Bill C-45 (Historical)

Jobs and Growth Act, 2012

A second Act to implement certain provisions of the budget tabled in Parliament on March 29, 2012 and other measures

Part 1 implements certain income tax measures and related measures proposed in the March 29, 2012 budget. Most notably, it
(a) amends the rules relating to Registered Disability Savings Plans (RDSPs) by
(i) replacing the 10-year repayment rule applying to withdrawals with a proportional repayment rule,
(ii) allowing investment income earned in a Registered Education Savings Plan (RESP) to be transferred on a tax-free basis to the RESP beneficiary’s RDSP,
(iii) extending the period that RDSPs of beneficiaries who cease to qualify for the Disability Tax Credit may remain open in certain circumstances,
(iv) amending the rules relating to maximum and minimum withdrawals, and
(v) amending certain RDSP administrative rules;
(b) includes an employer’s contributions to a group sickness or accident insurance plan in an employee’s income in certain circumstances;
(c) amends the rules applicable to retirement compensation arrangements;
(d) amends the rules applicable to Employees Profit Sharing Plans;
(e) expands the eligibility for the accelerated capital cost allowance for clean energy generation equipment to include a broader range of bioenergy equipment;
(f) phases out the Corporate Mineral Exploration and Development Tax Credit;
(g) phases out the Atlantic Investment Tax Credit for activities related to the oil and gas and mining sectors;
(h) provides that qualified property for the purposes of the Atlantic Investment Tax Credit will include certain electricity generation equipment and clean energy generation equipment used primarily in an eligible activity;
(i) amends the Scientific Research and Experimental Development (SR&ED) investment tax credit by
(i) reducing the general SR&ED investment tax credit rate from 20% to 15%,
(ii) reducing the prescribed proxy amount, which taxpayers use to claim SR&ED overhead expenditures, from 65% to 55% of the salaries and wages of employees who are engaged in SR&ED activities,
(iii) removing the profit element from arm’s length third-party contracts for the purpose of the calculation of SR&ED tax credits, and
(iv) removing capital from the base of eligible expenditures for the purpose of the calculation of SR&ED tax incentives;
(j) introduces rules to prevent the avoidance of corporate income tax through the use of partnerships to convert income gains into capital gains;
(k) clarifies that transfer pricing secondary adjustments are treated as dividends for the purposes of withholding tax imposed under Part XIII of the Income Tax Act;
(l) amends the thin capitalization rules by
(i) reducing the debt-to-equity ratio from 2:1 to 1.5:1,
(ii) extending the scope of the thin capitalization rules to debts of partnerships of which a Canadian-resident corporation is a member,
(iii) treating disallowed interest expense under the thin capitalization rules as dividends for the purposes of withholding tax imposed under Part XIII of the Income Tax Act, and
(iv) preventing double taxation in certain circumstances when a Canadian resident corporation borrows money from its controlled foreign affiliate;
(m) imposes, in certain circumstances, withholding tax under Part XIII of the Income Tax Act when a foreign-based multinational corporation transfers a foreign affiliate to its Canadian subsidiary, while preserving the ability of the Canadian subsidiary to undertake expansion of its Canadian business; and
(n) phases out the Overseas Employment Tax Credit.
Part 1 also implements other selected income tax measures. Most notably, it introduces tax rules to accommodate Pooled Registered Pension Plans and provides that income received from a retirement compensation arrangement is eligible for pension income splitting in certain circumstances.
Part 2 amends the Excise Tax Act and the Jobs and Economic Growth Act to implement rules applicable to the financial services sector in respect of the goods and services tax and harmonized sales tax (GST/HST). They include rules that allow certain financial institutions to obtain pre-approval from the Minister of National Revenue of methods used to determine their liability in respect of the provincial component of the HST, that require certain financial institutions to have fiscal years that are calendar years, that require group registration of financial institutions in certain cases and that provide for changes to a rebate of the provincial component of the HST to certain financial institutions that render services to clients that are outside the HST provinces. This Part also confirms the authority under which certain GST/HST regulations relating to financial institutions are made.
Part 3 amends the Federal-Provincial Fiscal Arrangements Act to provide the legislative authority to share with provinces and territories taxes in respect of specified investment flow-through (SIFT) entities — trusts or partnerships — under section 122.1 and Part IX.1 of the Income Tax Act, consistent with the federal government’s proposal on the introduction of those taxes. It also provides the legislative authority to share with provinces and territories the tax on excess EPSP amounts imposed under Part XI.4 of the Income Tax Act, consistent with the measures proposed in the March 29, 2012 budget. It also allows the Minister of Finance to request from the Minister of National Revenue information that is necessary for the administration of the sharing of taxes with the provinces and territories.
