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.

Second Reading

[John Brassard, Conservative, Barrie—Innisfil, ON]

Mr. Speaker, it gives me great pleasure to rise today to speak to the bill. I have spoken on the budget in the past, but the budget implementation act is something that I am going to address right now.

I will say at the onset that one of the things that came out of the last election was the fact that all Canadians have a voice in this place. Every single member, all 338 of us, we have the opportunity to use our voices to speak on behalf of our constituents.

Not being a part of the previous government, I understand that there were some procedural manoeuvres that were made, but the fact that the Liberals today have invoked closure on this debate has caused me, as the representative for Barrie—Innisfil, great concern.

As a new member of Parliament, I go back to something that the hon. member for Barrie—Springwater—Oro-Medonte said this morning, and it relates to the throne speech. I think it is worth repeating at the outset of my comments that, in the throne speech, the Liberals stated that:

In this Parliament, all members will be honoured, respected and heard, wherever they sit. For here, in these chambers, the voices of all Canadians matter.

Let us not forget, however, that Canadians have been clear and unambiguous in their desire for real change. Canadians want their government to do different things, and to do things differently....

Through careful consideration and respectful conduct, the Government can meet these challenges, and all others brought before it.

By working together in the service of all Canadians, the Government can make real change happen.

Well, what hypocrisy that today, a lot like in the medically assisted dying debate, the Liberals would invoke closure and not allow Canadians to have a voice on this and the previous bill. I am fortunate to be able to rise on behalf of my constituents, as I was not given the opportunity to speak on medically assisted dying because of that debate being closed.

I want to focus, in the short time I have, on three things. One is what I referred to, in previous comments I have made in the House, as the middle-class tax fraud, or the reduction of the middle class in terms of tax implementation; the shell game that the Liberals are playing. I want to use some very specific examples of that.

The second thing is the innovation sector. I want to speak specifically on that, given the fact that Startup Canada was here last week and I had some very productive meetings, as did my colleagues. I want to speak on behalf of the innovation sector.

The third thing, if I have time, is infrastructure.

As it relates to the middle-class tax fraud, what we are seeing in the budget is that what the Liberals give, the Liberals take back. I use the example of the child care benefit. I would classify a firefighter and a nurse with a combined income of roughly $180,000 as middle class in this country. They actually would be worse off because of the child care benefit. In fact, under the Conservative plan, that same firefighter and nurse would have received almost $240 a month, but under the current Liberal plan, they would only receive $112 a month. In fact, those we could classify as middle-class Canadians would actually be worse off. Granted, there would be some Canadians who were better off, but I think the majority of Canadians, or a large part of Canadians, would actually see less.

What is also disturbing with this shell game that the Liberals are playing with the budget is that we have heard the talking points, we have heard the Minister of Finance stand up in this House and talk about nine million Canadians and all of the rhetoric that goes with it, but there are certain facts in the budget that prove that this is a middle-class tax fraud.

The fact is that the fitness tax credit would be removed. Since 2006, Canadians have benefited to the tune of $1.13 billion in tax relief. Since 2011, there was the arts and activity tax credit, from which Canadians have benefited to the extent of $190 million; and income splitting would be gone for Canadians, at $2,000 a year. As I said earlier, what the Liberals give, the Liberals take back.

What are middle-class Canadians getting for that in this shell game? They are getting burdened with deficit and debt, not unlike my home province of Ontario. We are seeing services cut and taxes go up, and it is just an inevitability.

I know that the finance minister and the Prime Minister have stood up and said that now is the time to invest in infrastructure, and saddle on some burden and debt. There is never a good time for that. In fact, when I was in Washington recently at the National Governors Association conference, some of the top economists in that country were talking about a pending recession.

They were saying that we are actually six years into what is normally a five-year cycle for recession. When that happens, and when we are being crippled with debt, it is going to be awfully difficult, if we do enter into that recession—and this is why governments need to plan ahead—to do what we need to do to take care of the most vulnerable in our country, including many within the middle class.

