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.

Bill C-29--Time Allocation Motion

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

Madam Speaker, I could not help but notice the coincidence that the motion for closure on the budget bill that would establish this new privatization bank was tabled on the very same day that the Prime Minister got together with investors of trillions of dollars of world capital, and that we are going to be voting on that motion the day after. When we talk about the purpose of debate in Parliament, sometimes that is to take the time to learn more about what the government plan is. Now, instead of having the benefit of information on what they discussed in that room as the details leak out, we will already have voted on second reading. I just could not help but notice that coincidence.

We can get a lot of fluff about moving on to committee and the next stage in debate and everything else. This is a seminal piece of legislation from the government. It would change the way that infrastructure projects are delivered in the country, and for the worse. This closure is really about trying to hide from Canadians the details of the Liberals' new privatization plan for Canadian infrastructure. Let us not pretend. I would like to hear what the government House leader has to say about that.

[Bardish Chagger, Liberal, Waterloo, ON]

Madam Speaker, this is the budget implementation act, No. 2. It would implement budget 2016 that was passed in the House, that was introduced in the House on March 22 of this year. It is important to note that this budget implementation act would only implement measures that were introduced in the budget in March 2016. It would implement the plan that Canadians elected us on, the plan that would help grow opportunities for Canadians, the plan that would invest in Canadian communities and families, and create the growth that we need for this great nation. We need to do this work and it is important that the committee has the opportunity to study this bill.

[Pam Damoff, Liberal, Oakville North—Burlington, ON]

Madam Speaker, in the last week I have had the opportunity to speak to students from Brock University, the University of Manitoba, and Western, McMaster, and Wilfrid Laurier. Young Canadians are our future, but as we know, many are struggling with student loans and increasing debt.

Minister, can you tell us how this bill would help young Canadians succeed—

[The Assistant Deputy Speaker, Carol Hughes]

I would remind the member to address her questions to the Chair.

I would also remind other members to wait their turn to speak when someone else has the floor.

[Pam Damoff, Liberal, Oakville North—Burlington, ON]

I apologize, Madam Speaker.

Could the minister tell the House how this bill would help young Canadians succeed and make education more affordable?

[Bardish Chagger, Liberal, Waterloo, ON]

Madam Speaker, that is an important question.

I, too, had the privilege of being in my constituency last week, just as all members of the House did. I got to interact with everyday Canadians, the very people whom we work hard for. I can remember being a student and the debt that came with it. The important measures this government has introduced would help those very students.

Now, more than ever, it is important that post-secondary education remains affordable and accessible. Young Canadians must have access to meaningful work at the beginning of their careers and must not be burdened by increasing student debt. Budget 2016 would make post-secondary education more affordable for students from low and middle-income families and would make it easier to repay student debt.

I heard this time and time again at doorsteps. It is something that Canadians and Canadian families want, something that students are asking for, and something we are committed to delivering on.

[The Assistant Deputy Speaker, Carol Hughes]

Before we continue, I want to remind members to stay in their seats until members have stopped speaking. Then, when I ask for questions and comments, members can stand.

Questions and comments, the hon. member for Central Okanagan—Similkameen—Nicola.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Madam Speaker, I am sure the minister is very happy to be speaking about something other than the pay to play fundraisers that she has become so familiar with. It seems that the Minister of Finance has completely abdicated his responsibility by pinning the defence of this bill and this motion on the member, so I feel sympathy for her in this case.

However, this half hour is for the government to tell parliamentarians why it is necessary to go ahead at this time. Liberals conducted a technical briefing and gave parliamentarians eight hours' notice. They have already directed, through their majority, to put forward a motion at committee to start the pre-study of it. They know exactly what they are doing. They are saying they want consensus. The minister said earlier that she wants consensus, and yet she is applying the government's majority rather than listening to the legitimate concerns of parliamentarians. That is disrespectful of the chamber.

I would like the minister to stand and articulate why this bill must push aside all of the parliamentarians who have not yet had a chance to speak at second reading. I want to hear exactly why a time limit is needed. They are simply using their majority because they can.

[Bardish Chagger, Liberal, Waterloo, ON]

Madam Speaker, I was looking forward to receiving a question from the member, because I feel that he is projecting something that the previous government did, but which is not true.

It is actually with great regret that I had to bring forward this motion today. I was hoping that we could work together better and would know how much debate was needed. Part of working together is having those conversations. I really believed we could have those conversations to know how much debate the members opposite wanted. We would be more than willing to work with the opposition, but when are not getting an answer, it is really hard to work with them in this case. I know there will be many more opportunities.

