Bill C-29 (Historical)

Budget Implementation Act, 2016, No. 2

A second 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 eligible capital property rules and introducing a new class of depreciable property;
(b) introducing rules to prevent the avoidance of the shareholder loan rules using back-to-back arrangements;
(c) excluding derivatives from the application of the inventory valuation rules;
(d) ensuring that the return on a linked note retains the same character whether it is earned at maturity or reflected in a secondary market sale;
(e) clarifying the tax treatment of emissions allowances and eliminating the double taxation of certain free emissions allowances;
(f) introducing rules so that any accrued foreign exchange gains on a foreign currency debt will be realized when the debt becomes a parked obligation;
(g) ensuring that amounts are not inappropriately received tax-free by a policyholder as a result of a disposition of an interest in a life insurance policy;
(h) preventing the misuse of an exception in the anti-avoidance rules in the Income Tax Act for cross-border surplus-stripping transactions;
(i) indexing to inflation the maximum benefit amounts and the phase-out thresholds under the Canada child benefit, beginning in the 2020–21 benefit year;
(j) amending the anti-avoidance rules in the Income Tax Act that prevent the multiplication of access to the small business deduction and the avoidance of the business limit and the taxable capital limit;
(k) ensuring that an exchange of shares of a mutual fund corporation or investment corporation that results in the investor switching between funds will be considered for tax purposes to be a disposition at fair market value;
(l) implementing the country-by-country reporting standards recommended by the Organisation for Economic Co-operation and Development;
(m) clarifying the application of anti-avoidance rules in the Income Tax Act for back-to-back loans to multiple intermediary structures and character substitution; and
(n) introducing rules to prevent the avoidance of withholding tax on rents, royalties and similar payments using back-to-back arrangements.
Part 1 implements other income tax measures confirmed in the March 22, 2016 budget by
(a) allowing greater flexibility for recognizing charitable donations made by an individual’s former graduated rate estate;
(b) clarifying what types of investment funds are excluded from the loss restriction event rules that otherwise limit a trust’s use of certain tax attributes;
(c) ensuring that income arising in certain trusts on the death of the trust’s primary beneficiary is taxed in the trust and not in the hands of that beneficiary, subject to a joint election for certain testamentary trusts to report the income in that beneficiary’s final tax return;
(d) clarifying that the Canada Revenue Agency and the courts may increase or adjust an amount included in an assessment that is under objection or appeal at any time, provided the total amount of the assessment does not increase; and
(e) implementing the common reporting standard recommended by the Organisation for Economic Co-operation and Development for the automatic exchange of financial account information between tax authorities.
Part 1 also amends the Employment Insurance Act and various regulations to replace the term “child tax benefit” with “Canada child benefit”.
Part 2 implements certain goods and services tax and harmonized sales tax (GST/HST) measures proposed or confirmed in the March 22, 2016 budget by
(a) adding certain exported call centre services to the list of GST/HST zero-rated exports;
(b) strengthening the test for determining whether two corporations, or a partnership and a corporation, can be considered closely related;
(c) ensuring that the application of the GST/HST is unaffected by income tax amendments that convert eligible capital property into a new class of depreciable property; and
(d) clarifying that the Canada Revenue Agency and the courts may increase or adjust an amount included in an assessment that is under objection or appeal at any time, provided the total amount of the assessment does not increase.
Part 3 implements an excise measure confirmed in the March 22, 2016 budget by clarifying that the Canada Revenue Agency and the courts may increase or adjust an amount included in an assessment that is under objection or appeal at any time, provided the total amount of the assessment does not increase.
Division 1 of Part 4 amends the Employment Insurance Act to specify what does not constitute suitable employment for the purposes of certain provisions of the Act.
Division 2 of Part 4 amends the Old Age Security Act to provide that, in the case of low-income couples who have to live apart for reasons not attributable to either of them, the amount of the allowance is to be based on the income of the allowance recipient only.
Division 3 of Part 4 amends the Canada Education Savings Act to replace the term “child tax benefit” with “Canada child benefit”. It also amends that Act to change the manner in which the eligibility for the Canada Learning Bond is established, including by eliminating the national child benefit supplement as an eligibility criterion and by adding an eligibility formula based on income and number of children.
Division 4 of Part 4 amends the Canada Disability Savings Act to replace the term “child tax benefit” with “Canada child benefit”. It also amends the definition “phase-out income”.
Division 5 of Part 4 amends the Royal Canadian Mint Act to enable the Royal Canadian Mint to anticipate profit with respect to the provision of goods or services, to clarify the powers of the Royal Canadian Mint, to confirm the current and legal tender status of all non-circulation $350 coins dated between 1999 and 2006 and to remove the requirement that the directors of the Royal Canadian Mint have experience in respect of metal fabrication or production, industrial relations or a related field.
Division 6 of Part 4 amends the Financial Administration Act, the Bank of Canada Act and the Canada Mortgage and Housing Corporation Act to clarify certain powers of the Minister of Finance in relation to the sound and efficient management of federal funds and the operation of Crown corporations. It amends the Financial Administration Act to provide that the Minister of Finance may lend, by way of auction, excess funds out of the Consolidated Revenue Fund and, with the authorization of the Governor in Council, may enter into contracts and agreements of a financial nature for the purpose of managing risks related to the financial position of the Government of Canada. It also amends the Bank of Canada Act to provide that the Minister of Finance may delegate to the Bank of Canada the management of the lending of money to agent corporations. Finally, it amends the Canada Mortgage and Housing Corporation Act to provide that the Bank of Canada may act as a custodian of the financial assets of the Canada Mortgage and Housing Corporation.

