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.

[Denis Lemelin]

Absolutely not; we weren't consulted. We know that this part, which is now included in Bill C-9, existed in other forms in the past. For example, there was Bill C-14 and Bill C-44. However, we were never consulted. We have always tried to be publicly accountable and we've always called for public debate on the postal services issue, since it's a service we provide to the public. This is a roundabout way of avoiding public debate on the issue.

[Daniel Paillé, Bloc, Hochelaga, QC]

Welcome.

It's obvious to everyone that Bill C-9 is an unpalatable stew that the government has put on the table, betting, even though it's a minority government, that the bill will be adopted. If the ranks of each party were respectable enough, this bill would not pass. The government wouldn't have tried to introduce this mess. As proof that we're being served up this stew, we have both people from the environment sector and a union president defending his business. That's what this leads to.

Mr. Lemelin, earlier we were told that no one had been consulted among the people in the environment sector. I'm going to continue down the road by asking you a first question. Were you consulted on Part 15, which concerns you?

[Denis Lemelin, National President, Canadian Union of Postal Workers]

Thank you, Mr. Chairman, committee members. I'll be making my presentation in French.

On behalf of the Canadian Union of Postal Workers, I want to thank you for the opportunity to appear before this committee on Part 15 of Bill C-9. CUPW represents 54,000 workers in rural and urban communities from coast to coast to coast. A majority of our members work for Canada Post.

CUPW would like to urge this committee to give this very small part of Bill C-9 a very large amount of attention as it amounts to partial deregulation of our public post office. In Canada, letter mail is regulated for a reason. Canada Post has an exclusive privilege to handle letters so that it is able to generate enough money to provide affordable postal service to everyone, no matter where they live in our huge country. This privilege includes both domestic and international letters. We believe it will become increasingly difficult for Canada Post to provide universal postal service if the government erodes the very mechanism that funds this service—the exclusive privilege.

Canada Post’s exclusive privilege to handle letters has received remarkably little attention over the years. But international mailers, who are currently carrying international letters in violation of the law, have recently taken issue with this privilege and waged a campaign to undermine our post office’s right to handle international letters. Canada Post estimates that international mailers siphon off $60 million to $80 million per year in business. Its concerns with remailers have grown as the international mail business has grown and as remailers have unfairly competed for international mail by exploiting the two-tier terminal dues system adopted by the Universal Postal Union in 1999.

It is our understanding that Canada Post attempted to address its concerns with international mailers through negotiations and finally through legal action against two of the largest companies, Spring and Key Mail. One ruling by the Court of Appeal for Ontario stressed the importance of the exclusive privilege in serving rural and remote communities and noted that international mailers such as Spring Canada are not required to bear the high cost of providing services to the more remote regions of Canada. The corporation won this legal challenge all the way to the Supreme Court of Canada.

After this victory, a coalition of private Canadian and international mail companies called the Canadian International Mail Association (CIMA), hired a lobbyist in an attempt to convince parliamentarians to remove international letters from Canada Post’s exclusive privilege to handle letters. The government initially defended the importance of the exclusive privilege but it was not long before it started to reconsider its position, presumably because of the CIMA lobby. Nevertheless, the government did promise, in a letter to CUPW, that no changes to Canada Post's exclusive privilege would be considered without thorough policy analysis. We would like to point out that, to date, there has been no serious review or thorough policy analysis of the international mail issue or the impact of removing international letters from Canada Post’s exclusive privilege.

The government’s recent strategic review of Canada Post did not look at these issues. Unfortunately, this did not stop the review’s advisory panel from recommending against deregulation of letter mail, with the exception of international letters. It simply doesn’t make sense to be proposing legislation before you look at the relevant issues. The proposed legislation doesn’t make much sense either. Canada Post’s letter mail volumes declined for the first time in 2008 and again in 2009. The corporation clearly needs international letters as a source of revenue to maintain and improve public postal service. Furthermore, most people in this country are opposed to deregulation of Canada Post. They do not support eroding or eliminating Canada Post’s exclusive privilege. Close to 70% of people oppose postal deregulation according to a 2008 Ipsos Reid poll.

Some remailers have argued that the French version of the Canada Post Corporation Act should carry no weight and that the English version would prevail. This argument has been rejected by the courts, as a result of which those businesses are now outlaws.

