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.

Sustaining Canada's Economic Recovery Act

[Shawn Murphy, Liberal, Charlottetown, PE]

Madam Speaker, I agree with the member's comments. There is a very serious issue with the present pension schemes. I am not going to suggest it is simple or that the federal government has all the levers at its disposal, but my friend identified the problem.

As I indicated in my remarks, it is a three-pronged scheme. The first two prongs are sound and are working well. However, the third prong, private savings, is not working. It has two components. There are the pension plans, and some of them are defined contribution or defined benefit, and there are the RRSPs and individual savings.

It is that third prong that is not working. We are seeing the middle class being squeezed out of the whole aspect for two reasons. One, the companies, not all but a lot of them, that used to offer defined benefit plans have abandoned them either for defined contribution plans or no plan at all. Then there is the idea of opening an RRSP. The member agrees with my earlier comments that this whole RRSP system has not worked out as well as was intended back when it was started about 50 years ago. We are seeing the results now. In Canada we do have extremely high MER rates compared to other foreign countries.

It is going to be a difficult hill for the Minister of Finance to climb. We cannot forget that the RRSP industry is controlled by the chartered banks and large financial institutions. The program generally is not meeting the original goals that were set for the program when it was first established.

[Ben Lobb, Conservative, Huron—Bruce, ON]

Madam Speaker, I thought the member's comments would have been more cheerful given that he comes from Prince Edward Island, which recently was recognized as the happiest province.

My question is about savings and investing.

We have heard much about defined benefit and defined contribution plans. People from my generation graduated from high school, college and university with little or no knowledge of budgeting, saving and investing. It is a crime that our school systems do not at least try to educate people on this.

The member has a few years on me as far as age goes, and I wonder if he has a few thoughts on school systems, the younger generation and the issues they have with budgeting and saving.

[Shawn Murphy, Liberal, Charlottetown, PE]

Madam Speaker, first I want to point out to the member that I am happy, but just because I am happy does not mean I am not concerned. I am concerned, as are many other people, about certain directions in which this country is going.

I agree with the member's point. A lot is taught in the curriculum of Canadian schools, but one issue that remains untaught is financial literacy. Some of the chartered banks are making an effort and the Government of Canada has made minor efforts, but I do not really think it is sinking in. A lot of financial literacy probably comes from parents, but in some cases the parents are not as well versed as perhaps they should be. This is an issue that is lacking. I do not like to refer to it lacking in the total education system but in the scheme of lifelong learning.

With respect to financial literacy, the first big decision people make, and it is unfortunate that they have to make this decision, is usually after grade 12 when they apply for a student loan. That sets in motion a lot of long-term decisions. Before that decision is made, people really should be grounded in financial literacy. Unfortunately, there are situations where people do not go to university because they are scared to borrow, or to borrow too much, and people go to school based on income, not initiative, which is unfortunate.

The member made a very good point. This is something that should receive much greater attention from all parties, provincial governments, educational institutions, the federal government, banks and people in the financial services industry than it is receiving now.

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

Madam Speaker, in his speech the member painted a picture of a Conservative government that has actually become comfortable with debt. We remember when the government members were led by Preston Manning. They refused to take their pensions and Preston Manning was handing back the keys to his government car and was refusing to move into the official residence.

Now there is a total reversal. The Conservatives are taking their pensions. They are driving the cars. They are comfortable with debt. We see them trying to buy their way to electoral success by spending money. The party that had some principles has now sold out all of those principles. It acts in many ways like the old Liberal governments that the Conservatives accused of buying their way to power and staying in power at the expense of large deficits. The Conservatives are doing the same thing, albeit not as successfully as the Liberals did.

Would the member like to comment on that?

[Shawn Murphy, Liberal, Charlottetown, PE]

Mr. Speaker, I would be pleased to comment on that. I was first elected in 2000, but starting in 1995, the Liberal Party gave Canada 11 surpluses and reduced the debt to GDP ratio from approximately 73%, which was left by the previous Conservative government, to the vicinity of 31% or 32%. The Liberal Party lowered interest rates, paid off in excess of $100 billion on the debt and left a very good economy.

We have to go back to the state of the economy at that time. When the Conservatives left in 1993, interest rates were at 11%. The unemployment rate was at 13%. The debt to GDP ratio was at 73%. The debt was around $43 billion, which I think was the second or third highest ever, replaced by the recent debt.

The member is quite right. If we look at the Conservative government that ended in 1993 and the Conservative government now, there is not that much difference. They both seem to be very comfortable with debt. That does not seem to concern the Conservatives in the least.

[Chris Charlton, NDP, Hamilton Mountain, ON]

Mr. Speaker, I am delighted to rise yet again to speak to Bill C-47, a bill that, in an Orwellian turn of phrase, is entitled Sustaining Canada's Economic Recovery Act.

Nothing would make me happier than to report to this House that people in my home town of Hamilton were actually experiencing an economic recovery. Then we, too, could take joy in a bill that claims to be sustaining that recovery. However in my home town, people are far from rejoicing in the lead-up to this holiday season. On the contrary, they are profoundly worried about their future.

