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

[Tony Clement, Conservative, Parry Sound—Muskoka, ON]

moved that Bill C-4, A second act to implement certain provisions of the budget tabled in Parliament on March 21, 2013 and other measures, be read the second time and referred to a committee.

[Andrew Saxton, Conservative, Parliamentary Secretary to the Minister of Finance]

Mr. Speaker, I appreciate this opportunity today to highlight some of the key initiatives in economic action plan 2013 act no. 2.

I would like to begin by saying that our government is very proud of the steps we are taking to support the economy through today's legislation. As always, we want an open, public, and timely debate on these measures; we also look forward to a detailed committee study in the House and in the Senate.

In keeping with previous budget legislation under our government, in addition to having the bill studied by the finance committee, we will recommend even further study to the provisions in today's legislation. It is for that reason that we will be asking the following committees to look at certain portions of the bill: citizenship and immigration; human resources, skills and social development and the status of persons with disabilities; and justice and human rights. Indeed, I will move a motion at the finance committee to this effect once second reading is completed by the House.

I hope opposition members will give their support at second reading as an indication that they genuinely want these committees to study the legislation instead of just playing political games.

On that note, let me outline why the opposition should support this legislation.

Economic action plan 2013 builds on the strong foundation that was laid last year. In addition to the portfolio of initiatives we have introduced since 2006 with affordable measures to create jobs, promote growth, and generate long-term prosperity, it will help to further unleash potential for Canadian businesses and entrepreneurs to innovate and thrive in the modern economy.

Let us revisit the facts.

Today Canada has the strongest job growth among G7 countries since the recession. Our unemployment rate is at its lowest level in four years. It is significantly lower than that of the U.S., which is a phenomenon that has not been seen in nearly three decades. Meanwhile, we have created over one million net new jobs, nearly 80% of which are in the private sector, and our government continues to make new opportunities for Canadians to find employment. Today's legislation does little to detract from this goal.

Both the independent International Monetary Fund, IMF, and the Organisation for Economic Co-operation and Development, OECD, are projecting that Canada's growth will be among the strongest performances in the G7 in the years ahead. Real GDP is significantly above pre-recession levels and is the best performance in the G7.

While other countries continue to struggle with debt that is spiralling out of control, Canada is in the best fiscal position in the G7. Canada still remains on track to return to balanced budgets n 2015.

However, our government has been very clear that we will not raise taxes on Canadians to balance the budget. Unlike the NDP, which continues to push high-tax schemes, our government believes that keeping taxes low means more money in the pockets of hard-working Canadians, and that in turn helps keep our economy strong.

A recent study by KPMG concluded that Canada's total business tax cost, which includes corporate income tax, capital taxes, sales taxes, property taxes, and wage-based taxes is more than 40% lower than it is in the United States. In short, our government has created an environment that encourages new investment, growth, and job creation, and one that ensures Canada has the strongest fiscal position and the lowest business tax costs in the G7.

Having the lowest overall tax rate on new business investment in the G7 translates into Canada having a competitive business tax system, one that plays a key role in supporting businesses in all sectors of the Canadian economy to invest, grow, and thrive.

Let me share some highlights of our tax relief initiatives.

Our government has implemented broad-based tax reductions that support investment and growth and is delivering more than $60 billion of tax relief to job-creating businesses over 2008-09 and the following five fiscal years.

For example, in order to boost investments and productivity, we reduced the federal corporate income tax to 15% from its 2007 rate of 21%.

In addition, the federal capital tax was eliminated in 2006, and the only corporate tax was eliminated for all businesses in 2008.

Furthermore, we reduced the small business tax rate to 11% in 2008 from 12% in 2007, and subsequently the amount of income eligible for this lower rate was increased to $500,000 in 2009.

Canada's system of international taxation was strengthened in order to better support cross-border trade and investment and to improve fairness.

These measures are part of a policy framework designed to increase our economy's production capacity and improve Canadians' quality of life.

Cutting federal corporate income tax and making other tax adjustments boost the assumed rate of return on investment and reduce capital costs. These measures encourage businesses to invest in Canada and hire Canadians.

That approach increases Canada's production capacity and improves Canadians' quality of life.

Economic action plan 2013 focused on positive initiatives to support job creation and economic growth while returning to balanced budgets, ensuring Canada's economic advantage remains strong today and into the future.

