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.

[Katherine Moynihan]

Canada Post has recently estimated that the revenue risk is between $40 million and $80 million on a revenue base of $7.3 billion. These companies have been in operation in Canada for over 20 years. The provision in Bill C-9, as in the previous Bill C-14 and Bill C-44, does not change Canada Post's powers or its mandate, which is to offer a universal postal service in a financially self-sustaining manner. We don't expect a significant impact.

[Katherine Moynihan]

We don't expect a large impact on Canada Post. As I said, the government has made its expectations clear in the Canadian postal service charter. Canada Post has already started annual reporting on those service commitments. Canada Post recently said that the revenue risk was in the neighbourhood of $40 million to $80 million, on a revenue base of $7.3 billion, so 0.5% to 1% of its revenues, and that's the risk. However, these companies have been operating for 20 years. Canada Post has been competing with them and will continue to compete with them if Bill C-9 is passed with this provision.

[The Chair, Conservative, James Rajotte]

I call to order the 15th meeting of the Standing Committee on Finance.

Colleagues, we are continuing with our study of Bill C-9, An Act to implement certain provisions of the budget tabled in Parliament on March 4, 2010, and other measures.

We are continuing our discussions with officials from various departments as we go through the various parts of this bill. We want to thank the officials for being with us here today. We hope to finish it this week sometime, but we'll see how things go today, as Mr. Pacetti says.

Colleagues, we'll go back to the five-minute rounds, and if you do have any questions, please indicate to the clerk.

We are on part 15, Canada Post Corporation, the amendment to the Canada Post Corporation Act.

Are there any questions?

Mr. McKay and then Monsieur Paillé.

Criminal Code

[Larry Bagnell, Liberal, Yukon, YT]

Mr. Speaker, I am delighted to speak to Bill C-16.

First, I was proud to be part of the justice committee when we limited Bill C-9. We took out minor offences, where people should not always be incarcerated because it would make society less safe. There were some ridiculous provisions in that bill. The opposition made it far more sensible.

As the members have heard all afternoon, I have asked simple questions about the bill. A bill is usually brought in when there is a big outrage and a problem. I have asked every member of the government to give me examples of how it is not working and why we need to make this change. There was no answer from the parliamentary secretary, or the minister or any member who has spoken,

A member from the Bloc has already said that there are hundreds and thousands of examples of conditional sentencing having worked for some of the minor offences in the bill. No one is arguing that in some of the serious offences it should not be allowed. However, for some of the minor offences, would it be possible to do that? There is no answer and no example.

The second question I have asked is if conditional sentences have been proven by the stats to be far more successful in reducing recidivism, when people get out, they do not commit other crimes, when it makes victims and other Canadians much safer, why would we change that? Why would we limit it in the less serious examples?

A member mentioned earlier that these conditional sentences were not done just off the cuff. Average research shows 11 to 13 reasons for the case from a judge, a judge who has a lifetime of experience in the criminal justice system, who understands the situation, who understands what will work and what will make Canadians safer. Only then do they oppose those sentences.

Why can the Conservatives not come up with examples? Perhaps it is because judges who have this lifetime experience do not give out conditional sentences. In a lot of cases, they make wise decisions and do not give them in serious situations, which would be covered in this bill. Just because the bill would prohibit them from giving out conditional sentences does not mean that they give them out now.

For a lot of the serious crimes, judges would never give out conditional sentences. This is one of the reasons why people are having such a hard time coming up with as many examples as there are for success stories.

I would encourage people to attend the restorative justice organization of the city of Ottawa to hear the success stories, or to read Professor Doob's book. I would challenge any Conservative member who does not believe in conditional sentencing to do that and then come back and say that he or she does not believe in them. There have been huge benefits to society, huge protection of Canadians and victims, in some of the cases where conditional sentences have been applied.

The members have brought forward a lack of understanding. In some of the Conservative speeches, it is very true. There is a lack of understanding of how it works. One Conservative member suggested that the people on conditional sentences just watched TV. In jail they get to watch a lot of TV as well. That is not all that is involved in a conditional sentence. This is not the only reason it turns out to be successful.

There are a number of other conditions of rehabilitation, conditions that cannot be provided on probation, that help. They could be tougher on the criminal and certainly would give him or her a much better chance of not recommitting an offence. It makes society much safer for the victims so they are not re-victimized. It makes it much safer for Canadians if criminals do not reoffend.