The Prime Minister points to soaring bank profits and takes that as proof that the recession is over. For him, if his banking friends are out of trouble, everyone is out of trouble. However, Canadians see it differently.

One and a half million Canadians are still out of work. Six out of every 10 Canadians live paycheque to paycheque. Household debt is at record highs. Life is more expensive than ever.

Unlike the Conservative government, New Democrats will not declare this recession over until middle class families are back on their feet. A true recovery must not leave anyone behind.

That requires a fundamentally different approach to dealing with the economy than what the Conservatives have brought before this House to date. Since the Conservatives first became government, they have been destabilizing what was once a balanced economy in this country. It is an economy that Canadians had painstakingly built together since the second world war, a strong primary sector with timber and mining, a strong secondary transformation manufacturing sector and of course an important service sector.

That formerly balanced economy got skewed because of the government's tax policies. Since coming to office, the Conservatives have handed more than $60 billion in tax cuts to Canada's wealthiest corporations. Now I know that some on the backbenches of the Conservatives Party will suggest that those tax cuts went to all corporations, not just the wealthy ones, and that therefore they have simply been trying to stimulate the business climate in our country.

However that is a false argument. If a company is not making a profit, it cannot pay taxes on that non-existent profit. There is no profit to be taxed. Companies that could use a break the most are not getting any benefit from the much-touted tax reductions.

Who did get the money? It is companies like Encana, those that are piling up seas of unimaginable poisons behind the world's longest dikes near the tar sands. I do not need to remind members in this House about what happened in Hungary last month. Approximately one million cubic metres of red toxic sludge was released when a dike burst at the waste reservoir of an aluminum plant in that country.

Clearly it is not inconceivable that something similar could happen here. The poor track record of managing something as simple as protecting ducks from tailings ponds should set off alarm bells in all of us. Let us just imagine what is going to happen the day the dike breaks and who is going to be on the hook for those costs. Why, it will be taxpayers, of course.

We have never internalized the cost of the tar sands. We are bequeathing the obligation of paying the normal cost of cleaning up the mess from the tar sands to our children and our children's children. That, combined with the $60 billion debt for corporate tax cuts is one of the principle causes of the destabilization of our economy, and it is an unconscionable legacy to leave to future generations.

Now before government members jump all over me, let me be clear. I know that the tar sands are an important source of wealth for our country, but that does not negate the need and indeed the responsibility for that resource to be developed in an environmentally, economically and socially responsible way. That is what sustainable development is all about.

What is happening now is not sustainable, because the true costs of extracting oil have not been internalized. We are selling oil at artificially low prices. That brings in an artificially high number of U.S. dollars. That, in turn, pushes our Canadian dollar higher, which then makes it more difficult to export Canadian goods.

We have set up a vicious cycle of job losses, which are being felt especially in the industrial heartland of Ontario and Quebec. Clearly such policies do not sustain Canada's economic recovery, as the title of this bill would want us to believe. On the contrary, they exacerbate the job losses that were already affecting hardworking Canadians as a result of the 2008 recession.

Even before the current crisis hit in the fall of 2008, Statistics Canada reported that we had bled off 300,000 jobs in the manufacturing sector. It is little wonder that Canadians are worried. They are worried about their jobs. They are worried about their retirement savings. They are worried about their children's futures.

Let me just remind members in this House of a few reports that have been raised in this chamber during various debates:

From RBC Economics, today the typical Canadian family must devote 49% of its income to own a standard two-storey home, while mortgage rates are at their lowest point. That means people on average are spending half of their income to own their home, and they know if interest rates go up the costs will only increase.

From the BMO Financial Group, 64% of parents worry they will not be able to afford the rising costs of post-secondary education. Having recently met with student groups from across the country, I know that CFS, CASA, students in professional programs and graduate students would all echo that.

From the Canadian Medical Association, 80% of Canadians fear that the quality of their health care will decline over the next three years.

From the Canadian Cancer Society, Canadian families are concerned about the cost of caring for a terminally ill loved one, which is currently $1,000 a month, excluding the loss of income from taking time off work to provide care. That is one of the reasons I have introduced Bill C-534. It is one small step toward providing financial assistance to spouses providing in-home care.

From the Canadian Institute of Actuaries, 72% of pre-retired Canadians worry about maintaining a reasonable standard of living in retirement and maintaining a reasonable quality of life.

From RBC Economics, 58% of Canadians are concerned with their current level of debt, averaging $41,470 per person, which is the worst among 20 advanced countries in the OECD.

From the Canadian Payments Association, 59% of Canadians believe they would be in financial difficulty if their paycheque were delayed one week. Think about that. More than half of all Canadians are living paycheque to paycheque with virtually no savings to fall back on. This is a country with a lot of people who are profoundly worried. For them, the devastating impact of the recession is clearly not a thing of the past. It is still being felt every single day.