However, the job does not end there. Bill C-4 would implement key measures from economic action plan 2013 as well as certain previously announced tax measures to help create jobs, stimulate economic growth, and secure Canada's long-term prosperity.

Our government's low-tax plan is helping to guide the Canadian economy along the path of sustainable economic growth. Bill C-4 builds on our successes and maintains our government's focus on the economy.

I would like to discuss three key aspects of the bill today: a continued focus on job creation and support for job creators, a firm response to tax loopholes and tax evasion, and an overall respect for taxpayers' dollars.

While we believe in the benefits of lower taxes, our government fully understands that sustaining an effective tax system also rests on the foundation of tax fairness. That is why economic action plan 2013 is committed to closing tax loopholes that allow a select few businesses and individuals to avoid paying their fair share. Broadening and protecting the tax base supports our government's effort to return to balanced budgets, responds to provincial governments' concerns about protecting provincial revenues on our shared tax bases, and helps give Canadians confidence that the tax system is indeed fair.

The efforts made to ensure that everyone pays their fair share also help keep taxes low for Canadian families and businesses. In so doing, there is more motivation to work, save and invest in Canada.

Since 2006, and including measures proposed in economic action plan 2013, the government has introduced over 75 measures to improve the integrity of the tax system. Today's legislation takes additional steps in support of this objective.

Two examples include further extending the application of Canada's thin capitalization rules—which limit the amount of Canadian profits that can be distributed to certain non-resident shareholders as deductible interest payments—to Canadian resident trusts and non-resident entities, and introducing stiff administrative monetary penalties and criminal offences to deter the use, possession, sale, and development of electronic suppression-of-sales software designed to falsify records for the purpose of tax evasion.

We are also providing the Canada Revenue Agency, the CRA, with new tools to enforce the tax rules to combat international tax evasion and aggressive tax avoidance, all while we are taking immediate action to improve the integrity and neutrality of the tax system. Specifically, economic action plan 2013 does this by streamlining the process for the CRA to obtain information concerning unnamed persons from third parties, such as banks; requiring certain financial intermediaries, including banks, to report to the CRA clients' international electronic fund transfers of $10,000 or more; and introducing a new program to stop international tax evasion that would pay rewards to individuals who report major international tax non-compliance.

As the opposition can see, tax fairness is a basic principle that our government is committed to upholding. We make no apologies for doing so. In fact, we are proud of our record and we are building on it.

A level playing field is what Canadian businesses deserve and require, and we are delivering. For example, the Income Tax Act contains a number of provisions intended to constrain the trading of corporate tax attributes among arm's-length persons. Unfortunately, despite the various provisions intended to curtail the inappropriate trading of loss pools, transactions to circumvent these provisions continue to be undertaken.

Our government understands the need to introduce practical legislative measures to ensure that there are appropriate tax implications attached to these transactions. This bill does just that. It introduces an anti-avoidance rule to support the existing loss restriction rules that apply on the acquisition of control of a corporation.

As everyone can see clearly, our government is committed to putting in place the right framework to ensure tax compliance. The Canadian Institute of Chartered Accountants had this to say about economic action plan 2013:

The budget looks to close tax loopholes, address aggressive tax planning, clarify tax rules, reduce international tax avoidance and tax evasion and improve tax fairness. It also provides the Canada Revenue Agency with new tools to enforce the tax rules.

The statement continued with a strong backing of our initiatives and stated:

We support efforts to maintain the integrity of the tax base....

The bottom line is this: our government is committed to fighting tax evasion and giving Canadians a tax system they can have confidence in. There are those who would rather take advantage of the system to skip their fair contribution; Bill C-4 introduces strong new measures to combat this and would ensure that any previously mentioned measures from economic action plan 2013 come to fruition.

Lowering taxes is not the only way our government is furthering taxpayers' dollars. Canadians deserve streamlined services and efficient programs.

Today's legislation contains several measures fully in line with our government's respect for taxpayers' dollars. A few examples include modernizing the Canada student loans program by moving to electronic service delivery, improving the efficiency of the temporary foreign worker program by expanding electronic service delivery, phasing out the labour-sponsored venture capital corporations tax credit, and modernizing service delivery for Canadians by accelerating the move from paper-based to automated passport application e-services.

These are all changes that I am extremely proud to speak to. It is measures like these that demonstrate our government's commitment to making it easier for Canadians to access services that are cost-effective and efficient. While many of the changes in Bill C-4 are technical in nature, many provide clear benefits for Canadians.

