Bill C-15 (Historical)

Budget Implementation Act, 2016, No. 1.

An Act to implement certain provisions of the budget tabled in Parliament on March 22, 2016 and other measures

Part 1 implements certain income tax measures proposed in the March 22, 2016 budget by
(a) eliminating the education tax credit;
(b) eliminating the textbook tax credit;
(c) exempting from taxable income amounts received as rate assistance under the Ontario Electricity Support Program;
(d) maintaining the small business tax rate at 10.‍5% for the 2016 and subsequent taxation years and making consequential adjustments to the dividend gross-up factor and dividend tax credit;
(e) increasing the maximum deduction available under the northern residents deduction;
(f) eliminating the children’s arts tax credit;
(g) eliminating the family tax cut credit;
(h) replacing the Canada child tax benefit and universal child care benefit with the new Canada child benefit;
(i) eliminating the child fitness tax credit;
(j) introducing the school supplies tax credit;
(k) extending, for one year, the mineral exploration tax credit for flow-through share investors;
(l) restoring the labour-sponsored venture capital corporations tax credit for purchases of shares of provincially registered labour-sponsored venture capital corporations for the 2016 and subsequent taxation years; and
(m) introducing changes consequential to the introduction of the new 33% individual tax rate.
Part 1 implements other income tax measures confirmed in the March 22, 2016 budget by
(a) amending the anti-avoidance rules in the Income Tax Act that prevent the conversion of capital gains into tax-deductible intercorporate dividends;
(b) qualifying certain costs associated with undertaking environmental studies and community consultations as Canadian exploration expenses;
(c) ensuring that profits from the insurance of Canadian risks remain taxable in Canada;
(d) ensuring that the dividend rental arrangement rules under the Income Tax Act apply where there is a synthetic equity arrangement;
(e) providing specific tax rules in respect of the commercialization of the Canadian Wheat Board, including a tax deferral for eligible farmers;
(f) permitting registered charities and registered Canadian amateur athletic associations to hold limited partnership interests;
(g) providing an exemption to the withholding tax requirements for payments by qualifying non-resident employers to qualifying non-resident employees;
(h) limiting the circumstances in which the repeated failure to report income penalty will apply;
(i) permitting the sharing of taxpayer information within the Canada Revenue Agency to facilitate the collection of certain non-tax debts; and
(j) permitting the sharing of taxpayer information with the Office of the Chief Actuary.
Part 2 implements certain goods and services tax/harmonized sales tax (GST/HST) measures proposed in the March 22, 2016 budget by
(a) adding insulin pens, insulin pen needles and intermittent urinary catheters to the list of GST/HST zero-rated medical and assistive devices;
(b) clarifying that GST/HST generally applies to supplies of purely cosmetic procedures provided by all suppliers, including registered charities;
(c) relieving tax to ensure that when a charity makes a taxable supply of property or services in exchange for a donation and an income tax receipt may be issued for a portion of the donation, only the value of the property or services supplied is subject to GST/HST;
(d) ensuring that interest earned in respect of certain deposits is not included in determining whether a person is considered to be a financial institution for GST/HST purposes; and
(e) clarifying the treatment of imported reinsurance services under the GST/HST imported supply rules for financial institutions.
Part 2 also implements other GST/HST measures confirmed in the March 22, 2016 budget by
(a) adding feminine hygiene products to the list of GST/HST zero-rated products; and
(b) permitting the sharing of taxpayer information in respect of non-tax debts within the Canada Revenue Agency under certain federal and provincial government programs and in respect of certain programs where information sharing is currently permitted under the Income Tax Act.
Part 3 implements certain excise measures proposed in the March 22, 2016 budget by
(a) ensuring that excise tax relief for diesel fuel used as heating oil or to generate electricity is targeted to specific instances; and
(b) enhancing certain security and collection provisions in the Excise Act, 2001.
Part 3 also implements other excise measures confirmed in the March 22, 2016 budget by permitting the sharing of taxpayer information in respect of non-tax debts within the Canada Revenue Agency under certain federal and provincial government programs and in respect of certain programs where information sharing is currently permitted under the Income Tax Act.
Division 1 of Part 4 repeals the Federal Balanced Budget Act.
Division 2 of Part 4 amends the Canadian Forces Members and Veterans Re-establishment and Compensation Act to, among other things,
(a) replace “permanent impairment allowance” with “career impact allowance”;
(b) replace “totally and permanently incapacitated” with “diminished earning capacity”;
(c) increase the percentage in the formula used to calculate the earnings loss benefit;
(d) specify when a disability award becomes payable and clarify the formula used to calculate the amount of a disability award;
(e) increase the amounts of a disability award; and
(f) increase the amount of a death benefit.