To be debating a bill that talks about sustaining Canada's economic recovery will seem a little far-fetched for a lot of Canadians who may be watching our proceedings in the House today. They want to experience the economic recovery first-hand, and so far, they have been left behind. Regrettably, it looks as if things are going to get worse before they get better, at least if the Conservative government has its way.

Last week the finance minister kicked off his pre-budget tour for the 2011 budget, purporting to be listening to Canadians. Yet he began by telling seniors and hard-working families that they should not get their hopes up, that there will not be any new big spending because he has no money left. Both parts of that assertion deserve a closer look.

First, let us look at why he has no money left. The government has created the single biggest deficit in Canadian history at $56 billion. We already know that the $6 billion annually for additional corporate tax cuts had a great deal to do with that, yet the finance minister insists on continuing them despite the fact that our corporate tax rates are already lower than those of our biggest competitor, namely the U.S.

Do Canada's chartered banks really need another tax break? In the first nine months of this fiscal year, they reported $15 billion in profits and they have set aside an astonishing $7.5 billion for executive bonuses this year. I would defy the government to find a single Canadian outside of that exclusive club who thinks that additional tax cuts for the big banks ought to be a priority for the government.

Nor did Canadians think that the government used money wisely when it hosted the G8 and G20 summits last summer. The Conservatives spent $1.3 billion for a 72-hour photo op at the G8 and G20 summits. That included $1 million for a fake lake, $300,000 for a gazebo and bathrooms that were 20 kilometres away from the summit site, $400,000 for bug spray and sunscreen, more than $300,000 for luxury furniture and $14,000 for glow sticks.

The Conservatives would want us to believe that such is the price of hosting events on the world stage, but the security cost of the G8 meeting in Italy was $124 million in 2009. The year before, it cost $280 million in Japan. It cost $124 million in Germany. Once again, it is about choices.

For just over half of what it cost to host the G8 and G20 in Canada this summer, we could have improved the guaranteed income supplement so no Canadian senior would have to live in poverty. The remaining $600 million would still have been higher than the expenditures on any other summit. Clearly, the Conservatives' claim of being fiscally responsible is not borne out by reality.

Now to the government, of course, that is all water under the bridge. The government wants us to forget all about how we got to the record deficit and just wants us all to begin focusing on tightening our belts to get it back under control. Well actually, that is not all of us. There is still new money around. It is just not there for the priorities of hard-working Canadians.

Here is some of the new spending that has already been announced and for which money will be found in the upcoming budget. First, of course, is the ongoing commitment to spending $6 billion annually on additional corporate tax cuts. Next, there is the government's decision to continue Canada's military presence in Afghanistan.

According to the Parliamentary Budget Officer, Canada's military mission to Afghanistan up until 2011 will cost Canadians $18 billion. The government originally estimated that the military extension from 2011 to 2014 would cost $1.6 billion in military and $300 million in aid over the three years.

However later on, the government announced that the military costs were actually higher and the extension will cost $2.1 billion.

By contrast, according to PCO documents, the strictly civilian role envisioned by Canadian officials for the 2011-2014 period would have focused on diplomacy and development at a total cost of $.5 billion over three years. That would have been less than 25% of the cost of the military extension.

Next, there is the commitment to build U.S.-style mega-prisons in Canada. This is despite the fact that crime rates are actually going down. According to the President of the Treasury Board, we need those prisons to lock up the unreported criminals who have been doing unreported crimes. The cost is a cool $10 billion to $13 billion, and to find the money for those astronomical costs the government has shortchanged municipalities to the tune of $500 million on policing costs and shut down the successful prison farm program.

At least no one can accuse the Conservatives of letting sound public policy stand in the way of their ideological agenda.

Then there is the $16 billion that has been committed for the next budget year to the purchase of F-35 fighter jets. This is the single biggest defence procurement purchase in Canadian history. It raises a number of important questions.

First, why is this huge expenditure so vital to Canada's defence when we cannot even properly patrol our coastline? Why was this an untendered contract? Where is the transparency? Where is the accountability?

We know that technology problems plague the F-35 program, that commitments from some other countries are far from certain and that even the U.S. Pentagon says the program is two years behind schedule. There is a cost overrun of 65% and, worse of all, we have no guarantees on price, jobs, quality or value for money.

The government is flying by the seat of its pants and yet it stands firm in its commitment to purchase 65 new fighter jets. Canadians deserve transparency and accountability, and above all they deserve a say in whether this money is well spent.

Together the above four commitments alone account for $34 billion in new money that is already earmarked for future spending. Apparently there is plenty of money floating around for the government to act on its priorities. However for hard-working Canadians and seniors, there is nothing left but to tighten their belts.

Frankly, that is not good enough. Canadians deserve better and they deserve to be heard.

I would invite the Minister of Finance to come to Hamilton with me and to listen, really listen, to what the priorities are in our community. Jobs, EI and retirement savings are right at the top of the list. The minister will know that our community has been devastated by plant downsizings, restructurings and closings.

