Bill C-60 (Historical)

Economic Action Plan 2013 Act, No. 1

An Act to implement certain provisions of the budget tabled in Parliament on March 21, 2013 and other measures

Part 1 implements certain income tax measures proposed in the March 21, 2013 budget. Most notably, it
(a) allows certain adoption-related expenses incurred before a child’s adoption file is opened to be eligible for the Adoption Expense Tax Credit;
(b) introduces an additional credit for first-time claimants of the Charitable Donations Tax Credit;
(c) makes expenses for the use of safety deposit boxes non-deductible;
(d) adjusts the Dividend Tax Credit and gross-up factor applicable in respect of dividends other than eligible dividends;
(e) allows collection action for 50% of taxes, interest and penalties in dispute in respect of a tax shelter that involves a charitable donation;
(f) extends, for one year, the Mineral Exploration Tax Credit for flow-through share investors;
(g) extends, for two years, the temporary accelerated capital cost allowance for eligible manufacturing and processing machinery and equipment;
(h) clarifies that the income tax reserve for future services is not available in respect of reclamation obligations;
(i) phases out the additional deduction available to credit unions over five years;
(j) amends rules regarding the judicial authorization process for imposing a requirement on a third party to provide information or documents related to an unnamed person or persons; and
(k) repeals the rules relating to international banking centres.
Part 1 also implements other income tax measures and tax-related measures. Most notably, it
(a) amends rules relating to caseload management of the Tax Court of Canada;
(b) streamlines the process for approving tax relief for Canadian Forces members and police officers;
(c) addresses a technical issue in relation to the temporary measure that allows certain family members to open a Registered Disability Savings Plan for an adult individual who might not be able to enter into a contract; and
(d) simplifies the determination of the Canadian-source income of non-resident pilots employed by Canadian airlines.
Part 2 implements certain goods and services tax and harmonized sales tax (GST/HST) measures proposed in the March 21, 2013 budget by
(a) reducing the compliance burden for employers under the GST/HST pension plan rules;
(b) providing the Minister of National Revenue the authority to withhold GST/HST refunds claimed by a business where the business has failed to provide certain GST/HST registration information;
(c) expanding the GST/HST exemption for publicly funded homemaker services to include personal care services provided to individuals who require such assistance at home;
(d) clarifying that reports, examinations and other services that are supplied for a non-health-care-related purpose do not qualify for the GST/HST exemption for basic health care services; and
(e) ending the current GST/HST point-of-sale relief for the Governor General.
Part 2 also amends the Excise Tax Act and Excise Act, 2001 to modify the rules regarding the judicial authorization process for imposing a requirement on a third party to provide information or documents related to an unnamed person or persons.
In addition, Part 2 amends the Excise Act, 2001 to ensure that the excise duty rate applicable to manufactured tobacco other than cigarettes and tobacco sticks is consistent with that applicable to other tobacco products.
Part 3 implements various measures, including by enacting and amending several Acts.
Division 1 of Part 3 amends the Customs Tariff to extend for ten years, until December 31, 2024, provisions relating to Canada’s preferential tariff treatments for developing and least-developed countries. Also, Division 1 reduces the rate of duty under tariff treatments in respect of a number of items relating to baby clothing and certain sports and athletic equipment imported into Canada on or after April 1, 2013.
Division 2 of Part 3 amends the Trust and Loan Companies Act, the Bank Act, the Insurance Companies Act and the Cooperative Credit Associations Act to remove some residency requirements to provide flexibility for financial institutions to efficiently structure the committees of their boards of directors.
Division 3 of Part 3 amends the Federal-Provincial Fiscal Arrangements Act to renew the equalization and territorial formula financing programs until March 31, 2019 and to implement total transfer protection for the 2013-2014 fiscal year. That Act is also amended to clarify the time of calculation of the growth rate of the Canada Health Transfer for each fiscal year beginning after March 31, 2017.
Division 4 of Part 3 authorizes payments to be made out of the Consolidated Revenue Fund to certain entities or for certain purposes.
Division 5 of Part 3 amends the Canadian Securities Regulation Regime Transition Office Act to remove the statutory dissolution date of the Canadian Securities Regulation Regime Transition Office and to provide authority for the Governor in Council, on the Minister of Finance’s recommendation, to set another date for the dissolution of that Office.
Division 6 of Part 3 amends the Investment Canada Act to clarify how proposed investments in Canada by foreign state-owned enterprises and WTO investors will be assessed and to allow for the extension, when necessary, of timelines associated with national security reviews.