Part 4 enacts and amends several Acts in order to implement various measures.
Division 1 of Part 4 amends the Trust and Loan Companies Act, the Bank Act, the Insurance Companies Act and the Jobs and Economic Growth Act as a result of amendments introduced in the Jobs, Growth and Long-term Prosperity Act to allow certain public sector investment pools to directly invest in a federally regulated financial institution.
Division 2 of Part 4 amends the Canada Shipping Act, 2001 to permit the incorporation by reference into regulations of all Canadian modifications to an international convention or industry standard that are also incorporated by reference into the regulations, by means of a mechanism similar to that used by many other maritime nations. It also provides for third parties acting on the Minister of Transport’s behalf to set fees for certain services that they provide in accordance with an agreement with that Minister.
Division 3 of Part 4 amends the Canada Deposit Insurance Corporation Act to, among other things, provide for a limited, automatic stay in respect of certain eligible financial contracts when a bridge institution is established. It also amends the Payment Clearing and Settlement Act to facilitate central clearing of standardized over-the-counter derivatives.
Division 4 of Part 4 amends the Fisheries Act to amend the prohibition against obstructing the passage of fish and to provide that certain amounts are to be paid into the Environmental Damages Fund. It also amends the Jobs, Growth and Long-term Prosperity Act to amend the definition of Aboriginal fishery and another prohibition relating to the passage of fish. Finally, it provides transitional provisions relating to authorizations issued under the Fisheries Act before certain amendments to that Act come into force.
Division 5 of Part 4 enacts the Bridge To Strengthen Trade Act, which excludes the application of certain Acts to the construction of a bridge that spans the Detroit River and other works and to their initial operator. That Act also establishes ancillary measures. It also amends the International Bridges and Tunnels Act.
Division 6 of Part 4 amends Schedule I to the Bretton Woods and Related Agreements Act to reflect changes made to the Articles of Agreement of the International Monetary Fund as a result of the 2010 Quota and Governance Reforms. The amendments pertain to the rules and regulations of the Fund’s Executive Board and complete the updating of that Act to reflect those reforms.
Division 7 of Part 4 amends the Canada Pension Plan to implement the results of the 2010-12 triennial review, most notably, to clarify that contributions for certain benefits must be made during the contributory period, to clarify how certain deductions are to be determined for the purpose of calculating average monthly pensionable earnings, to determine the minimum qualifying period for certain late applicants for a disability pension and to enhance the authority of the Review Tribunal and the Pension Appeals Board. It also amends the Department of Human Resources and Skills Development Act to enhance the authority of the Social Security Tribunal.
Division 8 of Part 4 amends the Indian Act to modify the voting and approval procedures in relation to proposed land designations.
Division 9 of Part 4 amends the Judges Act to implement the Government of Canada’s response to the report of the fourth Judicial Compensation and Benefits Commission regarding salary and benefits for federally appointed judges. It also amends that Act to shorten the period in which the Government of Canada must respond to a report of the Commission.
Division 10 of Part 4 amends the Canada Labour Code to
(a) simplify the calculation of holiday pay;
(b) set out the timelines for making certain complaints under Part III of that Act and the circumstances in which an inspector may suspend or reject such complaints;
(c) set limits on the period that may be covered by payment orders; and
(d) provide for a review mechanism for payment orders and notices of unfounded complaint.
Division 11 of Part 4 amends the Merchant Seamen Compensation Act to transfer the powers and duties of the Merchant Seamen Compensation Board to the Minister of Labour and to repeal provisions that are related to the Board. It also makes consequential amendments to other Acts.
Division 12 of Part 4 amends the Customs Act to strengthen and streamline procedures related to arrivals in Canada, to clarify the obligations of owners or operators of international transport installations to maintain port of entry facilities and to allow the Minister of Public Safety and Emergency Preparedness to require prescribed information about any person who is or is expected to be on board a conveyance.
Division 13 of Part 4 amends the Hazardous Materials Information Review Act to transfer the powers and functions of the Hazardous Materials Information Review Commission to the Minister of Health and to repeal provisions of that Act that are related to the Commission. It also makes consequential amendments to other Acts.