I have raised the case of U.S. Steel on numerous occasions in the House. Not only did the government fail to do due diligence when it approved the foreign takeover of Stelco by U.S. Steel but, now that the workers have been locked out, it is failing to provide even the basic support of providing the workers with EI. This is despite the fact that there was a $57 billion surplus in EI, which successive Liberal and Conservative governments stole to pad their general revenues in previous years.

It is simply outrageous, and hard-working members of USW Local 1005 deserve better from this government.

However they are not the only ones who have been devastated in recent years. I could list literally dozens of manufacturing plants that have closed their doors completely and thousands of workers in just about every sector who have lost their jobs or had their hours cut during this last recession.

That is why they have looked with hope to the government's infrastructure program, which promised $3.2 billion for job creation through investments in provincial, territorial and municipal infrastructure. Fourteen projects were approved within the city of Hamilton, totalling $184 million of stimulus funding. The 15th project was announced for the city on September 25, 2009. A condition of the funding was that approved projects be substantially completed by a deadline of March 31, 2011. It was understood that the federal and provincial governments were determined to see the projects completed in a timely manner.

However, it is difficult to appreciate the taxpayer benefit of withdrawing funding to the municipal governments for public infrastructure projects that extend beyond the March 31 deadline, particularly where projects may be delayed due to a number of factors that are beyond the municipalities' control.

In Hamilton six projects are at risk for not meeting that deadline, primarily due to factors that are indeed beyond the municipalities' control. First, although the program was intended to run over two years, project announcements were not made until June 2009, thereby effectively leaving only a single construction season for project completion.

Second, one of the projects was further delayed when its funding was not announced until September 2009.

Third, contractors, particularly for specialized construction, were difficult to obtain because of the large influx of stimulus funding, all with the same completion deadline.

Fourth, the approval process by some ministries and regulatory agencies have delayed some of the projects.

Despite these challenges, all 15 of the infrastructure projects are well under way. The delay in completion before the March 31 deadline is a matter of months, not years, and yet now the government is indicating that there will be absolutely no extension given to complete these important community projects. This, despite the fact that the Prime Minister himself stated at the opening of the recent G20 summit, “To sustain the recovery, it is imperative that we follow through on existing stimulus plans”.

In Hamilton, this is particularly germane. While recent employment figures reflect significant year over year job creation across the country, Hamilton is still experiencing increased unemployment. From June 2009 to June 2010, our jobless rate rose half a percentage point, from 7.2% to 7.7%. For our community, the ability to complete all of our infrastructure projects is critical to Hamilton's economic recovery. Conversely, the potential withdrawal of infrastructure funds after March 31 will only compound the pressures on our city and local taxpayers during this economically challenging time.

I have absolutely no doubt that the completion of these projects is much more important to Hamiltonians than the construction of prisons for unreported crimes, and I suspect the same is true in communities from coast to coast to coast.

I implore the government to listen to Canadians and extend the infrastructure deadline.

While I am on the subject of jobs, let me point out as well that we urgently need action on creating green jobs for a sustainable future. My NDP colleagues and I have laid out a comprehensive strategy for protecting jobs and protecting the environment, but urging the government to take action on that file is probably not time well spent. After all, the Prime Minister and his Conservative colleagues just killed a landmark climate change plan after it was passed by elected members of Parliament.

The New Democratic climate change accountability bill was Canada's only federal climate change legislation. Members of Parliament supported it and Canadians supported it but the Prime Minister refused to listen and then he instructed his unelected, undemocratic senators to kill the bill. By obstructing progress, the Prime Minister ignored the will of Canadians and left our country dangerously unprepared for climate change. Regrettably, it is our children and grandchildren who will pay the ultimate price.

I know I am running out of time but there is so much more that needs to be addressed. I have heard from so many constituents about what they believe the government should focus on in the upcoming budget but I will not be able to get it all on the record here today. Perhaps I could point to the excellent report of the HUMA committee as a short form for some of the other issues that must become priorities for government support.

Currently in Hamilton, 18,600 people depend on food banks every month and more than 8,100 are children. The Globe and Mail reported last Friday that there has been a 25% spike in the number of seniors now living in poverty. Poverty is real and it is pervasive but it is not inevitable.

We must ask ourselves a question. The banks and car companies received their bailouts from the government but where is the bailout for the poor? During this recession, we have seen the Conservative government bailing out big businesses. such as the auto and banking industries, but putting few resources into helping to build the social infrastructure necessary to aid the most vulnerable in our society.

Civil society groups are challenging all of us to do better. They are calling on the federal government to be more responsible, more accountable and to prioritize resources to child care, the child tax benefit, EI reform and social housing. These organizations have all been working tirelessly toward the same goal of eliminating poverty in Canada.