Last week, as I mentioned earlier, Startup Canada was in town. Many of us in this chamber actually met with them. I had the opportunity to meet with the person I would consider is one of the brightest micro-entrepreneurs in this country, Chad Ballantyne, and his wife, Sandra. They talked a lot about the innovation agenda.

I asked Chad, if he had a couple of minutes to speak to Canadians, what he would say to them. Chad wrote me a long email, and I would like to share some of what Chad said. He said:

[The] Prime Minister...charged his leadership to “develop an Innovation Agenda that includes: expanding effective support for incubators, accelerators… These investments will target key growth sectors where Canada has the ability to attract investment or grow export-oriented companies.”

Startup Canada would merit a seat at the table when the advisory council for the innovation agenda is established. Startup Canada, with its vision of an innovation nation, has in place the only nationwide network to support, nurture, and educate entrepreneurs as they launch and build their companies.

Startup communities, like ours in Barrie, Ontario, are the connective tissue bringing together the entire entrepreneurship community, ensuring the healthy functioning and optimization of an economic and social ecosystem supporting every entrepreneur.

Startup also feels that an innovation agenda should include the entire startup ecosystem and ensure that it does not become too narrowly focused. The agenda proposes pouring investment into a handful of clusters. This is too narrow a focus, and limits the investment opportunity to only later-stage enterprises and R and D tech sectors, and ignores the early-stage startups in service-based companies, which are the foundation of our economic engine in Canada.

There is little, if any, funding for these communities in this budget, and companies that are post R and D, despite their sector focus, recommend to fund innovation throughout the entire ecosystem and support the more than 150,000 people who are a part of micro-entrepreneurs, the startup communities in this country.

Last, on the issue of infrastructure, I know a lot has been said with respect to infrastructure. I said this earlier, when I was speaking on the budget, and we heard it earlier today from the Bloc Québécois member. The easiest way to make sure that infrastructure money flows out that door is to do something with the gas tax, either double it or triple it.

The Liberals have put billions toward infrastructure. One of the things they said during the campaign was that infrastructure was not effectively a Liberal issue, a Conservative issue, or an NDP issue; it was a Canadian issue. The purest, fairest, and simplest way, in order to ensure that communities across this country get what they need in terms of infrastructure with criteria that are already in place, is to make sure we use the gas tax formula as a means to do it.

Over the last couple of weeks and months, we have been seeing a lot of announcements by the Liberal Party in Liberal-held ridings. We need to make sure the money gets to communities that need it. It does not matter whether it is Cariboo—Prince George, Nanaimo—Ladysmith, or Barrie—Innisfil; there is a need across this country, and using the gas tax formula to provide infrastructure funding, to me as a former city councillor, is the purest and only way to ensure fairness and transferability in that system.

In the past, the member for Spadina—Fort York has said that municipalities have used the gas tax funding to decrease taxes in their municipalities. I have not seen any evidence of that at all.

[Kevin Lamoureux, Liberal, Parliamentary Secretary to the Leader of the Government in the House of Commons]

Mr. Speaker, in addressing the budget, the member brought up the really important issue of investing in Canada's infrastructure. He made reference to his previous role as a councillor. I agree it is important to recognize that Canada has a great deal of infrastructure that needs to be worked on and improved. That is why we will find that not only does the budget have the largest amount of money being allocated toward infrastructure but we are looking at investing today in Canada's infrastructure.

The member understands the importance of getting the money to the different communities. I am sure he would agree that by investing in Canada's infrastructure we are, in essence, building a healthier and more robust economy, because often infrastructure feeds into economic activity in creating opportunities for Canada's middle class and beyond.

[John Brassard, Conservative, Barrie—Innisfil, ON]

Mr. Speaker, when we look at the budget and the deficit that is being created, a lot of it goes to ongoing programs. Again, it comes back to the shell game.

As a former city councillor, I can speak to the infrastructure deficit. I was chair of the infrastructure committee, so I know full well what the infrastructure deficit was in the city of Barrie, and it kept growing every year. There is no question that an infrastructure investment is required. In fact, the previous government made significant infrastructure investments.

