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

[Alexandre Boulerice, NDP, Rosemont—La Petite-Patrie, QC]

Mr. Speaker, I thank my colleague for her speech.

I do not want to ask a question about the environment. However, I will use a term invented by the Liberal government that reminds us of the environment, and that is asset recycling. We approve of recycling. However, asset recycling means privatization. The Liberals never campaigned on the privatization of our infrastructure.

What does my hon. colleague think of the idea of selling our assets and making consumers pay twice as much for using federal infrastructure?

[Elizabeth May, Green, Saanich—Gulf Islands, BC]

Mr. Speaker, I thank my colleague for his question.

I completely agree with him. We did not hear the term “infrastructure asset recycling” during the election campaign. It is not until the end of Bill C-29, on page 228, that there is mention of what the Minister of Finance may do for the sound management of the consolidated revenue fund on terms and conditions he considers appropriate. Perhaps this would allow the creation of an asset recycling system. I believe it is essential, for everyone's well-being, that infrastructure remain in the hands of the public. Management of our public sector should not be privatized.

[Arnold Viersen, Conservative, Peace River—Westlock, AB]

Mr. Speaker, I will be addressing some of the points my colleagues have made.

I will start off with the fact that TD Economics recently announced that the deficit would be $34 billion this year. I will put that into some sort of perspective.

Although 30 does not sound like a large number, when we say 30 billion, we often do not even put all of the zeros behind it. Rather, we write “30” and the word “billion” behind it. To some degree it sometimes falls into the abstract. We know it is a large number, but we do not really have a definite reference point as to how much money it actually is.

This morning, I Googled the new Chrysler Pacifica minivan that came out six or eight months ago. It ranges in price from $42,000 to $55,000. I used a rough middle-of-the-road $50,000 for a new Chrysler minivan to make for easy math. Thirty billion dollars would buy us 600,000 new Chrysler minivans. I took the measurement of the new minivan and if we were to line them up bumper to bumper, we would have a line-up of brand new Chrysler minivans from Edmonton all the way to Toronto. That kind of puts into perspective what $30 billion would look like in hard, fall on our toes, ouch that hurt, kind of stuff.

Thirty billion dollars is a huge amount of money that the government is borrowing today to pay for projects that our children will have to pay for in the future. If these projects were happening and we could all see this burst in infrastructure spending around us, then we could say we were making a good investment. However, history has taught us that when we deal with the Liberals, they spend a lot of money, and typically it goes to pay their friends and donors.

They have said that they will spend all of this money to create jobs. That was their main point. They have pointed to the many years of stagnant growth in the economy, and have said that they need to invest all of this money now, in times of low interest rates, to ensure growth in the economy, and to create some jobs.

What has this done for the number of jobs? We have been here for a year and have seen this historic investment, as the Liberals like to call it. What are the job numbers? They have remained stagnant. We are still at 7% unemployment. If we were to narrow it down from across the entire country and look at places like Alberta, it has seen a spike in the jobless numbers and the unemployment rate since these historic investments have come into play. Clearly, if the Liberals have a plan, it is not working.

The Liberals claim to have created many jobs through this amazing summer jobs program. Frankly, if we think the summer jobs program is creating jobs, we fail to understand basic economics, and what value and production are. If these summer jobs are being paid for through the public purse, there is no incentive for production or to understand the concept of value. People are hired at an hourly wage to do whatever is required. This is great in that it gives young people a chance to get some job experience doing different things, but it does not necessarily instill in these young people the concepts of value and production that typically come with the free market interactions between labour and production.

I am an automotive mechanic by trade. We typically were paid about one-third of whatever the door rate was at the mechanic at which shop I worked. If the door rate was $100 an hour, the mechanic was paid about $33 an hour. This was based on the fact that we were busy. If people needed their vehicles fixed, they would come to our dealership. There was a sign on the door that said that we charged $100 an hour to fix vehicles. Although people realized that it might cost them several thousand dollars to have their vehicle fixed, they would make the calculation and pay me that $33 an hour to fix it because they needed it to go to work.

There is a series of calculations that goes into that in the private sector where people get paid, and that is set up by rational people making decisions for their own lives essentially.

However, for the summer jobs program, none of those calculations come into the equation. One applies for a position, sends in an application to the government to hire someone to do something for X amount of hours, and asks the government to fund it. The whole concept of value and production are thrown out the window in that case. Although it creates experiences, it is not necessarily typical of what a job should be and is.

