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 Specifically, the excise tax exemptions for renewable fuels, including ethanol and bio-diesel, are repealed, effective April 1, 2008.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

Motions in AmendmentBudget and Economic Statement Implementation Act, 2007Government Orders

December 7th, 2007 / 10:40 a.m.
See context


Mario Laframboise Bloc Argenteuil—Papineau—Mirabel, QC

Mr. Speaker, I am pleased to rise to speak to the NDP's amendment to Bill C-28, which is about the Conservative government's economic statement.

At the outset, I would like to make it clear to my NDP colleagues that the Bloc Québécois opposed Bill C-28 and the economic statement. We will also oppose the NDP's amendment for one simple, good reason. The reason we are opposed to the economic statement is that it does nothing to address the most serious crisis currently facing Quebec's regions: the crises in the forestry and manufacturing sectors. Once again, the NDP must be seeing the world through rose-coloured glasses, because it has not put forward anything to solve the real problem: the crises in the manufacturing and forestry sectors.

My colleagues here in the House will confirm what I am saying. The member from Chicoutimi—Le Fjord will tell you that the Saguenay region has been hit hard by the forestry crisis, and my colleague from Berthier—Maskinongé will tell you that Mauricie has been feeling the pinch because of the crises in the forestry and manufacturing industries. The time for looking at what the Conservative government could do through rose-coloured glasses has passed. Once again, it is time to see things as they really are.

It is clear that the Conservative Party has decided not to do anything about the forestry and manufacturing crises in its economic statement. The party's philosophy is to let businesses die, to let the free market do what it wants, to believe that big companies will survive and should be allowed to destroy small companies every day. Right now, the problem in the manufacturing and forestry sectors is that the big companies are destroying each other. Even they cannot survive. That is the reality of the situation.

The government is offering tax cuts to businesses, and that is fine for businesses that are making a profit. But right now, Quebec's forestry sector and much of its manufacturing sector are having problems. The softwood lumber crisis was never resolved. Businesses were never given the help they needed. Then the Canadian dollar rose to dizzying heights. Even in the economic statement, the picture painted by the Minister of Finance is one of economic recession in the manufacturing sector. Oil companies will not be affected.

Obviously, in granting tax reductions, the Conservative Party wanted mainly to please its friends, the oil companies. That was the purpose of the economic statement and that is the problem I have today with the NDP motion. Once again, it does not address the real problem. The idea behind the motion is to remove tax credits, which is fine, but the NDP is not addressing and does not want to address the real problem, which is the crisis in forestry and manufacturing. The NDP, with its rose-coloured glasses, is as bad as the Conservative Party, except that the two parties are at opposite ends of the spectrum.

I am glad to be a member of the Bloc Québécois. It is the only party in this House that is in touch with the grassroots, close to the people, and that can clearly say what impact the higher Canadian dollar and the softwood lumber crisis, which the Conservative government never solved, are having today. Jobs are being lost in most regions of Quebec.

Companies are closing on the other side of the river in Gatineau. Everyone will say that it is a large city, but Domtar has closed and Bowater has shut down one machine. Once again, the forestry crisis is affecting the cities in Quebec. Imagine the impact it is having in the regions. That is the hard reality and the impact of the Conservatives' free-market approach.

In the manufacturing and forestry sectors, the government should look at its own data, its own figures, which clearly show that there have been successive job losses since 2005, totalling 125,000, including 65,000 jobs lost in Quebec since the Conservatives came to power. The economic statement solves nothing, absolutely nothing. The member from Roberval—Lac-Saint-Jean and the Minister of Labour are telling us to wait for the next budget. That means there is nothing in the economic statement, absolutely nothing.

That is why, once again, we will vote against Bill C-28 and against the NDP amendment. It was a flawed economic statement, a flawed bill for the forestry and manufacturing industries. We will take a stand for Quebeckers in the regions and in the urban centres who are being hard hit.