In addition, it contains transitional provisions that provide, among other things, that the Minister of Veterans Affairs must pay, to a person who received a disability award or a death benefit under that Act before April 1, 2017, an amount that represents the increase in the amount of the disability award or the death benefit, as the case may be. It also makes consequential amendments to the Children of Deceased Veterans Education Assistance Act, the Pension Act and the Income Tax Act.
Division 3 of Part 4 amends the sunset provisions of certain Acts governing federal financial institutions to extend by two years, namely, from March 29, 2017 to March 29, 2019, the period during which those institutions may carry on business.
Division 4 of Part 4 amends the Bank Act to facilitate the continuance of local cooperative credit societies as federal credit unions by granting the Minister of Finance the authority to provide transitional procedural exemptions, as well as a loan guarantee.
Division 5 of Part 4 amends the Canada Deposit Insurance Corporation Act to, among other things, broaden the Corporation’s powers to temporarily control or own a domestic systemically important bank and to convert certain shares and liabilities of such a bank into common shares.
It also amends the Bank Act to allow the designation of domestic systemically important banks by the Superintendent of Financial Institutions and to require such banks to maintain a minimum capacity to absorb losses.
Lastly, it makes consequential amendments to the Financial Administration Act, the Winding-up and Restructuring Act and the Payment Clearing and Settlement Act.
Division 6 of Part 4 amends the Office of the Superintendent of Financial Institutions Act to change the membership of the committee established under that Act so that the Chairperson of the Canada Deposit Insurance Corporation is replaced by that Corporation’s Chief Executive Officer. It also amends several Acts to replace references to that Chairperson with references to that Chief Executive Officer.
Division 7 of Part 4 amends the Federal-Provincial Fiscal Arrangements Act to authorize an additional payment to be made to a territory, in order to take into account the amount of the territorial formula financing payment that would have been paid to that territory for the fiscal year beginning on April 1, 2016, if that amount had been determined using the recalculated amount determined to be the gross expenditure base for that fiscal year.
Division 8 of Part 4 amends the Financial Administration Act to restrict the circumstances in which the Governor in Council may authorize the borrowing of money without legislative approval.
Division 9 of Part 4 amends the Old Age Security Act to increase the single rate of the guaranteed income supplement for the lowest-income pensioners by up to $947 annually and to repeal section 2.‍2 of that Act, which increases the age of eligibility to receive a benefit.
Division 10 of Part 4 amends the Special Import Measures Act to provide that a finding by the President of the Canada Border Services Agency of an insignificant margin of dumping or an insignificant amount of subsidy in respect of goods imported into Canada will no longer result in the termination of a trade remedy investigation prior to the President’s preliminary determination. It also provides that expiry reviews may be initiated from a date that is closer to the expiry date of an anti-dumping or countervailing measure and makes amendments related to that new time period.
Division 11 of Part 4 amends the Pension Benefits Standards Act, 1985 to combine the authorities for bilateral agreements and multilateral agreements into one authority for federal-provincial agreements, and to clarify that federal-provincial agreements may permit the application of provincial legislation with respect to a pension plan.
Division 12 of Part 4 amends the Employment Insurance Act to, among other things,
(a) increase, until July 8, 2017, the maximum number of weeks for which benefits may be paid to certain claimants in certain regions;
(b) eliminate the category of claimants who are new entrants and re-entrants; and
(c) reduce to one week the length of the waiting period during which claimants are not entitled to benefits.
Division 13 of Part 4 amends the Canada Marine Act to allow the Minister of Canadian Heritage to make payments to Canada Place Corporation for certain celebrations.
Division 14 of Part 4 amends the Jobs, Growth and Long-term Prosperity Act to authorize the Minister of Infrastructure, Communities and Intergovernmental Affairs to acquire the shares of PPP Canada Inc. on behalf of Her Majesty in right of Canada. It also sets out that the appropriate Minister, as defined in the Financial Administration Act, holds those shares and authorizes that appropriate Minister to conduct, with the Governor in Council’s approval, certain transactions relating to PPP Canada Inc. Finally, it authorizes PPP Canada Inc. and its wholly-owned subsidiaries to sell, with the Governor in Council’s approval, their assets in certain circumstances.
Division 15 of Part 4 amends the Canada Foundation for Sustainable Development Technology Act to modify the process that leads to the Governor in Council’s appointment of persons to the board of directors of the Canada Foundation for Sustainable Development Technology by eliminating the role of the Minister of Natural Resources and the Minister of the Environment as well as the consultative role of the Minister of Industry from that process. It also amends the Budget Implementation Act, 2007 to provide that a sum may be paid out of the Consolidated Revenue Fund to the Foundation on the requisition of the Minister of Industry and to clarify the maximum amount of that sum.

