Bill C-13 (Historical)

Keeping Canada's Economy and Jobs Growing Act

An Act to implement certain provisions of the 2011 budget as updated on June 6, 2011 and other measures

Part 1 of this enactment implements income tax measures and related measures proposed in the 2011 budget. Most notably, it
(a) introduces the family caregiver tax credit for caregivers of infirm dependent relatives;
(b) introduces the children’s arts tax credit of up to $500 per child of eligible fees associated with children’s artistic, cultural, recreational and developmental activities;
(c) introduces a volunteer firefighters tax credit to allow eligible volunteer firefighters to claim a 15% non-refundable tax credit based on an amount of $3,000;
(d) eliminates the rule that limits the number of claimants for the child tax credit to one per domestic establishment;
(e) removes the $10,000 limit on eligible expenses that can be claimed under the medical expense tax credit in respect of a dependent relative;
(f) increases the advance payment threshold for the Canada child tax benefit to $20 per month and for the GST/HST credit to $50 per quarter;
(g) aligns the notification requirements related to marital status changes for an individual who receives the Canada child tax benefit with the notification requirements for the GST/HST credit;
(h) reduces the minimum course-duration requirements for the tuition, education and textbook tax credits, and for educational assistance payments from registered education savings plans, that apply to students enrolled at foreign universities;
(i) allows the tuition tax credit to be claimed for eligible occupational, trade and professional examination fees;
(j) allows the reallocation of assets in registered education savings plans for siblings without incurring tax penalties;
(k) extends to the end of 2013 the temporary accelerated capital cost allowance treatment for investment in machinery and equipment in the manufacturing and processing sector;
(l) expands eligibility for the accelerated capital cost allowance for clean energy generation and conservation equipment;
(m) extends eligibility for the mineral exploration tax credit by one year to flow-through share agreements entered into before March 31, 2012;
(n) expands the eligibility rules for qualifying environmental trusts;
(o) amends the deduction rates for intangible capital costs in the oil sands sector;
(p) aligns the tax treatment to investments made under the Agri-Québec program with that of investments under AgriInvest;
(q) introduces rules to strengthen the tax regime for charitable donations;
(r) introduces anti-avoidance rules for registered retirement savings plans and registered retirement income funds;
(s) introduces rules to limit tax deferral opportunities for individual pension plans;
(t) introduces rules to limit tax deferral opportunities for corporations with significant interests in partnerships;
(u) extends the tax on split income to capital gains realized by a minor child; and
(v) extends the dividend stop-loss rules to dividends deemed to be received on the redemption of shares held by certain corporations.
Part 1 also implements other selected income tax measures and related measures. Most of these measures were referred to in the 2011 budget as previously announced measures. Most notably, it
(a) accommodates an increase in the annual contribution limit to the Saskatchewan Pension Plan and aligns its tax treatment with that of other tax-assisted retirement vehicles;
(b) clarifies that the “financially dependent” test applies for the purposes of provisions that permit rollovers of the assets of a deceased taxpayer’s registered retirement savings plan or registered retirement income fund to an infirm child or grandchild’s registered disability savings plan;
(c) ensures that the alternative minimum tax does not apply in respect of securities that are subject to the election under section 180.01 of the Income Tax Act;
(d) clarifies the rules applicable to the scholarship exemption for post-secondary scholarships, fellowships and bursaries; and
(e) amends the pension-to-registered retirement savings plan transfer limits in situations where the accrued pension amount was reduced due to the insolvency of the employer and underfunding of the employer’s registered pension plan.
Part 2 amends the Softwood Lumber Products Export Charge Act, 2006 to implement the softwood lumber ruling rendered by the London Court of International Arbitration on January 21, 2011.
Part 3 amends the Customs Tariff in order to simplify it and reduce the customs processing burden for Canadians by consolidating similar tariff items that have the same tariff rates and removing end-use provisions where appropriate. The amendments also simplify the structure of some provisions and remove obsolete provisions.
