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

[John McKay, Liberal, Scarborough—Guildwood, ON]

Mr. Speaker, this is the budget implementation bill. I emphasize the point that this is the implementation of the budget.

As members know, the Liberal Party has given the government a conditional pass on its budget. Part of our concern has to do with the government's competence to implement what it proposes in the budget.

The budget calls for substantial amounts of money to be spent on a stimulus package. In this bill, literally, there is a call for billions of dollars to be spent on stimuli. To be precise, it is $5.973 billion, as indicated in part 6. This is a considerable sum of money by anybody's standards.

Many of these initiatives are quite supportable and have the appearance of being good ideas. However, I would remind members that this is an implementation bill. This is a bill that would enable the government to actually spend the money.

There is a substantial consensus among economists and other Canadians that we need an economic stimulus from the federal government and that it would be welcomed in the Canadian economy. Therefore, $6 billion into the economy should put Canadians to work and should stimulate the economy. Unfortunately, the government has a very poor record of delivery.

The budget is the promise. The budget implementation bill is the delivery. The government is very good on the promise side of the equation, but it is much poorer on the delivery side of the equation.

I direct the attention of members to page 10 of the Parliamentary Budget Officer's budget 2009 economic and fiscal outlook briefing note of February 5, wherein he states:

Historically, however, the Government has experienced significant delays in delivering funds related to planned infrastructure investments.

For example, in 2007-08, the last year for which data is available, Infrastructure Canada lapsed 50% ($1.1 billion of $2.3 billion) of its non-gas-tax related funding.

“Lapsed” is government jargon. “Lapsed” in the real world means “promised but didn't spend”.

In the last fiscal year, the government promised to spend $2.3 billion, yet was only able to write cheques for $1.2 billion. If we want a stimulus in the economy, it does no good in the government's bank account. Money in the government's bank account does nothing for the economy.

If we applied the same track record to the promises contained in the budget implementation bill, we would have $6 billion promised, but only $3 billion delivered. I suppose it is not news that the government is long on promises but very short on delivery.

It gets worse. Some parts of Canada appear to be more favoured than others.

Out of the 50% delivery rate, apparently it is virtually only Conservative ridings that are in need of a fiscal stimulus. Notwithstanding that the Conservatives are a minority party in Parliament, representing about 40% of the ridings, it appears that they would receive in excess of 75% of the funding.

We are in an economic crisis. President Obama has been pouring trillions of dollars into stimulus, yet our government can only get 50% of its money out the door. Of that 50%, 75% goes to its cronies and friends. Members can see why we put the government on probation.

The idea of a stimulus is pretty simple. If we put $100 of taxpayer money into the economy, it is supposed to act as a multiplier in the economy and create at least $100 worth of economic activity and, hopefully, more than $100 worth of economic activity.

Therefore, the government is right to emphasize infrastructure stimulus, which is temporary, which is timely and which is targeted. That is the right thing to do, but its track record is one of incompetence and parochialism. There is no sabotage like self-sabotage.

For years the Liberal Party has argued that the transit pass is a complete waste of taxpayer money. We argued it when we were in government and we have argued it when we have been in opposition. It is a public policy disaster.

When I was parliamentary secretary to the minister of finance, I argued that it was a stupid waste of taxpayer money. I had Department of Finance briefing notes to back up that argument. To no one's great surprise, the Auditor General confirmed our arguments last week. In the report it said:

In its 2007 Climate Change Plan under the Kyoto Protocol Implementation Act, Environment Canada stated that the Tax Credit is expected to result in emission reductions of 220,000 tonnes each year from 2008 through 2012.

The 220,000 tonnes sounds pretty good. It was unfortunately approximately double Finance Canada's estimate of the resulting emission reductions in its strategic environmental assessment. In its 2008 plan Environment Canada amended the figure for the expected reductions to an average of 35,000 tonnes per year, about 16% of the original estimate of 220,000 tonnes when that budget implementation bill was going through.

The 35,000 tonnes is quite a reduction from 220,000 tonnes. Given the lower figure the tax credit will have a negligible impact on Canada's greenhouse gas emissions. Many factors influence public transit ridership, including the price of gasoline. The result is that it is almost impossible to measure actual greenhouse gas emission reductions attributable to a tax credit.

