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.

Sponsor

Jim Flaherty  Conservative

Status

This bill has received Royal Assent and is now law.

Summary

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 Specifically, the excise tax exemptions for renewable fuels, including ethanol and bio-diesel, are repealed, effective April 1, 2008.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

Elsewhere

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.

Votes

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

November 29th, 2007 / 1:20 p.m.
See context

Liberal

Yasmin Ratansi Liberal Don Valley East, ON

Mr. Speaker, I am pleased to rise on behalf of my constituents of Don Valley East and represent them in this debate of Bill C-28, an omnibus bill that would implement certain portions of budget 2007 and the recent economic statement.

In particular, the bill covers personal income tax rates, corporate tax rates, interest deductibility, and the GST. Therefore, I would like to begin with the so-called personal income tax cuts announced in the October 2007 economic statement.

These cuts are no surprise to my colleagues in the Liberal caucus because they were contained in the last Liberal budget in 2005. The Liberal budget proposed to lower the personal income tax rate for those who earned the least in society from 15.5% to 15%. The effect would be to take 20,000 low income Canadians off the tax rolls and deliver tax relief where it is needed most.

Lo and behold, when the Conservatives assumed office, their first budget eliminated these tax measures. What did the government do instead? It increased the personal income tax rate from 15% to 15.5% and claimed it was reducing income tax.

Canadians are not foolish. They understood this.

Instead of giving a personal income tax cut, the government cut the GST by 1%.

Let us look at what effect this Conservative budget had on average Canadians in 2006.

For a single-income taxpayer earning $35,000 a year, the Conservatives increased his or her personal income tax by $122, so that the same person could then save a penny on a cup of coffee by the GST cut. But the devastating impact is that if the personal tax rate is increased so that a person is paying $122 more, that person would need to earn $12,200 more in order to get the same benefit in a GST cut.

The Conservatives were making no sense. They were not helping the people that we are here to help, the very low income earners.

This GST cut makes absolutely no sense. Most economists at that time agreed that the first Conservative budget suffered from a certain lack of fiscal sense.

Now, after almost two years, the Conservatives still suffer from confused priorities. The October economic statement effectively restores the Liberal tax cuts announced in 2005, yet the finance minister again refused the advice of leading economists and once again implemented a 1% reduction in the GST.

Let us be clear on this. The reason why a personal income tax cut makes more sense than a reduction in GST is quite simple. Canadians would far prefer a larger paycheque over a minuscule cut to the GST.

The GST is a consumption tax. I have already given one example. Another is that a Canadian who earns $300,000 and buys goods valued at that amount would benefit from probably a $3,000 saving. However, a person who does not earn that amount of money and wants to have a $300 benefit from a GST cut actually would have to spend $30,000, and that does not even guarantee anything. This really impacts low income earners.

The Conservatives could have gone a lot further with personal income tax cuts, yet they have chosen to squander another opportunity. Canadians would benefit if the Conservatives reduced personal income taxes.

There have been a lot of deputations by economists, poverty groups, community groups and tax groups. They all state that the consumption tax is not a good economic strategy. As well, the GST rate reduction represents a significant loss of federal tax income, which will have an impact on our fiscal future.

Therefore, the question is very simple: why not reinvest the approximately $12 billion in lost GST revenue in municipal infrastructure?

I recently met with the Federation of Canadian Municipalities, which is warning us that our crumbling infrastructure, most of it constructed in the 1950s, 1960s and 1970s, must be addressed now. The FCM estimates that we currently face a $123 billion infrastructure deficit across the whole country.

Without a significant federal investment, we will face a catastrophic loss of critical infrastructure at a significant cost to the taxpayer. As my mother always used to say, a stitch in time saves nine, and this is why it is very important to have a strategy now rather than wait to replace the whole of our capital works.

The FCM recommends that we adopt a national strategy to address this deficit. We in the Liberal Party were in the forefront of the cities and communities agenda and we believe that cities and communities must have stable and predictable long term funding.

The cities and communities agenda put forth by the Liberal government had municipalities at the table with the federal government and the provinces in order to address this problem. Unfortunately, the Conservatives are choosing to ignore this advice at the expense of our future.

Let us now turn to corporate taxes. The previous Liberal government reduced the federal corporate tax rate from 28% to 19%. The Conservatives are now talking about taking a bold step by further reducing the tax rate to 18.5% by 2011.

It is clear that Canadian firms need a corporate advantage on the international stage. That is why the Liberals argue for significantly lower corporate tax rates in order to compete at the global level.

That therefore brings me to another curious misstep by the Conservatives with respect to interest deductibility. Budget 2007, the second Conservative budget, contained what the former chairman of the Canadian Tax Foundation, Allan Lanthier, called “the single most misguided policy” to come “out of Ottawa in 35 years”.

I am not referring to the disaster caused by the Conservatives in the income trust sector in October 2006. Rather, I am referring to the tax measure tucked away on page 242 of budget 2007 regarding interest deductibility and foreign affiliates. It would have essentially thrown a major hurdle in front of Canadian firms that want to make foreign acquisitions by removing the interest deductibility from money borrowed to carry out those transactions.

While the Conservatives may fancy themselves as the party of free enterprise, the fact is that the finance minister is no longer a welcome face on Bay Street, nor is he any longer considered a friend of industry in Canada.

Tom d'Aquino of the Canadian Council of Chief Executive Officers commented that the proposed policy “may seriously undermine the competitiveness of Canada's homegrown champions--the companies that are most active and most successful in building global businesses from head offices” in Canada.

What the finance minister called a tax loophole is actually a competitive edge for Canadian firms to compete globally on an even playing field with firms enjoying similar tax measures in the United States, Japan and Europe.

Therefore, it was beyond belief why the minister was so determined to hobble the Canadian economy. According to tax specialist Neal Armstrong: “it is typical for a Canadian parent company to arrange most of its borrowing in Canada, then use the funds to invest in foreign acquisitions”.

Yet the Conservatives wanted to take this tool away from business. This policy proposal made no sense whatsoever. As Mr. Armstrong pointed out, the result is that “Canadian banks will lose the income from those loans, and the government in turn will lose the tax benefit from that income”.

Mr. Armstrong went on to say “that doesn't do us any good, because the bank in a foreign country isn't paying any [Canadian] tax”.

Tax specialist Karen Atkinson predicted that many companies would have had to “jump through hoops” to create financing structures, calling the finance minister's proposal a “make-work project” for lawyers and accountants.

Fortunately, thanks to a determined effort by the Liberal caucus, and especially the work done by my colleague, the hon. member for Markham—Unionville, the finance minister was forced to flip-flop on this issue and order a full retreat last May.

The finance minister was compelled to announce that interest deductibility would be preserved for Canadian companies investing abroad and that the policy would now target so-called double-dippers, or those companies that claim the same deduction in multiple jurisdictions.

Again, this confused leadership at the Department of Finance is not appreciated by the business community in this country. This is the same minister that brought on the income trust debacle and Canadians have had enough.

In conclusion, one has to wonder why the Conservatives so desperately lack an economic vision for the country.

Budget and Economic Statement Implementation Act, 2007Government Orders

November 29th, 2007 / 12:55 p.m.
See context

NDP

Jean Crowder NDP Nanaimo—Cowichan, BC

Mr. Speaker, I am pleased to speak today to Bill C-28. In the view of New Democrats, this was an unprecedented opportunity to invest in Canadians. Instead we see a Conservative government that continues to take Canada in the wrong direction.

It was not a balanced approach. It could have provided targeted tax relief for those who needed it most, instead of providing billions of dollars in tax relief to the friends of the Conservatives, the oil and gas companies. It was an opportunity to close that ever increasing prosperity gap. However, as we have seen in many of the programs and legislation that comes from the Conservative government, it has not invested in working class and middle class families, in ordinary Canadians.

With regard to the wrong direction, the Canadian Centre for Policy Alternatives, in a 2007 paper called “Why Inequality Matters: The Canadian Case”, talks about that growing prosperity gap. It see income distribution deteriorating.

