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.

[The Chair, Conservative, Rodney Weston]

Did I...? Mr. Toone, I'm going to thank our witnesses at this time, because I know Mr. Taylor has a flight to catch.

To our witnesses, I want to thank you for coming today and for appearing before this committee and providing us with your thoughts on Bill C-45, clauses 173 to 178. We certainly do appreciate it. Again, on such short notice, we do appreciate your time.

Mr. Toone, I told you I would come back to you and give you the opportunity to propose a motion, so the floor is yours now.

[Lawrence MacAulay, Liberal, Cardigan, PE]

Thank you very much, Mr. Chair.

Mr. Taylor, looking at the obstruction of the passage of the salmon, could they be, in your opinion...? I'd just like to have your view, possibly looking at Bill C-45 and Bill C-38, on whether they have made any changes that will help the situation. Do you think that it could obstruct fish from the feeding grounds or spawning grounds?

I'd like you to comment on the minister's authority to allow fish to be killed. Do you see any time or any reason that this should happen? If so, I'd like you to explain to the committee how you think the minister would have that authority. He has the authority, but what would be a good enough reason to allow these types of things to happen?

Also, if you have some recommendations to expand upon, go straight ahead. I expect you have a lot.

[Audrey Mayes, Senior Policy Analyst, Environmental Stewardship, Assembly of First Nations]

Yes.

We had requested some background materials so that it would assist us to formulate our own analysis of what was contained in Bill C-38, and now we're faced with Bill C-45.

We suggested during our brief technical meeting with DFO...to produce four helpful documents that we could disseminate to first nations as well as take a look at so that it would assist us in doing our outreach with first nations. We requested a powerpoint deck-type of overview. We asked for a comparison document.

I'll also note that this is the first time we've had any definition of “aboriginal fishery” contained in the bill. Previous attempts to change the Fisheries Act over the years have not looked at or examined the definition of an aboriginal fishery. This is a very new clause for us, and we wanted to have a little bit more of a conversation with the department and have the time to talk to first nations across the country about what that means to them.

We have a lot of case law to look at. We also have various complex self-government agreements and treaties. We have the peace and friendship treaties and the numbered treaties as well as new treaties that are being negotiated.

There's quite an array of different complexities. We thought that by requesting some of this background information from the department, it would assist us in providing information to first nations so they could understand what is being proposed.

Thank you.

[Randy Kamp, Conservative, Pitt Meadows—Maple Ridge—Mission, BC]

I think the department wouldn't disagree with that.

This change in Bill C-45 was made because feedback was received from some first nations groups and others that the definition in Bill C-38 would exclude some aboriginal fisheries, and the intent in the fisheries protection section of the act was to make sure that fisheries that involve fish that are fished, that are important to Canadians, be protected, and not to find a way to not protect some of those fisheries.

The advice was that by using the word “subsistence”, there would be some other fisheries.... The Nisga'a was one that was mentioned by the department official. Because they have a fishery that is commercial-like but doesn't have a commercial licence, it wasn't clear how a fishery like that would be caught by the terms “recreational”, “commercial”, and “aboriginal”. We were told that this broader term of “land claims agreement” would cover fisheries like that as well as arrangements that were made under treaty.

If you differ with that interpretation, perhaps you could say so, and if we have time—

[Randy Kamp, Conservative, Pitt Meadows—Maple Ridge—Mission, BC]

Thank you, Mr. Chair.

Thank you to the witnesses for appearing before us as we consider these clauses to amend the Fisheries Act.

As you've heard, I think, the primary purpose of these clauses in Bill C-45 is to provide greater certainty and clarity to the changes that were in Bill C-38. These are not a substantive change to the old Fisheries Act, as such. In that respect, perhaps I can just begin with a clarification.

I understood, Mr. Taylor, that you're somewhat pessimistic about the environmental damages fund and how much money might be available there. But to clarify what happened there, the intent of the changes in Bill C-38 was to align the penalties section of the fisheries protection program with the Environmental Enforcement Act. To be frank, as I understand it, it kind of overlooked the necessity to specify that those monetary penalties would go to the environmental damages fund, as it does with the Environment Canada violation. So this is just to correct that.

I think it could be argued, as well, that the legal requirement to report harm, which was in Bill C-38, the legal requirement now to deliver on the commitment you make when you receive an authorization.... There's the fact that the penalties are increased, they're significantly higher. Now there is a minimum. There wasn't before.

