Bill C-3 (Historical)

Supporting Vulnerable Seniors and Strengthening Canada's Economy Act

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

Part 1 of this enactment implements income tax measures and related measures proposed in the 2011 budget, and income tax measures referred to in that budget that were previously announced. In particular, it
(a) amends the Income Tax Act and related legislation to allow beneficiaries of Registered Disability Savings Plans who have shortened life expectancies to withdraw more of their plan savings by permitting annual withdrawals without triggering the 10-year repayment rule, subject to specified limits and certain conditions; and
(b) amends the Income Tax Act to ensure that individuals have the legal authority in all circumstances to appeal a determination concerning their eligibility for the disability tax credit.
Part 2 amends the Excise Tax Act to introduce a 100% rebate of the goods and services tax and the harmonized sales tax paid by the Royal Canadian Legion on acquisitions of Remembrance Day poppies and wreaths. Part 2 also amends the Excise Act, 2001 and the Excise Tax Act to allow the sharing of information obtained under these statutes with countries or jurisdictions with which Canada has entered into a tax information exchange agreement.
Part 3 amends the Old Age Security Act to allow an amount to be added to the amount of benefits payable to certain low-income beneficiaries.
Part 4 authorizes payments to be made out of the Consolidated Revenue Fund for various purposes.
Part 5 amends the Auditor General Act to repeal a provision that provides for mandatory retirement.
Part 6 amends the Canada Student Financial Assistance Act to change the rules concerning interest paid by part-time students.
Part 7 enacts the Protection of Residential Mortgage or Hypothecary Insurance Act, which is designed to support the efficient functioning of the housing finance market and the stability of the financial system in Canada by authorizing the Minister of Finance to provide protection in respect of certain mortgage or hypothecary insurance contracts. It also makes consequential amendments to the National Housing Act and the Office of the Superintendent of Financial Institutions Act and repeals Part 9 of the Budget Implementation Act, 2006.
Part 8 amends the Federal-Provincial Fiscal Arrangements Act to authorize additional payments to certain provinces in respect of major transfers.
Part 9 amends the Insurance Companies Act to prohibit a federal mutual company from distributing its property or other benefits to policyholders and shareholders, until the Minister of Finance has approved a conversion proposal made in accordance with the regulations.
Part 10 amends the Assessment of Financial Institutions Regulations, 2001 to modify the assessment of financial institutions and validates amounts assessed after May 31, 2001.
Part 11 amends the Financial Administration Act to permit departments to enter into agreements respecting the provision of internal support services. It also authorizes the transfer of money when a power, duty or function or the control or supervision of a portion of the federal public administration, is transferred under section 2 or 3 of the Public Service Rearrangement and Transfer of Duties Act.
Part 12 amends the Canada Shipping Act, 2001 to allow the Governor in Council to make regulations exempting vessels, and authorizing the Minister of Transport to temporarily exempt vessels, from the registration requirements in Part 2 of that Act. This Part also amends the Act to allow for the registration of a group of vessels as a fleet in the small vessel register, under a single certificate of registry and single official number.

The House proceeded to the consideration of Bill C-3, An Act to implement certain provisions of the 2011 budget as updated on June 6, 2011, as reported (without amendment) from the committee.

Speaker's Ruling

[The Speaker, Andrew Scheer]

I am now prepared to make the ruling on Bill C-3, An Act to implement certain provisions of the 2011 budget as updated on June 6, 2011. There are seven motions in amendments standing on the notice paper for the report stage of Bill C-3.

Motions Nos. 1 to 7 will be grouped for debate and voted upon according to the voting pattern available at the table.

I will now propose Motions Nos. 1 to 7 to the House.

Motions in amendment

[Peggy Nash, NDP, Parkdale—High Park, ON]

moved:

Motion No. 1

That Bill C-3 be amended by deleting Clause 20.

Motion No. 2

That Bill C-3 be amended by deleting Clause 21.

Motion No. 3

That Bill C-3 be amended by deleting Clause 22.

Motion No. 4

That Bill C-3 be amended by deleting Clause 23.

Motion No. 5

That Bill C-3 be amended by deleting Clause 24.

Motion No. 6

That Bill C-3 be amended by deleting Clause 25.

Motion No. 7

That Bill C-3 be amended by deleting Clause 26.

