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.

Second Reading

[Marilyn Gladu, Conservative, Sarnia—Lambton, ON]

Madam Speaker, there are some parts in my colleague's speech with which I could also agree. As the first female engineer in the House of Commons, I was happy to collaborate with the Minister of Innovation, Science and Economic Development to come up with a better plan for science for Canada. However, in the rest of the budget, did you miss the part that says you promised a $10 billion budget—

[The Assistant Deputy Speaker, Carol Hughes]

I would remind the hon. member to address her questions and comments to the Chair.

[Marilyn Gladu, Conservative, Sarnia—Lambton, ON]

You are absolutely right, Madam Speaker. Having promised a $10 billion deficit, the government is now pushing its way past $30 billion and out of the 87 infrastructure projects that were approved, most of which were in the pipeline with our government. Only a handful are actually in the ground. The Liberals missed the construction season. There is no plan. What would the member say about that?

[Raj Saini, Liberal, Kitchener Centre, ON]

Madam Speaker, we were elected on real change and real change means thinking outside the box and being innovative. I congratulate the hon. member on being the first female engineer in the House. I am the first pharmacist in the House. Scientifically through innovation, through infrastructure, I know that what we are doing right now is going to be historic and it is going to work for all Canadians.

[David McGuinty, Liberal, Ottawa South, ON]

Madam Speaker, I have always believed that the single most important investment a nation can ever make is in learning. If we want to compete and thrive in the future, we need the smartest workforce on the planet.

Could the member take a few minutes to expand on some of these? In the budget, for example, we increased the grants for college and university students, and for kids going into the trades. We have doubled the summer employment program for jobs. He comes from a community which is strongly steeped in college and university traditions. Could he take a second—

[The Assistant Deputy Speaker, Carol Hughes]

We are running out of time at this point, so if we want him to answer, we will give him that chance right now.

The hon. member for Kitchener Centre, a very brief response, please.

[Raj Saini, Liberal, Kitchener Centre, ON]

Madam Speaker, my hon. friend is absolutely right. The next generation of Canadians will need the right tools. As he mentioned, the Canada summer jobs grant was doubled. We have invested $2 billion over the next three years in post-secondary institutions. We have also tried to ensure we have invested in infrastructure, public transit, and in other areas which will help the next generation of Canadians.

Bill C-29--Time Allocation Motion

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

moved:

That, in relation to Bill C-29, a second act to implement certain provisions of the budget tabled in Parliament on March 22, 2016 and other measures, not more than one further sitting day shall be allotted to the consideration at second reading stage of the bill;

and

That, 15 minutes before the expiry of the time provided for government orders on the day allotted to the consideration at second reading stage of the said bill, any proceedings before the House shall be interrupted, if required for the purpose of this order, and, in turn, every question necessary for the disposal of the said stage of the bill shall be put forthwith and successively, without further debate or amendment.

[The Speaker, Geoff Regan]

Pursuant to Standing Order 67.1 there will now be a 30-minute question period. I invite hon. members who wish to ask questions to rise in their place so the Chair has some idea of the number of members who wish to participate in this question period.

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

Mr. Speaker, let me begin by saying how disappointed I am that the government House leader has moved this motion. I think that to this point in time we have had a very good working relationship. There have been certain bills that our members have not wanted to speak to at length, and so the government has been able to see legislation move through at a pace it would have been happy with.

Definitely, in the case of this bill, we have a lot of members who are extremely concerned with the budget implementation bill. Our members on this side of the House wanted to speak to this important bill and get their voices on the record.

I recognize that maybe the government thinks that some of what is being said may be what it considers repetitive, but these are important points that need to be made. By moving this motion and stopping the time that we are allowed to speak, it does a number of things. It really disenfranchises the members of Parliament who have been elected, who are duly elected, and who want to speak. I think it also does not benefit our working relationship.

I have concerns about that.

However, I am also very concerned about something else. I am not assuming the Minister of Finance will be answering the questions that we have. This is his bill and he is not even here in respect of this place, so what is really the plan? Why is the government rushing this through? Why does it not see the importance of this budget implementation bill, in terms of the harm that it would do to Canadians, the massive deficit that would be passed on to generations and generations of Canadians? The government is not dealing with the problems of the bill and, instead, it is rushing it through.

