Bill C-10 (Historical)

Budget Implementation Act, 2009

An Act to implement certain provisions of the budget tabled in Parliament on January 27, 2009 and related fiscal measures

Part 1 implements income tax measures proposed in the January 27, 2009 Budget. In particular, it
(a) increases by 7.5% above their 2008 levels the basic personal amount and the upper limits for the two lowest personal income tax brackets, thereby also increasing the income levels at which income testing begins for the base benefit under the Canada Child Tax Credit and the National Child Benefit supplement;
(b) increases by $1,000 the amount on which the Age Credit is calculated;
(c) increases to $25,000 the maximum amount eligible for withdrawal under the Home Buyers’ Plan;
(d) introduces amendments to the rules related to Registered Retirement Savings Plans and Registered Retirement Income Funds to allow for recognition of losses in accounts between the time of the annuitant’s death and final distribution of property from the account;
(e) repeals the interest deductibility constraints in section 18.2 of the Income Tax Act;
(f) extends the mineral exploration tax credit for one year;
(g) increases to $500,000 the annual amount of active business income eligible for the 11% small business income tax rate and makes related amendments;
(h) clarifies rules relating to timing of acquisition of control of a corporation; and
(i) creates cost savings through electronic filing of tax information.
In addition, Part 1 implements income tax measures that were referenced in the January 27, 2009 Budget and that were originally proposed in the February 26, 2008 Budget but not included in the Budget Implementation Act, 2008. In particular, it
(a) clarifies the application of the excess corporate holdings rules for private foundations;
(b) increases the amount that corporations will be able to pay as “eligible dividends”;
(c) enacts several regulatory amendments that complement and complete measures enacted in the Budget Implementation Act, 2008;
(d) introduces minor adjustments to the Tax-Free Savings Account rules and the scientific research and experimental development investment tax credit rules included in the Budget Implementation Act, 2008;
(e) implements rules in respect of donations of medicines; and
(f) reduces the paper burden on businesses by allowing a larger number of government entities to share Business Number-related information in connection with government programs and services.
Part 1 also implements other income tax measures referred to in the January 27, 2009 Budget that either were themselves previously announced or flow directly from previously announced measures. In particular, it
(a) implements technical changes relating to specified investment flow-through trusts and partnerships and new tax rules to facilitate the conversion of these entities into corporations;
(b) contains amendments to take into account financial institution accounting changes;
(c) extends the general treatment of capital gains and losses on an acquisition of control of a corporation to gains and losses that result from fluctuations in foreign exchange rates in respect of debt denominated in foreign currency;
(d) enhances the carry-forward for investment tax credits;
(e) implements amendments relating to the computation of income, gains and losses of a foreign affiliate;
(f) implements amendments to the functional currency tax reporting rules;
(g) implements minor tax amendments relating to interprovincial allocation of corporate taxable income, the Wage Earner Protection Program and the Canada-United States tax treaty’s rules for cross-border pensions;
(h) provides for an extension of time for income tax assessments that are consequential to provincial reassessments;
(i) ensures the appropriate application of the Income Tax Act’s trust rules to certain arrangements and institutions under Quebec civil law;
(j) enacts regulatory amendments relating to prescribed amounts for automobile expenses and benefits, eligible medical expenses, and the tax treatment of foreign affiliate active business income earned in a jurisdiction with which Canada has concluded a tax information exchange agreement;
(k) introduces rules to reduce the required minimum amount that must be withdrawn from a Registered Retirement Income Fund or from a variable benefit money purchase pension plan by 25% for 2008, and allows related re-contributions;
(l) extends the deadline for Registered Disability Savings Plan contributions; and
(m) modifies the provisions relating to amateur athletic trusts.
Part 2 amends the Excise Act, 2001 and the Excise Tax Act to implement measures to reduce the paper burden on businesses by allowing a larger number of government entities to share Business Number-related information in connection with government programs and services.
Part 3 amends the Customs Tariff to implement measures announced in the January 27, 2009 Budget to
(a) reduce Most-Favoured-Nation rates of duty and, if applicable, rates of duty under other tariff treatments on a number of tariff items relating to machinery and equipment imported on or after January 28, 2009;
(b) divide tariff item 9801.10.00 into two separate tariff items pertaining to conveyances and containers, respectively, and make two technical corrections, effective January 28, 2009; and
(c) modify the tariff treatment of milk protein substances, effective September 8, 2008.
Part 4 amends the Employment Insurance Act until September 11, 2010 to extend regular benefit entitlements by five weeks. It also provides that a pilot project ceases to have effect. In addition, it amends that Act to provide that the cost of benefit enhancement measures under that Act, provided for in the budget tabled in Parliament on January 27, 2009, are not to be charged to the Employment Insurance Account. Finally, it sets the premium rate provided for under that Act for the years 2002, 2003, 2005 and 2010.