I know that my constituents back home expect a fiscally responsible government. Let us take the modernization of the Canada student loans program as an example. Students in my riding of North Vancouver rely on this important program to help achieve their goals and make their educational aspirations a reality. This change in Bill C-4 would not only eliminate a cumbersome and often long process of paper agreements and identification but would also provide the government with approximately $10 million in cost savings per year. It is just common sense to provide a better service to Canadians and while saving taxpayers' dollars at the same time. It is initiatives like this that make bills like today's all the more important to pass.

I have talked about how we are working hard to make our tax system fair and how we are doing everything possible to maximize taxpayer money, but I have not forgotten about an area that Canadians have on their minds: jobs.

Quite simply, our government values job creators and we have been working hard with them in recent years to ensure that they are in the best position possible to provide jobs for Canadians.

The legislation I have the privilege of speaking about today introduces some new ways our government can support job creation in this country. Examples include extending and expanding the hiring credit for small business, which would benefit an estimated 560,000 employers; increasing and indexing the lifetime capital gains exemption to make investing in small business more rewarding; expanding the accelerated capital cost allowance to further encourage investments in clean energy generation; freezing employment insurance premium rates for three years, leaving $660 million in the pockets of job creators and workers in 2014 alone.

Let me elaborate on one of these measures that I think will have a big impact for small businesses.

Among the many ways that Canada's income tax system supports small business owners, farmers and fishermen is the lifetime capital gains tax exemption, the LCGE. In order to increase the potential rewards of investing in small business, farming and fishing, economic action plan 2013 proposes to increase the LCGE from $750,000 to $800,000 in 2014. The exemption helps these entrepreneurs better ensure their financial security for retirement and facilitates the intergenerational transfer of their businesses. In 2007 our government increased the LCGE to $750,000 from $500,000, the first increase in the exemption since 1988.

In addition, to ensure the real value of the LCGE is not eroded over time, economic action plan 2013 proposes to index the $800,000 LCGE limit to inflation for the first time ever. The first indexation adjustment will occur for the 2015 taxation year. This is added security for the small business owner and provides financial freedom to create new jobs.

The initiatives set out in economic action plan 2013 are based on domestic government measures to improve the overall strength of Canada's tax system and to once again demonstrate our government's commitment to using taxpayers' money responsibly.

With a comprehensive and forward-looking agenda, these initiatives will deliver high quality jobs, economic growth and sound public finances.

Economic action plan 2013 would allow Canada to meet these challenges and emerge from them stronger than ever today and in the future.

While the opposition continues to focus on issues that do not matter to Canadians, our government remains focused on the task at hand. Economic growth did not stop at the last budget, or the last budget implementation act, for that matter. We continue to look for ways to maximize taxpayer dollars, increase the efficiency of the inner workings of government and make certain that job creation and economic prosperity are at the forefront of any new legislation. In this respect, the bill would make significant improvements that would benefit Canadians. I urge members of the House to pass it.

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

Mr. Speaker, clearly the government has not learned from the past. Here we have the fourth omnibus budget implementation act in two years. We have yet another bill that is crammed with changes to 70 laws. It is over 300 pages long. It is a grab bag of the wants and desires of the Conservative caucus. It contains things that should not be in a budget bill, such as Supreme Court nominations, changes to health and safety legislation for workers and changes to the National Research Council.

If my colleague and his caucus colleagues are so convinced that their government is on the right track, why are they hiding all of these changes in an omnibus budget bill rather than presenting them as individual bills? Why are they using the spin that they are doing such a great job on the economy when almost 300,000 more people are unemployed now than before the recession, growth is slowing and many of our trading partners are outdoing Canada? Our current account deficit is growing and the Conservatives are not dealing with it. Could the member answer that?

[Andrew Saxton, Conservative, North Vancouver, BC]

Mr. Speaker, that was more than one question. That was really a grab bag of a whole bunch of questions.

[An hon. member]

It is like an omnibus question.

[Andrew Saxton, Conservative, North Vancouver, BC]

That was an omnibus question, Mr. Speaker. I would like to try to address as many of those questions as I can possibly remember.

First, the length of this bill is really quite similar to the last four acts that have been introduced over the last number of years, so it is very similar in length.