In Hamilton, I want to give a particular shout-out to the Hamilton Roundtable for Poverty Reduction, the Social Justice Coalition that campaigned for adequate welfare, Social Planning & Research Council, the Hamilton Community Foundation, Wesley Urban Ministries, the Good Shepherd Centres, Food Share, St. Joseph's Immigrant Women's Centre, Neighbour 2 Neighbour, the Hamilton's Centre for Civic Inclusion, the Housing Help Centre and the United Way. The list does not end there but each and every one of these organizations demonstrate unbelievable resilience through their continued efforts. Their work is inspirational and is a large reason that I remain so hopeful that it is not too late to build a better world.

Here in the House of Commons, New Democrats are taking up their call. Thanks to the incredible work of my colleague from Sault Ste. Marie, New Democrats now have a bill on the floor of this House calling for a national poverty strategy and an action plan with clear targets and timelines. The three priority areas that the bill addresses are income security, social inclusion and housing.

Instead of hitting seniors, who are the most vulnerable, with the HST on everything from home heating to haircuts, let us bring the federal government back into the discussion about its role in public life relating to poverty, the economy and taxation. Part of that conversation has to--

[The Deputy Speaker, Andrew Scheer]

I will have to stop the hon. member there as her time has expired.

Questions and comments, the hon. member for Mississauga South.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, I appreciate the member's speech because she touched a lot of points that Canadians have also raised. In the brief time I have to ask a question, I want to focus in on the economic stimulus.

Last Tuesday, on the front page of The Globe and Mail, the finance minister was quoted as saying, “March 31, that is it. It is over”. There was an article about the city of Ottawa and should it not complete the project that it does not anticipate completing but costing some $5 million.

Interestingly enough, on the same day the minister appeared before the finance committee on Bill C-47 and was asked about the stimulus plan. His response was that the Conservatives would be flexible and would look at each project on a case by case basis. Just yesterday, the member for Ottawa—Orléans reported, although I do not know whether it was an authorized comment, that those that are substantially complete.

It does raise the question that there does not seem to be a position of the government. It appears to be a strategy to somehow create a crisis that March 31, 2011 is hurling toward us, then to ease up a little, and then to say that it will do something. It is almost like the Conservatives want to create a crisis and then they will resolve it and take credit for doing something good, when in fact they are the authors of both ends of the argument.

I wonder if the member would care to comment on whether the government has been straight with Canadians, with the municipalities and the provinces about their obligations so that they can make appropriate plans to deal with the projects they have. Timeliness is very important in this regard and the government should not be coy with Canadians, provinces or cities, but should just clearly indicate its intent with regard to the stimulus funding.

[Chris Charlton, NDP, Hamilton Mountain, ON]

Mr. Speaker, it is funny that my colleague from Mississauga South used the line “creating a crisis”. He, too, will remember that in Ontario we had an infamous Conservative minister of education by the name of John Snobelen who talked about needing to create a crisis in education so that the Conservatives under Mike Harris could then bring in their right wing reforms in our school system. The member has chosen his words very well in asking about the infrastructure program.

The Conservatives may well be creating a crisis. I am not sure what the end game is, though, because for communities like ours, and I am sure it is the same in Mississauga, in Ottawa and everywhere else, the construction programs that have been funded under the infrastructure program are a process and that process is continuing. We cannot tell people to stop putting shovels in the ground today and say that maybe we will be flexible by the time next April rolls around. The program does not work that way.

Communities like Hamilton and almost every other community from coast to coast to coast in this country are relying on the infrastructure money, not only because it helps to create jobs, but because it helps us to deal with the very serious infrastructure deficit that all communities have been amassing over the last 20 years. This was finally an opportunity to do right by both Canadians, by taxpayers and the communities in which they live.

This is a fundamentally important program and we urge the government to continue the commitments it made under the infrastructure program and tell municipalities today that projects that were authorized will be allowed to be completed under the infrastructure program.

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

Mr. Speaker, the member spoke about some concerning statistics in her speech and indicated that one-half of Canadians' disposable income is now spent on owning a home. That is particularly concerning because Canadians know that historically interest rates have rarely been this low.

Interest rates normally, I would guess, over time have been in the area of 6% to 9% or thereabouts. We have seen interest rates as high as 18% in our lifetime, just in the last 20 years. We know that if homeowners are paying 50% of their disposable income on mortgage payments now, it does not take much of an increase to put people out on the street. We saw this 20 years ago with a lot of foreclosures in the early 1980s.

Once again, the banks get off scot free because, unlike American banks, Canadian banks take no risks in handing out mortgages in excess of what people should be borrowing. Why is that? It is because banks require mortgages to be insured through CMHC. However, the homeowners are the ones who pay the insurance fees for the CMHC loan in the first place. When a mortgage goes into default and people must move out of their home and onto the street, the bank is not out anything because the house is insured, thanks to payments by homeowners, and the banks simply collect from CMHC.

I am questioning why the government waited so long to bring in the new restrictions that it did a number of months ago on house sales. It brought in some tougher requirements for homebuyers and, by the way, the restrictions brought in a few months ago still are not as tough as the restrictions back in the 1980s.

Would the member comment on that because this is a looming disaster that the government seems totally oblivious to or maybe it knows it is going on but it is happy to let it ride its way through?

