Bill C-47 (Historical)

Sustaining Canada's Economic Recovery Act

A second Act to implement certain provisions of the budget tabled in Parliament on March 4, 2010 and other measures

Part 1 of this enactment implements a number of income tax measures proposed in the March 4, 2010 Budget. In particular it
(a) allows for the sharing of the Canada Child Tax Benefit, the Universal Child Care Benefit and the Goods and Services Tax/Harmonized Sales Tax credit for eligible shared custody parents;
(b) allows Registered Retirement Savings Plan proceeds to be transferred to a Registered Disability Savings Plan on a tax-deferred basis;
(c) implements disbursement quota reform for registered charities;
(d) better targets the tax incentives in place for employee stock options;
(e) expands the availability of accelerated capital cost allowance for clean energy generation;
(f) adjusts the capital cost allowance rate for television set-top boxes to better reflect the useful life of these assets;
(g) clarifies the definition of a principal-business corporation for the purposes of the rules relating to Canadian Renewable and Conservation Expenses;
(h) introduces amendments that are consequential to the introduction in 2011 of new International Financial Reporting Standards by the Accounting Standards Board; and
(i) amends the Canada Pension Plan, the Employment Insurance Act and the Income Tax Act to provide legislative authority for the Canada Revenue Agency to issue online notices if the taxpayer so requests.
Part 1 also implements income tax measures that were previously announced regarding:
(a) rules to facilitate the implementation of Employee Life and Health Trusts, released in draft form on February 26, 2010;
(b) indexing of the working income tax benefit announced in the 2009 Budget;
(c) technical changes concerning TFSAs announced on October 16, 2009; and
(d) an amendment to the rules regarding labour sponsored venture capital corporations that are consequential to the introduction of TFSAs.
Part 2 amends the Air Travellers Security Charge Act, the Excise Act, 2001, the Excise Tax Act and the New Harmonized Value-added Tax System Regulations to provide legislative authority for the Canada Revenue Agency to issue online notices if the taxpayer so requests.
Part 2 also amends the Air Travellers Security Charge Act, the Excise Act, the Excise Act, 2001, the Excise Tax Act, the Brewery Departmental Regulations and the Brewery Regulations to allow certain small remitters to file and remit semi-annually rather than monthly.
Finally, Part 2 amends the Air Travellers Security Charge Act and the Excise Tax Act to extend the protection from civil liability claims that is already provided under the Income Tax Act and other federal statutes to agents of the Crown who collect the Goods and Services Tax/Harmonized Sales Tax and the air travellers security charge in intended compliance with their statutory obligations.
Part 3 amends the Federal-Provincial Fiscal Arrangements Act to facilitate the sharing of taxes under Part I.01 and Part X.5 of the Income Tax Act with provinces and territories.
Part 4 amends the Bank Act and the Financial Consumer Agency of Canada Act to require that banks belong to an approved external complaints body and to authorize the Governor in Council to prescribe the approval requirement for that body. The amendments also assign the responsibility for managing the approval process and supervising the approved external complaints bodies to the Financial Consumer Agency of Canada.
Part 5 amends the Canada Disability Savings Act to allow a 10-year carry forward of Canada Disability Savings Grant and Canada Disability Savings Bond entitlements.
Part 6 amends section 11.1 of the Customs Act to exempt from the User Fees Act fees that are charged for expedited border clearance programs and that are coordinated with international partners.
Part 7 amends the Federal-Provincial Fiscal Arrangements Act to implement the total transfer protection for 2010-11, to set out the treatment of the one-time transfer protection payment under the fiscal stabilization program, update legislative references made in the fiscal stabilization provisions and give greater clarity to the calculation of the fiscal stabilization payment.
Part 8 amends the Office of the Superintendent of Financial Institutions Act. In particular, the Act is amended to
(a) harmonize the assessment of costs associated with the administration of the Pension Benefits Standards Act, 1985 with the regime in place for the assessment of costs associated with the administration of laws governing financial institutions; and
(b) allow the Superintendent to remit assessments, interim assessments and penalties and to write off certain debts.
Part 9 amends the Pension Benefits Standards Act, 1985. In particular, the Act is amended to
(a) authorize the Minister of Finance to enter into an agreement with the provinces respecting pension plans that are subject to the pension legislation of more than one jurisdiction;
(b) authorize the Minister of Finance to designate an entity for the purposes of receiving, holding and disbursing the pension benefit credit of any person who cannot be located;
(c) permit information to be provided in electronic form, including information provided by the administrator of a pension plan to members or to the Superintendent;
(d) allow the administrator of a pension plan to offer investment options with respect to accounts maintained in respect of a defined contribution provision or accounts maintained for additional voluntary contributions;
(e) provide rules regarding negotiated contribution plans;
(f) require consent of a member’s spouse or common-law partner before the transfer of the member’s pension benefit credit to a retirement savings plan; and
(g) authorize the Superintendent to direct the administrator of a pension plan that is subject to the pension legislation of more than one jurisdiction to establish a separate pension plan for certain members, former members and survivors.