The House resumed consideration of Bill C-3, An Act to implement certain provisions of the 2011 budget as updated on June 6, 2011, as reported (without amendment) from the committee, and of the motion in Group No. 1 to 7.

Supporting Vulnerable Seniors and Strengthening Canada's Economy Act

[Peggy Nash, NDP, Parkdale—High Park, ON]

Mr. Speaker, I rise to speak in support of the amendments, which would have the impact of removing part 7 from the bill.

The rush by the government to pass the budget implementation act is ostensibly to get increased benefits out to seniors. This is something we have campaigned on and supported. We certainly want to see every senior get out of poverty. However, what takes up almost half of the bill is a section on mortgage insurance. It is a section we believe requires further debate and examination. It needs to have the light of day shine in. What is the rush to pass this part of the bill? That is why we would argue, with our amendments, to take this section out of the bill and examine it in good time.

We are talking about the delivery of a fundamental social good, and that is housing. We have a crisis of affordability in housing in the country. We have many people under or poorly housed.

We are talking about the delivery system for housing in Canada and breaking off part of that delivery system where profits can be made, mortgage insurance, and handing it to U.S. multinational mortgage companies that played a role in creating the housing bubble in the United States, which led to the global financial crash. They provided mortgages at extremely appealing terms to people who could not assess the risk and many of whom could not afford to take on that risk.

In many respects, this is the housing equivalent of privatizing a service like health care, something that is so fundamental to Canadians. In the current system with CMHC, the risk is shared by all Canadians so as to achieve the widest public benefit. In this case, it is meeting the housing needs of Canadians effectively and with affordability.

The government argues that speed is of the essence. Yet further reinforcing the privatization of the mortgage insurance market is a major public issue that deserves further debate. Canadians needs to know if this is truly in their best interest, but the government would rather not open this up for debate.

Effective lobbying of both previous Liberal and Conservative governments by U.S. insurance giants like AIG, Genworth and PMI was rewarded when first the Liberals and then the Conservatives welcomed this competition into our housing insurance market.

Promoters of private insurance talked about the innovation that the private sector would foster. In fact, that was said in the U.S. before the housing crash. Innovation meant dressing up high-risk mortgages and veiled financial instruments that no one understood or whose risks were hidden. Canada does not need that kind of innovation. The fact remains that the case for offering private multinationals access to Canada's mortgage insurance market has not been convincingly made. We would like to have more time for examination.

The effect of having U.S. private mortgage insurance giants like the now defunct AIG or Genworth enter the Canadian market was to sign up borrowers for risky mortgages: $56 billion in 40-year mortgages, the most expensive and least flexible mortgages there are, $10 billion of which requires no money down. These instruments entice many Canadians into debt far over their heads.

The finance minister justified the arrival of the U.S. giants by arguing greater choice and innovation, that this would benefit consumers and promote home ownership. The housing bubble, especially south of the border, showed that these companies created tragic results. One U.S. executive told the Globe and Mail in a story at the time that the 40-year mortgage, “just becomes a mechanism for borrowing more than you probably should have”.

Since the government backs 100% of CMHC's mortgage insurance risks, it concluded that it should level the playing field for private mortgage insurers by guaranteeing their liabilities, too. The deal is it guarantees 90% of up to $300 billion in insurance liabilities for a 10% premium, $300 billion of public money to guarantee the liabilities of private insurers, most of whom would be foreign or American insurers.

Why would Canadians want to sign up for this? It is certainly something we need to examine. Have we really learned nothing? Why are these companies still around? Why are we still guaranteeing their liabilities?

Canada is the second largest mortgage insurance market in the world. Until the Liberals opened the door to GE, now Genworth, Canadians provided their own insurance and shared their own risk. Now we still share the risk, but pay profits to U.S. multinationals. This fits a pattern the government likes to repeat.

One argument for welcoming U.S. competition for CMHC, the mortgage insurer Canadians already own, was that Canadian insurance rates were too high and competition would bring them down. What happened? The Globe and Mail said that the rates stayed the same. In committee Monday, the head of CMHC, Karen Kinsley, said that the CMHC price was still better. Therefore, competition has not reduced the cost to consumers.

Also in the committee meeting on Monday, Ms. Kinsley told us that CMHC also ensures the social housing sector, apartments, low-income housing, non-profits and other affordable housing both in urban and rural areas and she pointed out that the private insurers chose not to go after that business. Therefore, we have a situation where the government and its private sector allies like the C.D. Howe Institute talk a good line about competition, but instead are cherry-picking and leave the CMHC to cover the social housing and rental sectors, where the risks are higher and the returns are lower. Why would we willingly put the mortgage insurer taxpayers own in that situation? In other words, it undermines its sustainability.