So I think we're more optimistic than you are that there might be a significant fund that groups like the Atlantic Salmon Federation could benefit from.

I guess the other comment that needs to be made, because I think there is some misunderstanding on this score, is that, to my understanding at least, there has been no January 1 commitment to roll out these changes. The commitment that was in Bill C-38 was only that they would come into force at a later date, to be decided by order in council, by Governor in Council, by cabinet. And cabinet, I assume, will do that when it believes that it's ready to do it and that we have all of the necessary things in place to transition into the new regime.

So as to the notion that it's January 1, 2013, I know that internally the department has said that they have set that, themselves, as a target to have the things in place. When the cabinet believes that everything is in place is quite another matter.

But we do appreciate your feedback about the need to delay until we're ready to roll. We would agree with that.

I will turn to Mr. Wuttke for a bit, if I could. I just want to make sure I understood what you were saying, and reflect, as well, what we were told by a departmental official.

We were told that the term “land claims agreement” kind of subsumes within it the notion of a treaty. Yet your comment made it sound as though you didn't agree with that. I wonder if you, as the AFN's general counsel, could provide any clarity to this committee on that.

[Bill Taylor, President, Atlantic Salmon Federation]

Thank you, Mr. Chairman.

Good morning, everyone. It's nice to see you all again.

I very much appreciate this opportunity to appear before you regarding Bill C-45 and the amendments, specifically clauses 173 to 178. I only wish that we would have had an opportunity for further consultation on all the amendments. I'll keep my comments general, with some specific relations to Bill C-45.

With respect to the Fisheries Act consultations, the amendments to the Fisheries Act were thrust upon Canadians without consultation. In answer to public outcry, Fisheries and Oceans Minister Ashfield promised consultation with the provinces, aboriginal groups, stakeholders such as conservation groups, anglers, landowners, and municipalities, to develop the regulatory and policy framework to support the new and focused direction that is set out by those proposed changes.

The deadline for approval of the Fisheries Act amendments by order in council is January 1, 2013, and that date is fast approaching. DFO has arranged no meaningful consultation before this.

The Atlantic Salmon Federation, ASF, recognizes that DFO staff are trying to consult with the provinces and develop the scientific data that would guide the amendments. Stakeholders such as ASF would benefit from being able to review some of the important scientific foundation work that has already been provided by DFO scientists through the Canadian Scientific Advisory Secretariat.

We request, on behalf of the Canadian public, access to these reports, and to have scientists available with whom we can discuss the scientific underpinnings to the key concepts of the amended act.

ASF is still committed to working with DFO to ensure that the implementation of the amended Fisheries Act will protect our fish and their habitats from the impacts of industrial projects in an effective and cost-efficient way, and sustain the many economic and social benefits our recreational fisheries provide now and far into the future. We cannot do this without meaningful consultation that is framed by DFO by providing its information and scientific data that spells out the rationale for protection of our fish and their habitat, amended under the Fisheries Act.

ASF recommends that to allow for meaningful, informed consultation to occur, the order in council required to have the changes to the act come into force by the January 1 date be deferred to June 2013. This extension should ensure adequate consultation and the involvement of all interested Canadians, and time for government officials to do an effective job to develop and share with stakeholders their science-based input.

ASF has prepared a preliminary report, which we have shared with DFO, on the Fisheries Act amendments. In summary, I'll speak to some of those items.

With respect to habitat, fisheries are very important, but a fishery is only as good as the health of the fish and the habitat in the ecosystem on which they depend. This should be the fundamental premise of implementation of the act. The principle of no net loss should continue and be applied consistently.

Regarding recreational fish, ASF emphasizes that protecting the recreational fishery requires not only protecting the specific recreational fish, but also the fish that support the recreational fish. There must be protection of the ecosystem, which supports the health and existence of recreational fish, and the fish that support those fish. The definition of a recreational fishery, as meaning that a species of fish “is harvested under the authority of a licence for personal use of the fish or for sport”, is far too simplistic and seems to infer that populations that are not healthy enough to support a fishery will not be protected. It is important to protect not only existing fisheries but also potential fisheries. The presence of wild Atlantic salmon in a river should be sufficient to identify the existence of a recreational fishery.

