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

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, the bill is entitled “Keeping Canada's Economy and Jobs Growing Act”. However, to look at one of the underlying statistics that was brought to our attention earlier today by the finance critic of the Liberal Party, back in August 2008, there were 14,631,000 employed and today that has dropped significantly, virtually by half a million, to 14,106,000.

Does the member not recognize that the most important issue today is jobs and the need to create jobs? Does he believe that this budget would create the hundreds of thousands of jobs necessary to really make the difference and make up for that gap in jobs that have been lost since the government has been in office?

[Brent Rathgeber, Conservative, Edmonton—St. Albert, AB]

Mr. Speaker, I absolutely disagree with the premise of that question. As I said in my remarks, the government has created 600,000 jobs since the recession of 2008. Most are full-time and almost all are in the private sector. It is the government's economic policies that nurture a business environment and allows small, medium and large businesses to make the new hires. I am reticent to believe that the opposition party can criticize the government with respect to job creation when the facts are that the government's job creation is the envy of any of its industrial partners.

[LaVar Payne, Conservative, Medicine Hat, AB]

Mr. Speaker, I am happy to be asking my colleague from Edmonton—St. Albert a question. He talked about the political subsidy in his speech. In my riding I hear this all the time, “Get rid of that political subsidy, the $1.95 per vote”. I want to ask my colleague, has he heard the same kind of comment from his constituents?

[Brent Rathgeber, Conservative, Edmonton—St. Albert, AB]

Mr. Speaker, I heard it loud and clear. Certainly in Edmonton—St. Albert the constituents are adamant that the $1.95, soon to be $2.00, per vote subsidy which costs taxpayers $30 million on an annual basis ought to be eliminated, and thankfully it would be eliminated with Bill C-13.

Political parties, and all other voluntary organizations, ought to be able to raise their own money. Of course, there is assistance that will continue, including a 75% tax credit for donations up to a specified amount. When we are dealing with a generous tax credit system, there is no reason for a political subsidy of $2.00 per vote. Canadians should only have to pay for and support the political parties that they support.

[Sadia Groguhé, NDP, Saint-Lambert, QC]

Mr. Speaker, many of those who spoke before me talked to the House about poverty and about Canadians who are living in very difficult situations. More and more people are relying on food banks. That is a telling indicator. From coast to coast, Canadian families are having a harder time taking care of themselves and feeding, housing or clothing themselves. The cost of living is rising higher and higher for these families, and they cannot manage to make ends meet. They are finding it even more difficult to meet these basic, fundamental needs because of the current crisis, which is rocking the foundations of the world economy.

In Canada, the gap between the rich and the less fortunate is growing. The current crisis has a particular impact on the most vulnerable people in our society, such as single-parent families, seniors, welfare recipients and the unemployed. Even people who are employed are making use of food banks.

Canada 's economic and social situation is worrying. According to recent statistics, approximately 1.4 million Canadians are officially unemployed. That number is close to 2 million if we include those who have given up or are underemployed. The International Monetary Fund predicts that Canada's unemployment rate will rise this year to 7.6%. According to the projections of this financial institution, the unemployment rate will rise from 7.6% in 2011 to 7.7% in 2012 because our economy is growing more slowly than expected. This high unemployment rate is costing $20 billion a year in lost income, not to mention the losses in terms of economic stimulus and tax revenue.

No segment of the population is immune. Youth employment is considered to be a disaster. The youth unemployment rate reached 17.3% last summer, which is an increase from the previous year and from the pre-recession unemployment rate, which was under 14%.

As we all know, Canada's current economic situation requires measures that will help reduce unemployment, create jobs and support the economy.

On September 29, 2011, in his fiscal sustainability report for 2011, the Parliamentary Budget Officer stated that Canada's fiscal structure is not sustainable over the long term. Economists and other financial experts are constantly pointing out how fragile the current economic situation is.

In order to reduce unemployment and stimulate the economy, considering how fragile the current economic situation is, we need measures that will support the economy and create jobs. Bill C-13 is completely out of touch with the problems facing Canadians. Accordingly, the measures it calls for do not address the current economic imperatives or the problems facing Canadian families, seniors and youth hit hard by unemployment.

