This bill is from the 41st Parliament, 2nd session, which ended in August 2015.
Joe Oliver Conservative
This bill has received Royal Assent and is now law.
This is from the published bill. The Library of Parliament has also written a full legislative summary of the bill.
Part 1 implements certain income tax measures proposed in the February 11, 2014 budget. Most notably, it
(a) extends the intergenerational rollover and the lifetime capital gains exemption for dispositions of property used in farming and fishing businesses;
(b) extends the tax deferral provision with respect to breeding animals to bees, and to all types of horses that are over 12 months of age, that are kept for breeding;
(c) permits income contributed to an amateur athlete trust to qualify as earned income for RRSP contribution limit purposes, with an election available to taxpayers for up to a three-year retroactive application;
(d) extends the definition “split income” to include income from a business or property that is paid or allocated to a minor child from a partnership or trust where a person related to the child is engaged in the activities of the partnership or trust to earn that income;
(e) eliminates graduated rate taxation for trusts and certain estates with an exception for cases involving testamentary trusts whose beneficiaries include individuals eligible for the Disability Tax Credit;
(f) eliminates the 60-month exemption from the non-resident trust rules;
(g) allows an individual’s estate to carry back charitable donations made as a result of the individual’s death;
(h) expands eligibility for the accelerated capital cost allowance for clean energy generation and energy conservation equipment to include water-current energy equipment and a broader range of equipment used to gasify eligible waste fuel;
(i) adjusts Canada’s foreign accrual property income rules in order to address offshore insurance swap transactions and ensure that income from the direct or indirect insurance of Canadian risks is taxed appropriately;
(j) better circumscribes the existing “investment business” definition in the foreign accrual property income regime;
(k) addresses back-to-back loan arrangements involving an intermediary; and
(l) extends the existing tax credit for interest paid on student loans to interest paid on a Canada Apprentice Loan.
Part 1 also implements other selected income tax measures. Most notably, it
(a) alleviates the tax cost to Canadian-based banks of using excess liquidity of their foreign affiliates in their Canadian operations;
(b) ensures that certain securities transactions undertaken in the course of a bank’s business of facilitating trades for arm’s length customers are not inappropriately caught by the base erosion rules;
(c) modernizes the life insurance policy exemption test;
(d) amends the foreign affiliate rules to ensure they apply appropriately to structures that include partnerships and makes generally relieving changes to certain of the base erosion rules to ensure they do not apply in unintended circumstances;
(e) amends the rules for determining the residence of international shipping corporations;
(f) provides for the appropriate taxation of taxpayers that invest in Australian trusts;
(g) amends the foreign affiliate dumping rules to ensure the rules apply in appropriate circumstances and, if applicable, provide appropriate results;
(h) excludes from the definition “non-qualifying country” in the foreign affiliate rules those countries or other jurisdictions for which the Convention on Mutual Administrative Assistance in Tax Matters is in force and effect;
(i) avoids unintended tax consequences with respect to the British Overseas Territory of the British Virgin Islands;
(j) simplifies the rules for the Canadian Film or Video Production Tax Credit regime;
(k) amends the trust loss restriction event rules to provide relief for investment trusts that meet specific conditions; and
(l) increases the maximum amount that may be claimed under the Children Fitness Tax Credit and makes the credit refundable starting in 2015.
Part 2 implements certain goods and services tax/harmonized sales tax (GST/HST) measures by
(a) ensuring that pooled registered pension plans are subject to similar GST/HST treatment as registered pension plans;
(b) implementing real property technical amendments that provide for the consistent treatment of different types of housing and ensure that the special valuation rule for subsidized housing works properly with the GST/HST place of supply rules and in the context of a GST/HST rate change;
(c) clarifying the application of GST/HST public service body rebates in relation to non-profit organizations that operate certain health care facilities; and
(d) relieving the GST/HST on services of refining precious metals supplied to a non-resident person that is not registered for GST/HST purposes.
Part 3 amends the Excise Act, 2001 to provide a refund of the inventory tax, introduced in the February 11, 2014 budget, on cigarettes that are destroyed or re-worked, in line with the refund of the excise duty that exists for tobacco products that are destroyed or re-worked.
Part 4 enacts and amends several Acts in order to implement various measures.
Division 1 of Part 4 amends the Industrial Design Act to make that Act consistent with the Geneva (1999) Act of the Hague Agreement Concerning the International Registration of Industrial Designs and to give the Governor in Council the authority to make regulations for carrying it into effect. The amendments include provisions relating to the contents of an application for the registration of a design, requests for priority, and the term of an exclusive right for a design.