It's important to also protect fish listed under SARA. The concept of expansion in productivity of a fishery is not captured in the amended act. Enhancement and restoration of recreational fisheries must be considered, which goes beyond protecting the productivity of fisheries that exist now.

Regarding economic value, the economic and social value of recreational fisheries relies on healthy rivers and oceans, which brings us back to the importance of protecting fish and their habitat to support long-term economic benefits far into the future. It is important to protect potential economic value by protecting fish that may not support a fishery at the moment but have the potential to do so through restoration and enhancement.

Regarding partnerships, there is little information from government on how partnerships under the amendments would work. ASF agrees that efforts of the private and government sector should be more effectively integrated and carried out under a central plan. ASF sees some potential in working in partnership, and recommends that the federal government develop a paper that helps groups such as the Atlantic Salmon Federation understand what is entailed in the government's concept of partnerships and how they would potentially work.

With respect to science, science is of utmost importance in arriving at sound decisions on protection of fish and their habitat, which in turn protects fisheries.

ASF recommends with all urgency that DFO scientists consult with NGO scientists very soon to develop scientific criteria that will underlie decisions on fish and habitat protection in the amended Fisheries Act.

To assist in addressing the science needed to support the Fisheries Act, just as an example, the Ontario chapter of the American Fisheries Society is working with Trout Unlimited and the World Wildlife Fund to produce an independent science piece on key principles that will inform the discussion.

Again, the short timeline of January 1 challenges the effective use of such important scientific input.

Specific to Bill C-45, which is meant to clarify parts of Bill C-38, I'll offer the following comments with respect to the environmental damages fund.

This will not be the cash cow that some profess it to be. A substantial reduction in penalties has occurred, and this is expected to continue.

Because of the new subjective terms that have been introduced, such as “serious harm”, “permanent alteration and/or destruction”, and “ongoing productivity of a fishery”, the amendments are at present legally and scientifically undefined.

It is a huge challenge to determine scientifically how “serious harm”, or causing “death of fish”, affects the productivity of a fishery. This will be a challenge when considering whether to authorize obstruction to the fish passage.

How many fish have to be destroyed to constitute “serious harm”? How do you take into account cumulative impacts? Without clear legal and scientific underpinnings, it will be impossible to get a conviction in the courts. In fact, there will be too much uncertainty in the definitions of serious harm and/or permanent damage for a judge to make a definitive ruling, or for habitat staff to lay a charge, for that matter.

With respect to destruction of fish passage, I know of no instances in eastern Canada where blockage of rivers increases the abundance of native fish. Damming rivers alters the habitat from moving water to still water, a river to a lake. The species composition for a river is very different from that of a lake, and this is often to the detriment of native fish. Although there may be an increase in fish biomass, this is often not in favour of a native wild fish. Productivity of a non-native fish to the detriment of a native fish is simply not acceptable.

Then there's the impact of serious cuts to the DFO habitat staff. These are the people who would make the charges that would lead to the convictions that would lead to the money in the environmental damages fund. We know now that the new fisheries protection program, which was formerly habitat, will have only 16 service delivery points across the country.

With respect to the Atlantic region, these offices will be located in three cities: Moncton, Dartmouth, and St. John's, Newfoundland. Prince Edward Island didn't make the list despite the province's significant impact on river habitat from agricultural runoff. In the Gulf region, we have lost the Tracadie and Charlottetown offices. In Newfoundland, five offices have been reduced to one. In Nova Scotia, at least four offices have been reduced to one.

In 2000, in the Pacific region, there were 1,800 habitat-related investigations, leading to 49 convictions. By 2010, the number of investigations was down to only 300. Convictions under the habitat provisions were down to only one.

The constant pressure of reducing staff and budgets has led to the staff being unable to do their jobs. Habitat protection has been dismantled, which leaves little hope that there will be effective control of assaults on fish habitat or much money flowing into the environmental damages fund.

I could go on, but I'll finish by urging this committee to use its influence to delay approval of the amendments by order in council to allow time to ensure that these amendments are scientifically and legally defensible and that there has been meaningful consultation with the many Canadians who want to have strong protection for our fish and fish habitat.

Thank you.

[Stuart Wuttke]

Once again, on behalf of the Assembly of First Nations and National Chief, Shawn Atleo, thank you for the invitation.

My name is Stuart Wuttke. I am general counsel for the Assembly of First Nations, and I appreciate the opportunity to be here today on behalf of the AFN.