Division 7 of Part 3 amends the Canada Pension Plan to ensure that the Canada Revenue Agency can accurately identify, calculate and refund overpayments made to the Canada Pension Plan and the Quebec Pension Plan in a particular year by contributors who live outside Quebec.
Division 8 of Part 3 amends the Pension Act and the War Veterans Allowance Act to ensure that veterans’ disability benefits are no longer deducted when calculating war veterans allowance.
Division 9 of Part 3 amends the Immigration and Refugee Protection Act to authorize the revocation of temporary foreign worker permits, the revocation and suspension of opinions provided by the Department of Human Resources and Skills Development with respect to an application for a work permit and the refusal to process requests for such opinions. It authorizes fees to be paid for rights and privileges conferred by means of a work permit and exempts, from the application of the User Fees Act, those fees as well as fees for the provision of services in relation to the processing of applications for a temporary resident visa, work permit, study permit or extension of an authorization to remain in Canada as a temporary resident or in relation to requests for an opinion with respect to an application for a work permit.
It also provides that decisions made by the Refugee Protection Division under the Immigration and Refugee Protection Act in respect of claims for refugee protection that were referred to that Division during a specified period are not subject to appeal to the Refugee Appeal Division if they take effect after a certain date.
Division 10 of Part 3 amends the Citizenship Act to expand the Governor in Council’s authority to make regulations respecting fees for services provided in the administration of that Act and cases in which those fees may be waived. It also exempts, from the application of the User Fees Act, fees for services provided in the administration of the Citizenship Act.
Division 11 of Part 3 amends the Nuclear Safety and Control Act to authorize the Canadian Nuclear Safety Commission to spend for its purposes the revenue it receives from the fees it charges for licences.
Division 12 of Part 3 enacts the Department of Foreign Affairs, Trade and Development Act, sets out the powers, duties and functions of the Minister of Foreign Affairs, the Minister for International Trade and the Minister for International Development and provides for the amalgamation of the Department of Foreign Affairs and International Trade and the Canadian International Development Agency.
Division 13 of Part 3 authorizes the taking of measures with respect to the reorganization and divestiture of all or any part of Ridley Terminals Inc.
Division 14 of Part 3 amends the National Capital Act and the Department of Canadian Heritage Act to transfer certain powers, duties and functions to the Minister of Canadian Heritage from the National Capital Commission. It also makes consequential amendments to the National Holocaust Monument Act to change the Minister responsible for the construction of the monument to the Minister of Canadian Heritage from the Minister responsible for the National Capital Act.
Division 15 of Part 3 amends the Salaries Act to add ministerial positions for regional development responsibilities for northern Canada, and northern and southern Ontario. It also amends the Salaries Act to replace a reference to the Solicitor General of Canada with a reference to the Minister of Public Safety and Emergency Preparedness. It also makes an amendment to the Parliament of Canada Act to provide that the maximum number of Parliamentary Secretaries who may be appointed is equal to the number of ministers for whom salaries are provided in the Salaries Act.
Division 16 of Part 3 amends the Department of Public Works and Government Services Act to remove the requirement for the Minister of Public Works and Government Services to obtain a request from a government, body or person in Canada or elsewhere in order for the Minister to do certain things for or on their behalf. It also amends that Act to specify that the Governor in Council’s approval relating to those things may be given on a general or a specific basis.
Division 17 of Part 3 amends the Financial Administration Act to give the Governor in Council the authority to direct a Crown corporation to have its negotiating mandate approved by the Treasury Board for the purpose of the Crown corporation entering into a collective agreement with a bargaining agent. It also gives the Treasury Board the authority to require that an employee under the jurisdiction of the Secretary of the Treasury Board observe the collective bargaining between the Crown corporation and the bargaining agent. It requires that a Crown corporation that is directed to have its negotiating mandate approved obtain the Treasury Board’s approval before entering into a collective agreement. It also gives the Governor in Council the authority to direct a Crown corporation to obtain the Treasury Board’s approval before the Crown corporation fixes the terms and conditions of employment of certain of its non-unionized employees. Finally, it makes consequential amendments to other Acts.
Division 18 of Part 3 amends the Keeping Canada’s Economy and Jobs Growing Act to provide for increases to the sums that may be paid out of the Consolidated Revenue Fund for municipal, regional and First Nations infrastructure through the Gas Tax Fund. It also provides that the sums may be paid on the requisition of the Minister of Indian Affairs and Northern Development.