It also amends the Patent Act to, among other things, make that Act consistent with the provisions of the Patent Law Treaty. The amendments include reducing the requirements for obtaining a filing date in relation to an application for a patent, requiring that an applicant be notified of a missed due date before an application is deemed to be abandoned, and providing that a patent may not be invalidated for non-compliance with certain requirements relating to the application on the basis of which the patent was granted.
Division 2 of Part 4 amends the Aeronautics Act to authorize the Minister of Transport to make an order, and the Governor in Council to make regulations, that prohibit the development or expansion of or any change to the operation of an aerodrome. It also amends the Act to authorize the Governor in Council to make regulations in respect of consultations by the proponents and operators of aerodromes.
Division 3 of Part 4 enacts the Canadian High Arctic Research Station Act, which establishes a new federal research organization that is to be responsible for advancing knowledge of the Canadian Arctic through scientific investigation and technology, promoting the development and dissemination of knowledge of the other circumpolar regions, strengthening Canada’s leadership on Arctic issues and ensuring a research presence in the Canadian Arctic. It also repeals the Canadian Polar Commission Act and makes consequential amendments to other Acts.
Division 4 of Part 4 amends section 207 of the Criminal Code to permit charitable or religious organizations to carry out, with the use of a computer, certain operations relating to a provincially-licensed lottery scheme.
Division 5 of Part 4 amends the Federal-Provincial Fiscal Arrangements Act to adjust the national standard for eligibility for social assistance to provide that no minimum period of residence is to be required for Canadian citizens, for permanent residents, for victims of human trafficking who hold a temporary resident permit or for protected persons.
Division 6 of Part 4 amends the Radiocommunication Act to:
(a) introduce an administrative monetary penalty regime;
(b) explicitly prohibit jammers, subject to exemptions provided by the Minister of Industry;
(c) provide for the enforcement of rules, standards and procedures established for competitive bidding systems for radio authorizations;
(d) modernize wording relating to the powers of inspectors and the requirements to obtain warrants;
(e) authorize inspectors to request information in writing and to seize non-compliant devices; and
(f) authorize the Minister of Industry to share information with domestic and foreign bodies for the purpose of regulating radiocommunication.
Division 7 of Part 4 amends the Revolving Funds Act to correct an error in the heading before section 4 by replacing the reference to the Minister of Foreign Affairs with a reference to the Minister of Citizenship and Immigration. The amendment is deemed to have come into force on July 2, 2013.
Division 8 of Part 4 amends the Royal Canadian Mint Act to eliminate the anticipation of profit by the Royal Canadian Mint with respect to the provision of goods and services to the Government of Canada.
Division 9 of Part 4 amends the Investment Canada Act to require foreign investors to provide notification whenever they acquire a Canadian business through the realization of security on a loan or other financial assistance, unless another Act applies. It also allows public disclosure of certain information related to the national security review process and makes related amendments to another Act.
Division 10 of Part 4 amends the Broadcasting Act to prohibit a person who carries on a broadcasting undertaking from charging a subscriber for providing the subscriber with a paper bill.
Division 11 of Part 4 amends the Telecommunications Act to provide the Canadian Radio-television and Telecommunications Commission (CRTC) with the authority to impose certain conditions concerning the offering and provision of services on providers of telecommunications services that are not telecommunications carriers, to prohibit providers of telecommunications services from charging subscribers for the provision of paper bills, to allow for sharing of information between the CRTC and the Competition Bureau, to provide the CRTC with the authority to impose administrative monetary penalties for violations of the Telecommunications Act, CRTC decisions and regulations, to provide the Minister of Industry with the authority to establish a registration system and update other processes relating to telecommunications apparatus in order to assess conformity with technical requirements, and to update inspection powers for ensuring compliance with that Act.
Division 12 of Part 4 amends the Business Development Bank of Canada Act to clarify the financial and management services that the Business Development Bank of Canada is authorized to provide, including financial services in respect of enterprises operating outside Canada. It also makes some changes to the governance provisions of that Act.
Division 13 of Part 4 amends the Northwest Territories Act — enacted by section 2 of chapter 2 of the Statutes of Canada, 2014 — to provide that, if the election period for the first general election under that Act would overlap with the election period for a federal general election, then the maximum duration of the first Legislative Assembly of the Northwest Territories under that Act may be extended until five years from the date fixed for the return of the writs at the last general election under the former Northwest Territories Act (chapter N-27 of the Revised Statutes of Canada).
Division 14 of Part 4 amends the Employment Insurance Act to allow for the refund of a portion of employer premiums paid by small businesses in 2015 and 2016. An employer is eligible for that refund if its premium is $15,000 or less for the year in question.
It also amends that Act to exclude from reconsideration under section 112 of that Act decisions of the Canada Employment Insurance Commission made under the Employment Insurance Regulations respecting the writing off of penalties owing, amounts payable or interest accrued on any penalties owing or amounts payable.