Part 4 amends the Customs Tariff to introduce new tariff items to facilitate the processing of low value non-commercial imports arriving by post or by courier.
Part 5 amends the Canada Education Savings Act to make the additional amount of a Canada Education Savings grant that is available under subsection 5(4) of that Act available to more than one of the beneficiary’s parents, if they share custody of the beneficiary, they are eligible individuals as defined in section 122.6 of the Income Tax Act and the beneficiary is a qualified dependant of each of them.
Part 6 amends the Children’s Special Allowances Act and a regulation made under that Act respecting payments relating to children under care.
Part 7 amends the Canada Student Financial Assistance Act to provide that the maximum aggregate amount of outstanding student loans is to be determined by regulation, to remove the power of the Minister of Human Resources and Skills Development to deny certificates of eligibility, and to change the limitation period for the Minister to take administrative measures. It also authorizes the Minister to forgive portions of family physicians’, nurses’ and nurse practitioners’ student loans if they begin to work in under-served rural or remote communities.
Part 7 also amends the Canada Student Loans Act to authorize the Minister to forgive portions of family physicians’, nurses’ and nurse practitioners’ guaranteed student loans if they begin to work in under-served rural or remote communities.
Part 8 amends Part IV of the Employment Insurance Act to provide a temporary measure to refund a portion of employer premiums for small business. An employer whose premiums were $10,000 or less in 2010 will be refunded the increase in 2011 premiums over those paid in 2010, to a maximum of $1,000.
Part 9 provides for payments to be made to provinces, territories, municipalities, First Nations and other entities for municipal infrastructure improvements.
Part 10 amends the Canadian Securities Regulation Regime Transition Office Act so that funding for the Canadian Securities Regulation Regime Transition Office may be fixed through an appropriation Act.
Part 11 amends the Wage Earner Protection Program Act to extend in certain circumstances the period during which wages earned by individuals but not paid to them by their employers who are bankrupt or subject to receivership may be the subject of a payment under that Act.
Part 12 amends the Canadian Human Rights Act to repeal certain provisions that provide for mandatory retirement. It also amends the Canada Labour Code to repeal a provision that denies employees the right to severance pay for involuntary termination if they are entitled to a pension. Finally, it amends the Conflict of Interest Act.
Part 13 amends the Judges Act to permit the appointment of two additional judges to the Nunavut Court of Justice.
Part 14 provides for the retroactive coming into force of section 9 of the Nordion and Theratronics Divestiture Authorization Act in order to ensure the validity of pension regulations made under that section.
Part 15 amends the Canada Pension Plan to include amounts received by an employee under an employer-funded disability plan in contributory salary and wages.
Part 16 amends the Jobs and Economic Growth Act to replace the reference to the Treasury Board Secretariat with a reference to the Chief Human Resources Officer in subsections 10(4) and 38.1(1) of the Public Servants Disclosure Protection Act.
Part 17 amends the Department of Veterans Affairs Act to include a definition of dependant and to provide express regulation-making authority for the provision of certain benefits in non-institutional locations.
Part 18 amends the Canada Elections Act to phase out quarterly allowances to registered parties.
Part 19 amends the Special Retirement Arrangements Act to permit the reservation of pension contributions from any benefit that is or becomes payable to a person. It also deems certain provisions of An Act to amend certain Acts in relation to pensions and to enact the Special Retirement Arrangements Act and the Pension Benefits Division Act to have come into force on December 14 or 15, 1994, as the case may be.
Part 20 amends the Motor Vehicle Safety Act to allow residents of Canada to temporarily import a rental vehicle from the United States for up to 30 days, or for any other prescribed period, for non-commercial use. It also authorizes the Governor in Council to make regulations respecting imported rental vehicles, as well as their importation into and removal from Canada, and makes other changes to the Act.
Part 21 amends the Federal-Provincial Fiscal Arrangements Act to clarify the legislative framework pertaining to payments under tax agreements entered into with provinces under Part III.1 of that Act.
Part 22 amends the Department of Human Resources and Skills Development Act to change the residency requirements of certain commissioners.