The vast majority of offenders get out. When they get out, we need a way to ensure they are unlikely to reoffend, which will keep all of us safe. They need the investment in rehabilitation.

When I go into the prisons, prisoners say that they are not getting the anger management they need. They are not getting the drug rehabilitation programs they need. They are not given the re-education they need to get out and to be successful in society, which would keep everyone much safer.

As some members alluded to at the beginning of this debate, we need to invest in the root causes of crime and the prevention of crime. Some of the minor crimes, as people have mentioned, are committed under bad circumstances or the individual came from a bad family situation. The person should not be put in jail as a result. Learning the background and finding out the cause of those crimes could stop the situation before it came to any kind of sentence.

The government could continue to invest in the aboriginal justice strategy. To the government's credit, it has extended the funding for a couple of years, but we wanted it to be made permanent. Under that system people working in restorative justice counsel individuals and they have a tremendous success rate in reducing recidivism and, in a number of cases, have eliminated it. It is almost like not approving funding for judges every two years. This strategy should be made permanent. The government could certainly continue investing in it.

I want to talk a bit about the policy process or the way the government comes up with the laws that I have seen when I was on the justice committee. Bill C-9 was just one of them.

When we had hearings in Toronto we were told by the public that the system had been turned upside down. The normal policy development process involves experts. In this case it involved experts from the justice department, people who have spent a good part of their lives finding out how to make Canadians safer by bringing in effective laws.

In this particular case, we were told that the direction came from the top. It avoided all the evidence and the science. It was not evidence-based legislation. The experts told us what would actually reduce crime and make people safer. However, for whatever reason, the government brought in totally ineffective laws that would endanger Canadians even more. Witness after witness, the experts at committee, made the same case. That is why some of these laws, like Bill C-9, were overturned, eliminated or put into a more reasonable and rational shape.

We would like this bill to go to committee in order to limit the situation to those cases where a conditional sentence would actually make sense. We have heard some examples today of some cases that should be in the bill and some that should not but that type of debate will be had at committee.

Hopefully at committee the government members, who will have had another couple of years of experience, will now listen more carefully to the experts, listen to what is working and what is not and we can come to a compromise and come up with a bill that will make Canadians safer by using the effective restorative justice processes, new processes compared to the thousands of years of failure by incarceration resulting in a number of people becoming worse off after jail and making society less safe.

One of the points made by the opposition, which the experts have proven to be another fallacy, is that this change would act as a deterrent. This is not what most criminals are thinking about. Making a change like this would not be a deterrent. Evidence has proven that deterrence is the perception of getting caught. If we want to have deterrents for these crimes then we would increase our police force, increase monitoring and increase the understanding that criminals will get caught. It is not by changing sentences in the ways being suggested in this legislation.

Judges need to make the right decisions but by limiting their options there will be more probation and suspended sentences, which actually will make society a more dangerous place. In those circumstances, one cannot add the same conditions. As I said earlier, conditional sentences have a number of conditions that can be put on offenders to ensure they do not reoffend, that they are not just sitting in cells learning more crime but actually being rehabilitated. That would not occur in some cases where judges' options are limited. They would not be able to do that.

People are unaware, which is partly the problem for all of us. There are some success stories and stories of difficult conditions imposed in conditional sentences. There are success stories of restorative justice here in Ottawa. From the society in Ottawa all the way to my riding, the farthest riding in the country, there are great success stories in restorative justice. We need to ensure that when we create a bill like this, we do not throw out the baby with the bathwater, that we do not throw out the good success stories in an attempt to limit certain situations, which, as I said, we all agree need to be limited as to when certain types of sentences can be provided.

If we want judges to have the best chance of making society safer, they need as many tools available to them as possible. They are the ones who listen to the evidence, understand the situations people come from, understand the circumstances of the crime and understand what caused it. They are the ones who understand, with a lifetime of experience in the criminal justice system, what would be most successful when dealing with a particular person, a particular offence and to make it safer for all of us. To do that, they need the tools. Why would we as parliamentarians want to limit the number of tools available to them to make the wisest decisions? In some cases, they will use this tool and another tool. Why would we want to limit the tools so there are less successful outcomes in the criminal justice system?

[Larry Bagnell, Liberal, Yukon, YT]

Mr. Speaker, with the member's vast experience, could he comment on the justice policy, programs and bills put forward by the Conservatives in the sense of whether they are evidence-based? He mentioned one particular professor who was totally against Bill C-9 as an example. When I sat on justice committee, my perspective, time and time again, was that what was presented was totally not evidence-based.