I draw your attention to the two recommendations we are submitting to the committee. They appear on the last page. We are asking that Part 15 of Bill C-9 be withdrawn. We're also asking that measures be taken to shut down the five or six international mail companies that are violating the law and that there be consultations with Canada Post and CUPW concerning the possibility of offering employment to workers at these companies. That's important for us. I think we'll have to debate the question of the jobs that are at issue.

Thank you for listening. I'll be very pleased to answer your questions.

[Jamie Kneen, Co-Manager, MiningWatch Canada]

Mr. Chair, members of the committee, good afternoon and thank you for the opportunity to speak today.

By way of introduction, MiningWatch Canada is a pan-Canadian coalition of 20 environmental, aboriginal, social justice, development, and labour organizations that advocate for responsible mining practices and policies in Canada and by Canadian companies operating internationally.

Environmental assessment is one of the areas MiningWatch has worked closely in, in terms of policy development, as well as working directly on a number of project-specific environmental assessments.

One of the most surprising aspects of this work has been the level of interest from the public. Communities potentially affected by mining projects are naturally very interested in the assessment of those projects, but so is the broader public, and we receive a constant stream of inquiries and requests for information and assistance.

Environmental assessment, or EA, is sometimes seen as a somewhat technocratic and esoteric process. It can certainly be complex and inaccessible. Yet people are adamant that we need strong and consistent EA processes, and they are willing to invest considerable time and energy in trying to understand the process and participate effectively in project assessments. They tell us what an important part of working together for sustainable development it is.

On January 21 of this year, not four months ago, the Supreme Court of Canada unanimously decided a case brought by MiningWatch Canada over the federal government's handling of the proposed Red Chris copper and gold mine in north-central British Columbia. The court ruled that the federal government cannot assess only part of a project, or split projects into artificially small parts, to avoid rigorous environmental assessments. The ruling guaranteed that the public would be consulted about major industrial projects, including large metal mines and tar sands developments.

The bill before you today includes amendments to the Canadian Environmental Assessment Act that would effectively reverse the Supreme Court ruling. These amendments should be removed from Bill C-9.

With support from Ecojustice and the broader environmental community, we have fought through the courts for three and a half years to try to correct profound deficiencies in the application of CEAA. It is with great dismay that we now see those same deficiencies being deliberately re-created, only now in the text of the act itself. What's perhaps most unfortunate about the proposed changes is that they won't address the actual issues with the act that they're supposed to resolve. There is in fact a structural problem with the way CEAA is framed that creates delays through a late triggering of an environmental assessment. By the time a permit or licence application is filed triggering the act, a project can be well along in its planning stages. A major projects management office was created a little over two years ago to help resolve this contradiction by identifying projects earlier on, although it's hard to determine at this relatively early point how effective it has been.

The Supreme Court decision on Red Chris should also help eliminate delays by clarifying the decisions that responsible authorities are required to make under the act. The Department of Fisheries and Oceans, for example, does not have to spend months and months trying to figure out how to avoid triggering an environmental assessment or how to reconfigure a project proposal to avoid a comprehensive study, if it simply accepts the project as proposed and assumes its responsibility.

By the same token, if there is a clear mandate behind the federal involvement in joint processes with other jurisdictions, then there is no need for protracted negotiations around the EA process itself. By putting arbitrary ministerial discretion on scoping into the act, the proposed changes will essentially re-create the situation that we fought through the courts to clarify.

MiningWatch Canada has always pressed for a strong federal role in environmental assessment, partly because of the consistency and accessibility that it brings, but primarily because of the federal jurisdiction in a number of critical areas, as has already been mentioned. But let me provide a concrete example.

The proposed Prosperity copper and gold mine in British Columbia is currently undergoing both a provincial assessment and a panel review under CEAA. If the project were to proceed as presented, it would have serious detrimental environmental effects, including the draining of Teztan Biny or Fish Lake to make way for the mine. I have provided you with a picture of this, so that you have an image of Fish Lake. The project would also have serious impacts on the Xeni Gwet'n and Tsilhqot'in people.

The federal panel review has been hearing evidence from the affected communities, independent fisheries experts, and social scientists. Serious shortcomings in the proponents' proposals have been identified and are being reviewed. Meanwhile, the provincial review has been completed and the project has been approved by the B.C. government.