Division 14 of Part 4 amends the Agreement on Internal Trade Implementation Act to reflect changes made to Chapter 17 of the Agreement on Internal Trade. It provides primarily for the enforceability of orders to pay tariff costs and monetary penalties made under Chapter 17. It also repeals subsection 28(3) of the Crown Liability and Proceedings Act.
Division 15 of Part 4 amends the Employment Insurance Act to provide a temporary measure to refund a portion of employer premiums for small businesses. An employer whose premiums were $10,000 or less in 2011 will be refunded the increase in 2012 premiums over those paid in 2011, to a maximum of $1,000.
Division 16 of Part 4 amends the Immigration and Refugee Protection Act to provide for an electronic travel authorization and to provide that the User Fees Act does not apply to a fee for the provision of services in relation to an application for an electronic travel authorization.
Division 17 of Part 4 amends the Canada Mortgage and Housing Corporation Act to remove the age limit for persons from outside the federal public administration being appointed or continuing as President or as a director of the Corporation.
Division 18 of Part 4 amends the Navigable Waters Protection Act to limit that Act’s application to works in certain navigable waters that are set out in its schedule. It also amends that Act so that it can be deemed to apply to certain works in other navigable waters, with the approval of the Minister of Transport. In particular, it amends that Act to provide for an assessment process for certain works and to provide that works that are assessed as likely to substantially interfere with navigation require the Minister’s approval. It also amends that Act to provide for administrative monetary penalties and additional offences. Finally, it makes consequential and related amendments to other Acts.
Division 19 of Part 4 amends the Canada Grain Act to
(a) combine terminal elevators and transfer elevators into a single class of elevators called terminal elevators;
(b) replace the requirement that the operator of a licensed terminal elevator receiving grain cause that grain to be officially weighed and officially inspected by a requirement that the operator either weigh and inspect that grain or cause that grain to be weighed and inspected by a third party;
(c) provide for recourse if an operator does not weigh or inspect the grain, or cause it to be weighed or inspected;
(d) repeal the grain appeal tribunals;
(e) repeal the requirement for weigh-overs; and
(f) provide the Canadian Grain Commission with the power to make regulations or orders with respect to weighing and inspecting grain and the security that is to be obtained and maintained by licensees.
It also amends An Act to amend the Canada Grain Act and the Agriculture and Agri-Food Administrative Monetary Penalties Act and to Repeal the Grain Futures Act as well as other Acts, and includes transitional provisions.
Division 20 of Part 4 amends the International Interests in Mobile Equipment (aircraft equipment) Act and other Acts to modify the manner in which certain international obligations are implemented.
Division 21 of Part 4 makes technical amendments to the Canadian Environmental Assessment Act, 2012 and amends one of its transitional provisions to make that Act applicable to designated projects, as defined in that Act, for which an environmental assessment would have been required under the former Act.
Division 22 of Part 4 provides for the temporary suspension of the Canada Employment Insurance Financing Board Act and the dissolution of the Canada Employment Insurance Financing Board. Consequently, it enacts an interim Employment Insurance premium rate-setting regime under the Employment Insurance Act and makes amendments to the Canada Employment Insurance Financing Board Act, the Department of Human Resources and Skills Development Act, the Jobs, Growth and Long-term Prosperity Act and Schedule III to the Financial Administration Act.
Division 23 of Part 4 amends the Canadian Forces Superannuation Act, the Public Service Superannuation Act and the Royal Canadian Mounted Police Superannuation Act and makes consequential amendments to other Acts.
The Canadian Forces Superannuation Act is amended to change the limitations that apply in respect of the contribution rates at which contributors are required to pay as a result of amendments to the Public Service Superannuation Act.
The Public Service Superannuation Act is amended to provide that contributors pay no more than 50% of the current service cost of the pension plan. In addition, the pensionable age is raised from 60 to 65 in relation to persons who become contributors on or after January 1, 2013.
The Royal Canadian Mounted Police Superannuation Act is amended to change the limitations that apply in respect of the contribution rates at which contributors are required to pay as a result of amendments to the Public Service Superannuation Act.
Division 24 of Part 4 amends the Canada Revenue Agency Act to make section 112 of the Public Service Labour Relations Act applicable to the Canada Revenue Agency. That section makes entering into a collective agreement subject to the Governor in Council’s approval. The Division also amends the Canada Revenue Agency Act to require that the Agency have its negotiating mandate approved by the President of the Treasury Board and to require that it consult the President of the Treasury Board before determining certain other terms and conditions of employment for its employees.