Shawinigan was hit hard last week and so was the City of Gatineau and insecurity reigns. Large companies such as Bowater and Abitibi-Consolidated have merged. That was the first phase of a shutdown that will be followed by a second phase. The companies, the industry and the owners are no longer hiding the fact that there will be a second phase.

The Conservative government is being consistent in its Conservative philosophy. It will wait as long as possible until as many businesses have closed as possible. In the end it will come to the rescue of one company that has only half its labour force left.

On one hand we have the Minister of Labour's attitude and on the other hand we have the Economic Development Agency of Canada, which is trying to revive the regions through diversification. At worst, we will end up with the Minister of Labour's approach. In my opinion, the member for Jonquière—Alma is an embarrassment to his region. He is saying that many jobs are being created in Alberta and that 55 year old unemployed workers should go there for work. That is his message. It is terrible coming from a minister from Quebec, especially from Jonquière—Alma, a region that has worked hard to build the Quebec of today and part of Canada.

Finally, if it were not for the primary resources sector, the forestry and mining sectors, Quebec and Canada would not be what they are today. The people in those sectors are living day to day.

The Conservatives think that since the oil industry is doing well we should all fall all over ourselves and make oil. Society is more complex than that. We realize every day that the Conservatives want nothing to do with Quebec's problems. The Conservatives say so and prove it every day. In any event, they have shown it in Bill C-28, in their economic statement. The New Democratic Party is doing the same thing by showing its flagrant lack of interest in the problems Quebeckers in the regions are experiencing in the forestry and manufacturing crisis. They must be able to sense that in the rest of Canada, but with their rose coloured glasses, instead of making amendments and proposing things that would solve the industry's problems, they want to lower corporate taxes.

The Quebec association of manufacturers and exporters is in favour of the tax cuts. In fact, the day these industries start making money, they will be happy to have more competitive taxation. But they are saying that this is not enough, because the crisis in the forestry and manufacturing industries must be addressed now. It is serious and will take some serious money. We must find a way to revive these sectors and implement everything the Bloc Québécois has called for in this House. We are telling the government that cuts and credits alone are not enough, that tax credits must be made refundable. This means that if a company is not making money, instead of it being deducted from profits, the company will receive a cheque, because it did not in fact turn a profit in a given year. With that money, the company would be able to purchase new machines and upgrade.

We are trying to make them understand that the solution is simple, and they know it. The problem is that they do not want to do it. Once again, the Conservative free market philosophy is that things should fix themselves. But things will not fix themselves in the forestry and manufacturing sectors for the simple reason that the Canadian dollar will not stop rising.

Obviously, the brilliant Conservatives had not counted on the dollar rising. Now this is happening and jobs are lost every week across Quebec. The Bloc Québécois will never accept this situation and will never stop rising in this House to speak out against what the Conservatives are doing and what the NDP is in the process of doing: ignoring the real problems, which leads to massive job losses in the forestry and manufacturing sectors.

These Quebeckers who have worked hard their entire lives to support this society deserve to be taken care of now. They deserve a good chunk of the $11.6 billion surplus to revive the forestry and manufacturing industries and not to create something new. That is what they deserve.

Motions in AmendmentBudget and Economic Statement Implementation Act, 2007Government Orders

December 7th, 2007 / 10:25 a.m.
See context


Scott Brison Liberal Kings—Hants, NS

Mr. Speaker, it is with pleasure that I speak today to Bill C-28, the budget implementation bill.

First, good governments make good, long term choices. They do not focus their policies on short term polls or on next week's polls. In fact, they focus on the challenges and opportunities in the coming century, which is why the Conservative government has made such a remarkable mistake in moving forward and cutting a consumption tax, the GST.

Cutting 1% on the GST represents a $6.5 billion loss to the federal treasury per year, and 2%, of course, is $13 billion per year, which is a lot of fiscal capacity that could have been used to invest in the priorities of Canadians, to invest in the social infrastructure of Canadians and to address the infrastructure deficit that is so critical in Canada today. It is also a lot of money that could have been used to reduce personal income taxes and help Canadians keep more of their hard-earned money, to reduce business taxes, to build a more competitive corporate tax environment and, ultimately, to build a richer, fairer and greener Canada.