Do members know how man other industrialized countries guarantee the policies of non-government mortgage money? Experts in committee on Monday could not name one, not one other country in the world that backs the risks of private mortgage insurers, but Canada wants to increase our liability. Why are we being so generous?

In May 2006, the government announced more U.S. mortgage insurers were welcome and increased the value of the taxpayers' guarantee to $200 billion. Five years later, in this bill, it is saying that guarantee should be $300 billion. The government has done no studies that we have been privy to on the impact of that decision. Nor has it done due diligence to date on the implications of yet again broadening the taxpayers' liability in guaranteeing $300 billion in private obligations today. It is very curious behaviour for people who like to betray themselves as better economic managers.

What do Canadians get in return for such generosity that they would not have gotten from their own company, the CMHC? When the committee and its Senate counterpart were holding hearings on the private mortgage insurance provisions back in 2006, AIG's top executive in Canada had this to say:

In terms of exposure to the government, the practical likelihood of AIG, an organization with $800 billion in assets, ever coming to the government for anything as it relates to a claim is not nil, but it is as close to nil as it possibly could be.

The government was all too happy to take that assurance for its ill-thought out policies. Two years later, the U.S. government had to pump $150 billion into AIG when its practices drove it into the ground. Why would we again place the same faith, $300 billion worth, in these companies today?

I would urge reflection and reconsideration. For that reason, we are urging, with these amendments, that this section on mortgage insurance be taken out of the bill and postponed for debate at a later date.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

Mr. Speaker, fortunately, I also had the opportunity to be at that meeting and I recognize that the member was there as well.

I would like the member's comments in relation to the response that was given by the witnesses stating that the increase the government was proposing would not increase percentage risk to Canadians by 1%. In fact, they suggested that this would be good for the economy and good for Canadians and, quite frankly, bragged significantly about the current good news story of CMHC, how well it was doing and what a great profit it was giving back to the Canadian people who own it and ultimately will receive the benefit of it. They stated clearly that we have an excellent marketplace here in Canada and that things are going very well in Canada relative to the rest of the world. It actually was a very good news story.

I do not know how the member can take something bad out of that but I would like to hear her comments in relation specifically to the fact that no increase in risk to Canadians would happen as a result of this particular amendment.

[Peggy Nash, NDP, Parkdale—High Park, ON]

Mr. Speaker, any time we increase the potential liability in the tens of billions of dollars, that it is something that requires greater reflection and greater study.

As I said, in 2006, our liability for these private insurers was $200 billion. With this bill, our liability would be $300 billion.

If there are no defaults, then it is true that we are not paying anything out. However, should there be defaults there could be future liability. In fact, we have heard real concern from the Bank of Canada regarding the steep rise in housing prices, the lack of affordable housing in Canada and the incredible indebtedness that Canadians are faced with.

This needs greater examination, which is why we are proposing a delay.

[Shelly Glover, Conservative, Parliamentary Secretary to the Minister of Finance]

Mr. Speaker, I would like to offer my new colleague an opportunity here to correct the record.

First and foremost, if claims are made in this House, they must be accurate and they must be factual. They must be based on things that have actually been said if one says that they are what was said.

I would invite my colleague to correct the record. She talked about other countries that have this type of system but not one country was mentioned. Let us start with Norway, which was mentioned, and which, oddly enough, happens to be a socialist country.

I would also encourage her to correct the record when it comes to the numbers she is using. It was repeatedly stated in committee, and we repeatedly attempted to correct her numbers, that it is presently at $250 billion, not $200 billion, and will go to $300 billion.

I invite the member to correct the record on those two issues, please.

[Peggy Nash, NDP, Parkdale—High Park, ON]

Mr. Speaker, I welcome the opportunity to again clarify that in 2006 the limit of taxpayers' liability was $200 billion. It was subsequently increased to $250 billion. The proposal today is to take that liability to $300 billion, which is a huge amount of dollars that Canadians would have to back up.