I have several remarks to put forward with regard to the definition of “aboriginal fisheries”, the prohibition against obstructing passage of fish or waters, and the environmental damages fund.

As a preliminary remark, we would like to note that my appearance today does not qualify as consultation with first nations. The Assembly of First Nations is a political organization and the first nations themselves are the individual rights holders of aboriginal rights and treaty rights. A robust consultation will be required by the Government of Canada with first nations across Canada on the amendments put forward for the Fisheries Act in Bill C-45.

Regarding Bill C-45, it's a concern that clause 175 amends Bill C-38 by replacing the definition of “aboriginal” in relation to fisheries. The definition in this section limits aboriginal fisheries to those fisheries practised for the purposes of using fish for food, social, or ceremonial purposes, or for purposes set out in land claims agreements. The amendments in clause 175 specifically remove recognition of “subsistence” fisheries and added those fisheries “in a land claims agreement”.

To begin with, the Assembly of First Nations is concerned about an attempt to legislate a definition as to which fisheries qualify as aboriginal. It is up to each first nation to determine the extent and nature of their fisheries. Leaving avenues open for policy to define food, social, and ceremonial fisheries may result in an infringement of first nation rights.

The government must robustly consult and accommodate first nations if it is to contemplate the nature of aboriginal fisheries.

With respect to amendments, clause 175 falls short of including all first nation fisheries protected by the Constitution Act, including fisheries set out in treaty and traditional fisheries based on first nation inherent rights.

The AFN is substantially concerned that the definition set out will freeze Fisheries and Oceans Canada's interpretations and policies in the year 1990, when the court decision reaffirmed first nations rights to food, social, and ceremonial fisheries in the Sparrow decision.

I'd like to note that the Sparrow decision included an important concept that is lacking in the government's attempt to narrowly define first nations fisheries. The Supreme Court clearly articulated that first nation rights must be interpreted flexibly so as to allow their evolution over time. It would make sense to define aboriginal fisheries in a way that allows evolution over time. Setting a definition that fails to acknowledge fisheries, reaffirmed by the Supreme Court after 1990, that fails to include wording that would allow fisheries that may be reaffirmed in the future, effectively prevents any flexible interpretation of rights and is contrary to the Supreme Court direction.

In a high-level engagement with the Department of Fisheries and Oceans, the Assembly of First Nations learned that the government intends to interpret this definition in a limited temporal scope, meaning that our fisheries that are not utilized, which often occurs for conservation purposes, will no longer be protected from serious harm.

I would argue that this does not qualify as a flexible interpretation. This is counterintuitive, and opens a door for abrogating and derogating first nation rights by allowing for species that first nations fish to continue to decline in population, potentially past the point of recovery, to the detriment of the ability to continue to exercise a right to fish.

Bill C-45 should be amended to make it clear that all traditional fisheries must be protected, whether currently practised or whether in a period of recovery to allow for future practice.

The government has argued that the definition of “aboriginal” fisheries need not include fisheries under economic components, since those fisheries would be protected under the definition of “commercial” fisheries. I caution that unilaterally deciding which fisheries are not aboriginal is contrary to the principle of self-determination, a principle embraced by Canada by virtue of adopting the United Nations Declaration on the Rights of Indigenous Peoples.

I would like to note that the separation of commercial and aboriginal fisheries is arbitrary. The Supreme Court of Canada has been clear that the commercial mainstream principle is not necessarily appropriate for determining what income is situated on a reserve, and it is clear that income attached to a reserve is different in nature from the commercial activities undertaken by non-first nations.

Since aboriginal fisheries must be clearly protected by section 35 of the Fisheries Act, the AFN would recommend that the definition be expanded to include traditional fisheries, fisheries within treaties as well as land claim agreements, and fisheries practised for the purpose consistent with an aboriginal right. An amendment noting that the minister must consult with first nations in determining which fisheries fall within a definition of “aboriginal” would assist in making the act consistent with case law.

On our concerns with regard to clause 174, the Assembly of First Nations is concerned about the breadth and discretion in administering the environmental damages fund for the purposes related to conservation and protection of fish, fish habitat, the restoration of fish habitat, or for administering the fund.

Specifically, the Assembly of First Nations is concerned about how these funds will be administered and used. First nations are specific resource users recognized by the act, and first nations have specific uses that differ from other resource users. It is absolutely essential that first nations rights and interests are considered when administering the fund.