Division 1 of Part 5 amends the Financial Administration Act to authorize the Minister of Finance to take, subject to certain conditions, a number of measures intended to promote the stability or maintain the efficiency of the financial system, including financial markets, in Canada.
Division 2 of Part 5 amends the Canada Deposit Insurance Corporation Act to provide the Canada Deposit Insurance Corporation with greater flexibility to enhance its ability to safeguard financial stability in Canada. The Division also adds Tax-Free Saving Accounts as a distinct category for the purposes of deposit insurance. It also makes consequential amendments to other acts.
Division 3 of Part 5 amends the Export Development Act to, among other things, expand the Export Development Corporation’s mandate to include the support and development of domestic trade and business opportunities for a period of two years. The period may be extended by the Governor in Council. Division 3 also increases the Corporation’s authorized capital.
Division 4 of Part 5 amends the Business Development Bank of Canada Act to increase the maximum amount of the paid-in capital of the Business Development Bank of Canada.
Division 5 of Part 5 amends the Canada Small Business Financing Act to increase the maximum outstanding loan amount in relation to a borrower. It also increases individual lenders’ cap on claims. These amendments will apply to new loans made after March 31, 2009.
Division 6 of Part 5 amends a number of Acts governing federal financial institutions to improve access to credit and strengthen the financial system in Canada, including amendments that will
(a) provide new authority for further safeguards to promote the stability of the financial system;
(b) enhance consumer protection by establishing new measures to help consumers of financial products; and
(c) implement other technical measures to strengthen the financial sector framework in Canada.
Division 7 of Part 5 provides for payments to be made to provinces and territories, provides authority to the Minister of Finance to enter into agreements respecting securities regulation with provinces and territories and enacts the Canadian Securities Regulation Regime Transition Office Act.
Part 6 authorizes payments to be made out of the Consolidated Revenue Fund for various purposes, including infrastructure and housing.
Part 7 amends Part I of the Navigable Waters Protection Act to create a tiered approval process for works in order to streamline the approval process and to exclude certain classes of works and works on certain classes of navigable waters from the approval process. This Part further amends Part I of the Act to clarify the scope of the application of that Part to works owned or previously owned by the Crown, to provide for the application of the Act to bridges over the St. Lawrence River and to add certain regulation-making powers.
Part 7 also amends the Act to clarify the provisions related to obstacles and obstructions to navigation. The Act is also amended by adding administration and enforcement powers, consolidating all offence provisions, increasing fines and requiring a review of the Act within five years of the amendments coming into force.
Division 1 of Part 8 amends the Wage Earner Protection Program Act and the Wage Earner Protection Program Regulations to provide that unpaid wages for which an individual may receive payment under the Wage Earner Protection Program include unpaid severance pay and termination pay.
Division 2 of Part 8 amends the Canada Student Financial Assistance Act to, among other things,
(a) require the Chief Actuary of the Office of the Superintendent of Financial Institutions to report on financial assistance provided under that Act; and
(b) authorize the Minister of Human Resources and Skills Development to suspend or deny financial assistance to all those who are qualifying students in respect of a designated educational institution.
Division 2 of Part 8 also amends both the Canada Student Financial Assistance Act and the Canada Student Loans Act to, among other things,
(a) terminate all obligations of a borrower with respect to risk-shared loans and guaranteed loans if the borrower dies;
(b) authorize the Minister of Human Resources and Skills Development to require any person who has received financial assistance or a guaranteed student loan to provide that Minister with documents or information for the purpose of verifying compliance with those Acts; and
(c) authorize that Minister to terminate or deny financial assistance in certain circumstances.
Division 3 of Part 8 amends the Financial Administration Act to provide express authority for agent Crown corporations to lease their property, restrict the appointment of employees of a Crown corporation to its board of directors, require Crown corporations to hold annual public meetings, clarify Treasury Board’s duties to indemnify Crown corporation directors and officers, permit more flexibility in the frequency of special examinations of Crown corporations, and require the reports of special examinations to be submitted to the appropriate Minister and Treasury Board and made public. This Division also makes consequential amendments to other Acts.
Part 9 amends the Federal-Provincial Fiscal Arrangements Act to set out the amount of the fiscal equalization payments to the provinces for the fiscal year beginning on April 1, 2009 and amends the method by which fiscal equalization payments will be calculated for subsequent fiscal years. It also amends the method by which the Canada Health Transfer is calculated for each fiscal year in the period beginning on April 1, 2009 and ending on March 31, 2014.
