Bill C-4 (Historical)

Economic Action Plan 2013 Act No. 2

A second 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) increases the lifetime capital gains exemption to $800,000 and indexes the new limit to inflation;
(b) streamlines the process for pension plan administrators to refund a contribution made to a Registered Pension Plan as a result of a reasonable error;
(c) extends the reassessment period for reportable tax avoidance transactions and tax shelters when information returns are not filed properly and on time;
(d) phases out the federal Labour-Sponsored Venture Capital Corporations tax credit;
(e) ensures that derivative transactions cannot be used to convert fully taxable ordinary income into capital gains taxed at a lower rate;
(f) ensures that the tax consequences of disposing of a property cannot be avoided by entering into transactions that are economically equivalent to a disposition of the property;
(g) ensures that the tax attributes of trusts cannot be inappropriately transferred among arm’s length persons;
(h) responds to the Sommerer decision to restore the intended tax treatment with respect to non-resident trusts;
(i) expands eligibility for the accelerated capital cost allowance for clean energy generation equipment to include a broader range of biogas production equipment and equipment used to treat gases from waste;
(j) imposes a penalty in instances where information on tax preparers and billing arrangements is missing, incomplete or inaccurate on Scientific Research and Experimental Development tax incentive program claim forms;
(k) phases out the accelerated capital cost allowance for capital assets used in new mines and certain mine expansions, and reduces the deduction rate for pre-production mine development expenses;
(l) adjusts the five-year phase-out of the additional deduction for credit unions;
(m) eliminates unintended tax benefits in respect of two types of leveraged life insurance arrangements;
(n) clarifies the restricted farm loss rules and increases the restricted farm loss deduction limit;
(o) enhances corporate anti-loss trading rules to address planning that avoids those rules;
(p) extends, in certain circumstances, the reassessment period for taxpayers who have failed to correctly report income from a specified foreign property on their annual income tax return;
(q) extends the application of Canada’s thin capitalization rules to Canadian resident trusts and non-resident entities; and
(r) introduces new administrative monetary penalties and criminal offences to deter the use, possession, sale and development of electronic suppression of sales software that is designed to falsify records for the purpose of tax evasion.
Part 1 also implements other selected income tax measures. Most notably, it
(a) implements measures announced on July 25, 2012, including measures that
(i) relate to the taxation of specified investment flow-through entities, real estate investment trusts and publicly-traded corporations, and
(ii) respond to the Lewin decision;
(b) implements measures announced on December 21, 2012, including measures that relate to
(i) the computation of adjusted taxable income for the purposes of the alternative minimum tax,
(ii) the prohibited investment and advantage rules for registered plans, and
(iii) the corporate reorganization rules; and
(c) clarifies that information may be provided to the Department of Employment and Social Development for a program for temporary foreign workers.
Part 2 implements certain goods and services tax and harmonized sales tax (GST/HST) measures proposed in the March 21, 2013 budget by
(a) introducing new administrative monetary penalties and criminal offences to deter the use, possession, sale and development of electronic suppression of sales software that is designed to falsify records for the purpose of tax evasion; and
(b) clarifying that the GST/HST provision, exempting supplies by a public sector body (PSB) of a property or a service if all or substantially all of the supplies of the property or service by the PSB are made for free, does not apply to supplies of paid parking.
Part 3 enacts and amends several Acts in order to implement various measures.
Division 1 of Part 3 amends the Employment Insurance Act to extend and expand a temporary measure to refund a portion of employer premiums for small businesses. It also amends that Act to modify the Employment Insurance premium rate-setting mechanism, including setting the 2015 and 2016 rates and requiring that the rate be set on a seven-year break-even basis by the Canada Employment Insurance Commission beginning with the 2017 rate. The Division repeals the Canada Employment Insurance Financing Board Act and related provisions of other Acts. Lastly, it makes technical amendments to the Employment Insurance (Fishing) Regulations.
