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

[Larry Bagnell, Liberal, Yukon, YT]

Mr. Speaker, I am glad the member mentioned two things.

The first was mining, which is as important to her riding as it is to mine. Could she comment on the effect of the one year extension of the mining exploration tax credit on her riding?

The second is she mentioned hope for people around the world. I hope the people who are near death in the Congo, Darfur and Burma, as well as the Baha'is in Iran, who are being persecuted and murdered, are not forgotten.

[Niki Ashton, NDP, Churchill, MB]

Mr. Speaker, on the mining exploration tax credit, we think it is a great idea to support some of the initial steps in mining exploration, and I pointed that out.

I want to be clear. People in mining communities are losing their jobs in the thousands. Many of these companies provide a great deal of tax revenue to the federal government. It is because of the hard work of people in communities in our area, in Thompson, Flin Flon, Snow Lake, that the Government of Canada and that Canada in general benefit. It is a huge stimulant for northern Canada as well.

Why is the government not responding to and supporting these communities that are facing great difficulties?

On the international front, we need to look at our role, the leadership role that Canada has been very proud of for years and that it has taken across the world. We are seeing that slip. As we look forward, this is another example of how we are losing hope in our ability to participate in the respectful way. We have had a history of doing this across our borders.

[Don Davies, NDP, Vancouver Kingsway, BC]

Mr. Speaker, during the last campaign, many parents told me of their need for quality, accessible and affordable child care to assist them in meeting their work obligations and to ensure their children had access to the best education and educational starts we could give them.

One of my constituents, Sharon Gregson, is a member of the school board and runs the daycare at Collingwood Neighbourhood House—

[The Acting Speaker, Conservative, Barry Devolin]

The hon. member for Churchill.

[Niki Ashton, NDP, Churchill, MB]

Mr. Speaker, the NDP has worked hard to push for child care and to look at the well-being of all our communities. However, it is unfortunate that it has been forgotten in the budget.

Many of us will continue to fight hard for it. We work closely as colleagues. We would like to see the government recognize how important it is to the social infrastructure of our country and most definitely the future of our country as well.

[Thierry St-Cyr, Bloc, Jeanne-Le Ber, QC]

Mr. Speaker, I do not have much time to address the House here this evening, but I would nevertheless like to summarize what has happened over the last few weeks regarding this budget.

A few weeks ago, three opposition parties did something rather exceptional. They completely abandoned their partisan interests in order to come together and do their best to bring down this ideological and dogmatic government, and provide Quebeckers and Canadians with a more interesting alternative. Unfortunately, a few days later, the Liberals pitifully caved in, putting their party's interests ahead of the interests of citizens, the interests of the people they represent. What we now have is a Conservative-Liberal coalition. This new coalition is especially shameful for the Liberals, who received nothing in exchange.

They proposed an amendment and got reports. They probably also got an end to legal action and a new coat rack in the lobby. They did not get much else. In their amendment, they asked for reports, which they said would help monitor the government. That is funny, because I always thought it was the role of the members of this Parliament, of this House, to monitor the government. If we understand the Liberal motion correctly, they are asking the government to produce reports so that they can monitor it. It is a bit ridiculous, and it does nothing for the people who really need help.

One might ask what happened to the Liberals' green shift. How could a party that supposedly campaigned on the environment support a budget that includes no environmental measures that are serious or worthy of the name? The only measure this government is trying to pass off as an environmental measure is the assistance to the oil companies for carbon storage, which is not nearly enough.

The coalition agreement drawn up by the three opposition parties talked about introducing the POWA, as it was formerly called, a program for older worker adjustment. Obviously, in the new Liberal-Conservative coalition, there is no such program. What was this program? It used to exist, but it was abolished by the Liberals and never reinstated by the Conservatives. This program enabled older workers who were victims of mass layoffs in their community to bridge the gap between the end of their employment income and the start of their retirement income. Now, people are forced to sell everything, give up all their assets and go on social assistance until their pension kicks in. I submit that this is a sad end for people who worked their whole lives to build this country, their country.

