This bill is from the 41st Parliament, 1st session, which ended in September 2013.
Jim Flaherty Conservative
This bill has received Royal Assent and is now law.
This is from the published bill.
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.
All sorts of information on this bill is available at LEGISinfo, an excellent resource from the Library of Parliament. You can also read the full text of the bill.
Bill numbers are reused for different bills each new session. Perhaps you were looking for one of these other C-45s:
Jobs and Growth, 2012Government Orders
The Deputy Speaker
I am not finding that it is irrelevant. I think I was clear on that. On the other hand, if the speaker also wants to address these other two points, I would invite him to do so.
Yvon Godin NDP Acadie—Bathurst, NB
Mr. Speaker, on the same point of order. I would just ask for clarification.
If there is a bill in the House, I cannot see why we cannot talk about what is not in the bill to correct certain measures. It is a bill on—
Jobs and Growth, 2012Government Orders
The Deputy Speaker
I think we have made it clear. The Speaker has made it clear in other rulings that relevancy allows for that type of an approach. I think it is also clear that one cannot apply one's entire time in the course of a speech, whether it be a 10-minute speech or a 20-minute speech, on what is not in the bill.
Perhaps the member can stay within those parameters, which have been a long-standing practice in the House. It is correct to say, “This is something that should be in the bill”. That is quite acceptable, but the member cannot spend his entire time on that.
Rodger Cuzner Liberal Cape Breton—Canso, NS
Once again, Mr. Speaker, that is a very fair and just ruling, which I appreciate.
I will be quizzed by the other side on why I do not support this budget implementation bill because of the EI credit for new hires. Every bundle of thorns may have a couple of roses in it. Actually, that is not a bad measure. That is a good measure and I support it, but it is the other measures around that.
The other problem around this are the employers in rural communities that operate seasonal industries. They will not have employees to hire if families are unable to sustain themselves in rural communities. That is the essence of how I would tie this together. The credit will be no good to them if there are no skilled workers in those communities left to support those industries.
Yvon Godin NDP Acadie—Bathurst, NB
I do not know any more, Mr. Speaker, if it is in the bill, out of the bill, close to the bill.
With regard to foreign workers, does he find that foreign workers accepting 15% less in wages compared to other Canadians is discriminatory with this type of formula?
Rodger Cuzner Liberal Cape Breton—Canso, NS
Absolutely, Mr. Speaker. We have to be careful how we address the issue of temporary foreign workers and I do not think we have it right yet. Temporary foreign workers are an important part of our economy, especially rural economies. If people go to the agricultural sector, some of the best workers are temporary foreign workers. A group of temporary foreign workers may come in every harvest. Those temporary workers are able to work and sustain other seasonal workers within that industry. That is where the crops are grown and the fish are harvested. That is where a lot of the wealth from the country is realized.
If there are 20 people working the fields, there is probably an infrastructure of another 10 or 15 that are being supported by those workers in the field. They have to be treated with respect. They get that money and go back to their own communities. It is almost an indirect form of foreign aid. It is of benefit to them, it is of benefit to the workers in that industry and it is of benefit to the businesses and communities.
We are hearing it not just from people that receive EI benefits, we are hearing it from municipal and community leaders who know that these changes are going to have a negative impact on their communities. That is why we stand and represent them today.
Costas Menegakis Conservative Richmond Hill, ON
Mr. Speaker, I wonder if I could ask the member to comment on a couple of statistical facts.
Canada has the lowest debt to GDP ratio in the G7 countries. I believe it is 34%, projected to go as low as 32%. In addition, the International Monetary Fund has predicted that Canada will be a leader in the global economy over the next two years. There have been 820,000 and some odd jobs created since the global recession ended in 2009.
Could the hon. member tell us what people in his riding have said about the jobs that have been created and about the fact that Canada has come out relatively well from the global economic recession in relation to other countries around the world?
Rodger Cuzner Liberal Cape Breton—Canso, NS
Mr. Speaker, I love the opportunity to speak about the foundation that was laid by the Jean Chrétien-Paul Martin years, and John Manley and the member for Wascana in their stewardship of the Department of Finance.