Part 10 enacts the Expenditure Restraint Act. The purpose of that Act is to put in place a reasonable and an affordable approach to compensation across the federal public sector in support of responsible fiscal management in a difficult economic environment.
It sets out rules governing economic increases to the rates of pay of unionized and non-unionized employees for periods that begin during the period that begins on April 1, 2006 and ends on March 31, 2011. It also continues certain other terms and conditions at their current levels. It preserves the right of collective bargaining with regard to other matters and it does not affect the right to strike.
The Act does not preclude the continued development of workplace improvements by employers and employees’ bargaining agents through the National Joint Council or other bodies that they may agree on. It also permits bargaining agents and employers to agree to the amendment of certain terms and conditions of collective agreements or arbitral awards.
Part 11 enacts the Public Sector Equitable Compensation Act and makes consequential amendments to other Acts. The purpose of the Act is to ensure that proactive measures are taken to provide employees in female predominant job groups with equitable compensation.
It requires public sector employers that have non-unionized employees to determine periodically whether any equitable compensation matters exist in the workplace and, if so, to prepare a plan to resolve them. With respect to public sector employers that have unionized employees, the employers and the bargaining agents are to resolve those matters through the collective bargaining process.
It sets out the procedure for informing employees as to whether an equitable compensation assessment was required to be conducted and, if so, how it was conducted, and how any equitable compensation matters were resolved. It also establishes a recourse process for employees if the Act is not complied with.
Finally, since the Act puts in place a comprehensive equitable compensation scheme for public sector employees, this Part amends the Canadian Human Rights Act so that the provisions of that Act dealing with gender-based wage discrimination no longer apply to public sector employers. It extends the mandate of the Public Service Labour Relations Board to allow it to hear equitable compensation complaints and to provide other services related to equitable compensation in the public sector.
Part 12 amends the Competition Act. The amendments include
(a) introducing a dual-track approach to agreements between competitors, with a limited criminal anti-cartel provision and a civil provision to address other agreements that substantially lessen or prevent competition;
(b) providing that bid-rigging includes agreements or arrangements to withdraw bids or tenders;
(c) repealing the provisions dealing with price discrimination and predatory pricing, replacing the criminal resale price maintenance provision with a new civil provision to address price maintenance practices that have an adverse effect on competition, and repealing all provisions dealing specifically with the airline industry;
(d) introducing an administrative monetary penalty for cases of abuse of dominant position, increasing the maximum amount of administrative monetary penalties for deceptive marketing cases, and increasing the maximum fines or terms of imprisonment, or both, for agreements or arrangements between competitors, bid-rigging, criminal false or misleading representations, deceptive telemarketing, deceptive notice of winning a prize, obstruction of Competition Bureau investigations and failure to comply with prohibition orders or production orders;
(e) clarifying that, in proceedings under section 52, 74.01 or 74.02, it is not necessary to establish that false or misleading representations are made to the public in Canada or are made in a place to which the public has access, and clarifying that the “general impression test” applies to all deceptive marketing practices in sections 74.01 and 74.02;
(f) providing that the court may make an order in respect of cases of false or misleading representations to require the person who engaged in the conduct to compensate persons affected by the conduct, and may issue an interim injunction to freeze assets if the Commissioner of Competition intends to ask for such a compensation order; and
(g) introducing a two-stage merger review process for notifiable transactions, increased merger pre-notification thresholds and a reduced merger review limitation period.
Part 13 amends the Investment Canada Act so that the review of an investment will be applied only to the more significant investments. It also amends the Act to allow more information to be made public. This Part also provides for the review of foreign investments in Canada that could threaten national security and allows the Governor in Council to take any measures that the Governor in Council considers advisable to protect national security, such as prohibiting a non-Canadian from implementing an investment.
Part 14 amends the Canada Transportation Act to provide the Governor in Council with flexibility to increase the foreign ownership limit from the existing levels to a maximum of 49%.
Part 15 amends the Air Canada Public Participation Act in relation to the mandatory provisions in the articles of Air Canada regarding constraints imposed on the issue, transfer and ownership of shares. It provides for the repeal of the provisions requiring that the articles of Air Canada contain provisions imposing limits on non-resident share ownership and the repeal of the provisions requiring that the articles of Air Canada contain provisions respecting the enforcement of these constraints.

