Bill C-9 (Historical)

Jobs and Economic Growth Act

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

Part 1 of this enactment implements income tax measures proposed in the March 4, 2010 Budget. In particular, it
(a) introduces amendments to allow a recipient of Universal Child Care Benefit amounts to designate that the amounts be included in the income of the dependant in respect of whom the recipient has claimed an Eligible Dependant Credit, or if the credit is not claimed by the recipient, a child of the recipient who is a qualified dependant under the Universal Child Care Benefit Act;
(b) clarifies rules relating to the Medical Expense Tax Credit to exclude expenses for purely cosmetic procedures;
(c) clarifies rules relating to payments made to a Registered Education Savings Plan or a Registered Disability Savings Plan through a program funded, directly or indirectly, by a province or administered by a province;
(d) implements amendments to the family income thresholds used to determine eligibility for Canada Education Savings Grants, Canada Disability Savings Grants and Canada Disability Savings Bonds;
(e) reinstates the 50% inclusion rate for Canadian residents who have been in receipt of U.S. social security benefits since before January 1, 1996;
(f) extends the mineral exploration tax credit for one year;
(g) reduces the rate of interest payable by the Minister of National Revenue on tax overpayments made by corporations;
(h) modifies the definition “taxable Canadian property” to exclude certain shares and other interests that do not derive their value principally from real or immovable property situated in Canada, Canadian resource property, or timber resource property;
(i) introduces amendments to allow the issuance of a refund of an overpayment of tax under Part I of the Income Tax Act to certain non-residents in circumstances where an assessment of such amounts has been made outside the usual period during which a refund may be made;
(j) repeals the exclusion for indictable tax offences from the proceeds of crime and money laundering regime; and
(k) increases the pension surplus threshold for employer contributions to registered pension plans to 25%.
Part 2 amends the Excise Act, 2001 and the Customs Act to implement an enhanced stamping regime for tobacco products by introducing new controls over the production, distribution and possession of a new excise stamp for tobacco products.
Part 2 also amends the Excise Tax Act and certain related regulations in respect of the Goods and Services Tax/Harmonized Sales Tax (GST/HST) to:
(a) simplify the operation of the GST/HST for the direct selling industry using a commission-based model;
(b) clarify the application of the GST/HST to purely cosmetic procedures and to devices or other goods used or provided with cosmetic procedures, and to services related to cosmetic procedures;
(c) reaffirm the policy intent and provide certainty respecting the scope of the definition of “financial service” in respect of certain administrative, management and promotional services;
(d) address advantages that currently exist in favour of imported financial services over comparable domestic services;
(e) streamline the application of the input tax credit rules to financial institutions;
(f) provide a new, uniform GST/HST rebate system that will apply fairly and equitably to employer-sponsored pension plans;
(g) introduce a new annual information return for financial institutions to improve GST/HST reporting in the financial services sector; and
(h) extend the due date for filing annual GST/HST returns from three months to six months after year-end for certain financial institutions.
In addition, Part 2 amends regulations made under the Excise Tax Act and the Excise Act, 2001 to reduce the interest rate payable by the Minister of National Revenue in respect of overpaid taxes and duties by corporations.
Part 3 amends the Air Travellers Security Charge Act to increase the air travellers security charge that is applicable to air travel that includes a chargeable emplanement on or after April 1, 2010 and for which any payment is made on or after that date. It also reduces the interest payable by the Minister of National Revenue to corporations under that Act.
Part 4 amends the Softwood Lumber Products Export Charge Act, 2006 to provide for a higher rate of charge on the export of certain softwood lumber products from the regions of Ontario, Quebec, Manitoba or Saskatchewan. It also amends that Act to reduce the rate of interest payable by the Minister of National Revenue on tax overpayments made by corporations.
Part 5 amends the Customs Tariff to implement measures announced in the March 4, 2010 Budget to 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 manufacturing inputs and machinery and equipment imported on or after March 5, 2010.
Part 6 amends the Federal-Provincial Fiscal Arrangements Act to provide additional payments to certain provinces and to correct a cross-reference in that Act.
Part 7 amends the Expenditure Restraint Act to impose a freeze on the allowances and salaries to be paid to members of the Senate and the House of Commons for the 2010–2011, 2011–2012 and 2012–2013 fiscal years.
Part 8 amends a number of Acts to reduce or eliminate Governor in Council appointments, including the North American Free Trade Agreement Implementation Act. This Part also amends that Act to establish the Canadian Section of the NAFTA Secretariat within the Department of Foreign Affairs and International Trade. In addition, this Part repeals The Intercolonial and Prince Edward Island Railways Employees’ Provident Fund Act. Finally, this Part makes consequential and related amendments to other Acts.
Part 9 amends the Pension Benefits Standards Act, 1985. In particular, the Act is amended to
(a) require an employer to fully fund benefits if the whole of a pension plan is terminated;
(b) authorize an employer to use a letter of credit, if certain conditions are met, to satisfy solvency funding obligations in respect of a pension plan that has not been terminated in whole;