Another thing I would like address on the new Liberal budget is that the Liberals seem to be starting in bumps and stops. They fail to realize that our entire economy is a delicately balanced system to some degree. When we push one spot in, another spot comes out essentially. However, it seems that the unintended consequences are not taken into account, and I will give an example of this from my riding.

There is significant oil and gas activity in my riding. One of the things that happens, especially in oil production, is that when we take the oil out of the ground, a lot of times we get natural gas or sour gas that comes along with it. Typically, there is a pipeline for the oil, but there is no pipeline to put the natural gas in. Therefore, they light a fire and burn the natural gas off right there. It turns from natural gas into water and CO₂ and everybody goes on their way.

However, starting about 10 years ago, the Alberta government worked very hard to get a system in place where people could use the natural gas they were burning off in a flare stack to produce electricity. They set up the market so rather than sticking the natural gas in a flare stack, they could buy a gas generator, run the natural gas in the generator, and create electricity. They could either sell the electricity to the grid or use it on site.

That whole system was set up to be revenue neutral. The oil company operating there was doing all of this for the environment. There was no cost benefit for the company. It cost it a bunch of money, but it was recouped over time. The company did not make money on it, but it did not lose money either. Therefore, for the sake of the environment, we would do this.

However, in comes the carbon tax from the provincial government, which now makes that cost benefit analysis so the cost is more than the benefits. It was at the break-even point, but now it costs more than the benefit. Suddenly, rather than buying the generator, putting it on site, hooking it all up, connecting it to the grid or a battery, or whatever the company was doing, it now costs too much and so it will have to just flare it once again.

This is one example where, if we do not take into consideration all the aspects of the economy, if we push in one spot, something else will pop out. This is a clear example of where the carbon tax, with its intended good to protect the environment, does the exact opposite.

I would like to think the government is unaware of these kinds of scenarios, but something tells me it is quite familiar with what is going on. The Liberals are betting against the Canadian economy when it comes to mortgage rules. They are saying that we are going to have a lack of growth going forward, market instability, and all of these kinds of things happening. Therefore, they have to ensure we do not have massive mortgage defaults. Therefore, the Liberals are saying that they are going to change the rules so we do not have massive mortgage defaults. They seem to be signalling that they know their plan is not going to work.

I know I am completely out of time. I probably have 10 more things to go over, but I will cede the floor and hopefully will get to some of them in questions.

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

Mr. Speaker, my questions are related to the agreements that have been achieved by the provinces and Ottawa.

The member and other members have made reference to the CPP. Provincial governments from all regions of the country, working with the strong leadership of this government, have come up with an agreement that will see future retirees receive a better pension. The Conservatives have really taken a philosophical approach to this, saying that it is a tax and a bad thing.

Would the member not agree that when it comes to issues around pensions for workers, even if it is for the next generation, that it takes a strong government to demonstrate leadership and ensures that we have adequate pensions for people who retire in the future? In good part, this budget is all that.

[Arnold Viersen, Conservative, Peace River—Westlock, AB]

Mr. Speaker, CPP is one of the things I wanted to get to. I recently received a letter from the Canadian Chamber of Commerce. It mentioned that bringing in the new CPP would restrict companies from hiring new employees. It said that companies would expect employees to work longer hours and do more work, rather than hire a new person, because that cost benefit analysis was going to come up.

Companies will say that hiring a new young person is not going to be as advantageous as keeping more senior staff members and paying them a little for to do more. Because there is a CPP cutoff, if companies can pay the senior staff members, those who already are past that cut off on the CPP maximum limit, a little more, the companies will get a better benefit.

On government leadership, it is important that the government show leadership on a wide range of issues. One particular issue I would like to see the government champion is the energy east projects.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Mr. Speaker, I thank my colleague for his speech.

From what he said, he is strongly opposed to deficits and adding to the national debt. He spent much of his speech criticizing deficits.

However, I am having a hard time reconciling his statements with the record of the Conservatives, who ran deficit after deficit. They too added to the public debt non-stop during their time in office and then, at the very end, after juggling the numbers a bit, they were barely able to announce that they had balanced the federal budget. However, during all that time, they continued to add to the national debt. I am trying to reconcile all of that.