All we asked was that the government reinstate this program to enable these people, who worked hard, to live out their days in dignity. The Liberals failed miserably. They were not even able—

[The Acting Speaker, Conservative, Barry Devolin]

I must interrupt the hon. member. He will have six minutes left when debate resumes tomorrow.

[Jay Hill, Conservative, Leader of the Government in the House of Commons]

Mr. Speaker, as you know, Canadians are anxiously awaiting financial relief during this economic crisis. My colleagues in the New Democratic Party have indicated that they still have a number of MPs who want to speak to the budget bill, which under normal circumstances would delay that relief. With unanimous consent, we can change those circumstances and accommodate more speakers and get the relief out to Canadians sooner instead of later.

Therefore, I would seek unanimous consent for the following motion: That, notwithstanding any Standing Order or usual practice of the House, the House shall sit beyond the ordinary hour of daily adjournment for the purpose of considering the second reading stage of Bill C-10, the budget implementation act, and shall not be adjourned before such proceedings have been completed except pursuant to a motion to adjourn proposed by a minister of the crown.

[The Speaker, Liberal, Peter Milliken]

Does the hon. Government House Leader have the unanimous consent of the House to propose this motion?

[Some hon. members]

Agreed.

No.

The House resumed from February 10 consideration of the motion that Bill C-10, An Act to implement certain provisions of the budget tabled in Parliament on January 27, 2009 and related fiscal measures, be read the second time and referred to a committee, and of the motion that this question be now put.

[The Speaker, Liberal, Peter Milliken]

Before yesterday's adjournment motion, the hon. member for Jeanne-Le Ber had the floor. He has six minutes remaining to finish his comments. The hon. member for Jeanne-Le Ber.

[Thierry St-Cyr, Bloc, Jeanne-Le Ber, QC]

Mr. Speaker, during my speech yesterday, I emphasized the fact that we have gone from an opposition coalition to a Liberal-Conservative coalition. I gave a few examples of the unfortunate results this has had for all citizens of Canada.

I would like to continue today by talking more specifically about the negative impact of this coalition on Quebec.

I hope to demonstrate that, whether it is the Conservatives or the Liberals in power, or whether it is a coalition of the two parties, like the one before us today, Canada always practices politics based on partisan interests. However, all too often, the interests of Canada unfortunately go against those of Quebec.

In the end, we, as Quebeckers, cannot hope for anything from this federation. The only solution of course is for Quebec to become a sovereign country so that it too, like all countries, can practice politics based on its own interests. Furthermore, being a sovereign country will help Quebec by giving it all the necessary tools to get through this crisis and meet its own needs, rather than the needs of oil companies in the west, for instance.

My first example is equalization, the transfer payments the federal government makes to the provinces and Quebec. In fact, these payments are not gifts, because the money comes from the taxes we pay. The equalization formula is constantly being modified. During the last parliament, the Conservative government, wanting to appear open to Quebec, said it would try to correct the fiscal imbalance. Equalization payments to Quebec were increased, but only thanks to pressure from the Bloc Québécois and the government's minority position.

At the time, I was a member of the Standing Committee on Finance, and I repeatedly said in this House that the government had not corrected the fiscal imbalance because there had been no transfer of tax fields and that whenever it pleased, the government could backtrack, change the formula again, penalize Quebec and go back to the ways things were before.

Unfortunately, my words were prophetic, because that is exactly what happened. At times of economic crisis, when we are faced with serious problems, the federalist parties revert to type and promote the interests of Canada as a whole. I would even say this is not completely abnormal. What is abnormal is that Quebec is not doing the same thing and becoming a country so that it can promote its own interests, especially during an economic crisis.

Even though the equalization formula is a bit abstract and extremely technical for many of our constituents, it is even more revealing when we look at how it is calculated.