Keeping Canada's Economy and Jobs Growing Act

[Joe Preston, Conservative, Elgin—Middlesex—London, ON]

Mr. Speaker, I congratulate the Parliamentary Secretary for Status of Women and my colleague from the city of London on an excellent speech pointing out the good things about London and how it got there.

We continue to hear from the other side about what a rotten place we seem to live. I was reminded by a piece of fan mail from someone, not even from my riding, after my speech saying, “Good! Tell them, Joe. Tell them that we live in the best country on the face of this earth”.

I would like to ask the parliamentary secretary why she thinks that happens in this place.

[Susan Truppe, Conservative, London North Centre, ON]

Mr. Speaker, I thank my colleague from London, Joe Preston from Elgin—Middlesex—London--

[The Acting Speaker, Conservative, Bruce Stanton]

Order, please. We know the sentiment is there but members are just reminded not to mention hon. members by their names but rather their riding names.

[Susan Truppe, Conservative, London North Centre, ON]

Mr. Speaker, the facts show that there are positive signs for Canada's economy. We are not immune to the problems facing the global economy, problems chiefly caused by out of control debt and reckless spending.

While our government has a plan to create jobs and grow Canada's economy through low taxes, training and increased trade, the NDP's medicine for Canada's economy is the same reckless spending and out of control debt that has affected the global economy.

[Ted Hsu, Liberal, Kingston and the Islands, ON]

Mr. Speaker, the remarks by my hon. colleague across the floor would lead me to begin my speech a bit differently because his remarks reminded me why I am here. I am here because I live in the best country in the world, a country that is worth serving, a country in which it is worth perfecting legislation as best we can and a country where it is worth looking at the details of the legislation and answering detailed questions on that legislation. That is what living in the best country in the world means.

I will begin by first acknowledging my family, my wife, Tara, and my daughters, Ella-Valentine and Vera-Claire. I work here in Ottawa but my life is back home in Kingston and the Islands. I want to acknowledge them here today. This is actually the first time I have stood to give a formal speech and I wanted them to know they are the centre of my life, even though my work is here in Ottawa and at my constituency office in Kingston and the Islands.

When I think about my family, this bill reminds me of filing income tax. It is a privilege and honour to stand here and realize that the things we are talking about in the chamber today are the things that will be on everyone's income tax return next year. It is amazing. It makes me think about why the income tax form is the way it is and what we decide in this chamber will determine what our income tax forms will look like next year.

That brings me to one of the main problems with the budget. As my colleague from Westmount—Ville-Marie mentioned, a lot of the good ideas for tax credits would only be available to people who have extra taxable income left at the end of their tax form in order to claim the non-refundable tax credits.

The government members have not been able to answer the question posed several times, once in question period and on several other occasions by my hon. colleague from Westmount—Ville-Marie. It would not cost a lot more to make the tax credits refundable so that they are available to people who do not have the incomes to afford these credits.

I think we will all be looking at the economy over the next year or two. This country is like a ship on the ocean and we see some storms on the horizon. The other side of the House is now in charge of the ship. The captain is on the other side of the House. He has responsibility for taking care of all the people on the ship. His officers are telling him that there is a storm on the horizon and that it is his duty to protect all of the people on the ship. Some of the people are on the deck, the ship is starting to sway and they are holding onto the rails. Others are sitting comfortably in their cabins. The captain should be thinking about the people on the margins. When it comes time to protect Canadians from the perilous economic situation, from the storms that we see on the horizon, in Europe especially, we should be giving preference to the poor and their situation and try to figure out how to protect them first because they will be the first people to feel the brunt of this economic storm.

I do not know if the government realizes this, but I remember that in 2008, when the markets first started collapsing and it was clear to many people that the global economy was in trouble, the government took a bit of time to recognize that danger.

Therefore, it would be a good idea for the government to reconsider that part of the budget, to make these tax credits refundable in order to protect the most vulnerable members of our society, the ones who are clinging to the rails on the deck of the ship as it is swaying back and forth as the storm brews. The captain has a duty to protect all of the people on the ship.

