Certainly, it has been telling that the Liberal caucus has not found it within its wish to actually stand up and vote against this budget. The Liberals have sat on their hands on at least three occasions that I can remember when they had an opportunity to say to the government that it was going in the wrong direction, that this is not the right agenda, that this is an unbalanced approach, and that it will hurt communities and people.

This budget will hurt working families across this country. This may sound strange coming from a New Democrat, but this was an opportunity for targeted tax relief for those who needed it most. The government has failed to do that.

The government failed to recognize even in the industrial realm which sectors of our industry needed help the most. The budget gives relief to big banks, to the oil industry and to insurance companies. The budget did nothing and it will do nothing as it rolls out for the manufacturing sector. Communities such as Hamilton, St. Catharines, Winnipeg and Sault Ste. Marie and others, that are being damaged by the downsizing in the manufacturing sector, will continue to feel that pain.

There will be no help coming from the federal government because there is nothing in this mini-budget. There was nothing in the previous budget and nothing in the Conservative's agenda to give communities any hope that the government will come to the table and be a partner, and participate in some kind of a restructuring and realigning of their fortunes.

It is for these reasons and the many others that my colleagues have laid out in front of this place and will continue to lay out over the next number of days, that we in the New Democratic Party caucus will be voting against this mini-budget.

Travelling the country over the last couple of years, I have met with community groups and leaders, and people struggling to make ends meet. I have met with the poor, with advocates on behalf of the poor, and with the poverty communities across Canada.

There is a reality out there that conditions are getting worse by the day. This is supported by all kinds of analysis and studies done by the National Council on Welfare, the Canadian Council on Social Development, NAPO and KAIROS. These are all well meaning groups. They are hard-working and committed groups in this country that have been working for years to try to deal with poverty, this unnecessary reality, in this wealthy country.

These groups say to us that corporations do not need tax cuts and tax breaks. What we need to be doing is investing in those institutions that will support Canadians and that will help Canadians and their children to make ends meet. Canadians need help looking after their health needs, getting their children into education, so that they can do better for themselves.

Canadians need affordable, clean and safe housing. Canadians need to be provided with the drugs that they need when they are sick. They also need the child care that is so necessary, both for the children's growth and development, as well as for those families where the parents want to get out and participate in the workforce without it costing them an arm and a leg. The government is not going there and it is not doing all these things.

The other really disturbing, unfolding reality that I discovered over the last couple of years, and perhaps it is because of the way our economy is evolving in Canada, is the low wage jobs that are being created, as opposed to the well paid jobs that were previously in the manufacturing sector.

We have more and more people working harder, working longer hours, and working full time all year living in poverty. We have a large group of people who actually have decent jobs who are feeling very insecure in those jobs. They do not know from one week to the next whether they will have their job next month or the month after.

They are a paycheque or two away from actually experiencing some pretty difficult circumstances themselves. Where a month, or six months, or years ago they could work hard, make investments, get an education, look ahead to bettering themselves and creating a better situation for their children, they are now beginning to look over their shoulder. They are not looking ahead any more. They are wondering what if they lose their job, what if a paycheque does not come in, what happens to them, and what is there for them?

The most obvious example of the damage that has been done, not necessarily by the current government but by the previous Liberal government was when it changed the rules that governed how we delivered the employment insurance program. In fact, many will not qualify and will end up in some pretty meagre, desperate welfare situation.

The social safety net that all of us over a number of years wove, because it was the Canadian thing to do for each other, for our neighbours, for our family members, for our friends, and for all of those people who call Canada home, has now disappeared.

As these people look over their shoulder they are beginning to see, as we have seen and have been trying to point out to this place and I have been trying to point out in my travels and through my focus on eradicating poverty and reducing poverty, that the social safety net is not there any more.

We have had an opportunity for the last 10 years at least in this country to make serious investments in those areas such as child care, housing, post-secondary education, and the health care system which is falling apart as we speak. We had an opportunity in all of those things that go to making sure that absolutely everyone has those fundamental necessary supports we have to have if we are going to be healthy, if we are going to look after our children, and if we are going to participate in the economy. Unfortunately, they are not there any more.

If we believe the economists who have done the analysis of this mini-budget and the budget of the government, we are going to be relieving the government of a capacity that is anywhere from $6 billion to $12 billion a year. After this budget goes through, this money will no longer available to government to invest.

If we pile that on top of the corporate tax breaks the Liberals gave to their friends and benefactors over the 13 years they were in power, that is a substantial amount of money. That could have done a lot of good. That could have created the kind of Canada that we can only imagine, that the world in many places thinks that we are, but in fact the reality is different.

We still have time. We have a couple of days here. We are hoping that the Conservatives will listen. We know that the Liberals have given up. They have virtually, if not physically, mentally gone home for the holidays. But we are here and we are going to be here, and we are going to get up on our feet, every last one of us. We are going to speak to this bill and we are going to put on the table those very real concerns.

We are going to speak about those concerns based on our experiences, out of the work we are doing, out of the travel across the province, out of going back to our community every weekend and talking to those men and women, talking to those families, talking to those institutions, and talking to community leaders who are telling us a very different story than the Conservatives are wanting to roll out in front of us as they have when they presented this budget.

They are no longer getting up in the House either because they want to get home for the Christmas holidays as well. They do not want to do the--

[The Speaker, Peter Milliken]

Order. I regret to interrupt the hon. member, but his time has expired.

Questions or comments, the hon. member for Burnaby—Douglas.