What I am talking about is not politicizing the fact that these infrastructure investments need to be made in communities. There is only one way to not politicize that, and that is to use the gas tax formula.

For example, the City of Barrie receives $1.8 million a year in gas tax money. If we doubled or even tripled that, it could improve the transit system in my city by being able to purchase six buses. It does not politicize the process. It gets the money to where it needs to go so that all of Canada can benefit from infrastructure investments, not just Liberal ridings.

[John Barlow, Conservative, Foothills, AB]

Mr. Speaker, I want to thank my colleague for the hard work he is doing in terms of industry and innovation.

In his speech he talked about another program that is being impacted by the budget bill. That is the children's fitness tax credit. I remember when the previous government brought in that tax credit in 2006. It was a huge benefit to my wife and me. We had a child in hockey, a daughter in volleyball, and another daughter in dance. I know how much that children's fitness tax credit meant to us as a low middle-income family.

As I was going around my riding this past election telling constituents that not only would we protect the children's fitness tax credit but we would double it to $1,000 per child, the feedback I got was overwhelming. It was absolutely phenomenal how many people were in support of that, how many people took advantage of it, and how important they felt it was to ensure that their kids remained healthy and active and could participate in some of these programs.

This is a program that benefited every single Canadian family with children. I would like to ask my colleague what he feels the impact is going to be on Canadian families and our children by eliminating the children's fitness tax credit.

[John Brassard, Conservative, Barrie—Innisfil, ON]

Mr. Speaker, my family is the epitome of a middle-class family. I have four kids and a beautiful wife. All of them have been active in sports. We have, as a middle-class family, used that fitness tax credit to our advantage. In the overall scheme of things, it may not have been much, maybe a $150 tax credit, but multiply that by four children and that meant $600 in tax relief for my family.

As I said in my presentation, the fitness tax credit since 2006 has benefited Canadian families to the tune of $1.13 billion. That is $1.13 billion that those families have been able to use to put their kids in sports.

From a fitness and health standpoint, we as members of Parliament should be encouraging families, not discouraging them by taking away these types of credits to put their kids into physical activities, because that physical activity helps in the overall health and wellness of the children of our country.

[Bobby Morrissey, Liberal, Egmont, PE]

Mr. Speaker, it is indeed an honour and a pleasure for me to rise in the House today as the newly elected member of Parliament for Egmont to speak to Bill C-15.

Before I get to my comments on the budget, I want to acknowledge the situation that is occurring in our sister province of Alberta, primarily the community of Fort McMurray. After all, the oil industry of Alberta and Saskatchewan is the single biggest employer in my riding. We depend on this part of Canada for a lot of the jobs that are created there.

I want to acknowledge as well that islanders will be there to support the community of Fort McMurray in its time of need. We are a generous society; Canadians in general are generous, and we all reach out to those in Fort McMurray.

For the last number of weeks, since the budget was introduced, I have listened intently to the debate in the House and to questions in question period. I have listened to opposition members rail on at length with their comments on the government's deficit budget. Listening to their newfound concerns and their degree of anxiety over the deficit budget, I chose to take a look at the fiscal track record of former governments over the past number of years.

It is interesting to look back at the fiscal situation over a number of years in this country. In particular, I looked back to 1994-95, which was the first year of a new Liberal administration, following nine years of a Conservative government in this country. In 1994-95, the debt-to-GDP ratio was near 70%, after nine years of Conservative rule. By 2006, at the end of roughly 12 years of a Liberal administration, the debt-to-GDP ratio had been reduced to below 30%. Shortly after, the debt-to-GDP ratio under a new Conservative government began to climb, and climbed to over 30%, the number where it is today. When I compared the fiscal situation that was inherited by a Liberal government in 1993-94 and the fiscal track record of the previous Conservative government, we can see how the debt-to-GDP ratio ballooned under that particular government.