I would therefore like to ask my colleague the following question: when exactly is it good to run deficits? His party ran deficits and the party that is currently in office is doing the same, saying that it will stimulate the economy. When is it good to run deficits? Does the member believe that his party was right in running deficits and adding to the national debt when it was in power?

[Arnold Viersen, Conservative, Peace River—Westlock, AB]

Mr. Speaker, as to whether we did the right thing by deficit spending during the greatest recession this world has seen, the jury is still out on that. I do not think we are overly proud of what we did. However, I do know we are very proud of our record in bringing our country through the recession better than other G7 nations. We did not have a significant meltdown in our housing market. In fact, our housing market is as strong as it has ever been.

On the deficit we took on, we did that with some chagrin. The deficit would have been much larger had that member's party been in power. We would be in a place right now where we would be unable to take on more deficit. Because of our good fiscal policy, we had a great credit rating. Those kinds of things have allowed the current government to now take on its deficit spending.

If the government is going to spend the deficit as it says it is, I would like to see the job numbers it is promising.

[Karen Vecchio, Conservative, Elgin—Middlesex—London, ON]

Mr. Speaker, I am honoured to rise to speak to Bill C-29, a second act to implement certain provisions of the budget tabled in Parliament on March 22, 2016, and other measures.

I had spoken about this budget, initially, when it was tabled. At that time, I was very concerned with the numbers and the spending that I saw, but today I am even more concerned, especially when we have seen a lack of growth and a lack of support, with a number of groups jumping off the bandwagon, saying the Liberals are not doing what they said they would do.

When the bill was initially tabled, there was $113 billion that was being borrowed. TD economic services has now estimated that there is going to be an additional $16.5 billion in new expenditures.

Let us go back to what the government promised during the 2015 election. The 2015 election was just a year ago. We have seen so many changes in terms of what the government is delivering compared with what it provided in its platform.

I would like to go back to a debate that I had in the city of St. Thomas. It was one of our final debates. There were six candidates. I recall the Liberal candidate, at that time, saying that they would have shovels in the ground by December of 2015. Obviously, I am here and I am very grateful for that. However, she obviously heard that as part of the platform. She was being told by her leader and by the leaders of her party that they were going to have shovels in the ground doing great work for Canadians and building infrastructure. I think they actually believed it. I believe many of the members who are now sitting across on the government side believed when they came here that they were going to be doing some good work.

As I said, December 2015 was when they promised to have shovels in the ground. I can tell members I have not seen too many shovels in the ground. I have not seen these projects they were talking about and that they were going to be working on.

The infrastructure minister will come out and talk about the projects that have been proposed, the projects that the provincial governments have submitted, saying that, yes, they are going to support these projects, but that is only stage one of this process. That means there is only a finite number of people who are working on this infrastructure build. They may be the architects, the engineers, or the administrative people who are putting in these applications, but it is not the people with the hard hats and the workboots who are out there doing that work. We do not see that happening yet.

Of all of these communities and provinces that were promised more roads and better infrastructure in the 2015 campaign, where is it and where is the spending? We have seen spending from the government, but we have not seen any results.

I go back to when we go to the bank and we talk about good debt versus bad debt. It is simple. It is something I say to my children. A good debt is when you go and buy a washing machine because it's something that you need and that washing machine is going to stay with you, not just one day or two days, it's going to stay with you, hopefully, for 20 years, which is the way I like to buy my washing machines, at least. That is a good debt. That is when we are investing in our homes and in the things in our homes. Going out and buying a gourmet dinner that might cost $200 or $300, however, is good for one day, if that, or it might be good for three hours. There is a difference between good debt and bad debt. I am very concerned that the government does not know the difference between the two and that we are spending a lot of money for things that are hot topics, but we are not spending on long-time prosperity.

The Bank of Canada has actually lowered the forecast for the GDP down to 1.1%. That has not even been within a year. It was 1.4% that was forecast in January, prior to this budget, and unfortunately the Bank of Canada is seeing the light as well and seeing that it is going to be 1.1%.

When this budget was tabled, it was not just organizations like the C.D. Howe Institute or the Fraser Institute but also the Canadian Federation of Independent Business, along with the members of the Conservative Party, that were very concerned with what was in the budget.