Except for perhaps the Prime Minister, I do not think there is an economist in Canada who believes that cutting the GST is a good idea. In fact, if economists were a licensed body, the Prime Minister would probably lose his licence over the decision to cut the GST because it is such a bad economic policy.

Just 1% of the GST, that $6.5 billion per year, in terms of needed infrastructure, would mean approximately $20 million in every federal riding in Canada. Let us consider what that could mean in terms of green infrastructure, water and sewage treatment and recreational infrastructure across Canada, whether we are talking about arenas, pools or libraries, a great infrastructure deficit is going on.

When we look at it, there were two waves of federal government investment in infrastructure. One was the memorial infrastructure with memorial community centres across Canada, built, I believe, after the second world war. Further to that, there were the centennial projects after the great year of 1967, which was the year I was born. My mother was at Expo 67. I was there but I had not been born yet.

Beyond that, the fact that the government has made no investment in those kinds of infrastructure in a significant way ignores the facts. The facts are that Canadians need to live in healthy communities with up to date water and sewage treatment. They need investments in public transit, in green transit infrastructure. We recognize now the imperative of green investment in infrastructure. Canadians also need to live healthier lives and they cannot do that if they do not have recreational infrastructure for their children.

I will give some examples from my own riding of the kinds of infrastructure I am speaking of. The East Hants Sportsplex in Lantz, Hants county, which was built decades ago, has served the community well during its time. However, Lantz and Elmsdale, that whole area of East Hants, has doubled in population over the last 10 years. Its recreational infrastructures are strained and require significant investment.

When our government was in power, the Liberal government, those were the kinds of investment we made. In my riding, we invested in indoor soccer facilities, libraries, pools and community infrastructure, which can make a difference. Those kinds of infrastructures can make the lives of families better and can ensure we have healthier Canadians. In the long term, it would reduce the cost to the taxpayer by reducing the costs to the health care system over the long term.

We invested in transportation infrastructure, whether we are talking about the twinning of Highway 101 in my riding to the Annapolis Valley or we are talking about investments being made in conjunction with the provincial government at the time.

We invested in infrastructure on a community basis because we were part of a government that recognized the important role that municipal leaders have in building their communities. The fact is that municipal leaders have limited capacity to raise money. They have property taxes, which is a very blunt instrument.

The government of Jean Chrétien and the government of Paul Martin were the first Governments of Canada to recognize--

Motions in AmendmentBudget and Economic Statement Implementation Act, 2007Government Orders

December 7th, 2007 / 10:05 a.m.
See context


Paul Dewar NDP Ottawa Centre, ON


Motion No. 1

That Bill C-28 be amended by deleting Clause 181.

Mr. Speaker, today, I rise to speak to the amendment that I put have forward. I want to begin by thanking my colleague from Hamilton for seconding the motion.

In fact, it is a very short amendment to Bill C-28. It asks that we delete clause 181. I say that because Bill C-28 is quite a document. It is in fact a document that is hundreds of pages long and this one particular amendment to delete clause 181 would do something extremely important. It would delete the corporate tax cuts that are in this package.

Notwithstanding the brevity of the amendment, the impacts I think would be substantive and positive.

We have seen in this country unprecedented growth. We have seen prosperity for some, but not spread out and achieved by all.

It is my belief that when we are dealing with tax policy, it is important to look at the many and not just the few. In this case, clause 181 looks at the few; in other words, those who would benefit from corporate tax cuts.

Some would say that is well and good, that it actually would be a good tax policy because it would increase investment in the country.

It sounds good, in theory. However, we have to strike a balance in this country. When we have Canadians sitting around their kitchen tables, as we speak, looking at how they are going to make ends meet, they would not see the same benefits in Bill C-28 that are proposed for corporations. They would see less benefits, if we were to do a cost benefit analysis.

