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

[Christine Moore, NDP, Abitibi—Témiscamingue, QC]

Mr. Speaker, I invite my colleague to venture outside his riding and travel a little. He would realize that sometimes there are 30, 40, or 50 kilometres between some small towns. These people cannot join forces to build a water filtration plant. The cost of the pipes alone would be more than the cost of building the other plant. What he is saying does not make sense.

Yes, sometimes municipalities can work together to obtain certain services, such as snowplowing. However, for other things, towns cannot work together. What the Liberal government is doing will not help these people in the least. It seems that he really does not understand what it is like for these small municipalities.

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

Mr. Speaker, one issue that my colleague brought up was with regard to this particular budget. We have seen a significant amount of redistribution of wealth, if I can put it that way, including a substantial increase in taxes on Canada's wealthiest, a substantial decrease in taxes on Canada's middle class, a substantial increase in the Canada child benefit program, and a substantial increase in the guaranteed income supplement for seniors, not to mention the significant benefits given to students.

Given the fact that New Democrats are voting against the budget implementation bills, they are saying they oppose the budget. Can the member tell the House if she is aware of any budget prior to this one that provided so much redistribution of Canada's wealth, in which the greatest benefactors are the middle class or those aspiring to be part of it and, in many ways, some of the most vulnerable people in our society, literally lifting thousands of seniors and children out of poverty?

[Christine Moore, NDP, Abitibi—Témiscamingue, QC]

Mr. Speaker, my colleague is talking about the tax cut for the middle class. However, more than 50% of the people in my riding are not even part of the middle class and are not entitled to any tax reduction whatsoever.

Let us look at my situation, for example. My husband is not entitled to anything because he does not make the $40,000 required to belong to the middle class. However, I do not make more than $200,00 and therefore I can get the full tax reduction without any problem. The Liberals missed the boat.

We had suggested that they not apply the tax reduction to the second tax bracket, but to the first, so that everyone, including the poorest in our society, would get a tax reduction. They refused to do it. They do not realize that many people are still earning less than the $45,000 that would make them eligible for a tax reduction.

[Sonia Sidhu, Liberal, Brampton South, ON]

Mr. Speaker, I am pleased to rise today to speak about Bill C-26. In my speech, I intend to discuss how this bill is focused on the long term.

I would like to start by simply reminding the House of the stark difference in our approach. The previous government spent a decade seeing the provinces as hurdles or opponents. Negotiation was done one by one. It was negotiation through division. Our approach is different. It is collaborative.

Our Prime Minister and the cabinet of our government have been working with the provinces as partners. Earlier this year, Canada's finance ministers reached an historic agreement to make meaningful changes to the CPP. This is what a collaborative approach looks like.

First and foremost, we believe that every Canadian deserves a secure and dignified retirement after a lifetime of hard work. Today middle-class Canadians are working harder than ever, but many are worried that they will not put away enough money for retirement.

I think about my three kids, who are in their early twenties. They are all in school. They are hard-working and brilliant people. They did their homework, got good grades, and got into post-secondary education with few challenges because of their work ethic and thirst for knowledge. Even so, many of their generation and friends are in a tough place. They are not saving now, because they have to think about paying down their student debt, paying for car repairs, or saving for their first home, let alone the cost of weddings these days. There are a lot of big expenses—

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

Mr. Speaker, on a point of order, I believe that we are on Bill C-29, not Bill C-26. The member is speaking on a bill that was before the House previously.

[The Assistant Deputy Speaker, Anthony Rota]

I thank the member for bringing that up.

Often in the House members bring up different areas and make a roundabout way back to the topic at hand. Therefore, I will allow the hon. member to keep going. She has eight minutes left in her speech. I think it is appropriate that she be given a chance to show how she is going to relate it back to the topic at hand.

[Sonia Sidhu, Liberal, Brampton South, ON]

Mr. Speaker, there are a lot of big expenses looming in the face of young people these days.

I am proud of the work our government has done to help kids with the repayment of student loans. That makes a real difference for students once they graduate. However, there is still significant work to be done to get young people saving for the future. It needs to be part of the system. They need to have that money going into a reliable, secure place, where it will be there for them once they need it.

Financial experts have been saying for years that financial literacy is important for young people. I would like to commend the Ontario government for making financial literacy part of the high school curriculum and congratulate the Ontario Young Liberals on their work in putting that forward.

Each year, fewer and fewer Canadians have workplace pensions to fall back on. The private sector needs to do its part to support a strong pension system as well.

Seniors receiving CPP put that money back into the economy and into the brands and businesses in their communities.

We all must do our part, public and private, to make Canada a prosperous place for everyone and make meaningful changes to the CPP that will allow Canadians to retire with more money in their pockets.

