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.

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

Thank you, Mr. Chair.

Minister, today the committee received a letter from the president of the CBC where he essentially threatens to sue the government if C-60, your budget bill, passes as is. He says that your budget bill “would reduce the independence that is critical to our operation” and that:

This could potentially embroil the government, our Corporation, and its unions in litigation, a result that could be avoided with an amendment that protects that independence.

Would you support an amendment to your budget bill that protects the independence of the CBC and avoids a court battle between the government and the CBC?

Motion That Debate Be Not Further Adjourned

[Peter Van Loan, Conservative, York—Simcoe, ON]

Mr. Speaker, that is indeed the case, because it is the number one priority of our government. One can see it in our legislative agenda.

I just went through some of the elements of Bill C-60. There are others, such as support for genomics research for Genome Canada and support for the Canada Youth Business Foundation to encourage an entrepreneurial ethic in the future for future generations. I know that an entrepreneurial ethic is something that is foreign to the NDP, but it is something we believe in and that we believe deserves support.

There is also funding for Indspire, for post-secondary scholarships and bursaries for first nations and Inuit students. This is something we are going to have an opportunity to debate and vote in favour of. Perhaps the NDP members will change their votes from the past, when they opposed it.

Enhancing the adoption expense tax credit is another item. Introducing a new, temporary, first-time donor super-credit for first-time claimants for charitable donations is another. These and many other measures are, of course, included in our budget and in Bill C-60, the economic action plan 2013 bill, which is focused on economic growth, job creation and long-term prosperity.

[Jim Flaherty, Conservative, Whitby—Oshawa, ON]

There will be adjustments to the program, as you know. Bill C-60 provides for that. The minister responsible was satisfied during the budget process that he had adequate resources to accomplish the goals.

[Peter Van Loan, Conservative, York—Simcoe, ON]

Mr. Speaker, there is some great irony to me in folks proclaiming how hard-working they are while they vote and oppose motions to work harder. That is what this motion is for.

The member raised the issue of economic certainty. Some of the things we hope to deal with are important for economic certainty. They are things that he and the NDP have already voted against. They are things like extending for two years the temporary accelerated capital cost allowance for new investment in machinery and equipment. This makes our manufacturers and our workers more competitive, more productive and more able to compete in global markets. This is something the NDP opposes. Indexing the gas fund payment to municipalities to better support their job-creating infrastructure is, again, something they voted against. However, we are determined that it should get through, notwithstanding the NDP's opposition.

There are reforms to the temporary foreign worker program so that the priorities of Canadian workers come first. New Democrats claim to be a workers' party, but they are opposing those measures and our economic action plan, Bill C-60.

I could go on and on, but these are the kinds of measures we are proposing to help ensure that Canada's focus is on job creation, economic growth and long-term prosperity.

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

I question whether journalistic independence would be respected in the case of political decisions being made, and whether there are truly independent decisions that will be made at the Bank of Canada under that scenario. But I need to move on to a different section.

This is part 3, division 9, temporary foreign workers. Back in 2009 the government admitted that there were no provisions existing in the regulations to hold employers accountable for their actions regarding temporary foreign workers. Nothing was done in that regard for another three and a half years. Now we see HRSDC is suffering the largest job cuts of any federal department, with more than 3,800 workers affected. They've been delivered notices about their jobs.

Will these job cuts affect the department's ability to administer the temporary foreign worker program and the new powers they are given under Bill C-60?

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

Thank you, Mr. Chair, and welcome, Mr. Minister, to the committee.

Of course, we're examining Bill C-60, which is another omnibus budget bill that affects about 50 different pieces of legislation. We've seen sections of this bill carved out and sent to other committees, although it will all come back here and we'll be voting on it—without having had the opportunity to hear witnesses' testimony or ask questions.

I want to ask you questions about two specific areas. First of all, part 3, division 17, gives the Treasury Board sweeping powers to unilaterally set the terms and conditions of employment for non-union workers and to impose a bargaining mandate on employees with a union. I'd like you to explain how allowing politicians to directly set wages and hours and perhaps even terminate employees is consistent with the independence of these crown corporations.

I just want to give you a couple of examples. Suppose a Bank of Canada economist publishes a research paper critical of the government's fiscal policy and the Treasury Board decides they want to cut that person's salary. Or suppose a CBC journalist publishes a story on the Senate scandal and the Treasury Board orders a reduction of that person's hours. These are scenarios that seem to be consistent with part 3, division 17.