With regard to other emissions, Environment Canada could not provide any analysis to support the assertion that the tax credit would result in measurable impacts.

Therefore, what do we have? We have a claim of a 220,000 tonne reduction amended down to 35,000 tonnes of reduction. The report further states:

A consultant’s report commissioned by Finance Canada prior to the Tax Credit’s approval dismissed an alternative proposal because the cost to government would be excessive ($800 per tonne of greenhouse gases reduced) and the reduced fares would have little impact on transit usage. For the Public Transit Tax Credit as announced, Finance Canada estimated that the cost through tax revenue loss would be much higher, ranging from around $2,000 to $3,000 per tonne of greenhouse gases reduced between 2006 and 2010.

If we take the 220,000 tonnes, the government says that it will cost $800 per tonne. We are down to 35,000 tonnes now and it will cost $2,000 to $3,000 per tonne.

Based on this estimated cost and the lower expectations for the greenhouse gas emissions reductions in the 2008 plan, the cost per tonne will be even higher. It is not $800 per tonne, it is not 2,000 per tonne, it is not $3,000 per tonne and it may actually be much more per tonne and we cannot measure it in the first place. It is a public policy disaster and a total waste of taxpayer money, which was the argument that the Liberal government put forward when we were in government and we put forward when we had been in opposition.

Our hesitation to endorse the government's budget is well founded. The public transit pass fiasco was just one of many budgetary initiatives that used the tax system for political purposes.

Jeff Simpson in this weekend's Globe and Mail said:

It was a farcical policy, not to put too fine a point on the matter.

It was estimated that about 95 to 97 per cent of those receiving the new subsidy were riding public transit anyway. There would be no major shift from cars to buses. The money would, quite literally, go down the policy drain, which is of course exactly what happened.

As a climate-change policy, it was among the least effective policies imaginable.

It goes on to echo the devastating critique of the commissioner of the environment and it concludes:

Policies like those devastatingly dismissed by the sustainable development commissioner are a scandalous waste of taxpayers' money.

I have spent many years in this chamber. I do not know how many times I have heard Conservative members, both in opposition and in government, say that they are the protectors of taxpayer money. I would urge all Canadians to read the commissioner's report before they buy that argument from any Conservative member. This is a scandalous waste of taxpayer money with little or no environmental impact.

We have a government that has a lamentable record of getting infrastructure projects out the door. When it does, surprise, surprise, it seems to end up in Conservative ridings. The government ignores good public policy in favour of dubious electoral politics.

I know this will come as a bit of a surprise, but I do want to say something good about the government. It will not take too much time, in fact, we could probably just cut this part right out. In my view, the purchase of asset-backed commercial paper, be it mortgages, or motor vehicles leases or sales contracts on equipment, is a good idea. It must have been a good idea because the Conservatives probably did not think of it.

The overall problem with the economy is that the consumer, particularly the American consumer, has simply stopped buying. If the consumer stops buying, the entire manufacturing chain backs up and layoffs ensue worldwide as manufacturers find themselves with excess inventory and no one to buy it.

Consumers are also employers and employees. When layoffs occur, not only does the person cease to be an employee, he or she also ceases to be a consumer and the whole system loops back on itself.

It may be awhile before consumers get enough confidence to get back into the marketplace. The government can do little or nothing about confidence, but it can do something about credit. Picking up frozen credit instruments is a good thing, and putting cash in the hands of manufacturers and others at a time when cash is needed is the right thing to do.

The other attractive feature from a government standpoint is that it provides stimulus in the economy without actually ratcheting up the debt or the deficit. The assets are purchased at market value and commercial prices, so the government has an offsetting asset to go with its expenditure. In some respects it is the best of both worlds, stimulus without deficit.

I encourage the government to use its considerable leverage to purchase this frozen paper, not only to get cash into the hands of manufacturers but also to allow retailers to sell product more easily when a customer does not have the full purchase price of the product.

Just last Friday we learned that Canada had lost 129,000 jobs in the month of January alone. To give a comparator, as one of my colleagues said, that would be as if America had lost 1.3 million jobs in a month. By anyone's standard, that is a huge job loss and it is the largest number of job losses we have had in recorded history, which goes back quite a number of years. There were 129,000 jobs lost, and nearly a quarter of a million since November.