One example of that which really strikes me, and it does not make sense at all, is the family caregiver tax credit. A lot of us have heard of situations where people have to quit their jobs to take care of loved ones at home who are seriously ill, so their incomes go down. It is very easy to imagine that in this situation they would not have sufficient income to have taxable income left at the end of their tax forms to be able to claim the family caregiver tax credit. It would have been a much better idea to have extended the employment insurance program to provide for longer benefits in the case where someone had to take an extended time off to take care of a seriously ill family member.

The next thing I would like to do is to think about numbers. I would like to talk about the hiring credit for small business and the scheduled increase in employment insurance payroll taxes. If we look at the numbers, for most small businesses, the EI payroll tax increase will swamp the hiring tax credit for small businesses. This does not make sense, especially when we know there is another tax cut coming for larger corporations at the beginning of next year. It strikes me that there is not a very coherent strategy here.

I know what is going to come from the other side. The Conservatives are going to talk about the announcement by Stats Canada of the 61,000 jobs that were created in September. I know about that, so they can save their time. They do not need to mention it in the next question. We have to think about a coherent strategy.

While I am on this, I will just take the opportunity to mention something that is a little different, but it is a concern that has been brought up by constituents in my riding and it is very appropriate to mention it at this time.

In the past, Canada has had quite a good program for funding capital costs of research and development. There is something called the Canada Foundation for Innovation. It has been quite good at funding big projects and little projects and new researchers going to universities, giving them the money to buy the equipment they need to start up their laboratories, to start up a research group and to have the equipment they need to be world-leading researchers. However, it turns out, as a good rule of thumb, that for every dollar that is spent on capital improvements about 10¢ a year is needed to utilize and maintain that equipment.

For example, for a university researcher that would mean funding for graduate students, for post-docs and for technicians to maintain and run the equipment. Big projects have had there problems recognized, but for small scale research and development, the funding streams from the granting councils, such as NSERC, for operational funds, which is needed to really take full advantage of all the capital expenditures, has not kept up with the great funding for infrastructure and capital expenditures. Therefore, I would request that the government consider, perhaps in the committee stage, adjusting the funding so the money set aside for our granting councils, and other councils that can give operating funds, be unrestricted funding to be consistent with the great level of funding that we have for capital expenditures in small scale research and development.

I will end with that. I have not spoken about the whole budget bill, nobody can, but these are some areas that I think are important.

[Lois Brown, Conservative, Parliamentary Secretary to the Minister of International Cooperation]

Mr. Speaker, for the record, so we are sure we have heard the number, more than 650,000 net new jobs have been created by this government and our economic action plan.

My hon. colleague from Kingston and the Islands is already talking about his next year's income tax form, so I am sure he is concerned with what that is going to look like.

As the Minister of Human Resources and Skills Development said this morning, we have taken nearly a million people off the income tax rolls already. We did that because we wanted to assist the people who were the most vulnerable in our society, to ensure that they had their own money in their pockets to spend. We have lowered the GST by 2%, which is a tax credit for everyone when they go shopping for consumerable items.

Since the hon. member is looking at his own income tax, how much more income tax is he willing to pay so we can help more people?

[Ted Hsu, Liberal, Kingston and the Islands, ON]

Mr. Speaker, let me answer the question in this way. Sometimes people ask me why I am a Liberal. The simplest answer I can give is I have been pretty successful in life. Fifty per cent of that is hard work and some of that hard work is other people's hard work. The other 50% is luck. A lot of that 50% of luck is having grown up in Canada.

As a Liberal, I feel it is very appropriate for me, as part of a society that has given so much to me, to work, to give back and to ensure that everybody in this society has equal opportunity. That is how I would answer that question. I am willing to pay taxes to ensure this is the best country in the world.

[Jasbir Sandhu, NDP, Surrey North, BC]

Mr. Speaker, we know the record of the Conservatives. They have had the largest deficit ever recorded in our history. That is their financial record.

