Bill C-43 (Historical)

Economic Action Plan 2014 Act, No. 2

A second Act to implement certain provisions of the budget tabled in Parliament on February 11, 2014 and other measures

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.

[Andrew Bauer-Gador, Economic Analyst, Natural Resource Governance Institute]

Thank you, Mr. Chairman.

Good morning. Thank you for inviting me to speak today, Chairman and all the members of the committee.

By way of introduction, as Mr. Benoit said, I'm an economic analyst with the Natural Resource Governance Institute. I've been working with Publish What You Pay Canada, the Mining Association of Canada, and the Prospectors and Developers Association of Canada for the last few years on exactly this issue, payments transparency. My organization is a non-profit policy institute, working in over 30 countries on improving the management of oil, gas, and mineral resources. Previously I was with Finance Canada.

I'm here today to talk about division 28 of Bill C-43 and I'll be referring to the same handout Claire was referring to and will be highlighting one recommendation and two revisions that would align what's been proposed with EU and U.S. standards.

We strongly support Publish What You Pay Canada's call to include project-level reporting in the legislation. The U.S. and EU laws require disclosure of payments for each project. This is important for a few reasons.

First, in more than 30 countries, payments made on extractive projects determine fiscal transfers from the national to subnational governments. Local governments in Mongolia, Myanmar, the DRC, Ghana, the Philippines, and lndonesia each collect a share of oil, gas, or mineral revenues on their land, as prescribed by formulas. Project-level disclosure is essential for helping these local governments plan their budgets, but it can also mitigate violent conflict in resource-rich regions.

An example that I know quite well and I think is a good one is the Philippines. There, some mining communities are entitled to a minimum 1% royalty on the minerals extracted on their lands. Since they don't have access to this information, there's no way for them to determine whether they're receiving their 1%. As a result, communities usually don't receive their legally entitled benefits. The result has been that this has fuelled kidnapping, the destruction of mining company property, and a communist insurgency. The U.S. and EU laws are designed to address exactly this type of problem.

Second, knowing the payments companies are making at the project level can help investors in oil and mining companies determine the political and social risks. lnvestors managing over $5.8 trillion have written publicly that this information is critical to deter corruption and improve the overall business climate in the countries where they invest.

Both the U.S. and the EU clearly require project-level disclosure, and we recommend that Canada does the same.

I would also highlight two additional concerns that we have with the draft legislation.

Our first concern is that the current draft leaves open the possibility of exemptions from disclosure. Any exemptions would undermine the intent of the legislation, which is to improve governance in the places that need it most. I think we can all agree that we would not want to give tyrants veto power over Canadian lawmakers. The EU rules specifically rule out exemptions, and we encourage Canada to do the same. If you turn to page 3 of the joint submission from Publish What You Pay Canada and NRGI, you will see that section 23(1)(b) explicitly opens up the possibility of exemptions in possible future regulations. We recommend that this provision be removed.

Our second concern involves the public availability of information and format of disclosure. Under the current draft, there is no clear and unequivocal commitment to making the information public. Keeping this information secret defeats the purpose of the legislation. We're recommending that we remove section 23(1)(f) to ensure that no information is hidden from public view. Linked to this issue, for the law to be effective, all users must have access to it. The U.S. and EU rules require that the information be centrally provided and publicly available. Canada should align with this international standard. We agree with the Canadian mining industry that these rules serve Canada's interests well and as such the bill is welcome. But in order to achieve the stated goals, improvements are needed. A requirement to disclose information at the project level, and addressing concerns around exemptions and format of disclosure would align with the U.S. and EU standards and level the playing field globally.

Thank you.

[Julia Deans, Chief Executive Officer, Futurpreneur Canada]

Thank you, Mr. Chair.

Good morning and happy global entrepreneurship week. My name is Julia Deans. I'm the CEO of Futurpreneur Canada which until May was known as the Canadian Youth Business Foundation or the Fondation Canadienne des Jeunes Entrepreneurs. We're the only national not-for-profit organization that's helped close to 6,000 Canadians, 18 to 39, launch businesses across the country. I'm very happy to have the opportunity to speak to you today in support of a proposed amendment in division 12 of Bill C-43.

This amendment will expand BDC's ability to support young entrepreneurs through not-for-profit organizations like ours. We have been co-funding with BDC for young entrepreneurs since 2008. With one application, a young entrepreneur can obtain a loan of up to $15,000 from Futurpreneur Canada and a further loan of up to $30,000 from the BDC. That's up to $45,000 collateral free with just one application through Futurpreneur Canada.