Secondly, when asked which countries around the world have public money backing private mortgage insurers, there was no country that was named that had a system like that. There are private insurers that pay their own premiums and self-insure, but not one country was named where the government backstops the risk of private insurers operating in the housing mortgage market.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

Mr. Speaker, if she is objecting to this particular section now, I would like to know from the member why, at that particular meeting when she and the NDP had an opportunity to vote against the bill, they actually voted for it. They did not vote against it. As we mentioned earlier, this is a classic example of sucking and blowing at the same time.

The member opposite should make up her mind. If she is now going to vote against the bill that she had voted for in committee, it sends the wrong message to Canadians. They want to see this Parliament work and that is what we are trying to do.

[Peggy Nash, NDP, Parkdale—High Park, ON]

Mr. Speaker, we did vote against this section of the bill.

I would also take this opportunity to correct the record. It may have sounded as though I called the CEO of CMHC by the name of Tinsley. It is in fact Karen Kinsley. I just want to better enunciate that for the record.

[Shelly Glover, Conservative, Parliamentary Secretary to the Minister of Finance]

Mr. Speaker, I do want to take this opportunity to also state that I was at that meeting and the NDP did in fact vote for our bill. Regardless of what has been said here, the facts remain. The truth is that the NDP voted for the bill in committee and have now flip-flopped for whatever reason they want to provide. That is up to them.

I would like to share my time with the hon. member for West Vancouver—Sunshine Coast—Sea to Sky Country.

I sincerely thank the House of Commons Standing Committee on Finance for quickly studying and passing this important bill. As hon. members know, the Supporting Vulnerable Seniors and Strengthening Canada's Economy Act includes a number of measures from the 2011 budget and is a key part of the next phase of Canada's economic action plan, a plan that keeps taxes low to stimulate growth and jobs. Our economic growth shows that Canada's economic action plan is working and that the Conservative government is on the right track with our economic recovery.

Let us look at the facts: Canada's economy has seen seven consecutive quarters of growth. Since July 2009, we have created almost 560,000 net new jobs, 80% of which are full time. Canada's unemployment rate is considerably lower than that of the United States, something we have not seen in over 30 years. Little wonder that countless independent experts and observers have been near unanimous in their praise for Canada's economy. For example, Claude Picher, an economic and financial columnist for La Presse, said:

It is true that all of Canada's economic indicators are quite positive when compared with other G7 countries. Canada has weathered the recession better than the others. It is certainly the G7 champion in terms of economic growth and job creation.

However, too many Canadians are still looking for work, and the global economic recovery remains fragile. The financial difficulties of some European countries, such as Greece, attest to the fact that there are still international issues that could affect us. That is why protecting the economy has been and will remain our government's top priority. And that includes implementing the next phase of Canada's economic action plan.

The supporting vulnerable seniors and strengthening Canada's economy act contains many important measures that will not only support our economic recovery but also help everyday Canadians, especially seniors, such as: assisting Canada's most in need seniors with a significant boost to the guaranteed income supplement; supporting health care and social programs at the provincial level with nearly $1 billion in payments to provinces eligible for the temporary total transfer protections extension to 2011-12; encouraging young entrepreneurs with $20 million to help the Canadian Youth Business Foundation; enhancing federal support for part-time students; improving the registered disability savings plan; supporting Canada's veterans with tax relief for the Royal Canadian Legion; maintaining Canada's leadership in genomics research with $65 million for Genome Canada; reinforcing the stability of Canada's housing market with increased government oversight of the mortgage insurance industry; and much more.

I think all parliamentarians recognize that Canada's seniors sacrificed a lot to build this great country and I believe we all want a strong support system for their retirement. That is why our Conservative government has taken significant action since 2006 to improve the quality of life of Canadian seniors.

The measures taken include providing seniors and pensioners with over $2 billion in annual tax relief and creating a minister of state for seniors to ensure they have a dedicated voice in government to address their issues.

However, there is always more to be done. Unfortunately, there are still too many seniors with fixed incomes experiencing financial difficulties. Many of these low-income seniors are widowers who made sacrifices of themselves to stay home, to raise their families and better their communities. As a result of that, they do not have a pension income.

To show our appreciation to these seniors and assist them, our Conservative government is proposing to provide an additional GIS top up annually of up to $600 for single seniors and $840 for couples. This would represent the single biggest increase to the GIS in over 25 long years. The new GIS top up will help over 680,000 of Canada's poorest and most vulnerable seniors starting July 1, providing them with improved financial peace of mind.