I wanted to look more specifically at the past years of the former Conservative government, now the opposition. In 2006-07, the government inherited a surplus of $13.8 billion, adjusted to $16.2 billion. In 2007-08, the surplus was at $9.6 billion, but by 2008-09, the Conservative government began to run a deficit of $5.8 billion in 2008-09. In 2009-10, it was $55.6 billion, adjusted to $61.27 billion. In 2010-11, it was $33 billion, adjusted to $36 billion. In 2011-12, it was $26 billion to $27 billion. In 2012-13, it was $18 billion. In 2013-14, it was $5 billion.

Obviously, the comments now coming from the opposition party, which was the government at the time, clearly show that the government they were a part of had no problem running deficits in this country, in fact sizeable deficits. I am told, but I could be corrected, that the deficit accumulated over that period of time was one of the largest this country incurred in any particular period.

Where are we today? Our party was honest and frank with Canadians during the election. We indicated that given the deteriorating fiscal situation, it was unlikely that in government we would be able to run a surplus. We indicated that given the fiscal situation at the time and the information our party had, we would anticipate a deficit in the $10-billion range in order to implement the programs that we wanted to implement.

My colleague the member of Parliament for Cumberland—Colchester gave me some good research material which indicates that with the drop in the price of oil per barrel, the federal treasury has lost in the vicinity of $18 billion since late last summer until now.

As a government we could have done a number of things. We could have reined in spending to do away with that deficit, but that would have forced us to abandon a number of the programs that we campaigned on, that we believed in, and that we felt this country needed.

I firmly believe that the government's fundamental role is to address the needs of the most vulnerable. For too many years this area has been neglected and significant effort will need to be made to address these matters. Over the last 30 years, Canadians at the top 0.1% have seen their income rise by about 155% and some 90% of Canadians have seen their income rise by only 33% over the same time frame. Clearly something had to change.

The platform that I was most proud to run on as a candidate in the last election and a key part of the budget that I am proud to support and defend is our position on the child benefit. The child benefit is simpler, fairer, tax-free, and targeted to those who need it the most, low-income and middle-income families. It is also much more generous than the former program. I can relate to one family in my riding that would benefit significantly by this program. There are 5,111 children enrolled in the school system in Egmont. The average family will benefit by $2,300. There are 4,150 families in my riding of Egmont. This adds up to $9.545 million for my constituency alone, which is a small constituency.

What had an impact on me the most during the election campaign was the financial distress that single seniors were feeling. As a candidate, that really had an impact on me. I was surprised at the extent of the financial hardship faced by single seniors, the majority of whom are women.

Our commitment to not only increase the GIS by 10% but to restore the age of eligibility to 65 is a significant component of our budget. I want to quote a fact. According to researchers at Laval University, the Conservative plan would have increased the number of 65-year-olds and 66-year-olds living below the poverty line from 6% to 17%. We in the Liberal Party felt that was unacceptable. We feel that we owe this segment of our population a reasonable living.

I am proud of these two significant changes that would be brought about by the passage of the budget. When the budget is implemented, people will see the benefits.

I want to close on another area where we have seen significant reform. At the same time, I will be a bit critical of my own government. This has to do the changes we have made to the employment insurance system. As a government, we should always target changes to address the most vulnerable in society. On this measure, we did not meet the needs of the short-term seasonal workers in my riding by extending their benefit period. We did it for some parts of the country, which I applaud. We made a lot of significant improvements to the system. However, on this one area, I feel we have a lot more work to do. I look forward to continuing the work on those issues in the coming sessions of Parliament and budgets.

[Kelly McCauley, Conservative, Edmonton West, AB]

Mr. Speaker, I would like to clear up a few rather disingenuous comments made by my colleague with respect to past history.

The truth is that the Mulroney government inherited a massive deficit from the Liberal government. The deficits it ran were solely due to interest payments. It actually had a balanced operations budget. When the Liberals took over after that, they continued massive spending only until they hit a debt wall. They then balanced the budget on the backs of massive health care cuts to Canadians and to our military. Therefore, that is not a record on which I would run. Our previous government then balanced the budget, including the increases to health care.