The AFN would suggest that the government include first nation representatives from accountable first nations organizations on the administering body, if and when such body is created. As well, as stated with the replacement of the 1986 habitat policy, the mechanisms for ensuring a preference for like-for-like habitat when compensating for habitat damages may no longer exist.

The Assembly of First Nations recommends that the government continue to maintain a preference for like-for-like habitat in order to ensure that more utilized species do not receive preference in compensation. For example, first nations are the primary resource users of the eulachon fishery. If a project destroys or alters an eulachon habitat, compensation should not come in the form of enhancements of walleye habitat.

On our concerns regarding clause 173, the prohibition against seines, nets, weirs, or other fish appliances that obstruct “more than two thirds of the width of any river or stream or more than one third of the width of the main channel at low tide of any tidal stream”, may result in the infringement of first nation rights.

Certain first nation fisheries require weirs that extend across entire rivers. These weirs all have mechanisms that allow for fish passage upstream. As the right to practice these fisheries is protected by the Constitution, we at AFN suggest an amendment to specifically exempt aboriginal fisheries from prohibition. I would suggest that the government also consider implications of this amendment on its own assessment weirs, which are used in much the same manner.

To recap, the AFN suggestions are the following.

First, clause 175 should be amended to include a definition of aboriginal fisheries to include traditional fisheries, fisheries within treaties as well as land claim agreements, and fisheries practiced for the purposes consistent with an aboriginal right.

Secondly, the government should ensure compensation projects under the environmental damages fund to give preference to like-to-like habitat and ensure that first nations are involved in the administration of the fund.

Thirdly, clause 173 should be amended to exempt aboriginal fisheries.

Thank you.

[The Chair, Conservative, Rodney Weston]

I call this meeting to order.

I'd like to take this opportunity to welcome our guests here today, and thank them for making the time in their schedules to appear before us with very short notice. We certainly do appreciate that.

Today we're studying Bill C-45, and more specifically clauses 173 to 178. Certainly we would appreciate some comment and some feedback, and an opportunity to question our guests here as well.

I won't go on too long here this morning. I know both groups have some opening remarks, and I'll start off with the Assembly of First Nations.

Mr. Wuttke, if you want to make your opening comments, the floor is yours.

[Shelly Glover, Conservative, Saint Boniface, MB]

Thank you, Chair.

Welcome again, Minister. It's been a great pleasure for me to learn by working with you. Every time you appear, I learn something new, so thank you for enlightening us.

When the CFIB was here the other day, they distributed a pamphlet I know you haven't been able to see, but I do want to share some information from it with you. I'm particularly interested in the challenges of older workers. I know we've done a number of things to help older workers. You yourself have pushed for things like the targeted initiative for older workers, approved the ThirdQuarter project that was put forward by the Manitoba Chambers of Commerce in the last budget, which will help to link employers to older workers who still enjoy working, and want to continue.

The CFIB surveyed their members and they asked this very question: “At what age do you believe you will be able to retire comfortably?”. They had almost 10,000 responses. What shocked me was that the majority of responses said age 68 or later.

Having said that, I know that in Bill C-45 you've taken some more measures to try to help older workers. Obviously it's needed, according to surveys like the CFIB's.

Can you enlighten us as to what we're doing for older workers? For example, under CMHC, you've taken some measures with regard to retirement age. Can you tell us a little about that?

[Mark Adler, Conservative, York Centre, ON]

Thank you, Chair.

I want to thank you, Minister, for being here today. I know how busy you are, so thank you for your time today.

In my riding of York Centre, we regularly convene a number of businesses, mostly small businesses. About twice a month we sit around a table, and we talk about issues and different concerns and challenges they may have.

I have to tell you that, to a business, and these are all small businesses, they all say to convey thanks to the Minister of Finance, particularly for the small business hiring tax credit. They are hiring people as a result of this. A number of them wanted me to pass on a thank you for that.

I want to talk a bit about the IMF's comment on the governance reform provisions which are contained within Bill C-45 and how they relate to what we saw in Bill C-38, the first budget bill. These are designed, of course, to strengthen the financial architecture around the world and all of that.

Canada is co-chair of the G-20 working group. Can you talk about why it's important that Canada take a lead on this to strengthen the international financial architecture and push the IMF to be more effective, particularly with respect to developing economies? How will that benefit Canada?