Budget Implementation Act, 2016, No. 2

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

Mr. Speaker, when such a well-posed question receives a worthwhile answer, all I can do is build on what was said.

Good Conservative management practices yielded good results. During the worst economic crisis since the Great Depression, Canada had the best job creation record and the best economic growth in the G7.

We cut taxes to the lowest they have been in 50 years, such that a typical family of four saved over $7,000 a year. We did all that while working to balance the budget so that our children would not have to pay the price later.

[Darren Fisher, Liberal, Dartmouth—Cole Harbour, NS]

Madam Speaker, I will get to it a little more quickly this time.

The member said that the role of the opposition, on the other side of the room, was to criticize the government. That implies criticizing for the sake of criticizing.

Does the member not think that the job of the official opposition should be to work with the folks on this side to come up with better policy on behalf of Canadians?

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

Madam Speaker, that is exactly what we are doing. The problem is that the Liberals are not listening. We are working very hard to show them the problems that their policies will cause for our children. We are showing them the problems that they will cause for our small and medium-sized businesses and for job creation. Unfortunately, no matter what tone we use or how, they never listen to give them the right answers.

The role of the opposition is to emphasize the government's small problems to ensure that it takes into account the opposition's excellent suggestion and amends its bills in order improve them.

[Sylvie Boucher, Conservative, Beauport—Côte-de-Beaupré—Île d’Orléans—Charlevoix, QC]

Madam Speaker, I would like to thank my colleague for his excellent speech, which was very topical and honest.

During the election campaign, we heard some promises. We then saw the sunny ways, here, in the House. We saw the Liberal Party break its promises one after the other. My colleague tore up almost the entire book; there is not much left to tear up.

Our children were told that they will have precarious jobs. My colleague said it very well: our children and our seniors deserve to have a better life.

Could he tell me a little about the pension bill? Will it impoverish our seniors?

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

Madam Speaker, once again, I know the page number of the Liberal promise concerning the Canada pension plan. During an election campaign, when a party sends its candidates out to campaign door-to-door in order to tell people that it is going to improve the Canada Pension plan, a 75-year-old might hear that and think that if the government is elected, their pension will increase the following day. People of that age do not think medium term or long term. In fact, at age 75, the long term and the medium term take on another meaning. Unfortunately, that is what the Liberals promised and that is what they are going to do. The enhancements will be felt in 40 years, and there is absolutely nothing for seniors now.