As I said at the beginning of my speech, we are seeing more groups, more organizations, and more individuals jumping on board, saying that this budget is not delivering the stimulus that they thought it was going to, this is not what the Liberals promised, and this government is not doing what it promised. I think that is one thing people are saying. Yes, they cast their vote in 2015, and like I say, we talked about seven million compared with six million, some of those people, 39%, cast their vote for the Liberal Party and many of those people are sitting there with voter's remorse, saying that they are not getting what they thought they had voted for.

We now see the Federation of Canadian Municipalities, the Canadian Chamber of Commerce, and the Business Council of Canada all being much more skeptical of the spending being done by the government.

However, there are also other groups. This is one thing I was really quite surprised about. We have a Prime Minister who talks about building relationships and one of the key relationships he is going to have is with first nations and aboriginal peoples.

Last week the Standing Committee on the Status of Women had the opportunity to listen to a lady by the name of Tracy O'Hearn. Tracy was representing the Pauktuutit Inuit Women of Canada. She talked about the work they had done regarding violence against women and a program that was done through phase one under the Conservative government.

Phase one of their program had some fantastic results, but they are ready to initiate phase two. In the last year, the current government, which is trying to build relationships with first nations people, has not been part of these negotiations and has not been at the table to communicate with them. We are not seeing a progression. We have seen some great things started, but they are now halted because the Liberal government has not acted.

This building of relationships with first nations is something Conservatives see as another broken promise. The NDP opposition has also had to put forward some of these concerns, because we have a government that is not listening. It is promising but not listening.

There was also confirmation by the parliamentary budget officer that the Conservative government left a $2.9-billion surplus in the 2015-16 fiscal year. The government proposed to spend its way to prosperity. If we just take the numbers out and do not look at what the Liberals were spending, we see that the Conservatives did very well as a government.

When this budget was proposed, a lot of economists said deficits can be good and in the previous session an NDP member asked my colleague if it was right to have a deficit. In 2008, 2009, and 2010 when Canada went through the worst economic downturn, Conservatives actually spent wisely. We had shovels in the ground and created retraining programs. We did everything we possibly could to get people back to work. That is why we were one of the first countries to recover from the economic downturn.

The current government is saying that it will spend its way to prosperity, something that seems to be okay because economists have said, yes, it could go into deficit as long as it spends money well, but we have not seen the money being spent well. The government is going into deficit and we are not seeing anything for it. Instead, people in Canada are floundering. The government is looking at employment insurance reform and things of that sort, rather than creating jobs.

One thing I am very proud of is being the critic for families, children, and social development, so in the last two minutes, I am going to touch on the changes to the Canada child benefit.

Once again, in the election campaign, it was all about nine out of 10 kids doing better under the Liberals' program. I have done the numbers and there is a lot more money being spent. I am not going to say there is not, but once again, the Liberal Party was selling something on which it had never put a pen to paper to see what the actual numbers were. There were not true estimates done.

As we debate Bill C-29, the CCB is being indexed. Back in July when these payments started, the first thing the media noticed was that the money was not being indexed and the programs by the Conservative government were actually better than the ones by the Liberal government today. With the indexing now, there is going to be double the spending on the Canada child benefit. A program that is already very large and questionably sustainable is going to be doubled in the next five years. That is absolutely poor fiscal management.

Yes, there are going to be hiccups and difficult things in the first year of taking over as government, Conservatives understand that, but there seems to be no focus. It is about spending and spending, but not creating prosperity or opportunities for Canadians. The government thinks if families have problems, it will give them more money, not opportunities to be educated or build new roads. The government is not going to do those things. It will just throw money at the problem, and that is not what is supposed to be done.

This government is in charge of the country and in charge of its finances, and I am very concerned that the promises the Liberals made in 2015 are extremely irresponsible. I am very concerned about where we will see our government and our country by the end of October of 2019.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Mr. Speaker, I thank my colleague for her speech. I would like to ask her a question about something that has been said a few times in the House about infrastructure.

Does the member have the same concerns as us about the $120 billion that was promised for infrastructure? In her speech, she mentioned that infrastructure was discussed in her riding during the election campaign.

Since the state of the public purse is not what it should be, is the member concerned about the fact that the government has taken an approach that will allow it to announce that it spent $120 billion, when much of that is private funding through an infrastructure bank?

Is she worried that this might be a smokescreen to lead us to believe that this promise has finally been kept when, in fact, it was accomplished in part with help from the private sector?

[Karen Vecchio, Conservative, Elgin—Middlesex—London, ON]

Mr. Speaker, in some sorts of infrastructure there needs to be partnership. When it comes to private businesses, if we are helping out there, there needs to sometimes be partnerships.