Canadians who are suffering in this recession are looking to their members of Parliament for help. We cannot let them down. The leader of the official opposition says that these staggering numbers are precisely why he has put the government on probation with his Liberal budget amendment.

During the election last fall, the Prime Minister said that it was a good time to buy stocks. He said that there was no need to run a deficit. In fact, I remember the Minister of Finance saying that he would not be the first finance minister in the last half dozen finance ministers to run a deficit and yet here we are. He also said that if we were to have a recession, it would have happened by now. We know that as he was saying that the market fell further, the Conservatives were in the red and over 234,000 jobs were lost, almost a quarter of a million jobs.

The Leader of the Oppostion said:

This government has failed to plan and failed to protect Canadian jobs. It didn’t see the seriousness of the downturn and failed to bring in an immediate stimulus package when the urgency was clear.

This budget is far from perfect. Had we drafted it, it would have been a different budget from the one we are debating today. However, Canadians cannot afford to wait any longer for the government to act. While this budget fails in some areas, some of which I have outlined, it also manages to provide some assistance that is needed. For this reason, the budget should proceed to committee without undue delay or partisan games.

The NDP decided to oppose this budget before it was even written. Canadians deserve more. Now it is time to put away partisan games and recognize that we are here to serve Canadians.

Therefore, pursuant to Standing Order 61(1), I move:

That the question be now put.

[Francis Scarpaleggia, Liberal, Lac-Saint-Louis, QC]

Mr. Speaker, I would just like to ask the hon. member for his comments on a couple of ideas.

First, the government has been saying, almost ad nauseam, that because this is a global situation, somehow it has very little responsibility for remedying the situation. However, there is macroeconomic policy and there is microeconomic policy. It is important that the government get its microeconomic policies right. Once such policy would be to reform the EI system to make it more generous in recessions and less generous, perhaps, in good times. That would pump money directly into the hands of people who would spend that money right away.

Second, I know the member was the parliamentary secretary to the former prime minister and minister of finance, Paul Martin. It is my understanding that his microeconomic policy of the day helped preserve the integrity and strength of our banking system, which, today, is highly appreciated. Would the member like to comment on those two points?

[John McKay, Liberal, Scarborough—Guildwood, ON]

Mr. Speaker, with respect to the member's first question on EI, the government probably did the least amount possible it could with the most vulnerable in our society. When we have 129,000 people being laid off, it is just not useful to tell them that if they stay laid off long enough they will actually get an extra five weeks on the tail end of their EI.

The least the government could have done was to have shrunk the two week waiting period. That would have been step one. The second thing it could have done is the whole reduction of the regionalization of EI. If one is unemployed in Toronto, it is the same as being unemployed in Miramichi or in Cape Breton, which is another fine place to be unemployed. Regarding the argument that one person has bills and another does not and so on, the fact is that the bills are coming in the door. The two week waiting period should be eliminated and the number of hours worked should be similar across the country.

With respect to the banking system, the member is absolutely right. The former prime minister and former minister of finance did not go crazy with respect to all the rules and regulations, so we do not have the craziness that went on in the United States. We have integrity in the system. We also did not allow mergers, which turned out to be the right policy decision in hindsight.

[Guy André, Bloc, Berthier—Maskinongé, QC]

Mr. Speaker, listening to my colleague, it seems obvious that he has more reasons to vote against the budget than to support it. He gave many more reasons to vote against the budget—and I agree with some of them—than he gave to vote in favour of it.

I would like to hear my colleague's thoughts on securities. This bill would establish a Canadian securities regulation regime transition office, and the government would give this office a $150 million budget. Quebec's National Assembly unanimously voted against creating a Canadian securities commission. The Bloc Québécois intends to support harmonizing the rules of a more decentralized financial system, such as it is now. I would like to hear my colleague's thoughts on this subject.

Is this one more reason he might vote against the measures contained in this budget? Because we feel it is another very negative aspect.

[John McKay, Liberal, Scarborough—Guildwood, ON]

Mr. Speaker, this concern about a national securities regulator has been around through two governments now and has been largely driven by the business community. The business community, both in Canada and outside of Canada, looks at our patchwork system of regulations as nonsense. We have 13 separate regulators in 13 separate jurisdictions doing, Lord knows, what all. Some set up regulations based upon best practice and some have very specified codes, and it becomes virtually impossible.