[The Assistant Deputy Speaker, Carol Hughes]

Before we continue, I would remind the hon. member for Mégantic—L'Érable and all hon. members in the House today that when you have reference documents in hand you are not to tear them up.

I checked in the House of Commons Procedure and Practice and on page 612, chapter 13, it says:

Members may hold notes in their hands, but they will be interrupted and reprimanded by the Speaker if they use papers, documents or other objects to illustrate their remarks.

There was a decision from the Deputy Speaker on May 7, 1999. The Deputy Speaker at the time indicated that:

The hon. member for Kamloops, Thompson and Highland Valleys is an experienced and capable member of this House and he knows it is quite wrong to use props. Tearing up bills and other papers in the course of his speech is surely using the document as a prop. I know that he is excited about the subject....

I just want to say that I understand that the member is very passionate about it, but that the House will not tolerate having papers ripped up and I assume that the member will be picking it all up and not leaving it for the pages.

Resuming debate. The hon. parliamentary secretary to the government House leader.

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

Madam Speaker, I was thinking of taking those very same papers and putting on them a piece of tape that said, “Promise kept.” Unfortunately, I will not be able to do that because it would be a prop and adding to what the member has cited.

What a privilege it is to stand in the chamber and talk about yet another very important piece of legislation that the government has tabled. Of course, it is all about the budget. When we think about the budget, we know it is all about priorities.

One of the things that today's Prime Minister stated a number of years ago when I was sitting in opposition with the then leader of the Liberal Party along with my colleagues at the time, was that there was an expectation. The expectation was that we as caucus members would go out and consult with Canadians and listen to what Canadians had to say about a wide spectrum of issues. I can say that virtually since our Prime Minister took on the role of leading our party he has been consistent on that very important issue that we need to work with Canadians, listen to what Canadians are saying, and then reflect what we are doing in this privileged House to ensure that Canadians are getting what they want the government to accomplish.

I would like to use an example. I have a constituent, Kourosh Doustshenas, who raised an important issue with me. It was dealing with budgetary types of measures. He raised the issue and I suggested that he maybe go out and do a petition on it, to try to show me and show the government some additional support. I want to provide this petition to the Minister of Finance because he and a few others, in particular members of the Winnipeg Real Estate Board and Manitoba Real Estate Association, had taken interest in doing that.

Let me share with the members of the House what that petition stated. Since 1992, the homebuyers' plan, the HBP, has helped over 2.8 million Canadians achieve their dream of home ownership. Also, the petition goes on to say that, due to inflation, the HBP has lost about $5,200 in purchasing power compared to 1992. It goes further to say that purchases resulted in over $2.9 billion in spinoff benefits and more than 22,000 jobs. The petition is calling for us to consider indexing the HBP to preserve its purchasing power and allow more Canadians to use it due to significant life changes.

I thank my constituents and I thank those who were involved. Most important, the reason I bring it up is because I truly believe that this government, more than many governments before it, is very genuine when it says that it wants input from Canadians. If we look at what the Minister of Finance has been able to accomplish in the last 11 months, it is overwhelming. I am going to do a year in review momentarily, but hundreds of thousands of Canadians have been reached out to by departments.

If I reflect on my colleagues within the Liberal caucus, I know there have been dozens if not hundreds of town hall meetings. In virtually every region of this great country, we have had MPs hosting or participating in town halls with the single purpose of trying to better understand what Canadians would like to see us as a government put in as priorities. I am proud to say that this government has delivered in many different ways.

That is unlike the Conservative Party, which lost touch with what Canadians wanted. I would suggest that had the Conservatives not lost touch, they might have done a bit better in the last election. Because they lost touch with real Canadians, we were provided an opportunity to form government. As the Prime Minister clearly indicated not only during the election but prior to the election, we can always do better. This is reinforced by this Prime Minister. In fact, many of my caucus colleagues genuinely believe that, and our efforts are in order to be able to achieve that.