The other picture I have is of the Kemess mine, just so you have an idea of what will take the place of Fish Lake. It's a large open-pit copper-gold mine, barely a few hundred kilometres away and very similar in ecological terms. But if it weren't for the federal review, there would be no meaningful consideration of significant issues around the project's impacts on water and fisheries, and the interests of the Xeni Gwet'in First Nation and the Tsilhqot'in national government.

The Canadian Environmental Assessment Act is a critical element in Canada's legal framework for sustainable development and environmental protection. It has its strengths and shortcomings, but there are also processes established to build on those strengths and to address those deficiencies, and they should be used to their fullest. Substantially weakening the act will deprive Canadians of one of the best and in some cases one of the only tools they have to ensure that vested interests and poorly considered projects do not compromise environmental, social, and economic sustainability.

Thank you for your consideration.

[Richard Lindgren, Counsel, Canadian Environmental Law Association]

Thank you, Mr. Chair.

I'd like to begin by thanking the committee for inviting us to speak to Bill C-9.

As you know, CELA is a public interest law group that was founded in 1970. Our mandate is to use and improve environmental laws in order to protect the environment and to protect public health and safety. We basically represent citizens and public interest groups before the courts and tribunals in order to protect the environment and human health.

CELA has long advocated for effective and enforceable and equitable environmental assessment legislation at the federal level. For example, about 20 years ago I appeared before a parliamentary committee to speak to CEAA when it was first being debated. It seems like only yesterday, but I guess it was 20 years ago. I also participated in the five-year review that occurred from 2000 to 2003.

I should also note the fact that we have intervened in the Supreme Court of Canada in various cases involving federal EA requirements. For example, I was counsel for the six environmental groups that intervened in the MiningWatch case decided by the Supreme Court of Canada earlier this year.

Mr. Chair and members of the committee, based on our experience and our public interest perspective, we have very serious and fundamental concerns about the Bill C-9 proposals to amend CEAA. Our main concerns were outlined in a letter that I sent to Prime Minister Harper back in April, before the bill was referred to this committee. I have provided a copy of my letter to the committee clerk for distribution. My understanding is that it has been translated and distributed to the committee.

In essence, our letter raises three main concerns about the Bill C-9 proposals to amend CEAA. First, CELA objects to the process that's being used to enact these amendments. In our opinion, proposed changes to CEAA should not be buried in a budget bill. Instead, any proposed amendments to the act should be brought forward and proceeded with as stand-alone legislation that's subject to full parliamentary debate and meaningful public consultation, neither of which has occurred in this case to this point. That's our first objection.

The second objection is to the timing of the proposed amendments. As the committee is aware, these amendments have been introduced just as the mandatory seven-year review of CEAA is about to commence. In our opinion, the 2010 review is by far the preferable forum for discussing and debating and developing changes to Canada's national EA statute.

Thirdly, and perhaps most importantly, we object to the content of the proposed amendments. In our opinion, Bill C-9 does not reflect sound public policy. To the contrary, it is our view that most of the amendments weaken or roll back existing EA requirements under CEAA and do not adequately address the various priorities or matters that really do need some legislative attention under CEAA.

Like the previous speaker, I am particularly concerned about the proposal in Bill C-9 to empower the environment minister basically to redefine the scope of projects as they go through the CEAA process. In our opinion, Mr. Chair, that proposal is likely to result in more delay, more uncertainty, and more litigation as the minister attempts on a case-by-case basis to scope out or screen out the most contentious or most environmentally significant components of a project. That's the very type of project-splitting that the Supreme Court of Canada disallowed in its MiningWatch decision. So why would we revisit it through this proposed amendment?

For those reasons, Mr. Chair, CELA does not support the proposed amendments to CEAA. We would respectfully request that this committee do everything in its power to delete or defer or defeat the proposed amendments to CEAA.

Thank you.

[Arlene Kwasniak]

Okay. Thank you. I wasn't expecting to go first, but here we go.

Thank you for this opportunity to connect remotely. I represent the Alberta Wilderness Association, which is the oldest conservation organization in Alberta, dating back to 1965. We promote wilderness, wild lands, and ecosystem protection generally, so of course environmental assessment is very important to us.

We'd like to stress the importance of strong, effective, federal environmental assessment in Canada. The federal government has exclusive constitutional legislative jurisdiction over a number of heads, including our fisheries, navigation, oceans, and others. If the federal government doesn't appropriately assess projects that impact these heads of power, no other level of government can constitutionally do it. So it's really important that the federal government keep its very strong role in environmental assessment.