The measures proposed in Bill C-13 are based on forecasts that no longer apply, as demonstrated by the International Monetary Fund, and on minimal-state theories that reject social programs. The measures are unrealistic and completely out of touch, not only with the real needs of Canadians, but also with the general economic situation that experts are describing as fragile and shifting. The budget proposed by the Conservatives does not even begin to respond to the needs of Canadian families, who want concrete measures to create jobs and promote economic growth. The measures proposed in Bill C-13 do nothing to address concerns about employment, improving health care for all Canadians, strengthening pensions and taking care of seniors in need. The measures set out in the bill do nothing to promote job creation.

Bill C-13 is sacrificing Canadian families while offering large corporations lavish and substantial tax reductions, which are not even conditional upon job creation. These tax credits are granted even if the corporations do not create any jobs to respond to the challenge of unemployment. In other words, the reductions serve only to reward companies that already have employees, whereas the economic recovery needs new jobs to put Canadians who are looking for employment to work.

Furthermore, since they are based on a certain income level, the tax credits in Bill C-13 actually benefit only a very few Canadians, mainly wealthy individuals. They exclude many people who, because of their poverty, do not pay taxes and therefore cannot benefit from these tax credits. Seen from this perspective, it is clear the tax credit measures are just for show. For example, Bill C-13 talks about tax credits for family caregivers. Creating such a tax credit is not a sufficient response to the needs of people who take time off to take care of their loved ones who are ill, simply because they must have a sufficient level of income to be able to benefit from the tax credits set out in Bill C-13. A total of 65% of households with a caregiver declare a combined income of less than $45,000 and 23% declare less than $20,000. In short, most caregivers cannot benefit from the tax credits in question.

For this measure to provide direct support to caregivers, we, the NDP, are proposing that these tax credits be turned into tax credits for caregivers. That is a concrete measure that responds to genuine needs. And that is why a number of members who spoke before me have proposed that the child disability benefit be used as a model. Caregivers would receive a monthly non-taxable amount that would help them cover the costs associated with taking care of a sick family member. This type of credit would be of particular help to low- and middle-income caregivers.

Another example from Bill C-13 is the tax credit for medical expenses. This credit allows Canadians to claim medical expenses that are not covered by the public health system. But the problem is that this measure does not fix the underlying issue in its entirety—Canadians with excessive medical expenses that are not covered by our public health system cannot recover all the expenses they incur.

The NDP is calling upon the government to listen to the needs of Canadians by creating a national pharmacare program, which would reimburse Canadians for all their medical expenses.

This same inconsistency exists with the children's arts tax credit. Where will people who already have a hard time feeding themselves find $500 to invest in arts activities to benefit from this credit? The measure proposed by Bill C-13 regarding the partial forgiveness of student loans for doctors and nurses raises the same questions.

Canadian families deserve better. They want concrete action to create jobs and fix the economy, not the Conservative government's half measures. Concrete measures need to be taken—ones that target the real job creators—instead of tax cuts being handed to big business.

According to the IMF, long-term, stable economic growth depends on equitable revenue distribution. In light of the objections I have raised, we believe that Bill C-13 does not contain enough measures to support the economy and jobs in Canada. It should be rejected, pure and simple.

[Wayne Marston, NDP, Hamilton East—Stoney Creek, ON]

Mr. Speaker, the speech of the member was very well-informed. We repeatedly hear about tax credits from the other side, but they are non-refundable tax credits. They are half measures.

Let me give an example of another half measure. Last year the Conservatives were pushing us to pass the $50.00 a month they were going to give to seniors on GIS. When we consider that someone living on GIS and old age security gets $15,200 a year and the poverty line is $22,000 a year, what the Conservatives did last year was half of a half measure of what was needed. What is needed for a quarter million seniors in the country is at least a $200 a month increase, not half of that half measure.

[Sadia Groguhé, NDP, Saint-Lambert, QC]

Mr. Speaker, I thank my colleague for his comments. I back him completely with regard to the $50 per year increase. I have spoken to seniors who have been truly shocked by that amount. They told me outright that it does not do much for them.

[Jasbir Sandhu, NDP, Surrey North, BC]

Mr. Speaker, my colleague's speech on Bill C-13 was very thoughtful. We have talked about small businesses being the economic engine that drives our economy and creates jobs. We know for a fact that the Conservatives are going to tax small businesses through the payroll tax.

Would my colleague comment on how it will hurt small businesses in her constituency and whether taxing small businesses is a good idea?

[Sadia Groguhé, NDP, Saint-Lambert, QC]

Mr. Speaker, I thank my colleague for his question.