(c) permit a pension plan to provide for variable benefits, similar to those paid out of a Life Income Fund, in respect of a defined contribution provision of the pension plan;
(d) establish a distressed pension plan workout scheme, under which the employer and representatives of members and retirees may negotiate changes to the plan’s funding requirements, subject to the approval of the Minister of Finance;
(e) permit the Superintendent of Financial Institutions to replace an actuary if the Superintendent is of the opinion that it is in the best interests of members or retirees;
(f) provide that only the Superintendent may declare a pension plan to be partially terminated;
(g) provide for the immediate vesting of members’ benefits;
(h) require the administrator to make additional information available to members and retirees following the termination of a pension plan; and
(i) repeal spent provisions.
Part 10 provides for the retroactive coming into force in Canada of the Agreement on Social Security between Canada and the Republic of Poland.
Part 11 amends the Export Development Act to grant Export Development Canada the authority to establish offices outside Canada. It also clarifies that Corporation’s authority with respect to asset management and the forgiveness of certain debts and obligations.
Part 12 enacts the Payment Card Networks Act, the purpose of which is to regulate national payment card networks and the commercial practices of payment card network operators. Among other things, that Act confers a number of regulation-making powers. This Part also makes related amendments to the Financial Consumer Agency of Canada Act to expand the mandate of the Agency so that it may supervise payment card network operators to determine whether they are in compliance with the provisions of the Payment Card Networks Act and its regulations and monitor the implementation of voluntary codes of conduct.
Part 13 amends the Financial Consumer Agency of Canada Act to provide the Financial Consumer Agency of Canada with a broader oversight role to allow it to verify compliance with ministerial undertakings and directions. The amendments also increase the Agency’s ability to undertake research, including research on trends and emerging consumer protection issues. Finally, the Part makes consequential amendments to other Acts.
Part 14 amends the Proceeds of Crime (Money Laundering) and Terrorist Financing Act to confer on the Minister of Finance the power to issue directives imposing measures with respect to certain financial transactions. The amendments also confer on the Governor in Council the power to make regulations that limit or prohibit certain financial transactions. This Part also makes a consequential amendment to another Act.
Part 15 amends the Canada Post Corporation Act to modify the exclusive privilege of the Canada Post Corporation so as to permit letter exporters to collect letters in Canada for transmittal and delivery outside Canada.
Part 16 amends the Canada Deposit Insurance Corporation Act to allow the Governor in Council to specify when a bridge institution will assume a federal member institution’s deposit liabilities and allow the Canada Deposit Insurance Corporation to make by-laws with respect to information and capabilities it can require of its member institutions. This Part also amends that Act to establish the rules that apply to the assignment, by the Canada Deposit Insurance Corporation to a bridge institution, of eligible financial contracts to which a federal member institution is a party.
Part 17 amends the Bank Act and other related statutes to provide a framework enabling credit unions to incorporate and continue as banks. The model is based on the framework applicable to other federally regulated financial institutions, adjusted to give effect to cooperative principles and governance.
Part 18 authorizes the taking of a number of measures with respect to the reorganization and divestiture of all or any part of Atomic Energy of Canada Limited’s business.
Part 19 amends the National Energy Board Act in order to give the National Energy Board the power to create a participant funding program to facilitate the participation of the public in hearings that are held under section 24 of that Act. It also amends the Nuclear Safety and Control Act to give the Canadian Nuclear Safety Commission the power to create a participant funding program to facilitate the participation of the public in proceedings under that Act and the power to prescribe fees for that program.
Part 20 amends the Canadian Environmental Assessment Act to streamline certain process requirements for comprehensive studies, to give the Canadian Environmental Assessment Agency authority to conduct most comprehensive studies and to give the Minister of the Environment the power to establish the scope of any project in relation to which an environmental assessment is to be conducted. It also amends that Act to provide, in legislation rather than by regulations, that an environmental assessment is not required for certain federally funded infrastructure projects and repeals sunset clauses in the Regulations Amending the Exclusion List Regulations, 2007.
Part 21 amends the Canada Labour Code with respect to the appointment of appeals officers and the appeal hearing procedures.
Part 22 authorizes payments to be made out of the Consolidated Revenue Fund for various purposes.
Part 23 amends the Telecommunications Act to make a carrier that is not a Canadian-owned and controlled corporation eligible to operate as a telecommunications common carrier if it owns or operates certain transmission facilities.
Part 24 amends the Employment Insurance Act to establish an account in the accounts of Canada to be known as the Employment Insurance Operating Account and to close the Employment Insurance Account and remove it from the accounts of Canada. It also repeals sections 76 and 80 of that Act and makes consequential amendments in relation to the creation of the new Account. This Part also makes technical amendments to clarify provisions of the Budget Implementation Act, 2008 and the Canada Employment Insurance Financing Board Act that deal with the Canada Employment Insurance Financing Board.