I'd like to say that what is happening now in Bill C-9 and some other events that preceded it in the last couple of years is defying a long tradition of legislative requirements and general comprehensive consultation for the CEAA and its regulations and policy.

I'd like to highlight a couple of things, and they're all set out in my brief. The CEAA took five years to develop. Obviously the government considered it to be very important legislation that impacted people, the environment, and the whole face of Canada. That is why it had such extensive consultation. The government formed the regulatory advisory committee, which advises the federal minister on CEAA matters. It was very instrumental in developing the key regulations under the CEAA, and has worked for several years to assist the government in the development of regulations and policy.

The first five-year review took three years, because it took that long to make sure the act was properly reviewed. The second review is scheduled to happen later this year. The act itself requires a comprehensive, substantive review of the provisions of the act.

I would like to suggest that there has been a recent demise in consultations having to do with the CEAA and an avoidance of the legislative requirement for consultations for substantive changes. This is very clear in the budget implementation bill of 2010.

In my brief I lay out a number of events prior to this budget bill, but I'm going to leave it to you to look at them, because I certainly don't have the time in these five minutes. I want to go right to the budget bill itself, because a number of destructive substantive changes to CEAA are buried in this bill.

For example, proposed section 15.1 would give the environment minister the right to slice and dice projects so that only one component was assessed. This provision completely undermines the potential application of the act and could result in significant environmental impacts not being assessed and mitigated. It will certainly diminish public participation. It also overrides a recent Supreme Court of Canada case that says a project is a project is a project, and the CEAA requires the assessment of projects, and not bits and pieces of them.

Finally, this provision opens the door for uneven and unfair application of the CEAA. There are no statutory conditions governing the exercise of the minister's discretion, except that the minister must set some conditions, whatever they might be. So I think that all interested persons, including regulated industry, should be very concerned about this.

There are also provisions that exempt most Building Canada plan projects from environmental assessment. These provisions, which are currently in the exclusion list regulation, have been challenged by the Sierra Club of Canada. Curiously, this bill purports to put these exclusions in the act, making that part of the challenge moot.

The exclusion list regulation can only, by the act itself, include projects that are known to have insignificant environmental effects. It's clear that this list of Building Canada plan projects could have any range of environmental impacts, so they certainly don't belong in the exclusion list legislation.

The addition to the act gets around that problem, but what it also does is completely undermine the logic and coherence of the CEAA. The CEAA requires that a project that triggers the act because there's a federal interest in the project be assessed no matter what its environmental impacts are, unless it's on the exclusion list. Putting this exemption in the act completely undermines that. Also under the act, the level of assessment depends upon the level of environmental impacts.

I'm done?

Fairness at the Pumps Act

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

Obviously I have touched a raw nerve somewhere here.

That contrast is quite stunning. We know, with the HST coming in July, that $2,000 to $5,000 will disappear from a family's pocket, and that was passed in two days. In this case, however, when millions of dollars are being lost at that pumps, no action has been taken. It takes a long time.

Maybe we should not be surprised. Even though we have raised the issue of tax subsidies to big oil and gas companies over and over again, we still see at least $1.2 billion in tax incentives going to the big oil and gas companies that are making billions of dollars of profits. We have noticed that there is a bill that is about to get third reading with the support of the Liberal party and members of Parliament here, Bill C-9, which would again give these very profitable oil companies a total of $6 billion with all the corporate tax cuts.

In the other bill, we have seen that oil companies would be able to skirt around environmental assessments. Also in that bill, environmental assessments are being removed. Companies do not need a federal environmental assessment if they get a few dollars of federal funding.

A different kind of assessment or check and balance is supposed to be done through the environment side. Instead, however, whether or it is drilling or oil sands explorations, it will to be done now through the National Energy Board. It apparently has nothing to do with the environment. We just recently had a huge oil spill that is having a devastating negative impact on the environment, wildlife, birds and the species in the water. This whole addiction to oil is really quite astounding.

Bill C-14 does not deal with the price fluctuation. Sometimes the price could be at an all-time low in terms of gasoline prices and yet at the pump it is high. All of a sudden it goes up to $1.20 for no reason. It is supposed to be about supply and demand but it seems that often there is no connection.

The bill also has no increase in the number of government inspectors. It is all done by non-governmental inspections. Government has a role to play, which is to inspect to ensure that industry is doing the right thing, and yet that is not in this bill.