The result is that the default goes to Toronto. Toronto becomes, effectively, Canada's securities regulator by default, which we think is a regrettable thing. We think there should be a national securities regulator. The measure provided by the government is a sensible approach to what is a fractured system. We will have to see how this budget implementation measure acts itself out but, in my view, this is a step in the right direction.

[Olivia Chow, NDP, Trinity—Spadina, ON]

Mr. Speaker, a woman earns 70¢ for every dollar a man earns but an immigrant woman only earns 56¢ for every dollar a man earns. Women, by and large, will not qualify for employment insurance and there is nothing in the budget to make it easier for them to qualify.

The budget also denies women access to the Canadian Human Rights Act. Clause 399 of the budget implementation bill states:

40.2 The Commission does not have jurisdiction to deal with complaints made against an employer....

--even if--

the employer has engaged in a discriminatory practice referred to in section 7 or 10

--or 11 of the Human Rights Act. I have heard that the hon. member and his party are against the amendment to this pay equity section. Will he or will he not move an amendment to delete clause 399 in the budget implementation bill as it has nothing to do with stimulating the economy, protecting the most vulnerable, creating jobs or protecting jobs?

[John McKay, Liberal, Scarborough—Guildwood, ON]

Mr. Speaker, the budget implementation bill does very little to protect the vulnerable, whether they are men or women, whether they are employed or are on their way to becoming unemployed. This has been a rather regrettable and lamentable exercise by the Conservative government. One would wish that these issues had been addressed in a more fulsome fashion by the government.

As I have said in the past, we have put the government on probation. We have a great deal of concern that what it has promised in the budget will not be delivered and, if it is delivered, that it will be delivered in a haphazard and parochial way. It will be devastating on whole categories of vulnerable people, some of whom the hon. member has mentioned.

[Colin Carrie, Conservative, Parliamentary Secretary to the Minister of Health]

Mr. Speaker, I thank the member for his comments and his party's support of the budget.

I did note that he made a little a joke about unemployment and where it occurs. I know he did not really mean to be funny but, coming from Oshawa, we are really suffering right now as far as the manufacturing sector.

In the budget, we have massive infrastructure spending. Locally, there is money put aside for cleanups, such as the Oshawa Harbour, money for roads and sewers,and help with the university.

The hon. member talked a little bit about the EI system and whether we should be eliminating the two weeks. We can debate that back and forth, and I do realize there are ideological differences, but instead of getting rid of the two week waiting period, we added five extra weeks. We also put in extensive opportunities for retraining. There is money for people who did not qualify for EI to apply for retraining. There is $500 million in the budget to help people who do not qualify under EI for retraining. My community really needs this.

The hon. member is not a person to play political games but, as he mentioned, the NDP decided to vote against the budget before they even read it. My concern is that the NDP will try to hold this up in the House for their own political ideology

Not too long ago, the Liberals were willing to get into a coalition with the NDP. Is there any influence he has that could put some common sense into the NDP so that communities like Oshawa could benefit from the budget, because we need to pass it as quickly as possible?

[John McKay, Liberal, Scarborough—Guildwood, ON]

Mr. Speaker, I am afraid my influence with the NDP is rather modest at this point.

The hon. member does come from Oshawa which is where I had the great honour to practise law for 22 years. I know the community quite well and I know exactly the concerns that are being faced by the folks in Oshawa, particularly those who are associated with the car manufacturing business. I share with him that concern.

The trouble is that because the government does not really pay much attention to serious policy discussion, bad choices get made. He mentioned EI. Probably, as I said before, the least the government could do was to add on five weeks at the tail end of the period. However, that is precisely it. That is all it did. We are facing 128,000 job losses and what do we get? We get five weeks at the tail end.

The government could have and probably should have eliminated the waiting period. What it could have done and should have done was eliminated the number of hours that Oshawa workers need to qualify for EI. It could have made it very similar to all of the other communities around the country that I have mentioned.

I regret that this is a budget implementation bill. The budget itself, the government takes some of the good stuff and wrecks it with some dumb ideas.

[Jean-Yves Laforest, Bloc, Saint-Maurice—Champlain, QC]

Mr. Speaker, I am pleased to have the opportunity to comment on this budget implementation bill.