Jobs and Economic Growth Act

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

Madam Speaker, all day the government members have been hiding from this debate. We have not seen any government speakers at all get up to defend their 880 page budget implementation bill. We see the odd one sneak in with some notes from above to ask a planted question and then they retreat.

I am looking forward to asking a government speaker, when and if they ever get up to speak on this particular bill, to justify the atrocious salaries that the bank presidents earned last year on profits of $15.9 billion. We have bank presidents making upwards of $10 million a year. I would like to know when the current government will come in with some guidelines that are being--

[The Acting Speaker, Denise Savoie]

Order, please. The hon. member for Trois-Rivières has 30 seconds to respond or to make a comment.

[Paule Brunelle, Bloc, Trois-Rivières, QC]

Madam Speaker, we can certainly criticize bank presidents' salaries, but the Bloc Québécois has also suggested higher tax rates for the leaders of large corporations, the managers who receive bonuses and golden parachutes for their retirement. Greater responsibility needs to be taken in that regard.

The House resumed from April 12 consideration of the motion that Bill C-9, An Act to implement certain provisions of the budget tabled in Parliament on March 4, 2010 and other measures, be read the second time and referred to a committee.

[Brian Murphy, Liberal, Moncton—Riverview—Dieppe, NB]

Madam Speaker, it is my pleasure to rise today and speak to Bill C-9, the budget implementation bill.

It is my pleasure to make a brief speech on behalf of the residents of greater Moncton, my riding of Moncton—Riverview—Dieppe, and the people of Atlantic Canada.

I would like to take this opportunity to speak to the budget on behalf of Atlantic Canadians. We are all in this place representing various areas of the country and I want to point out what is a glaring absence of any policy, of any care or of any words related to the hopes, the aspirations and the mere existence of Atlantic Canada.