Division 15 of Part 4 amends the Canada-Chile Free Trade Agreement Implementation Act in order to implement amendments to the dispute resolution mechanism of the Canada-Chile Free Trade Agreement.
Division 16 of Part 4 amends the Canada Marine Act to provide for the power to make regulations with respect to undertakings that are situated in a port. It also authorizes those regulations to incorporate by reference documents, including the laws of a province. Finally, it authorizes port authorities to acquire federal real property or federal immovables and to lease or license any real property or immovable other than federal real property or federal immovables.
Division 17 of Part 4 amends the DNA Identification Act to, among other things,
(a) create new indices in the national DNA data bank that will contain DNA profiles from missing persons, from their relatives and from human remains to assist law enforcement agencies, as well as coroners, medical examiners and persons or organizations with similar duties or functions, to find missing persons and identify human remains;
(b) create a new index that will contain DNA profiles from victims of designated offences to assist law enforcement agencies in identifying persons alleged to have committed designated offences;
(c) create a new index that will contain DNA profiles derived from bodily substances that are voluntarily submitted by individuals to assist in either the investigations of missing persons or designated offences;
(d) establish criteria for adding and retaining DNA profiles in, and removing them from, the new indices, and transferring profiles between indices;
(e) specify which DNA profiles in the existing and new indices will be compared with each other;
(f) specify the purposes for which the Commissioner of the RCMP may communicate the results of comparisons of DNA profiles and the purposes for which that information may be subsequently communicated; and
(g) specify the uses to which the results of comparisons of DNA profiles may be put.
It also makes consequential amendments to the Access to Information Act and the Public Servants Disclosure Protection Act.
Division 18 of Part 4 amends the Proceeds of Crime (Money Laundering) and Terrorist Financing Act to provide that certain foreign entities that are engaged in the money-services business are included in the definition “foreign entity”.
Division 19 of Part 4 amends the Department of Employment and Social Development Act to eliminate the limit on the number of full-time and part-time members of the Social Security Tribunal.
Division 20 of Part 4 amends the Public Health Agency of Canada Act to create a new position of President as deputy head of the Public Health Agency of Canada, thereby separating the responsibilities of the Chief Public Health Officer from those of the deputy head of the Agency.
Division 21 of Part 4 amends the Economic Action Plan 2013 Act, No. 2 in order to provide that certain provisions of Division 8 of Part 3 of that Act apply to any corporation resulting from an amalgamation referred to in that Division, and to provide that certain provisions of the Blue Water Bridge Authority Act continue to apply to the Blue Water Bridge Authority after its continuance.
Division 22 of Part 4 amends several Acts to discontinue supervision of provincial central cooperative credit societies by the Office of the Superintendent of Financial Institutions, to eliminate tools for federal intervention in relation to those centrals and to provincial local cooperative credit societies, and to facilitate the entry of provincial cooperative credit societies into the federal credit union system by simplifying the process for continuation and amalgamation that applies to them.
Division 23 of Part 4 amends the Financial Administration Act to authorize Her Majesty in right of Canada to neither pay nor collect low-value amounts, except amounts owed by Crown corporations to persons other than Her Majesty in right of Canada, amounts payable to Crown corporations by such persons, amounts payable under the Air Travellers Security Charge Act, the Excise Act, 2001, the Excise Tax Act, the Income Tax Act or the Softwood Lumber Products Export Charge Act, 2006, and amounts related to the public debt or to interest on the public debt. It also provides Treasury Board with the authority to make regulations to set a low-value threshold, to specify circumstances for the accumulation of amounts and to exclude amounts, as well as regulations generally respecting the operation of the authority to neither pay nor collect low-value amounts.
Division 24 of Part 4 amends the Immigration and Refugee Protection Act to, among other things,
(a) replace references to an opinion provided by the Department of Employment and Social Development, with respect to an application for a work permit, with references to an “assessment”;
(b) authorize the Minister of Citizenship and Immigration or the Minister of Employment and Social Development to publish on a list the name and address of an employer who, among other things, has been convicted of certain offences; and
(c) authorize the Governor in Council to make regulations
(i) regarding the publication and removal of the names and addresses of employers,
(ii) regarding the power to require documents from any individual or entity for inspection in order to verify compliance with regulatory conditions,
(iii) requiring an employer to provide prescribed information in relation to a foreign national’s authorization to work in Canada for the employer,
(iv) governing fees to be paid for rights and privileges in relation to an assessment provided by the Department of Employment and Social Development with respect to an application for a work permit,
(v) governing fees to be paid in respect of the compliance regime that applies to employers in relation to their employment of certain foreign nationals,
(vi) regarding the collection, retention, use, disclosure and disposal of Social Insurance Numbers, and
(vii) regarding the disclosure of information for the purposes of cooperation between the Government of Canada and the government of a province.