We work really hard to make it easy for young entrepreneurs to work with us. We use as many of our resources as possible for the front-line programs and services we provide to young entrepreneurs. Our admin costs are about 7% of our budget.

The way it works is this. Futurpreneur Canada manages the initial relationship with the young entrepreneur applying for financing and we conduct the due diligence. BDC relies on our strong track record and our sound adjudication process when it looks at applications from young entrepreneurs who also would like loans from BDC.

Since 2008, we have had close to 1,700 young people take advantage of BDC's co-funding. Last year, 44% of our young entrepreneurs also secured co-funding from BDC, so it's on the rise.

I should note that since October, BDC has also provided all of the financing, that's up to $45,000, for 34- to 39-year-olds. They might not strike you as young people but they are and they're often coming to entrepreneurship for the first time at that point. This is a really growing group.

Through this co-funding arrangement, BDC is able to help young entrepreneurs who are considered too risky to get mainstream financing. They're also people who are very hard for BDC to reach and who need a lot of extra support when they're starting their businesses.

The proposed amendment won't change this co-funding arrangement at all. It will, however, make it possible for us to help start more new businesses with less money from government. Right now, we raise money from governments and other sources to provide loans and services to young entrepreneurs. In the future, we plan to secure our loan capital from a private bank. This is a new relationship and so to start with, the private bank, while they get to know us, requires a guarantee. The proposed amendment will allow BDC to provide this guarantee. Given our loan repayment track record, there's a very low risk of the guarantee ever being called upon and BDC will price the guarantee accordingly.

This amendment will mean that the money we raise to provide services to young entrepreneurs will be leveraged to raise private sector money for the loan capital. This could be up to $50 million of new money from the private sector going into the hands of young entrepreneurs in the next five years. It will also mean a reduced ask of governments and improve our future sustainability and our capacity to help grow more successful businesses in the future.

Thank you.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

Just so that we understand, this is not part of this consultation on Bill C-43. This is part of future considerations.

[Roxanne James, Conservative, Scarborough Centre, ON]

Mr. Chair, I'm hoping everybody is in agreement. I'm going to put forward this motion:

That the Chair of the Committee send a letter to the Chair of the Standing Committee on Finance stating that this Committee has achieved the objective that it set, and that this Committee has no amendments to propose to clauses No. 232 to No. 249 of Bill C-43, C-43, A Second Act to implement certain provisions of the budget tabled in Parliament on February 11, 2014 and other measures.

[Chris Dobrzanski]

I'll be quite pedantic here. There are specific rules that apply for the credit unions with respect to activity within the area of incorporation in British Columbia. With the bank, while it's under the Bank Act and the federal charter, we also have to register in the provinces we seek to do business in. These are quite separately run organizations even though there is a single shareholder and it's Vancity.

The view that I was presenting today around Bill C-43 is really that, as was noted, as membership-led credit unions, consultations are an essential part of our forum. Over the last decades we've been able to find a forum that builds scale nationally. Some regions have an equal importance of credit unions relative to their population but don't have the same dollars. We run the pool, as Vancity does, by putting all of its scale of clearings and systems in with our region so that our region can aggregate up to be at scale and competitive. Our region then aggregates that up with the other provinces.

That is what we're understanding today and we think that member-led consultation will require a little bit more time than perhaps was anticipated in the bill to get to the new framework. We've said that we're very much in favour of tighter financial regulation, in favour of sound banking services from industry, and we will stand behind that statement.

[Martha Durdin]

That's right. The Department of Finance issued a technical paper in mid-October, discussed the framework around some of these changes, and asked for our feedback by the end of December of this year. They are allowing a two-year timeframe for these changes to be implemented, but it's unclear to us when the clock starts.

Does the clock start at the end of December when the period is over or will it start when Bill C-43 is enacted? When does it actually start? We're asking for a minimum of two years, a timeframe that's more related to what needs to be done once we understand the full scope of what changes are required, because some of them are beyond our control.

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

Thank you very much.

Bill C-43 amends the Business Development Bank of Canada Act to allow BDC to extend credit or provide liquidity to any person through a category of transaction that's prescribed by the regulations.

Do you have any concerns that these changes to BDC's potential mandate may creep into work that you're doing? Do you have any concerns or thoughts on these changes?

[Martha Durdin]

Could I just add to my last answer? If your question relates to amalgamation, because credit unions are provincially regulated, the amalgamation within a province shouldn't be impacted by Bill C-43.