In fact, the hiring credit in Bill C-13 will not help at all to create jobs. Furthermore, the status quo for taxes on small business will have a serious impact on their budgeting and will not create new jobs. Small businesses in my riding are asking for assistance. Keeping these taxes will not help small and medium-sized businesses at all.

[Hoang Mai, NDP, Brossard—La Prairie, QC]

Mr. Speaker, I would like to ask my colleague a question. The government says it is open and wants to adapt its plans to reality, and is proposing this plan. What concrete results has she seen in her riding or on the economy?

[Sadia Groguhé, NDP, Saint-Lambert, QC]

Mr. Speaker, I want to thank my colleague for his question. Earlier he talked about something that I think is essential and that is to have a vision. That is what is missing from this budget: vision. Concretely, in my riding, there are families in need who are likely to turn to food banks for help. Last week I was in my riding all week and able to interact with agency representatives and families. Unfortunately, even those who are currently employed have to get help from charitable organizations to feed their families. In that sense, I think this budget lacks a great deal of vision.

[John Williamson, Conservative, New Brunswick Southwest, NB]

Mr. Speaker, I rise today in favour of our government's keeping Canada's economy and jobs growing act.

Our government has remained squarely focused on the economy during these turbulent economic times and we have been getting results for Canadians. For instance, approximately 650,000 more Canadians are working today than in July 2009.

In the IMF and OECD forecast our economy will continue to be among the strongest in the G7 this year and next. When we consider what is happening around the world, that is a positive accomplishment. What is more, only recently Forbes magazine ranked Canada as the best place in the world for businesses to grow and create jobs.

Canadians can be confident their country is better positioned to face global economic challenges than most and that our government will remain focused on what matters to Canadians: jobs and the economy.

Focusing on the economy and helping Canadian families is exactly what we are doing through the keeping Canada's economy and jobs growing act. This key legislation would ensure we can keep moving forward in implementing Canada's economic action plan to grow the economy and create jobs.

The plan has been well received in my home province. For instance, the Conseil économique du Nouveau-Brunswick has called it, “far-sighted with provisions to help small and medium-size businesses increase and retain their workforce”.

As well, Doug Northrup, H&R Block tax professional in New Brunswick and a Moncton Times & Transcript personal finance columnist, called it “a people budget with new credits that will help families and seniors get more money back”.

I would like to highlight a few of the important measures in the bill at this moment.

First, recognizing the need for new family physicians, nurse practitioners and nurses to practise or work in underserviced rural or remote communities, we are introducing the medical graduates loan forgiveness initiative. This plan would forgive a portion of Canada student loans for new family physicians, nurse practitioners and nurses who worked in rural or remote communities.

Starting in 2012, new family physicians practising in such communities would be eligible for a federal Canada student loan forgiveness of up to $8,000 per year to a maximum of $40,000. New nurse practitioners and nurses practising in underserved rural or remote communities would be eligible for forgiveness of up to $4,000 a year to a maximum of $20,000.

Another measure I would like to highlight is the volunteer firefighters tax credit.

Another important measure I will highlight is the volunteer firefighters tax credit. This measure is long overdue and it recognizes the hard work of men and women in communities across the country. Volunteer firefighters play a critical role in serving communities across Canada, including in my riding of New Brunswick Southwest, often putting themselves at risk for the safety of their neighbours. Often, in rural and remote communities, these volunteer firefighters are the first responders at the site of home fires or accidents on roads. Across the country, nearly 85,000 volunteer firefighters provide their services to protect the lives of Canadians and they deserve our gratitude and support. That is why this act includes a volunteer firefighters tax credit in the amount of $3,000. This is a positive measure that has been welcomed across the country, including in my home province, as a tool to ensure we retain our volunteer firefighters.

The New Brunswick Association of Fire Chiefs declared:

...the tax credit is also an important tool when it comes to recruitment and retention. We feel that retaining volunteers that are already in place is even more important almost...because you've already invested money into those volunteers. So you want to keep them on and keep them as long as you can. Retention with some of the smaller volunteer fire departments is a big deal.

In my riding there are a lot of these small fire departments and this support is welcome.

Another measure I will highlight is supporting infrastructure in Canada by legislating that the gas tax fund transfer be permanent.

As we know, Canada’s economic action plan has helped accelerate and expand federal investments in infrastructure. The actions we took helped Canada deal with the global economic turbulence in the short term, with more modern infrastructure for the long term.