Division 25 of Part 4 amends the Judges Act and the Federal Courts Act to implement the Government’s Response to the Report of the Special Advisor on Federal Court Prothonotaries’ Compensation with respect to the salary and benefits of the prothonotaries of the Federal Court.
Division 26 of Part 4 amends the Canadian Payments Act to make changes to the governance structure of the Canadian Payments Association and to add new obligations in respect of accountability, including by
(a) changing the composition of the Board of the Directors of the Association and the procedures for selecting the directors of the Board;
(b) establishing a Member Advisory Council;
(c) expanding the power of the Minister of Finance to issue directives to the Association; and
(d) adding new obligations in respect of the preparation of annual reports and corporate plans.
Division 27 of Part 4 amends the Payment Clearing and Settlement Act to expand and enhance the oversight powers of the Bank of Canada with respect to systems for the clearing and settlement of payment obligations and other financial transactions, so that the Bank is better able to identify risks related to financial market infrastructure and to respond in a timely and proactive manner. It also makes minor consequential amendments to other Acts.
Division 28 of Part 4 enacts the Extractive Sector Transparency Measures Act in order to impose the following obligations on entities that are engaged in the commercial development of oil, gas or minerals for the purpose of implementing Canada’s international commitments in the fight against corruption:
(a) the obligation to report to the responsible Minister certain payments made to payees; and
(b) the obligation to make reported information accessible to the public.
For the purpose of verifying compliance, the Act provides for an inspection regime and gives a power to the responsible Minister to require an entity to provide certain information. Finally, the Act provides for certain offences relating to the obligations under the Act.
Division 29 of Part 4 amends the Jobs and Economic Growth Act to provide that Canadian Nuclear Laboratories Ltd. (CNL) is an agent of Her Majesty in right of Canada, effective as of the date of CNL’s incorporation, and to provide that CNL will cease to be an agent on the day on which Atomic Energy of Canada Limited disposes of CNL’s shares. The Division also amends that Act to provide that the Public Service Superannuation Act will apply for a transitional period of three years to persons who are employees of CNL on that day.
Division 30 of Part 4 repeals a provision of the Economic Action Plan 2013 Act, No. 2 that amended a provision of the Public Service Labour Relations Act. It also amends provisions of the Economic Action Plan 2013 Act, No. 2 that amended the Public Service Employment Act in respect of the staffing complaint process.
It also makes a technical correction to a coordinating amendment in the Economic Action Plan 2013 Act, No. 2.
Division 31 of Part 4 transfers the pensionable service that is to the credit of certain Royal Canadian Mounted Police pension contributors under the Royal Canadian Mounted Police Superannuation Act to the Public Service Superannuation Act and deems those contributors to be Group 1 contributors under the Public Service Superannuation Act. It also amends the Royal Canadian Mounted Police Superannuation Act to repeal provisions relating to members of the Royal Canadian Mounted Police not holding a rank.
All sorts of information on this bill is available at LEGISinfo, an excellent resource from the Library of Parliament. You can also read the full text of the bill.
Bill numbers are reused for different bills each new session. Perhaps you were looking for one of these other C-43s:
Economic Action Plan 2014 Act, No. 2Government Orders
Nathan Cullen NDP Skeena—Bulkley Valley, BC
Mr. Speaker, it is an interesting thing. Some watching may wonder why there is a question about child care on a speech about the economy and the budget. However, everyone who has studied the aspects of affordable child care knows that the impacts can be enormous for the economy. It represents, much like infrastructure spending, a true investment. We throw the term “investment” around here all the time, but we know that some things are investments and some things are not. Investing in affordable, good child care is a smart thing to do, both on the social side and the economic side.
We see other G7 and OECD countries struggling to increase worker participation in the economy, spending tens of billions of dollars to help people get into that economy because productivity is so low. Canada has struggled with productivity for years now, and one would argue generations. There is a great deal of evidence, and this is not coming from one sector of economists, left, progressive or conservative but across the board, showing that to help families out directly is an effective way for government to invest in the economy. This is not with some token $100 cheque that comes once a month, which gets taxed, and pretending that is a child care strategy, but a real child care plan. We have working models from which to borrow. We can look to Quebec and understand what the benefits have been to it as a society and its economy. The government gets back more than it puts in. That is a good investment for me.
Perhaps the Conservatives believe in some other world view. That is obviously the case.
Scott Brison Liberal Kings—Hants, NS
Mr. Speaker, my colleague is a fellow member of the finance committee. A range of witnesses who came before that committee, from the Canadian Labour Congress to the Canadian Chamber of Commerce, said that we had an unprecedented opportunity to invest in infrastructure. We have a record low of bond yields and real interest rates are negative. It is an opportunity to invest in fixing Canada's crumbling infrastructure.