The rich and poor gap is at a 30 year high, in after tax terms, the fastest growth in the past 10 years under economic conditions that traditionally lead to it falling. There is a far greater polarization of incomes. The bottom half has been shut out of economic gains of the last 30 years, despite working more hours. As a cohort, these families raising children are better educated and working more than those 30 years ago. On average, those families are working 200 hours more a year. That truly is a prosperity gap.

In the economic statement, the government talks about delivering broad based tax relief for individuals, families and businesses. Let us do a bit of a reality check around that.

The government's own document says that families earning between $15,000 and $30,000 will pay on average almost $180 less in tax in 2008. My question has always been this. Exactly how many child care spaces, how many child care days, does $180 in tax relief pay for?

Social Planning Cowichan recently issued a report in October. It talks about quality child care. I will read briefly from that because my community is in a crisis around child care. It says:

Quality, affordable child care is crucial to the social and economic welfare of the Cowichan Region. The successful development of our children, especially in the early years, has a long term impact on our region....

Currently, there is a critical lack of licensed child care spaces in the Cowichan Region, with enough spaces to serve only 48 percent of the estimated 4,862 children under the age of 12 who need child care. For the estimated 1,047 aged three and under who need child care, there are only 165 licensed spaces, or 16 percent of the number needed.

This situation continues to worsen due to the current labour shortage and increasing cost of housing which requires that most families need two incomes to afford a home which is resulting in an estimated 70 to 75 percent of mothers entering the workforce.

Three significant barriers to providing quality child care are consistently identified by information gathered from interviews with local informants as well as the websites of many provincial, national and international organizations involved in promoting quality, affordable child care: lack of child care spaces; funding for child care services and programs; staffing, training, recruitment and retention in birth to three year services.

The economic statement would have been an opportunity to take meaningful action around child care. The Conservatives will talk about choice in child care when they talk about the $100 a month, but that $100 a month simply does not create new child care spaces.

The New Democrats have put forward Bill C-303, which calls for meaningful attention to early learning and child care. One would hope, with the kind of support this bill has garnered, that the Conservatives would have seen fit to take the opportunity in the economic statement to invest in the creation of child care spaces and in early learning. Instead, we have seen tax relief of $180 a year for people earning between $15,000 and $30,000 a year. This kind of tax relief will not create child care spaces.

In my province of British Columbia, and I know in other provinces, many industries are facing severe labour shortages. We could have encouraged people to join the labour force by ensuring there would be affordable, quality, regulated child care. This was a missed opportunity to invest in working and middle class families. This was a missed opportunity to close that prosperity gap.

Another element that is of critical importance to Canadians, certainly to those living in my riding of Nanaimo—Cowichan, is housing. On October 22, the United Nations special rapporteur on adequate housing, Miloon Kothari, took a preliminary look at the Canadian housing situation. I will quote from his report because he says it far better than I could. He says:

Everywhere that I visited in Canada, I met people who are homeless and living in adequate and insecure housing conditions. On this mission I heard of hundreds of people who have died, as a direct result of Canada's nation-wide housing crisis. In its most recent periodic review of Canada's compliance with the International Covenant on Economic, Social and Cultural Rights, the United Nations used strong language to label housing and homelessness and inadequate housing as a “national emergency”.

This is an international overview of what is happening in Canada. People are saying that the housing situation is in a crisis.

Mr. Kothari goes on in his report to talk about why there has been a significant erosion of housing policy rights over the past two decades. Not only is the current Conservative government not taking the kind of action that is required in terms of a national housing strategy, but when the Liberals were in government, they directly contributed to the crisis that we are in today.

Mr. Kothari says:

—Even more dramatic housing cuts in the coming years as the federal government “steps out” of its financial commitments under the 1973 to 1993 national housing programme.

--Reductions in income support programs at the federal level, and in every province, that have left many Canadians with little money to pay for ever-increasing housing costs, and

--A shift in housing policy to provide support for homeownership, mainly through the tax system, while eroding support for social and rental housing.

It is clearly a failure of leadership, both under the Conservatives and under the previous Liberal government.

The Cowichan Valley fall 2006 report talks about the crisis that has emerged in Nanaimo—Cowichan. It talks about the fact that no new rental units have been built in the Cowichan region during the last 20 years, therefore the supply is scarce. Vacancy rates in private rental buildings in the city of Duncan and in North Cowichan have declined in recent years from 8.4% in October 2002 to 1.6% in October 2005.

Under rents and incomes in the same report, in 2001 more than 6% of households in the CVRD had incomes of less than $10,000, and an additional 14% had incomes of between $10,000 and $19,999 and a further additional 12.9% had incomes between $20,000 and $29,999, in total, 35% of the households. Clearly, the ability to afford rent is a significant issue for many people in the region. The proportion of households spending more than 30% of their gross income on rent was higher in the CVRD than for B.C. as a whole. Thirty-five per cent of the households in my riding are making under $30,000. The $180 tax relief is in the pockets of 35% of the households in my riding. How will $180 help someone rent an apartment when rents are rising because of the severe shortage in supply?

A national housing strategy looked at a continuum housing, from homelessness, transitional shelters, accommodation for singles and families, up to aging in place. We need a continuum. We need that national strategy. That was in the Cowichan Valley. It is no different in the city of Nanaimo.

Another report talked about the market rental and row housing vacancy. It was 3.4% in 2002 and down to 1.4% in 2005. They are turning away people from emergency shelters. Transition houses that responded cited the increasing cost of housing, both owned and rental. They also cited the increasing incidence of homelessness and raised concerns about the declining stock of rental and market housing.

A number of suggestions have been made on actions that can be taken to deal with it. It is no surprise that people in Nanaimo are calling for a range of housing types catering to different ages, family types and income levels, including smaller unit sizes to low income single adults and seniors.

Back in March, a panel, sponsored by the Nanaimo Canadian Federation of University Women, talked about the fact that there were a significant number of women in Nanaimo living on the streets. The Haven Society's Willow WAI for Women have said that 99% of homeless women generally have addiction or mental health issues, are undereducated, lack employment life skills and many commit crimes to support an addiction. They become homeless because of estrangement from their families due to violence or drug use, or marital breakdown or incarceration, or they have been evicted and lack affordable housing.

Affordable and adequate safe housing is only one part of dealing with homelessness in a community. We certainly see that very visible face of homelessness in many of our communities. The economic statement and the throne speech were an opportunity to take leadership both in Canada and internationally in a meaningful national housing strategy. It was a failure in dealing with some of these very serious issues confronting our communities.

Again, the economic statement talked about the fact that people who worked on our shop floors and assemble lines or in our forests and mills were struggling, that the manufacturing and forestry sectors were bearing the brunt of a strong Canadian dollar, that they were facing increased competition from emerging economies and that this is a difficult situation.

I argue the fact that a difficult situation is probably an understatement. In many of communities in Nanaimo—Cowichan our forestry sector reeling. Another one of the pulp and paper mills in my riding has applied for bankruptcy protection, and those are important jobs in our community. Forestry is not a sunset industry. Forestry is a vibrant and vital industry in the province of British Columbia and in other provinces across the country. We are not seeing a strategic investment and national leadership in forestry.

In my province and in my riding, raw log exports continue to be a source of aggravation. Our raw resources are being shipped elsewhere for processing as our sawmills close down. The closure of those sawmills is having repercussions for the pulp and paper mills. When the Bloc put forward a motion calling for some attention to manufacturing and forestry, the Conservatives voted against it and the Liberals abstained, instead of taking a strong stand for our forestry communities across the country.

Our critic for industry, the member for Parkdale—High Park, has compiled some good statistics. She talks about the fact that we have seen significant job loss. She said that there were job losses resulting in 8% of wood products. In British Columbia the manufacturing and forestry sector has lost 13,700 jobs. That is partly to do with the softwood lumber agreement. It did not take into consideration the downturn in the housing sector in the United States. This means the price per board foot has now dropped below that threshold, so we are now paying a 15% tax.

The economic statement acknowledged that forestry was struggling, that these were difficult times, yet there was no commitment in either the throne speech or the economic statement to develop a national strategy to ensure that our forestry sector would remain as a vibrant and vital part of our economy.