[The Chair, Conservative, James Rajotte]

Thank you, Ms. Nash.

Your chair has a ruling.

Clause 130 of Bill C-60 provides for post-secondary scholarships for students who are registered as Indians under the Indian Act and for Inuit students. The amendment seeks to amend the bill so that unregistered first nations, Métis, and Inuit students would also be eligible for the scholarship. House of Commons Procedure and Practice, second edition, states at pages 767 and 768:

Since an amendment may not infringe upon the financial initiative of the Crown, it is inadmissible if it imposes a charge on the public treasury, or if it extends the objects or purposes or relaxes the conditions and qualifications specified in the royal recommendation.

In the opinion of the chair, the amendment expands the groups eligible to receive a scholarship, which seeks to alter the terms and conditions of the royal recommendation. I therefore rule this amendment inadmissible.

That deals with NDP-9.

(Clauses 130 to 132 inclusive agreed to)

(On clause 133)

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

I just want to ask a question, to go back to the clarification that Bill C-60 seeks to provide.

Just to be specific, this is simply a clarification of which measurement of GDP, GDP growth, will be used. Is that what Bill C-60 is seeking to do—to provide a clarification of which measurement of GDP growth will be used?

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

Okay. So in Bill C-60 this is simply a clarification.

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

These clauses broadly apply to the residency requirement for financial institutions. Bill C-60 reduces the Canadian residency requirement for committees of directors of financial institutions. These are smaller groups who deal with particular decisions within a board of directors, and they would report to the full board of the directors. However, a significant amount of business is conducted by board subcommittees, in the same way that there are subcommittees of cabinet that deal with issues and then report back to cabinet. It's the same with corporate boards.

A lot of very important work is done by subcommittees. There are, for instance, audit committees, human resource compensation committees.

There's a concern that this provision is actually much more significant in terms of its impact on decision-making in corporate boards of financial institutions than the government would indicate. I mean, it could create a very significant loophole, if you will, and a significant change in terms of who ultimately would be making very important and significant decisions on the future of our financial institutions.

I would like to ask if Ms. Hardy could explain to Canadians what types of business typically would be delegated to committees of directors and what types of business would not be, or could not be, delegated

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

The intention of my amendment, or the Liberal amendment, is similar to that of Ms. May's, so I expect the outcome, perhaps, will be similar as well. We'd prefer to see the government get rid of this section of Bill C-60 so that the tax credit for credit unions would remain in place as is. It's clear that the government is not willing to do that. What this amendment would do is at least provide credit unions with more time by extending the phase-out of the tax credit, and I think that's a reasonable compromise.

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

Okay. I need to say something by way of introduction. I'll be as brief as I can. I'm here at the invitation of the finance committee. I did not ask for this opportunity. I support the statement made by Ms. Nash that this is not proper parliamentary procedure and that I've been invited to submit amendments and will not have an equal opportunity to present them, not even equal to my colleague from the Bloc Québécois. I underscore that my participation at this moment is without prejudice to my rights as a member of Parliament to submit amendments at report stage.

This amendment is based on testimony to committee in relation to credit unions. They are deeply concerned that the changes in Bill C-60 will eliminate their ability to provide the very essential financial services that they provide—as Mr. Brison said—particularly across rural Canada. What I've attempted to do with this amendment, Mr. Chair, is to reduce the tax benefits they now receive, the preferential tax treatment, but not eliminate it all together, so that under my amendment being proposed at this moment, which I hope is consistent with the purpose of the act, it would reduce the credit unions' preferential tax rate from where it is now to 75% after 2016.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Plamondon.

As the chair, I have a ruling on this amendment.

Bill C-60 amends the Income Tax Act to phase out a tax deduction for credit unions. This amendment proposes to revert back to the original wording of the act, thus allowing the tax deduction to remain in place. As House of Commons Procedure and Practice, second edition, states, on page 766:

An amendment to a bill that was referred to a committee after second reading is out of order if it is beyond the scope and principle of the bill.

In the opinion of the chair, the deletion of a key element is contrary to the principle of Bill C-60 and is therefore inadmissible. Therefore, this amendment is inadmissible.

Thank you.

We have Ms. May, who has her first amendment.

Ms. May, very briefly for one minute, please.

[Louis Plamondon, Bloc, Bas-Richelieu—Nicolet—Bécancour, QC]

Thank you, Mr. Chair.

We would like to restore the balance of Bill C-60 to what it was before. I feel that it worked very well.

Earlier, the NDP member reflected my own thoughts very well when he spoke about how important credit unions are in small communities. There are 51 municipalities in my riding, and at least 35 of them have no financial institution except the credit union. So we are not talking about competing with other financial companies.

This bill will have an effect on the dividends that go back to their members. By members, I include small businesses taking out loans. For example, a loan of $150,000 or $175,000 can result in a rebate to a business of $2,200 to $2,500 at year end. That is a significant amount for an SME. If they can no longer count on the dividends, economic development will be hurt.

I do not want this deduction to be progressively eliminated; I want it to be maintained as it is at the moment.

Thank you.