The member across the way made a comment about the election campaign and his government being “honest and frank” about the finances. The Liberals then broke their promise with respect to the deficit. The $3 billion home health care promise was broken. There is no money in the budget for that. They broke their promise that their tax cuts would be revenue neutral. They broke their promise on cutting taxes for small business.

How is that honest and frank?

[Bobby Morrissey, Liberal, Egmont, PE]

Mr. Speaker, we were the only party that was candid during the elections. Given the fiscal situation we could see at the time, we were unlikely to balance the budget. In fact, we indicated that we would run a deficit that could exceed the $10 billion range, while the other two mainline parties, the Conservatives and the NDP, said they would balance the budget. Therefore, one would have to ask this question. In order to be at a balanced budget today, given what happened dramatically in the fall, and continues today with the decline in oil prices, in which areas would a Conservative or NDP government make cuts?

We have made it clear that we would invest in Canadians. We have brought in measures, such as a tax cut to the middle class, the child tax benefit, and an increase in seniors pension, all of which are investments in Canadians.

Small businesses need customers with money in their pockets to spend. That is the most important part for a small business. It has to make a profit before it pays taxes. To make a profit, it needs to have customers with money in their pockets and the ability to spend. That is what is most important for small business.

[Brigitte Sansoucy, NDP, Saint-Hyacinthe—Bagot, QC]

Mr. Speaker, our colleague spoke with pride about his last election campaign, but I am certain that the voters in his riding who voted for him voted for change and the promise of greater openness and transparency.

We agree that a budget is important. Now, the Liberals have introduced a 179-page omnibus bill. Parliamentarians are being gagged. Given that they were promised change, Canadians were not expecting such an undemocratic move.

The Liberals campaigned in Atlantic Canada and promised real employment insurance reform. However, the Atlantic regions are not among the 12 regions entitled to supplementary unemployment benefits. Can my colleague tell me whether that is what the people of Atlantic Canada were expecting in the way of employment insurance reforms?

[Bobby Morrissey, Liberal, Egmont, PE]

Mr. Speaker, of course we delivered changes to things on which we campaigned. We changed the tax rate for the middle class. We changed the child benefit, which has a significant impact for those most in need. We changed the GIS for single seniors. We changed significant parts of the employment insurance system for the better. We changed the infrastructure program. In fact, we adjusted the criteria that the former government had put in place for the provinces on the east coast as it was impossible for them to spend money and invest in their communities.

I am proud of the changes we have brought in, but we have more work to do in some areas. My hon. colleague will see that in my comments I was equally critical of my own government.

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

Mr. Speaker, I salute all my colleagues in the House and everyone watching us debate the budget.

We are extremely disappointed with the turn of events. The government wants to muzzle the House and parliamentarians in this very important debate. I will come back to that at the end of my speech.

First of all, this budget is totally irresponsible because it confirms that the government has lost control of public spending and it will be our children, grandchildren and great-grandchildren, who are not even born yet, who will have to pay for today's excesses.

On election day, October 19, Canadians spoke. We are democrats and therefore respect their decision. However, what was the state of public finances? The previous government, with the hon. member for Calgary Heritage at the helm, had the best economic performance in the G7. In fact, in economic matters, it won the G7 triple crown. We had the best debt-to-GDP ratio. The current government boasts that it has the best ratio, but members should not forget that we are the ones who generated it.

Second, our country bounced back from the economic crisis of 2008-10 more quickly than any other country. We also had the best job creation rate. Under the former government, Canadians had the lowest taxes in 50 years.

The Department of Finance found that in November, when the Liberals took office, there was a billion-dollar surplus. That is the situation. I am always pleased to quote the Department of Finance's well-known “Fiscal Monitor”, which I always have at my fingertips. We have tried to table it about 50 times, but the Liberals refuse to face the truth.

This is the Canada that the Liberals inherited: a Canada that had a budget surplus, a Canada that had the best debt-to-GDP ratio, and a Canada whose economic performance was recognized around the world as being the best in the G7. What is more, Canadians had the lowest taxes in 50 years. In short, everything was on track, economically speaking.