[Jim Flaherty, Conservative, Minister of Finance]

Thank you, Mr. Chair.

I am joined this evening by officials from various departments that are responsible for various aspects of the bill. As you know it's been referred to 10 different committees with respect to various areas of expertise.

I will begin with a few opening remarks in order to leave as much time as possible for the committee members' questions.

However, before I begin, I want to thank the chair and the members of the Standing Committee on Finance for the work they have done recently and all their work, in general.

I would like to thank the committee for its work on the annual pre-budget consultations that began earlier this fall. I know it's a great deal of work and some travel, although I understand you used conference methods more this year than before, which is laudable. I thank you for that and the savings that go with it.

Alongside my own consultations as finance minister, your committee's pre-budget outreach is a vital tool that helps ensure Canadians from coast to coast to coast that they have the opportunity to make their voices heard. Rest assured, as in previous years, that the recommendations from the finance committee's report will play a key role in informing and shaping the next federal budget.

Many of the measures included in the bill you are considering, Bill C-45, were indeed recommendations from last year's finance committee report; for example, reforms to public sector pensions, new tax incentives for renewable energy, revamping the Navigable Waters Protection Act, removing internal barriers to internal trade, and more. I encourage the committee's continued pre-budget consultation work, especially your eventual report and recommendations.

I would also like to congratulate the committee for its comprehensive work over the past year examining potential ways to increase charitable giving in Canada with new or improved tax incentives and other targeted action. I'm looking forward to receiving the committee's report and recommendations, which I understand are likely to be forthcoming in the near future. But first I urge the committee to consider and support Bill C-45, which is the bill before you, the jobs and growth act 2012, which proposes to enact many of the key measures from the budget, economic action plan 2012.

As we all know and are all too often reminded, the global recovery is fragile and global economic turbulence remains. Our largest trading partners, the United States and Europe, continue to wrestle with significant challenges and are struggling to find lasting effective solutions to their fiscal problems. While there are signs of recent progress, the problems they face have no painless solutions, no quick fixes, and as a result the global economic environment remains highly uncertain.

Not only is the global economy uncertain, it is also increasingly competitive, as Canada faces increasing competition as well as opportunities from emerging economies.

That is the reality of global economy today and the reason why our government is still completely focused on its number one priority—support and growth of the economy here, across the country.

Economic Action Plan 2012 is at the heart of that approach. This comprehensive and ambitious plan developed by our government will help Canada maintain a fairly strong position compared with the other G7 countries in the industrialized world. That strong position will enable Canada to capitalize on the current economic challenges and turn them into economic opportunities that will contribute to our long-term prosperity.

I submit to the committee that our plan is on the right track to grow our economy, something which the facts clearly demonstrate. They are facts like Canada's having the strongest record of employment growth in the entire G-7 since July 2009, with over 820,000 net new jobs created, over 90% of which are full-time and nearly 75% of which are in the private sector. They are facts like Canada's having the best fiscal position in the G-7, with the lowest debt-to-GDP ratio by far. They are facts like Canada's having the safest and soundest financial system in the world, as ranked by the World Economic Forum, for five years running. They are facts like Canada's being forecasted to be among the leaders of the industrialized world in economic growth by the OECD and the IMF in the years ahead. The list goes on and on.

Canada's economic policy stands out for all the right reasons, and the world is paying attention. As the president of the U.S. Chamber of Commerce, Tom Donohue, wrote: We’ve got a strong example of the positive effects of good policies even closer to home—Canada. Why has our northern neighbor recovered faster and more robustly from the global recession than nearly all other major economies? Due to a series of smart policy decisions.—Canada has transformed its economy while other nations continue to struggle.

Christine Lagarde, the head of the IMF, said recently that Canada is a bit of an anomaly, that Canada is doing a lot better than other advanced economies and has a path of its own.

Of course, here in Canada we cannot be complacent. We can't allow political gridlock and instability, which all too often threaten and delay vital economic and fiscal reforms in the United States and Europe, to throw Canada off course for long-term economic growth. Post the U.S. election, I'm hopeful that further political stability in the United States will enable the administration and Congress to take the required steps needed to deal with their fiscal and economic challenges swiftly.