However, in the situation the hon. member is referring to, the public infrastructure, which is the roads, the hospitals, the things that we see in Canada where we have the provincial and territorial governments as well as the municipal governments, I am very concerned that the government will back out of some of those.

As I said, I compare it to a washing machine. There is good and bad debt. If a road is built, we have that road for decades and decades with a few repairs. I do not think that we are spending ahead of ourselves because we see that the Liberals have put themselves into a new position where we are expecting lower growth and not the revenues the government thought it would have.

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

Mr. Speaker, I would like to continue on the topic of infrastructure.

In the province of Alberta there have been a number of difficult times. The government has moved in many different ways to try to help Albertans as they go through these difficult times. We are very optimistic, as Albertans have a very strong spirit, that they will not only get out of it but will do well in the future.

One of the ways they will be able to capitalize on doing well is due to the government's commitment on infrastructure. In fact, there are 72 projects, working with municipalities and the province, that have already been approved to date. I am wondering if the member would recognize that through this infrastructure spending and working in co-operation with the province and municipalities all Albertans will directly benefit from this.

[Karen Vecchio, Conservative, Elgin—Middlesex—London, ON]

Mr. Speaker, I know the member said he was listening to my speech, but I think he missed a part of that speech where I said that there is phase one, the administrative part, the people who are building the plans and all of those things. It is not the men and women who are going back to work with the hard hats and the workboots, so phase one does not incorporate.

We may see these projects, but do we actually see shovels in the ground? Maybe the member will have this conversation with me outside, but how many of these projects are actually shovelling, taking the dirt, and creating new opportunities, or are they still architectural things where the provincial government has said it would allow this and the building will start in three or four months?

I think we have to question that, because we really do not know how far they have progressed.

[Alice Wong, Conservative, Richmond Centre, BC]

Mr. Speaker, the Conservative government cut taxes over 160 times to reach the lowest level in 50 years and allowed the average family to save $3,400 per year, and we still balanced the budget.

What damage has the current government done to our families regarding taxes?

[Karen Vecchio, Conservative, Elgin—Middlesex—London, ON]

Mr. Speaker, I will just compare what we had with what we do not have any longer.

I am a mother of five, which I have probably said many times. My children had memberships all the time up to the age of 18 at the YMCA. Those were things I was able to use as fitness tax credits. My children play sports. One takes acting lessons. They all do different things. With the previous government, there was the incentive for parents to give opportunities to their children.

On one hand, the present government provides money through the child benefit, and as the Liberals like to say, those middle-class tax cuts. On the other hand, it gives us the bill for our CPP, it gives us the bill for our carbon tax, and it gives us the bill for our $130-billion deficit. It is short-term prosperity with long-term debt.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Mr. Speaker, I am pleased to participate in the debate on Bill C-29, a second act to implement certain provisions of the budget tabled in Parliament on March 22, 2016 and other measures. Since that time, we can say that sunny ways have come and gone. Over the past 12 months, we have seen countless promises broken, a ballooning deficit, and a stagnant economy.

We are also watching as the federal government picks too many needless fights with the provinces. The separation of powers that is a fundamental part of Canada's Constitution appears to be an afterthought for the Prime Minister and his government.

The cornerstone for the government is to tax and spend and get more and more involved in the day-to-day lives of Canadians. There is no decision too small for the government to make, no area in which it should not intervene. A day does not go by in the Chamber that I do not hear the Liberals take pride in repeating some platitude like “what we promised to Canadians is to help them throughout their lives”. We know that for the Liberals, government knows best.

Unfortunately, big government costs a lot, and the money to pay for it all comes from Canadians paying taxes on their income and on most goods and services, and from mandatory fees. To these Liberals, government is not the last resort, it is the first call. The idea that government should serve as a safety net has outlived its usefulness. Instead, the government should be omnipresent and helping Canadians each and every day.

Right now, the resource sector in western Canada is struggling because of low commodity prices, but rather than focus on the underlying long-term issue, which is the discount Canadian energy products are sold at due to a lack of access to markets, the Liberal solution is to provide a temporary bump in employment insurance to folks who are out of work. This bears repeating. Rather than put in place the conditions needed to create real jobs and opportunities, the government's preferred course of action is to increase employment insurance. This exemplifies quite well what the Liberal vision is.

