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

[Jim Maloway, NDP, Elmwood—Transcona, MB]

Madam Speaker, we know that perhaps 65% of unemployed people are ineligible for EI benefits under the current system. We are not helping matters by not making changes. Given the conditions that this country is under at the moment, we definitely should eliminate the waiting period for EI because that would be the proper thing to do.

All the government has done is add an extra five weeks on at the end. The pain is up front. I would expect that we would keep pushing the government to see the light in this case and do something. We only need to look at the unemployment stats just in the last month and in the last quarter to see the huge increase in unemployment numbers. The signs point to matters only getting worse, not better, in the short term.

I know the Tories are holding on, hoping that we will come out of the recession so they will not have to spend any of this money. They want to be able to go back to their Reform Party cousins and say that they did it because they had to in order to save the government, but that they did not really have any intention of spending the money. They want to hold on long enough so that the economy will begin to come out of the recession.

However, it does not look like that will happen. Things are starting to look like they will be even worse. If those people in that party are aghast at the deficit they see the government looking at running right now, they will need to take another look at what could happen in another six months to a year from now when conditions might be far worse. We would hope that the government will take a look at this EI situation now and make the changes now before conditions get even worse than they are.

[Claude Gravelle, NDP, Nickel Belt, ON]

Madam Speaker, I would like the hon. member from Winnipeg to enlighten me on how the non-monetary measures that have been added into this budget, which is supported by the Liberals, will help stimulate the economy.

[Jim Maloway, NDP, Elmwood—Transcona, MB]

Madam Speaker, I am quite familiar with the Tories in Manitoba doing the same thing. They also brought in big omnibus bills with poison pills in them.

When we were in opposition for the 11 years under the Filmon government, we had to deal with one of these bills every year. They were about 400 pages long and we would send our staff in to read it over and reread it to find these hidden poison pills. There were all kinds of them, which made it very difficult for us at times to vote against the bill because the government always put something in there that would be hard for us to vote against. That was just tactics on its part but that is what the government is all about, tactics.

[Paul Dewar, NDP, Ottawa Centre, ON]

Madam Speaker, I want to thank my colleagues for standing up in opposition in a constructive and critical way. It is important for us as members of Parliament to understand our role, and our role is to be critical when necessary. We are not always critical. We have been constructive in our criticism and have put ideas forward. It is important to make that statement to begin with.

Before I get into the substance of my comments on the budget bill, I want to take a moment to pass on condolences from the Ottawa community and my caucus to the family of Madame Michèle Demers on her sudden and tragic death. Madame Demers was the president of the Professional Institute of the Public Service of Canada. She was a leader not only of her union and for the people she worked for, but also for the Ottawa community. We are saddened today for her family and quite frankly for the labour movement. I had the opportunity to meet with Ms. Demers on many occasions. She was always clear in her convictions about what she was doing and served her members well. We will all miss her greatly.

If we look at the trajectory of the budget, we have to look at the fiscal update, of course. Three components in the fiscal update were obviously not satisfactory to all members of Parliament, save the government. Included in the fiscal update was the well-known political financing issue. My colleague spoke of poison pills. The political financing issue was a large dose of poison.

However, that was not the focus for us in the NDP. We focused on the fact that the government wanted to ban the right to strike by public servants the day after it had just negotiated a contract with one of the public service unions.

In both the economic statement and Bill C-10 the government wants to take away the right of women to have pay equity. It also wants to take away the right to challenge if they do not receive equal pay for work of equal value.

In the fiscal update there was also a $10 billion assumption. It was a whopper. It was that the government was going to find savings in government operations by selling off enough assets to gain $10 billion.

In his own comments, the finance minister admitted that his numbers were a bit rosy. We will have to give him the new nickname of “Rosy”. Actually, I think “Rosy” is being polite.

Every single economist who looked at that $10 billion assumption, and this is especially for our friends who used to be reformers, thought it had no credibility. The finance minister was also criticized by the government's own parliamentary budget officer. The Conservative government pretends that it knows how to manage a lemonade stand, but it has a $10 billion assumption that was laughed at from every corner.

The government grabbed onto power and prorogued the House. Then it did a Hail Mary pass, which is the budget. The Hail Mary pass is sadly being caught by the official opposition, as those members like to call themselves.

The rosy $10 billion number from our rosy Minister of Finance came back in the budget in front of us as $8.7 billion. The government has managed to figure out some of the math. However, the government forgot to tell us where the money is going to come from.

This year in the budget--and I say this to all those who purport to be fiscal conservatives, be they in the official opposition or be they on the government benches--the government is going to get $4 billion from the sale of government assets and from finding government savings.

We all know what the game is. The game is that the Conservatives are going to have to do one of three things: increase the deficit, not spend the stimulus or have a fire sale of government assets in a buyer's market. Does anyone find that credible? I certainly do not. That is what bothers me most about this budget.

My colleagues have underlined the importance of looking at what this does for people, and I applaud that. It does not do much for people. What gets me more than anything are the assumptions made and the rhetoric put forward by a government that pretends it actually knows what it is doing when it comes to managing the nation's finances.

I will give another example. A couple of years ago the government said, and I go back to its assumptions in this budget, that it was going to find $2 billion through savings in government operations and through selling off assets. It was going to find $2 billion that was booked by the previous government, I might add, in government operations.

What it did was a real whopper. It hired a consulting company by the name of A.T. Kearney out of Chicago. The company has a branch office in Toronto. The consultant racked up a bill, and I know my friends know this one well, of not $1 million, not $2 million, not $10 million, not $15 million, not $20 million, but $24 million. Does anyone know what the government got for it? It got zero.