I'm wondering if you can comment on the appropriateness of politicians making these decisions for independent crown corporations.

[Jim Flaherty, Conservative, Minister of Finance]

Thank you, Chair.

It's good to be here with the finance committee and the members of the committee. This is a hard-working committee, of course, particularly with respect to budget preparation, and I thank all of you for that.

I'm always short, but I'll also try to be brief in my opening remarks.

Your work pre-budget and the report you wrote were an important part of the presentation of the budget this year, as it is most years. Your recommendations do inform the budget, and I include from the committee's report—because I looked to see—some of the things that ended up in the economic action plan of 2013, including establishing a long-term plan for infrastructure, reviewing the temporary foreign worker program, extending the mineral exploration tax credit, reviewing current tariffs on consumer goods, ensuring fairness and neutrality in the tax system by closing tax loopholes, and further strengthening Canada's manufacturing sector.

Secondly, I'd like to congratulate the committee on its recent study and its in-depth report on options intended to increase charitable donations in Canada by using tax incentives and other targeted initiatives. The recommendations in this report also greatly influenced the preparation of the 2013 budget.

I will continue, but I will not say all the things I was going to say because I'm sure some of it will come up in questions, and I know votes may interfere.

Canada has done relatively well. Let me speak about this context. I use the word “relatively”. The world has been through a difficult time, particularly the western industrialized economies, since what the economists are now calling the great recession of 2008-09.

We had been paying down public debt in 2006-07 and into 2008—about $38 billion of public debt in Canada—in preparation for what was at that time the concern, quite frankly, which was more the American deficit and the accumulating public debt than it was Europe, although today perhaps the emphasis is more on the continuing recession in most of Europe.

In January 2009 we brought in the economic action plan, which was the budget of 2009, the earliest budget in Canadian history. It was a dramatic move toward stimulating the economy because of the fear that we had of very large unemployment and a deep, dark, prolonged recession.

The economic action plan worked. Canada came out of recession before any of the other industrialized economies. We were in recession for three quarters only. Our unemployment rate, thank goodness, never went into double digits.

Times remain challenging. I just came back from a G-7 finance ministers and central bank governors meeting 10 days ago in the United Kingdom. As I said, Europe has been in a prolonged recession. We're not out of the woods yet. There's a tension between some of the industrialized countries in the west—and I shouldn't just say the west because Japan is part of this—about spending more, stimulating more, more debt, more deficits, more perceived economic growth, and more printing of money, which is euphemistically called “quantitative easing”.

And then there are those of us who feel that the correct balance is what we tried to do in the budget this year in economic action plan 2013; that is, moving continually toward a balanced budget, which we will have by 2015, which was the plan from January 2009, while at the same time stimulating the economy in a few very important areas, which this committee has also highlighted from time to time—manufacturing through the accelerated capital cost allowance extension; infrastructure, which is vitally important to our communities and our municipalities in Canada; and skills training through the Canada job grant.

We feel we've hit the right balance, and we encourage our colleagues in the G-7 to follow that pattern.

The IMF recently remarked—and I'm quoting—“Canada is in an enviable position...[and] the policies that are being deployed are, in our minds, broadly appropriate”.

However, as our government has said over and over, we cannot let our guard down. As we are reminded too often, the world economy remains fragile. The United States and Europe, who are among our biggest partners, continue to face serious economic challenges. As it was noted earlier this month, the euro zone is now in the longest recession it has ever experienced, that is to say negative economic growth for six consecutive quarters.

In the middle of this economic and global turmoil, Canada must also face the reality of a more and more competitive world market, with the increased participation of emerging economies such as Brazil, India and China.

To build a stronger economy and produce increased job growth, the many positive initiatives contained in Bill C-60 include the major measures I've already mentioned with respect to manufacturers. There is also the indexing of the gas tax fund, which was a major pre-budget request of the Federation of Canadian Municipalities during our meetings with them, and I know the committee had the same experience. We are extending the mineral exploration tax credit. We know that sector of the Canadian economy has a lot of growth and is very important to Canadian economic growth overall. We are providing $165 million in multi-year support for genomics research, $18 million to the Canadian Youth Business Foundation to help young entrepreneurs grow their firms and their futures, and $5 million to Indspire for post-secondary scholarships and bursaries for first nations and Inuit students.