When we are talking about closing the prosperity gap, let us just turn for one moment to first nations.

First nations, Inuit and Métis across this country continue to be the poorest of the poor. One of the pillars that we know will contribute to raising people out of poverty is education. The throne speech did mention education. The minister said that there needed to be investment in skills training and development with regard to industries emerging in the north. I would argue that there needs to be a far broader plan for education in this country.

We are seeing discrepancies throughout the first nations education system from coast to coast to coast. In an article today in the Winnipeg Free Press, there is an editorial on education on reserves. The numbers here highlight the difference. On one hand, we hear the Minister of Indian Affairs and Northern Development talking about the importance of standards and looking at provincial standards, curriculum and those kinds of things, and yet, on the other hand, he is telling first nations schools on reserve that he wants them to meet the standards but that he does not actually want to give them the same amount of money.

We have provincial standards on a per capita basis that talk about how much provincial governments say is necessary to provide an adequate education in the K to 12 system, but then we have the federal government telling first nations on reserve schools that it wants to deliver the same standards of education but that it does not want to give the money needed to do it.

Let us talk about some of these numbers. In this editorial it states:

The base funding--per student grants--from Indian and Northern Affairs Canada for on-reserve schools across Canada is lower than provincial grants, and that extends to grants that cover special education. As an example, in Manitoba the Opaskwayak Education Authority receives total federal funding that works out to $6,400 per student.

Contrast that to the Wapanohk Community School in Thompson--whose student body is almost entirely aboriginal--which is under a public school board that spends an average $9,384 per student. On average, Manitoba school boards spent $8,900 per pupil. Across the western provinces, the average was $8,386, according to a report compiled by the Society for the Advancement of Excellence in Education.

There is roughly a $3,000 difference between what the province of Manitoba is spending and what is funded for, in this case, one on reserve school. This is not atypical. This is happening in provinces across this country.

In 2004, the Auditor General said that the department did not have a good handle on the funds that were required for education and did know whether or not it was actually getting results for the money it was spending.

Right now the first nations educational renewal is up in 2008 and there is something called a band operating funding formula. Here we are, at the end of November, and there still has not been agreement on this band operating funding formula. We know there are huge discrepancies. At a meeting with the department and the minister this morning, they said that it was difficult and that there were different things happening in different provinces.

We talk about a prosperity gap. First nations are certainly in the middle of that prosperity gap. One in four first nations children live in poverty, which means their families live in poverty. We know that one of the elements to raising people out of poverty is adequate education so why are we not investing in education?

The same thing is happening with the building of schools. We have schools in Manitoba that have been on wait lists forever. We have schools in Saskatchewan where, from the department's own records, there is a serious problem with the funding. We heard from the department today that it is juggling funding around when there is an emergency.

If we truly mean that we are committed to education, we need to put the money into the education system for first nations, Métis and Inuit so they have access to an adequate education.

The economic update and the throne speech are missed opportunities to close that prosperity gap and it clearly takes Canada in the wrong direction. Therefore, we will not be supporting that.

Budget and Economic Statement Implementation Act, 2007Government Orders

November 29th, 2007 / 12:45 p.m.
See context

Conservative

Rick Norlock Conservative Northumberland—Quinte West, ON

Mr. Speaker, I listened to my colleague across the way discussing Bill C-28 and some other issues surrounding that and how it does not help some of the less privileged Canadians, I think were some of his words, or lower income people, especially those who may be single and raising a family.

I think the member forgot that Bill C-28 has the working income tax benefit. This is concrete action to help low income Canadians with various measures, not the least of which is WITB, as the finance minister calls it. I suppose we could say that it would be our spin that it is a good idea because it is a good idea and we are saying it is. However, there are other folks who are saying it is a good idea.

The United Way of greater Toronto has said that it is a positive change that will help improve the situation of low income families. The Rotman School of Management sings its praises. The Ontario Liberal finance minister said, “It's a positive move. I think it will help those at the lower end of the income ladder and I think the federal government has taken a good step”.

Indeed, the NDP member for Winnipeg North has said that WITB is an important program that goes in the right direction.

When the hon. member says that there is no help for lower income families, he is exaggerating profoundly the great benefits of Bill C-28. He says it is full of gimmicks. I see no gimmick when it does not take out of the pockets of the Canadian people some $190 billion over the next five years and brings taxes to their lowest levels in about 50 years. There is some great amount of exaggeration going on here.

If I could enlighten those folks who might be listening, the member said the GST reduction to a family of limited income does not do anything. When this family goes to the grocery store, or the young mother who has young children, they are buying products that have a tax on them. The young mother may not even be paying any income tax. People who do not pay any income tax at all are receiving a tax break through the GST rebate.

I ask the hon. member: Has he really read Bill C-28? Has he really thought through all the comments he has made?

Budget and Economic Statement Implementation Act, 2007Government Orders

November 29th, 2007 / 11:45 a.m.
See context

Liberal

Judy Sgro Liberal York West, ON

Mr. Speaker, when talking about budget bills, a ways and means motion is something I think all of us have a real interest in. When we have an opportunity, whether it is a last minute opportunity or not, to stand and speak in the House on things that matter to us, I am glad to have that opportunity.

Bill C-28, which we are talking about today, is not something with which we are 100% happy but, at the same time, do Canadians want an election? No. We have had plenty of them. The next election will be my fifth in eight years and I am not anxious to go on the hustings again. In fact, the $500 million that an election costs, which is the last number that I heard, I would much rather see it being invested in our children, our seniors or helping to lower the tax rates, a variety of things.

A far better idea for us is to keep the government going and move it forward for all of us.

As my colleague said, we are supportive of a variety of things in the bill but there are other issues that we are not. The economic policies of the current Conservative government are different in some ways from the policies of the Liberals. They are much more designed to be focused on the next election, which the Conservatives have been most anxious to have. I am not sure they are as anxious today to have it as they were previously, but they were quite anxious to have one. Our party and our leader were quite clear in not taking the bait and falling into that trap of going back into an election that, at this particular time, is unwarranted and could quite possibly bring us back into the same situation, except we could be on the other side of the House rather than on the opposition side.

However, I for one am not interested in going down that road at this particularly moment. I want to go down that road when we have clear, decisive issues on which the public can make a decision.

Even though we support some of the measures in Bill C-28, the idea of reinstating our Liberal personal income tax cuts was quite interesting. We had reduced it to 15% but in the Conservatives' very first budget, which, to me, indicates who they really care about, they increased the very lowest rate up to 15.5%. That rate is not one that the corporations or the rich worry about but it is certainly one that affects thousands of low income Canadians.

Again, that, as with many other issues, has indicated to me where the Conservatives' priorities lie and they do not lie with many people in Canada who need that helping hand up, which many of us support.

We also oppose the Conservatives' economic vision. I do not think they have one. I think they have a vision strictly on the next election and on how to get there and how to get a majority government, which is not why Canadians sent us here. They sent us here to effect a positive Parliament and to work on behalf of all Canadians, not to have an eye on how soon we can have an election campaign so we can get a majority. Our job is to come here every day and to work in the best interest of Canadians, period, for those who are rich and well off and for those who are not as wealthy as they might like to be.

The GST cut is ridiculous. I know it was a political move by the government but I look at all of the things in which we could be investing that $5 billion GST cut, whether we are talking about investing it in our seniors, in child care or in learning opportunities. We could be doing so much with that $5 billion.

I am sure the Canadian public could think of what we should do with the $5 billion rather than cutting the GST. We only need to look at our cities and the campaign in Toronto, which is the city I represent, for the 1¢ now out of the GST. We could take that $5 billion and reinvest it in our communities or even target it to our major cities.

This week, campaign 2000 released a huge report about how much poverty there is in Canada. A lot of people like to think that the poverty level is quite low. It has been a very difficult issue to deal with and as much as we try to move forward and reduce it, we are reducing it very slowly.

Far more investment needs to be made in education so we can ensure people get an education because, as far as I am concerned, education is the key to ending poverty. A good education reduces poverty because education opens the door to many opportunities. However, education for some people is way beyond their means. Refocusing some of the $5 billion on those opportunities would have been a good thing to do.