Public works had the blessing of the cabinet. The former minister of foreign affairs is nodding and smiling. He knows it well. The government got shaken down for $24 million by A.T. Kearney. The problem is that we were shaken down.

One member looks as if he does not know what this is about. He should look it up. I am going to send it to him, actually, because he is a minister now in cabinet. He is walking away now, and he should. He is hanging his head in shame, I hope. A sum of $24 million was spent, and we received zero value for the money.

These are the people who are now responsible for bringing us out of the recession. God help us all. What we need right now are people who understand how finances work. That is why I will not only be opposing this budget, but doing so vigorously and with clarity.

The government wants us to believe it has the best interests of the country in mind. When a government signs on for a $24 million contract with a consulting company from Chicago and gets zero value for the money, I am sorry, but I do not trust it, my constituents do not trust it and neither should anyone in the House, including its own members.

In the time I have remaining, I want to talk about some solutions.

It is interesting to note that south of the border there is an entirely different situation. There are people who actually listen to those who want to pull us out of the recession by investing in people and communities. One of the most exciting things happening south of the border is the green collar momentum. It is a move toward taking us from this economic recession and transforming our economy to one that is not only environmentally sound but also sustainable.

One of the alliances is different from the alliance we see in the House. It is called the Blue Green Alliance, an alliance in which labour and those pushing for environmental change have come together. They have said they need to come together to provide stimuli and solutions for the economy. We see this being applauded, lauded and supported by the federal government in the states.

My final comment is that instead of paying $24 million for bogus reports, we should be investing in blue-green alliance solutions similar to those we see south of the border. That is what this party will be doing, it is what we will be advancing and it is why we will not be supporting this budget.

[Claude Gravelle, NDP, Nickel Belt, ON]

Madam Speaker, there is a gaping hole in this budget, and a lot of money is missing. The Conservatives are going to have to sell off some public assets to meet their target.

I would like the hon. member for Ottawa Centre to comment. The CBC is being talked about as one of the things the Conservatives are going to sell. I would like the hon. member to tell me what effect selling off public assets is going to have on Canadian culture.

[Paul Dewar, NDP, Ottawa Centre, ON]

Madam Speaker, that is why I was stating in my comments on the budget that every Canadian should be concerned. The government has an $8.7 billion hole in its assumptions in the budget. It was $10.1 billion before; now it is $8.7 billion.

My concern, and many of my colleagues share it, as should the official opposition, is that things like the CBC are in danger right now, because the budget document itself says that the government will be reviewing public sector assets that are in competition with the private sector. I am sorry, but that is where CBC is.

We also look at assets such as AECL, which needs some money. I am afraid the Conservatives will pump in taxpayers' dollars, turn around and sell it to their friends, and leave us holding the bill for it all.

This should be of concern. The government does not care. It wants to use the assets to make its books look better. It already did that in the last Parliament, when it sold off a bunch of buildings so that we could rent them back.

I implore my friends from the Liberal Party to actually understand what the Conservatives are doing. When we are aware of what they are doing, it demands action. No one will believe them when they say they did not know that was going to happen. They are fully aware of what is wrong with the budget. I ask the Liberals to wake up and oppose the budget.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Madam Speaker, I want to follow up on the question of the kind of carny huckster attitude that the government has toward government assets.

In the last sale, public buildings were sold on the fact that the government sells off prime real estate all across Canada and then makes the taxpayer rent it back and pay for all improvements. It is not the owners. They get off scot-free.

In 25 years the taxpayer has to buy the building back at full market value. I do not know any real estate from the early eighties that is worth zero now, but this is the argument the government uses: at the end of 25 years, this prime real estate is supposed to somehow be valued at zero, so we are getting value for our dollar.

Could the hon. member, who knows this file so well, explain to the people back home about the real estate scam being perpetrated in the selloff of these assets? It is putting the taxpayer on the hook for all improvements and then making the taxpayer buy the building back at the end of the day.

[Paul Dewar, NDP, Ottawa Centre, ON]

Madam Speaker, I want to thank my colleague from Timmins—James Bay for the question, because this is extremely important.

Right now, as we speak, the federal government is looking around this region for extra office space. It is projecting ahead. It is a good idea to plan ahead--very smart.

At the same time, it is looking to sell off assets. It has already done this little ruse when it sold off government buildings, buildings that we need, meaning that taxpayers have to lease the assets and have to pay. The simplest way to put this is to ask whether we would rather own or rent. What the government is doing, has done and is contemplating doing right now is similar to selling off our homes and then having to rent them back. It looks good in the short run because we have some money in our pockets. In the long run, it makes no sense at all.

The problem with the government is that it only looks at the short term to gain advantage. In this case it means putting an asset on the books to make things look good. In five or ten years, unless we do away with government entirely and no longer need buildings anyway, which is maybe the real plan, we need to have a place for our public service to work. I would rather have a government asset that we own than one that we have to sell and then rent back. It makes no sense. It is not good economics. It is not good management.

[The Acting Speaker, NDP, Denise Savoie]

Resuming debate. Seeing no other speakers, is the House ready for the question?

[Some hon. members]

Question.

[The Acting Speaker, NDP, Denise Savoie]

The question is on the motion. Is it the pleasure of the House to adopt the motion?

[Some hon. members]

Agreed.

No.

[The Acting Speaker, NDP, Denise Savoie]

All those in favour of the motion will please say yea.

[Some hon. members]

Yea.

[The Acting Speaker, NDP, Denise Savoie]

All those opposed will please say nay.