In the past, income from non-renewable resources like oil was excluded from the equalization calculation. Clearly, for the purposes of this calculation, provinces that generate such revenue appear poorer than they really are, and provinces that do not generate such revenue and whose economy is based essentially on renewable energy, such as Quebec, seem richer than they really are. These provinces are therefore penalized.

What is more, from the environmental point of view, we wonder why this government, with the backing of the Liberals, wants to encourage industries that use non-renewable energies, when they should be doing the opposite and giving equalization premiums to provinces using renewable energies.

In the last budget, the imbalance was made even greater by the decision that Hydro One revenues in Ontario will no longer be included in the equalization calculations, although it was arbitrarily decided that those from Hydro Quebec will continue once again to be included. This will mean a loss of $250 million annually for Quebec.

We could go on to the example of the Quebec securities commission. Once again, the federal government, with the backing of the Liberals, wants to centralize finance in Ontario. We could also give the example of this government's environmental policies, which are clearly not in Quebec's interests. In fact, dependency on oil and gas impoverishes Quebec, while an independent Quebec could fully free itself of that dependency and be the richer for it.

Once again, we have a made-for-Ontario budget backed by the Liberals, who have a real partisan interest in Ontario. The big lesson the people of Quebec need to take from this is that, even when governments switch places, nothing can be expected from the federalist parties. Nothing from the Canadian federation either, not because it is bad, but simply because all members in this House, with the exception of the Bloc Québécois members, are looking after the interests of the Canadian nation, which are not unfortunately the same as the interests of the Quebec nation.

For the Quebec nation, the only solution is to do the same thing: acquire its own sovereignty, fly on its own, make its own decisions according to its own values, but also and particularly according to its own interests. The route to that goal is to acquire national independence, while continuing to cooperate with Canada as a good neighbour. Sovereignty will not be against Canada, and not because we do not like Canadians, but merely because we believe that the best ones to define what is good for Quebeckers are Quebeckers themselves. We will make decisions, sometimes good ones, sometimes bad ones, but at the end of the day they will be our decisions.

[Christian Ouellet, Bloc, Brome—Missisquoi, QC]

Mr. Speaker, I would like to congratulate my colleague on the clarity of his speech.

Since we were recently described as sectarian, I would like to ask him if he feels that having the desire to stand up to have one's own country is not precisely what Canada did. Does he not believe that we could remain very good friends and that wanting a country for oneself does not mean one is sectarian? I would like to hear his thoughts on this.

We now realize, as the member clearly said, that the Liberals truly got down on their knees when they ended the coalition. In that sense, one could say that the Liberals were worse than the Conservatives. I would really like my hon. colleague to comment on that.

[Thierry St-Cyr, Bloc, Jeanne-Le Ber, QC]

Mr. Speaker, it is true. My colleague's last comment made me think about the time I was on television with the member for Bourassa. He asked why I was always criticizing the Liberals. It is because while we had no expectations of getting anything from the Conservative government, the Liberals at least had the opportunity to get a little something in the process. What did they get besides a new cloakroom in the lobby and an end to the lawsuit against them? They got reports to monitor the government. I always thought it was the work of Parliament to monitor the government. In the end, the Liberal amendment is asking the government to monitor itself and to do the work we should be doing. The Liberals got absolutely nothing in this regard. It is quite sad.

As for the accusations of sectarianism, let us be serious. If sovereignty is a good thing for Canada, if it is good for France, Germany, Gabon and any other country in the world, why is sovereignty not good for Quebec? This comment seems a bit ludicrous to me. The comment was made, in France, on the same day that a Quebec premier was being honoured. It is even more ironic that France had already honoured two Quebec premiers in the past, and with higher honours at that. If we are to believe what the French president said, it would mean that they honoured sectarians. I obviously do not believe that. I think that his comments were unfortunate and uncalled for. I do not believe that they reflect the image the French have about sovereignists.