Division 2 of Part 3 amends the Trust and Loan Companies Act, the Bank Act and the Insurance Companies Act to remove the prohibition against federal and provincial Crown agents and federal and provincial government employees being directors of a federally regulated financial institution. It also amends the Office of the Superintendent of Financial Institutions Act and the Financial Consumer Agency of Canada Act to remove the obligation of certain persons to give the Minister of Finance notice of their intent to borrow money from a federally regulated financial institution or from a corporation that has deposit insurance under the Canada Deposit Insurance Corporation Act.
Division 3 of Part 3 amends the Trust and Loan Companies Act, the Bank Act, the Insurance Companies Act and the Cooperative Credit Associations Act to clarify the rules for certain indirect acquisitions of foreign financial institutions.
Division 4 of Part 3 amends the Criminal Code to update the definition “passport” in subsection 57(5) and also amends the Department of Foreign Affairs, Trade and Development Act to update the reference to the Minister in paragraph 11(1)(a).
Division 5 of Part 3 amends the Canada Labour Code to amend the definition of “danger” in subsection 122(1), to modify the refusal to work process, to remove all references to health and safety officers and to confer on the Minister of Labour their powers, duties and functions. It also makes consequential amendments to the National Energy Board Act, the Hazardous Materials Information Review Act and the Non-smokers’ Health Act.
Division 6 of Part 3 amends the Department of Human Resources and Skills Development Act to change the name of the Department to the Department of Employment and Social Development and to reflect that name change in the title of that Act and of its responsible Minister. In addition, the Division amends Part 6 of that Act to extend that Minister’s powers with respect to certain Acts, programs and activities and to allow the Minister of Labour to administer or enforce electronically the Canada Labour Code. The Division also adds the title of a Minister to the Salaries Act. Finally, it makes consequential amendments to several other Acts to reflect the name change.
Division 7 of Part 3 authorizes Her Majesty in right of Canada to hold, dispose of or otherwise deal with the Dominion Coal Blocks in any manner.
Division 8 of Part 3 authorizes the amalgamation of four Crown corporations that own or operate international bridges and gives the resulting amalgamated corporation certain powers. It also makes consequential amendments and repeals certain Acts.
Division 9 of Part 3 amends the Financial Administration Act to provide that agent corporations designated by the Minister of Finance may, subject to any terms and conditions of the designation, pledge any securities or cash that they hold, or give deposits, as security for the payment or performance of obligations arising out of derivatives that they enter into or guarantee for the management of financial risks.
Division 10 of Part 3 amends the National Research Council Act to reduce the number of members of the National Research Council of Canada and to create the position of Chairperson of the Council.
Division 11 of Part 3 amends the Veterans Review and Appeal Board Act to reduce the permanent number of members of the Veterans Review and Appeal Board.
Division 12 of Part 3 amends the Canada Pension Plan Investment Board Act to allow for the appointment of up to three directors who are not residents of Canada.
Division 13 of Part 3 amends the Proceeds of Crime (Money Laundering) and Terrorist Financing Act to extend to the whole Act the protection for communications that are subject to solicitor-client privilege and to provide that information disclosed by the Financial Transactions and Reports Analysis Centre of Canada under subsection 65(1) of that Act may be used by a law enforcement agency referred to in that subsection only as evidence of a contravention of Part 1 of that Act.
Division 14 of Part 3 enacts the Mackenzie Gas Project Impacts Fund Act, which establishes the Mackenzie Gas Project Impacts Fund. The Division also repeals the Mackenzie Gas Project Impacts Act.
Division 15 of Part 3 amends the Conflict of Interest Act to allow the Governor in Council to designate a person or class of persons as public office holders and to designate a person who is a public office holder or a class of persons who are public office holders as reporting public office holders, for the purposes of that Act.
Division 16 of Part 3 amends the Immigration and Refugee Protection Act to establish a new regime that provides that a foreign national who wishes to apply for permanent residence as a member of a certain economic class may do so only if they have submitted an expression of interest to the Minister and have subsequently been issued an invitation to apply.