Some of the Liberals liked the budget, and some did not, but as we know, all members of the Bloc Québécois voted against the budget. It is clear that the budget implementation bill does nothing to correct the fundamental flaws that made it impossible for us to support the budget.

I want to go over the major issues we disagreed with. These issues are really important because they affect everyone in Quebec.

As I was saying earlier, the proposed changes to equalization are still a fundamental issue. Proposed amendments to equalization would cause Quebec to lose $1 billion of the money it was expecting for next year, and even more the year after that. That is completely unacceptable, and I will come back to that later with some examples of how badly that will hurt us and the tough choices Quebec's National Assembly will have to make.

I also want to point out that Quebec's National Assembly passed a unanimous motion that addressed equalization. In it, Quebec's National Assembly demanded that the federal government maintain the current equalization formula as is, which included additional revenues of over $1 billion for next year alone.

As the Liberal member mentioned earlier, this bill does not fix the pan-Canadian securities commission problem. Quebec's National Assembly has conveyed Quebec's traditional strong opposition to the proposed pan-Canadian securities commission. We know that the Government of Quebec has also said that it is prepared to take the matter to court because this is about jurisdiction and the powers that belong to the Government of Quebec. Naturally, the Bloc Québécois is completely opposed, once again, to a bill that does not reverse the budget's intent in this regard.

The other major problem we have with the budget implementation bill has to do with access to employment insurance. The Conservative government wants to improve the employment insurance system, but is not going about it the right way. The government is not going to help the unemployed by giving them five more weeks of benefits.

During the debate on the budget speech, I said that people who have just lost their jobs need access to employment insurance and that the waiting period should be abolished. The two-week waiting period is what hurts the most, because people who lose their jobs—and many in my riding will lose theirs—often find a new job by the end of their benefit period, so the extra five weeks do them no good.

They will find a new job and keep on paying employment insurance contributions. Then, in another six or seven months, they might lose their job again. So every seven, eight or nine months, they are faced with a two-week waiting period, and they can never make up for those losses.

When both parents in a family lose their jobs, they are hard-pressed to meet their family obligations, such as covering their mortgage, taking care of their children's needs and paying for the cars they need to get to work. The government is not choosing the best way to help the unemployed so that they can have more flexibility and some breathing room.

There is also the whole issue of accessibility. Why did the government not make employment insurance more accessible if it really wanted to help the unemployed? In January, Statistics Canada said that nearly 40,000 jobs had been lost in Quebec alone and 129,000 across Canada. That is huge. We know we are in the midst of a crisis, and these statistics prove it.

The government should have opted for much better targeted measures to help all these people. What is more, this is happening during the winter. People's heating and electrical bills are even higher than usual. The government really did not listen and is not doing the right thing to help people.

This bill, once again, does not improve the budget or the whole question of the misguided tax cuts—and I will come back to that later—for both individuals and businesses. The bill eliminates a provision in the Income Tax Act aimed at preventing companies from using tax havens to avoid paying taxes. I will also come back to this, because it is completely unfair.

Even the current Minister of Finance said in 2007 that it was unfair and inequitable to allow companies to write off interest from some of their loans, for example, because they will invest outside of Canada. Creating jobs outside of Canada and allowing companies deductions in two separate places, that is, allowing them to twice write off the interest they have to pay, is completely unfair. The Minister of Finance said so in 2007. He said it was completely unfair. Small and medium-sized businesses as well as individuals must pay higher taxes because big businesses that invest outside of Canada are allowed to take advantage of such benefits and pay less tax. It is completely unacceptable.

The budget implementation bill still contains those measures. The minister is going back on his word. This is a scandal. It is completely unacceptable that big businesses are being allowed to take advantage of undue benefits, while unemployed workers and people who are struggling to get by every month will have to pay more taxes. We are also thinking about the next generation. As we all know, we will be facing deficits for some time. It is completely unacceptable.

The bill also opens the door to deregulation in the area of foreign investments, which in turn opens the door to foreign takeovers, without taking into account the economic interests of Quebec and Canada. Many loopholes in the budget and the budget implementation bill will allow companies and foreign investors to take control of companies that are already being well managed in Quebec and Canada. This also shows a lack of economic vision towards Quebeckers and Canadians who are perfectly capable of managing their companies.