In fact, in the last number of years, we have seen a widening prosperity gap, and our party has been very clear on this issue. In fact, the affordability of things is increasing for many Canadians, such as health care, which I know, Mr. Speaker, has been a concern of yours in the past and remains a concern of yours.

In 1980, 80% of our health care system was publicly financed. We are at the level now where 70% of our health care system is publicly financed which means that 30% is financed through the private sector.

I say that because many Canadians cannot afford the drugs they need. Many Canadians are on waiting lists and are having to seek other forms of help in terms of getting health care when they need it.

There is nothing in this package that would help them. There is no affordable drug plan in this package. There is nothing that would help everyday Canadians who need affordable education. There is nothing in this package that would deal with the housing crisis. There is nothing in this package that would give hope to people who need help right now.

This amendment would eliminate the corporate tax giveaway. In fact, David Lewis once famously said it is corporate welfare.

I see it as corporate welfare because the party in power right now never ever campaigned on this corporate tax cut. Members will remember the Conservatives famously ran on five things. I can guarantee that corporate tax cuts was not in those five issues. They talked about the GST, certainly, but they did not talk about corporate tax cuts.

So, this is about holding the government to account. It is about equity. It is about the importance of investing to make our country more productive. In fact, a representative who spoke to committee on another bill recently said:

Investors will keep investing in Canada. Why? Because we have an educated, efficient workforce. We're marvellously endowed in resources. We have a good, though perhaps somewhat neglected, infrastructure.

He went on to say that corporate cuts are not what brings an educated and efficient workforce, it is not what protects our environment and natural resources, and it does not rebuild and strengthen our neglected infrastructure.

The point that we are endowed with resources and have a good, though perhaps somewhat neglected, infrastructure is key because when we look at the way these corporate tax cuts will be handed over, it is basically like throwing money into the wind and hoping it lands in the right place.

By the way, the person who I am quoting was actually a representative from the Canadian Chamber of Commerce. From my perspective certainly not someone who the government would usually ignore. However, in doing this act, in providing these kinds of corporate tax cuts, in fact it is.

I want to take a moment to speak to the opposition parties, both the Bloc Québécois and the Liberal Party. Recently, the leader of the Liberal Party spoke to his party's vision on economics and fair taxes. He said that the previous Liberal government reduced the federal corporate tax rate to 19% from 28% and that the Conservatives will reduce it to 18.5% by 2011. He said that he would go deeper than that and then went on to tell us why.

I would plead with the Liberal Party to take a look at where our corporate taxes are. The fact is that it gave the green light to this government with this speech in saying that it should go further. Indeed, it did.

Many have said that once the Conservatives heard that the Liberals were going to go deeper in corporate tax cuts, they raced to 15% when they were going to stay at 17%. I hope the Liberal Party takes a look at who benefits from these corporate tax cuts, particularly in the way they are ascribed.

I do not believe that at this point in our economy, when students have record debt, when we have an infrastructure deficit of $123 billion, and when people cannot afford the medicines they need, that we need to give corporations welfare.

This is a very simple, sanguine, smart amendment to a policy that is wrong. Further corporate tax cuts were never debated during the election. I have quoted spokespersons from the Chamber of Commerce who have said that the key thing to invest in is infrastructure.

There is absolutely no guarantee, when corporate tax cuts and gifts are handed over to corporations, that they will invest. We hope they would, but where is the guarantee? Indeed, where is the accountability?

It is interesting to note that we see on the front page of the Ottawa Citizen today that the government was able to forgive huge tax bills for a select few Canadians, 35 of them, that had been burned during the boom and bust of the high tech industry. It is sad for those people and I guess terrific for those few who are going to benefit, but where is the tax fairness for other Canadians?

Where is the fairness in this bill? This amendment would actually balance things off. It says now is not the time for deeper tax cuts for corporations. Now is the time for key strategic investments in people. That is what has been missing from the government. Where is the human face in its economic plan?