Division 17 of Part 3 modernizes the collective bargaining and recourse systems provided by the Public Service Labour Relations Act regime. It amends the dispute resolution process for collective bargaining by removing the choice of dispute resolution method and substituting conciliation, which involves the possibility of the use of a strike as the method by which the parties may resolve impasses. In those cases where 80% or more of the positions in a bargaining unit are considered necessary for providing an essential service, the dispute resolution mechanism is to be arbitration. The collective bargaining process is further streamlined through amendments to the provision dealing with essential services. The employer has the exclusive right to determine that a service is essential and the numbers of positions that will be required to provide that service. Bargaining agents are to be consulted as part of the essential services process. The collective bargaining process is also amended by extending the timeframe within which a notice to bargain collectively may be given before the expiry of a collective agreement or arbitral award.
In addition, the Division amends the factors that arbitration boards and public interest commissions must take into account when making awards or reports, respectively. It also amends the processes for the making of those awards and reports and removes the compensation analysis and research function from the mandate of the Public Service Labour Relations Board.
The Division streamlines the recourse process set out for grievances and complaints in Part 2 of the Public Service Labour Relations Act and for staffing complaints under the Public Service Employment Act.
The Division also establishes a single forum for employees to challenge decisions relating to discrimination in the public service. Grievances and complaints are to be heard by the Public Service Labour Relations Board under the grievance process set out in the Public Service Labour Relations Act. The process for the review of those grievances or complaints is to be the same as the one that currently exists under the Canadian Human Rights Act. However, grievances and complaints related specifically to staffing complaints are to be heard by the Public Service Staffing Tribunal. Grievances relating to discrimination are required to be submitted within one year or any longer period that the Public Service Labour Relations Board considers appropriate, to reflect what currently exists under the Canadian Human Rights Act.
Furthermore, the Division amends the grievance recourse process in several ways. With the sole exception of grievances relating to issues of discrimination, employees included in a bargaining unit may only present or refer an individual grievance to adjudication if they have the approval of and are represented by their bargaining agent. Also, the process as it relates to policy grievances is streamlined, including by defining more clearly an adjudicator’s remedial power when dealing with a policy grievance.
In addition, the Division provides for a clearer apportionment of the expenses of adjudication relating to the interpretation of a collective agreement. They are to be borne in equal parts by the employer and the bargaining agent. If a grievance relates to a deputy head’s direct authority, such as with respect to discipline, termination of employment or demotion, the expenses are to be borne in equal parts by the deputy head and the bargaining agent. The expenses of adjudication for employees who are not represented by a bargaining agent are to be borne by the Public Service Labour Relations Board.
Finally, the Division amends the recourse process for staffing complaints under the Public Service Employment Act by ensuring that the right to complain is triggered only in situations when more than one employee participates in an exercise to select employees that are to be laid off. And, candidates who are found not to meet the qualifications set by a deputy head may only complain with respect to their own assessment.
Division 18 of Part 3 establishes the Public Service Labour Relations and Employment Board to replace the Public Service Labour Relations Board and the Public Service Staffing Tribunal. The new Board will deal with matters that were previously dealt with by those former Boards under the Public Service Labour Relations Act and the Public Service Employment Act, respectively, which will permit proceedings under those Acts to be consolidated.
Division 19 of Part 3 adds declaratory provisions to the Supreme Court Act, respecting the criteria for appointing judges to the Supreme Court of Canada.