Budget Implementation Act, 2009

[An hon. member]

No, it's gone. It has been re-spent.

[John Cannis, Liberal, Scarborough Centre, ON]

Oh, it's been re-spent, Madam Speaker. Where did it go? It could not have gone to the arts. It could not have gone to our cultural communities, because the government cut them as well. It could not have gone to our cities, because the cities are having to raise levies. For example, there is an increase of $60 per car registration in the city of Toronto. A young person who wants to go to a swimming pool has to pay an extra levy. Property taxes have gone up in the city of Toronto by almost 4%. How are the seniors going to afford it? The government is not spending the money where it should. These are just some examples. The Federation of Canadian Municipalities, which we all support, is complaining and saying to give the municipalities the money to do the work.

In closing, we have to change the system because there are cities, towns and other areas that cannot afford to put in their one-third share. We have to find ways and means to help those areas get their share of infrastructure funding.

[André Bellavance, Bloc, Richmond—Arthabaska, QC]

Madam Speaker, I would like to ask the member, who just gave a passionate, heartfelt speech about the Conservative government—with some criticism, of course—what he thinks about a very recent story in the weekend media.

During his speech, he said that he and his party are standing up to defend good legislative measures. I have my doubts because as recently as this weekend, Saturday to be more precise, more than 100 unionized public service workers demonstrated in front of a Halifax hotel where Liberal Party members were meeting. The leader of the Liberal Party of Canada was there to speak. But the crowd was not there to demonstrate against the government, but against the Liberal Party, which supported Bill C-10.

According to the representative of the Public Service Alliance of Canada, which was also present, Bill C-10 contains three poison bills, namely a public service wage cap, a rewrite of the federal pay equity legislation and a complicated new employment insurance process.

I would like to hear my colleague's comments on this.

[John Cannis, Liberal, Scarborough Centre, ON]

Madam Speaker, between 1993 and 2006 when the Liberals governed this country, I do not recall one demonstration against the government by the group the hon. member talked about. Why? Because we worked with them.

With the previous Mulroney government we all remember demonstrations. We all remember what happened with the seniors. We all remember the Prime Minister meeting with Mrs. Joyce Carter, the widow of a veteran, and how he, in essence, misled her. I cannot use the word “lie”; I will just say that he misled her.

The Liberals have a record to stand on. When it comes to pay equity, we know our record. It is there, but I do not have time to go into the details. When it comes to the civil servants, we had harmony, we had dialogue, we found ways to solve our problems and we did not have one demonstration.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

Madam Speaker, the hon. member remonstrates about the lack of attention in the Conservative budget to support for renewable energy development and implementation and to energy retrofits rather than simply building decks. Around the world the International Energy Agency, the European nations and now the Obama administration are shifting their budgets over to the development of green energy. Why on earth is the member voting for the budget which includes none of that?

[John Cannis, Liberal, Scarborough Centre, ON]

Madam Speaker, we have to look at this given what is happening to our country and given what is happening globally.

I do agree with the hon. member that it is an important issue. It is something we had mapped out, outlined and committed to in our platform in the last election. We are committed to making sure that green policy is part of the Liberal policy.

That is what the Prime Minister was saying the other day on CNN to my surprise. That is what he has been discussing with the President of the United States. To everyone's surprise, all of a sudden, the Conservatives are hugging trees along with everybody else.