It throws out the idea that there is a GST cut. When we compare that to the deep cuts in corporate taxes and the minuscule crumbs that are being handed over to everyday people, there is a balance problem.

When we take a look at certain people being rewarded because of successfully lobbying the government for investments they made and were burned on in the case of JDS Uniphase, we have to wonder who the government is listening to.

The government is not listening to seniors. Recently, my colleague from Hamilton pointed out that seniors have been burned. Their pensions were not properly indexed. Is the government helping them out? No.

In summary, I hope that my friends from the Liberal Party will support this measure, will not stay with this corporate tax cut craze, and that my friends from the Bloc will support this amendment.

Indeed, I urge the government to look at this as a progressive thing that will help people and their communities. It will allow us to invest in people, our communities, our infrastructure, and cut off the corporate welfare that seems to exist today.

Speaker's RulingBudget and Economic Statement Implementation Act, 2007Government Orders

December 7th, 2007 / 10:05 a.m.
See context


The Deputy Speaker NDP Bill Blaikie

With respect to Bill C-28, I would like to inform the House that there is one motion in amendment standing on the notice paper for the report stage of Bill C-28. Motion No. 1 will be debated and voted upon.

December 6th, 2007 / 10:35 a.m.
See context

Senior Chief, Personal Income Tax Division, Tax Policy Branch, Department of Finance

Sean Keenan

With respect to the tax credit, the expert panel recommended that where activities don't involve supervision, these not be covered by the credit, because their recommendation was that supervision was required to encourage active participation, and also for a safety reason, that essentially organized activities would require an adult. Therefore they recommended that self-directed activities not be eligible for the credit.

I should note that Bill C-28, which is currently before Parliament, implements the changes for DTC-eligible children that were announced by the Minister of Finance last December, where essentially the fitness tax credit is being enhanced. For children with disabilities, it in fact provides an additional credit equal to up to $500 where a DTC-eligible child has enrolled in a program that costs at least $100 and the equipment that is required for those DTC-eligible children would also be covered by the fitness tax credit.

FinanceCommittees of the HouseRoutine Proceedings

December 5th, 2007 / 3:20 p.m.
See context


Rob Merrifield Conservative Yellowhead, AB

Mr. Speaker, I have the honour to present, in both official languages, the second report of the Standing Committee of Finance in relation to 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. The committee has had due consideration on this and is presenting it without amendment.

December 5th, 2007 / 1:50 p.m.
See context


The Chair Conservative Rob Merrifield

We'll call the meeting to order.

The first order of business of the committee is to recognize the first report of the subcommittee on Bill C-28. You have it there. It's a great report. You have the report in front of you, so I have presented it to you.

Shall the report be adopted?

Budget and Economic Statement Implementation Act, 2007Government Orders

December 4th, 2007 / 5:25 p.m.
See context


The Acting Speaker Conservative Andrew Scheer

It being 5:30 p.m., the House will now proceed to the taking of the deferred recorded division on the motion at second reading stage of Bill C-28.

Call in the members.

Budget and Economic Statement Implementation Act, 2007Government Orders

December 3rd, 2007 / 4:25 p.m.
See context


Joe Comartin NDP Windsor—Tecumseh, ON

Mr. Speaker, I rise to speak to Bill C-28, referred to as the budget bill, that is shocking in many respects in terms of its consequence.

We need to put this in the proper context and I will spend most of my time addressing the corporate tax cuts.

It is important to look back as recently as the budget of 2007 when the government came forward with a series of substantial corporate tax cuts over the next four years. In that period of time, the corporate tax rate would have dropped from 22%, which is where it was at the time, down to 18.5% by the 2011 budgetary period.

We then jump forward to the October-November period with the throne speech and to, what in the common parlance is being referred to as the mini-budget, the economic update statement.