Does the member have any comments on that?

Sébastien's Law (Protecting the Public from Violent Young Offenders)

[Derek Lee, Liberal, Scarborough—Rouge River, ON]

Mr. Speaker, most of us have difficulty with omnibus bills sometimes, because they do tend to have a lot of legislation buried in them. The thing about an omnibus bill is that there is a theme that brings all the pieces of proposed legislation together. In Bill C-9, the budget implementation bill, there is virtually no theme. With the potential sale of AECL and legislation about payment cards or credit cards, it is all over the map. There is no theme.

In terms of criminal law legislation, we have seen bills in the past here and in other jurisdictions that have a themed Criminal Code amendment, and I was referring to those.

My colleague makes a good point that, when we are dealing with youth criminal justice, it is a very visible separate component of our criminal justice system. We keep it separate. That is why I styled my remarks around the theme of intervention as opposed to retribution, accountability, deterrence, these types of issues.

I recall visiting a youth boot camp in the Ontario jurisdiction. It was a very successful operation that dealt with youth. It was well run and disciplined. The young men there earned points to get the chance to go home on weekends on a supervised home visit.

I did bump into one young man and I asked him where he was going after he was out of there. It was a very sad comment because he said he did not have any family so it did not matter whether he earned any points to go home on the weekend. He said he would probably go back to the pool hall.

What a sad situation that the intervention that was there, which seemed to be having some benefit, was going to come to an end. The intervention would end and that young man would go back to a pool hall in Toronto. He was not going to go back to school. He did not seem to have any appetite for that. He was about 17 years old. I was quite saddened that the intervention that was there was going to come to an end and he was going to end up back at the same place that probably got him into trouble in the first place.

I go back to my theme of quality intervention. The better the quality, the better the outcome and the better it is for our society.

[Larry Bagnell, Liberal, Yukon, YT]

Mr. Speaker, if I interpreted the member's speech correctly, he said the government should have put this bill in with a bunch of other bills into an omnibus bill. I would definitely disagree with that. The government does that when it has a whole bunch of ineffective, poor bills it wants to pass all at once.

On the other hand, does this mean the member also thinks that Bill C-9 as an omnibus bill was a good idea? There were lots of things all in that one bill.

Sébastien's Law (protecting the public from violent young offenders)

[Derek Lee, Liberal, Scarborough—Rouge River, ON]

Mr. Speaker, we are debating another, another, amendment to the Youth Criminal Justice Act. I say that knowing that the act used to be referred to, at one point, as the Young Offenders Act. This is probably the fifth set of changes this Parliament has dealt with since the time when Parliament accepted that the old Juvenile Delinquents Act did not really suit where we were headed as a society.

It is quite fair to accept that, from time to time, it is necessary to fine-tune our legislation. That is essentially what we do here all the time for all of our laws and our public policy. Approximately five years ago, there was an inquiry in the province of Nova Scotia dealing with young offenders. That particular inquiry produced a very credible report that suggested that components of our Youth Criminal Justice Act were not up to par and that portions of it could use some minor amendments in the public interest.

Those areas dealt with the way we handled youth who, with 20/20 hindsight, were potentially violent and seriously violent offenders and were not really controllable by the kinds of routine orders and judicial intervention available under the act. I sat on the justice committee at the time and I recall pretty much around-the-table acceptance of those suggestions. Those suggestions for reform have now found their way into this bill.

In fairness, I should say that there have been a couple of other bills before Parliament that attempted to implement the same changes. We are finally getting around to it now. For those changes dealing with the really hard-to-handle procedural problems involving young offenders, I could not imagine there would be too much dissent.

Even the judge who led the inquiry in Nova Scotia said that these should be seen as minor amendments. There is no need to make a radical overhaul of the statute, but these amendments would suit the public interest in the sense that they would protect both the public and the young offender from potential serious harms in the period that follows the police intervention until the time when the youth is sentenced. That would be the interim period while the youth is being processed, while charges are being laid and during the trial.

I do not think he pointed out any problems with the act regarding the period after conviction and sentence. But he did request that these amendments look very clearly and honestly at the problem of youth who have adopted a potentially violent modus operandi and society needs protection from that.