Early learning and child care would probably have been this century's newest and best social program. It would have provided help for a lot of struggling single parents. One area in my riding is quite affluent but I also have areas that are very high need areas. Many women in my riding who are single moms went back to school to get a job but now they cannot afford to put their children into child care where it is safe for their children or the waiting list for subsidies is huge.

As much as we say that we want to get people into a healthy economic stream, if we do not provide learning opportunities for them and safe environments for their children, then we are wasting our time. We can spin our wheels as much as we want talking about how we will end poverty, but if we are not providing the opportunities for those people who are at the minimal level, then we will never succeed.

The Liberal Party made a commitment to early learning and child care, although it did take us a while to get it because when we came into government in 1993 we had a $43 billion deficit. Canada was almost at the point of bankruptcy. It took six or seven years for us to deal with that issue and to get the country's finances in order. From that point, we were able to start reinvesting and working on achieving the goals that we all wanted to see go forward.

Unfortunately, that did not happen. We did not end up with the support of the NDP and the government was defeated. I expect that it will be a very long time before there will be a desire to have that new social program here in Canada again.

It took a long time to get the provinces on board and to do all of the work that is required for these kinds of agreements. They do not happen overnight. A lot of great work was done by my colleague and it is unfortunate that we were not able to see that program come to fruition. It was just one more casualty, but I do not think the people who voted thought that would happen.

Politics being what it is, governments come and governments go, as the Conservative government will. We will continue to ensure we move rapidly forward so that when an election does come, we will have plenty of opportunity to lay out our platform showing where we will go to ensure we have a richer, fairer, greener Canada.

If we want to have enough money to invest in our children, in low income seniors and so on and so forth, we need to ensure we also have a strong economy. Our manufacturing sector and our auto industry are suffering tremendously as a result of the rising loonie and we need to deal with that issue. We need to find a way to protect jobs.

When we talk about jobs we are not talking about $7 an hour jobs. For people to feed their family and pay the mortgage, they need to earn more than $7 an hour. The comment about how the number of jobs has increased is not a valid comment. As a result of various issues, we are losing the good quality jobs that Canadians had but we do not hear the Conservative government telling us how it will offset this problem.

An important issue for all of us is to ensure that Canadians are employed. We do not want our country to go into a recession. Many of us remember how difficult that was for many people. We want to have a strong Canada and we need to ensure we are moving forward in a positive way.

Budget and Economic Statement Implementation Act, 2007Government Orders

November 29th, 2007 / 11:40 a.m.
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NDP

Alexa McDonough NDP Halifax, NS

Mr. Speaker, I have to say in listening to the member for Esquimalt—Juan de Fuca that one has the sense he and his party are still fighting the last election instead of addressing this issue, the current bill that is before us, Bill C-28, which effectively combines the budget in the spring with the mini budget that was brought in this fall. I am not sure how that serves Canadians.

I listened very carefully when he conducted what was a fairly vicious attack, actually, on my colleague, the member for Trinity—Spadina, around the issue of balance. His criticism of her speech on the budget before us, and also on the NDP's decision to oppose this budget, was that budgets need to be about balance.

Speaking of balance, I am sure the member is well aware that the government's corporate tax cuts alone will cost $50.5 billion, phased in over six years, and will keep costing the treasury $14.8 billion every year. If this member has done his homework, and he usually does, then he will also know that this budget actually will benefit the average hard-working Canadian by about $1.50 a day.

I want to ask the member whether this is his idea of balance. If it is not, why is it that not only this member but his entire caucus have decided that instead of taking a stand against the lack of balance contained in this budget, they are actually going to sit in their seats, as they have already done, and are not prepared to commit themselves or vote one way or the other?

Budget and Economic Statement Implementation Act, 2007Government Orders

November 29th, 2007 / 11:20 a.m.
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Macleod Alberta

Conservative

Ted Menzies ConservativeParliamentary Secretary to the Minister of Finance

Mr. Speaker, I listened with interest to my hon. colleague from the NDP and her comments about Bill C-28.

It is difficult to understand how the hon. member can say that there is nothing in all of these tax measures. We have reduced personal income taxes. All the supportive measures, in what has been lauded by many Canadians as a very forward thinking and positive move, have been wrapped into one in the second implementation act of our budget.

The economic statement was filed by the finance minister in the House, but because of the NDP members, he was unable to speak to it. They refused to allow the finance minister to make a public statement in the House about the fall economic update. I am still amazed that they refused to allow him to speak in the House of Commons. He could have told Canadians that we were giving back some of their hard-earned tax money.

It is interesting that the hon. member suggests the Liberals may abstain. The NDP will vote against this. This morning the Bloc said that it would vote against it. I have more respect for the Liberals abstaining and not blocking this than I have for some other members of the House, who will deny benefits of $190 billion over 22 months. That is what we have provided in the economic statement, when it all comes together, in reduced taxes for Canadians. The NDP is going to vote against that.

I wish the hon. member luck when she goes back to her riding and says that she opposed $12 billion in cuts to GST. How will she face her constituents when she tells them that she does not think they are worthy of a cut in taxes?

Budget and Economic Statement Implementation Act, 2007Government Orders

November 29th, 2007 / 11 a.m.
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NDP

Olivia Chow NDP Trinity—Spadina, ON

Mr. Speaker, there is a lot of sound and fury in the House this morning signifying not a whole lot. Why? Because ordinary Canadians cannot count on the official opposition, the grand Liberal Party of Canada, to actually do anything about the mini-budget. The Liberals will sit on their hands and not participate at all in the vote that will come after the debate.

The bill before us has 14 parts. None of the 14 parts really contributes much to ordinary Canadians and their communities. It continues the grand Liberal tradition of giving large corporate tax cuts to the most profitable organizations in Canada.

From 2001 to 2007 Canada has lost over $53 billion in revenue that we could have had. Imagine what that money could have done in terms of investing in communities. It does not surprise me that in the upcoming vote in the House, members of the official opposition will sit on their hands and not vote because the mini-budget before us continues the Liberal tradition.

Part 14 of the bill reduces the general corporate income tax rate much further, from the original 2001 tax rate of 28% to 21%. Now it will take it down to 15%, because 18% is not low enough. The government will forgo at least $14 billion per year because of corporate tax cuts.

What does that mean? When the bill passes, all the massive tax cuts in the mini-budget will mean close to $190 billion in lost revenue, a complete gutting. That is really unfortunate, because there will not be much money left to invest in ordinary Canadian communities.

Big urban centres and small communities across Canada are suffering a great deal. Every one of them is struggling to balance the budget, as they have to do. There are massive property tax increases all across Canada because the municipalities cannot handle the kind of debt load they have. They are looking to cut vital services in local communities.

In my area the library just up the street from where I live has always been open seven days a week. However, this coming month the library will not be open on Sundays. Why? Because it has no money to open on Sundays. The city of Toronto does not have the kind of funding to continue to keep that library open on Sundays. That is really unfortunate, because a lot of families and children count on the library to be open on a Sunday so they can do their homework, read, borrow books or videos. It is a place where a lot of the community gathers.

Speaking about gathering places, community centres are the lifeline in local areas, especially for the at risk youth. They have no other place to go other than the local community centre. However, the community centres are also facing trimming because there is just not enough funding.

Because of smog a lot of people suffer asthma attacks. We would think that the budget would have invested in public transit in a massive way. It does not. In municipalities all across Canada there is hardly any funding for public transit. We are seeing fare increases, service cuts or the inability to increase the service. People are standing out in the cold waiting for buses to come. The subways are jam-packed. More people want to leave their cars at home but unfortunately that is not possible because there is not enough investment in public transit across Canada.

We are looking also at a massive deficit in infrastructure funding. The Federation of Canadian Municipalities has said that there is a $123 billion deficit in infrastructure. This budget has not increased funding in infrastructure for different cities. Whether it is highways, housing or potholes, none of that work is going to be done because there is no investment for it.