Does the member agree that we have a significant opportunity and that our pension funds, such as OMERS, teachers' and CPPIB, could be very important partners in progress in fixing Canada's infrastructure? Our pension funds are building infrastructure around the world. We probably have the greatest concentration of expertise in the design, financing and construction of infrastructure in the world resident in Canada. Does the member agree that we should be engaging those pension funds in Canada to fix our infrastructure?
Nathan Cullen NDP Skeena—Bulkley Valley, BC
Mr. Speaker, the analogy of a household is often used by Conservatives when talking about the economy, that we have to manage ourselves like a household would. If our house were falling down, if we did not have enough food in the fridge, if our parents said that whatever we did we had to pay off the mortgage today or next month and that it did not matter if the roof leaked and the kids did not have shoes on their feet, that would be a bit of a drastic economic model.
When bank economists come to us and when the world view is predominated by the idea of incredibly low interest rates, it seems like an opportunity to invest in infrastructure now rather than at some point later when interest rates rise. That investment could lead to a more productive economy and could help our completely stagnant private growth sector rate. We know productivity is directly connected to our ability to move around the country. As my friend has said, there are willing and incredibly competent fund managers who know what they are doing because they are building things around the world and they are doing it well. However, it runs up against an ideology that has its eyes transfixed on an election promise, such as income splitting. The government would rather spend $5 billion helping out a little less than 16% of Canadians who are predominately wealthier, leaving 86% of Canadians with nothing. It would rather fixate on this ideological promise rather than address the reality in front of it.
This is the demise of every government. It seems that over time its ability to listen and learn from what it hears is replaced increasingly by its idea that it always has it right, that it cannot listen to anybody else, that everybody is an opponent who needs to be beaten down rather than a conversation that needs to happen in a place like this, on the floor of the House of Commons and at the finance committee, where we to listen to experts and we talk about what the options are going ahead. Investing in child care is important. Having a living wage is something that is worthwhile to our economy. It helps small and medium businesses because those people spend money locally. We know that and a living wage makes sense.
In large part, I agree with what my friend has to say. It is about time the Conservatives drop the ideological mantra of their fixations and pet projects and actually pick up the evidence in front of us and realize that this our economy needs a little help right now. Otherwise, future generations will certainly curse our actions of today.
Economic Action Plan 2014 Act, No. 2Government Orders
The Acting Speaker Barry Devolin
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 Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, The Environment; and the hon. member for Beauport—Limoilou, The Environment.
Scott Brison Liberal Kings—Hants, NS
Mr. Speaker, I rise this afternoon to speak to the latest Conservative omnibus bill. This bill is a product of a tired, old Conservative government that has lost touch with the challenges and opportunities of Canadians.
Bill C-43 is overflowing with changes that have no place in a budget bill, such as the petty change the Conservatives want to make to deny refugee claimants access to social assistance.
The Conservatives are actually using Bill C-43 in an effort to deny income support to refugee claimants, right after their attempt to limit refugee claimants' access to health care was struck down by the Federal Court. The court called that Conservative policy “cruel and unusual treatment” that “outrages (Canadians') standards of decency.”
A recent editorial in The Globe and Mail called this bill “an abuse of process and shown contempt for Parliament by subverting its role”. The Globe is right. It is anti-democratic for the Conservatives to once again use a massive omnibus budget bill to limit debate and ram through so many unrelated measures in Parliament.
In the last few years, the Conservatives have concocted and implemented a process that prevents MPs from all parties from doing their jobs in properly scrutinizing legislation. This is leading to a lot of sloppy mistakes. The Conservatives' general disdain for Canada's democratic institutions and their outright contempt for Parliament have led to countless errors being cemented into Canadian law.
This bill would try to fix a number of previous Conservative mistakes. I would like to give members a few examples of areas where the Conservatives are trying to use this omnibus bill to fix errors in previous bills.
First, the Conservatives forgot to include a tax credit in the last omnibus budget bill, Bill C-31, for interest paid on Canada apprentice loans. The Conservatives try to fix that in clause 35 of Bill C-43.
The second is that the government forgot to ensure that PRPPs are subject to similar GST treatment as RRSPs. The fix for that is found in part 2 of Bill C-43.
Third, they forgot to include a refund in Bill C-31 for duties paid on destroyed tobacco products. That correction is in Bill C-43, part 3.
Fourth, they forgot to change a legal heading when the Conservatives used Bill C-19 to transfer spending powers from the Minister of Foreign Affairs to the Minister of Citizenship and Immigration. The Conservatives gave all of the powers in that section of the law to the immigration minister, but still named the section “Minister of Foreign Affairs”.
Fifth, they forgot in Bill C-38 to allow the Minister of Industry to publicly disclose certain information regarding the review process.