I would like to remind the hon. member that our budget implementation bill is half the size of a bill the previous government once introduced. We have given more time to debate this legislation at second reading, six days of debate. The previous government thought that three or four days was always more than enough. It is interesting to see how perspectives change.

We will continue to ensure that we have meaningful debate and that committees have the ability to do the good work they do, as well.

[Sheila Malcolmson, NDP, Nanaimo—Ladysmith, BC]

Madam Speaker, to hear the Liberal House leader say this budget implementation bill is a reflection of the Liberals' campaign commitment to Canadians is hard to square with the government's failure to live up to its commitment to reduce the small business tax to 9%.

Its failure to do that in the March budget was a broken promise to Canadians. The parliamentary budget officer estimates that this cancellation, this broken promise, will cost small and medium-sized enterprises more than $2.1 billion. Small business was looking forward to those promised tax reductions as a way to stimulate the local economy and create jobs. We know that 80% of new jobs are created by small business.

In what way does the small business tax cut broken promise square with the Liberals' election commitments to Canadians? As well, why is the government unwilling to allow further debate on this broken promise?

[Bardish Chagger, Liberal, Waterloo, ON]

Madam Speaker, this is a great opportunity for me to rise in the House during Global Entrepreneurship Week when small businesses and entrepreneurs are being celebrated. They should not only be celebrated for a day or a week, but every day. I agree that small businesses are the backbone of this economy. They are our job-creators. They are the people that grow communities.

We have been working very closely with them. We are taking a whole-of-government approach, with over 20 departments recognizing how they are relating directly to and working with small businesses. We know we can always do more. We are listening to them and engaging with them.

We are taking the priorities and changes they want to see, so we can advance and implement them. It is important to note that small business owners do believe they can grow their businesses. They want measures so they can grow and create the opportunities and jobs they want to create. Small business owners do not want to remain small. Some may, and they are welcome to. However, there are many who want opportunities to grow their businesses, to create the jobs that Canadians want them to create, to grow their communities and the opportunities in them.

We look forward to continuing to work with all members of the House and small business owners, especially.

[Jim Eglinski, Conservative, Yellowhead, AB]

Madam Speaker, I, too, had a great return to my riding last week. While there, I visited a number of high schools and met with four different classes. They were all kids who are about to graduate. They are very concerned.

They are concerned about where the Liberal government is going with their taxes, asking how they were going to pay for this. Some of the kids were telling me that they were looking at the budget as part of a class project. They wanted to know how a government comes out with a budget that does not even factor in indexing. The kids were very concerned about that.

I would like to ask the government House leader a question. How can you bring in a budget without putting in indexing, and how much is that indexing going to cost us over the next five years?

[The Assistant Deputy Speaker, Carol Hughes]

I am assuming the member is asking that through the Chair, not directly to the member.

[Bardish Chagger, Liberal, Waterloo, ON]

Madam Speaker, it is always great to hear about colleagues visiting their constituents and visiting kids.

I would like to commend that teacher for bringing the budget into her classroom so that our youth had the opportunity to discuss it, and for more youth to have the opportunity to engage with the Government of Canada to see the work we are doing. They are not only the leaders of tomorrow, but the leaders of today. Therefore, I applaud that teacher and the hon. member for taking the time to speak with those very students. Those are the kind of people we are investing in.

The hon. member said this government has lowered taxes on middle-class Canadians. This government increased taxes on the 1% of wealthiest Canadians. That is something we have not seen done before. That is investing in Canadian families. That is investing in middle-class families. That is living up to the commitment we have made.

As the member said so eloquently, the youth are watching to see what this government is doing. They expect us to deliver on our commitments. That is why the implementation of the budget is so necessary and why the committee should have the opportunity to study this legislation.

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

Madam Speaker, I want to return to the issue of privatization, because a central piece of the Liberal promise and budget was to invest in infrastructure. What we learned from the economic update is that the way the government will do this is by selling that infrastructure and having that new infrastructure owned by private investment firms, many of which are not from Canada. Therefore, the idea that we should be closing down debate just as we are learning the details of this central pillar of the Liberal financial platform is ridiculous. Perhaps it is the fact that the only person from the government side that I have heard standing up and defending this cockamamie scheme during the debate is the member for Spadina—Fort York. He likes to talk about how this is really about affordable housing, and that we should look at the platform. He mentioned the Canada infrastructure bank. The platform mentions it as a bank that will lend money to municipalities and provinces that want to build infrastructure; it does not talk about using it to leverage private funds and then having our highways, airports, and bridges owned by multinational foreign investors. That is simply not in the platform. Maybe the member for Spadina—Fort York is running out of breath and the government cannot find anyone else to defend this scheme.

Is that why we have to close down debate, because the government cannot find anyone else on its benches willing to defend this ridiculous scheme?