[Bill Siksay, NDP, Burnaby—Douglas, BC]

Mr. Speaker, I thank my colleague for his work on poverty issues over many years in the province of Ontario and across Canada.

He will agree with me that there has been report after report on poverty in Canada. All those reports call us to action, but they also stress the importance of a national housing program to eradicate poverty.

There have been many reports in the last few months about the need for affordable housing, for social housing, for programs to deal with homelessness, such as the preliminary report from the UN special rapporteur Miloon Kothari and the report put together by northern agencies on homelessness and women in northern Canada. Report after report have stressed the need for affordable housing and still we do not have a national housing program in Canada.

We used to have a housing agency that did excellent work. It was very creative and was known around the world. Canada Mortgage and Housing was known for its housing development work. Sadly, it has been gutted by Liberal and Conservative governments over the past decades. It does not do that kind of work any more. We need to get back to that again.

In question period today, the member for Sault Ste. Marie asked questions of the Minister of Human Resources and Social Development on the need for a national housing program. The minister said that the government was doing something. It is doing something with the money the NDP fought for in the last Parliament and in the last Liberal budget.

Could he talk a bit more about the importance of a national housing program to Canadians and as an anti-poverty measure in Canada?

[Tony Martin, NDP, Sault Ste. Marie, ON]

Mr. Speaker, my colleague does an excellent job as the NDP critic for housing. He knows this file inside and out.

He is right. I have travelled the country over the last couple of years. I have met with community groups, people who advocate on behalf of people who live in poverty and people themselves who live in poverty. They have said that we need a national housing program. With the money we are siphoning off and turning over to the corporate sector, we could begin a national housing strategy right now. We need it because everybody needs an affordable, safe place to call home.

Homelessness has become a national disgrace and disaster. Agencies that have been working for a number of years to come to terms with this reality in their neighbourhoods are running out of money. People committed to this kind of work are always digging deeper, but they are running out of energy. They need the government to partner with them and to provide them with support and resources.

I phoned the Toronto Disaster Relief Committee yesterday to get some statistics for my question for the minister and it has closed down. It is no longer in business. That agency, the most important agency in the country, was the voice for those who had no voice. It shut down because it had no resources.

We obviously need money for housing. We need a national housing strategy and a national homelessness strategy as well.

[Dawn Black, NDP, New Westminster—Coquitlam, BC]

Mr. Speaker, I also congratulate my colleague from Sault Ste. Marie for his advocacy work on social issues in our country. He is a role model for many of us in my caucus and should be a role model for many other members of Parliament.

Canada is living off the social investment made in the seventies and the early eighties. Much of that social infrastructure is crumbling and is in great need of investment. There is a social structure deficit, and I find that very distressing.

I have noticed in certain sectors in my own community, and certainly in the downtown east side of Vancouver, that emergency services personnel are being left to deal with the people in most need in our society, the very poor and the mentally ill. It is a shame that the Conservative government and our country have left the care of the most vulnerable to emergency services personnel, whether they be paramedics or police officers. Would the member for Sault Ste. Marie comment on that? All of the issues he raised around housing, about investing in the homeless, relate to this.

What a shame for Canada to be left now with emergency services personnel being the last resort to deal with the people in our society, people who the government and many Canadians have forgotten.

[Tony Martin, NDP, Sault Ste. Marie, ON]

Mr. Speaker, the member is absolutely right. A lot of the homeless end up in jails because communities have no other options it seems.

There are places in the country where people would not expect to see homelessness. The most prosperous and economically active of our communities, like Calgary and Victoria, now experience homelessness like no other city in the country.

Because Calgary does not get the money from the province and the federal government to deal with the issue, out of desperation it is passing laws to make it illegal to be homeless. People cannot sleep in the parks, or under bridges or hang out in the malls. What do they do?

[Dawn Black, NDP, New Westminster—Coquitlam, BC]

Where are they supposed to go?

[Tony Martin, NDP, Sault Ste. Marie, ON]

Exactly, and that is why they end up in the preserve of our emergency services.

[Peggy Nash, NDP, Parkdale—High Park, ON]

Mr. Speaker, while I agree with my colleague on his criticism of the tax cuts contained in the current mini-budget, which we will vote on, I also want to raise this point. Between 1984 and 2006, with the current government and the two previous governments, Canada voluntarily gave up over $250 billion in revenue through tax cuts.

The incredible challenge, the disaster, the crisis of poverty that we face in the country did not happen overnight. It has been building for 20 years. Could the hon. member describe how the previous Liberal government laid the foundation for this disaster?

[Tony Martin, NDP, Sault Ste. Marie, ON]

Mr. Speaker, people have studied and worked on this challenge for a number of years to figure out how a country so wealthy as ours could all of a sudden have such poverty, with people sleeping on our streets. If we talked to them, they will tell us it started in a very serious way when the previous Liberal government got rid of the Canada assistance plan.

That was the vehicle the federal government used to ensure there was enough money flowing to the provinces and the municipalities to deal with these issues. It was the vehicle that used to ensure there was accountability, that the money being transferred for programs was actually being spent on those programs.

When the Canada assistance plan was dropped, it was the tool box the federal government gave to the provinces—

[James Bezan, Conservative, Selkirk—Interlake, MB]

Mr. Speaker, I rise on a point of order. I know members of the NDP are trying to filibuster and are running out of things to say, but they have to stay on topic.

We are talking about Bill C-28, at third reading. Every comment made has to be about the substance of the bill. They cannot go on one tangent or another about what they do with money. They have to talk about the issues of Bill C-28. I would ask that you bring them to order.