It truly goes against the economic interests of Quebec and Canada.

In this budget, funds have been allocated for social housing. However, they are misdirected. Once again, the government has targeted the renovation of social housing. Yet, it has been stated rather clearly that there is a need for new social housing rather than renovations. There is a dire need for new housing so that demand can be adequately met. Once again, they have missed the mark.

There is a very important component with which we disagree. I am referring to that part of the bill which, in some ways, completely ignores public sector negotiations and agreements concerning compensation by imposing working conditions

A number of employees at the Shawinigan tax and research centre in my riding of Saint-Maurice—Champlain find themselves in this situation. By wanting to impose salaries, the government is completely undermining a negotiating strategy that is of tantamount importance to labour relations and that ensures that there will be good relations between the employees and their employer, the Government of Canada. Once again, the rights of these individuals are being denied. The Bloc Québécois is totally against this. It is one of the reasons why we will vote against this bill.

Earlier I mentioned that this bill will implement tax cuts contained in the budget and I stated that they are misguided. We have checked the numbers and, based on our calculations, in order for an individual to take advantage of all the cuts, they would have to earn at least $81,500 per year. You will agree that this does exactly represent the middle class.

I do not believe that tax cuts for the middle class should be calculated based on a salary of $80,000. Middle class households or families—two people who have to work in order to pay the mortgage, heating, cars, children's clothing and food—do not have an income of $81,500.

If, by chance, two people make that type of salary, they are far from middle class. Before the budget, the Conservative government told us that tax cuts would target the middle class. But the targets were poorly defined, and this issue is being completely ignored. The tax reductions should really be directed at people with much lower incomes.

The Conservatives stated this and demonstrated it in their budget on page 239: a one-dollar drop in personal or corporate taxes does not have a significant impact on economic stimulation compared with aid for the poor or investment in other areas.

They themselves have said that it will not be a big help in fixing the economy. We are in the midst of an unprecedented crisis that, in January alone, left 129,000 Canadians without work. That does not even count those who lost their jobs in the fall and—we hope this will not be the case—those who will lose their jobs in February and the coming months. Hopefully there will not be that many.

It seems as though government analysis is lacking when it comes to tax reductions.

As for businesses, I am in total disagreement with the government on one major point. In 2007 the Minister of Finance committed to eliminating double deductions of interest for Canadian businesses that invest overseas. I spoke about this earlier. Without this provision, businesses will be able to continue evading taxes with impunity. And that is what is about to happen. We see that both the government members and the Liberal members will enthusiastically support this situation. The Liberals have shown the Conservative government how it is done. So, we are not surprised, but we are saddened.

I want to point out that the Minister of Finance already backed down on that. During certain election campaigns, the Conservatives made a number of promises. They made some progress in the fight against tax havens. They even demonstrated a degree of openness by saying that they would put an end to the practice because, as the Minister of Finance himself said, it was unfair. Now they have backed down because of an advisory panel made up of people whose independence and impartiality are questionable. We know that the panel was created to determine whether it was worth introducing a measure to prevent entities from double-dipping, a measure announced by the Minister of Finance. The group was made up of six members, four of them from private corporations that could easily have taken advantage of such a strategy. For example, one member is the former president and CEO of Scotiabank, the Canadian bank with the most branches in tax havens. We think that the authors of the report are clearly in a conflict of interest.

I have listed a some of the reasons why the Bloc Québécois completely disagrees with this bill. It does nothing to correct the problems that came up in the latest budget. There is no doubt that it is a direct attack on Quebec's jurisdiction, particularly in respect of equalization.

One example of a great injustice is the issue of a single securities commission. I would also point to the inequity in the budget, which allocates $170 million to the manufacturing and forestry industries, even though Quebec's forestry industry has been in crisis for a very long time. In Quebec, the sector has been dealing with these problems for three or four years now. Yet the government is giving Ontario's auto industry $2.7 billion. I agree that there is no doubt the industry is going through tough times. However, even though Quebec has been having problems for much longer, Ontario is getting a lot more, proportionally, than Quebec.

[Ted Menzies, Conservative, Parliamentary Secretary to the Minister of Finance]

Mr. Speaker, I thank my hon. colleague from the Bloc, who sits on the finance committee with me, for his comments.