[Chris Charlton, NDP, Hamilton Mountain, ON]

Mr. Speaker, the member for Elmwood—Transcona has, of course, described the problem very well.

He asked if I could explain why it took the Conservative government this long. I have to admit that I always have a really tough time with questions that ask me to get into the minds of Conservatives. That is a scary place and I do not think I can shed much light on what happens there.

However, I do want to speak to the larger point that he raises because it gets to the heart of affordability. I have spoken to literally dozens of seniors in my hometown of Hamilton who have worked hard all their lives and have played by the rules and now, with every bill they open, they are paying more and getting less. They already own their homes. They have paid for their houses. What they cannot keep up with are the property taxes and the cost of heating and food, the prices of which are growing exponentially. They are losing their homes because they can no longer afford to keep up with those very basic costs.

What has the Conservative government done to support them? It imposed the HST. People are now paying HST on essentials like home heating. We live in Canada and heating is not a luxury. Every winter, seniors will be paying extra percentages of taxes because of the imposition of the HST. Instead of making life easier for seniors, the government has added to that cost burden. Seniors are losing their homes.

We need to take action now and take action on all fronts. We need to reduce the 5% federal portion of the HST on home heating. We need to ensure that retirement incomes are secure both in terms of protecting private pensions and ensuring that public pensions are adequate, and that includes doubling CPP benefits and raising the OAS.

For goodness sake, for a mere $700 million we could lift every senior out of poverty in Canada by raising the GIS. We had $1.3 billion to spend on the G8-G20 boondoggle, surely to goodness we could find $700 million to lift every Canadian senior out of poverty.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, the member read off a list of a number of initiatives that will be added to the fiscal burden of Canadians. Today it has been reported that the gross domestic product has dropped and slowed to a 1% rate per annum. It would seem to me that the government needs to take some tough fiscal measures to deal with it and yet, as the member laid out, there are billions and billions of dollars of ideologically justified expenditures on the backs of Canadians. I cannot believe this will end like that.

Does the member feel that the government must rethink these things on the basis of the economic performance reported today?

[Chris Charlton, NDP, Hamilton Mountain, ON]

In short, Mr. Speaker, the answer is yes, if one of the engines of our economy is the manufacturing sector. I had a brief opportunity in my comments to talk about the devastating impact that the recession has had on the manufacturing sector. Clearly that sector has not recovered. Instead of helping the sector, the government is implementing policies, such as its lack of oversight on foreign investments, that really hurt Canadian productivity.

I would love to go into more details but I see my time is up.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, I am pleased to participate in the debate on Bill C-47, which is not a short bill. The printed version is 143 pages long. The bill includes about nine different sections and 199 clauses. I hope all hon. members will appreciate that when we get a bill this size, it is difficult for any speech to touch on the substantive matters.

The House will often deal with the issue of relevance in debate. I have heard people say that we are debating the budget from last March and they start talking about virtually every item in the budget. However, subsequent to that we have had one implementation bill and this is the second. These implementation bills are intended to put the technical mechanics in place so the representations in the budget are operable. I want to get into a few of those.

I want to advise those who are interested that this bill deals substantively with amendments to the Income Tax Act and related acts in part 1. Part 2 deals with amendments to the Air Travellers Security Charge Act. Part 3 deals with amendments to the Federal-Provincial Fiscal Arrangements Act, which is extremely important in terms of funding of provincially delivered programs and services. Part 4 deals with amendments to the Bank Act and the Financial Consumer Agency of Canada Act. Part 5 deals with amendments to the Canada Disability Savings Act, which we discussed substantively at committee. Part 6 deals with amendments to the Customs Act. Part 7 deals with amendments to the Federal-Provincial Fiscal Arrangements Act. Part 8 deals with amendments to the Office of the Superintendent of Financial Institutions Act. Bill C-47 is a very broad-based bill.

When we are dealing with a budget implementation bill, we are often not talking about anything in the bill in terms of specific amendments to legislation. We tend to drift back to the budget itself and some of its consequences.

The parliamentary secretary, on behalf of the government, led off the debate on the bill. He did not talk much about the budget implementation bill but rather he talked about the budget. This opened up the debate to virtually everything to do with the budget. That is why some people who are interested in the proposed changes to some of these acts have been somewhat ignored in the debate. To rectify that, I want to deal with the proposed amendments to the Income Tax Act and related acts. It is an area in which I have some experience.

The first important area has to do with benefits entitlement and shared custody. Under the Universal Child Care Benefit Act, an eligible individual is defined in subdivision a.1 of division E of part I of the Income Tax Act. If I repeat a lot of these references, people will not understand, so let me just say it is defined in the act. The act currently provides for only one eligible person for a given period.

Under the current provisions, the Canada Revenue Agency has rotated benefits for the universal child care benefit, the Canada child tax benefit and the GST-HST credit for families with shared parenting arrangements on a six month payment basis. The budget proposed to allow two eligible parents in a shared custody arrangement to receive child benefits, including the UCCB. I support that change. It makes sense. A lot of people are at a disadvantage by having just one eligible recipient where shared custody would be a more equitable situation.