In the budget speech we all received a document entitled, “Leading the Way on Jobs and Growth”, delivered by the Minister of Finance who, like many in this House, has Maritime roots, in fact New Brunswick roots, which I know he is proud of. Nonetheless, in his speech of some 19 pages there was not one word toward Atlantic Canada, which is what we might call exhibit A.

Second, we in Atlantic Canada laud our coastal brethren in the Pacific for their initiative with respect to the Pacific Gateway and we understand that it is vital to Canada's economic growth and future. I could probably speak for all members of the Atlantic Liberal caucus when I say that we are happy there was mention of and movement toward forming and making stronger the Pacific Gateway, but there was not one mention of the term “Atlantic gateway” in the budget speech, the Speech from the Throne or the budget documentation.

We have a right arm and a left arm. We have a ying and a yang. In this place, we represent a country with three coasts. Economically, we have a Pacific coast but we also have an Atlantic coast and that coast deserves and is acting on a provincial level toward the crystallization of an Atlantic gateway, both port-wise and inland. No one need take my word for it. There are various provincial governments of all political stripes. We have a whole rainbow of colours of governments in Atlantic Canada now. We have a provincial NDP government, a provincial Conservative government and provincial Liberal governments. It is not partisan when I say that there is good work being done by all provincial governments on the Atlantic gateway and yet the federal government appears not to want to mention anything of it in its recalibration document. In fact, there is no real effort toward sustaining or helping the Atlantic lobster fishery which is in crisis.

I want to take a few moments to speak to other entry point aspects. Moncton is an area that is clearly inland and it is the hub of the Maritimes. It is a transportation centre. For a long time, after being one of the first airports to be transferred to a private authority in Canada, has been at the cutting edge of having small or mid-sized community transportation issues made important. The Greater Moncton International Airport handles over 500,000 passengers a year. It puts itself into the same category, with the same aspirations, hopes and struggles, as places like Abbotsford, Charlottetown, Mont Tremblant, Fredericton, Saint John and Kelowna, the airports that are not, frankly, Vancouver, Toronto or Montreal.

There are challenges presented to those points of entry, which is why, in the budget document beginning at page 299, there is the strange term called “strategic review savings”. To many people, this might go unnoticed, but we need to be clear that those are cuts to budgets. If they were cuts to budgets of Air Force One and the PMO's plane, maybe we would not have a big problem, but they are cuts to things like CATSA, the Canadian Air Transport Security Authority. Those are the fine men and women who, until I suppose a month ago or so, were not very well-known until a certain visit by a former cabinet minister to Charlottetown. However, they are the people who administer security in our airports. They perform a very vital function in flowing traffic for commerce and ensuring security, which needs to be top of mind for all of us.

In the 2011-12 budget, $12 million will be cut to the services, followed by a further $15 million in 2012-13. The government gives lip service to the notion of airport security. When the focus should be on ensuring security personnel in our airports, the only safety measure the government is able to employ is body scanners and there is no indication that the body scanners will be deployed in mid-sized airports. It is of crucial importance to people, like I say, in Abbotsford, Charlottetown and Moncton to ensure the flow of passengers continues.

The presence of body scanners suffices for the government while it cuts personnel. How will that help on the issue of security and with respect to the flow of goods and persons on a commercial level? For many of the airports in Atlantic Canada, it will be crippling. Frankly, the government is abdicating its responsibility in this regard to protect Canadians. We can forget about commerce, Atlantic Canada gateways and the importance of emerging economies, the real point is that there is an offloading of the costs of security to the citizens.

While the government talks about tax decreases and easing the burden for Canadians, what is happening through this budget instrument is that the Conservative government, in claiming to prioritize security in Canada, is hiking airport security fees to the passengers while simultaneously reducing the budget by some $12 million to $15 million for CATSA, the agency providing security. In the end, the Canadian traveller will pay.