Because there is no investment in communities, cities and municipalities, many municipalities are having difficulty investing in their water treatment plants and sewage plants. In Toronto, for example, the water rate is going up because the capacity is just not there to retrofit the pipes, which needs to be done because the pipes are very old.

There is really nothing to support immigrant families in the mini-budget. We have recently found out that the user fees that are being charged by the immigration department in fact are going into the general revenue stream. The department actually makes $100 million per year from immigrants who apply to bring their families, fathers and mothers into the country. Refugees have to pay hefty fees to bring their families to Canada. None of that money, the $100 million in application fees, is invested in dealing with the backlog which is now at 800,000 people. If one is sponsoring a family, it might take three, five, eight years. In fact we have heard of cases where the parents of immigrants have died waiting to come to Canada to be reunited with their families.

There is no investment, whether it is the $100 million or new investment, in terms of settlement services. We recently heard that a lot of agencies are waiting for immigrant services funding from ISAP, the immigration settlement and adaptation program. They have not received their funding so they are beginning to give out notices to many of their agencies. That means many new immigrants will not get the services that they desperately need.

In Ontario the minister recently sent out a notice saying that Ontario is missing $100 million that was promised by the federal government to the province of Ontario for settlement services. That money has not arrived.

While there is a lot of funding for tax cuts from the surplus, there is nothing for cities, for communities and for ordinary Canadians.

We have noticed that as greenhouse gas emissions rise, the ecoEnergy program is renewed in the mini-budget but there is no expansion of the criteria. Affordable housing is not included. Seniors who barely can afford to pay rent now have to pay hefty hydro bills. Some of them I have heard are not turning up their heat this winter because they cannot afford to pay their hydro bills. We would think that the government would immediately invest in retrofitting affordable housing buildings so that the buildings would be the most efficient and state of the art so that the tenants would use less hydro and therefore pay less on their hydro bills.

Unfortunately, the ecoEnergy program that is mentioned in the bill does not include affordable housing. The $100 million program which the NDP pushed the former Liberal government into establishing is also gone.

On top of that, the ecoEnergy program does not include condominiums. In my riding, there are condominium owners who would love to retrofit their buildings. They would like to find some way to make the buildings green and energy efficient, but they cannot receive $1 from the ecoEnergy program.

This legislation is not fair for people who are earning very low income. Neither is it fair for people who are living in multi-residential buildings such as condominiums.

There is nothing in this bill for unemployed people who are seeking to get some money from employment insurance. A recent United Way report said very clearly that one of the reasons people remain poor is that they cannot access employment insurance. The national average in terms of the number of workers who can access their own employment insurance funding is only 40%. In big urban centres sometimes only 22% or 30% of workers who find themselves unemployed can access their own funding through the employment insurance program. No wonder they are stuck in a cycle of poverty.

A few days ago Campaign 2000 said that we must deal with the tragedy of child poverty. Eighteen years ago, on November 24, 1989 in this House, former NDP leader Ed Broadbent said that we have to eliminate child poverty by the year 2000. Here it is 18 years later, in 2007, and there has been no improvement in the number of kids who lead a life of poverty.

There is really not a lot of funding in this legislation. There is no increase in the child tax benefit which means that there are children who go to school who cannot afford to pay $1 to buy a hot dog or a slice of pizza. They will be excluded. Because kids' feet grow fast, families do not have the money to buy their kids new running shoes and those kids will be excluded from gym classes. The cycle of poverty will continue. That is a national shame. There is funding for the biggest, most profitable oil companies and the biggest, most profitable banks, and yet there is no funding available to help kids in Canada.

Bill C-28 also breaks the Atlantic accord. It betrays the people who live in the Atlantic provinces. No doubt my colleague, the member of Parliament for Halifax, will address this in detail later on.

The bill in front of us does not do anything for aboriginal people. One-third of aboriginal communities do not have safe drinking water. For the second straight year the Conservatives have announced that they will ensure there is safe drinking water but there is no money included in this budget to accomplish this.

There is hardly any money in this legislation to support the arts. There is no new funding for the CBC, the Canada Council, or to promote our artists. This unfortunately is a missed opportunity.

There is no increased funding in Bill C-28 for foreign aid even though the House has continually said that we have to increase foreign aid to .7% of our GDP. The mini-budget actually decreased our foreign aid as a percentage of our GDP from .34% to .31%. It is hard for Canada to talk about our international relationships and our standing in the world when we do not contribute much to foreign aid.

December 1 is World AIDS Day, and we have seen a 30% cut in funding to community groups that assist groups that deal with the prevention of AIDS. In fact, organizations in my riding have come to me and have said that they are laying off staff. All the good work they do will stop because of cuts in their funding.

There is no funding for a national home care program. Many seniors desperately need a home care program so they can stay at home. It is more economic if there is affordable, high quality home care for our seniors, which allows them to live in dignity. There is nothing in the bill for pharmacare, home care or long term care, nothing new for our seniors.

Again, there is no new funding for housing. We have a national housing crisis. When the cold weather arrives, people will still be on the streets. There are no new co-ops being built. Housing does not seem to be a priority whatsoever.

The bill mentions nothing about student loans or student debt. We know the average price of tuition for Canadian undergraduate students has tripled since 1991. The minister's mini budget does not make post-secondary education any more affordable. The provinces are not accountable for the funds transferred to them. Therefore, we do not know how those transfers will be used.

Sadly, when we talk about seniors, not only do they not get the kind of home care or nursing care hey desperately need, they also do not get an increase in their guaranteed income supplement. This means many seniors will continue to live in poverty. We already know that 25% of seniors live in poverty. For women, that figure climbs to 36%. We know there is $14 billion for the most powerful companies, but nothing for seniors.

There is hardly any mention about the minimum wage. Nor is there any commitment by the government to increase the minimum wage to $10 an hour.

There is also hardly anything for the Status of Women. I know our critic and advocate for women has been saying that we need $100 million a year. The mini budget gives $10 million a year for two years. That is hardly enough funding for the women's organizations that are struggling.

Unfortunately, the budget does not invest in our communities. It does not make our country a better place to live. In fact, if we look at this, there is a photo accompanying the economic statement recently released by the government. In the photo we see a little child looking out into the world. If we look closely at the picture, the child is standing on high ground and it looks as though this child could fall off the cliff. We are doing nothing to invest in our children and our young people. This is truly a missed opportunity for Canada.

We should be following other countries such as Ireland. It has mapped out a plan to invest in children and to reduce child poverty. It is delivering on and meeting its targets. However, Canada does not have a commissioner for children. It has no plan for children and no targets have been set to reduce child poverty. Yet there is money for very big companies. This is a sad statement on how we deal with our communities.

Sadly, the Liberals, when we finish the debate, will abstain from the vote. They will not make a statement. They will do nothing to say no to this terrible plan, and that is a missed opportunity.

Budget and Economic Statement Implementation Act, 2007Government Orders

November 29th, 2007 / 10:30 a.m.
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Bloc

Paul Crête Bloc Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC

Mr. Speaker, the bill before us now is very odd. The adoption of a budget is typically accompanied by a budget implementation bill. If the measures in the bill match those announced in the budget, those who voted in favour of the budget generally support the bill. That is the logic that parliamentarians apply—logic that the Bloc Québécois was prepared to apply.

However, the Conservatives made a truly partisan decision to combine completely different elements. On the one hand, we have the 2007 budget, which the Bloc Québécois supported and continues to support. On the other, we have some elements from the economic statement, which we did not support, and the Nova Scotia and Newfoundland and Labrador offshore oil agreements, which we also did not support because they are unfair to Quebec.

The Bloc Québécois will therefore vote against this bill because on the whole, it is not in the best interest of Quebeckers. The economic statement is the main reason we have taken this stance. The government made a unilateral decision to use $10 billion to pay off part of the debt. They made that decision without holding any debate on the subject and despite the fact that our people have serious, urgent needs, which I will list briefly.