The answer is that I cannot speak for the Prime Minister and his government. I can only speak on behalf of my constituents and what I am hearing is that, unlike the NDP, Canadians do not want an election right now. They want us to work things out. They want us to move forward to help maintain and improve the job situation in Canada. They want to make sure our institutions are solid and that our companies are solid.

Today, GDP was down 3.1% or 3.2%, so we have to find a way to turn that around, to bring back the good days of Liberal management and manage the economy well.

[Alan Tonks, Liberal, York South—Weston, ON]

Madam Speaker, as it is my first opportunity to talk about the budget, I am pleased to rise to speak not just on the amendments that have been presented but to attempt to capture the budget's themes and relate them to the residents in my constituency of York South—Weston. Hopefully, members will find that there are some similarities with respect to issues across the country because that is why we are here. We are here to extract the best from the provided legislation, the budget in this case, and to criticize the shortcomings.

For those who are watching, this is Bill C-10, the budget implementation bill. There are hundreds of amendments that have been moved to varying degrees, exercising the will of the opposition to impress on the government those shortcomings. The shortcomings in the areas of pay equity and employment insurance have been discussed and commented on much better than I could. I am going to let it rest on the record that the government has been listening. It has listened from the very beginning, when the opposition indicated in the budget overview that there was no response to the kinds of issues that Canadians across this country could see on the horizon.

I would like to talk about 10 areas as briefly as I can. First, I think that it behooves us to talk about the manufacturing sector. There is probably no area in the country that has been harder hit than Southern Ontario. We were told years in advance that there was a crisis brewing within the manufacturing sector in Ontario. I do not need to dwell on this, but a huge amount of the disposable part of the gross domestic product comes from Ontario and that goes toward equalization. We have just been informed that the GDP is dropping very rapidly, notwithstanding the situation in Ontario. If there is a gap between the growth and the GDP, that impacts on our regional ability to contribute to equalization.

That was a case that was made. None of us come to the House with clean hands. That is an issue that was not addressed. My hope is that out of this discussion, the issue with respect to equalization and its impact on Ontario is placed under the microscope of concern. However, the creation of a regional authority providing $1 billion for a community adjustment fund that will look at manufacturing, particularly in Southern Ontario, and attempt to stabilize, reinvest in and revitalize the sector is a step in the right direction.

Small businesses are reeling in my constituency, especially those related to the automotive sector. Those that are not employed by the Big Three but are peripheral to the automotive sector, involved in various used parts and creating new parts for the industry, are being hurt very much. I am encouraged that, with more funds being allocated through the Canada Small Business Financing Program and the Business Development Bank, some of my constituents and the small businesses in the area I represent will find that there is hope in this budget. The sooner we can ignite that hope and bring it from the declaratory stage to the implementation stage the better.

When we talk about a more sustainable environment, we cannot help but look at the transformation that is occurring with respect to industry. We have talked about green jobs and green technology. There is no question that there is capacity built into the budget to develop integrated technologies across this country.

The natural resources committee is looking into this with ongoing hearings. We must begin bit by bit contributing to a more integrated and technologically transformative and green economy, certainly producing climate change results that will excite Canadians and that will begin to be part of this global transformation that is taking place.

I would like to think that in York South—Weston, for example, in the Kodak plant that is no longer in existence, that 60 acres would find an incubating taking place that would see high value added activity on that site, and that it would contribute to the city of Toronto's green plan and to green plans similar to it right across the country.

There is no question that local and community investments in cultural, sports and community centres are part of the budget. In York South—Weston the boards of education have been reeling, along with the city, in trying to continue to rehabilitate their recreational facilities. It is the proverbial caucus race. They are investing but they are falling further and further behind. We now have an opportunity, through cooperation with cities like Toronto and cities and communities across the country, to make a substantive change in retrofitting those buildings and bringing them up-to-date. The legacy from that will be that future generations will benefit.

Investments in federal infrastructure projects through the federal infrastructure programs are high on the list for municipalities but this is where I have one criticism. It relates to the one-third, one-third, one-third that has been discussed. Many municipalities are going through a credit crisis in looking at their fiscally sustainable future and possibly not being able to participate in the programs that have been etched out as partnership programs. The suggestion we would put forward in this regard is that we do have the mechanism, for example, of the commitment of the federal gas tax and the ability to front-end load that by using it and taking hopefully the revenues that might come from it and reinvesting them back in as a revolving form of financing into infrastructure programs that are going to stimulate the economy. There is absolutely no question about that.