Fighting Internet and Wireless Spam Act

[Paul Szabo, Liberal, Mississauga South, ON]

Madam Speaker, the member's point is well taken. It is the roll out. It is one thing to have a piece of legislation. The other is to have a piece of legislation that is operable and efficient.

I can give one example. At the finance committee today we had the finance minister and his officials before us on the budget implementation act, the second bill. I asked them about the tax free savings accounts because in that bill there needs to be amendments dealing with deliberate overcontributions and prohibited investments. There were about five different amendments dealing with tax free savings accounts. If people put up to $5,000 a year in this account, the income they earn on it is not taxable. Real complex.

However, there are more amendments happening in Bill C-47 on tax free savings accounts than the legislation segment creating it.

I basically told the officials that they had not done their job. Where was the due diligence? Where was the consultation? Where was the anticipated question? Where was the roll out plan and how were we going to be sure that this thing worked, when we had anticipated all of the things that people would do, particularly some of these shrewd tax planners.

We do not seem to work smart. We work hard. We have jillions of people. I was told we had sign-offs at every level but not one of them contemplated what to do if there was an overcontribution. It is obscene.

[Paul Szabo, Liberal, Mississauga South, ON]

Okay. Under Bill C-47, with regard to the disbursement quotas for registered charities, this all has to do with a private member's bill that is currently before the finance committee, in which the member has expressed some concerns about the amount of money related to the charity that's not getting down and hitting the ground to help people but is being absorbed by expenses and in other ways. In fact, it touches on disbursement quotas.

This seems to be going in the opposite direction, so that it's opening up the ability of charities, in fact, to spend more money on operating expenses and capital expenditures with less money hitting the ground to assist the targets of the charity. Is that the fact?

[Paul Szabo, Liberal, Mississauga South, ON]

It's a good thing question period is coming.

Gentlemen, I had the opportunity to attend the briefing that officials gave when Bill C-47 first came out. As far as I recall, there were very few questions, and that I think was a credit to the work that was done by the officials, to be there, to be prepared, and to answer whatever questions there were.

On the TFSA, the tax-free savings accounts--and you may know that I asked the minister about that--this is a very straightforward, understandable intent, to be able to set up an account in which the income from that will not be subject to taxation, subject to certain limits per year. But the number of amendments, the scope of the amendments that have been proposed in Bill C-47 with regard to over-contributions, prohibited investments, attributed income, non-qualifying investments, etc.... It's a fair bit, and it strikes me that when you see all of these things...this was a very sloppy job, in my opinion.

I would have thought that any program worth its salt would have had a rigorous review, due diligence, and a sign-off by everybody who touches this thing. Did that happen?

[Thomas Mulcair, NDP, Outremont, QC]

It is fine. It was in response to Mr. Wallace's request that we start. To help you determine how we are going to proceed, I just wanted to let you know that we are going to vote against Bill C-47 and its various clauses, and I will ask for a recorded division on each clause.

[Tim Wach]

The elimination of the disbursement quota as a function of charitable receipts clearly will make it easier for charities because they will have a disbursement quota that they no longer have to worry about, or at least one that used to be in place. And raising the threshold of the disbursement quota that is a function of assets that are not used in charitable activities from the $25,000 to the $100,000 threshold will also eliminate, for some of the smaller charities, filing requirements. They'll still have to file with the CRA. They'll still be subject to CRA supervision. And as I mentioned, there are within Bill C-47 anti-avoidance rules that were introduced, and they were announced in the budget as well. The intention to introduce these rules--

[Tim Wach]

The changes to the disbursement quota are not intended to affect the ability of the CRA, Canada Revenue Agency, to oversee the activities of the charitable sector. In fact, the changes in Bill C-47 introduce some stronger anti-avoidance rules that are intended to address some transactions that we had become aware of whereby charities were engaging in some activities that might be viewed as contrary to the disbursement quota rules as they stand.

[Tim Wach, Director of Legislative Development, Tax Policy Branch, Department of Finance]

The box-top sets in question are the decoders that are used for satellite or cable television. It's actually not an accelerated capital cost allowance that is provided, but really one that reflects the economic life of the asset. The change that was proposed in the budget and that is included in Bill C-47 is simply intended to bring the CCA rate into line with the economic useful life of the underlying asset. It was a particular item that was identified by the department. We are constantly looking at the rates that are provided for tax depreciation to ensure that they accurately reflect the economics of the particular assets, and this is one that was identified and brought forward as part of the regular process.

