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.

Consumer Protection

[Rhéal Fortin, Bloc, Rivière-du-Nord, QC]

Mr. Speaker, Bill C-29 will place consumer protection at the mercy of Toronto banks. This is a direct attack on consumers and on Quebec’s ability to make social choices.

The National Assembly has unanimously condemned Bill C-29, as have consumer protection groups, notaries, an army of constitutional experts, and law professors. In Quebec, consumers are the ones we want to fight for, not the big banks.

Will the 40 Liberal government members from Quebec stand up and—

[Simon Marcil, Bloc, Mirabel, QC]

Mr. Speaker, I guess Toronto banks are keen to see Bill C-29 passed considering the minister of high finance is imposing closure. He is anxious to legalize hidden fees in Quebec, authorize misleading advertising, allow banks to change our contracts without our consent, and eliminate our recourse or any sanctions.

How far is this government of banks prepared to go to quash consumer rights in Quebec to the benefit of high finance in Toronto?

The day that Quebeckers no longer have rights, will they have to cut a cheque to the government, like the Chinese billionaires did?

[François-Philippe Champagne, Liberal, Parliamentary Secretary to the Minister of Finance]

Mr. Speaker, we will speak on behalf of consumers.

For my hon. colleague's sake, I would like to review the consumer protection principles underlying Bill C-29. I am sure he will agree with me.

The first principle states that basic banking services should be accessible to all; disclosure of information should enable an institution's customers and members of the public to make informed financial decisions; an institution's customers and members of the public should be treated fairly; and complaints processes should be impartial, transparent, and dynamic. That is what it means to protect Canadians.

[Louis Plamondon, Bloc, Bécancour—Nicolet—Saurel, QC]

Mr. Speaker, in Quebec, consumers whose credit card is stolen are liable for, at most, $50. That is the law.

At the federal level, the credit card issuer can stipulate liability in the contract. If Bill C-29 passes, banks will have free rein to demand that clients pay back every penny spent by a credit card thief.

Does the minister of high finance see the difference between being protected by the law and being at the mercy of the banks?

Bill C-29—Time Allocation Motion

[Bill Morneau, Liberal, Toronto Centre, ON]

Madam Speaker, as I said, counting today and tomorrow, we will have had nine days of debate on Bill C-29. We know that 60 members have had the opportunity to participate in our debate. That is very important.

We also know that corresponds to 20% of the time available for government business for this session. It is very important to have time. We have had time, and that is how we can get things done for Canadians. That is our goal.

[Bill Morneau, Liberal, Toronto Centre, ON]

Madam Speaker, I want to be clear that this is not about tactics; this is about doing work for Canadians that we know needs to be done. This is about moving forward on consumer protection so that Canadians will be protected. This is about moving forward on tax fairness so that we will have a system that will work for all Canadians.

I want to repeat that including today and tomorrow, we will have had nine days of debate on Bill C-29. That has allowed more than 60 members of Parliament so far to participate in debate. Again, with nine days of debate, including today and tomorrow, that means we will have provided 20% of the available time for government business on this bill, and this bill alone. It is important that we move forward and make a measurable difference for Canadians. That is what we intend on doing.

[Murray Rankin, NDP, Victoria, BC]

Madam Speaker, I rise and find myself in substantial agreement with the hon. member for Louis-Saint-Laurent. It is really quite disturbing that after merely one hour of debate at report stage, a bill as important as Bill C-29, the budget implementation bill after all, will suddenly be subject to this guillotine motion.

I think it is the 10th time, if I am not mistaken. Who can keep count if the government has done that. I know it is only a 10th as much as the Conservatives did, but nevertheless, any Canadian watching who thinks this is real change will have to conclude that it is not. It is a very sad day.

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

Madam Speaker, once again, we are very disappointed to have to rise, on this side of the House, in response to the government’s systematic obstruction of parliamentarians’ right to speak.

In both form and substance, the government is simply wrong. First, wanting to deny the right to speak, even though at this stage of the bill we have had just one hour of debate, is completely disrespectful and irresponsible on the government’s part toward the official opposition.

As for substance, it is worse. In fact, Bill C-29 concerns implementation of the government’s budget measures, a budget that, as we know, will lead to the unfortunate inflationary spiral of this government’s colossal deficits. We are headed toward a $30-billion deficit, three times higher than what the Liberal Party had promised in its election platform.