Second, the vast majority of the items in the bill refer to technical items that were already presented in economic action plan 2013 by the Minister of Finance back in March of this year.

It is a lengthy bill because we have a lot of work to do in Canada. We have been extremely fortunate to have weathered the economic storm so well. However, we still are not immune to pressures from outside the country and therefore we have to take measures in order to protect our economy.

To give the House an idea of some of those measures, economic action plan 2013 focuses squarely on the creation of jobs, economic growth and the long-term prosperity of Canadians. It is doing this by connecting Canadians with available jobs, a new long-term $70 billion infrastructure plan over 10 years, which is an precedented amount, investing in world-class research and innovation and much more.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, every time I hear one of the Conservatives stand and use the phrase “economic action plan”, I have this vision of someone sitting inside the PMO putting a little gold star beside that name.

It is almost like it is mandatory, “You will stand up. You will say economic action plan”. Every time the members say it, they get a gold star. I am sure there is someone in the Prime Minister's Office making note of every time one of the members talks about it.

For most Canadians, we see it as a great deal of waste in terms of the promotion of that slogan, the millions of dollars that have been spent on it.

My question is related to the balanced budget legislation about which the government is talking. We all know the government inherited a huge surplus, turned it into a deficit and now it says it will get out of a deficit into a balanced position in 2015-16. At the end of the day, we will not find out if that is true or false until after the next federal election.

On the balanced budget legislation, is there a consequence to the government if it is does not meet that balanced budget requirement, whatever it might be?

[Andrew Saxton, Conservative, North Vancouver, BC]

Mr. Speaker, regarding the balanced budget, before the global recession hit, our Conservative government paid down over $37 billion in debt, bringing Canada's debt to its lowest level in 25 years.

It is because we paid down the debt that we were in a position to help the economy when it needed it most. Our fiscal responsibility and aggressive debt reduction placed Canada in the best possible position to weather the global economic storm.

When the global economic recession hit, we were able to respond quickly and effectively with Canada's economic action plan. Here are some examples of how well we are doing. Canada's net debt to GDP ratio was 34.6% in 2012. That is the lowest level among G7 countries. Germany, by contrast, is the second lowest at 57.2%. The G7 average is 90.4%.

[Lynne Yelich, Conservative, Minister of State (Foreign Affairs and Consular)]

Mr. Speaker, I wanted to know if the member would like to tell the member for Winnipeg North just how the budget had been balanced by the Liberals, which he was applauding.

How did that really occur? If I remember correctly, the Liberals balanced the budget on the backs of Canadians. Maybe the member would like to tell the story.

[Andrew Saxton, Conservative, North Vancouver, BC]

Mr. Speaker, I am glad that my colleague asked me that very important question.

Unlike the previous Liberal government that balanced the budget on the backs of hard-working Canadians and on the backs of the provinces by cutting health and education transfers, which caused significant shortages in our health care system and our education system, we are not doing that.

When the member opposite mentions that we inherited a surplus, I can tell members where that surplus went. It went back into the pockets of ordinary hard-working Canadians, because that is where that money should be, not in government coffers.

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

Mr. Speaker, my first comment is for my hon. colleague, the Parliamentary Secretary to the Minister of Finance.

Although this administration has reduced corporate taxes dramatically, economists such as Mark Carney, the former governor of the Bank of Canada, found that corporations were not using it to create jobs. In fact he called it “dead money”.

An RBC economist has pegged that amount at over $600 billion, money that corporations are saving, not spending. They are not spending it on jobs. They are not spending it on growth. It is in fact dead money and we need to adjust the corporate tax rate to the benefit of Canadians.

I have a lot of questions. I attended the briefing last night, and I think the hon. member did the right thing postponing until tonight, but it means I have a lot of specific questions. I do not know what this has to do with budget 2012. I never saw in budget 2012 that the intention of the budget was to change the Canada labour code so workers covered by it would be less protected against dangerous assignments.

The revision in clause 176, found by coincidence at page 176 of Bill C-4, changes the definition of “danger” and removes, as a reason a worker can refuse to participate in that work, injury or illness that could result in chronic illness, removes the words “injury or illness” and insists that to be dangerous it has to be an “imminent or serious threat to the life or health” and removes what is in the current definition of damage to the reproductive system.

In other words, it is a systematic attack on the rights of a worker to refuse to work in dangerous conditions. That was never cited in budget 2012. I would like to know if the hon. member could explain it to us.