In this particular bill, there is a whole lot more than just those recommended changes. Members should go to the title; this is not the first time I have spoken about this. On the front page, it says, “An Act to amend the Youth Criminal Justice Act”. There is nothing the matter with that, but then clause 1 says that this act may be cited as somebody’s law, protecting the public from violent young offenders.

That is a commercial. That is an Orwellian mantra. It is a distortion. It is an adulteration of what should be there in the first section. This is a bill that is there to make a minor but important amendment, not a very complex set of amendments, to the Youth Criminal Justice Act. I object to that type of title. When that kind of a title is in there, it actually ought to tell us something. The bill just might be torqued to do a little bit more than just a minor amendment to the Youth Criminal Justice Act. Anyway, we read through the bill and find it does attempt to make some significant changes.

I note that this is one of about half a dozen criminal law amendment bills, and I also ask the question: Why did the Conservatives not put all these criminal justice bills into one bill? We have done that lots of times before. We make several amendments to the Criminal Code, we put them in a bill, call it an omnibus Criminal Code amendment bill and the House deals with it. But no, the government has to do a separate bill for every category of change it can think of. That has to tell us something also.

So utterly telling is the contrast between this bill and the budget implementation bill, Bill C-9. Do members know how many bills that bill changes, how many statutes that bill amends? It seeks to amend 29 statutes in one bill, and yet when it came to making amendments to the Criminal Code, the government had to introduce a half dozen separate bills. I do not quite understand that. Maybe I am naive and maybe there is something going on here I do not see, but I will leave it to the voters to figure that one out.

When it comes to youth criminal justice, a term we should be dealing with is the concept of intervention. I have not heard that term a lot here, but it is so important, and in my view it is the most important concept. When a youth goes offside, breaks the law, and I am talking of a person who is between the low threshold and 17 years old, I prefer to regard our obligation as that of intervention. Now some Canadians would just like to treat that like a normal criminal act; we charge, we convict, we sentence, we deal with it. But we have learned in society that it is the absolute worst way to deal with young offenders. For a person in the sometimes turbulent, confused youth years, a lot of things happen.

I will admit that, when I was under 10 years old, I broke into a house, I as a little kid with some other kids. As great irony would have it, Mr. Speaker, you will not believe it, but the house I and the others broke into was the house of a Juvenile Delinquents Act judge. Is that not unbelievable? And I was the son of a policeman, to boot. At the time I really did not think I was breaking any laws. I actually did not know a lot about what I was doing. But the point is: What if they had taken all those youths who were all different ages and just put us all in jail? How would our lives have turned out? That would have been a bad story.

I refer colleagues to the Perry preschool project and the whole history of that project, which began about 1960 and went on for 25 years in the Chicago area. It measured outcomes between one group with which there was a huge intervention, in school and otherwise, and another group for which there was no intervention. The outcomes were like night and day. We have proven that intervention works and jailing does not. Even though it can be very expensive, the dollars we spend on intervention are infinitely better spent than any money we are going to have to spend later, after the fact, jailing and punishing. In addition, the youth who get through these turbulent years and make better choices rather than bad choices end up costing us zero and are productive citizens.

I am getting close to the end of my time for debate. I will pause here in the hope of being able to speak further at a later date.

[Thomas Mulcair, NDP, Outremont, QC]

Absolutely. As you allowed the day before yesterday, Mr. Chairman, you know as well as I do that Bill C-9 implements a number of provisions, including measures related to equalization. These clauses deal directly, as we have seen earlier, with the social transfer and with equalization payments in general.

And we had a question for the officials responsible for calculating equalization payments about a difference in the way the federal government treats provinces. In the case of Quebec, they say that they are not allowed to take into account the wall that exists between the different functions within Hydro-Québec. They say that Hydro-Québec should be considered as a whole, and he said that several times, because they find it too difficult. Mr. McGirr told us...

[Ted Menzies, Conservative, Macleod, AB]

On a point of order, Mr. Chair, we are not talking about Hydro-Québec or Ontario Hydro. We're here talking about Bill C-9. If the honourable member can point out those two items for me somewhere in this piece of legislation I will tolerate this, but he had an entire meeting to talk about what wasn't even in Bill C-9. I request that we move on.

[The Chair, Conservative, James Rajotte]

I call the 14th meeting of the Standing Committee on Finance to order. We're continuing our study of Bill C-9, an act to implement certain provisions of the budget tabled in Parliament on March 4, 2010, and other measures.