Sixth, they forgot in Bill C-31 to include foreign money services businesses as foreign entities under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act.
Seventh, they ignored expert advice and capped the size of the Social Security Tribunal in Bill C-38, leading to massive backlogs in the system.
Eighth, they failed to realize in Bill C-4 that the amalgamation of the Blue Water Bridge Authority might not go as planned.
Ninth, they created confusion in Bill C-4 with various amendments related to public service labour, including a reference to the wrong clause number.
Tenth, they forgot in Bill C-45 to coordinate between RCMP pension rule changes in Bill C-42 and rule changes that raised the age for public service pensions in Bill C-45.
There are 10 examples of the the mistakes the Conservatives made in the previous bill that they are trying to fix in this omnibus bill.
The fact is that the Conservatives' game plan of limiting debate and ramming these bills through Parliaments is responsible for creating these mistakes. Parliament is denied its legitimate role to identify these flaws in the process of real parliamentary debate at committee and in the House and fixing them.
The reason these mistakes are made in the first place is because of the deeply flawed process surrounding omnibus legislation.
I would like to talk a bit today about tax policy, GST, EI, and the income-splitting proposal that the Conservatives had in their last platform.
Bill C-43 actually adds GST to some goods and services that are used by or provided by non-profit organizations operating health care facilities. When we asked officials for an example of what kinds of service might get caught up in this GST hike, the example they provided was of a health care facility that also runs a residential apartment building, such as an old age home. Adding GST to services purchased by or provided by old age homes means one of two things: either it will cut into the bottom line of the health care facility, or the old age home will have no choice but to pass the tax hike on to the people they serve. In the case of an old age home, it means that the government is getting ready to hike the GST and punish Canadian seniors, who are already struggling to get by on a fixed income.
In terms of employment insurance, Bill C-43 also gets it wrong. Bill C-43 offers a small EI tax cut to employers, but only if they agree to stay small. Instead of creating real jobs and growth, Bill C-43 would actually encourage businesses to stay small and would punish them if they grow and become more successful. Due to a design flaw in Bill C-43, the so-called small business job credit creates an incentive for some businesses to fire workers. That is why economist Jack Mintz has called it “a disincentive to growth” and why economist Mike Moffatt said “...the proposed ‘Small Business Job Credit’ has major structural flaws that, in many cases, give firms an incentive to fire workers and cut salaries.”
Even Finance Canada officials last night acknowledged that this tax credit creates a disincentive for some employers to hire.
Last month the PBO looked at this tax credit and found that it will only create 800 jobs over the next two years, at a cost of $550 million. That means it will cost taxpayers almost $700,000 per job.
In response to the need to encourage businesses to hire and to reduce EI premiums for businesses that do that or reward businesses that hire, the Liberals have proposed an EI holiday for new hires. This plan would only reward businesses that actually create jobs. The Liberal plan has been endorsed by Canadian job creators, including the Canadian Manufacturers & Exporters, which has said that the Liberal plan for an EI exemption for new hires “would create jobs”. The Restaurants Canada organization, representing restaurants across the country, said “This...proposal for an EI exemption for new hires would help restaurants create jobs.” The CFIB said it loves the Liberal plan to exempt small business from EI premiums for new hires, which has lots of job potential.
The same PBO report that looked at the Conservatives' tax credit and identified the flawed program that would cost $700,000 per job also identified that the Conservatives are collecting billions of dollars in excess of taxes in EI over the next two years and that the Conservatives actually have the capacity to cut EI premiums significantly.
The PBO estimates that artificially high EI rates under the Conservatives will cost the Canadian economy 10,000 jobs over the next two years. That is 10,000 more Canadians who will be out of work over the next two years because the Conservatives are using artificially high EI premiums to pad the books to fund pre-election spending. The Conservatives are ignoring the evidence and putting Conservative politics ahead of the Canadian economy and ahead of the interests of Canadian workers and employers.
Speaking of ignoring the evidence, the Conservatives appear ready to go ahead with their flawed income-splitting scheme that was introduced in their last platform. The idea that the Conservatives were putting forth in their last platform has been panned by everyone from the C.D. Howe Institute and the Canadian Taxpayers Federation to the Mowat Centre and the Canadian Centre for Policy Alternatives. It was even panned by the late Jim Flaherty himself.
It is being panned because, as articulated in their platform, fewer than 15% of Canadian households would benefit, most of them high-income households, at a cost of $3 billion per year to the federal treasury and another $2 billion per year to provincial governments. Provincial governments, as we know, are facing deficits and huge fiscal challenges.
Under the Conservatives' scheme, the Prime Minister, earning $320,000 a year and with a stay-at-home spouse, would save about $6,500 per year. Meanwhile, a Canadian earning the average industrial wage and with a stay-at-home spouse would save less than $10 per week, and most households would get no benefit whatsoever.