Canadians already pay up to $17 in security taxes per flight and the government is proposing to raise it on some flights by over $8. It may not sound like a lot but for some people travelling across this country it may be the difference between some people choosing to stay home, to not travel through an airport or not to use the Moncton airport, for instance, especially if there is one scanner employed for over 500,000 passengers. We do not know what the future holds but there is certainly no emphasis on small and medium-sized cities and their airports in this budget and, as I mentioned, not a word about the issue of the Atlantic gateway.

The government claims to care about Canadian security but it is cutting funding to CATSA and expecting taxpayers, Canadian citizens, to cover the shortfall. It is another instance of a hidden tax. It is another incidence of untruthfulness in a budget document. It does not even provide sufficient funding for airport security in terms of personnel and there will be cuts of people employed at Canada's airports.

Another issue with respect to security, an issue of importance to the Greater Moncton International Airport and other airports, is the work of the Canada Border Services Agency. The disregard for the security and safety of Canadians citizens shown in this budget has been furthered by the fact that the CBSA cuts, which total $6.5 million in this year and $54 million in 2011-12, show a complete disregard for the need for service at our airports and ports. How will CBSA deal with the budget cuts?

I want to know where the champions of Atlantic Canada are. Where are the Allan J. MacEachens? Where are the Don Jamiesons? Where are the Roméo LeBlancs? They are not in the House or in the government. They are not on the government side because Atlantic Canadians have been told, along the lines of a famous 1997 speech given by the prime minister, that Atlantic Canadians should come to the House and mind their spots. They should just mind their place, follow the rules and be quiet about their aspirations.

It is no longer time for Atlantic Canadians to accept the ignorance of the government toward their dreams and aspirations. It is no longer time for them to be quiet about the future of Atlantic Canada. It also is not time for the Government of Canada to omit the words “Atlantic Canadians” from a budget document. We will not stand for it and I urge all members of the House to take that to the government during the budget debate.

[David Tilson, Conservative, Dufferin—Caledon, ON]

Madam Speaker, I have spent many a summer in my colleague's riding and it is certainly one of the most beautiful ridings in this country and it has great lobster.

He made some comments about there being an absence of policy in this budget and several times said that there was no mention of Atlantic Canada but I believe the policies of this budget affect the entire country.

I would like the member to comment on some statistics that have been put out that indicate that Canada has the lowest debt to GDP ratio in the G7, that Canada's decline in the real GDP was virtually the smallest of all G7 countries, that Canadian labour markets have fared much better than the U.S. where job losses are proportionately three times larger than Canada, and that Canadian domestic demand growth has rebounded more strongly than all other G7 countries since the beginning of 2009 and led Canada out of the recession in mid-2009. Other statistics tell us that Canada has weathered this recession much better than any other country on this planet, and we should be proud of that.

Whether the member is correct or not, I would like him to comment as to whether or not these policies affect the entire country, which includes Atlantic Canada.

[Brian Murphy, Liberal, Moncton—Riverview—Dieppe, NB]

Madam Speaker, the hon. member was doing so well up to beaches and lobster.

He is correct that the fundamentals of the economy, which were put in place by a good friend of many of us on this side, Paul Martin, and the resistance of a former government to things like bank mergers, which most people on the other side agreed with at the time, are largely responsible for the fact that we did not do as badly as some other economies.

The point is, and I will use an aeronautical analogy, had someone been doing something else other than just being on auto pilot, like those members were, we might have avoided racking up such a huge deficit. To turn the argument over on my friend, a huge deficit does affect everybody in Canada and probably will affect the regions more.

When we get down to budget deficit slaying, the people of Atlantic Canada know they will be the ones to suffer. They know that budget deficits need to be dealt with and ACOA and the other shoes that may drop, Marine Atlantic, who knows, these will be the first things that the Conservative government will look at because it cares not for Atlantic Canada.