I want to ask my colleague a question. We know there is nothing in this budget for small businesses. We have big corporate tax cuts, yet the engine that drives this economy are the small businesses.

Now the government will be adding a new payroll tax on small businesses, on workers, starting in January. That is called a tax.

There were $54 billion in the EI fund. Where did that money go?

[Ted Hsu, Liberal, Kingston and the Islands, ON]

Mr. Speaker, that is a good question. I have to confess, because I do not want to say anything that is not true in the House, that I do not have an answer to the question. I would be very happy to answer it at another time.

[Michael Chong, Conservative, Wellington—Halton Hills, ON]

Mr. Speaker, I would be happy to answer the question on behalf of the member opposite. The fact is that money went into the consolidated revenue fund, which the then Liberal government used to fund programs and balance its budget.

Our government has introduced rules to ensure that premiums paid into the Canada pension plan eventually go into a separate fund and that there is an independent arm's-length oversight of that pension plan—sorry of the employment insurance fund to ensure that the premiums match the payouts. That is what we have done to ensure this situation never happens again.

[Ted Hsu, Liberal, Kingston and the Islands, ON]

Mr. Speaker, I thought I heard “Canada pension plan”. I wonder if the hon. member meant to say employment insurance.

[John Duncan, Conservative, Vancouver Island North, BC]

He corrected himself.

[Paul Calandra, Conservative, Oak Ridges—Markham, ON]

Liberals just do not listen.

[Ted Hsu, Liberal, Kingston and the Islands, ON]

Mr. Speaker, I did listen.

I am not an expert on the expected payouts that will come from the employment insurance program. I do not have anything intelligent to add to the comment from across the floor.

[Pierre Poilievre, Conservative, Parliamentary Secretary to the Minister of Transport]

Mr. Speaker, as I begin, I note that the previous speaker from the Liberal side stated that he was happy to continue to pay taxes in order to live in the best country in the world. He provoked enthusiastic applause from his opposition colleagues, which indicates to Canadians that those members on the other side believe that what makes our country the best in the world is taxes.

We understand that it is not taxation, but the hard work of workers, small businesses, entrepreneurs and the Canadian people who make us the best country in the world.

Those members have illustrated the clear difference between the two sides of the House of Commons. I dedicate part of this speech to those on the other side who believe, for example, that the solution to the debt crisis in Europe is to have more debt in Canada, who think we can create jobs by taxing those who hire and who say that the individual cannot be trusted with his own money, but a collection of individuals can be trusted with the money of others.

Those people on the other side say that the individual is too flawed to make his or her own decisions, but that those same flawed individuals, when they combine their flaws in the collective, can make decisions for everyone else.

We on this side understand that it is the basic tenets of freedom, as laid out, for example, in the Bill of Rights of the Right Hon. Prime Minister Diefenbaker. Those freedoms are what make Canada great: freedom of speech; freedom of religion; freedom of association; and also freedom of enterprise and freedom of trade.

On the subject of trade, I will just share a bit of an excerpt from one of the finest economists of the last century, Milton Friedman. He says:

Look at this...pencil, there is not a single person in the world who could make this pencil. Remarkable statement? Not at all. The wood from which it's made, for all I know, comes from a tree that was cut down in the State of Washington. To cut down that tree, it took a saw. To make the saw, it took steel. To make the steel, it took iron ore.

This black center, we call it lead but it's really compressed graphite, I am not sure where it comes from but I think it comes from some mines in South America. This red top up here, the eraser, a bit of rubber, probably comes from Malaya, where the rubber tree isn't even native. It was imported from South America by some businessman with the help of the British government. This brass feral - I haven't the slightest idea where it came from or the yellow paint or the paint that made the black lines - or the glue that holds it together.

Literally thousands of people cooperated to make this pencil. People who don't speak the same language; who practice different religions; who might hate one another if they ever met. When you go down to the store and buy this pencil, you are, in effect, trading a few minutes of your time for a few seconds of the time of all of those thousands of people. What brought them together and induced them to cooperate to make this pencil? There was no Commissar sending out orders from some central office. It was the magic of the price system - the impersonal operation of prices that brought them together and got them to cooperate to make this pencil so that you could have it for a trifling sum.