We have been talking about the baby boomers and the generational shift under way for decades. We always knew that this massive portion of the population would retire, and we knew that we would have to take action to make the system sustainable for them and their children too.

The bill addresses those on their way to retirement by doing more to ensure that they have dignity, security, and stability.

The more than one-quarter of Canadian families nearing retirement, or 1.1 million families, who are facing a drop in their standard of living will be able to retire in dignity as a result of this enhancement.

The revisions in Bill C-26 are designed to help Canadians in every step of their lives: grandparents, parents, and children.

The deal will boost how much Canadians get in their pension from one-quarter of their earnings now to fully one-third. To make sure that these changes are affordable, we will phase them in slowly over seven years, from 2019 to 2025, so that the impact is small and gradual.

When l was going door to door in Brampton South in the last election, I met many seniors. I met seniors who were concerned about themselves but more concerned about their families' futures. They wanted to know if their grandchildren would have the chance to go through life with the same security that was there for them.

That is why the bill is important to me. When we talk about evidence-based and long-term growth, I think of the effects for Canadians tomorrow and five years from now. In both these scenarios, Canadians will be better off.

At the core of our plan is investment. Investment in the future is what past generations did when they built transport corridors that moved countless goods and people every day. Investment in the future is what donors to universities and colleges have done for decades. It is about giving back so others can follow.

Investment in the future is what the government did in the post-war years after World War II in building a system that is envied around the world.

In Brampton, while most of my constituents were born in Canada, there are those of us who were not. We came to Canada with our eyes on the system of compassion and mutual support.

That is why investing in the Canada pension plan matters today more than ever. We cannot wait, as some of my colleagues across the aisle might suggest. If past generations had thought to wait and save their pennies instead of investing them in the Canada around us today, we would be less well off.

Every Canadian deserves a secure and dignified retirement after a lifetime of hard work. Through this enhancement, we have taken a powerful step to help make that happen.

This investment is in the people of Canada and the public system that makes us more equal and more united. That is why I will be voting for Bill C-26, and I encourage all my colleagues from all parties to do so as well.

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

Mr. Speaker, I cannot help but ask whether the member who was speaking is going to be voting for Bill C-29, because that is actually what we are debating.

[Sonia Sidhu, Liberal, Brampton South, ON]

Mr. Speaker, even though it is Bill C-26, it is related to the budget, so I will answer according to that.

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

Mr. Speaker, I appreciate the comments from my colleague when she is talking about the importance of Canada's pension programs. We are talking about the CPP, which the member spoke so well about, but we also have the guaranteed income supplement. As she knows, the Government of Canada is substantially increasing the guaranteed income supplement. The government also reduced the age of retirement from 67 to 65. It is something the Conservatives raised from 65 to 67.

Given the member's obvious interest in the pension issue, I wonder if she could provide some comment on how important all three of those pension programs are: the OAS, the GIS, and the CPP.

[Sonia Sidhu, Liberal, Brampton South, ON]

Mr. Speaker, as we know, this is the Canada pension plan. It has an effect on Bill C-29. The Canada pension plan provides payments to beneficiaries who are hard-working Canadians. With over $45 billion contributed last year, it will allow demand to increase. There is also a big impact on small businesses. Small businesses will grow, and if they grow, our economy will grow, so of course, it impacts our economy. If our economy is lavish, then Canadians' lives are also going to be lavish.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Mr. Speaker, when the member ran in the last election for the Liberal Party and there were big promises made about investing in public infrastructure, was she aware at the time that $15 billion of that money was actually going to be used as a pool to attract foreign investment that would then partially or wholly own that important public infrastructure the Liberals ran on a promise to build? If she was aware of that, where in the Liberal platform was that written down? Perhaps the member could enlighten the other members of this House.

[Sonia Sidhu, Liberal, Brampton South, ON]

Mr. Speaker, yes the Liberal Party had a big platform, and we made promises, and we are fulfilling the promises step by step.

Regarding the CPP, it is a universal system, one that is available to everyone who works. We need to be invested in that investment so people can retire to a dignified life. The CPP Investment Board is very strong, and its management ensures that the funds Canadians depend on in their retirement are secure. This is a type of investment that is required to be collected for future retirement. That is what we promised in our campaign, and we are going to fulfill that promise.

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

Mr. Speaker, I will try to get the debate this afternoon back to the bill that we are supposed to be debating, the budget implementation act, Bill C-29.