[Scott Brison, Liberal, Kings—Hants, NS]

Initially, on Bill C-47, I would like you to explain. We're all very interested in the accelerated capital cost allowance on box-top sets of televisions, because I think that's an issue that's pivotal to our deliberations today. So please explain to the committee the accelerated capital cost allowance on these. We do have a global economic crisis, and the government is bringing forward visionary policies to address the issue that we're hearing about from constituents on an ongoing basis, and that is, accelerated capital cost allowance around box-top sets? What is that? I don't own a television. Explain to me the policy. It's very important that we understand it.

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

So we don't see it in Bill C-47, correct?

[Russ Hiebert, Conservative, South Surrey—White Rock—Cloverdale, BC]

I have an additional question, if there's time.

My colleague Mr. Szabo introduced the subject of the tax-free savings account and the changes in Bill C-47. But I don't feel he provided an appropriate amount of time for you to elaborate on the changes that are taking place in that respect.

I'm sure Canadians are becoming aware of the fact that as a Conservative government we've cut taxes in a hundred different areas, in every form of tax that the government collects: personal, consumption, business, and excise.

The tax-free savings account was a landmark change for Canadians. I note that Peter Aceto, the chief executive officer of ING Direct Canada, is known to say:

We think TFSAs are a great gift the government has given Canadians to help them save.... It's the most important thing that's happened in that regard since RRSPs 50 years ago.

Bill C-47 does address some of the abuses that were taking place in the last year. I am wondering if you could elaborate further for the committee on what those changes are.

[Kelly Block, Conservative, Saskatoon—Rosetown—Biggar, SK]

Thank you very much. I'm going to focus on a similar subject to red tape, but in a different area.

Supporting the good work of charities across Canada is obviously a shared goal among all parliamentarians. During the finance committee pre-budget consultations, we heard many ways that government could assist charities, either through tax changes or reducing red tape. I know we have heard from many charities throughout the years about the need to cut their red tape so they can devote more of their time and energy, their resources, to actually helping others and not dealing with needless administrative paperwork.

One measure being legislated through Bill C-47 helps to cut red tape facing charities. I'm wondering if you'd be willing to describe how this measure will help the charity sector. Also, what has been the reaction to date among the charities to that important measure?

[Jim Flaherty, Conservative, Whitby—Oshawa, ON]

Thank you.

As you know, we did reduce the paperwork burden on business in Canada by 20%. That got rid of about 80,000 redundant regulatory requirements.

There are two specific red tape provisions in Bill C-47. First of all, there's providing Canada Revenue Agency with the authority to issue notices online, if the taxpayer requests, for those notices that can currently only be sent by ordinary mail. That will decrease the amount and volume of paper. Secondly, it will allow certain small businesses to file and remit semi-annually rather than monthly. Many small businesses would prefer to do that, and it reduces their paperwork burden as well.

[Russ Hiebert, Conservative, South Surrey—White Rock—Cloverdale, BC]

Thank you, Mr. Chair.

Minister, we hear from constituents in small businesses in our communities about the burden they face with filing tax returns, the red tape associated with that. This is especially true of the small and medium-sized businesses in our communities that are the largest job providers, as you know. The Canadian Federation of Independent Business estimates that businesses currently spend over $30 billion a year in complying with regulations.

Our government has done a lot to reduce the number of regulations that businesses have to comply with and the paperwork burden associated with that, but Bill C-47 goes further and it includes two important measures. I was wondering if you could elaborate for this committee the steps this bill takes to reduce that paperwork burden even further.

[Paul Szabo, Liberal, Mississauga South, ON]

Thank you.

Minister, tax-free savings accounts: good idea, poorly executed. This act, Bill C-47, has to now deal with deliberate over-contributions, prohibited investments, income attributed to non-qualified investments, withdrawals of deliberate over-contributions, prohibited investments, non-qualified investments, swap transactions, related investment income, and effective prohibited asset transfer from TFSA accounts to other accounts.

Considering it was such a simple plan—a good plan—but so badly executed and having so many amendments, what have we done to make sure this never happens again, so that our tax act doesn't become even more complex than it already is?

[Mike Wallace, Conservative, Burlington, ON]

Thank you, Mr. Chair, and thank you, Minister, for joining us today.

I left the industry meeting to come here. We're talking about pensions at industry. We've talked about pensions around this table at finance. I know that you've worked very hard with your counterparts at the provincial level on pensions.

The Conservative government has put together proposals and changes to the pension plan, the federally regulated pension plan, over the last year. Could you highlight for me, Minister, what's in Bill C-47 that continues our progress in improving the pension system for Canadians?

It's a nice question, isn't it?

Thank you.