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

[Bardish Chagger, Liberal, Waterloo, ON]

Madam Speaker, I will remind members that this is the budget implementation act. It does not refer to the infrastructure bank. The budget implementation act brings in the amendments that we committed to to Canadians, which were introduced in budget 2016 in March of this year: amendments to the Employment Insurance Act; to the Old Age Security Act; to the Canada Education Savings Act; to the Canada Disability Savings Act; and to the financial consumer protection framework.

To go back to an earlier question, our tax measures closed loopholes to protect consumers, to support our small business owners, and to do the work that Canadians want us to do. This act implements the measures that were introduced in budget 2016 in March of this year. Every measure in this implementation act was in the budget of 2016. It only advances and implements that act.

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

Except this part.

[Bardish Chagger, Liberal, Waterloo, ON]

Madam Speaker, we are saying let us get it to committee so that it can study it.

[The Assistant Deputy Speaker, Carol Hughes]

I would remind the member for Elmwood—Transcona that he was afforded the opportunity of respect while he was standing. I would expect that he will do the same when someone else is speaking.

[Chris Bittle, Liberal, St. Catharines, ON]

Madam Speaker, Canadian veterans have bravely served our country. They have stepped up to serve us in the most difficult of situations. We owe them our respect, gratitude, and support.

Can the hon. government House leader tell the House how this bill will support our veterans?

[Bardish Chagger, Liberal, Waterloo, ON]

Madam Speaker, I thank the hon. member for that great question, especially as last week was Veterans' Week. As I am sure many members did, I had the opportunity to be with our veterans on Remembrance Day. The night before Remembrance Day, I went around my community to visit cenotaphs and to thank our cadets as well. Last week, I also had the opportunity to bring together land, sea and air cadets in one room to have a fruitful discussion with the Minister of National Defence.

We recognize the important work that our veterans have done. We recognize that the rights and freedoms that we enjoy today are because of our men and women in uniform, not only those who have paid the ultimate sacrifice but also those who came home and those who continue to fight for our rights and freedoms. The government will give back to the veterans who have given so much in service to all Canadians. Canada will restore critical access to services for veterans, and ensure the long-term financial security of disabled veterans. Canada's veterans will receive more local in-person government services, as well as better access to case managers.

I was in the Waterloo region and I had multiple people commend this government for opening up the offices—and most recently in Nova Scotia as well. I have to say that it has been very well received, not only because it is the right thing to do but because it is what we should have done a long time ago.

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

Madam Speaker, I heard the government House leader talk about the importance of moving this legislation to committee so it could hear from witnesses, study the bill further, and send it back to the House with recommendations. Is the government House leader aware that closure has already been introduced in committee on this particular legislation? If committee only has a limited amount of time to study the bill, then how can moving closure at this time in the House be justified?

[Bardish Chagger, Liberal, Waterloo, ON]

Madam Speaker, the committee has recognized the important work that has to be done. Under this government, committees are working. They are doing good work. They are a part of the process, and there is a reason why the process exists. The work of the committee is the work of the committee. I do not comment on the work of committees. That was part of the commitment we made to Canadians. Our parliamentary secretaries do not even have a vote in committees, so that they can do the open and transparent work that they do.

I understand that the committee wants to study this legislation. I understand the committee recognizes the importance of this legislation, especially when it comes to the Canadians we represent in the House.

We have important work to do. I know that if we really want to, and if we work a bit harder, we can work together for Canadians. That is a commitment this government has made, and it is a commitment we will continue to live up to.

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

Madam Speaker, I have two points I want to make to the government.

First of all, we are in the middle of a session of Parliament, and we just returned after a week in our constituencies. What I am trying to say is that when we gather for a parliamentary session, we have a duty, which is to speak directly to the legislation before the House.

In addition, we have nothing against ministers or the Prime Minister meeting with people outside of the House, but there is a time for that, and that time is when Parliament is not sitting. Ministers need to be present in the House in order to respond directly to our questions and so that all members who want to speak to a given bill have the opportunity to do so. The motion being put forward by the government right now does the exact opposite.

On the other point, the member for Yellowhead raised the issue of youth. It is important to tell our youth the truth. May I remind the minister that she has been elected under the oath of her platform? It said a modest deficit and getting back to zero deficit in three years. The reality is everything but that. The deficit is expected to be three times higher, and we do not know when we will get back to a zero deficit. How can she deal with that?

[Bardish Chagger, Liberal, Waterloo, ON]

Madam Speaker, I am sure the hon. member was not implying that I am not telling the truth. The member has been in the chamber far longer than I, and he knows that we do not make such implications.

We have already had six days of debate, and we want the committee to be able to study the bill, hear from witnesses, and work hard so that we can continue our discussions.

I find it unfortunate that we could not reach a consensus. We wanted to work together to find out how many days of debate the Conservatives wanted, but they did not provide us with that information.

When it comes to youth, we are committed to working with youth and we will continue to engage with youth. We have done that at unprecedented levels.

[Anne Minh-Thu Quach, NDP, Salaberry—Suroît, QC]

Madam Speaker, it is truly a shame that the Liberals are imposing time allocation on a bill that has more than 146 clauses and amends 13 statutes. Its 234 pages make changes to a number of aspects related to the budget.

The Liberals claim to be transparent. They claim to be agents of change, the kind of change ensuring that all Canadians will be consulted, that there will be time to talk things out, and that there will be fewer inequalities.

There are several measures in this bill that will not help reduce inequality. For example, there is no tax credit for hiring young people in this budget. There are a number of inconsistencies when it comes to employment insurance. The board that is meant to ensure that workers are heard—

[The Assistant Deputy Speaker, Carol Hughes]

I must interrupt the hon. member if she wishes to obtain a response. The minister, for a brief response to the hon. member.

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

Madam Speaker, it is precisely for the reasons the hon. member has given that we want to refer the bill to committee for review.

Again, we do not take these decisions lightly. We are committed to ensuring that all members have enough time within reason.

[The Assistant Deputy Speaker, Carol Hughes]

It is my duty to interrupt the proceedings and put forthwith the question on the motion now before the House.

Is it the pleasure of the House to adopt the motion?

[Some hon. members]

Agreed.

No.