Jobs and Growth Act, 2012

[Robert Sopuck, Conservative, Dauphin—Swan River—Marquette, MB]

Mr. Speaker, where does one start? It is hard to know. What the other side has to realize is that there is a real difference between environmental performance, environmental outcomes and environmental process. That bunch is so in love with process they do not understand that almost all of Canada's environmental indicators have improved markedly under our watch: sulphur dioxide, NO₂, protected land, water quality, and so on.

As an example from the member's constituency of environmental process that has run amok, I was a young biologist in the 1970s working on the Mackenzie Valley pipeline. That 34-year environmental process resulted in no pipeline being built. We know how to build pipelines in an environmentally sound way and all those communities in the Western Arctic have the distinct possibility of remaining impoverished for the foreseeable future. That is what that environmental process has done. How can he defend it?

[Dennis Bevington, NDP, Western Arctic, NT]

Mr. Speaker, the Mackenzie gas project has been approved. The reason that it is not being built is because the gas is not worth enough right now to put that pipeline down. If those people had gone ahead with that pipeline, it would be producing gas right now that would not be economic.

What has happened? We are waiting. Some day that resource will be developed. Maybe my grandchildren will enjoy that. Why not? Why should this generation, the me generation, take it all off the land right now? What is it about those guys? Do they not see what the future has for our children? What is wrong with you? Wake up.

[The Acting Speaker, Bruce Stanton]

I would again ask hon. members to direct their comments through the Chair.

Questions and comments, the hon. member for Winnipeg North.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, we recognize that the member makes reference to navigable waters. He makes reference to natural resources. We all agree that there are many pieces of legislation on which the budget bill would have a very significant impact. However, I want to go back to the question that I have asked before. Could the member explain to the House why the New Democratic Party did not support having clause by clause dialogue and debate on this issue in committee? Instead, the NDP members voted with the Conservatives to limit debate.

[Dennis Bevington, NDP, Western Arctic, NT]

Mr. Speaker, actually, we supported the Liberals at the committee. We supported their right to a vote and the votes were taken. That is the way democracy works. That does not change the problem that we have with the bill, nor does it t change what will happen with the bill.

The Liberal Party is clutching at straws these days. I am sorry about that. It was once a great party but now it is not.

[Jonathan Tremblay, NDP, Montmorency—Charlevoix—Haute-Côte-Nord, QC]

Mr. Speaker, I quite enjoyed my colleague's speech.

I have noticed a pattern among government members. They seem to think that every good thing that happens is their doing, and every bad thing is someone else's. Anyone who disagrees with them is either lazy or incompetent. If every dissenting voice is like a pebble in their shoe, why not simply give the government absolute power? That would be the end of democracy, the end of parliamentary debate, the end of studies and transparency. Wait a second. That sounds a lot like what is happening right now.