This is about the third or fourth time now that I have had the opportunity to speak to the budget since it was introduced by the finance minister in the spring, and it does not get any better when I speak to it as we go forward. The financial situation just seems to be getting worse. In fact, we are debating a budget implementation bill that has already been effectively ripped apart by the minister's economic statement here a couple of weeks ago. It is a budget that fails to create the jobs and the growth promised by the government. The finance minister stood up in the House and said that the modest little deficit that was promised in the election campaign is going to bloom to some $30 billion and that the government is not going to give any indication as to when it can balance the budget again.

I will save the deputy government House leader from asking the question that he always asks when we make these relevant points, which is: Did the Conservatives not run a deficit at one point in time? The Conservative government did run a deficit because it was dealing with the worst economic downturn since the Great Depression. However, the difference was that the Conservative government had a plan to get back to a balanced budget while the Liberal government has shown us it has no plan to get back to a balanced budget despite the fact that it was left with a balanced budget when it took office.

Lately, I have not heard the government saying that it did not have a surplus when it took over. I have not heard that lately from my colleague from Vaughan. All he has talked about this afternoon is the infrastructure bank that was in the Liberal's election platform. Not a word was mentioned in their election platform about the infrastructure bank. When those members stand up here and start talking about fulfilling their election promise, we all know that is not the case.

This budget has failed to address what it actually set out to do. It was set out to go deeply into debt so that jobs could be created. About two weeks ago the September-October Statistics Canada job numbers came out and the top line looked pretty good. It talked about 44,000 net jobs having been created, but then some Liberal math kicks in, because despite the fact 44,000 net new jobs were created, the country lost 23,000 full-time jobs while creating 67,000 part-time jobs. The group that was hit the most is who the government always talks about, the so-called middle class. Working men between the ages of 25 and 54 have suffered 63,000 lost positions since the Liberals took office a year ago. That is shameful. The government is not fulfilling its promise for why it is going into debt. There is no plan to get out of debt. There is no indication that going into debt is actually working.

We hear a lot about infrastructure. The budget was supposed to create infrastructure projects. I asked the Minister of Finance when he appeared before the finance committee about this, because a Bloomberg report said that out of some 860 projects that had been approved, only one has actually broken ground.

During our constituency break last week the infrastructure minister was running around the country spending other people's money. I saw he was in Edmonton announcing a $30 million flood mitigation program. I guess we will see how many jobs that flood mitigation program creates. It is ironic that it happened to be in Mill Woods, which, if we check, is the riding that this particular infrastructure minister represents. Not only is he spending taxpayers' money to redo his office, he is also spending taxpayer's money in his own back yard.

It reminds me a bit of the move that the immigration minister made, closing down the office in Vegreville, which happens to be, by the way, a Conservative-held riding and has been since the beginning of time. He moved it into a riding in the centre of Edmonton that a Liberal member happens to represent today. He will be a one-term member, because this is another effort by the Liberals to try to shore up their shaky ground in Alberta. Albertans are not going to be fooled again by this particular government.

Instead of the infrastructure minister running around the country handing out cheques that taxpayers are footing the bill for, he should be spending some time convincing his cabinet colleagues that there are other ways to create jobs in this country, indicated by one simple word: “pipelines”. The Minister of Infrastructure and Communities should convince his cabinet colleagues. All of the studies that have been done around Kinder Morgan, and everyone else, have recommended that the Kinder Morgan pipeline be approved, and yet his cabinet is sitting on that decision.

If cabinet said tomorrow that it would approve Kinder Morgan's pipeline, it would create thousands of jobs, not only on the construction of the pipeline but in Alberta for revitalization. Many of the full-time positions that the Liberals have lost over the last year are in Alberta in that particular industry. It could also get the process under way for the energy east pipeline. Despite some of the musings about our friends from Quebec, located next to us, who shake their heads and smile when my colleague from Calgary Shepard talks about jobs lost in the industry, energy east could save some of those jobs. That is a project that absolutely needs to go ahead and the process to get it approved has to move quickly.

Of course, now we are left with the much improved possibility of Keystone being approved by the new president-elect, once he takes office in the United States. I know the Liberals worship the outgoing president, whom we saw here in the House when he visited, but I think a lot of the things that the liberal president of the United States implemented in the last few years will be undone pretty quickly, although it is hard to come up with many accomplishments of his in the last eight years, whatever they were.

I will conclude my remarks with a couple of comments. As I said, the Conservative government left the Liberal government with a surplus. It is not even denying that any more. This is a budget that is out of date before it even passes the House. The finance minister acknowledged that in his economic update. The election campaign promise about modest deficits has now ballooned into a runaway budget deficit, and for that reason, I would like to move the following subamendment. I move:

That the amendment be amended by adding after the words “exemplified by” the following: “a stagnant economy”.

[The Assistant Deputy Speaker, Anthony Rota]

The subamendment is in order.

Questions and comments, the hon. member for Eglinton—Lawrence.