Similarly, Canada must move ahead and stay focused on the economy. The jobs and growth act, 2012 does exactly that. It moves ahead with important steps to build a strong economy and create jobs, steps such as extending the job-creating hiring credit for small business, promoting interprovincial trade, improving oversight of Canada's financial system, removing barriers to cross-border trade, supporting Canada's commercial aviation sector, expanding tax relief for investment in clean energy generation, and much more.

The act also introduces important measures to support families and communities by improving the registered disability savings plans, by helping Canadians save for retirement, by implementing the tax framework for pooled registered pension plans, and more.

The jobs and growth act, 2012 also builds on our government's already strong record of better respecting taxpayers' dollars by closing tax loopholes, by taking landmark action to ensure that the pension plans for federal public sector employees are sustainable, financially responsible, and fair compared to those offered in the private sector, and much more.

With that, I want to take a moment to highlight our landmark action to reform federal public sector pension plans, and as a result, to better respect Canadian taxpayers while helping to ensure that Canada's fiscal position remains sustainable in the long term. As we all know, public sector pension plans represent a significant element of the federal government's total compensation expenses, expenses which, as recent international events have shown, can weigh heavily on the long-term fiscal sustainability of a government if affordability is not the guiding principle.

As I mentioned earlier, this committee recognized that very fact in last year's pre-budget consultation report, which urged the government to take action to ensure the sustainability of public sector pensions. Unlike previous governments, which were content to ignore questions of long-term affordability for the sake of political expediency, we are taking the fiscally responsible position and putting the long-term state of Canada's finances first, even introducing landmark reforms for members of Parliament and senators pensions. Indeed, that's why the jobs and growth act, 2012 is taking necessary steps to make public sector pension plans sustainable, responsible, and fair.

We're doing this in two important ways. First, we are moving the public service pension plan to a 50-50 contribution arrangement, finally making public sector employee contributions equal to what the government contributes. Second, for employees who join the federal public service starting next year, the normal age of retirement will be raised from age 60 to age 65. These two important changes will go a long way to promoting the long-term sustainability of public sector pension plans while ensuring they are fair to Canadian taxpayers. Long overdue, these reforms to public sector pensions were necessary and part of our Conservative government's commitment to responsible financial management.

In the words of TD chief economist Craig Alexander:

The government is taking action to pursue fiscally sound policies for the long run. The increase in the qualifying age for Old Age Security, the new normal age for retirement among public sector workers and reforms to public pensions are good examples of this.

Because of such long-term responsible reforms, I urge the committee to support Bill C-45, the jobs and growth act, 2012, to help create a long-term stronger future for Canada.

With that, Mr. Chair, I invite questions from the committee.

Thank you.

[The Chair, Conservative, James Rajotte]

I call this meeting to order.

Welcome to meeting number 91 of the Standing Committee on Finance. Our orders of the day are pursuant to the order of reference of Tuesday, October 30, 2012, our study of Bill C-45, A second Act to implement certain provisions of the budget tabled in Parliament on March 29, 2012 and other measures.

We're very pleased to have the Hon. Jim Flaherty, Minister of Finance with us this evening. We also have officials from other departments to deal with certain parts of the bill as well.

Minister, thank you for being with us this evening. I understand you have an opening statement and then we'll have questions from members.

[Sharon McKeen]

Bill C-45 does not bring about changes for the retention period. Bill C-45 is only asking for the information for those who are expected to be on board a commercial carrier destined for Canada.

[Rosane Doré Lefebvre, NDP, Alfred-Pellan, QC]

Okay.

That would make it possible to gather information earlier and to extend the retention period. You will now be able to keep the information for three and a half years.

Are those the only changes under Bill C-45 that affect your agency?

[Rosane Doré Lefebvre, NDP, Alfred-Pellan, QC]

Thank you, Mr. Chair.

I would like to thank you for the information about the amendments made to Bill C-45. I greatly appreciate it and I find it very interesting.

As my colleagues were asking questions, I kept taking notes. I am sorry, but I am going to try to sort all this out at the same time.

You talked about the fact that the information would be reviewed earlier. As you said, at the moment, that takes place when you are already on the plane. If I am not mistaken, with this amendment, you would get the information at the check-in. It is simply a matter of the processing procedure. Nothing changes in the way the information is gathered, but that gives you the power to do it 20 minutes earlier, for example, to make sure that people do not get on the plane if there is a serious problem.