The bill does not establish an ombudsperson, something that the NDP has asked for over and over again. We need an independent office to evaluate the problems, investigate complaints and to ensure consumers are given justice and fairness. It is not here in this bill and it is not fair.

What else is not fair? If people were being cheated, they would think that they would get some of that money back. In this bill, even though the government would be collecting more fines, which we support, the bill says that the government would be fining minor offences up to $10,000, major offences up to $25,000 and new fines for repeated offences up to $50,000. Hopefully the government will send a message out there and fine a few gasoline companies.

However, one would think that if the government were collecting a few dollars out of it, that it would at least compensate and ensure the gas companies compensated and refunded those who were being ripped off, but no, there is nothing in here to protect the consumers. This is, in many ways, really unfair because every dollar counts, especially if and when the price of gasoline goes up.

What else does it not do? It does not actually repay the GST. The gas tax right now is 10¢ per litre but if the consumers are being shortchanged, which the last I saw amounted to $240 million, one would think that with the taxes that are charged on these so-called phantom purchases at least there should be a refund on the taxes being collected on the purchase. The bill says nothing about a tax refund or any type of compensation for those who have been ripped off. It contains nothing to deal with the price fluctuations and nothing to protect the consumers. It says nothing about an ombudsperson and there is no place to file a complaint. It is no wonder the government is known to just make a lot of noise. It makes it appear as if something is being done but it takes very little action.

Our consumer critic and industry critic will be making a lot of amendments when this bill comes to the committee and if the Conservatives and the Liberals really want to protect consumers, they will support the kinds of recommendations and amendments that the New Democrats will be pushing.

I suspect that this bill, unfortunately, may not pass until the fall. With long weekends and the summer coming up, how will people who are travelling to visit their friends and families protect themselves? I looked up some pointers. One of the pointers that I found quite fascinating was that we should put in 10 or 20 gallons and then multiply the price by 10. We would then know precisely how much we were paying and know exactly the amount of gas that we paid for. It looks like the consumer needs to resort to those kinds of activities to protect themselves since the Conservative government, unfortunately, is dragging its feet and not taking real action.

We will support different aspects of this bill, such as the mandatory inspection frequencies and the additional fines, but we will not support using private sector authorized service providers. We will not support the kind of privatization of inspections that we see in front of us because we believe that regulations put out by government should be done by government. We have seen far too many times that when we privatize inspections, it just means that the retailers end up having to pay more and the consumers continue to get ripped off and hosed.

[Larry Bagnell, Liberal, Yukon, YT]

Just on your future study on the oil spills, it's great that you're doing that. I've raised that at committee a couple of times. You might be interested in looking at the evidence from the Beaufort project, which was set up in the 1970s to study that.

My understanding is that in Bill C-9, the budget implementation bill, I was told that in part 20 they took the environmental assessment responsibilities from CEAA and put it in NEB, which is not an environmental assessment organization. So hopefully you'll be looking into that when you do that study.

[Robert Carrier, Bloc, Alfred-Pellan, QC]

Thank you, Mr. Chairman. Four minutes goes fast. I’m going to speak to the people from the Fédération des travailleurs et travailleuses du Québec.

I understand why you’re exasperated over the fact that workers have been robbed of $54 billion in surpluses accumulated over the years. I think that, if money were taken from anyone here, that person would be in the same frame of mind. Earlier, Mr. Bellemare, you said that, if Bill C-9 were adopted, you would go to the Supreme Court since the government is not interested in doing so. You know that Bill C-9 will surely be adopted, with the cooperation of the Liberals, who don’t want to see the government defeated. So are you going to take immediate steps to go to the Supreme Court?

[Daniel Paillé, Bloc, Hochelaga, QC]

I’m going to take 30 seconds to speak to Bob Kirke. I’m surprised to see that a representative of an employer, who pays 1.4 times the employee premium rate, can be in favour of Bill C-9 on employment insurance. If we have some time left, we can discuss that further.

I’d like to thank the people from the FTQ for presenting their file. That file reminds me of the victims of Earl Jones. In that case, they were a group of vulnerable individuals who were cheated in a swindle, and here we have vulnerable people who contribute to employment insurance and who are also being cheated. If we can’t say the government is a swindler, what is the term you would use to illustrate the fact that some $50 billion has disappeared and that everything has been accumulated since premiums have been paid by employees and paid at one point four times that rate by employers?

[Michel Ducharme]

One minute left? I’m going to go right to the conclusion.