I would like to hear my colleague's views on transparency, on the debate on this second mammoth bill and on all of the “parliamentary work” we have had to do.

[Dennis Bevington, NDP, Western Arctic, NT]

Mr. Speaker, I think back to the previous question from the member for Dauphin—Swan River—Marquette. He talked about the remarkable improvements that the Conservative government created in the environment. The Conservatives should recognize where those laws started. They did not start with the current government. The laws that they have brought in, now that they have a majority and can bring in the types of changes they want, will really affect the environment. Prior to this, for the six years with them in a minority position, they had to work pretty hard to make any changes to our good laws. We worked hard. The opposition worked in concert to ensure that the laws that were being put forward were at least somewhat reasonable over that timeframe.

Maybe we made a mistake. Maybe if we had let them go then they would not have this majority today and we would not be suffering with this kind of nonsense.

[Elizabeth May, Green, Saanich—Gulf Islands, BC]

Mr. Speaker, I found it remarkable that the first question posed to my hon. friend from Western Arctic by my friend from Dauphin—Swan River—Marquette was to suggest that he was not paying attention to navigation but speaking more generally to the environment.

The hon. member for Western Arctic spoke directly to the Hay River situation and the fact that it was a very busy port that required regulation over navigation. I wonder if he would like to return to that point if it were not understood the first time.

[Dennis Bevington, NDP, Western Arctic, NT]

Mr. Speaker, yes, we did refer solely to rivers in the Northwest Territories that we engage in navigation on. Those were removed from the act. Those were the only ones that I spoke to.

[Larry Miller, Conservative, Bruce—Grey—Owen Sound, ON]

Mr. Speaker, I am pleased to rise in the House today in support of Bill C-45, the jobs and growth act, 2012. I am also honoured to have the opportunity to speak to this legislation and present some of the measures within Bill C-45 that I am very happy about and that I think will be of great benefit to Canada, unlike a $21 billion carbon tax, which would not be good for Canadians.

First, I want to address the comprehensive nature of the budget. The basis of economic success lies in the ability of government to address all issues facing the economy. This budget does just that. It is through legislation, such as Bill C-45, that we will work hard to ensure that we address the entire scope of issues facing the Canadian economy.

The number of threats, and I take the NDP carbon tax as an example, facing the security of our economy is not small in size. and, therefore, a plan of action should not be either. A comprehensive plan is the only way that we can ensure a secure economic future for Canada.

Before I get into some of the specific measures of the legislation, I want to take some time to highlight the economic success that has been seen by the government through previous economic action plans.

Since 2006, Canada has created over one million net new jobs and has had the best job growth rate in the G7. Furthermore, Forbes magazine has ranked Canada as the number one country in the world for businesses to grow and create jobs. Anybody who thinks that would be possible if the government had brought in a $21 billion carbon tax is living in another world.

Along with this focus on job creation, there has been an immense amount of work put into lowering taxes for Canadians. Since 2006, taxes have been cut or eliminated 140 times. The overall tax burden has been reduced to its lowest level in nearly 50 years. That is something to be proud of. I am very pleased that Bill C-45 continues this focus on lowering taxes for Canadian families through several different measures.

For example, extending the hiring credit for small businesses for an additional year will help up to 536,000 employers with additional hiring and will reduce small business 2012 payroll costs by about $205 million.

Further measures include improvements to the registered disability savings plans and increased travellers exemptions on the value of goods that Canadians can bring in duty and tax free.

In line with keeping money in the pockets of Canadians, we are also concerned about having a strong, stable and fair pension program. That is why Bill C-45 contains measures to implement a pooled registered pension plan. This would allow for well regulated, low cost, private sector pension plans to be accessible to many hard-working Canadians who have not, up to this point, had access to these important plans. Furthermore, Bill C-45 contains measures that would improve the administration of the Canada pension plan.