[Chris Dobrzanski]

Yes. Vancity, as you know, has the privilege of being both provincially incorporated as a credit union and having a federal chartered bank solely owned. Our board of directors, elected by our members, has taken a view that the credit union's purpose is for local impact and for creating and responding to our community. They continue to view that a provincial incorporation actually strengthens and enables that regional and local model.

As for the bank, the bank gives us an important plateau in the payments structure. While we are not an active deposit-taking financial institution, we remain in proper status with our regulators OSFI and CDIC.

I will say that the credit union Vancity has been supportive of the transition measures that Bill C-43 seeks to clarify, so those credit unions that wish to make the choice to become federal have a clear path and a clear line of sight.

If I can use the observation about a clear line of sight, we understand in the current structure how our cooperation with the current regulations create a line of sight for our members through our central into the payments into a federal financial institution network. It's that consultation we would wish to carry, going forward.

[Andrew Saxton, Conservative, North Vancouver, BC]

In your opinion, how will the measures in Bill C-43 help streamline the process, specifically for amalgamations, and providing choice and stability for consumers?

[Martha Durdin]

The impact of Bill C-43 and the changes are, from what the government has told us, to clarify the roles of provincial jurisdiction and federal jurisdiction. That is the impact of the changes.

The impact on the centrals is still to be defined. We're working through that process to understand what changes need to be made to accommodate that change. It's difficult to say at this point because we're still responding to the technical paper and trying to understand what needs to be done.

[Andrew Saxton, Conservative, North Vancouver, BC]

Thank you, Chair, and thanks to our witnesses for being here today.

My first questions are for Credit Union Central, Ms. Durdin.

Economic action plan 2014 proposes to improve and clarify the federal regime for credit unions. In your opinion, how will Bill C-43 help to clarify federal regulation in respect to provincial credit union centrals that want to be federally regulated?

[Martha Durdin]

The way I'll address that is to say that's why we're here today, to ask for more time in terms of the implementation of Bill C-43 and when the clock starts.

[Chris Dobrzanski, Chief Economist, President and Chief Executive Officer, Citizens Bank of Canada, Vancouver City Savings Credit Union]

I want to thank the chair and the committee members for inviting Vancouver City Savings, or Vancity, to be part of today's discussion on Bill C-43.

My name is Chris Dobrzanski, and I am the Chief Economist at Vancity Credit Union, based in Vancouver, British Columbia. I am also the CEO of Citizens Bank of Canada, which is fully owned by Vancity and provides a national financial framework to our credit union.

Today, I will share our perspective, which is rooted in community and provincial incorporation. As Ms. Durdin was saying, credit unions and caisses populaires continue to attract a growing number of members and talented financial services employees who serve many sectors in the real economy. Constituents benefit from the national network of provincially incorporated deposit-taking financial cooperatives. The Canadian credit union sector, excluding Desjardins caisses populaires, represents 5.3 million members, or 20% of the population.

Since 1946, Vancity has known that members make us who we are. We were founded by providing banking services to those in our community who weren't served by existing financial institutions. As a cooperative, Vancity is driven by the needs of its members, which has resulted in the provision of many firsts extending the reach of financial inclusion.

This ability to work with the needs of the community serves us well today and has allowed Vancity to be an innovator in providing real-time solutions to community challenges in areas of affordable housing, local food systems, social enterprises, renewable energy and environment, and financial literacy, to name a few. This local innovation, in part, relies on direct access to payment settlements. Specifically Vancity, via its membership in Central 1, has Canadian Payments Association, or CPA, protocol, reliability, and stability. Vancity is grateful for the existing framework that allows regional central credit unions to be equal partners in the CPA. Today, with over 501,000 members and assets of nearly $18 billion, Vancity is Canada's largest community credit union.

Vancity understands the big picture for financial regulations emerging, especially for the implementation of Basel III internationally by 2018. We agree that some financial reform will inconvenience regulated deposit-taking financial institutions to provide more stable credit pipes that support the real economy, which is aided greatly by harmonizing and tightening regulation. Vancity favours regulation that provides for a stable supply of banking services to Main Street, where our credit union members work.

Nationally, Vancity cooperates with credit unions across the country to create a large-scale secure network. In our case, this is done through Central 1. We are grateful for the current framework that today allows our regional central credit unions to be equal partners in the CPA, and be subject to the same rules of the Office of the Superintendent of Financial Institutions. These uniform standards support Vancity members, as they create greater financial stability for all deposit-taking financial institutions, and not just credit unions and their member centrals.