Let’s go back to Judge LeBel of the Supreme Court. In his view, the fundamental reason to rule on the constitutionality of the amounts collected and accounted for was to maintain a connection in the act between the needs of the plan and a certain rate stability. These principles maintained an allocation policy, a balance in the collections that preserved their constitutional characteristics as regulatory collections. This action is based on the idea that the government can do what it wants with the cumulative surpluses in the employment insurance account. However, that claim was not allowed by the Supreme Court because appropriate accounting had been kept.

In conclusion, we consider that the government must abide by the Constitution. The section of Bill C-9 repealing the employment insurance account does not appear to be a legislative choice authorized by the Constitution of Canada in that it retroactively alters the nature of the amounts collected and entered in the account.

We demand that the planned increases in premium rates be used to restore the employment insurance plan, enabling it to adequately cover workers’ unemployment risk on a permanent basis, and we ask the House of Commons and the Senate to block the coming into force of this repeal of the employment insurance account—

[Michel Ducharme, Vice-President, Fédération des travailleurs et travailleuses du Québec]

Mr. Chairman, committee members, on behalf of the Fédération des travailleurs et travailleuses du Québec, I thank you for allowing us to express our opinion, in particular on Part 24 of this bill.

With respect to the employment insurance account, I would say, from the outset that, for the FTQ, eliminating the employment insurance account is an unconstitutional act, contrary to democracy. Bill C-9, An Act to implement certain provisions of the budget tabled in Parliament on March 4, 2010 and other measures, states: “The account in the accounts of Canada known as the Employment Insurance Account is deemed to have been closed at the beginning of January 1, 2009 and removed from the accounts of Canada at that time.”

The bill adds that only those premiums and other amounts collected under the employment insurance plan as of January 1, 2009 will be included in the new employment insurance operational account. To take this kind of action, the Conservative government assumes it has constitutional authority to cancel public accounts, the amounts contributed and counted for employment insurance plan purposes of $57 billion in the employment insurance account. And yet, in its previous budget, the government was compelled, following a judgment by the Supreme Court of Canada in the challenge by the Syndicat national des employé(e)s de l'Aluminium d'Arvida and by the CSN, to have the premium rates for 2002, 2003 and 2005 passed by the House of Commons in accordance with the imperative democratic rules provided for under the Constitution of Canada. The purpose of the government's efforts at the time was clearly to adopt premiums for the purposes of the employment insurance plan, not a general tax.

Now the government is clarifying the scope of the amendments adopted in previous budgets respecting the setting of the premium rate with respect to cumulative surpluses in the employment insurance account. These are cumulative surpluses, remember, reducing access to employment insurance for thousands of workers in Canada, with all the negative effects that result from that for those people and the communities to which they belong, and systematically setting premium rates distinctly higher than the atrophied employment insurance system through various cuts since the early 1990s.

Moreover, all stakeholders who have had to analyze the premium rate setting process, in particular, have observed that rates have been set based on other imperatives than the financial imperative, essentially the employment insurance plan. The Canadian Institute of Actuaries did it, as did Judge Gascon of the Superior Court and Judge LeBel of the Supreme Court of Canada. Judge Gascon held that the fact nevertheless remained that, despite their scope—he talked about cumulative surpluses—criticized by the Auditor General of Canada and the Chief Actuary of HRSD, one searches through the evidence in vain for justifications and explanations for maintaining these surpluses at the level where they stand. Judge LeBel held as follows, on behalf of the Supreme Court of Canada: “In my opinion, those amendments had a significant effect on the validity of such levies in the circumstances in which they were adopted, that is, at a time when government representatives could not have helped but see that employment insurance revenues in fact greatly exceeded what the system required and that those revenues no longer had an actual connection with the system.”

In 2005, the government put a legislative framework in place to exclude the cumulative surpluses in the employment insurance account from the premium rate-setting process. It also altered the premium rate-setting parameters by stating that the rate had to be set based on the estimated costs of the plan for the subsequent year, not on the basis of the maintenance of a reserve to prevent upward fluctuations in premium rates at the time of an economic slowdown, a role that cumulative surpluses were officially supposed to play in the employment insurance account.

Despite this new rate-setting mechanism, the rates adopted since 2005 to cover only the costs of the employment insurance system, with the exception of 2010, nevertheless had the effect of increasing the cumulative surpluses in the employment insurance account by nearly $8 billion. However, Judge LeBel of the Supreme Court did not see fit to comment on the legislative amendments since 2005 because they were not directly concerned by the legal issue.