When we talk about statistics, the unemployment rate has actually increased under the Conservative crew. They say that they have created 800,000 jobs, but those jobs have been created in Alberta, Saskatchewan and a few in Newfoundland. The Conservatives can separate their shoulders patting themselves on the back, but it is the resource sector that is creating those jobs.
Let us talk about the statistics. Let us talk about the record debt in the history of our country that the Conservatives continue to accrue.
The Minister of Foreign Affairs stood today to say that the Liberals used to present three budgets and that the Conservatives only presented one. However, our three budgets were balanced at least. Those guys have not been able to do that and I do not really see anything in the future that would show they might be able to balance it either.
Jobs and Growth, 2012Government Orders
The Deputy Speaker
It is my duty, pursuant to Standing Order 38, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Churchill, The Environment; the hon. member for Western Arctic, Fisheries and Oceans; the hon. member for Manicouagan, Aboriginal Affairs.
The hon. member for Essex.
Jeff Watson Conservative Essex, ON
Mr. Speaker, to finish off the last debate on the foundations put forward by Jean Chrétien, the member for Cape Breton—Canso sat there while that government took $53 billion from workers and businesses from the EI surplus.
Bill C-45, the jobs and growth act, 2012, is about the budget implementation act, part 2, which would implement some extremely important measures from the March budget. There are many provisions to improve our economy, which continues to be the primary focus of this government.
The results are beginning to speak for themselves in terms of the economy. There are over 820,000 net new jobs since the worst of the great recession in July 2009. Of those jobs, 90% are full-time, which speaks to strong private sector job growth.
The World Economic Forum said that our banks were the soundest in the world. Forbes magazine ranked Canada as the best country in the world in which to do business. The OECD and IMF predict that our economic growth will be among the strongest in the industrialized world over the next two years. Our net debt to GDP ratio remains the lowest in the G7 by a country mile or two. All three major credit ratings, be it Moody's, Fitch, or Standard & Poor's, have all reaffirmed Canada's top credit rating.
The global economy obviously remains fragile. To look at the European Union, the newspapers yesterday were filled with stories about Spain and its continued problems. Also, the U.S. growth, if we exclude the quantitative easing measures by the current administration—
Yvon Godin NDP Acadie—Bathurst, NB
Mr. Speaker, I rise on a point of order. I do not know what this has to do with the budget. This is off topic. We are in Canada not in the United States. The budget has nothing to do with the United States.
I would like the member to stay on the budget, in the same way he asked me to do a few minutes ago.
Jeff Watson Conservative Essex, ON
Mr. Speaker, I waited eight minutes into his speech to raise a point of order. I am 60 seconds in on setting the general tone of the economy as the context for the budget measures, which will continue to improve economic growth. The member should at least allow me seven more minutes.
Jobs and Growth, 2012Government Orders
The Deputy Speaker
As I have indicated in the past and again today on the relevancy issue, which I think is the point being raised, there certainly was not anywhere near enough time given to the member for Essex to get to that.
The member is welcomed to proceed.
Jeff Watson Conservative Essex, ON
Mr. Speaker, I thank the hon. member. I take it in the good spirit that the member intended it of course. It is very collegial in the House and Canadians who are watching at home should understand that is how we do business in the House.
I would just like to finish my thought on the economy. If we exclude the quantitative easing measures, the recent second stimulus of the U.S., its growth failed to meet expectations in the last quarter. We are watching that economic development and responding to it. We understand there is more work to do and that is why we are doing it.
Bill C-45 continues our low tax trajectory. The extension of the EI hiring credit, for example, is a measure specifically against taxes incurred by small businesses. We continue on that low tax trajectory for creating jobs and growth.
Contrast that with the opposition. Those members like a high tax trajectory. Their plan is full of it. The member for Nickel Belt, on October 25, lamented that the government was not collecting enough taxes from Canadians. They support a much different approach, but it is one that would kill jobs, not expand economic growth. We cannot increase the cost of doing business as significantly as those members have proposed and expect that businesses will somehow create jobs.
We support many measures in Bill C-45 and I wish opposition members could bring themselves to stand on their feet and support them.