It is little wonder that the Service Employees International Union, representing front-line health care providers and other service industry workers, applauded the GIS increase as, “A win for every senior living in poverty in Canada”.

I want to be crystal clear with all elected members in this House and all appointed senators in the Senate when I say that Canada's most vulnerable and poorest seniors are absolutely counting on the GIS top up and they need this bill passed quickly to allow it to come into effect on July 1, 2011, as promised.

I have heard some in Parliament smugly dismiss the GIS top up as only an extra few dollars a year. I challenge those parliamentarians to say that to the countless widows and seniors who are counting on the monthly GIS top up to make ends meet. I challenge members to ask those poor seniors, who do not have the luxuries we as parliamentarians enjoy, if those extra few dollars will make a difference to them as they worry day by day about how they will pay for their rent and food.

I know the answer because I have actually asked them. They need this money and it will make a world of difference for many of them. They are depending on us to ease their financial burden and the hundreds of dollars they will collect from the government's proposed GIS top up are absolutely crucial to their future.

I ask all parliamentarians, both here and in the Senate, to please put partisanship antics aside, do the right thing and pass this bill before we rise. Royal assent must be ensured to allow the increased GIS cheques to start going out July 1. Let us give these vulnerable seniors the dignity and respect they deserve.

I also implore my colleagues to consider another important measure in this bill that has the potential to change lives substantially. Genome Canada is a not-for-profit organization dedicated to supporting Canada's research leadership in genomics.

Genomics is the science of studying the genome or blueprint contained in the DNA of a human or other species, along with what happens when certain genes interact with each other and the environment. Genomics research is helping Canadians make scientific breakthroughs and advances in important areas, such as health, fisheries, forestry, agriculture and the environment.

To date, the government has provided over $900 million to Genome Canada. This support has helped establish Canada as a world leader in genomics research, including in the areas of cancer, infectious and rare genetic diseases, adverse drug reactions and crop sciences. What is more, Genome Canada-funded research has contributed to the development and training of thousands of highly skilled individuals and the creation of more than 20 new companies.

I am proud to note that Genome Canada has a centre in my hometown of Winnipeg as well as centres in Vancouver, Calgary, Halifax, Montreal and Toronto. The additional $65 million for Genome Canada proposed in today's legislation would launch a new competition in the area of human health, while also covering ongoing operating costs.

Genome Canada President Dr. Pierre Meulien has expressed his appreciation for this new financial support, noting:

--it provides the means necessary to continue advancing our genomics...It also reiterates the government’s interest and priority in cultivating a genomics enterprise in Canada--

These are just two of the many important measures we are proposing in the Supporting Vulnerable Seniors and Strengthening Canada’s Economy Act. These measures will help Canadian families, particularly the most vulnerable ones. This bill is an essential part of implementing the next phase of Canada's economic action plan, which will ensure that our economy recovers for the benefit of all Canadians, today and in the years to come. For these reasons, I once again call upon the House to support this bill promptly and without delay.

[Peggy Nash, NDP, Parkdale—High Park, ON]

Mr. Speaker, I wonder if the hon. parliamentary secretary could tell the House, after the private sector was allowed into the mortgage insurance sector in Canada, how many 40-year zero-down mortgages were introduced, and how many Canadians have these mortgages which we know are the most risky, least flexible and most expensive for Canadian consumers.

[Shelly Glover, Conservative, Saint Boniface, MB]

Mr. Speaker, I am so glad my colleague has asked a question about those very dangerous 40-year amortized mortgages that no longer exist. Thanks to who? Thanks to this government that changed the rules and now we see that an amortized mortgage is reduced to a much smaller limit.

It is thanks to this government that recognized early in the recession that the housing market was very much at risk in other areas of the world. It is because we took actions very early that the housing market in Canada is seen as the strongest in the world. I continue to be proud of the measures that our government is going to continue to take to secure oversight in that area.

[Scott Brison, Liberal, Kings—Hants, NS]

Mr. Speaker, I have a question to the parliamentary secretary, based on her last response.

She just claimed credit for her government's ending the ridiculous policy of 40-year mortgages with no down payment. I agree with her. It was a dangerous, reckless policy, and we supported the government's ultimate decision to change that policy.

However, is she not aware that it was her government and her Conservative finance minister who, in his first budget in 2006, introduced to Canada 40-year mortgages with no down payment? Is she aware of that?