Colleagues, as you know, we are going through Bill C-9 part by part, and we were still on part 6 at our last meeting. In the interest of time, perhaps we can try to be as brief as possible in our questions. I'm going to recommend that we do rounds of five minutes maximum. If people still have questions beyond that, I'll perhaps put them at the bottom of the list.

We will try to get through this section and as many parts as we can today. We have two hours, until 5:30. Mr. McGirr is back with us again.

Thank you for coming back, Mr. McGirr.

Bankruptcy and Insolvency Act

[Mike Wallace, Conservative, Burlington, ON]

Madam Speaker, I am pleased to speak to the important issue raised in Bill C-501 put forward by my colleague, the hon. member for Thunder Bay—Rainy River, dealing with unfunded pension liabilities.

The bill is a sign of his and his party's concern about pensions and the income security of Canadians in or approaching retirement. This is a concern shared by the government as evidenced by the number of initiatives that we have undertaken in response to the concerns of many Canadians across the country.

We appear to be coming out of the recent economic downturn experienced by countries all around the world. In that regard, I am pleased to point to the April 7 OECD interim economic assessment report that noted that the Canadian economy grew 6.2% in the first quarter of this year compared to 1.9% overall growth estimated for the other G7 countries. Our economy will continue to expand in the second quarter at 4.5%, twice the G7 average.

I mention this because a healthy economy can only be good for the stability of companies, the pension funds they support and the employees who will benefit from them. However, I do not suggest that this is not a reason for concern for individuals and for their companies that have not weathered the economic storm well.

During the downturn, which has led to a number of employers filing under insolvency legislation, many people, especially senior citizens, were understandably concerned that their pensions would be affected. While Canada is showing signs of emerging from this downturn, the financial well-being of these older Canadians must not be taken for granted.

Although the government has undertaken a number of specific initiatives to deal with those heartfelt concerns, debate on this bill allows us an opportunity to stand back and see where we are when it comes to our pension and bankruptcy legislation. The best place to start is in understanding exactly what the current legislation covers.

Canada's insolvency regime relies mainly on two statutes: the Bankruptcy and Insolvency Act, often called the BIA, and the Companies Creditors Arrangement Act, or the CCAA. These two statutes set the rules for the process of bankruptcy or, in the alternative, companies restructuring. Both are important pieces of marketplace framework legislation. They influence Canada's economic health, so much so that we must take great care not to tinker with their provisions on a piecemeal basis.

In broad strokes, the following is how the legislation works.

In bankruptcy, a trustee in bankruptcy seizes the non-exempt assets of the bankrupt company and sells, liquidates and distributes the proceeds of the sale among the creditors according to the distribution scheme set out in the BIA.

In the alternative, a company may choose to restructure. In restructuring, the company becomes a debtor rather than bankrupt. Rather, it works with an insolvency professional to try to find a repayment scheme for its debts that will satisfy the debtor's creditors and allow the firm to continue perhaps in a different and restructured form.

Historically, creditors receive better recovery under restructuring than they would if the debtor simply became bankrupt. Furthermore, it is better for jobs, growth and opportunity as it allows for the quick redeployment of assets from insolvent businesses to new and profitable ventures in a controlled and orderly manner, which is essential in today's economy.

That brings me to today's debate. One of the objectives of the insolvency legislation is to balance the competing interests of creditors, including employees and pensioners, for the scarce resources available in insolvency files as there is not usually enough money to satisfy the full claims of all creditors.

Great care must be taken when amending insolvency legislation because if the proper balance is not achieved, it is possible that the cost and availability of credit for companies with defined benefit pension plans could be negatively affected. This could, in turn, reduce the ability of companies to create or continue to fund benefit pension plans for their employees.

We also should be mindful that while exploring the various ways to help pensioners of insolvent companies, we do not impose additional constraints on reorganizing firms that could interfere in the reorganization process and eventually push still viable businesses into bankruptcy. Evidence has shown that restructuring and reorganization, as opposed to bankruptcy, provide better recovery for creditors and help to save jobs, which ultimately protects employees' wages and pensions.

I leave it to my colleagues to go over in greater detail the factors of which we must be mindful in considering the implications of pension protection in insolvency for the interests of stakeholders and the economy as a whole.

In the Speech from the Throne, the government committed to explore ways to better protect workers when their employers go bankrupt, and it certainly understands the value of secure and sustainable pension plans.

In order to promote more secure private sector pensions in the federal sphere, in October 2009, the government announced a comprehensive reform plan for the federal private pension plan legislation and regulatory framework. Many of these significant pension reforms announced by the finance minister are to be implemented through Bill C-9, the jobs and economic growth bill.