Additionally, Bill C-60 brings forward many positive initiatives to support families and communities. Some of these are much less expensive than the major initiatives, of course: promoting adoption by enhancing the adoption expense tax credit; introducing a new first-time donor's super credit to encourage Canadians to donate to charity—that came in significant part out of the work done by this committee on charitable issues. We are expanding tax relief for our home care services, providing $30 million to support the construction of housing in Nunavut, investing $20 million in the Nature Conservancy of Canada to continue to conserve ecologically sensitive land, providing $3 million to support training in palliative care for front-line health care providers, committing $3 million to the Canadian National Institute for the Blind to expand library services for the blind and partially sighted, and supporting veterans and their families by no longer deducting veterans' disability benefits when calculating other select benefits. There are also many other initiatives.

I know you have had an opportunity to look at Bill C-60 carefully. I know some parts of the bill have been referred to other committees of the House of Commons. I emphasize to you the need for balance in the approach we take as a government. I can tell you that in international discussions I have had with my colleagues in finance and central banking around the world, Canada is well respected for the way we have grappled with economic issues also facing other countries over the course of the past several years.

I am prepared to receive questions, Mr. Chair.

[The Chair, Conservative, James Rajotte]

I call this meeting to order.

This is meeting number 123 of the Standing Committee on Finance. Orders of the day are pursuant to the order of reference of Tuesday, May 7, 2013, a continuation of our study of Bill C-60, An Act to implement certain provisions of the budget tabled in Parliament on March 21, 2013 and other measures.

Colleagues, we're very pleased to have before us today the Honourable Jim Flaherty, the Minister of Finance, to discuss this bill.

Minister, I understand you have an opening statement, and then we'll have questions from members. Welcome back to the committee.

[John Carmichael, Conservative, Don Valley West, ON]

Thank you, Chair, and thank you to our witnesses. I think this will be my last go-round.

It's my understanding—and if this is repetitive from earlier questions, I apologize—that in proposed Bill C-60, the SOE definitions of direct or indirect influence remain undefined. Am I correct in that?

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

Thank you, Mr. Chair. I'll attempt to use my time efficiently.

Thank you, witnesses.

I want to go back to the competition policy review panel and their advice before the amendments were tabled in 2009. I'm going to ask questions specifically around the fact that these amendments through Bill C-60 are attempting, as I see it, to bring greater clarity around certain concepts and to extend timelines for national security reviews.

What I want to know is whether within Industry Canada, you received advice that it would be helpful to review and clarify the term “national security”, which currently isn't defined within the act.

[Geoff Regan, Liberal, Halifax West, NS]

Thank you. I think Mr. Bezan should have more confidence in the witnesses and their ability to handle these questions.

Was the definition of net benefit test under consideration during the review of the Investment Canada Act that led to the changes in Bill C-60?

[James Bezan, Conservative, Selkirk—Interlake, MB]

Mr. Regan had asked at what point in time who made the decision to include this in Bill C-60. I think that compromises the position of our witnesses in trying to answer a question that is beyond their mandate in providing testimony here today.

[Geoff Regan, Liberal, Halifax West, NS]

Who made the decision that these amendments would be part of Bill C-60 instead of being introduced as a stand-alone bill which, of course, would have ensured that Parliament and this committee would have a chance to actually have the proper time to hear from expert witnesses, analyze this, consider amendments, and give serious consideration of the impact of these changes?

[Geoff Regan, Liberal, Halifax West, NS]

An investor here in Canada, a person with his RRSP or whatever, wants to invest in a company and invests and suddenly finds out that the minister says it's not Canadian. “Well, I didn't know that.” Now the idea the person has perhaps that it might be sold to foreign investors or whatever suddenly is a problem. Doesn't that create uncertainty?

How is an investor going to know what the heck is going to go on, and isn't it the case, according to the Canadian Bar Association, that it may even happen after the fact? According to the provisions of Bill C-60, it looks like this declaration could be made at any time. There is no requirement for the minister to do this in advance of a takeover. He can do it afterwards and nullify it. When investors are trying to decide what they should invest in and are looking for companies that will potentially have some gain, maybe because they'll be sold in some cases, how are they going to know?

[Hélène LeBlanc, NDP, LaSalle—Émard, QC]

I want to pick up on something you said in your opening statement.

I would like to know whether natural resource companies with oil sands operations are going to benefit from the exceptional circumstances under Bill C-60. Would you kindly elaborate on that?