The second item under the income tax amendments has to do with the rollover of RRSP proceeds to an RDSP, or registered disability savings plan.

The existing registered retirement savings plan rollover rules are extended under the bill to allow a rollover of a deceased individual's RRSP proceeds to a registered disability savings plan of a financially dependent, infirm child or grandchild. The reason that is important, and why I support it, is that on death of the holder of a registered retirement savings plan, if there is not a spouse for which the act already provides a tax-free rollover, it would then collapse and be taxable fully in the year of death.

If an RRSP collapses all in one year and has a tax liability, in many cases most of that would be taxed at the highest possible rate. It means the estate of the person involved would pay much more tax now than it would have paid had he or she not bought the RRSP in the first place. This would allow that investment in the RRSPs to rollover to a disabled person, financially dependent infirm child or grandchild. It would in fact help families. Members will know that anything that helps families will have my support.

The third area under the Income Tax Act has to do with charities and the disbursement quota form. The finance committee presently is looking at Bill C-470, which tries to put transparency through the expenditures, particularly the human resources costs and salaries of executives of charities. Concerns have been raised that some charities pay exorbitant amounts of compensation to people with the amount of the moneys actually go for charitable purposes being substantially reduced, and that is a problem.

Interestingly enough the changes made in Bill C-47, and I do not know enough about individual cases, I suspect will help some and hurt others because it deals with a disbursement quota.

First, the disbursement quota reform for registered charities, specifically the charitable expenditure rule, would be repealed. Second, the capital accumulation rule would also be modified to increase the threshold from $25,000 to $100,000 for charitable organizations. Third, the anti-avoidance rules would be extended to situations where it could be reasonably considered that the purpose of the transaction was to delay unduly or avoid the application of the disbursement quota. Finally, measures would be implemented to ensure that transferred amounts between non-arm's-length charities would be used to satisfy the disbursement quota for only one charity.

The problem I have with that section is it goes in a different direction than Bill C-470 in terms of the transparency and the concern that there be moneys. In fact, it would allow the charity to have a higher threshold of making disbursements. It would also allow certain charities to accumulate money for capital investments, for instance, if they wanted permanent facilities or core funding for certain programs.

I can understand that in terms of, for instance, hospitals, hospital foundations. I am not sure if the same rules would not have maybe unintended consequences with regard to other charities that are not in some of those key areas of universities or hospitals or organizations like the Cancer Society or the Heart & Stroke, et cetera. There are 85,000 registered charities in Canada. When we start to play around with the disbursement quota rule, somebody will fall through the cracks and there may be some unintended consequences. It will be up to us to monitor the situation.

The next area under part 1 has to do with the employee stock options. There are various methods in the Income Tax Act to deal with the treatment of employee stock options.

First, there is an amendment that would preclude double deductions of both the employee and the employer in respect of the same stock option benefit, which would make sense. The stock option agreement to a non-arm's-length person results in an employment benefit at the time of disposition, and, again, that makes some sense.

A further measure would repeal the tax deferral election. As well, the existing tax withholding requirements would be clarified to ensure that the amount in respect of tax on the value of the employment benefit associated with the issuance of the security would be required to be remitted to the Canada Revenue Agency by the employer. Again, administrative and substantively I agree with that.

Finally, the last measure introduced is a special elective and relieving tax treatment for taxpayers who elected under the tax deferral election introduced in budget 2000 to defer taxation of their stock option benefits until the disposition of the options securities. That appears to be a sound approach.

Section (e) under part 1 deals with accelerated capital cost allowance for clean energy generation. At the finance committee's prebudget hearings, which we have recently concluded, the issue of accelerated capital cost allowance came up frequently. It is an opportunity for businesses to write off, for tax purposes, desirable investments on an accelerated or quicker basis so they pay less tax, which allows them more cash flow to meet their obligations or, more important, to reinvest and continue to roll over their assets to ensure they have the assets, the machinery, the equipment and the like to be more efficient in their work.

Accelerated capital cost allowances is with us to stay. It has been used as a tool rather than a tax cut or something like that. This is effectively a tax deferral scheme. If the businesses keep doing it, it effectively represents a permanent reduction in taxes that could carry forward as long as they continue to invest in the capital, equipment and machinery. I agree with it as a tool and it is very much supported by those who are involved in equipment.

In this one, the section deals specifically with clean energy generation. With regard to our environment and addressing greenhouse gas emissions, et cetera, this is a positive development, which I support.

Section (f) is capital cost allowance for television set-top boxes. I do not know if anybody will understand that, but the capital cost rate for satellite and cable set-top boxes that are acquired after March 4 and that have neither been used nor acquired or used before March 5 will be increased to 40% to better reflect the useful life of the assets. This is effectively a correction of a rate, which is already available in the tax act. As it indicates, it is simply to reflect the fact that these assets have a very short lifespan or utility before substitutes become available and desirable by consumers. It allows them to write them off over a short period of time.