However, then the Liberals took office and started racking up deficits and debts left and right. Let us look at each of the promises that the Liberals made and broke concerning sound management.

First, let us look at tax changes. The Liberals bragged about wanting to be like Robin Hood by taking from the rich to give to the poor. They said that they wanted to make revenue-neutral tax changes.

They cannot say that anymore because those tax changes resulted in a $1.7-billion deficit. The money that they promised is money that they do not have. We too want to give money to people. We lowered taxes, but we did it in a realistic and responsible way, and we still managed to balance the books in the previous government's last budget. The Liberals were elected on the promise that they would make tax changes without going into debt, which is completely untrue since the changes that they made resulted in a $1.7-billion deficit.

The same is true for assistance for children. The Liberals are proud to say that they are thinking about families and children, that they want to bring children out of poverty, and that this will all cost nothing. However, that is not how it works. That is not reality. Their measures resulted in a $1.4-billion deficit.

They accumulated a $3-billion debt on these two commitments. That is the irresponsible management we keep hearing about. That is why we think these people have lost all control over public finances and that they are acting in an unrealistic and irresponsible way. It is all well and good to promise the moon and the stars, but you have to have the means. In this case, they do not.

What is most absurd is that the Liberal Party promised small $10-billion deficits, which have now become big $30-billion deficits. Not only was this a bad promise, but it also caused a real financial disaster. It was completely unrealistic and irresponsible.

The Liberals did not keep their promise to Canadians. The Liberal Party was elected by promising a small deficit and by saying that they would achieve a balanced budget in three years. This is completely untrue. This year, the deficit is $30 billion, and who knows if the government will even be able to balance the budget in the next four or five years. Some estimate that our deficit could hit $150 billion. That is completely unacceptable, unrealistic, and irresponsible for our future generations.

That is why, in this situation, we really have two contradictory visions, specifically the vision of a responsible government that made tough but necessary decisions, compared to the vision of the current government, which is governing as though nothing was wrong, has lost all control over public spending, and plans to compulsively run up deficits, one after the other.

It is not at all pleasant, especially given that this government's budget contains an appalling clause to abolish the Federal Balanced Budget Act. It is completely irresponsible, especially since on page 51 of the budget document, it states, “The government remains committed to returning to balanced budgets, and will do so in a responsible, realistic and transparent way.”

Two pages later in the same document, there is a statement saying that the Federal Balanced Budget Act must be repealed. They say one thing, and then two pages later, they say the exact opposite, which is so typical of the Liberals.

What is more, regarding this string of deficits, about two weeks ago, the Minister of Finance, an honourable man who had a distinguished, responsible, and exciting career in the financial world, said that we were stuck in this whole balanced budget thing.

Of course we are stuck on that. That is how to manage things properly. I am very proud to be stuck on balancing the budget. That is the Conservative Party's trademark, and we are very proud of that. Meanwhile, what are they doing on that side of the House? The Liberals are running deficits like mad one after the other, and that is totally unacceptable.

Let us talk about creating wealth. To the Conservative Party, the real creators of wealth are entrepreneurs and small and medium-sized businesses. They are the ones who create employment, wealth, and the necessary economic stimulus.

A government does not create employment. A government needs to support businesses in order to create employment, but not tell them what to do. We respect SMEs, unlike the hon. member for Papineau, the current Prime Minister of Canada, who said not so long ago that the wealthiest Canadians use small businesses to avoid paying taxes. Such behaviour is insulting to those who create employment.

When the Prime Minister said that, he might have been looking in a mirror, because the Prime Minister, the hon. member for Papineau in Quebec, filed his tax return in Ontario in order to save $6,000 in tax in Quebec. He had four numbered businesses to save on taxes. As the saying goes, “Do as I say, not as I do.”

In this case, the Prime Minister could tell us what he did and why he is contemptuous of small businesses, because he thinks that small business owners are people who want to reduce their tax bill. The Conservative Party believes that small business owners are people who risk their own money to create jobs and wealth, and we owe them respect.