Canada's historic investment in infrastructure, like improving our roads, bridges or, in my riding, wharves, will continue to support jobs and growth beyond the economic downturn. Announced in budget 2007, the seven year building Canada plan consists of programs to meet varying infrastructure needs across the country, including the gas tax fund and a full rebate of the goods and services tax paid by municipalities. Through the gas tax fund, the Government of Canada provides $2 billion annually to support municipal infrastructure. Today's act proposes to legislate a permanent annual transfer, through the gas tax fund, to provide predictable, long-term infrastructure funding to Canada's cities and towns. This means that this funding would be taken away from the hands of politicians, I suppose, to use it as a political football, thereby guaranteeing it to municipalities so that it would be there year in and year out.

We all know that state of the art infrastructure moves people, goods and services safely and reliably. It improves business competitiveness, allowing the economy to grow and prosper, and it also enhances the quality of life of Canadians.

The Canadian Taxpayers Federation—a group I am very familiar with—has applauded this move, noting, “making the Gas Tax Transfer permanent is a clear follow-through on a longstanding taxpayer priority. This will ensure that more gas tax revenues go back into roads”.

That is a good measure and one that is long overdue.

A final point that I will highlight is our Conservative government's commitment to return to balanced budgets through the responsible spending of taxpayer dollars. We are committed to principled, effective fiscal management through a detailed review of all government spending.

Nevertheless, prudent fiscal management also means leading by example and that includes political parties. That is why today’s bill phases out the costly per-vote subsidy to political parties, which forced taxpayers to support political parties rather than political parties receiving donations voluntarily from Canadians.

We firmly believe that Canadians demand that their tax dollars be treated with great care and only used in the public interest, in good times as well as in turbulent economic times. As such, I believe this move to end the political party subsidies has been and will be applauded by Canadians from coast to coast.

Again, the Taxpayers Federation said:

Eliminating the per-vote subsidy is a major victory in the fight against political welfare. ...this is major win for taxpayers and for democratic reform.

Another plug is from the Calgary Herald editorial. It remarked:

Phasing out the subsidy also forces political parties to do their own fundraising, while asking Canadians to back up their beliefs by putting their hard-earned dollars behind the parties they support.

Here in Ontario, a Kingston Whig Standard editorial heralded it as well when it stated:

If people want to advance a political agenda, let them work to finance the means to get elected. If it appeals to people, they will support it.

It's time politicians and their shills learned how to earn our support, not merely expect it.

While I only highlighted a few measures of today’s act, there are many more.

The keeping Canada's economy and jobs growing act recognizes the need to focus on the economy for the short and long term. I would therefore encourage all members of the House to support this key legislation.

[Hoang Mai, NDP, Brossard—La Prairie, QC]

Mr. Speaker, I want to thank the hon. member for his speech.

The hon. member talked about investing in infrastructure. We know that there is a $130 billion deficit in infrastructure. The Minister of Finance says investing in infrastructure is five times more effective than cutting the corporate tax rate. Could the hon. member explain why the government is making more cuts to the corporate tax rate instead of investing in infrastructure?

[John Williamson, Conservative, New Brunswick Southwest, NB]

Mr. Speaker, like any good economic policy, a government needs to look at different levers when it sets the fiscal plan every year. We can point to countries throughout Europe, some of which are in big trouble today. They have wonderful infrastructure but lousy tax structures. As a result, they do not receive the investment, jobs or growth that is important to ensuring a high standard of living.

If the member is suggesting that we put all our eggs into building only infrastructure and we do not deal with reducing the tax burden on businesses to create jobs, he has a thing or two to learn. Bringing down taxes will ensure job creation going forward and ensure we have good roads so that our goods can get to and from market.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, it is always encouraging when we hear a moment of truth from the Conservative government.

I will quote something from October 12, which I am sure my colleagues on the other side will appreciate. It is from the President of the Treasury Board. The article reads:

...is crediting much of Canada’s current economic success to actions taken long before his government came to power, telling a Washington business crowd Wednesday that Canada made the right moves when faced with serious debt troubles of its own in 1995.

I applaud the President of the Treasury Board for acknowledging the role that the Liberal Party played in terms of protecting Canada's economy today.

Would the member not acknowledge that there is so much more good advice coming from the Liberal Party that, if acted upon by the government, it would create a lot more jobs in Canada?