As a cooperative, Vancity is democratically governed by its members. Together with other British Columbia credit unions, we are members of our regional central credit union. Through our member-elected board of directors, we consult with each other on matters of financial reform, financial scale and sound financial practices. Our consultation process reaches a deeper consensus, perhaps, than our competition. It does take time to consult within our peer groups and to coordinate across our credit union regions.

We note that the important changes envisioned in Bill C-43 with respect to credit unions would also benefit from a deeper consultation. Our experience is that when we devote adequate resources and time to policy changes, like those in the bill, we are able to ensure a smooth transition to a new state with clear benefits for all those involved. We ask the committee, therefore, to understand that we would welcome sufficient time to allow for our system of cooperative collaboration to develop a coordinated response to the regulatory changes envisioned.

In closing, Mr. Chair, on behalf of the members of Vancity, I wish to emphasize our agreement that it is only prudent to start planning for the topics we covered today.

I thank you very much for the opportunity to present to you today. You can always come by Vancouver to see the positive effects we have on the communities we serve and the importance of our values as the basis for our financial activities. We hope you will visit Vancity next time you are in Vancouver.

Thank you.

[Avvy Yao-Yao Go, Member, Steering Committee, Colour of Poverty - Colour of Change Network]

Thank you.

The network is actually a provincial network, based in Ontario, of individuals and organizations that are working to address the growing racialization of poverty in Ontario. I'm also the clinic director of the Metro Toronto Chinese and Southeast Asian Legal Clinic, which is also a member of the network.

I want to thank the committee for the opportunity to speak to you today about the amendments. We've also signed the letter that Ms. Rico mentioned earlier. We believe that the amendments as proposed are discriminatory and illogical and contradict the federal government's stated commitment to poverty reduction.

The proposed amendments purport to give provinces the power to impose minimum residency requirements on certain groups of individuals based on refugee or immigration status. While on its face these sections are silent as to which groups of individuals will be excluded from receiving social assistance, the combined effect of the residency requirement and the enumerated groups of individuals who are exempt makes it abundantly clear that the only and real targets of these provisions are refugee claimants.

As many speakers have talked about before, refugees are among the most vulnerable in our society. They often arrive in Canada with nothing, just the shirt on their back, so these provisions, if implemented, will effectively render them ineligible for even the bare minimal amount of support they need for food and shelter. These sections are clearly discriminatory towards refugees, the vast majority of whom are racialized, so they face additional barriers not simply because they're refugees, but also because they are people of colour.

Further, the bill will have a disproportionate impact on refugees who are the most vulnerable, namely women, children, and people with mental health issues or post-traumatic stress disorder. They are also the ones who are most likely to rely on social assistance when they first arrive in Canada.

As many have mentioned, the bill violates international human rights laws that prohibit discrimination. It's contrary to the Charter of Rights and Freedoms, including section 15, the equality rights, and section 12, the right not to be subjected to cruel and unusual treatment or punishment.

I also want to say that there are other problems with the bill apart from it's being discriminatory. First, it draws an artificial distinction between refugees and refugee claimants while denying assistance to all refugees, including those who will eventually be accepted as protected persons under our refugee determination system.

Second, the provisions are actually self-contradictory; for instance, by exempting only victims of human trafficking who hold a temporary residency permit but not those who apply for a refugee claim when they first arrive in Canada.

The provisions actually purport to give provinces the powers that they say they do not want and will likely not exercise due to the serious concerns about the human rights breach resulting from the provisions. The provinces, by the way, already have rules that will disentitle visitors if someone is concerned that visitors will get assistance. They already have rules around that, so they don't need any new power.

The proposal is touted as a cost-cutting measure without considering the real cost that would be borne by Canadian taxpayers in the form of increased use of homeless shelters, food banks, emergency care, and hospitals when refugees become ill after they become homeless and hungry.

Besides, if the goal is to discourage individuals who don't need protection from coming to Canada, there is actually no evidence that in fact it will do so. Meanwhile, refugees, all refugees, will be painted with the same brush and be affected in the same way.

But at a more fundamental level, we're also opposed to these provisions because they undermine the role of the federal government in poverty reduction. The passage of these sections will signal to Canadians that the Government of Canada does not believe in reducing poverty. It suggests that the government is wanting to download its responsibility onto provinces, territories, and municipalities by eroding the national standard that sets the bare minimum baseline security for all Canadians and by downloading the costs of caring for the most vulnerable among us. While the government's immediate goal might be to deny refugee claimants access to social assistance, this very blunt instrument it has chosen to achieve that goal will, in the long run, hurt all Canadians.

Therefore, we think it's a good idea for this committee to call on the government to remove these sections from Bill C-43.

Thank you.