[Andrew Saxton, Conservative, North Vancouver, BC]

Mr. Speaker, the first part of the question regarded lowering taxes for businesses. We are proud that our government has lowered taxes to record lows. It is at 15% now in Canada.

Let me give an example of a result of that. Tim Hortons had its international headquarters in the United States five years ago. It has now moved those headquarters back to Canada because of our low tax measures. That is a perfect example of jobs being created in Canada as a result of our government's policies on lowering taxes for small, medium and large businesses.

Regarding the member's question about the Canada Labour Code and the change to the definition of “danger”, these amendments ensure that employees and employers remain at the forefront of resolving occupational health and safety issues. This would allow our government to improve our focus on critical issues that affect the health and safety of Canadians in the workplace. Employees still have the right to refuse to work where they have reasonable cause to believe a situation is dangerous. Health and safety officers remain available 24-7 to respond to real situations of danger in the workplace.

Worker safety is of the utmost concern to us, and it will remain at very high levels.

[The Acting Speaker, Bruce Stanton]

It is my duty pursuant to Standing Order 38 to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Vancouver Kingsway, International Trade; the hon. member for Winnipeg North, Intergovernmental Relations.

Resuming debate, the hon. member for Parkdale—High Park.

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

Mr. Speaker, I rise today to speak to Bill C-4, the second federal budget implementation bill in 2013, and the fourth omnibus bill introduced in the House in the past two years. This time, the Conservatives have pushed the urgency to new levels to get their files through the House.

Bill C-4 was introduced yesterday morning and we have already started debate on a bill that is over 300 pages and that amends or repeals 70 legislative measures. This is yet more proof of the Conservatives' absolute contempt for the democratic process.

Once again, the NDP must express its opposition to these heavy-handed tactics. Canadians deserve better.

Canadians were asked to wait for an extra month for their MPs to come back to work here in Ottawa. The Conservatives said the prorogation was necessary and that it was time to reset the government's policy agenda. I certainly agree that the government's policy needs a serious redo, but that is not what Canadians heard last week in the Speech from the Throne.

Instead, despite soaring youth unemployment and nearly 300,000 more people unemployed today than before the recession, the Conservatives failed to lay out a jobs plan or take concrete action that would create good middle-class jobs.

Just today, the Bank of Canada issued a report. It said that it had significantly overestimated growth in its last report and has now lowered GDP growth projections for 2013, 2014 and 2015. That is the kind of job the government is doing. The Bank of Canada is now predicting that in 2013, GDP growth will be a meagre 1.6%. Clearly, the government's economic agenda is failing. The Prime Minister has failed miserably. I will say it again. The Prime Minister's economic agenda has failed miserably.

In fact, the government is pushing ahead with its plan to claw back $300 million from skills funding for the most vulnerable workers, even in the face of united opposition from the premiers. Bill C-4 focuses more on gutting Canadians' right to a safe and healthy workplace and prompting conflict with civil servants than it does on job creation.

Despite all the Conservative spin, Canadians know that only New Democrats can be trusted to put their needs first and to give middle-class Canadians a fair break. Canadians need a government committed to genuine consultation to get to the bottom of this. Only by working together and pulling in the same direction can we have an economy performing to meet the needs of all Canadians and Canadian businesses.

The NDP vision for the economy is one where we maximize the opportunities we have, based on our enormous advantages as a country, to deliver the best we can for Canadians.

Since the 2008 financial crisis, the economy has been at the heart of Canadians' concerns. We have faced an endless number of foreign economic threats. Our recovery was marked by fear of a debt spiral in Europe and political impasses in the United States.

Today, the Canadian economy is facing new challenges. We still face threats abroad, but we are also facing threats that originate much closer to home.

Canadian families are struggling like never before. They are caught between a rising cost of living on the one hand and disappearing middle-class jobs on the other. Over the last 35 years, income is up for the top 20% of wage earners, but down for the bottom 80%. Our economy has grown nearly 150% over that 35-year period of time and yet median household income has declined by 7%.

Professor Miles Corak at the University of Ottawa said:

Over the last couple of decades or more the median wage rate has hardly changed, and wage rates below the halfway point have fallen by five to as much as 10 percentage points....

This means that many families who face lower wage rates have to run harder just to stand still....