Motions in amendment

[Steven MacKinnon, Liberal, Gatineau, QC]

Mr. Speaker, I want to thank the hon. member for that thunderclap from the failed school of supply-side economics. I guess they were going to get to that in the fourth mandate.

My friend across the way talks about insiders, friends, as though he never had a file to defend. I have a question for him about friends. We define insiders or friends as, for example, the unemployed workers who fell victim to the drop in oil prices in western Canada, the parents of poor families who will have to raise their children below the poverty line, and the farmers whose Canadian Wheat Board was stolen from them under the previous government. Those people were not friends of the Conservative government.

I would like to know how my friend, the member across the way, defines these parents, these unemployed workers, and these farmers. How were they treated in our budget?

[Pierre Poilievre, Conservative, Carleton, ON]

Mr. Speaker, I am thankful the member raised the plight of working low-income people, for example. Those people have benefited by our previous government's decision to raise the personal exemption, which literally liberated hundreds of thousands of people from taxes altogether. Many low-income people actually saw their income tax drop by 100% while we were in government. We were proud to reward their hard work. We wanted to ensure that work always paid more than welfare, so people who made the decision to enter the workforce and earn some money would always be better off. That was the approach our previous government took.

Speaking of supply-side economics, the Liberals are the ones who believe in trickle-down government, this notion that if they tax enough from working families, from the poor and the middle class, and then take that money and give it to powerful and wealthy insiders like the billionaires who control Bombardier and the so-called green-energy entrepreneurs who have made hundreds of millions of dollars off of artificially inflated electricity contracts, somehow that money will trickle down and help the poor. We know that does not work. It does not trickle down. It is people on the ground who work hard who lift us all up, and those are the people on whose side we will fight.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Mr. Speaker, I would like to thank my colleague from Carleton for his speech.

Obviously, the NDP's economic plan does not have much in common with the Conservatives', but my colleague will agree with me that, if there was one thing that all three parties agreed on during the election campaign, it was that the tax rate of SMEs should be lowered from 11% to 9%.

When I talk to my constituents, particularly small and medium-business owners, they tell me that they had planned for new investments, new hires, and pay raises for their employees over the next two to four years. Now, they are being left disappointed. They have to quickly change their economic outlook and plan for growth.

Can my colleague talk about the reality of SMEs in his riding? How will these businesses have to adjust because the Liberals broke their promise?

[Pierre Poilievre, Conservative, Carleton, ON]

Mr. Speaker, it is interesting that all of the parties agreed to lower taxes for our small and medium-sized businesses. That is why we included that measure in our 2015 budget. In their election platform, the Liberals promised to lower our entrepreneurs' taxes.

Because of their broken promise, the Liberals are going to take $2 billion away from our SMEs over the next five years. Meanwhile, the Liberal governments of Quebec and Canada are going to give that $2 billion to Bombardier, a company controlled by millionaires.

We would rather leave money in the pockets of the entrepreneurs who earned it instead of giving it, in the form of a subsidy, to a company that is far too cozy with the Liberal government. That is the difference in our approach.

We would leave the money in the pockets of small business people who earned it, rather than giving it to the billionaires who did not.

[François-Philippe Champagne, Liberal, Parliamentary Secretary to the Minister of Finance]

Mr. Speaker, first, it might be a great day for the member for Cambridge because it is his birthday, but it is an even better day for Canadians. It will be a great year for Canadians. It might be a great day for him, but it is a great year for Canadians.