Economic Action Plan 2013 Act No. 2

[Marc Garneau, Liberal, Westmount—Ville-Marie, QC]

Mr. Speaker, I would like to ask my hon. colleague about the fact that we have just come through six years of deficits in a row and that after two fantastic years, 2006 and 2007, because of huge Liberal surpluses since 2008, we have added $160 billion. If we break that down, it is about $30 billion per year. That is $1,000 of debt for every man, woman, and child every year since 2008.

I wonder what my hon. colleague thinks about the fact that we are strapping the future of our generations that will follow us with such debt. It will be more than $1,000 per person—

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

Do you remember something called a recession? Do you remember that?

[The Acting Speaker, Bruce Stanton]

Order. There is too much noise in the House. I am sure that hon. members will want to know the response. We have a short time for the response.

The hon. member for Winnipeg North.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, if only I could have leave to explain in detail.

Suffice it to say what we do need is a reality check. As has been pointed out, the current Minister of Finance inherited billions of dollars of surplus. At the time before the recession he was able to make that evaporate and turn it into billions of dollars of annual deficit.

[Scott Armstrong, Conservative, Parliamentary Secretary to the Minister of Employment and Social Development]

Mr. Speaker, the hon. member across the way talked about how these things were evaporating. His party saw more taxpayer dollars evaporate into the coffers of Quebec Liberal ad agency firms with $40 million still owed to taxpayers. We have to ask: where is that $40 million that the Gomery inquiry says that the Liberal Party owes to the taxpayers of our country?

As far as this budget implementation act goes, the Minister of Finance has done a tremendous job of putting together an economic program that is going to lead our country to jobs, growth and long-term prosperity.

I am from Atlantic Canada. Our region has struggled over the years with its economy, but it is starting to turn the corner for many reasons, the most important one being the economic policies put forward by our Minister of Finance and this government. A young child growing up in Atlantic Canada today can look forward to a bright and robust future.

A $25 billion shipbuilding program has been awarded to the Irving shipyards. That is equivalent to 11,000 jobs in Nova Scotia, 55,000 jobs across the country.

Our government strongly supports the west-east pipeline to Saint John. That is going to bring a whole new industry of oil exports to Atlantic Canada. Oil will be refined, value-added, in Saint John and exported to countries all around the world.

We have invested in a loan guarantee for the Lower Churchill Falls project. That is a $7.2 billion project. That means jobs and skilled tradespeople will be able to return from out west and take those jobs at the Irving shipyard in Saint John and in Labrador to fill those three large projects. We are taking steps in economic action plan 2013 to ensure we have the measures in place to provide the training so young people from Atlantic Canada fill those jobs and build a future for themselves and their families.

Our Minister of Finance, our Prime Minister and this government have a visionary approach to the future, unlike what we have seen from the opposition. Our Conservative government continues to get the job done for Canadians through economic action plan 2013.

On October 22, the Minister of Finance released the Annual Report of the Government of Canada for 2013. The report shows the continued downward track of Canada's annual deficit. In 2012-13 the deficit fell to $18.9 billion. This was down by more than one-quarter, or $7.4 billion, from the deficit of $26.3 billion in 2011-12. This was down nearly two-thirds from the $55.6 billion deficit recorded in 2009-10 at the pit of the largest economic recession since the Great Depression of the thirties.

Our government's responsible spending of taxpayer dollars has played an important part in the results we have seen in 2012-13, with direct program expenses falling by 1.2% from the prior year and by 3.8% from 2010-11. We are looking at program spending, at government spending, before we look at cutting transfer payments like the Liberal Party did in the 1990s.

I am proud that our government is focused on helping to create jobs and growth and opportunities for Canadians. I am proud our government supports hard-working families. Families and communities will be safer because of the measures we are taking in the area of justice and always putting Canadians first.

According to the Minister of Finance, our government continues its efforts to ensure that every tax dollar is spent as efficiently as possible and wasteful spending is eliminated. We are keeping Canada on track to balance the budget in 2015 without raising taxes and without cutting those very valued transfer payments to the provinces.

As reported by the OECD, Canada's total economic net debt to GDP ratio, which includes net debt of the federal, provincial and territorial governments and assets held in the Canada pension plan and the Quebec pension plan, stands at 34.5% in 2012. This is by far the lowest level among the group of seven countries which the OECD expects will average a net debt of 87% in the same year, more than twice as much. All Canadians should be proud of this success.