In my own city of Toronto, a recent report by the Daily Bread Food Bank found that almost one-quarter of the people accessing food banks have someone in their households who is working. In the 905 region, that number is almost 40%. Therefore, paid employment, even a full-time job, is clearly not always a ticket out of hunger and poverty. That is shocking. That is simply unacceptable.

In September, Statistics Canada announced that household debt had reached a whopping 166% of disposable income. More than one in eight households has a debt-to-income ratio higher than 250%; that is one in eight. Mortgage debt alone now stands at roughly one trillion dollars. In many communities the cost of housing is squeezing household budgets.

A report by the Toronto Community Foundation found that according to 2001 figures, almost one-third of Toronto region households are spending 30% or more of their total income just on housing. Among the city's renters, the number was even higher, at over 43%. According to the OECD, the Canadian housing market is now among the most overvalued in the world. Taken as a whole, Canadian household debt is now dangerously close to American debt levels just prior to the financial crisis of 2008.

Before leaving his post as governor, Mark Carney warned that mounting household debt may force the Bank of Canada to pull back on economic stimulus. While the rate of growth of household debt has slowed somewhat since Mr. Carney's departure, the Bank of Canada says that household debt is still the “biggest domestic risk” facing our economy.

All of this, the rising cost of living, coupled with stagnating wages, has major implications for domestic demands. After all, if a consumer-driven economy is to succeed, consumers need money in their pockets to spend. This is, of course, what every business knows, especially small businesses.

Earlier this year, The Economist magazine remarked on Canada's economy:

...five years on, consumers are showing signs of flagging. ...So the authorities are casting around for another source of growth. The trouble is they cannot seem to find one.

The Conservatives promised to focus on affordability in their throne speech with a so-called “consumer first” agenda for the new session of Parliament, but Bill C-4 makes no progress for Canadian consumers. The Conservatives have made big promises about protecting consumers for seven years, but have failed time and time again to help consumers in need and consistently vote against consumer-friendly provisions put forward by the opposition.

Consumers are failed by the government. The Conservatives have been big on talk and very small on follow-through. By contrast, New Democrats have led the way on consumer protection and will be looking to hold the government members to account to ensure their actions match their words. We know that any serious attempt to tackle this complex issue has to start with an honest look at the economic conditions facing business and labour markets as well as families.

The Canadian labour market is facing significant challenges, in both the short and medium terms. Today, our unemployment rate remains stubbornly high. There is only one position available for every 6.5 Canadians looking for a job.

Even worse, youth unemployment is now over 14%, which means that the next generation of workers cannot gain the experience they will need to replace the older generation.

In my city of Toronto, one in five youth is unemployed. With households and workers facing such challenges, it is no wonder our business sector is struggling as well. We have heard the statistics, $600 billion in private money sitting on the sidelines. The former governor of the Bank of Canada has spoken about this.

While the Minister of Finance admonishes business to just step up and invest, New Democrats are more interested in working with business leaders, listening to them and finding out what the barriers are to them investing in the current climate. While Liberal and Conservative governments sat back and watched a generation of middle-class jobs disappear in Canada, pausing occasionally to wag their fingers at business for not doing better, we are more interested in working together, pulling together to create the next generation of middle-class jobs here in Canada.

Let us talk about those jobs, an area that the Conservatives have continually failed to take any action on, even in four omnibus budget bills. The real question is this. What kind of jobs are we creating?

Simply put, we want Canada to own the most profitable and productive slice of the global supply chain, 21st century knowledge economy jobs, in the most modern, innovative and energy-efficient industries, instead of falling further behind under the current government. I know that is easier said than done. However, the fact is that with as many challenges as we have ahead of us we have opportunities too. Canada has many advantages. Canada is among the most entrepreneurial countries in the world. Even through the worst of the recession, Canadian small businesses continued to thrive and multiply.

Yet one of the most disturbing trends in Canadian business development is that alarmingly few of those small businesses are growing into medium businesses and beyond. From 2006 to 2010, Canada lost more than 1,500 medium-size businesses, even as the number of small and large businesses grew. During that period, mid-size businesses were 10 times as likely to shrink or shut down as they were to grow.

Bank of Canada Governor Stephen Poloz told the Vancouver Board of Trade:

A characteristic of a naturally growing economy is a steady increase in the population of companies. However, for five years after the start of the crisis, we saw virtually no increase in the population of Canadian companies.

This matters, a lot.