I was deeply disturbed when I listened to the member for Cambridge speaking against Canadian industries. That is not the first time I have heard him do that. Just yesterday he insulted our aerospace industry. When he talks about insiders, I wish I had the opportunity to ask him who he considered insiders among the nine million Canadians for whom we reduced taxes since January 1, 2016? Perhaps the nine families out of ten that will receive more benefits through our Canada child benefits? Perhaps the 300,000 children who will be lifted out of poverty. Maybe he is talking about the 250,000 students who will be better off with our student grants. Perhaps he is talking about 900,000 seniors who will be better off with our budget.

I respect the member for Cambridge a lot, but I am deeply perplexed when he talks about insiders. Maybe that was the Conservative way of doing government, but our government is about the middle class. It is about middle-class families, it is about helping Canadian families and it is about helping Canadians.

I had the great privilege of going across this nation with the Minister of Finance. I personally went from Moncton to Yellowknife, engaging with thousands of Canadians, talking about their dreams and their concerns. The Minister of Finance did the same. He went from Halifax to Vancouver. We engaged with Canadians. This was unprecedented. I think the member would be interested in listening to that, a different way of doing government, open, talking with Canadians, something the previous government did not do very much.

I wish members had been with me everywhere I went. They would have seen how many Canadians showed up in our meetings to engage with us and talk to us about their dreams and what they wanted for this economy.

People said two simple things: they asked us to help them and their families, and help them to grow the economy. When people asked for help for themselves and their families, we responded.

I would like to apologize. I was referring to the member for Carleton, not to the member for Cambridge. He is listening carefully and he knows what I meant. If it is the only mistake I have made, I will take it. When I listen to the mistakes my colleagues on the other side have made, I would not be boasting in the House.

However, Canadians asked us to help them and their families. The first thing the government did was to reduce taxes for Canadians, nine million Canadians, the insiders who the member for Carleton is talking about, the nine million Canadians who are paying less taxes since January 1, 2016.

These people wanted help because they were hurting. They said that they had not seen growth in their income for the last 10 years of Conservative government. They had nothing to show for it. We therefore reduced taxes for them.

After that, we did something for families. The Canada child benefit is one of the most progressive policies since universal health care in our country. This policy is about helping the insiders, those who the member for Carleton talked about, the nine out of ten families. These insiders will benefit from a much simpler allocation to help raise children, buy clothes, and send the children to camp this summer. This allocation will even be non-taxable. We are talking about $2,300 more, on average, in the pockets for Canadian families.

Let us get back to what it means for people. If we look at a riding like mine, Saint-Maurice—Champlain where the average income is probably one of the lowest in the country, that may give families 10% of additional disposable income, and that is significant. I am very proud to be on this side of the House because those measures will help families. These measures are meaningful for people. This is not about talk; this is about action.

We promised during the campaign that we would be there for families for once. This is a government of families. This is a government of middle-class Canadians and those who are working hard to join it, not a government of insiders to which the previous government liked to refer.

This is what people had to say. After they asked for help for themselves and their families, they said that they wanted to see the economy to grow. After 10 years of low growth, they wanted a bit of growth in the country. We answered that with our infrastructure program. We are talking about $120 billion over 10 years. We are talking about $11.9 billion in phase one.

Let us talk about that for a minute. We have talked about public transit, something that is dearly needed in our cities as goods and people need to move. I have been in many cities where people have said that they need public transit.

[The Assistant Deputy Speaker, Anthony Rota]

Order, please. We will break for statements by members. Once debate resumes, the hon. member will have another 4 minutes and 30 seconds, plus five minutes for questions.

The House resumed from June 3 consideration of Bill C-15, An Act to implement certain provisions of the budget tabled in Parliament on March 22, 2016 and other measures, as reported with amendments from the committee, and of the motions in Group No. 1.

Budget Implementation Act, 2016, No. 1

[The Deputy Speaker, Bruce Stanton]

The hon. parliamentary secretary will have about four and a half minutes to finish his speech.

[François-Philippe Champagne, Liberal, Parliamentary Secretary to the Minister of Finance]

Mr. Speaker, I am pleased to resume the debate on the budget, which we began last week.

I think it is important to go over some background on the consultation we did with Canadians. What was different during our last consultation is that the Minister of Finance and I criss-crossed the entire country.

I personally went from Moncton to Yellowknife, while the Minister of Finance went from Halifax to Vancouver. We consulted with Canadians in order to give them a budget that works for the middle class and for Canadian families.