First, the Bloc Québécois believes that $3 billion of this year's $11 billion surplus should be used to pay down the debt, not the whole $11 billion. The ratio of debt to Canada's gross domestic product has been improving steadily over the past 10 years. We have now reached a point where the government's desire to use the entire surplus to pay down the debt looks a lot like a homeowner's obsession with paying off the mortgage as quickly as possible. That same homeowner is ignoring the fact that the deck needs a coat of paint and is kind of unstable, and he is failing to ensure that his children or parents who live with him have enough income.The Bloc Québécois does not share the government's obsession with paying off the debt at any price and does not want this bill to go through.

The Bloc Québécois feels that, instead of using the full $11 billion to pay down the debt, the government should pay it down by $3 billion. This is a reasonable amount, and it would let Canada meet its goal of reducing the debt to GDP ratio to 25%. The remaining $8 billion could be spent on urgent issues such as the guaranteed income supplement for seniors.

In an affluent society like Canada, it is important to do justice to our seniors. We currently have an old age pension system that includes the basic pension and the guaranteed income supplement. This system is supposed to protect seniors against poverty. However, the total monthly benefit amount is still $100 below the poverty threshold.

Instead of using the full $11 billion surplus to pay down the debt, the federal government could at least start by paying the retroactive benefits it owes people who were entitled to the guaranteed income supplement but did not receive it because the system did not provide for automatic registration. When you come right down to it, the federal government took advantage of our seniors' lack of knowledge to pocket as much money as possible.

As a result, today some people are living below the poverty line. Last week, we heard the incredible but sadly true testimony of someone living below the poverty line. With retroactivity, this person, who is over 65, would receive $12,000. Since 2001, this person has been living on very little money. She was entitled to the guaranteed income supplement, but the current act does not allow more than 11 months of retroactive benefits.

Each one of us has had to deal at some point with the Canada Revenue Agency. When this agency reassesses tax returns to recover unpaid taxes, it can go back not only up to 11 months, but up to five years. That is why we would like the government to make fully retroactive payments to the people entitled to the guaranteed income supplement. This would cost an estimated $3 billion.

Then, $1.5 billion should be invested in the workers. Of that, $60 million would go towards a support program for older workers. That is not an astronomical sum, but it would allow many workers affected by the forestry and manufacturing crisis to bridge the gap until their retirement and to live with dignity until they receive their old age pension.

In addition to that, a reserve of $1.4 billion must be given to employment insurance.

As we know, for the past 15 years, the federal government has made a cash grab of $54 billion from the EI contributions paid by employers and employees. It has used this money for all kinds of expenditures, including the deficit. There has never been any return on investment for unemployed workers, for people who paid into the system and all those who were affected by the stricter criteria.

One would think that, with this year's $11 billion surplus, the government could make a one-time payment of $1.4 billion to a reserve, in order to improve the conditions of the employment insurance program.

Of that $11 billion surplus, $3 billion should go towards the debt, $3 billion should go to seniors, $1.5 billion should go to workers and $2 billion should be invested in the manufacturing economy. There is unanimous consent on this in Quebec, not only within the Government of Quebec, but also within the manufacturing associations, the Quebec federation of chambers of commerce and the forestry industry, which has been sending us congratulatory letters, telling us not to give up and that policy changes are definitely needed in the manufacturing sector.

The economic statement included some nice tax reductions for companies that are making profits. The problem is that those who are making profits, the oil companies for example, are going to pocket a lot of money. However, all the businesses that are not making as much profit, or almost none at all, will not benefit whatsoever from this uniform tax reduction. They would earn a lot more if refundable tax credits were offered. That would allow companies to draw the maximum benefit from the higher dollar.

If a manufacturing company had the means today to buy machinery to increase productivity, and it bought that machinery, that would be its way of having a competitive product. To do that they need money. Without profits, that is not possible. If it had a refundable tax credit for research and development, that would be possible.

I know that the government, especially the senior public service, is saying that it is too great an expense. But estimates have been made; people have studied this; it is a reasonable amount of money.

This year, thanks to the surplus, the government could allocate $1.5 billion to that end and $500 million to reinstate Technology Partnerships Canada. What is that? It is a program that encourages innovation in aerospace and a number of other sectors. For example, in La Pocatière, Premier Tech used that program to develop new products from sphagnum peat moss. This helped develop an industry that is carving out a place for itself in the Rivière-du-Loup area. It is a major driving force behind the economic development of that region. I want to give credit to the Liberals for creating that program, which I always defended. The Bloc Québécois defended it as well. The Conservatives abolished the program.

In today's economic conditions, with the higher dollar and global competition, this program is an investment for the federal government, not an expense. Reinstating this program for $500 million, out of an $11 billion surplus this year, would be one way of encouraging productivity. This would also allow money to be invested across Canada in companies that develop new products.

We have the means to allocate the reasonable sum of $2 billion to the manufacturing economy, and that money could come from this year's $11 billion surplus. We also have the means to put $3 billion toward the debt.

And what about the regions affected by the forestry crisis? During the election campaign in the riding of Roberval—Lac-Saint-Jean, I had the opportunity to see the serious impact of the forestry crisis on the regions. Last week, at the Standing Committee on Finance, the mayor of Hearst, in northern Ontario, told us the same thing. I also live in a region struggling to cope with the forestry crisis.

If we apply the $11 billion surplus to the debt, that will only decrease Canada's debt. Instead, we could establish a $1 billion fund for regional economic diversification. With that money, this year, right now, in the coming days and months, we could breathe life into our regional economies. We have the means to do it. This would not be borrowed money; it would come from the federal government's current surplus.

Finally, we could allocate $1 billion to the environment for the purchase, for example, energy saving appliances. That would improve our ratio of fuel oil versus electricity consumption, enabling us to move increasingly towards clean energies.

We see that there is a fundamental difference between the bill the government wishes to pass today and the 2007 budget that we supported. The latter resulted in a partial solution to the fiscal imbalance and we supported that bill. I believe that Quebeckers are pleased with that.

But with regard to the other part that has been included in the bill on the economic statement, it clearly is not in the interests of Quebeckers. This is significant enough for us to vote against this bill.

In addition, the bill now includes the agreement with Nova Scotia and Newfoundland and Labrador concerning offshore oil resources. For the Bloc Québécois, obviously, that aspect is neither relevant nor positive because it creates an unfair advantage in terms of equalization.

Let us briefly review the facts. With respect to the Atlantic accord, Newfoundland and Labrador’s oil resources, and the whole Nova Scotia question, it was rather difficult to follow the Conservative government. It had initially made a commitment that satisfied the Atlantic provinces. Then they refused to consider all of the revenue related to energy in the equalization formula. The bottom line is that there is now an agreement to try to put things back together and correct a blunder.

However, the final version creates more inequities and, for us, that is not appealing. The Bloc Québécois believes that this measure should not have been incorporated into the same bill that implements the 2007 budget because they are different matters.

The government has an opportunity to correct the situation, but the way it is presenting this bill is really unacceptable to Quebec. They cannot, on one hand, seek approval for the 2007 budget and, on the other hand, incorporate measures that are clearly contrary to the interests of the Government of Quebec.

In truth, one can ask the question whether, after Quebec had paid for the development of fossil fuel energy, the province should pay for its exploitation. That is out of the question. These grants and federal investments have cost Quebec dearly. They have, in part, amounted to more than $10 billion over the years. This agreement amounts to giving a bonus to the provinces that produce oil and making the provinces that produce hydroelectricity pay for it. That is turning the world upside down when there is an increasing demand for the development of clean energy. The federal government is doing the opposite with this measure.

There really is an almost unhealthy connection between the petroleum industry and the Conservative government. Most of Canada is paying the price, especially Quebec, which has developed hydroelectricity over the years without any support from the federal government.

Accordingly, the government will have to revise its position before we can vote in favour of this bill.

Why do I think the economic statement is so odd? It is now fall of 2007. Since February 2007, the federal government has been in possession of a unanimous report from the Standing Committee on Industry, Science and Technology entitled “Manufacturing: Moving Forward—Rising to the Challenge”, which clearly stated that we needed a quick action plan to help the manufacturing sector. The committee chair, the member for Edmonton—Leduc, had this to say in the foreword to the report:

While the rest of the Canadian economy is generally very robust, many industries within the manufacturing sector are struggling to remain competitive against the backdrop of a Canadian dollar that has risen in value by more than 40% in just four years in comparison to its American counterpart, rising and unpredictable energy costs, increasing global competition, particularly from China and India, and excessive and inefficiently designed regulations, to name but a few challenges.