We have a different approach. The Liberal approach is that we need to build a plan for 2015 that would be focused on creating jobs and growth to strengthen the Canadian middle class. The status quo is not working. The current federal government is so preoccupied with day-to-day politics that it has lost track of and is out of touch with the challenges and opportunities facing Canadian families. Those are challenges such as aging demographics and a slow-growth economy, which some refer to as secular stagnation. Baby boomers are rapidly approaching retirement age, and as they exit the workforce, they will leave a shrinking tax base and labour shortages in their wake. They will also place a greater strain on health care systems as they age. We will end up with more Canadians using the social safety net and fewer Canadians paying into it. These demographic pressures are leading economists to predict that slow economic growth could become the new normal.
The Canadian economy, frankly, is already sputtering under the Conservatives. Job growth over the last two years has been extremely weak, consumer debt is high, infrastructure is in disrepair, and housing prices in our cities are inflated. Last year the Canadian economy created a paltry 5,300 net new full-time jobs across the country. The percentage of Canadians working today is still two full points lower than before the downturn. There are 200,000 more jobless Canadians today than before the downturn, and the number of Canadians who are considered long-term unemployed is twice that of 2008. More than 150,000 Canadians are unemployed and have been searching for work for a year or longer. As we all know, the longer they are out of the workforce, the harder it is for them to get back in.
On the other end of the spectrum, we have young Canadians who simply cannot get their foot in the door of the Canadian labour market. Recent grads are facing huge challenges. There are 200,000 fewer jobs for young Canadians today than before the downturn, before 2008. Persistently high youth unemployment and under-employment is robbing a generation of people of opportunities they need to succeed. TD economist Craig Alexander and CIBC economist Benjamin Tal describe a scenario of a lost generation of Canadian youth and a lost generation of potential for all Canadians.
This is despite the fact that this generation is the most technologically adept, most educated generation in our nation's history, and therein lies the challenge we face. There is a gap between the education they have and the job market. We have people without jobs and jobs without people.
Too many Canadians in their twenties are left saddled with big student loans and are unable to make ends meet. All too often, it is their middle-class parents and grandparents who are footing the bill. Among the hardest hit are Canadians who are actually squeezed between helping their adult children pay the bills and taking care of their aging parents at the same time, the sandwich generation. In many cases these parents in their forties, fifties, and sixties are taking on additional debt or dipping into their retirement savings. In fact, this is one of the things that is driving record levels of personal debt, which is about $1.65 for every dollar of annual income. According to the Canadian Financial Monitor, Canadians who are 55 years of age or older are two and a half times more likely to refinance their mortgage if they have children than if they do not have children. Their average household debt is twice that of their childless peers.
Meanwhile, many younger families do not actually have a mortgage to refinance. Instead, they are being priced out of the housing market altogether.
On this front, the Conservative government must share at least part of the blame for the high housing prices in Canada and commensurate personal debt. It was the Conservative government, in budget 2006, that brought in 40-year mortgages with no down payment. It introduced them for the first time in Canada. It had an effect, because in the first half of 2008, more than half of all new mortgages in Canada were 40-year mortgages, and 10% of those had zero down payment.
The Conservatives shifted Canada's borrowing culture and lending culture, and that shift has helped fuel record levels of housing prices commensurate with that household debt. They have since reversed course and returned to the norm that was the case under Liberal governments in the past, meaning 25-year mortgages with at least 5% down. However, it is important to recognize the Conservatives' culpability in bringing 40-year mortgages with no down payments into Canada and helping fuel record levels of personal debt related to skyrocketing housing prices.
From the OECD and the IMF to the Bank of Canada, one thing on which Canadian and international economists agree is that elevated housing prices and household debt pose a big domestic threat to our economy. These elevated housing prices have helped widen the generational divide between those on the one hand who have watched the value of their house appreciate and in some cases have tapped into that equity to help fund consumption, and those on the other hand who cannot afford to even enter the housing market.
We are seeing greater income inequality in Canada, and fewer Canadians now think of themselves as being middle class. In fact, the number of Canadians who self-identify as middle class has dropped from 64% in 2009 to 47% in 2014. Even more troubling is that for the first time in recent history, more Canadians now believe that the next generation, their children and grandchildren, will be worse off, not better off, than they are today. That is the first time this has happened in Canada.
What we need is a federal government that will rise to meet these big challenges facing our country: aging demographics, slow growth, soft job market, and high levels of youth unemployment and underemployment. These are all challenges, but they also represent opportunities. I will give one specific challenge to our country that is a big social and economic challenge but that also represents an opportunity if we can get it right.