One measure is our attempt to extend the EI hiring credit for small business another year. It benefited over half a million businesses last year and stands the prospect of doing similarly in this current context as well.
I would think the NDP would oppose our shift from oil and gas tax preferences to bio-energy, but that does not seem to be the case.
There are two major issues I want to talk about with respect to Bill C-45, which I wish the NDP would support.
The first issue is the changes to the Navigable Waters Protection Act. I have been a member of the Standing Committee on Transport, Infrastructure and Communities since 2007. We looked at this issue extensively for many months back in 2008. We are seeking to clarify the intent of the bill first of all. It is about protecting navigation. It was that way in 1882 when the bill was brought in and it was, quite frankly, that way up until the mid-1990s. It is a series of court interventions that have broadened the definition of a navigable water to the point where it is no longer useful. If a canoe or a kayak can be floated in four inches of water for a small distance that is considered a navigable water even if one has to portage that canoe or kayak five times over the course of a kilometre. They consider that a navigable water. Most of us in terms of applying common sense would know that is actually not the case.
We are looking to clarify that act, and that is important for a number of reasons. One is the infrastructure projects that roll out across the country, building critical infrastructure. We need to have a regulatory environment that focuses on allowing those projects to move forward. We are applying scrutiny where we need to apply scrutiny, which is where navigation has a serious likelihood of impairment. Our approach does that.
We had to consider two options. One is do we narrow the definition of a navigable water or do we take an exemption approach or a list approach as to which waterways we look at and which ones a navigation permit will not apply.
Witness after witness for weeks could not come up with the definition of a navigable water. It is incredibly complex and the nature of waterways across the country are exceedingly complex. That makes it difficult to come up with a workable definition of what a navigable water is. We had the municipalities come before committee. Representatives of seven provinces and two territories were at committee. They agreed with the approach that we are taking, which is to look at which waters we apply this to and which ones we do not.
Where are navigational interests to be protected and navigational rights to have that additional scrutiny, and where will they not? When we debated it back then, we had three parties supporting that approach. Sadly, that is not the case as we debate this measure today.
I gave the example earlier when asking the member for Prince George—Peace River about a forestry company going into an area where navigability is not an issue. If one were to take a kayak somewhere, according to the way the courts have defined navigable water, it would take one, in some cases, hundreds of kilometres to get to that particular area, if one even dared to go there. These are areas where logging companies go in and cut on a regular basis. However, for every temporary bridge across a creek, even if it were an intermittent creek, there would have to be a separate application to get a navigable waters permit. If there are 200 temporary bridges, it would take 200 applications. If an inspector from Transport Canada has to go there and do a site inspection, we can imagine how unwieldy and difficult it would be for one to develop a plan when navigability is not even a remote issue at all. We are moving to a risk-based approach and one that makes a tremendous amount of sense.
The second item I want to talk to is the bridge to strengthen trade, DRIC. The new Detroit River international crossing is this government's single most important infrastructure priority. We have not only said so here but have consistently proven it in this place, whether via the establishment of the borders and gateways fund in 2006, or the International Bridges and Tunnels Act in 2006, or the budgetary measures to support the parkway and the DRIC in 2007 and beyond. This act would insulate the DRIC from frivolous lawsuits. We already have 10, including three NAFTA challenges, aimed not at ensuring that the project is compliant with Canadian laws but to slow it down and kill it. The opposition stands for that delay and it should not. Its members should get behind this and Bill C-45 so that we can get jobs going.
Some 10,000 construction jobs and thousands more will be created from the necessary long-term business investment that will come because we have predictability at that corridor. Our trucks can move our goods across the border. Billions of dollars and thousands of jobs are waiting for this to go ahead. Opposition members stand for delay. Shame on that party. The members should instead stand up for it.
Alain Giguère NDP Marc-Aurèle-Fortin, QC
Mr. Speaker, the hon. member's fine statement was very interesting to hear, but the problem is when the government's only priority is to export Canada's raw materials as quickly as possible without any processing, and when, in order to do so, it destroys environmental laws.
The following question comes to mind: does the government really believe that the models used by some third world countries, that is, exporting only raw materials, have helped those countries develop?