When I look at this budget, I say it is all about priorities. What sorts of priorities have we seen from this government in the last year?

The first piece of legislation was a significant decrease in taxes for Canada's middle class. We are talking about hundreds of millions of dollars being put into the pockets of more than nine million Canadians.

We will often hear from the opposition benches, “What about small businesses? Give small businesses a break”. Let me tell members that what drives Canada's economy is Canada's middle class. The healthier the middle class of Canada is the healthier our economy will be. If we put money in the pockets of the middle class, we will find that, generally speaking, the middle class will spend that money, which helps the economy.

That was the very first initiative. That was a promise given by the Prime Minister, and that was a promise that was kept.

I was very proud when the Prime Minister indicated that we were going to have a public inquiry with respect to the 1,200-plus murdered and missing indigenous women and girls, many of whom actually used to call Winnipeg North their home. This is an area I was truly concerned about. I believe that Manitobans and in fact all Canadians care passionately about this issue. Within a couple of months, we saw a commitment to have that public inquiry. I think it was long overdue. I had petitioned the government in the past. Many members of this chamber had asked the prime minister for that to take place.

These are but a couple of the initiatives that were taken right out of the gate.

The other day we were talking about gender equity and how important it is. We saw a Prime Minister, for the first time in Canadian history, introduce a cabinet with gender equity. I think that sends a very strong message. Not only do we have a better cabinet as a result; it demonstrates leadership from a Prime Minister that truly believes in gender equity.

We have seen a government that responded to what was taking place in Alberta. We are all concerned about the plight of many Albertans. For many years, Alberta, as a province, was contributing immensely to our nation. Many people would go to Alberta to generate income and would often go back to their home regions to continue to support families and so forth. Alberta is an important province. This has been demonstrated by numerous ministries. We have seen literally hundreds of millions of dollars spent in the province of Alberta, because we recognize how important it is to be there for that province.

We have seen employment insurance changes that have enabled individuals who are suffering hardship the opportunity to have a bit more money. Where we can help, we have offered additional stability. We hope, and we know, that it is only a question of time before Alberta is back in the role of providing that strong leadership.

There have been many issues since those first three months. Where do I start? How do I try to encapsulate the many different things that have taken place?

I do not know how many speeches I have given inside the House dealing with seniors. Seniors are such an important policy matter for all members of this House. I am so proud of how much we have done in such a short period of time.

I could talk about the fear factor of Stephen Harper, when he said that there was a crisis looming and we had to raise the age of retirement from 65 to 67. Many of my colleagues will recall that.

Within months of taking office, we reversed that decision. We know that Canada, as a nation, can in fact afford to allow individuals to retire at age 65. That is something I think sent a very positive message with respect to our seniors.

However, that is not all. We also introduced substantial increases to our guaranteed income supplement program. That one hits home for me because of the many doors I knocked on, and we all knocked on doors. Imagine the seniors who we talk to, the poorest, the most vulnerable of our seniors, telling us they do not know if they can afford to buy their medication because they have to put food on the table, or they say no to food, or go to food banks because they have to buy medication?

This is a very real issue for many of our seniors. With the increase to the GIS, the poorest and the most vulnerable of all our seniors will receive up to $900-plus additional a year. When they make $12,000 or $13,000 a year, that really helps. That is something of great substance we are giving to our seniors.

Many Canadians, and I have produced petitions on this, have argued the importance of our three seniors programs, those social programs that are fundamental, that make us feel good about being Canadian. I have talked about two of them. I will now talk about the third one, and that is our Canada pension program.

For years we sat in opposition and asked the Government of Canada, led by Stephen Harper, to do something about CPP. For years he turned his head and ignored the issue. There was no will at all from the former Conservative government to deal with the need to increase CPP into the future.

Just months ago, we were able to come to a historical agreement. Individuals who are working today will have more money in their pockets when it comes time to retire because of the leadership demonstrated by this government and its ability to work with the provinces.