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

Madam Speaker, for many years Canadian workers and small business owners have jointly contributed into the employment insurance fund. However, instead of receiving some of these insurance funds when unemployed, many workers, whether they are from Moncton or Toronto, end up not qualifying as a result of the former Liberal government changing and tightening the EI rules.

This budget empties the employment insurance account of roughly a $57 billion surplus, which is money that was paid by workers and built up throughout the years. It is grossly unfair.

The hon. member is a member of the Liberal Party. How could his party possibly agree to a budget that ripped $57 billion out of the hands of unemployed workers?

[Brian Murphy, Liberal, Moncton—Riverview—Dieppe, NB]

Madam Speaker, EI is a pressing issue for all of those who need access to it, whether it is in Toronto, Moncton or elsewhere.

We on this side prefer to take a calibrated approach to EI reform. My colleague from Dartmouth—Cole Harbour leads the charge with respect to improvements to the EI program, which so far have been completely ignored by the government. There are people in need and people who need access to EI. There are people who need a longer term of EI.

The way to look at this subject, rather than just being outside the palace all of the time throwing snowballs, is to try to get into the palace and change the way we deal with EI, which is what we on this side are doing. We are coming up with constructive arguments toward sustainable, sensitive EI reform that will help all Canadian workers, whether in Atlantic Canada or elsewhere.

[Glenn Thibeault, NDP, Sudbury, ON]

Madam Speaker, today I rise to speak against Bill C-9, which would bring into legislation a number of measures already announced in different ways and means motions or previous budget documents. It also spells out a number of measures originally presented as part of the most recent Speech from the Throne.

As the New Democrat consumer protection critic, I will devote the majority of my time to discussing the provisions contained within Bill C-9 that relate to the credit and debit industry. However before my analysis of the credit and debit sector provisions, I would first like to address two measures contained in Bill C-9 that are extremely concerning. The first is environmental assessments, and the second is the employment insurance fund.

With regard to environmental assessments, and in keeping with our party's concerns about the oil sands, the measures contained within Bill C-9 are very worrisome. If passed, Bill C-9 would exempt certain federally funded infrastructure projects from environmental assessments, going well beyond efforts by the Canadian Council of Ministers of the Environment to streamline the environmental assessment process.

Bill C-9 also would allow the minister of the environment to dictate the scope of environmental assessments. It would also weaken public participation and enable the removal of assessment of energy projects from the Canadian Environmental Assessment Agency to the National Energy Board and Canadian Nuclear Safety Commission.

Eighteen months ago, the Conservatives came out with their now infamous economic and fiscal update. Within this update, they gutted the Navigable Waters Protection Act, which had been in place for 100 years, and the Liberals supported them. Now the Conservatives are trying to finish what they started by doing away with environmental assessments for most projects that receive federal funding. Several provinces have rather weak legislation and no way to conduct real inspections and assessments. The Navigable Waters Protection Act was the only way some provinces could have an assessment done.

The second measure I would like to address, before going into my analysis of the credit and debit provisions, is the measure introduced regarding employment insurance. If passed, Bill C-9 would empty the employment insurance account, which held a surplus of roughly $57 billion, money paid by workers and businesses, built up over years of Liberal and Conservative rule. First the Liberals took the $57 billion from the employment insurance fund and transferred it to the government's general revenue fund, and now the Conservatives will finish off the job they admonished the Liberals for.

There is a fundamental difference between the employment insurance fund and the government's consolidated revenue fund. All Canadian companies and their employees have contributed to the employment insurance fund. If a company recorded a loss, it did not matter. It still had to contribute to the employment insurance fund. Only a company with enough profits to pay tax was required to fork over corporate taxes into the general revenue fund.

In other words, the same companies, primarily the forestry and manufacturing industries, which suffered greatly because of the high dollar, for example, that had not turned a profit and that did not have to pay tax, could not benefit from the $60 billion in tax cuts given to the most profitable companies, and yet each and every one of these companies paid for every single one of their employees and every employee contributed to the EI fund.

