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.

Motions in amendment

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

moved:

Motion No. 99

That Bill C-45 be amended by deleting Clause 31.

Motion No. 100

That Bill C-45 be amended by deleting Clause 32.

Motion No. 101

That Bill C-45 be amended by deleting Clause 34.

Motion No. 102

That Bill C-45 be amended by deleting Clause 36.

Motion No. 103

That Bill C-45 be amended by deleting Clause 37.

Motion No. 104

That Bill C-45 be amended by deleting Clause 38.

Motion No. 105

That Bill C-45 be amended by deleting Clause 39.

Motion No. 106

That Bill C-45 be amended by deleting Clause 40.

Motion No. 108

That Bill C-45 be amended by deleting Clause 41.

Motion No. 109

That Bill C-45 be amended by deleting Clause 42.

Motion No. 110

That Bill C-45 be amended by deleting Clause 43.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

moved:

Motion No. 111

That Bill C-45 be amended by deleting Clause 44.

Motion No. 112

That Bill C-45 be amended by deleting Clause 45.

Motion No. 113

That Bill C-45 be amended by deleting Clause 46.

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

moved:

Motion No. 114

That Bill C-45 be amended by deleting Clause 47.

Motion No. 115

That Bill C-45 be amended by deleting Clause 48.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

moved:

Motion No. 116

That Bill C-45 be amended by deleting Clause 49.

Motion No. 131

That Bill C-45 be amended by deleting Clause 50.

Motion No. 136

That Bill C-45 be amended by deleting Clause 51.

Motion No. 138

That Bill C-45 be amended by deleting Clause 52.

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

moved:

Motion No. 139

That Bill C-45 be amended by deleting Clause 53.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

moved:

Motion No. 140

That Bill C-45 be amended by deleting Clause 54.

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

moved:

Motion No. 142

That Bill C-45 be amended by deleting Clause 55.

Motion No. 143

That Bill C-45 be amended by deleting Clause 56.

Motion No. 144

That Bill C-45 be amended by deleting Clause 58.

Motion No. 145

That Bill C-45 be amended by deleting Clause 59.

Motion No. 146

That Bill C-45 be amended by deleting Clause 60.

Motion No. 147

That Bill C-45 be amended by deleting Clause 62.

Motion No. 155

That Bill C-45 be amended by deleting Clause 63.

Motion No. 157

That Bill C-45 be amended by deleting Clause 64.

Motion No. 158

That Bill C-45 be amended by deleting Clause 65.

Motion No. 159

That Bill C-45 be amended by deleting Clause 67.

Motion No. 160

That Bill C-45 be amended by deleting Clause 68.

Motion No. 162

That Bill C-45 be amended by deleting Clause 69.

[André Bellavance, Bloc, Richmond—Arthabaska, QC]

moved:

Motion No. 151

That Bill C-45, in Clause 62, be amended by replacing line 26 on page 134 with the following:

“(b) 65% multiplied by the proportion that”

Motion No. 153

That Bill C-45, in Clause 62, be amended by replacing line 30 on page 134 with the following:

“(c) 65% multiplied by the proportion that”

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, it is with pleasure that I stand today and raise the issue of what is before us, a seriously flawed budget bill. The Liberal Party has been consistent from the moment the bill was introduced to the point at which we sat for hours in committee, working to try to send a strong message to the government of the day.

We are disappointed in one sense because we understand what it is that the government is attempting to do with the budget bill and how it is being used to pass what many, including myself, would argue is a piece of legislation that should have taken into consideration a whole session of legislation. There are numerous pieces of legislation that should have been brought to the chamber, but instead the government—a majority, Reform Party-style government—has lumped all of the amendments and changes to legislation into one bill and tried to sneak them in through the budget. We within the Liberal Party believe that is undemocratic and is not the way the House should pass budget legislation.

We were disappointed when we tried to raise the issue in committee and we saw the New Democratic Party, which claims to be an opposition party, go onside with the government. It really surprised a number of people. I do not know how many times NDP members stood in their places and voted with the government on this legislation. I would suggest it was a thousand plus times. Time and again the NDP failed Canadians by not recognizing the importance of what was taking place in committee. Had NDP members understood what was taking place, had they understood what their role in the House really is, they would have opposed this legislation that was being brought in through the back door. The Liberal Party opposed it. I am very disappointed that the NDP did not fulfill its responsibility in terms of trying to oppose the budget bill.

That is why I was a bit surprised when the opposition House leader stood in his place to complain about the system. It was just a few days ago when the NDP was sucked in by the government. Those members overruled the chair in co-operation with the government in order to limit debate on the clause-by-clause discussion, which was critically important. It should have taken place. We would have expected that in finance committee, at the very least, the government would have recognized the need for debate on every clause. Every clause should have been debated on this budget during committee. That is what the Liberal Party wanted to see happen. The Liberal Party wanted to see a legitimate vote on each clause. We wanted to be able to point out to the government the many flaws within the budget.