That is why the operation of the free market is so essential. Not only to promote productive efficiency, but even more, to foster harmony and peace among the peoples of the world.

That is where we disagree with our opposition colleagues, who believe that they can control the economy from the centre. They can issue dictates out to people far and wide, tell them how to run their lives and how to run their family budgets.

Our government on this side has expanded on that international enterprise by bringing in free trade agreements with Panama, Jordan, Colombia, Peru, Iceland, Liechtenstein, Norway, Switzerland. We are working a trade agreement with the largest market in the world, the European Union. The second most populous country on earth, India. This will allow us to expand the prosperity, creating new markets for our businesses and new products available to our consumers at lower prices, all of these measures opposed by our official opposition, which would build a wall around Canada's system of enterprise.

This is an opposition that speaks often about the pensions of, for example, unionized workers. I give it credit because we should all be concerned with that subject. Defined benefit pension plans are under pressure. What to do? Some say to scale back the entitlements and others say to increase the employer contribution. Neither of these options are very favourable, but there is a third option, and that is to lower business taxes. Virtually every defined benefit plan in the country owns shares in the country's largest and most profitable enterprises. If these businesses make good after tax money, they can pay better dividends to the pension funds that own their shares.

Take the Canada Post pension plan for postal workers. During the recent debate over their strike, members of the NDP simultaneously demanded that the existing pension plan be bolstered while proposing to increase business taxes on the holdings in that very same pension fund. The irony of the two demands is as follows. The top five holdings of the Canada Post pension plan are: the Toronto-Dominion Bank, Royal Bank of Canada, Bank of Nova Scotia, Suncor and Canadian natural resources. They are banks and oil companies, the twin villains in every left-wing storyline.

These are the same enterprises that pay dividends directly to the unionized workers who deliver our mail through Canada Post. These dividends come from after tax profits. If the business tax rises, the after tax profit remaining in the pension fund drops. The Canada Post fund has $202 million invested in the Toronto-Dominion Bank, roughly. As of a couple of weeks ago when I checked, that was the market value of those holdings. When TD profits, it reinvests the money in the growth of the company or it pays dividends to the shareholders. Either way, the pension funds and the pensioners, therefore, benefit.

When we lower taxes for entrepreneurs and businesses, large and small, the beneficiaries in many instances are pensioners, people who are part of defined benefit plans. Businesses are comprised of people. That is something the official opposition refuses to acknowledge. They are employees, shareholders and consumers.

When the NDP proposes to raise taxes on those businesses, it must choose on whom it would raise those taxes, the shareholders, like pensioners, the consumers through higher prices, or the workers through cut wages or lost jobs, because one of those three consequences or a combination of them will surely result when taxes are increased on the nation's enterprises.

The reason why Forbes magazine recently said Canada is the best place to do business is because we are removing the obstacles to success in overregulation and overtaxation, so that enterprises can hire and create more opportunity for Canadians.

The old utopian dream was for workers to become owners of the means of production through a process of forced collectivization. In an ironic twist of fate, it was the capitalistic stock market and not the state that transformed workers into business owners. It was inventions like the RRSP and now the tax free savings account or defined benefit pension plans which hold equities that have allowed everyday blue collar workers, who only a half century ago would have never considered share ownership to even be a distant dream, to now become owners of businesses.

The workers are the owners because in this system of free enterprise that has made our country so strong and made us succeed so vastly, even in this difficult economic time, we have unleashed the ability of workers to achieve the maximum opportunity for themselves and their families, to lift themselves up and succeed in this country.

In order for us to hold these beliefs and realize these successes, we must continue to have faith in Canadians who work hard every day to provide for their families, to share the blessings of this land with their neighbours and loved ones, and to do so without the shackles of the government holding them down and blocking their success.

I am very proud that the people of Nepean—Carleton elected me to carry on this great Canadian tradition of free enterprise and free trade.