The manufacturing and forestry companies that were already suffering believed their contributions would be used for a very specific, precise and dedicated purpose. This means that those who paid, who suffered because of the high dollar, supported the rich, particularly those in the oil industry in western Canada.

Now I will move on to discuss the measures relating to the credit and debit industry in Canada. I would like to share with the House the opinions of various stakeholders in the credit and debit industry on the government's latest measures released in the budget.

The Credit Union Central of Canada appreciates the overall intent of the draft code as stated in its purpose. However, and that is a big however, it believes that the draft code should give additional consideration to protecting the interests of Canadian consumers, to ensure they are provided with transparency, flexibility and the opportunity to make an informed choice when using debit and credit services, and of course to preserve a competitive, balanced market that includes a strong Canadian-focused payments delivery channel, as provided by Interac.

The Credit Union Central of Canada continues by stating that the most significant concern of Canadian credit unions regarding the draft code is the combined potential of provisions 5 and 6. They negatively impact the future of Interac debit services and the viability of Interac itself. They believe that providing merchants with the ability to set priority routing for debit services will exacerbate the concerns put forward by the Canadian Federation of Independent Business and that aggressive marketing practices and the dominant market positions of Visa and MasterCard may cause debit card processing fees to skyrocket and may ultimately lead to the end of Interac.

The CUCC believes that provisions 5 and 6, as currently written. will make it easier for Interac to be overwhelmed by targeted pricing strategies of the much larger international payment card networks. Provision 5 reads:

Merchants will be allowed to provide discounts for different methods of payment (e.g. cash, debit card, credit card). Merchants will also be allowed to provide differential discounts among different brands.

Depending on how this provision is interpreted and applied by merchants, consumers may find that it becomes hard to tell the difference between discounting and surcharging, particularly if there is no requirement for the discount to reflect or relate to the merchant's cost for the transaction or payment card network.

Provision 6 reads:

Merchants can decide whether they will accept multiple forms of debit card payment. In such a case, merchants can choose the lowest-cost option on transactions involving co-badged debit cards.

The draft code states:

When a consumer uses a co-badged debit card with a merchant who accepts both debit products on the card, the merchant will decide which debit payment option is used for the transaction.

By unintentionally facilitating a significant threat to the future viability of Interac, these provisions may ultimately hasten a reduction in competition and choice of debit services available to Canadian merchants, consumers and card issuers.

Canada's payment card industry is one of the most successful and stable models in the world, due in no small part to the unique role of Interac and its national infrastructure for the provision of debit card services. Interac has become a valuable national utility that Canadians trust and depend on to provide universal, cost-effective debit services and is uniquely positioned to design and deliver services suited to the Canadian markets and in the interests of Canadians.

The principle of protecting the public and consumer interest should be primary and should be reflected in the rules of conduct and operation for all parties involved in providing debit and credit services, including the payment card networks, card issuers, acquirers and merchants. We believe the draft code, as written, places consumers at a disadvantage. It does not acknowledge the consumer as an equal participant and party to debit and credit card transactions, and several of the code's provisions either do not adequately protect consumer interests or protect the interests of merchants at the expense of the consumer.

Option consommateurs, a not-for-profit association dedicated to the defence and promotion of consumers' rights, is also concerned about the adoption of the code of conduct for the debit and credit card industry. According to Option consommateurs, if adopted as is, the voluntary code would give more power to merchants, to the detriment of consumers.

It also argues that whenever consumers make a purchase, they must be able to freely and transparently choose their preferred payment method from among those offered by merchants. However, the voluntary code allows merchants to require the payment method of their choice.

Furthermore, the government should prohibit surcharging on the payment method in order to make it easier for consumers to compare prices.