What do we see? First we see in the throne speech that the Conservative government will reduce the corporate tax rate. However, when we jump forward to the mini-budget, all of a sudden that drop has become accentuated. It has become accentuated because in between the throne speech and the finance minister standing in the House, although I am not sure he actually stood in the House or did it some place else, he told the country that he would introduce even greater corporate tax cuts. Now we have the corporate tax rate by 2012 going to 15% as opposed to just six or eight months ago the proposal that by 2011 would have been fixed at 18%.

What happened in that couple of weeks, maybe a month, between the throne speech by the government and the mini-budget? We heard the opposition leader and a number of other members of the Liberal Party saying that we needed bigger corporate tax breaks. What we had was the government of the day and the official opposition taking the same position.

What I find it most shocking is when I look at where the bulk of those corporate tax breaks will go. They will go to sectors of the economy that, quite frankly, do not need them: the oil and gas sector and the banking sector. A full 50% of every one of those tax dollar breaks will go to those two sectors.

In the figures that came out showing the profit levels of those two corporate sectors, banks were the highest. They made over $19 billion in profit last year and they will break $20 billion at the rate they are going this year, perhaps up to $21 billion or $22 billion. They will be getting a huge tax break because of the size of their profits.

We see similar figures, because of the international demand for oil and gas and the export rates at which we are selling it, that the oil and gas sector will get huge corporate tax breaks from this change that was very rapid. It was in less than nine months.

I come from a region of the country that has as its primary economic base the auto sector. In that same period of time, we saw thousands and thousands of jobs disappear from that sector and a substantial number of closings. We saw it again in some of the news reports this weekend, going through regions in southern Ontario, seeing auto parts supplier companies shutting down in large numbers.

It is estimated that over the last two and a half years--and this took place not just during the 22 months of the Conservative regime but a good number of the months when the Liberals were still in power, 250,000 to 300,000 jobs have disappeared in that sector and it is not finished.

When we look at these corporate tax breaks, 50¢ on the dollar will go to the banks and the oil and gas sector. What is happening in the auto sector? Actually, nothing is happening because there is very little profit. Even for the large manufacturers, the full-blown, primary manufacturers, particularly in the auto parts sector, there is very low profit, if any at all, because so many of them are going bankrupt or at least going out of business before they go bankrupt.

Those corporate tax breaks will do nothing for the auto manufacturing sector, whether in the parts sector or in the primary manufacturers.

In roughly that same period of time, when we jumped from giving the substantial corporate tax breaks to, in the latter part of the year, even more substantial corporate tax breaks, we see in just six months a 7% drop in the auto parts sectors in terms of its productivity. Those are the exports going out of the country.

In the same period of time we wonder what the government has done. We constantly hear the Finance Minister say that he is giving a tax break. It has already been shown that those are useless. He says that he has accelerated the ability to take write-offs on machinery. If we are not making any money and have no profit to write these off against, those write-offs are useless also.

This is not anything new being heard by the government. Both the manufacturers and the auto parts sector have told it repeatedly what is happening.

What do we need? We need those corporate tax cuts reduced dramatically and that revenue, which would have come in, used to help the auto parts sector get through this. We are hearing that it needs $400 million immediately in the form of loans. It would be in that form, not a tax break because that would not do any good, and not with write-offs because that would not do any good. The sector needs loan guarantees and outright loans to allow the auto parts sector to purchase equipment that will allow it to be more productive, more competitive and be able to put people back to work.

Are we seeing that? Absolutely not. The Conservative government has refused to do anything in that regard. We have seen the province of Ontario step in and the province of Quebec step in with direct assistance because manufacturers are in a crisis. This is not something where we can talk long term policy. For example, if we do this, that will happen eventually. We are away beyond that. By the time that happens we may have lost the auto sector in this country.

I say that advisedly. I have lived in the community of Windsor all my life and, for the first time in the last two and a half to three years, I have become convinced that at the rate we are going with our trade policies and with the kind of economic policies we have seen, both from the Liberals when they were in power and now from the Conservatives, which have policies that are almost identical, we are at serious risk of completely losing, by eyesight 20:20, our entire auto sector.