What is in this budget for SMEs? Absolutely nothing. If it was simply nothing, it would not be so bad, but things are even worse. In fact, some measures directly attack small businesses. We were on a roll and had promised to reduce the corporate tax rate. Poof, no tax cut. Our government proposed tax credits to create jobs. Poof, they are abolished.

Consequently, according to the Department of Finance, these bad Liberal measures will cost SMEs another $2 billion. What I find insulting is that there is no respect for SMEs, there is no help for them, and some measures are detrimental. This Liberal attitude deserves to be condemned.

The same goes for retirement age. Yes it was bold, but it was a realistic and responsible move on the part of our government to raise the retirement age from 65 to 67. Our prime minister made that well-thought-out, responsible choice, and he gave plenty of notice. He announced it in 2011, but it would not have come into effect until 2023. People would have had enough time to adjust.

Who agreed with that measure at the time? The current Minister of Finance. In a book, he wrote: “It would also alleviate any shortages in the workforce due to the aging of the population....Phasing in the eligibility age...from 65 to 67 is a step in that direction”.

That is what the current Minister of Finance said before he became a Liberal Party of Canada flag-bearer, unfortunately.

This budget is completely unrealistic and irresponsible, and it plunges us right into a disastrous deficit spiral. It always makes me laugh when Liberals talk about the Right Honourable Paul Martin. Paul Martin hated deficits with a passion. I think it is a bit unseemly of them to mention Paul Martin.

Most of all, we strongly condemn the fact that the government is going to shut down this important debate. Earlier, one of my colleagues pointed out that this is yet another broken throne speech promise. What was it the throne speech said?

It said, “[The government] will not resort to devices like prorogation and omnibus bills to avoid scrutiny”. That is exactly what is happening today.

That is why we are going to vote against this budget.

[Francis Scarpaleggia, Liberal, Lac-Saint-Louis, QC]

Mr. Speaker, it is true that companies need to create jobs and wealth, but the government needs to build trust. The previous Conservative government did not do that.

With regard to the deficit, if the deficit that we announced was any cause for concern, then the financial markets would have reacted negatively. However, they did not react to the announcement of a deficit. Who then is right, the hon. member or the thousands of investors who invest in the financial markets and did not react to the news of a federal budget deficit?

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

Mr. Speaker, the reason why the markets reacted positively is that we have the best debt-to-GDP ratio, which was generated by the previous Conservative government. That is why it is too bad that the current government is squandering the financial legacy that we left. I would like to remind the government of that because it is important that we compare ourselves to the best and not just to two or three other countries.

Canada's debt-to-GDP ratio, economic recovery, and rate of job creation were the best in the G7, and Canadians had the lowest taxes in 50 years.

That is the Conservative track record and that is why the economy always did so well under the government led by the right hon. member for Calgary Heritage.

[Brigitte Sansoucy, NDP, Saint-Hyacinthe—Bagot, QC]

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

He referred to the throne speech, but the change announced in that speech was in relation to the previous Conservative government, which kept introducing omnibus bills and imposing gag orders on parliamentarians. I know that my colleague was not a part of that government. As he said, we are democratic. I know how much respect he has for the workings of Parliament and this institution.

Does he not find it strange that the Liberals are perpetuating the Conservative practice of imposing omnibus bills and gag orders?

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

Mr. Speaker, I thank my colleague from Saint-Hyacinthe—Bagot. I will not forget the name this time. I have had the great pleasure of working with her on Bill C-14.

Six months ago, Canadians had their say. We are democratic and we respect their choice. If we had been perfect, we would not be on this side of the House. Each government has its own experiences. The reality is that these people got elected by making promises, and now they are doing the complete opposite. That is the reality. These people got elected by promising that there would be a small $10-billion deficit. How big is the deficit now? It is $30 billion. They got elected by promising that they would make tax changes without any cost to the public, but those changes will cost $1.7 billion. These people were elected on a platform, but they are not following through on it.

This is insulting, and it only adds to Canadians' cynicism about politics.