The government has to listen to the critiques that are being made of these programs and in the mechanism that has been suggested by the opposition where there are quarterly reviews coming forward. If that part of the stimulus program is not working, then there has to be a recalibrating of that mechanism, so that we can extract the highest value in the shortest amount of time from our partners at the municipal level.

Regarding the whole matter of investments in housing in my area, there are many social housing units. It is a very high needs area and this budget makes it very clear that investment in housing, social housing in particular, and the rehabilitation of old housing stock, is a high priority.

Finally, I would like to talk about students and an aging workforce and what the budget provides, but I want to finish with two issues that are really time-fused issues. That is the issue of private pension plans and the issue with respect to deposit insurance with respect to our banking institutions and so on. These are two areas that the government must take under greater scrutiny because the whole issue of private pensions and deposits will become more and more an issue as the actuarial differences between existing investments and their ability to cover both deposits and pensions is strained to the limit.

[Kirsty Duncan, Liberal, Etobicoke North, ON]

Madam Speaker, I would like to thank my hon. colleague for his reflective and well thought-out discussion, as well as the previous member.

They both talked about companies and housing. Last week I met a taxi driver who proudly told me he had earned his bachelor's degree at 19, his master's at 21, and has since run a construction company and a real estate agency. In the last two months, both of those businesses have failed.

I asked him what we could do to help, and I will put that to my hon. colleague. He wants to know what the government could have done? What would help him is to restore consumer confidence.

[Alan Tonks, Liberal, York South—Weston, ON]

Madam Speaker, there's no question that we have a huge potential that is both undervalued and underutilized in our human capital. The government has talked about making eligible loan amounts for small businesses, talked about a different form of capital allowance and how that is charged back, and the taxable chronology within which that has to be paid.

There are many mechanisms that can help small business. There is one that I find is absolutely necessary, and that is to recognize that the support services for a small business, the accounting services, the advertising services, the ability to access provincial and local, municipal support mechanisms, the information that is available, the supports that are available are not there.

The idea of building local business incubators, where those services can be provided, is kind of looking at the national issue but thinking locally. Providing that kind of infrastructure will help those young people and those who have been working with corporations or are having a career change, and help them to start their own business. The capital and the credit access is important, but the actual infrastructure that will help them maintain and carry that business on is absolutely necessary for their success.

[Raynald Blais, Bloc, Gaspésie—Îles-de-la-Madeleine, QC]

Madam Speaker, I would simply like to remind my hon. Liberal colleague that, unfortunately, there is sometimes a huge gap between words and actions. In terms of words, I find the member's ideas very interesting, but in terms of actions, how can we make things better for society, especially in this time of economic crisis, and support a bill like the one before us today? Ultimately, they are maintaining a little latitude, but, really, there are no specific measures, particularly concerning pay equity for women.

In that regard, how can the member be so interesting in terms of what he says, but then, in terms of what he does, so ready to support a budget like this one?

[Alan Tonks, Liberal, York South—Weston, ON]

Madam Speaker, there is an old Yogi Berra phrase that says either “When you can do it, it ain't boastin” or “When you do it, it ain't boastin”. The question is well put.

The mechanism that has been suggested generally by the opposition with respect to quarterly reports is really an attempt to galvanize Parliament and its apparatus to deal with those reports, and then to make substantive changes if that stimulus package is not working as my colleague is afraid will occur.

It is our challenge to mobilize the capacity of Parliament through our committee structure, I would suggest to take those reports and where the value-added that was calculated into the stimulus package is not being achieved to suggest mechanisms that would change that, that would change either the formula or the programs that are being put forward, if they are not successful.

That would be the approach that I would use. Rather than approach the budget and say that it cannot and will not work, I would suggest that the way we should approach it is that we must make it work. It is within Parliament's capacity to do that. We are accountable to do that.

[The Acting Speaker, Denise Savoie]

No other members have risen, we will move on.

Is the House ready for the question?

[Some hon. members]

Question.

[The Acting Speaker, Denise Savoie]

The question is on Motion No. 1. Is it the pleasure of the House to adopt the motion?

[Some hon. members]

Agreed.

No.