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.

Budget Implementation Act, 2016, No. 1

[Pierre Poilievre, Conservative, Carleton, ON]

Mr. Speaker, there is no question that Liberal elites, wealthy elites, not just Liberal elites, will do very well under the Liberal tax plan. For example, a member of Parliament earning $150,000 a year would get about $1,000 in tax relief. A working class, blue collar person earning $45,000 a year would get absolutely nothing from the changes the Liberals are bringing in. A senior who has just downsized and has sold a home so that the real estate wealth can be turned into income would find that the amount of money that can be put into a tax-free savings account has dropped from $10,000 to $5,000 a year, which means that low-income seniors who were relying on an increased tax-free income to pay their bills will have less of it to do so with.

This is a budget designed for the wealthy elite and the rich, despite the rhetoric we hear from across the way. I thank the hon. member for giving me the opportunity to say so.

[Kelly McCauley, Conservative, Edmonton West, AB]

Mr. Speaker, I want to change the topic a bit. We heard previously some Liberals talking about broadband Internet across the country. I wonder if my colleague could comment on the fact that the Liberals seem to be pushing broadband as a universal right in their most recent budget but have broken their promise to provide palliative care. They promised $3 billion for the delivery of broadband as a universal right but are ignoring people who are in desperate need of palliative care.

[Pierre Poilievre, Conservative, Carleton, ON]

Mr. Speaker, it is an interesting contrast, and I thank the member for asking about broadband.

Recently Telus Communications came up with a very innovative idea to expand Internet to low-income people by simply putting a slip in the twice annual child benefit mail-out. On that slip would be a pass code that low-income families could use to sign up online and receive Internet for only $10 a month. There would be no extra cost to taxpayers, because that mail-out already goes in the system and CRA already has the data on who is low income. Telus would be prepared to cover the cost of giving this ultra-low-cost Internet to families who need it most. Rogers has a similar proposal for a program, I might add.

I am now waiting for the Liberals to agree with this zero-cost solution that would help children who would otherwise not have access to the Internet to do their homework. They would get that chance from a corporate enterprise that is willing to offer it to them for such a low price.

I encourage members of the Liberal government to come onside with this proposal so that we can expand the availability of Internet to young people who desperately need it to succeed with their homework and other projects.

[Romeo Saganash, NDP, Abitibi—Baie-James—Nunavik—Eeyou, QC]

Mr. Speaker, I thank the member for his very clear presentation.

I know he did not address any indigenous issues, but he was part of a government and sat around the cabinet table. I would like to hear his views on the Liberal approach to indigenous issues, and I want to know whether he sees much of a difference.

Let me give an example. The budget has earmarked $500 million for indigenous housing. If we divide that by the number of communities, it gives about $300,000 a year to each community. One house in the northern part of my riding costs about $300,000.

I would like to know if he sees much of a difference between the Liberal approach to indigenous issues and the previous government's approach.

[Pierre Poilievre, Conservative, Carleton, ON]

Mr. Speaker, I thank the hon. member for his question. I know that he is very passionate about this topic. I appreciate his work on this file.

When we were in government, we improved the quality of life of indigenous people. We also gave indigenous people the right to know how their money was being spent. We proposed a bill on financial transparency. This is one of the best ways to improve the situation in indigenous communities. It is a matter of giving them the right to know where their money is going.

[Ron Liepert, Conservative, Calgary Signal Hill, AB]

Mr. Speaker, I rise today as the final speaker on the bill, which has plodded along through the process in the House. I thought I would recap for members of the House how we have gotten to where we are today, describe what the process has been throughout, and then conclude by making a few comments about the bill itself.

The bill was concocted without the input of Canadians. Typically, in a budget process, Canadians are consulted about what they would like in the budget, but we had a situation, after the October 19 campaign, where, I would say, due to the ineptness of the government in early December, the government House leader was unable to strike a finance committee. We all knew who was on the finance committee, but unfortunately, the government could not get the committee struck in early December. Therefore, members of the finance committee sat around for about six weeks without actually consulting Canadians.

By the time the government managed to get approval to strike the finance committee, the committee heard some 92 witnesses over a period of about a week or a week and a half. However, we also knew in early February when we heard those witnesses that the budget had probably already gone or was very close to heading to the printer.

One thing this budget has clearly lacked is the input of everyday Canadians through consultation. With all due respect, I think the finance minister had a great deal of difficulty pulling together this budget, because he was hamstrung with the fact that so many promises had been made in the campaign. He was stuck with trying to put together a budget based on a bunch of promises in which, quite frankly, the dollars did not add up.

It also included a number of broken promises. A promise was given in the election campaign, whereby the Liberal leader of the day, now the Prime Minister, promised that the budget would have no more than a $10-billion deficit. We all know that promise was broken very quickly. We are not sure yet if $30 billion is the final number for the deficit. During the short period of time since the budget was introduced, as an example, there was a horrible situation in Alberta with the fires. As a result of that, the federal government is going to be on the hook for some significant costs associated with the wildfires in Alberta, so I think the deficit could go well past the $30 billion.

While it was not a broken promise, it was a promise that I personally would have liked to see the finance minister break, and that was the ill-conceived decision to reverse former finance minister Flaherty's decision to increase, some 10 years into the future, the eligibility age for OAS to 67 from 65. This particular decision was not based on any particular science or data, which, of course, the Liberal government keeps saying it prides itself on. It was based on a back-of-the-napkin campaign promise made by the Prime Minister and it is one that I wish the federal government had not followed through on.

As I said earlier, this is a budget that I do not believe the Minister of Finance felt good about presenting. I know how that feels, as someone who has had to present a budget based on some campaign promises made simply to get elected.

I see the benches of the government are starting to fill up as is the press gallery. I do not think they are filling up to listen to my speech, so I will sit down and let the House proceed on to the business of the day.

[Blaine Calkins, Conservative, Red Deer—Lacombe, AB]

Mr. Speaker, my colleague from Calgary was a very distinguished member of the provincial cabinet at one time in my home province. I remember the good old days when Alberta was at the forefront of economics. Are the policies of the day in Alberta today reflective of the policies we will see federally? Are we in for the same tough times across our country as we currently have in Alberta?

[Ron Liepert, Conservative, Calgary Signal Hill, AB]

I would concur, Mr. Speaker.

[The Deputy Speaker, Bruce Stanton]

Is the House ready for the question?

[Some hon. members]

Question.

[The Deputy Speaker, Bruce Stanton]

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

[Some hon. members]

Agreed.

No.

[The Deputy Speaker, Bruce Stanton]

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

[Some hon. members]

Yea.

[The Deputy Speaker, Bruce Stanton]

All those opposed will please say nay.