Further on he said:

The Committee believes that the Government of Canada should make the preservation of a competitive Canadian manufacturing sector a national goal, and that given the gravity of the challenges facing the sector, the recommendations presented in this report should be implemented in a timely fashion.

If this report had been produced in October or the beginning of November 2007, it could be said that the government had not had enough time to prepare, and that it would do so for the next budget. However, this report was published in February 2007. There was time to prepare for the 2007 budget, and especially to prepare for the economic statement, to propose a real program to help the manufacturing sector. Yet it was not until yesterday at the Standing Committee on Finance that a motion was finally passed, with the support of the Liberals and the NDP, calling on the federal government to implement as soon as possible all the tax measures set out in the report.

What is really significant here is that the Conservative members did not vote. The motion was adopted unanimously because the Conservatives did not oppose it. These were the recommendations in a report that was adopted unanimously in February 2007 by all members of the committee, from all the parties. By their abstention yesterday, the Conservative members acknowledged that they really should have done something. What I want to say to them today is that they need to act now.

Insofar as the economic statement is concerned, it is amazing to see the attitude of the Minister of Finance, who is from Ontario and can see the devastating impact on job creation in his province. I remember the committee going to the Windsor area a year ago. The catastrophe could already be seen looming. We know now that the effects of the rise in the dollar this fall—not the rise three years ago but the one four months ago—will be felt a year from now. If the government does not act, another 150,000 or 200,000 jobs will be lost in addition to the 130,000 already lost since the Conservatives took power. There is a disaster out there, but the government just closes its eyes.

The approach they are taking is an ideological one. They want to reduce taxes across the board and let the market adjust on its own, but we know very well where that leads. It means that more and more industries in the energy sector will reap enormous profits while more and more industries in the manufacturing sector will be unable to keep pace with the competition. The tax recommendations in the report, on the other hand, were to give companies refundable tax credits, create a fund for them like Technology Partnerships Canada, for example, and in this way give them a chance to diversify the economy in our regions. These were very specific, practical recommendations that the government could have included in its economic statement but chose not to.

Our vote today against Bill C-28 is largely due to this inaction on the part of the federal government. I thought that with the change in the industry minister, the department might take a more pragmatic approach, but it is sticking to the same theoretical line.

It is always good for the Minister of Finance to go out and consult people. The newspapers tell us today that he is going to consult with the manufacturing industry in the Quebec City area. I hope that when he returns, he will have changed his tune and will take action as quickly as possible in accordance with the recommendation of the Standing Committee on Finance, which was adopted unanimously not only by the Bloc—it was our proposal—but also by the Liberals, the NDP, and the Conservative members, who told the government through their abstention that it should take action and implement these tax measures.

Decisions need to be made quickly. If we wait for the next budget, we will have lost several months in the fight that is going on at present. The Canadian dollar is at par with the American dollar. The crisis is not over just because the dollar has gone down from $1.05 to $1. The Minister of Finance's arguments on this point are simplistic. The dollar may be at par, but its value has gone up by more than 40% in the past few years. The manufacturing sector has adapted to this reality as best it can. It has adjusted its productivity as much as possible, but now the federal government needs to take action.

When the minister places responsibility in the provincial ministers' hands, he is not doing his job. It is his job to make sure that, in its industrial strategy, the federal government can take real action as quickly as possible to help companies. The Canadian system is a bit complicated; you always have to convince two governments of everything. It would be simpler if we had just one government instead of two. At least, that is what we have to do as long as we are still part of the Canadian system. We know what the Government of Quebec has done. People may criticize its actions, but at least it has an action plan and it has asked that the federal government give this issue priority.

For all these reasons, in order to send a clear message to the Conservative government, the Bloc Québécois will vote against Bill C-28. Obviously, we were in favour of the budget tabled last fall, and we continue to be. We believed that we had to support it, if only because of the issue of the fiscal imbalance. However, it is impossible to include in the same bill both the whole issue of the economic statement and the accord with Nova Scotia and Newfoundland and Labrador on offshore petroleum resources.

I believe that we represent exactly how Quebeckers are feeling. With our vote, we are sending a clear message to the government that it needs to go back to the drawing board, come up with an action plan for the manufacturing sector as soon as possible and waste no time in using the surplus for something other than just paying down the debt.

The time for putting everything on the debt is over. The federal government must use a portion of the surplus tax it takes each year to pay down the debt, but it must also use a significant portion to correct inequities and lend a hand where needed to go forward.

Budget and Economic Statement Implementation Act, 2007Government Orders

November 28th, 2007 / 5:20 p.m.
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Liberal

Massimo Pacetti Liberal Saint-Léonard—Saint-Michel, QC

Mr. Speaker, I am pleased to rise in the House today to speak to Bill C-28, the budget implementation bill. I ask for unanimous consent to split my time today with my colleague, the member for Halton.

Budget and Economic Statement Implementation Act, 2007Government Orders

November 28th, 2007 / 4:50 p.m.
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Conservative

Ted Menzies Conservative Macleod, AB

That is incredible, Mr. Speaker. My hon. colleague is reminding me how incredible that is, $190 billion.

Furthermore, the government's plan to reduce the federal budget by $10 billion will bring total debt reduction since 2005-06 to more than $37 billion. That is over $1,500 for every man woman and child in Canada. Not only have we reduced the debt, but through our tax back guarantee, we have further reduced taxes for Canadians.

We are limiting the growth of spending in government and we are balancing the books. We are building modern and accessible world-class infrastructure that will help move Canadian goods to market, allowing our economy to grow and prosper. Our economic fundamentals are solid. We are experiencing the second longest period of economic expansion in Canadian history.

Business investment is expanding for the 12th consecutive year. Corporate profits are at an all time high in Canadian history. Along with that, overall inflation has remained low and stable. Our unemployment rate is the best it has been in 33 years. But we cannot rest on our laurels and we are not about to. At the same time we must be aware of the significant challenges ahead.

Our government is prepared to meet those challenges head-on. Let me illustrate how we are going to do that by outlining some of the key measures in Bill C-28. These measures are many, so today I will focus on the key provisions of the bill.

For too many low income Canadians, working can mean being financially worse off than staying on social assistance. In Advantage Canada, Canada's new government committed to work with the provinces and the territories to lower the so-called welfare wall by implementing a working income tax benefit to make work pay for low and modest income Canadians.

The working income tax benefit will provide up to $1,000 per year to low income working couples and single parents and up to $500 to single individuals. This benefit will help make work more rewarding and attractive for an estimated 1.2 million Canadians already in the workforce, thereby strengthening their incentive to stay employed.

In addition, it is estimated that a working income tax benefit will encourage close to 60,000 people to enter the workforce. Advantage Canada has also committed to foster academic excellence and choice.

Hon. members may recall that in budget 2006 the government fully exempted scholarship, fellowship and bursary income received by post-secondary students. The combination of these measures will help ensure that no Canadian is deterred from accepting and experiencing exceptional education opportunities. This measure will benefit about 1,000 Canadian children and their families.

This government also pledged to increase health spending for sport and physical activity. In budget 2006 we acted on that commitment by introducing the children's fitness tax credit, which became effective January 1 of this year. Parents can claim the credit for eligible fees up to $500 a year for each child participating in physical activity programs.

An important component of this initiative is that substantial additional support will be provided to children who are eligible for the disability tax credit. This recognizes the unique barriers these children face in becoming more active.

Hon. members may also recall that in budget 2006 we introduced the public transit tax credit. The proposals include measures that will help low income individuals who may not be able to afford the financial commitment of a monthly pass to take advantage of the credit.

I have spoken about tax measures in this bill for individuals and families. This government also understands the need to ensure Canada's corporate tax system is competitive. I can assure hon. members that we are delivering on that need. In fact, the economic statement announced that we will move Canada to the goal of establishing the lowest overall tax rate on new business investment in the G-7 by 2011.