It is our solid economic and fiscal fundamentals that have ensured Canada remains one of the few countries in the world to continuously receive the highest possible credit ratings from all major credit rating agencies.

Having said that, we are not immune to the effects of slow global growth. We must build on our record by continuing to keep taxes low here in Canada, to work to expand trade, as we announced our trade deal with the European Union last week, to keep Canada on track for a balanced budget in 2015, and to grow our relationships not only here in North America but around the world so we continue to be a trading nation that people in other countries look to with great jealousy.

We are one of the few countries in the world, and one of the only industrialized countries, that has trade deals now with both the European Union and the United States of America, over 800 million people. We have free trade deals with the two most valuable markets in the world. Canada is the country that has that deal now. This is something that all Canadians should be proud of.

Much has been said in the past months about the temporary foreign worker program. We will ensure that the only purpose of the temporary foreign worker program is to provide temporary help where clear and acute labour shortages exist and where Canadians are truly not available for those jobs. We believe that is consistent with the wishes of Canadians.

We have over a million net new jobs that have been created since July 2009; 90% are full time and over 80% are in the private sector. We are getting the job done when it comes to job creation.

Our economic action plan 2013 is going to help many people in my riding and all Canadians through a number of key measures that will strengthen our local economies. In rural areas, in Atlantic Canada, we rely on seasonal employment. Sometimes that is not enough. Training will be required to help workers get into the workforce full time, year-round. As some of these large projects come online such as I mentioned at the beginning of the speech, we will need people who are trained to take those jobs up as we transition from an economy that relies purely on seasonal employment, particularly in the summers, to one where we have full-time good employment for skilled tradespeople, year-round, in Atlantic Canada.

To that end, economic action plan 2013 will increase the skills and training to support these workers with a new $15,000 Canada job grant. This will help retrain workers so they can find high-quality, well-paying jobs, something that will be of direct benefit to my riding and all of Atlantic Canada, as well as all Canadians across the country.

As parliamentary secretary to the Minister of Employment and Social Development, I cannot stress enough the importance of training workers so that they can get into the workforce. Equally important is the strengthening of the apprenticeship program, which we put in place through economic action plan 2013. It will make it easier for apprentices to get the experience they need to get their journeyman status. With a skilled workers shortage in this country, reallocating $4 million over three years to work with the provinces and territories to increase opportunities for apprenticeships will go a long way toward filling this gap.

We are listening to the skilled tradesmen and women and reducing barriers to apprenticeship accreditation. These include examining the use of practical tests as a method of assessment for apprentices. We are also putting these apprentices to work through measures that will support the use of apprentices through federal construction and maintenance contracts, investments in affordable housing, and infrastructure projects that are receiving federal funding.

An often forgotten segment of the workforce is the disabled. We have not forgotten them in this budget. We will introduce a new generation of labour market agreements for persons with disabilities by 2014 to better meet the employment needs of businesses and employment prospects of persons with disabilities. We will do this through the expansion of the opportunities fund. There will be an ongoing funding of $40 million per year starting in 2015-16 to provide more demand-driven solutions for people with disabilities.

Nova Scotians and all Canadians will also benefit from an allocation of $19 million over two years to promote education in high-demand fields, such as trades, science, technology, engineering and mathematics. These are the programs that will lead our young people to jobs in the future. We are supporting that now so those jobs will be filled by Canadians with proper training. Students are our future workers. Our Conservative government recognizes this need, and we are fulfilling that need with steps in this budget.

We recently heard through media reports that first nations youth have only a 60% high school graduation rate in Canada. Our government recognizes that these young people need training and opportunities so they can join our larger economy. The aboriginal youth in this country are the fastest growing segment of our youth, and we need to take steps now to provide them the education and training they need to fully embrace the greatness that is this country, Canada.