Over the next 10 years, there will be about 400,000 young aboriginal and first nation Canadians who will be of workforce age. If they have the skills they need for the jobs of today, that would be really good for our economy. If they do not, it represents a demographic, economic, and social time bomb for our country.
The reality is that we have failed collectively as governments at all levels to address this challenge. If we take it seriously, young aboriginal workers can be part of a Canadian growth and economic success story. We have to get it right. We have to take these issues seriously.
Liberals believe that sustainable growth and a focus on creating jobs, growth, and opportunities is the best way to benefit Canadian middle-class families and to restore hope to them. We believe we need to invest in infrastructure, training, innovation, and trade, and we believe that we need to keep our competitive tax rates.
Bill C-43 does nothing to grow the Canadian economy, and it ignores the very real challenges of the middle class and of young Canadians.
In a very short period of time, potentially within days, we will be seeing a fall economic statement. We hope the government chooses to invest in the future by investing in infrastructure, in training, and in young Canadians. We need the government to do so, and if this government does not, a future Liberal government will.
Nathan Cullen NDP Skeena—Bulkley Valley, BC
Mr. Speaker, I was reminded by a colleague, just recently, it is the 30-year anniversary of the Thrilla in Manila, the fight between Ali and Frazier—
Nathan Cullen NDP Skeena—Bulkley Valley, BC
Mr. Speaker, I will get it right. I got my year wrong. Against Foreman, there was a technique used by Ali that was later called rope-a-dope. I do not think he fixed the fight but the rope-a-dope idea is to just sort of lay back and let the opponents swing wildly away, burning themselves out.
While that is an amusing pugilistic tactic, what we are worried about in this particular budget is that if the government continues to swing wildly away with these very expensive schemes, the effect would not only be burning through a great deal of actual capital, and real and perceived political capital, but it would hurt Canadians in the long term.
What we have heard from small businesses and the business community at large is that merchant fees, in particular, are a grave concern, that restaurants and small businesses across the country are getting hit with higher and higher fees when customers use these credit cards, and that there is a voluntary but useless program that has been invoked by the Conservative government.
Would my friend join with me in suggesting that we need to begin to have mandatory rules set out for credit card companies and banks to restrict these abusive practices that hurt small—
Economic Action Plan 2014 Act, No. 2Government Orders
Scott Brison Liberal Kings—Hants, NS
Mr. Speaker, my colleague is right. The voluntary approach has not worked. When we talk to the restaurant association or the retailers or the CFIB, they acknowledge that more needs to be done. Some of them point us toward the Australian model and potentially capping rates.
Just to show how perverse the current system is, if a persons goes into a store in Windsor, Nova Scotia, and buys a pair of shoes with a credit card, the merchant can be dinged with a 3% charge upon the sale of those shoes. The person takes the shoes home, finds out his spouse does not like them, brings them back and exchanges them. There is another 3% charge for the merchant. The merchant has been hit by a 6% charge and has not sold a pair of shoes yet. That is one of the best ways to illustrate how ludicrous the current situation is and how important addressing it is for the engine of Canadian economic growth: small business.
A mandatory approach may be the best way, but ignoring it with a voluntary approach certainly has not worked.
Massimo Pacetti Liberal Saint-Léonard—Saint-Michel, QC
Mr. Speaker, I want to thank my colleague for a good speech. I know he only had a 20-minute opportunity to speak.
He talked about the lack of infrastructure investment the government has made and continues to make. In his conversations during the pre-budget consultations, did he consult his own mayors and the premier in his own province? What is their input? What are the discussions involving infrastructure?
Every time I talk to a local mayor or a local politician or somebody at the provincial level, it is always about lack of infrastructure. Whether it is in my province of Quebec or not, I hear that the Canadian government is not in partnership in any projects and that it is reducing investments in programs.
I wonder what the member thinks about the lack of money in infrastructure.
Scott Brison Liberal Kings—Hants, NS
Mr. Speaker, when I spoke recently with Mayor David Corkum, the mayor of Kentville in my riding, he stressed the need for infrastructure investment. He also stressed the need for us to take investing in social infrastructure, such as housing, seriously.
There is a strong role for the federal government. This is certainly not the time for the federal government to cut by 89% planned infrastructure spending for next year. It is doing that, again, to pad the books on the eve of an election. It may be good politics. It is bad economics.
The reality is that, if we listen to David Dodge or the OECD or the IMF, with bond yields at historic lows, with real interest rates actually negative, we have an historic opportunity to invest in Canadian infrastructure, to create jobs today and to improve Canada's competitiveness tomorrow. We heard that from the former deputy minister of finance yesterday, Scott Clark, at committee.
Beyond that, we have the greatest concentration of expertise in the design, construction, and financing of infrastructure in the world resident in Canada in our pension funds. Let us work with them to invest in fixing Canada's infrastructure and create good jobs here in Canada.