That is a shock because the auto sector, and nobody can debate this, is the sector that drives the entire economy in this country. By and large, in comparison with any other sector, it is the major driver, and both those political parties are prepared to sacrifice that because of their belief in free trade agreements, which do not work in that sector, and by economic policies that have no benefit to the auto sector whatsoever.

Budget and Economic Statement Implementation Act, 2007Government Orders

December 3rd, 2007 / 4:10 p.m.
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John Cannis Liberal Scarborough Centre, ON

Mr. Speaker, thank you for the opportunity to add my comments on Bill C-28, the budget and economic statement implementation act, 2007.

It certainly was a statement worth discussing with our constituents. We had the opportunity to meet with them at home in our constituencies to get their views and opinions. We also had the opportunity to get the views of the city councillors and our provincial representatives. Today I would like to bring some of those comments to the attention of this House.

In the Liberals' last budget, moneys were allocated for the cities. The cities need funds to take care of sewers, to take care of roads--

Budget and Economic Statement Implementation Act, 2007Government Orders

December 3rd, 2007 / 2 p.m.
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The Acting Speaker Conservative Royal Galipeau

We will now have statements by members under Standing Order 31. When we return to the study of Bill C-28 after question period, there will be eight minutes left for the hon. member for Scarborough--Guildwood.

Budget and Economic Statement Implementation Act, 2007Government Orders

December 3rd, 2007 / 1:40 p.m.
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Peter Stoffer NDP Sackville—Eastern Shore, NS

Mr. Speaker, I will call this 10 minute speech opportunities completely lost.

We have billions and billions of dollars in surpluses, a lot of it coming from the federal superannuation pension plan as well as the EI fund, but most of it coming from Canadian taxpayers and businesses across this country. I have always advocated the one-third approach: one-third on debt relief, one-third on strategic tax incentives and relief and one-third on reinvestment. What do we get? We get $14 billion toward the entire debt.

We can argue whether that is good or bad, but the reality is--I would like those handclappers to stand in their places and tell families what they are prepared to do to help children with autism, what they are prepared to do to help families in the shipbuilding industry and what they are prepared to do to help widows of veterans who cannot get assistance because the government says that it does not have the money. What will they tell students? What will they tell all kinds of folks? Giving somebody on minimum income, under $15,000 a year, a GST break is like giving a diet pill to a hungry man. It simply does not make any economic sense.

The Conservatives talked about lowering the income tax rate but all they did was reintroduce what the Liberals did in their budget. It is like the Seinfeld show of regifting. They are not fooling anyone. Every economist said very clearly that if the government wants to give breaks to citizens, it should do it on the income tax roll, which is where we in the NDP believe it should happen.

We cannot sit here like Uncle Scrooge on our pile of cash and tell the people who require homes, education and a better environment that we will not do anything for them.

I just completed a tour of Resolute Bay, Arctic Bay and Iqaluit in the far north. Those people did not ask for a GST cut. They asked for an increase to their northern allowance, which has not increased in 20 years.

The Prime Minister showed up in Resolute Bay. He did not even tell the local citizens he was coming. He informed them, without prior discussion with the Nunavut government and the local government in Resolute, that the government would be putting a 100 man army base there. One of the questions asked concerned the cost but there was no answer.

He then dropped by Nanisivik, again without telling the local people until the last second, and said that the government would be putting a deep water port there. The first question the Inuit asked the government was whether it did an environmental assessment on increased traffic up Lancaster Sound. The answer, of course, was no.

In Iqaluit there is a desperate need for housing. These families are crowded into their homes now. What is the answer? It is no.

Speaking of autism, a motion was passed by all parties in the House, including the Conservatives, to have a national strategy working with the provinces and territories. What do we get? We get cancelled meetings and nothing else.

In the previous election, the government promised to get rid of the VRAB, the Veterans Review and Appeal Board, and replace it with people of medical and military backgrounds. Twenty-two months later VRAB is still there. If we ask any veteran or family member of a veteran who has had dealings with the Veterans Review and Appeal Board, it is nauseating at best.

