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

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

Mr. Speaker, I thank my hon. colleague from Kingston and the Islands for raising the importance of what we find at division 10 of Bill C-4.

When we are dealing with omnibus budget bills, there is scant attention paid to the multiple ways in which the legislation would impact on dozens of pieces of legislation.

I would ask about these changes to the National Research Council. They are obviously not intended to save money. They would reduce the scope of the work of the National Research Council in terms of the expertise upon which it can draw. However, the member failed to mention one of the other changes that has been brought about by this administration, which was the elimination of the position of the science adviser to the Prime Minister. It was recently outlined in a book by Chris Turner, The War on Science.

What does my hon. colleague make of this effort to undermine access to good advice from those who are qualified to offer it in areas of scientific competence?

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

Mr. Speaker, it is very important for a government to have access to, respect, listen to, and act on the very best advice to formulate policy. That includes science advisers. That includes, in terms of the management of NRC, advice that can come from the members of the council.

The thing that can happen, if people are willing to accept this advice, is that sometimes they realize that they are wrong and have to change what they are doing. That is what I mean by saying that sometimes we are humbled by respect for the truth. I think we should govern that way. It is a good thing for the country to govern in that way. It can be embarrassing sometimes for the government, but perhaps not as embarrassing as what the government is experiencing now. It is a good thing to be humbled by the truth sometimes. If we let ourselves be humbled by the truth, we will avoid the kind of situation the current government is in with the problems the Prime Minister's Office is having with some of the Senate appointments.

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

Mr. Speaker, the NDP opposes all omnibus bills, as we previously opposed the omnibus bills introduced by the Liberals in the 1990s.

However, my question is about employment insurance. We have spoken a lot about it on this side of the House. I would like to know whether my Liberal colleague approves of the changes to EI proposed in this bill, particularly the elimination of the Canada Employment Insurance Financing Board.

I would also like to know what my Liberal colleague thinks about the fact that the Minister of Finance is being granted new powers that will allow him to play political games with the EI premium rate.

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

Mr. Speaker, we are not happy with how the current government has treated employment insurance. This bill was a chance for the Conservatives to change some of their plans, and they did not take advantage of that opportunity, so I would have to say that we are opposed.

[Frank Valeriote, Liberal, Guelph, ON]

Mr. Speaker, the member for Kingston and the Islands opened his speech by commenting on a previous speech given by the member for Huron—Bruce. I want to ask him a question about that.

The member for Huron—Bruce was lauding the Canada job grant and how wonderful it is and how much it means to everybody in his riding. The interesting thing is that it is a myth. There is no Canada job grant. It has not been created.

The Conservatives have been spending $90,000 per minute for commercials on TV for a program that does not exist. Why does it not exist? It is because they took $300 million away from the provinces that were using that money for skills training.They took it for themselves and said that they would give it back to the provinces, provided that they do it their way. The Conservatives did that without consulting the provinces at all. There is no Canada job grant.

I would like the member for Kingston and the Islands to comment on the seriousness of youth unemployment and the lack of the current government's attention to that issue.

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

Mr. Speaker, as I have said before in the chamber, the youth employment strategy is not working. The number of jobs the federal government has created for young people has decreased since 2006. It is something like half of what it was in 2006. I think it is very important for the government to look at that and to take some measures, because this will have a big impact on the economy. Youth is the age group for which employment has not recovered since the 2008 recession. There should be quite a focus on that, and there is not.

[Mike Wallace, Conservative, Burlington, ON]

Mr. Speaker, it is my pleasure to stand and speak to Bill C-4 today, the last speaker before we vote on this.

Yesterday I heard a lot of discussion from both sides of the House. I want to take a couple of minutes to explain exactly what we are doing here. This is a budget implementation bill. It is the second one. We have one in the spring and one in the fall. It is the traditional way of doing things. We have a budget, and out of that budget, we have to implement what is going on in the budget. That is what this bill does.

I am the 69th speaker to this item. Twenty-two percent of members of the House have spoken to this implementation bill thus far. This is at second reading stage. Then the bill goes to committee, and committee studies the bill. It calls witnesses, has a discussion, and more members of Parliament have an opportunity to comment on the bill. Then the bill comes back to the House for report stage. Then there is another set of speakers to this. Then there is third reading.

More than half the members of the House of Commons have an opportunity to speak to the bill. That is a significant amount of input and debate on this implementation bill.

I have heard over and over about there not being enough time, about closure motions, and about time allocation. The reality is that the public expects us to get things done for them. That is what we are doing here, and that is what the implementation bill does.

I hear about the omnibus bill. The bill is 309 or 312 pages, French and English. I know that I can read 150 pages. I am making the assumption that the opposition members can read 150 pages. I cannot read it in French. I wish I had that talent, but I do not. I do not think there is anything in the bill we need to complain about in terms of there being so much in it that it cannot be understood. Those are not the facts.

We on this side will do our homework. We will do the job we need to do to get things done for Canadians and move things forward. There are many good pieces in this bill. If members do not want to read the whole bill, there are summary pages at the front. In the summary, the very first item is to increase the lifetime capital gains exemption to $800,000 and to index it to inflation. For the first time, it would be indexed to inflation.

We are giving small businesses the opportunity to create jobs and create wealth for them, their families, and their communities. They get to keep it after they have done their jobs. They pass that on to the next generation. They sell it to the next entrepreneur, and they keep building this country through jobs and economic activity. We support small business. We support entrepreneurs, and that is what the implementation bill does. I am very happy that we are getting it done.

Tonight we are voting on it. We will get it to committee and will get it back in this House. Hopefully we will get it passed by Christmas so that people can continue to create good-quality jobs for this country and for our youth, and we will continue to build a great Canada.

[The Deputy Speaker, NDP, Joe Comartin]

It being 5:15 p.m., pursuant to an order made on Thursday, October 24, it is my duty to interrupt the proceedings and put forthwith every question necessary to dispose of the second reading stage of the bill now before the House.

The question is on the amendment. Is it the pleasure of the House to adopt the amendment?

[Some hon. members]

Agreed.

No.

[The Deputy Speaker, NDP, Joe Comartin]

All those in favour of the amendment will please say yea.

[Some hon. members]

Yea.

[The Deputy Speaker, NDP, Joe Comartin]

All those opposed will please say nay.

[Some hon. members]

Nay.

[The Deputy Speaker, NDP, Joe Comartin]

In my opinion the nays have it.

And five or more members having risen:

Call in the members.

(The House divided on the amendment, which was negatived on the following division:)

Vote #6