Even though the Conservatives today oppose what we are doing with CPP, I should remind them that all the provinces had to agree. All that Ottawa could do was demonstrate the leadership, which we did, and encourage it. We had to get the support of other governments.

It pleases me to indicate very clearly to Canadians and to the House that we achieved that agreement. Because of that, many individuals will retire with more money. On the one hand, the GIS is lifting people out of poverty. On the other hand, the CPP will prevent future seniors from living in poverty. Seniors are important for the Liberal Party and the government.

Let us talk about the other end. We often hear New Democrats being somewhat critical. I think they are just looking for excuses for voting against this progressive budget. They often mention Canada's poor or those who do not make more than $35,000 a year. The Canada child benefit program has been greatly enhanced. That increase will allow literally tens of thousands of children to be lifted out of poverty. It will be based on a scale of affordability. We do not need to give multi-millionaires the same money we give a single parent who has two or three children and is finding it difficult to make ends meet. There is more fairness in the Liberals' Canada child benefit.

I would challenge my New Democratic friends, who saw fit to vote against the budget, to show me a budget in the last 20 or 30 years where they have seen such a redistribution of Canada's wealth, where there has been more of a will to try to assist those in need.

Think of indigenous people and the level of commitment that is there in a tangible way. We are talking about hundreds of millions of dollars. However, it is not just the money. We are seeing a new era of recognizing the value of the many different stakeholders.

There is nothing more important, and the Prime Minister himself has said this, than the relationship with indigenous people and a nation-to-nation attitude. Does that mean we will be able to resolve every problem, such as foster care? Trust me, I know the issue of foster care well. I represent Manitoba, which has the highest per capita number of children in foster care, and that is not a good thing. There are a lot of wonderful things. I will talk a lot about the positive things in Manitoba, but when it comes to foster care, the answer is no.

Many of the issues correlated with indigenous people have become so problematic over the years that it might take some time, but I believe that we have started off on the right foot. That is because we have seen the level of interest in this government in working with others.

We saw another achievement here today. A big part of this government's agenda is jobs. We recognize the value of jobs. In fact, I suggest that if we were to do a comparison, we would find that past governments did exceptionally well. I am thinking of former prime minister Jean Chrétien and some of the policy initiatives he brought in. We can contrast that with the last 10 years, when we saw a government that took a back seat and said it did not want to get involved. We now have a government that genuinely cares and is prepared to get involved.

The CETA agreement was signed yesterday, and I applaud the Minister of International Trade and her efforts. I know the immense amount of commitment, time, and energy she personally put into that agreement. As the Prime Minister and she herself acknowledged, we appreciate the efforts of the previous government. The signing of that agreement has fantastic potential for Canada's economy, manufacturing, and jobs. We are a trading nation. The Liberal Party is very much aware of that.

The last time Liberals were in power, there was a multi-billion dollar trade surplus. We understand the importance of trade surpluses and are actively trying to reverse the hole the Conservatives put us into. When they inherited that multi-billion dollar trade surplus, they turned it into a multi-billion dollar trade deficit. It might take us some time to do that.

I only have one minute remaining, but I have so much more to say. We have helped students pay for their educations. We have ratified the Paris Agreement. I could speak for half an hour on the historic investments we have made in infrastructure. We introduced a new teacher and early childhood educator school supply tax credit. We have invested in innovation at Canada's post-secondary institutions. We have built new business relationships abroad. There is so much more. I have not even talked about immigration.

I will leave it at that. I hope there will be questions.

[Bob Zimmer, Conservative, Prince George—Peace River—Northern Rockies, BC]

Madam Speaker, I would like to thank the member for his comments. Many of us on this side wanted to ask some questions, but I got the luck of the draw tonight.

We are doing a study right now on poverty and poverty reduction strategies in the human resources committee. One thing we found particularly strange was how many departments had not actually costed the CPP increases, and also a carbon tax.