The Minister of Finance has also announced consultations with Canadians to obtain their input on this important matter, as well as consultations with his provincial and territorial counterparts that are currently ongoing concerning retirement security. A review of policy options is scheduled for the finance ministers' meeting to be held in May 2010.

In considering this bill, we must be mindful of the larger issue of pension and retirement income security. We must consider as well the interaction of this bill with the initiatives that are currently ongoing to promote the security of pensions as an important component of the retirement income security system. The government is considering all of these factors in fulfilling its commitment to explore ways to better protect workers whose employers go bankrupt.

I have a final note on this issue. Based on our experience at committee, I want to be clear on the present structure of the BIA. In fact, there is a super-priority group of current employees of a company that is looking at bankruptcy. That money that is available goes to those wages that are earned but not paid and they are a super-priority.

The next level is the secure level of debtor, which, to be frank, is the banks, those that have security against the bankrupt company in terms of hard assets and so on. It is really the banking level that most people consider.

The third level at present is everybody else, which includes the pensioners but also includes the suppliers, bondholders and a number of other debt instruments that companies use to operate.

This bill, from my understanding, and I will need some clarification as we debate this bill further, would move the pensioners above the secure level into the super-priority area. That was what was indicated in the speech by the mover of the motion. I will check into that further. However, what the Nortel employees who came to see us at the finance committee said is that they do not want to be a super-priority. They do not believe they could qualify for the secure level but they would be interested in a preferred position, ahead of suppliers and ahead of bondholders.

Through the debate over the next number of weeks on this and if it makes it through to committee, those are the questions that, as a member of the finance committee, I will be asking the mover to ensure we have clarification on what this bill would do. We need to be very careful when making these changes to the Bankruptcy and Insolvency Act to ensure everyone is treated fairly through this process.

Pensions

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

Mr. Speaker, the only deceit here this morning comes from the opposition when it even suggests that it cares about seniors. Maybe it did in that half-day conference that was convened here in Ottawa to listen to seniors. Those who could not travel here, I guess the Liberals did not want to hear from them.

Last year we consulted with those involved in the federally regulated private pension plans. We found out what the problems were and we put in fixes for them. They are in Bill C-9 and we would encourage hon. members to actually read that they are in the budget and help us get them through for those people.

Bill C-9--Jobs and Economic Growth Act

[Ted Menzies, Conservative, Macleod, AB]

Mr. Speaker, I would be glad to let them continue but my focus here is to ensure that Bill C-9 passes because that is what Canadians have asked us to do.

The mining industry had asked us to continue the flow-through shares, and that is part of this bill.

The universal child care benefit is being changed so that single parents actually qualify for it. We heard that from Canadians as well.

Maybe the issue here is hidden. Maybe the member, along with other members of this House, are concerned that in this budget implementation act their wages will be frozen for three years. I think that is leadership and that is what we are showing.

The member for Outremont just talked about the devastation that happened with the changes in the Navigable Waters Protection Act in budget 2009. We did not hear much from those people who came to committee and were reassured that those changes in budget 2009 to the Navigable Waters Protection Act were nothing but improvements. They are happy. I am not sure where the hon. member for Outremont has been canoeing lately but he has not been impeded from canoeing anywhere because of those changes.

I think I have spoken long enough about my frustration with this frivolous motion. Therefore, I move:

That the debate be now adjourned.

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

Mr. Speaker, I have a question for my hon. colleague who sits on the finance committee with me and who, I am sure, will bring forward healthy debate when we do debate Bill C-9 at the finance committee, where it should be debated. We have offered to extend meetings. I hope he will stay past his supper hour and join us in those meetings, because we think it is very important, and I referred to that in my last question.

However, let me read a quote. This is supposed to be all about the environment. This is why the hon. member for Edmonton—Strathcona wants to split this bill. Let me read a quote from my good friend, Elizabeth May. This is going back some time.

So we were extremely hopeful with the 1993 red book, where there was a commitment that CEAA

—the Canadian Environmental Assessment Agency—

—would receive royal assent, but it would be with significant strengthening and the creation of an independent Canadian environmental assessment agency that would be more like the CRTC in its functions.

That is what is in Bill C-9. That is exactly what we are doing in Bill C-9, giving the minister more strength to ensure that environmental assessments are done, and done properly.