Navigable waters are not only a vital part of this country's trade system but they are also an essential part of the livelihood of many Canadians. I represent a great riding in Simcoe North that borders the Great Lakes and their harbours that will certainly benefit from the protections and funding for improvements that are in place in the bill.

The protections in place in Bill C-45 are of great importance. They will ensure that these vital waterways are protected from activities such as de-watering, dumping of waste and the construction of obstacles in the waterways. Further in line with protecting navigable waters is the attention that this bill puts toward strengthening environmental protections. Through amendments that will be made to the Canadian Environmental Assessment Act, 2012, there will be strengthened protections for the environment that will also allow for economic growth.

This issue was brought forth by a western member back in 2006-07 on the rural caucus of the Conservative Party, which I was very fortunate to be chairing at the time. It was through this caucus that changes were slowly made to the Navigable Waters Protection Act. These are changes that the municipalities and organizations that represent municipalities right across this country were asking for and they will now have.

Among the major amendments is the streamlining of the environmental assessments that I talked about. This would reduce red tape for businesses by placing a two-year time limit on assessments of environmental projects. This would allow for inclusive and proper study of the environmental impacts within a reasonable timeframe. I was listening to the previous speaker, who comes from a riding where a project was held up for 25 years plus because of delaying tactics. This would eliminate that kind of thing. If it is not a good project, it should be turned down and allow the business or industry spend their money on development somewhere else, or make them go through the process, which this would do, approve it and get on with business.

Furthermore, Bill C-45 would protect our environment by expanding tax relief for investment in clean energy generation equipment and would also phase out tax preferences for the mining and oil and gas sectors. It would not be like the NDP's $21 billion carbon tax that would totally reverse that.

Finally, I am pleased to see that Bill C-45 would improve Canada's immigration system by requiring any foreign national coming to Canada to apply for an electronic travel authorization. Along with this and other measures contained within the legislation, there would be an increased amount of security when it comes to immigration in Canada. Immigration can promote new and innovative ideas that contribute to the health of Canadian economy. This can translate into new jobs and opportunities for Canadian workers.

However, we must ensure that those who come to Canada are coming for the right reasons and legally. In this regard, we must look at ways to stop those who are looking at coming here illegally, as they take job opportunities away from Canadian workers. That is exactly what this legislation would do. Bill C-45 would encourage new and innovative ideas in Canada while protecting Canadian workers by preventing those who try to take advantage of our open system by immigrating here illegally.

Canada has always maintained an open—

Am I running out of time, Mr. Speaker?

[Ted Menzies, Conservative, Macleod, AB]

Keep going. More, more.

[Chris Warkentin, Conservative, Peace River, AB]

More on the carbon tax.

[Scott Andrews, Liberal, Avalon, NL]

He already said it four times.

[Larry Miller, Conservative, Bruce—Grey—Owen Sound, ON]

I hear comments from both sides, even my friends in the corner, who agree that a $21 billion carbon tax is definitely not the way to go.

Canada has always maintained, as I was saying, an open immigration system and, as such, there is a strong need for close regulation on who is entering the country and ensuring that people are in fact here legally.

The time for action is now. The global economy remains fragile, as we can see with the economy in Europe slipping back into recession and the United States, our closest economic partner, approaching a financial cliff.

Canada has been a leader when it comes to economic prosperity and we have emerged from this recent recession atop all G7 countries. However, the global economy is just that, very global, meaning that Canada is included and affected by all issues facing the global economy. We cannot simply take the wait-and-see approach to the economy that the opposition would have us do.

That is why I am pleased to support Bill C-45, a bill that would implement and enforce various measures of our economic action plan. I urge all hon. members in the House to support economic growth in Canada and Bill C-45.

[Denis Blanchette, NDP, Louis-Hébert, QC]

Mr. Speaker, I thank the member for his speech.

Near the end, he said we are part of the global economy and that things are looking grim in Europe and the United States. The budget before us today would slow the economy down, however. It would slow things down because it cuts jobs and spending.

Given the new information on the situation in Europe and the United States that was not available to us in the spring, does he still believe this budget to be adequate?