Capital taxes increase the cost of investing for Canadian businesses and reduce the competitiveness of Canada's tax system. Recognizing this, the government took action in its first budget, budget 2006, to eliminate the federal capital tax in January 2006. Bill C-28 proposes further action on this front by establishing a financial incentive to encourage provinces to eliminate their capital taxes as soon as possible.

Provinces can qualify for the incentive if they enact legislation after March 18, 2007 and before 2011 to eliminate their capital taxes over that time period. Provinces have an important role to play in improving Canada's business tax competitiveness. This incentive is important because it will encourage provinces to do the right thing and eliminate their capital taxes.

By reducing taxes for small businesses, it will help them succeed in an increasingly competitive global marketplace. However, small businesses also face other challenges, such as handling the paperwork associated with filing tax forms and remitting taxes. This can sometimes be an onerous task for small businesses. Bill C-28 proposes to implement measures from budget 2007 to ease the paperwork burden by reducing the frequency of tax remittances and filings for small businesses. These proposed changes will reduce the filing and remitting requirements of more than 350,000 small businesses by, on average, about one-third.

This government also recognizes the importance of small business owners, such as farmers, fishermen and fisher women. Indeed, these sectors are key drivers of Canada's economic success.

One of the ways that Canada's federal income tax system supports these entrepreneurs is through the lifetime capital gains exemption. Providing a tax exemption on capital gains realized on the disposition of qualified farm and fishing property, or qualified small business corporation shares, increases the rewards of investing in small business, farming and fishing. It also helps to ensure financial security for their retirement.

In recognition of the importance of these entrepreneurs to the Canadian economy and to help them better prepare for the future, budget 2007 proposes to increase the lifetime capital gains exemption to $750,000 from the existing $500,000. This is the first time it has been increased since 1988.

Canada's economy depends on the trucking sector to function effectively. It is all very well to manufacture quality Canadian goods, but if we cannot get those goods to market, where does that leave us?

Increasing demands for highly skilled truck drivers and a rapidly aging workforce are raising concerns that Canada may be facing a shortage of qualified truck drivers. In budget 2007, the government introduced a proposal that is aimed specifically at helping this important industry.

In order to provide better recognition of the significant meal expenses incurred by long haul truck drivers while on the road, budget 2007 proposes to increase to 80% from 50% the share of meal expenses that long haul truck drivers can deduct for tax purposes. To parallel the treatment on the income tax side, Bill C-28 proposes to amend the sales tax legislation by increasing the percentage of available input tax credits for GST/HST paid on meal expenses of long haul truck drivers.

As I have outlined here today, Bill C-28 contains numerous measures that will help businesses. There is one other measure that I would like to mention because it builds on a commitment made by this government to create child care spaces.

Hon. members will recall that in budget 2006 we introduced the universal child care plan, a strategy to provide support for families with children. In July 2006 parents began receiving support of $100 per month for every child under age six, to be used for the priorities identified by parents as they determine how best to balance home, work and other commitments.

By recognizing that parents often choose to use child care services, the government also committed to provide $250 million annually to support the creation of up to 25,000 new spaces, beginning in 2007-08. In budget 2007, and indeed in this bill today, we are further delivering on a commitment to help create child care spaces.

I would now like to outline the measures in Bill C-28 that were announced in the recent 2007 economic statement. These initiatives complement the proposals from budget 2007 that I have just outlined.

Canada's strong fiscal position provides us with an opportunity that few other countries have to make broad based tax reductions that will strengthen our economy, stimulate investment and create more and better jobs.

About three-quarters of the tax reductions will benefit individual Canadians and their families. This includes reducing the GST rate to 5% from 6%, effective January 1, 2008. Building on last year's GST reduction, the combined two percentage point reduction represents some $12 billion in annual savings for consumers. The total savings are significant. Let us look at some of these examples. A family purchasing a new $300,000 home will save $3,840 in GST. Spending $10,000 on home renovations will save a family $200 in GST. A family spending $30,000 on a new minivan will save $600 in GST.

It is important to point out that to benefit low and modest income families, the GST credit will remain at current levels, even though the GST is being reduced.

Bill C-28 also proposes to increase the amount all Canadians can earn, without paying federal income tax, to $9,600 in 2007 and 2008 and to $10,100 in 2009. Furthermore, the lowest personal income tax rate would be reduced to 15%, from 15.5%, effective January 1, 2007. Together, these will deliver relief on next spring's income tax returns and move some 385,000 people off the income tax rolls at least a year earlier than currently legislated.

For Canadian businesses, Bill C-28 proposes a bold new tax reduction imitative that will reduce the general federal corporate income tax rate to 15% by the year 2012, starting one percentage point reduction in 2008 beyond the already scheduled reductions. This move will give Canada the lowest overall tax rate in new business investment in the G-7 by 2011 and the lowest statutory tax rate in the G-7 by 2012.

Canadians want a government that sets clear goals and delivers concrete results. We have set those goals and with the measures in this bill, we are delivering those results.

Once passed, the measures in Bill C-28 from this year's budget, in combination with the tax reduction initiatives announced in the 2007 economic statement, will deliver to Canadians key components of the “Advantage Canada” plan that would help secure Canada's place as a clear leader in the world.

Budget and Economic Statement Implementation Act, 2007Government Orders

November 28th, 2007 / 4:50 p.m.
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Macleod Alberta

Conservative

Ted Menzies ConservativeParliamentary Secretary to the Minister of Finance

Mr. Speaker, it is indeed a pleasure to get onto the discussions of Bill C-28. We have all been waiting for this second budget implementation bill to finally get to the House and we are so excited to be discussing all of the wonderful things that are in it. There are some tax cuts for which Canadians have been waiting. We are certainly seeking quick passage of the bill so that we can make sure that Canadians see their tax cuts as soon as we can possibly get this bill through the House.

I am very pleased to present Bill C-28 today at second reading. The first bill to implement measures from budget 2007 received royal assent on June 22, 2007. This comprehensive bill also proposes to implement bold new measures from the 2007 economic statement that will reduce taxes further for Canadians and usher in a new era for Canadian business taxation, while further reducing the federal debt.

The measures in Bill C-28 are key components of this government's strategy to create a tax advantage, one of the priorities identified in our long term economic plan, Advantage Canada. To that end, there is little doubt that our government is well on its way to establishing a proud legacy of tax relief. In fact, we have provided broad based relief in personal income taxes, consumption taxes, business taxes and in excise taxes.

Moreover, we have made tremendous strides in a short period of time, but we are not finished yet. Canadians expect their government to help them build on this legacy. They want a government that sets clear goals and delivers concrete results for all Canadians. We have done that.

The 2007 Speech from the Throne delivered on October 16 outlined how the government plans to build on the action already taken to implement the commitments to Canadians in the Advantage Canada plan. Reducing taxes for all Canadians and establishing the lowest overall corporate income tax and new business investment in the G-7 is part of this government's long term vision of creating a tax advantage for Canada.

With the almost $60 billion in tax reductions for individuals, families and businesses announced recently in the 2007 economic statement, we have reached that goal. That is $60 billion in relief over this and the next five years. Combined with previous relief provided by the current government, the total tax relief over the same period is almost $190 billion.

Budget and Economic Statement Implementation Act, 2007Government Orders

November 28th, 2007 / 4:50 p.m.
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Conservative

Income TaxOral Questions

November 23rd, 2007 / 11:40 a.m.
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Macleod Alberta

Conservative

Ted Menzies ConservativeParliamentary Secretary to the Minister of Finance

Mr. Speaker, I thank the member for Burlington for his work on this file.

Unlike the Liberals, we are not simply talking about tackling poverty. We are doing it through measures like the working income tax benefit. This measure will supplement earnings of low income Canadians to encourage them to work, instead of remaining on social assistance. We hope to build on this key first step.

The Liberals should stop opposing this measure and vote for Bill C-28.

Budget and Economic Statement Implementation Act, 2007Routine Proceedings

November 21st, 2007 / 3:10 p.m.
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Whitby—Oshawa Ontario

Conservative