Section (g) under part 1 deals with the Canadian renewable and conservation expenses to do with principle business corporations. The definition of that will be amended to clarify that flow-through share eligibility extends to corporations the principle business of which is one or any combination of producing fuel, generating energy or distributing energy. I agree with that. It is a constructive move to make that change.

Section (h) deals with international financial reporting standards. It gets a little too technical, so I will not go to go there. Having looked at it, there is a five-year transition rule, and I think it works.

There is a sub-item on that. Amendments to the Canada pension plan and the Employment Insurance Act and the Income Tax Act will be made to provide legislative authority for Revenue Canada to issue online notices where authorized by a taxpayer. Again, this is an efficiency in terms of the process.

In addition, part 1 of the bill implements a number of other income tax measures. Employee life and health trust is new. The working income tax benefit will be amended for 2009 to $925 for single individuals with no eligible dependents and to $1,680 for individuals with at least one eligible dependent.

The amendments in this bill will ensure that the working income tax benefit amounts will continue to be indexed to inflation on an annual basis. Thank you, Mr. Minister. I think it is an important change.

There are some technical amendments to the tax-free savings account. I want to comment more fully on that, but I will move on.

Finally, there are the labour-sponsored venture capital corporation rules. Very few people will understand very much about that, but there are consequential amendments related to the tax-free savings account, which I want to address now.

First of all, I certainly support the tax-free savings account instrument, which allows Canadian residents who are 18 years of age or older to be eligible to contribute up to $5,000 annually in a tax-free savings account. The contributions are not tax deductible, but the investment income earned in a tax-free savings account will not be taxed. Since the contributions were not deductible when deposited, there will be no tax when withdrawn.

It is a good instrument to save money if one has money. This is of benefit certainly to middle and higher income Canadians who have cash that they are presently investing and paying income tax on the investment income. Now there is an instrument where they, their spouses and kids can have tax-free savings accounts. All of a sudden, formerly taxable investment income is going to be growing up in non-taxable instruments.

Eventually, I suppose, the taxes will ultimately come when that money is taken out and disbursed for consumption purposes and it works its way through the system. However, it is a leakage of tax revenue to the government, no question about it.

I raised my concern on this with the finance minister and officials last Tuesday. It has to do with the number of amendments they have to make. This is a simple program. One can put up to $5,000 a year in there, and on any income earned on eligible investments, one will not have to pay any tax ever.

We have amendments to make the income attributed to deliberate overcontributions and prohibited investments subject to existing anti-avoidance rules. We also want to make any income attributable to non-qualified investments taxable at regular tax rates. As well, we want to ensure that withdrawals of deliberate overcontributions, prohibited investments, non-qualified investments or amounts attributable to swap transactions or related investment income from a tax-free savings account would not create additional tax-free savings account contribution room. Finally, we want to effectively prohibit asset transfer transactions between tax-free savings accounts and other accounts.

It is a simple program, but the amendments that are being made say to me that the crafters of this and all the levels of care and due diligence that took place in the process somehow did not consider what would happen if people made overcontributions. The government did not consider that if people made an overcontribution, a penalty of 1% was actually a lower amount than what they could earn on those investments, so 1% was not a deterrent. People realized that they could invest at 3%, and if it cost 1% in penalties, they would still make 2% on something that is not going to be taxable anyway. It is getting around the rules.

How is it that the government could not deal with the issues of non-qualified investments? Obviously there are some. It could not deal with deliberate overcontributions, prohibited investments, non-qualified investments, or amounts attributable to swap transactions and what happens if this is done and what are the consequences.

The point I made there and I will make again today in the House is that I did not get a strong comfort level that there was rigorous due diligence and careful thought given to this particular program. With all the things that the government missed in a very simple program, in my view, if the little things are not done well, there is not a great confidence level with regard to the larger items.

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

Mr. Speaker, regarding the TFSA, the government did catch on to it at the end of the day and now it is closing the loophole, which as the member said, should not have been. If it was well thought-out and well planned, executed and implemented, it should not have happened in the first place.

The member also knows that the government increased the air travellers security charge by 50%, which now makes us the highest taxed in the world. The member also knows that revenues collected through the tax exceed the amount spent on security. Over a five-year term, $3.3 billion was collected in taxes but only $1.5 billion spent on security.

That would not necessarily be the end of the world if it were not for the terrible results we are having, that the government now has become the best friend of the United States airline industry, because in Manitoba alone, although it is not the only jurisdiction, 50,000 Manitobans per year are going to Grand Forks, bypassing the Winnipeg airport and Canadian airlines such as WestJet and Air Canada and flying with United States carriers because the taxes are much less there. Coupled with the higher dollar and higher passport fees, we see why we are bleeding our tourism industry and working against ourselves.

With the government's ability to study each issue and access to experts that we do not have, why does it keep making such major blunders? Could the member explain that? We obviously cannot get any answers out of the government.