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

Mr. Chair, I want to say on the record that we believe the process that's been adopted by the finance committee to deal with the amendments of Bill C-60 submitted by non-members does not conform with parliamentary procedure. Only the House of Commons can appoint committee members, and non-members cannot move motions. I just want to be on the record with that.

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

I appreciate Mr. Keenan's earnest response, but he would understand that it's difficult for us as parliamentarians to deal with the legislation today when we're still waiting for information.

I propose Liberal-1 amendment, the rationale being that today the government has the discretion to provide tax-free status to missions with a risk score between 1.5 and 2. Bill C-60 gets rid of that discretion. It effectively handcuffs the government and prevents it from extending tax-free status to certain missions. And the government has yet to provide the rationale for this. My amendment would simply restore that discretion.

[The Chair, Conservative, James Rajotte]

I call this meeting to order.

This is meeting 125 of the Standing Committee on Finance. Orders of the day, pursuant to the order of reference of Tuesday, May 7, 2013, are to study Bill C-60, an act to implement certain provisions of the budget tabled in Parliament on March 21, 2013, and other measures.

Colleagues, I want to welcome you all here, as well as the officials from the Department of Finance especially, and other departments who are here with us this morning. They are here to address any issues that members may have as we go through clause-by-clause consideration. I want to welcome the officials to the table and those in the room here.

Colleagues, I do have a series of amendments and I will be proceeding clause by clause. You should be following the agenda that I will be proceeding with for all of you here today. Everybody should have a copy of that agenda.

Pursuant to Standing Order 75(1) consideration of clause 1, the short title, is postponed.

Therefore I shall start with clause 2.

Colleagues, I do not have an amendment until clause 7, in which case I have amendment LIB-1.

(Clause 2 agreed to on division)

(Clauses 3 and 4 agreed to)

(Clauses 5 and 6 agreed to on division)

(On clause 7)

Bill C-48, Technical Tax Amendments Act, 2012

[Cathy McLeod, Conservative, Kamloops—Thompson—Cariboo, BC]

Mr. Speaker, I was going to bring up exactly that same point. I believe the member is talking about Bill C-60. We are going through clause-by-clause study tomorrow and we look forward to having that conversation in the House.

However, I want to note the tax loopholes that the government has consistently closed and the integrity of our tax system has improved immensely since 2006 when we took over government.

Incorporation by Reference in Regulations Act

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

Mr. Speaker, can the hon. member for Newton—North Delta explain for me, because I cannot figure it out, what has changed since 2009, when this Parliament and the Standing Joint Committee for the Scrutiny of Regulations recommended against these broad and flexible ways of short-circuiting public scrutiny and access to review of the regulatory process?

At that time the members of the joint committee said, “What this really means is that it allows rules to be imposed without having to go through the regulatory process”.

This is part and parcel of a number of changes we have seen happening, including in Bill C-60, where there would be intervention at the political level over collective bargaining by crown corporations or through more discretionary powers at the hands of ministers. Slowly but surely, the executive in this country—the Prime Minister's Office, which is subservient to the will of Parliament—will have all the levers of power it needs to rule, with Parliament merely an anachronism.

[Geoff Regan, Liberal, Halifax West, NS]

Mr. Krane, let me ask you what you think of this process. It provides us with...well, actually, it turns out that it's supposed to be two hours of hearing from any witnesses other than officials from Industry Canada as we consider the provisions in Bill C-60.

I guess finally, along with that, what should the committee recommend to the finance committee on these provisions?

[Jim Stanford]

My actual point there is not so much that the resource sector is dependent on incoming capital, in the sense that we actually need that capital, otherwise the sector couldn't be developed. To the contrary, my point is that it's become dominated by incoming foreign capital, which has been interested more in purchasing control of the asset rather than in actually building, investing in new capital, new productive capacity, new jobs, and so on. In the oilsands, for example, the majority of the production is now attributed to foreign-owned shares of companies.

I don't think the provisions contemplated in Bill C-60 would affect that. I know that when the government announced its intentions in December, it did indicate that, in general, state-owned enterprise takeovers, in the oilsands sector in particular, would not pass a net-benefit test except under extraordinary circumstances.

Now, I'm not a lawyer, so I'm not an expert on the actual language, but in my review of the proposed amendments, I don't see how that is going to be affected through these amendments. It sounds like it will be more affected through the decision-making of the industry minister on any future oilsands-related transaction. At any rate, I think the focus, again, just on the oilsands itself is arbitrary. I don't know why we would put a fence around that particular resource industry, recognizing that it is, obviously, a uniquely important one, but all of our commodity-based resource sectors have important direct and indirect effects. And if we're concerned about the intended and unintended consequences, if you like, of foreign investment in resource-based sectors, I think we need a more general and transparent approach than what we would see through these amendments.