To maximize our potential we need effective education and skills training programs so that we have innovative companies ready to adapt to a changing global economy. This means doing the best job possible to tap into first nation communities so that they can develop to their full potential, while providing a badly needed skilled workforce, especially in remote areas.

Under the current government, a generation of young Canadians is facing double-digit unemployment; precarious, uncertain, low-paid jobs; and an equally uncertain future. The unemployment rate fell in September, but only because 20,000 young Canadians gave up searching for work. Yet Bill C-4 has only deafening silence to offer on youth employment. Instead, the Conservatives are focused on ensuring that Canadian workplaces will be less healthy, less safe and less secure for workers in the future. It makes no sense.

Canadians know that the NDP is the party most focused on the next generation. New Democrats have proposed a job creation tax credit for small and medium-sized businesses as well as large corporations. Therefore, the NDP is targeting businesses that create new jobs and contribute to economic growth.

Under the NDP proposal, companies could receive up to $1,000 for hiring a young employee and an additional $1,000 in compensation for the training of that employee. The tax credit would be doubled in the regions with particularly high youth unemployment rates.

The NDP tax credit for hiring young people would benefit both young workers and the companies that hire them. Canadians do not want to be left behind or told that they have to settle for less.

We want to do better, improve the situation and show leadership. These are our objectives.

In the 21st-century global economy, Canadian cities will be the engines of economic growth. Cities are the economic hub that brings together the mix of investment, technology and talent that allows our economy to thrive. There is a growing body of research that highlights the key cluster effect that cities play in our larger, macroeconomic picture, and the role that government can play in bringing these elements together. In my own city of Toronto, we have a film and television industry that is growing at the rate of 25%, more than double the economic growth rate of China, vastly outpacing the industry as a whole because of a partnership between industry, labour and government that has delivered these results. We need more models like that. Unfortunately, we are faced with a government that does not focus on the vital role that cities play as engines of economic growth.

Bill C-4 offers nothing for cities to address the massive infrastructure deficit that is a drag on our economy. In fact the PBO revealed that under the guise of a long-term infrastructure funding plan of $50 billion over 10 years, the Conservatives had actually cut infrastructure funding in budget 2013 by $5.8 billion. This is over the next few years. It is easy to make promises for years when they will not even be in government, I suppose.

What is needed is a serious commitment to sustainable and predictable funding in our urban centres. There are some things we can just do better when we work together. Investing in our future is one of them.

We should be asking ourselves what we can do better as a nation, what we can do together in addition to our efforts as families and communities. The Conservative government keeps telling Canadians, “We'll cut your taxes, but you're on your own. Don't count on us”. Services are being cut back. Programs are being cut back. Conservatives, again in this bill, are telling Canadians that they are on their own to ensure safe and healthy workplaces. When it comes to the needs of the country's veterans, when it comes to EI financing and taking real action for a more prosperous Canada for all Canadians, they say, “you are on your own”.

Speaking to Canadians across this country, I know that people still believe we need to work together to build for a better tomorrow.

Canadians understand governments have a role to play in supporting the economic conditions that improve their lives. In dealing with broad economic problems, we need solutions that address all sides of the ledger: creating good, high-quality jobs; making life more affordable for families; encouraging Canadians to save and invest for retirement; fostering the conditions for businesses and communities to succeed; ensuring all Canadians have a place to live; investing in needed infrastructure such as transit; taking a co-operative approach with the provinces on education and training; building a future full of opportunities for Canada's youth.

We need a balanced approach that will help us succeed. New Democrats can do better. We know that Canadians deserve better and New Democrats will stand up for Canadians every day until they get better.

In my time remaining, I move:

That the motion be amended by deleting all the words after the word “That” and substituting the following:

this House decline to give second reading to Bill C-4, A second act to implement certain provisions of the budget tabled in Parliament on March 21, 2013 and other measures, because it:

(a) decreases transparency and erodes democratic process by amending 70 different pieces of legislation, many of which are not related to budgetary measures;

(b) dismantles health and safety protections for Canadian workers, affecting their right to refuse unsafe work;

(c) increases the likelihood of strikes by eliminating binding arbitration as an option for public sector workers; and

(d) eliminates the independent Canada Employment Insurance Financing Board, allowing the government to continue playing politics with employment insurance rate setting.

[The Acting Speaker, Bruce Stanton]

The amendment is admissible.

Questions and comments. The hon. member for Medicine Hat.