I also find the ideological elastic demonstrated by the government on the child care benefit astounding. It was not long ago that the Liberal Party's official position on allowing families to make their own decisions when it came to child care was that parents could not be trusted, that they would spend more on beer and popcorn than on their own children. Now we learn that the new Liberal program for child care is fraught with problems. Bill C-29 would index the Canada child benefit to inflation beginning in 2020. The parliamentary budget officer has estimated that this would cost $42.5 billion over the next five years. That is double what the Liberals budgeted when they originally introduced the program.

I have spoken to many young families who wonder where the money for this is going to come from, how much debt will be incurred, and how much their taxes are going to have to go up in the medium and long term to pay for it. They do not want to trade short-term gain, if there is any, for long-term pain. Then there are those families that are receiving much less than they did in 2015.

Furthermore, the budget has cut the child fitness tax credit, the children's art tax credit, and tax credits for post-secondary education and textbooks. To the Liberal member for Newmarket—Aurora, who stated on Friday that “tax credits do not work”, can he honestly tell the House that the post-secondary students in his riding did not utilize the tuition tax credit?

“Big government knows best” is a broken model. European countries that have tried to spend their way to long-term prosperity have more often than not failed. This debate is about whether we believe, as a country, that the individual financial choices Canadians make are better or worse than those made by government.

Last week I noted that according to the 2016 Index of Economic Freedom, government expenditures presently represent 40.7% of GDP here in Canada. Australia, by comparison, sits at 35.7% and the United States at 38.9%. Are we better off in Canada than in Australia, for example, because more of our economy flows through Ottawa? I do not think so.

Is Canada a better place to live because this bill will compel banks to publish a description of the consultations undertaken with the public on their existing products and the development of new products and services? That is right. One particular measure in the bill will require financial institutions to provide a description of the consultations they have done to identify trends and emerging issues that may have an impact on their customers or the public. This should not surprise us, given how much the Liberals love consultation. In other words, the government is asking banks to make publicly available consumer and societal trends that would normally be considered commercial proprietary data.

Furthermore, major banks will also have to provide to the regulator a description of their consultations on matters on which the bank has received complaints. Why the federal government needs a description of the consultations banks hold on each and every complaint they receive is beyond me. While these legislative requirements will apply only to Canada's largest banks for now, is the next step asking smaller institutions, like credit unions, which are owned by their members, to do the same thing? The compliance costs for smaller institutions could drive them out of business. This would have a devastating effect in small communities all across the Prairies.

Let us look at the ways the Liberals have increased the overall tax burden on Canadians. They have given Canadians a carbon tax that will cost approximately $1,200 per person, and they have not even bothered to figure out how interprovincial emissions will be regulated or priced. They have raised contributions to the CPP from 9.9% to 12%. As a consequence, Canadians will get 2% less on each of their paycheques. This CPP contribution increase will cost families more than if the government had raised the sales tax from 5% to 7%.

It goes on. The Liberals are freezing a planned tax cut for Canada's small businesses, a planned tax cut they campaigned on and that they supported while in opposition.

They are also imposing a myriad of new regulations that just drive up the cost of doing anything for Canadians. For example, the Minister of Transport just introduced new regulations on railways that will order them to provide detailed information on the emissions produced by every single one of their locomotives.

Rail is the most environmentally friendly means of moving goods. A gallon of diesel can move a tonne of goods over 800 kilometres. What is worse, the minister based these new regulations on data collected before 2010, which is now completely out of date.

As railways are working to move western Canada's harvest to market, they are being faced with added red tape and tougher emissions standards, on top of the new carbon tax on diesel. Ultimately it is the farmers trying to get their grain to market who will see their bottom line affected. These regulations will inevitably lead to increased costs that will be passed on to consumers. It is just another hidden tax.

At the end of the day, all Canadians, including the families the government likes to talk about, are being asked to pay up to finance the big Liberal society.

In conclusion, more and more Canadians are expressing not only their frustration but their deep concern about the direction the government is taking Canada. Governments should always act with great humility and modesty, as its actions impact all Canadians and cannot be reversed quickly and without disruption. In the eight years I have had the privilege of serving as a member of Parliament, my belief that Canadians, not government, know best how to manage their finances has only been strengthened. Unfortunately, the Prime Minister and his government's belief in big government permeates this budget, and that is why I will not be supporting the bill.