I sat on the immigration committee. I did not like what was happening in that committee when we had the portion within the budget that would change immigration. It should have been a separate piece of legislation. That section went before immigration committee.

I had hoped for the opportunity to not only address it at the immigration committee but to also address it at the finance committee. That would have been the right thing to do because there is a need for amendments. In essence, what the government is intending to do through the budget bill with respect to immigration, which should require a separate bill, is establish three types of visitors who would come to Canada.

The first type of visitors are American citizens, who are welcome to come at any point, whether by hopping on a plane or crossing the border, as long as they have a valid passport. We all know that the Liberal Party is a very strong advocate of the easy access cross-border movement to encourage Americans to come to Canada. We want to see that.

The second type of visitors are citizens from countries where a visa is required, an area which creates all sorts of problems. We could have debated the issue of getting visas for hours and hours. It poses a serious problem. We need to do a lot more in that area. Parents and siblings are being denied entry into Canada, through visiting visas, to participate in events such as funerals, weddings, birthday celebrations, graduation ceremonies, bar mitzvahs and the like. Far too often they are being rejected. This is an issue that should be brought up in the immigration committee.

I will now come to the relevance of the creation of the third section within the legislation, the visitors. I suspect very few Canadians are aware of the fact that, now, no matter where people are living in the world—with the exception of American citizens from the United States or citizens from a country where a visa is required—they would be required to go online and acquire electronic approval before they could come to Canada. That is a significant change. That means people from London, Australia, many European countries and countries all over the world can no longer just board a plane with their passports and come to Canada. Rather, they have to be pre-approved before doing so.

One might ask what is wrong with that, but the biggest problem is that the government has not done its homework on the issue. The minister of immigration has no idea of the details of the program.

Fortunately, I had the opportunity to ask some questions in committee, because we were able to get some of the stuff off to committees and ask some basic questions. The department could not provide the answers in terms of what the anticipated costs were of implementing the program. The government had no idea.

I wanted to be able to ask those questions at the finance committee. We know the department of immigration, through the minister of immigration, had no idea. I suspect and was hoping that the Minister of Finance and the finance committee would know the answers, but we were denied that because the Conservatives were in a hurry to pass this legislation through committee, in an underhanded way and with the support of the New Democratic Party. What is so shameful is that the NDP has collapsed like a stack of cards with a light breeze going through it.

The New Democrats should be ashamed of their performance. They say that they object to the bill and do not want to see it passed. Actions speak louder than words and their actions the other night are a complete abrogation of any sort of opposition to the bill.

However, not to worry, the Liberal Party of Canada will stand and defend—

[Craig Scott, NDP, Toronto—Danforth, ON]

Mr. Speaker, I rise on a point of order. I would like to point out that what was just said is completely inaccurate. The NDP does not support the bill.

[The Deputy Speaker]

That is not a point of order. I will stop you right away.

Questions and comments, the hon. member for Chatham--Kent--Essex.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

Mr. Speaker, I listened with some interest to the hon. member across the way. He talks in defence of his party, how the Liberals rallied to the cause and fought for their constituents and the rest of Canada.

However, would he comment on this? It is a fact that we spent, I believe it was in excess of 50 hours, from 3:30 in the afternoon on Wednesday until 7:30 in the afternoon on Friday. The majority of that time was changes that the Liberals wanted to make to lakes and rivers and not just in a cluster, but one after another. We witnessed department people sitting there for who knows how long on the first day and then the rest of the time. All that time and money was spent for no apparent reason.

Could he comment on that and tell Canadians why the Liberal Party would waste that kind of time and taxpayer money?

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, there is the reality of what we do and there is a cost for that. Many civil servants are deeply offended by what the bill would do and appreciate the Liberal Party's fight to try to get the government to do the right thing. This is at the same time that the government and the NDP support increasing the size of the House of Commons by 30 plus MPs, at a cost of over $30 million annually. What about that cost?

In bringing together of all the legislation under the one budget bill, we spent a small amount of time on it. It should have been almost a complete legislative agenda, which normally would have had hundreds of hours of debate and questions and answers. Instead of that, the government chose to bring it in by sliding it through the back door of a budget debate.

It is historic. Never before in the history of Canada has there been such a huge budget bill presented to the House. That is one of the reasons why the Liberal Party opposes the legislation. We stand alone in ensuring that—

[The Deputy Speaker]

Order, please. I would ask that we try to get three questions in each five minute session of questions and comments, which means you will have to limit your questions and answers to 45 seconds maximum.

The hon. member for Parkdale—High Park.

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

Mr. Speaker, the hon. member has displayed not only inaccuracy, but quite frankly, embarrassing partisanship. The New Democratic Party is focused in holding the government to account and raising the substantive issues about which Canadians tell us they care. The partisanship and partisanship games that the member is displaying, frankly, are not fit for the debate on this important bill.

However, I will give him another opportunity and will ask the hon. member if he could comment on the very serious changes to the research and development grant cuts that have been made in the budget. This would seriously affect jobs, research and development, innovation and productivity in Canada. Could he answer a substantive question on that?