Last Friday we asked the Minister of Veterans Affairs a question on what he said the government would do, which was to increase the VIP services to all widows and all veterans of World War II and Korea immediately. The Conservatives said that they would do that immediately upon forming government. They have done absolutely nothing.

The Conservatives said that they would look after and compensate all those people from defoliant spraying in Gagetown from 1956 to 1984 and that they would call for a public inquiry. What do we get? No public inquiry and only those people from 1966 and 1967.

Ironically, that is what the previous Liberals were going to offer. The member for New Brunswick Southwest, who is now the Minister of Veterans Affairs, went all over Gagetown and said that the Liberals were allowing his people to perish because they did not have any heart to care for his people. He is now the Minister of Veterans Affairs and he has the power to honour his own commitment and that of the Prime Minister. What do we get? Absolutely nothing.

We have the Atlantic accords in Atlantic Canada, in particular, in Nova Scotia. We have the soon to be former premier, Rodney MacDonald, in Nova Scotia, and that provincial election cannot come soon enough. Premier MacDonald tells us that life is good but let us do a little history on that.

First, when the budget was before us, Premier MacDonald told all the federal members from Nova Scotia to vote for the budget. We told him quite clearly, as did the member for Cumberland—Colchester—Musquodoboit Valley, that this was seriously flawed and that the Atlantic accord agreement with the previous government was broken. However, he did not believe it. How could his own Conservative brethren break their word? We have been telling him that the government does that on a regular basis.

He finally figured it out and then called everyone to tell them not to vote for the budget. The member for Cumberland—Colchester—Musquodoboit Valley did what his premier asked him to do and did not vote for the budget. What was the member's reward? Before he even sat down in this place he was automatically removed from the Conservative Party of Canada.

In another reward for that, the premier had a press conference months later with the two members from Nova Scotia, the member for Central Nova and the member for South Shore—St. Margaret's, and told them how great the new deal was. Can anyone imagine how the member for Cumberland—Colchester—Musquodoboit Valley and his Conservative constituents felt about the betrayal of the provincial government?

Premier MacDonald said very clearly that Nova Scotia would receive an extra $229 million out of this accord, not $226 million or $230 million, but $229 million. At a briefing with finance officials and the Parliamentary Secretary to the Minister of Finance, we asked them where Rodney MacDonald got the figure of $229 million? Their answer was that those were provincial numbers, not federal numbers.

Did Mr. MacDonald simply pick the number out of a hat? The reality is that there were no major discussions on the accord between the provincial finance department and the federal finance department. If we read Bill C-28 carefully, Nova Scotia will get screwed. It is as simple as that.

It is the politics of perjury that the Conservatives consistently practice. They say one thing while in opposition and when in government they turn around and completely abandon their morals and principles when it comes to these issues of finance.

It is unconscionable that the Conservatives admit that between 2002 and 2006 Statistics Canada made a mistake on its indexing for the Canada pension plan. The government admits that a mistake was made of well over a billion dollars. We asked, quite rightly, that the money be returned to Canadian seniors.

What answer did we get? The government said that it would not give it back. It admitted that a crown corporation of the government made a mistake but that it would absolutely not give it back to the seniors and their families.

I will admit that the mistake has now been corrected but there is still a four and a half year gap that has not been paid for. I can assure members that the people listening to this know that if they owe Revenue Canada any money at all, Revenue Canada will sick the hound dogs on them and it will collect the money with interest and penalties. Why can the same not apply to government when it owes the citizens of this country money?

This is an opportunity lost. The government had an opportunity to fulfill the promises that it made in writing. The Minister of National Defence says that they have letters on the accord that signify a contract.

Joyce Carter of Cape Breton had a letter and it said that the government would immediately extend the VIP. It has not happened yet. We simply cannot trust the federal Conservatives to do what they say. How can we trust the government with anything else it says? Tommy Douglas once said, “Fool me once, shame on you. Fool me twice, shame on us”. Shame on the Conservative government.