As was also mentioned by the minister, how are Canadians going to be able to afford the increases from a carbon tax, considering that they have tight budgets? Kraft Dinner is something that a lot of Canadians eat at the end of the pay period because they simply cannot afford anything more. Now we are going to put a carbon tax on top of it, plus a CPP increase. The CPP increase can be upwards of $3,000, and a carbon tax could be $3,000 as well.

The member talks about what the Liberal government is giving back to Canadians. What are you taking from Canadians?

[The Assistant Deputy Speaker, Carol Hughes]

I am not taking anything from Canadians, but I will certainly redirect the question.

The hon. parliamentary secretary.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Madam Speaker, that question demonstrates very clearly why the Conservatives are so out of touch with what Canadians really want and expect of their government.

Both of the examples that the member referenced were not just something that the national government had to put into place. We actually had to work with the different provincial counterparts, whether on CPP or the carbon pricing issue.

Therefore, we have provinces from all regions of the country, with different parties providing governments, and all of them are saying that on both accounts we need to move forward.

Not only are we thinking about today, we are thinking about tomorrow's generation. This is something that a good strong government does. It demonstrates leadership and does not just think about today. We think about the future, and all governments recognize that. It is only the Conservatives who have lost touch on this issue.

[The Assistant Deputy Speaker, Carol Hughes]

I want to remind members that when someone is speaking, we allow that person to speak without having interruptions. The House is in process, so I would assume members would keep their voices down.

Questions and comments, the hon. member for Kootenay—Columbia.

[Wayne Stetski, NDP, Kootenay—Columbia, BC]

Madam Speaker, I always appreciate the member's unbridled enthusiasm for everything Liberal.

Last week, I attended a precarious workshop convention here in Ottawa that was hosted by the NDP. It brought together employable youth from across Canada. I went there to listen to some of the challenges they are facing, and it was with problems in finding work at all. A lot of the work is part time. It does not come with any benefits, and it does not come with any pensionable future for them. It was to the point where one of the members at the table I sat at was in tears.

My question to the member is, if this government is so good, particularly for employable youth, why has it left youth in tears?

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Madam Speaker, I appreciate the question, but I would say to the member that we have a Prime Minister who truly cares in terms of what is happening with our youth. It is one of the reasons we have the Prime Minister's council on youth. It is why members of Parliament will see that there are councils being established virtually in all of the different regions.

However, it is more than just talking about youth. We have doubled the budget for youth summer employment. Often that summer employment allows for the connections to be made that will ultimately lead to full-time jobs. We have also increased Canada student grant amounts by 50%, from $2,000 to $3,000 per year for students from low-income families; from $800 to $1,200 per year for students from middle-income families; and from $1,200 to $1,800 per year for part-time students.

This is a government that cares about youth. Not only do we care, but we have demonstrated that we can actually make a difference if we have the right policies in place.

[Julie Dabrusin, Liberal, Toronto—Danforth, ON]

Madam Speaker, it was quite wonderful to hear what my friend had to say about the past year, and what a year it has been. When I say this, it is because all of us give up a lot to be here. We take time away from our loved ones. Today I am particularly heartbroken because I am missing Halloween with my family. We all do that, across aisles. However, we see that we are working towards something. We are doing something. It is heartwarming to hear of all the things we have accomplished so far, and to know there is so much more.

One thing I hear about in my community a lot is about the need for work on immigration. There is always a concern about immigration, with families who want to be reunited, as well a desire to welcome more people, such as Syrian refugees. Could the member comment on that?

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Madam Speaker, the member asked that question because immigration is such an important issue, not just for me personally but also for the constituents I represent, and many other Canadians.

One of the things I take a great pride in is the fact that we have a Minister of Immigration who got the job done with regard to the refugee crisis. Also, and equally important from my perspective, is that we are seeing the processing times speed up. The family reunifications and marriages, particularly from the Punjab and other areas, was a huge priority for me. I talked a great deal about it. We are seeing a significant decrease in processing times for those, as well as a huge decline in that for citizenship applications. However, to quote the Prime Minister, we can still do better and the government will do just that.