I would be much happier if we could have some support from the Bloc in moving this forward. We can have some discussion here about whether we are doing enough or whether it is exactly right, but that does not ring very solidly among those who have lost their jobs in terms of the importance of getting this budget implementation bill through.

The hon. member said that what we are doing goes against well-managed businesses. I would like to remind the hon. member that we have in fact reduced taxes for businesses as well as individuals. We have cut red tape for businesses. We have offered a common securities regulator, which will allow businesses to attract foreign investment, because there would be one securities regulator across the country.

Is the hon. member ready to go back to his constituents and suggest that he voted against $200 million for low-income seniors housing, $25 million for housing for the disabled and $100 million for renovations of social housing? I would like his answer on that.

[Jean-Yves Laforest, Bloc, Saint-Maurice—Champlain, QC]

Mr. Speaker, I thank the member for his question. He said that the government has cut red tape for businesses. This takes me back to the last election campaign, where I met I do not know how many stakeholders from various businesses. In fact the issue of red tape was one of the major reasons why they disagreed with the positions taken by the Conservative government.

Access to programs is extremely difficult. It is a known fact, as shown by an analysis of business access to various programs. A lot of money was not spent on various government programs because access to these programs is too complicated. Programs are not necessarily made for businesses. They are the ones having to adapt to programs, which creates a great deal of difficulty.

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

Mr. Speaker, I am interested in my hon. colleague's statements in the House. I have been listening with absolute fascination to the Conservative Party's new mantra that it is suddenly concerned with the unemployed and that we have to do all this for the unemployed.

This is a government that ridiculed the notion that Canada was coming into hard times even as the U.S. economy was collapsing. The Prime Minister was telling senior citizens and pensioners to pick up some quick bargains when the stock market was collapsing.

Just two months ago, we heard the finance minister say that we were not in a recession, that we would not be in a recession and that we would not be in debt. Now we are $30 billion in deficit, and the Conservatives are trying to manipulate public opinion in saying that this $30 billion is economic stimulus, when really half of it is paying for last year's mistakes. They are paying for a structural deficit that they have created.

The fundamental issue in my region, where people are losing their jobs, is the issue of employment insurance. A plan for employment insurance has been put forward again and again, yet of the 130,000 people who are losing their jobs, not one will be more eligible for EI because of what the government is doing, which means that maybe half of them will not get EI at all.

I would like to ask the member about the failure of the government to come forward with a clear and reasonable plan for EI to help us through an economic recession.

[Jean-Yves Laforest, Bloc, Saint-Maurice—Champlain, QC]

Mr. Speaker, I thank my colleague for his question. Employment insurance is certainly an area of concern for all political parties. Nevertheless, we realize that the government is incapable of choosing the right measures that would really help the unemployed.

One just has to look at recent history. In his question, the member also talked about the recession and the credit crisis that we are facing right now and that the Conservatives kept denying. The government even ignored its own legislation calling for fixed election dates and we found ourselves in another election campaign. The Prime Minister stated at that time that Canada was not in a recession even though there was a major problem in the United States.

An analysis of the appropriateness of EI measures brought in by the government clearly shows that the Conservatives are just as mistaken in terms of the measures they are proposing to help the unemployed as they were in judging the seriousness of the crisis.

[Larry Bagnell, Liberal, Yukon, YT]

Mr. Speaker, I have two questions and a comment. I will give the questions first.

It was said earlier today that the Conservatives were downplaying the intensity of the recession in Canada compared to the United States by saying that it is not as bad, when in fact the figures show it is worse. Does the member agree that it is the same situation in Quebec?

In relation to the common securities regulator, I would just comment on the fact that it is actually a voluntary initiative.

The comment I want to get on the record is that today is Yukon Day. I know the premier is having a reception at 5:00 p.m. at 131 Queen Street, and the chiefs are here. One of the budget problems that has been brought to my attention by a chief is that although the northern housing money is set aside for all northern citizens, the northern self-governments, which have delivered housing money in the past, have no indication of how much they might get and whether it will be transferred directly to them. They would like to be treated as governments.

I wanted it on the record that hopefully when the chiefs who are down today meet with the ministers, they will sort out that problem and also sort out a quick resolution to the nine-year review of the implementation of land claims, which has been going on for a long time.