[Bardish Chagger, Liberal, Waterloo, ON]

Madam Speaker, I appreciate the opportunity to respond to the hon. member's question. I agree that we have been working well together. I believe that we can continue working together.

The reality is that, including today, there will have been six days of debate on this legislation. This is the budget implementation act. This bill will be moved on to committee, where it will be further debated and further studied. The committee will have an opportunity to invite Canadians to come as witnesses to answer some questions, and to share with the committee what they like about this bill and what their concerns are. The committee also has the opportunity of doing a clause-by-clause, word-by-word analysis. This furthers the debate on this legislation. It is important that we allow the committee to do the good work that it does.

[Murray Rankin, NDP, Victoria, BC]

Madam Speaker, I too rise more in sorrow than in anger. I agree with my colleague, the House leader for the Conservatives, that the working relationship in this Parliament has been affected as a consequence of this bill.

I can remember when the Conservatives, under the Harper government, moved time allocation on over 100 occasions, perhaps setting a parliamentary record, and that the Liberals joined with us many a time to advise the House how upset they were with time allocation. How things have changed.

The Minister of Finance told us just how important this budget was to Canadians. He talked about the importance of dealing with tax evasion measures, pollution measures, and so many other things. We have drawn attention to the incredible change in Canadians' lives that the infrastructure provisions are going to bring, and the government tells us how important this budget is.

My question is, if it is that important, why is the government limiting the right of parliamentarians to scrutinize such an important budget?

[Bardish Chagger, Liberal, Waterloo, ON]

Madam Speaker, I would like to take a moment to commend the working relationship that I have had with the hon. member, and I look forward to continuing that conversation. The member very well knows that I do believe in reaching consensus and that we can all work better in this place. We can work better for Canadians, for middle-class Canadians, who are the very people who elected us to do the good work that we do.

I recognize that members of Parliament are here to represent their constituents and I also recognize that Canadians expect this government to advance the legislation that they have mandated us to advance. It is important that we have the opportunity to have a fruitful and meaningful debate, but also to allow the committee to do the good work that it does. This budget implementation act actually would implement only measures that were introduced in budget 2016 on March 22.

I assure members of this House that the work will continue, and I look forward to working with all members of this House.

[Todd Doherty, Conservative, Cariboo—Prince George, BC]

Madam Speaker, once again we see the government members grabbing their toys. Like kids in a sandbox, they are grabbing their toys and going home if they do not like the way things are going.

Our hon. colleague from Portage—Lisgar, our hon. House leader, said that we have not had the opportunity to hear our voices. It is not our voices that the government needs to hear. There are 338 members of Parliament who have been elected to be the voices of their constituents, of Canadians. There are six days of debate, if that is actually what the number is, and if our hon. colleague says it I guess we have trust that. Similar to that, I guess we have to trust that they only spent $10 billion; or I guess that is wrong as it is actually quite a bit higher than that.

The current government has pledged to spend billions of dollars, putting us further into debt. It is not for us here; it is going to be on the future generations who are going to have to pay that back.

This budget, this financial update, and this bill impact my riding. We do not have a softwood lumber agreement in place. This bill and the Liberals' update do nothing to create jobs in my riding. I have not had an opportunity, except for today right now, to be able to share what the government is doing and is not doing and how that impacts my riding. Six days does nothing to further the voices of the constituencies of the 338 members of Parliament.

I ask this of my hon. colleague. Why is the government trying to rush this through? Why not give a voice to Canadians and to the members of Parliament, as we have been elected to be the voices of our constituents?

[Bardish Chagger, Liberal, Waterloo, ON]

Madam Speaker, I agree that members of Parliament are elected to represent their constituents. I agree that we do important work for Canadians each and every single day. We are saying, let us continue that work. Let us continue to work hard for Canadians, whether they are in our constituencies or across this great nation.

Including today, we will have had six days of debate on Bill C-29 at second reading. The bill will move on to committee where it will be further studied and further debated. Canadians will have the opportunity to come as witnesses. It will return to this chamber where we will get to continue the debate, the dialogue, and the discussion so that we can represent our constituents and Canadians across this nation.

Our plan for middle-class Canadians and Canadian families in the hon. member's constituency, in my constituency, and across this nation and our plan for infrastructure are about delivering for Canada. They are about delivering for their families. They are about delivering the plan that Canadians elected this government on. We need to work together so that we can ensure that we create the opportunities that Canadians need us to create.