I could go on at length about this, but I am going to give the minister a chance to clearly explain himself. I am reaching out to him for the 13th time. Can he tell us when and how he intends to return to balanced budgets for all Canadians?

Bill C-29—Notice of Time Allocation Motion

[Marie-Claude Bibeau, Liberal, Minister of International Development and La Francophonie]

Mr. Speaker, I regret to inform the House that an agreement could not be reached under the provisions of Standing Orders 78(1) or 78(2) with respect to the report stage and third reading stage of Bill C-29, a second act to implement certain provisions of the budget tabled in Parliament on March 22, 2016, and other measures.

Under the provisions of Standing Order 78(3), I give notice that a minister of the Crown will propose at the next sitting a motion to allot a specific number of days or hours for the consideration and disposal of proceedings at the said stage.

Consumer Protection

[François-Philippe Champagne, Liberal, Parliamentary Secretary to the Minister of Finance]

Mr. Speaker, I am a parliamentary secretary, not a personal secretary.

We are proud of Bill C-29. I would remind my colleague that what we did is very simple, as he is well aware. The Supreme Court's ruling in Marcotte asked us to clarify measures that protect citizens and consumers across Canada. That is exactly what we are doing. We have modernized and simplified the rules that help Canadian consumers. That is all.

For example, the rules in Bill C-29 will allow the use of a broader range of personal identification documents to open a bank account or cash Government of Canada cheques. That is what Bill C-29 will do. This bill will help—

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Mr. Speaker, with Bill C-29, the federal government is protecting banks against Quebec consumers and the Consumer Protection Act. That means that Quebeckers will no longer have any recourse when the banks impose hidden fees on them or rip them off. What a great precedent.

Next, cell phone companies will be asking the federal government to protect them from the Consumer Protection Act. Then Internet providers, cable companies, and airlines will be doing the same.

I am asking the minister of high finance and his private secretary where the gouging of Quebeckers will stop.

Business of the House

[Bardish Chagger, Liberal, Leader of the Government in the House of Commons and Minister of Small Business and Tourism]

Mr. Speaker, today we are continuing with opposition day. Tomorrow the House will consider the report stage of Bill C-29, the second budget bill, and it will continue studying that bill Monday and Tuesday of next week.

For the remainder of the week, we plan to call the following bills: Bill S-4, the tax conventions legislation, and Bill S-3, the Indian tax amendment, provided we get these two bills from the Senate; Bill C-25, the business frameworks bill; and Bill C-30 concerning CETA. All these bills are at second reading.

It is my hope that parties will be able to negotiate on how to proceed in advancing these very important initiatives. Something I have committed to is working well with other parties, and I will continue to do that.

[Candice Bergen, Conservative, Portage—Lisgar, MB]

Mr. Speaker, we certainly do hope there will be a withdrawal of that comment.

Before I ask the usual question, I would like to ask the House leader if she would consider being more generous with allocating time for debate of Bill C-29, the budget implementation bill, than she was with Bill C-26, which she well knows was allocated the minimum amount of time possible. Worth noting is that the House leader's predecessor committed five sitting days to the same stages of the budget implementation bill on this watch. Since she was appointed—

Consumer Protection

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Mr. Speaker, what does Bill C-29 do?

Hidden bank fees are currently outlawed in Quebec. That will disappear. A consumer who has a contract can cancel it if he or she is being shafted. That will disappear. A bank cannot charge new fees without the client's consent. That will disappear. There are fines for misleading advertising. That will disappear. We have a neutral tribunal that examines all complaints. That too will disappear.

The minister of high finance is supposed to protect the people from banks. Why is he instead protecting the banks from the people?

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Mr. Speaker, the holidays can be an expensive time between gifts, travelling, parties, and trips for those fortunate enough to do that. It adds up quickly and so does the level of stress for the majority of Quebeckers who live paycheque to paycheque and have an average household debt of $80,000. However, with Bill C-29, the government is giving a gift to the banks instead of the public.

As the holidays approach, as everyone is preparing to stretch their budgets, the federal government is opening the door to all sorts of hidden fees without giving us the chance to defend ourselves. That is Bill C-29 in a nutshell.

By allowing the banks to get around Quebec's Consumer Protection Act, the Liberals are proving they are still beholden to the banks, despite their claims of working for the middle class. Merry Christmas, Bay Street.