I am especially proud of the fact that during the consultations that were held from coast to coast to coast, we had the opportunity to listen to Canadians, who told us what they would like to see in the federal budget. Between the two of us, we met with hundreds, if not thousands of people through that consultation process. On top of that, about 300,000 people contacted the Department of Finance to share their opinions. The Trudeau government is all about being open and transparent, as well as consulting Canadians.

Most people who took part in the consultations asked us to do two things: help them and their families, and grow the economy.

The first thing we did in order to help families was lower taxes for the middle class, which was one of the most important measures in the last budget.

I listened to the comments made by the members across the aisle. It is important to remember that the Trudeau government has lowered taxes for no less than nine million Canadians.

[The Deputy Speaker, Bruce Stanton]

I normally do not interrupt members when they mention the name of another member. However, in this case, the hon. member mentioned the Prime Minister's name twice.

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

Mr. Speaker, thank you for your indulgence.

Obviously, I was talking about the current Prime Minister's government. I apologize. Essentially, I was saying that the Liberal government is working for the middle class.

The first measure taken was to lower taxes for no less than nine million Canadians, effective January 1, which puts more money in Canadians' pockets. This tax cut will help grow the economy, help small and medium-sized businesses, and allow Canadians to invest more.

The second measure was the Canada child benefit. It has often been said, but this may be the most significant social public policy since universal health care was introduced in Canada. Nine out of 10 Canadians will receive more help to raise their children. The benefit will be simpler and non-taxable. It will help families send their children to summer camp, or buy school supplies and clothing.

Canadians asked us to grow the economy. I must admit that I am quite proud of the investments in infrastructure that we will be making, which total no less than $120 billion over 10 years. In the last budget, we announced phase 1, which will involve a record investment of $3.4 billion in public transportation. Goods and people must be able to circulate more freely in our cities.

We are also planning historic investments of $5 billion in wastewater treatment systems. There is no need to remind members that municipalities across the country need this assistance. After 10 years of underfunding in our infrastructure, these investments are being very well received by Canada's municipalities.

We will also be investing $3.4 billion in social housing and affordable housing. This is a very important measure. Canadians have told us that affordable housing is a priority.

In closing, I would like to say a few words about our innovation program. We are well aware that innovation is what will drive continued economic growth in Canada. At present, we are working on our innovation program, which will allow our economy to work for all Canadians, the middle class, and Canadian families.

I am proud of our recent budget.

[Dianne Lynn Watts, Conservative, South Surrey—White Rock, BC]

Mr. Speaker, I appreciate the member's comments and speech. Obviously in speaking about not funding infrastructure for 10 years, I am just wondering if the member realized that, number one, we led the G7 in investments in public infrastructure. I just wanted to know if he was aware of that.

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

Mr. Speaker, infrastructure is a key component of our last budget. I would disagree with the member. I had the privilege to travel across Canada and speak with mayors. They have quite a different view from the member in terms of investment in infrastructure.

That is why we had to make a historic investment of $120 billion over the next 10 years, investing in public transport, water and waste water, and social housing.

When we speak to mayors, we understand what the facts are and what the reality is in this country.

[Erin Weir, NDP, Regina—Lewvan, SK]

Mr. Speaker, the Liberals ran on the idea of a new health accord, and yet this budget does not include any increase at all in the Canada health transfer. In fact, if we compare budget 2016 to budget 2015, we find that projected transfers to provincial governments are actually lower now than they had been under the previous Conservative government.

Indeed, by 2019-20, the Canada health transfer will be $600 million lower under budget 2016 than it would have been under budget 2015, and if we look at overall transfers, they are about $1 billion lower again by 2019-20.

I wonder if the hon. parliamentary secretary could explain to us why his government is cutting transfer payments to the provinces.

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

Mr. Speaker, I have a lot of respect for the hon. member and I have known him for a long time. We did a number of things in public policy together.

I can only invite the member to look at the budget. I am quite happy to answer that question. I wish I could have been asked that question because we have made a historic investment in health transfers, $36.1 billion in health transfers. That is the historic high in this country in terms of investment, so obviously we do take health as a very serious matter.

I am happy to see that my colleague the Minister of Health is negotiating the next health accord, but I can say for this House, $36.1 billion. This is a fact. This is the historic high investment in terms of health transfers in this country.