Higher education is the pathway to employment, and our government is improving services for students who apply for loans and grants. The minister's authority to electronically administer or enforce the Canada student loans program is consistent with economic action plan 2013's commitment to examine new ways to transform the way the Government of Canada does business to improve service and achieve efficiencies within our programs.

This amendment would modernize the delivery of the Canada student loans program--

[The Acting Speaker, Bruce Stanton]

Questions and comments, the hon. member for La Pointe-de-l'Île.

[Ève Péclet, NDP, La Pointe-de-l'Île, QC]

Mr. Speaker, in the most recent budget, the Conservatives attacked labour-sponsored funds. The majority of chambers of commerce and investment organizations across Canada have said that this is very serious because these types of attacks harm investment and will create uncertainty among investors.

In budget 2013-14, the government attacks venture capital funds. This, too, will create uncertainty and will not promote investment in our country.

How can it attack labour-sponsored funds, small credit unions, co-operatives and capital funds, and then brag that it is supporting investment in Canada? Something is wrong.

[Scott Armstrong, Conservative, Cumberland—Colchester—Musquodoboit Valley, NS]

Mr. Speaker, that is not true. What our budget is doing is bringing savings and streamlining practices, which will bring them in line with other jurisdictions. We are going to reform the system so that we can better support organized labour, our chambers of commerce, and our credit unions. We need to align our system with those different jurisdictions so that we can better administer these programs.

[Ted Hsu, Liberal, Kingston and the Islands, ON]

Mr. Speaker, I preface my question by saying that I do not expect the member to be able to answer this particular fine point, although perhaps he could get advice from the members around him.

My question is about the National Research Council. The bill would reduce the size of the council from 18 to 10. Given the large geographic diversity in this country and the large diversity of research in the natural sciences, engineering, health sciences, and social sciences, should we not have a larger council advising the president at this time of very ambitious, large-scale change at the NRC?

[Scott Armstrong, Conservative, Cumberland—Colchester—Musquodoboit Valley, NS]

Mr. Speaker, just because there are more people does not mean it is a better council. We believe on this side of the House that any dollars spent should be targeted to the actual delivery of programs not to paying for bureaucracies to support those programs.

Whether the council is 18, 10, four, or three does not matter. What is important is whether the council is running effectively and whether those program dollars are being delivered the way they should be. That is what is important.

[Mike Wallace, Conservative, Burlington, ON]

Mr. Speaker, I have been here all day, and I have been listening to the opposition members saying that we should be spending more and more and more. Then in the same breath, they complain about the deficits the government has had to incur to get us through the financial crisis. It is not even logical that they would say the same thing on two opposite sides. It is hypocritical. Does the member agree that it is hypocritical for members to say to spend more and reduce deficits at the same time?

[Scott Armstrong, Conservative, Cumberland—Colchester—Musquodoboit Valley, NS]

Mr. Speaker, the opposition parties in the House really--

[Some hon. members]

Oh, oh!

[The Acting Speaker, Bruce Stanton]

Order, please. I am sure members would love to hear what the Parliamentary Secretary to the Minister of Employment and Social Development has to say on the question.

The hon. member.

[Scott Armstrong, Conservative, Cumberland—Colchester—Musquodoboit Valley, NS]

Mr. Speaker, we know that calls from the opposition to spend more and more is what we typically hear. That is what we typically see from NDP governments when they are in place around the country.

In answer to my colleague from Burlington, a tremendous member of Parliament, who has actually completed several long runs in my province, he understands that what we are doing, particularly in Atlantic Canada, is investing in the future. We are making sure we keep taxes low. We are bringing our deficits down and returning to a balanced budget. We are making key investments in key projects that are going to lead to jobs and growth, like the urban shipyard deal, a $25 billion deal; like Lower Muskrat Falls; like the west-east pipeline. It is targeted spending, making sure we also keep our taxes low, our deficits low and return to a balanced budget in 2015.