In closing, the measures contained within Bill C-9, mainly the gutting of our employment insurance fund, the removal of environmental checks on government infrastructure projects and the implementation of a flawed code of conduct that would negatively impact consumers, are just some but definitely not all of the reasons why our party cannot support this budget.

[Larry Bagnell, Liberal, Yukon, YT]

Madam Speaker, I think it was reprehensible behaviour that the credit card companies raised the rates for individuals during the recession, the time Canadians needed it least. They also raised the fees for companies. I got all sorts of complaints from small businesses.

The chartered banks, which I have a great respect for and am a big supporter of, also unfortunately raised the rates for businesses and individuals for their loans. I commend the government for providing liquidity to the banks, but they did not pass it on.

I assume that, because the member deals with this topic, he got from a lot of his businesses this questionnaire from the Canadian Federation of Independent Business about the fairness and oversight needed in the credit and debit industry. I got a lot of them. I agree with him that the budget is not sufficient to deal with this. I wonder if he would like to comment further on that.

[Glenn Thibeault, NDP, Sudbury, ON]

Madam Speaker, I too have many small businesses in the riding of Sudbury, and they have been coming to me with their concerns about both Visa and MasterCard entering the debit market.

We had a voluntary code of conduct that was presented in November, and of course prorogation stopped the process in which we were supposed to have a discussion when that voluntary code of conduct assessment ended. When the toothpaste is out of the tube, we cannot stuff it back in.

Many small business owners are concerned about priority routing. Many of them are concerned about how this will impact consumers' choice. That is, if consumers come into their place of business, whether they will be able to even use their cards and whether the businesses will be able to take their cards.

Consumers are very concerned about the interest rates that we have seen on the credit side as well. When they go in there, they want to use their card, but now they are starting to hesitate because of the interest rates.

On that side, we also see small businesses having interchange fees increasing. In some cases they have a negotiated rate of 1.6%, but when we start getting all of these new cards in place, the premium cards that the companies are putting out, those negotiated rates go out the door and they end up paying about 2.6%, sometimes even 3%, on the interchange fees.

More needs to be done. We need to have an honest discussion and debate about this, because more needs to be done to help consumers—

[The Acting Speaker, Denise Savoie]

The hon. member for Elmwood—Transcona.

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

Madam Speaker, I want to thank the member for his presentation, and he is absolutely correct when it comes to the whole issue of the credit cards and the fees.

The government constantly acts against the interests of consumers. Whether it is in the air passenger bill of rights issue, where it sided solidly with the industry, with the airlines, or in this case. Not only is the government acting against the interests of consumers, but it is actually acting against the interests of small business.

We have seen, as the member for Yukon has experienced, letters from small businesses, and I have seen some figures that are just astounding as to how much credit card costs have been assumed by businesses over the last year or two. It has doubled and tripled for a lot of small businesses.

Now the Conservatives are basically adopting their laissez faire attitude to the very people, the small businesses, that they purported to represent all these years. It is a big joke that they would suggest that they will come up with voluntary guidelines and somehow these business-oriented credit card companies will somehow take it easy on the consumers. It is absolutely nonsense, and I would like to ask the member to comment further on that point.

[Glenn Thibeault, NDP, Sudbury, ON]

Madam Speaker, I would like to thank the hon. member for his question and commend him on the work he did on the airline passenger bill of rights.

There are so many things we need to implement in this budget to actually help consumers and small businesses, but let us look specifically at small businesses and how they are being affected by these credit card companies and the big banks. The interchange fees they are paying are costing them thousands upon thousands of dollars every year. What is that doing? That is stopping them from hiring another person, from expanding their business, from growing their business. That money is then going to the credit card companies who are making billions and billions of dollars in profits.

We need to implement a code of conduct now, not a voluntary code of conduct. That lacks teeth. If it is voluntary and we choose not to do it, what is stopping people from actually implementing it? We need the code of conduct now. It should not read in the budget, “only if necessary”. It is necessary now. Ask any small business in Canada.