[Bob Kirke, Executive Director, Canadian Apparel Federation]

Thank you, Mr. Chairman, for the opportunity to address the committee. I'm pleased to be here to provide our comments on Bill C-9.

Before I begin, please allow me to introduce our association and our industry. The Canadian Apparel Federation represents over 400 Canadian companies that are active in the apparel industry. The industry itself produces a wide range of women's, men's, and children's apparel. The industry directly employs approximately 50,000 people, with the largest concentration in the Montreal area. Other areas of concentration include Toronto, Winnipeg, and the Vancouver area. We are one of the few manufacturing sectors found in all provinces and territories.

Many Canadian firms have become market leaders and successful exporters in the past decade. They have made major inroads into the U.S. market, in particular. Despite our successes, the Canadian apparel industry faces immense pressures and challenges, including one of a domestic nature; that is, duties of up to 14% on imported raw materials.

Our association last appeared before this committee in 2004 on this issue. Duties paid on these imported raw materials represent the most significant policy issue for the industry, as companies need to have access to competitively produced raw materials to meet the needs of the Canadian consumer and our export markets. Since 2004, we have seen some progress on this issue. But currently, our industry pays approximately $65 million in import duties on raw materials on an annual basis.

The clothing industry is one of the truly global manufacturing industries. Clothing is made in virtually all countries. And in developing countries, it is seen as a key strategic industry. Our firms understand globalization, because they know that they are competing with manufacturers from around the world who are keenly interested in our domestic market and our major export market, the United States.

Canadian firms can compete based on superior design and innovation combined with superior customer service. However, if we are to remain competitive, we must have a policy framework that ensures that we are not working at a disadvantage to our competitors internationally.

As we have mentioned in previous appearances before this committee, our most important industrial policy issue has been the duties paid on imported raw materials. I am happy today to support the passage of Bill C-9, because it contains the elimination of these duties.

Last year, the Department of Finance initiated a consultation on input tariffs, including textile tariffs. The Canada Gazette notice on September 19, 2009 set out the government's intention to eliminate duties on imported raw materials. From our perspective, it is a balanced approach, as it applies to the apparel and textile sectors. Fabric mills will benefit from the removal of duties on their inputs, namely yarns and unfinished fabric. Apparel producers will benefit from the removal of duties on inputs they use to manufacture, primarily finished fabrics.

In the current economic climate, this is the most effective policy at the government's disposal to lower the costs of domestic manufacturing. It eliminates an unnecessary financial burden on domestic manufacturers, namely the 14% duty on raw materials.

Our members have made dozens of individual submissions to the Department of Finance requesting tariff relief on literally hundreds of different tariff lines.

I have provided the clerk of the committee with a summary of our association's submission. The bottom line is that we strongly support the passage of Bill C-9. We also support the red tape reduction initiatives contained in the budget.

We also believe that the government should establish a mechanism to review various proposals that came up in this process relating to other tariff relief measures, such as outward processing. These should be reviewed on a sector-specific basis.

I thank you for your time, and I'd be happy to answer any questions.

[Louis Beauséjour, Director General, Employment Insurance Policy, Skills and Employment Branch, Department of Human Resources and Skills Development]

It should be noted that the budget officer’s office conducted its analysis before the new provisions in Bill C-9, An Act to implement certain provisions of the budget tabled in Parliament on March 4, 2010 and other measures, was introduced and that changes were made to the mechanisms for handling deficits and the employment insurance account.

First of all, one of the provisions was deleted. There were no more advances. The advance mechanism in the employment insurance account, whereby interest could have been added, no longer exists. It is a mechanism that no longer exists, and, consequently, there cannot be any interest added to the deficit.

[The Chair, Conservative, James Rajotte]

I call the meeting to order, this 17th meeting of the Standing Committee on Finance, as we continue our study of Bill C-9, an act to implement certain provisions of the budget tabled in Parliament on March 4, 2010.

Colleagues, we are on part 24 of the overview, with officials. We hope to have about a 30-minute discussion with officials on part 24, and then move to the witnesses who are invited for today. That will depend on the number of questions we have from colleagues.

This part 24 deals with amendments to 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.

We'll proceed as we have on other parts, with questions from members for five-minute rounds. We'll start with Mr. McKay.